Reshaping Current Business at Axis

Context

This is January 2016. You are an associateatAxis, a top 50 law firm.Real estate is acore practice area:it accounts for a third of all billable hours, and has historically been a strong and stable source of revenue and profits. It employs a significant number of associates.

The trend in thepast five yearsis, however, cause for concern.

  • Overall, there has been a reduction in the more complex work that is done at higher billable rates. The past 12 months alone have seen a decline of 15% in billable hours.
  • The core work around property portfolio management for large institutional clients is being increasingly standardised. In the past 12 months, about 10% of work that was previously done in a bespoke manner, has been standardised.The rates at which standardised work is done are not attractive. Some of the work will likely migrate to lower cost providers.
  • Finally, pressure from clients for reduction in costs has become relentless. Hardly any conversation goes by without the GC mentioning this topic.

Theoutlook is not bright; something needs to be done soon.

Possible direction

Not all is doom and gloom. Clients in the real estate practice have been asking aboutother services. In particular, there is a growing demand for data protection and privacy (DPP) work. This is driven by increasingly sophisticated collection and use of data by organisations; and also by the GDPR framework which is due to be implemented in 2018. Much of this work will be of a bespoke advisory nature.The DPP practice is small; a shift from real estate will require a combination of re-training, hiring, and retrenchment. The opportunity is large, and the benefits in the longer term are considerable.

The managing partner has asked your team to help with making the decision. You have spent the last two months examining the pros and cons of making the change, and have concluded that it is feasible.However, the risks are not trivial, and a number of associates will be asked to leave.

A bit more information. This is not the first time that Axis has been through a big change. Five years ago, it acquired another firm to expand the roster of clients and jurisdictional reach. The acquisition involved a reduction in headcount, and it was messy. In particular, there was little clarity or transparency from the side of the partners. It affected morale, and the reputational effects were adverse. The residue lingers to date. The acquisition has not provided the benefits that were originally envisaged.

Your task

The managing partner has asked your team to make a presentation of the findings and recommendations to the forthcoming meeting of the partners.

What will be your recommendation to the partners?Choose one:

(a)Recommendation: Axis should make the shift toward DPP work subject to further verification by a team of senior partners

(b)Recommendation: the shift is too risky; Axis should look to shore up its real estate practice instead

(c)No recommendation as of now: The question needs further examination by a team of senior partners or a consultant

Your further involvement

A trusted colleague has asked yourteam if you wish to participate in the project (shift to DPP, reduce focus on real estate)should the partners decide to go ahead with it. This is obviously a big opportunity.You are simply indicating a non-binding interest: your answer will be kept confidential and will not be shared with partners.

What is your preference regarding further involvement in the project? Choose one:

(a)This is an exciting opportunity.You wish to be involved in the next phase

(b)This may be an exciting opportunity, buthas high downsides for your career.You prefer not to be involved

(c)Regardless of the opportunity, you do not wish to be involved

Draft – please do not shareAP