50-Cent Dollars Are In Vogue Again

Now, I know I am speaking to a certain demographic when I recall the heady days when law firm expenses were equal to only 50 cents of every dollar of revenue. Since then, firms have been struggling with escalating operating ratios—that is, all expenses before any payments to partners divided by revenue—that are now in the 60-cent to 70-cent range.

This erosion has often been blamed on escalating rents, increased salaries for attorneys and staff, and the burgeoning cost of marketing and technological investments. Yet it would seem that under the tutelage of the national certified public accounting firms' consulting arms, law firms are being advised that a return to the past glory days is indeed possible and worth doing.