Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m F E B R U A R Y 2 0 1 8 23 another to determine best practices. But that could be applied to individual lawyers as well, forcing them to keep track of what they charge, how much and how often they discount their fees, what percentage of the bill they collect and how long it takes to collect on that. "We haven't nailed that down com- pletely yet," says Szot. "We're starting to look at profitability metrics." When two partners, for instance, have a $1-million book each, but one is more profitable than the other, the goal is to break that down to determine the differ- ences. But examination of the client might also be warranted. If the information shows that a client's own performance isn't up to par, the firm will have to ask if it's worth keeping that client. Szot says the client must understand that the firm, too, needs to be profitable and if its objectives aren't being met through that client that it's time to move on. "And that could turn the table on the client. "I can see getting to the point of doing profitability calculations per client," he says. "We may get to the point where we say maybe this client isn't reliable. It's early stages from that perspective." Partner compensation may well be included in the profitability metrics as well. John Hawke, Calgary's McLeod Law chief operating officer, says the focus in the past has been to examine profitabil- ity on a firm-wide basis, but not at the partner level. He believes that's on the way and that the individual's compensa- tion will be tied to that person's profit- ability instead of simply to their billings and the work they generate that is spun off to other lawyers. So, issues such as expenses and other costs will play a role in the overall assessment. Like other businesses, law firms are being pressured to become more effi- cient and competitive and that trickles down to the individual lawyers as well. "This is a challenging but exciting time for law firms because I think that firms that are embracing KPIs and are embracing profitability and are really focused on how we do it better, faster, cheaper are going to be the firms that are going to be successful going for- ward," says Hawke. I CAN SEE GETTING TO THE POINT OF DOING PROFITABILITY CALCULATIONS PER CLIENT. WE MAY GET TO THE POINT WHERE WE SAY MAYBE THIS CLIENT ISN'T RELIABLE. IT'S EARLY STAGES FROM THAT PERSPECTIVE. OREST SZOT, Miller Thomson LLP BROUGHT TO YOU BY Canada's leading in-house counsel discuss their top priorities and challenges for 2018 TUNE IN http://www.canadianlawyermag.com/inhouse/videos/ VIEW 2018 Untitled-2 1 2017-12-14 10:57 AM

• Cover