Is there an easy way to increase per partner profits by $27,000? 

I previously reported that IBM’s global consulting business built a system to match consultants with the right job. Business Week (11/21/05) reports that using it, IBM “with 36,000 consultants in its system… saved $500 million in the first year alone, cutting the time needed to assign the employee by as much as two weeks.” That works out to almost $14,000 per consultant.

Let’s play with some numbers: Assume in BigLaw a blended associate billing rate of $300/hour. If each associate billed 30 more hours per year, that would generate an additional $9,000 in profit (assuming no increase in costs). If leverage is 3 associates for each partner, that would increase per partner profit by $27,000.

Possible? Maybe. Clearly, associates are, on average working very long hours already. But not all meet billing targets. More importantly, opportunities may exist to convert some non-billable time to billable hours via more effective workforce utilization. This is no sure thing but IBM’s win should tempt law firms to think about more effective ways of assigning lawyers to matters.