In the last two lessons, we've been talking about Profit, and redefining it. The traditional law firm definition is along the lines of increase rates, manage capacity and drive hours. This formula isn't so much wrong, as unsustainable. Why, because it's all about the law firm at the expense of everything else.

Let's unpack this, starting with increasing rates. This is the annual knee-jerk reaction of law firm leaders, and it's at the expense of the clients. This year, it was amped up by the talent wars and the associated salary hikes, but still it's at the expense of the clients. Same service, just at a higher price.

Then comes managing capacity. Before the talent wars this meant cutting lawyers and keeping the rest busy. Now it means paying the lawyers more to stay and keeping them all busy. At whose expense? It's the clients who pay for all this activity, and the lawyers whose lifestyles are impaired. Then comes driving hours. You see the pattern, right? It's all bottom-line focused at the expense of the clients and lawyers.