Every organization faces significant problems if not dealt with effectively and in a time-bound manner. In a law firm also, there are severe quality problems faced making it profusely difficult to cope up with the growing competitive market conditions. But in addition to the quality issues, it faces operation management problems as well. Highlight 10 such problems with the solutions which can be offered to resolve them for better functioning of a legal organization.
TEN OPERATION MANAGEMENT PROBLEMS ASSOCIATED WITH LAW FIRM 1. ) There is no guidance to be used in formulating firms’ strategies concerning how various activities needs to be carried out. Problem statement: Lack of proper guidelines in setting the ways to achieve the goals of firm results into some of the goals being not achieved. Pinning the guidelines and policies on various office boards to always remind the lawyers to act in a manner that supports the goals of firms. 2.) Business firms needs to have a sufficient office size to allow for expansion. Problem statement: Law firms are faced with the challenge of expanding the services offered by lawyers when there in an increased demand. This is a challenge because smaller size of a firm impedes construction of new offices to accommodate more lawyers. Having a clear strategic plan would help the firm consider factors such as expansion hence solving the problem. The firm needs to develop plans to have more spaces, for instance by purchasing more land to make it easier for the firm to expand when there is an increased demand. 3. ) The firm has few offices hence only few lawyers are required to occupy and work for the firm. Problem statement: Poor office design layout leads to most space going to wastage. Creation of larger offices only to be occupied by a single lawyer and one or two clients is a wastage/inefficient usage of space. This problem can be solved by designing smaller offices for single clients and also other offices to accommodate many clients. The problem of space wastage can be solved by restructuring the offices by hiring professional office designers to offer advice on the best way to layout the offices depending on the services offered and the number of clients expected in each office at a time. 4.) The law firm may be located in a remote area hence clients facing a hard time to visit the offices. Problem statement: Locating the firm in a least accessible area such as areas without proper infrastructure poses a challenge for the firm to offer services to clients. The firms need to identify places with suitable infrastructure such as roads to facilitate efficient movement of both the lawyers and clients to the firm. 5.) The failure to utilize internal resources such as lighting results to increased costs. Problem statement: Improper planning for internal resources for instance using of parallel switching rather than series switching creates more costs to the firm in purchasing more resources. To solve this challenge, the firm needs to identify the various alternatives of how the available resources can be used to perform various operations and choose the best. This would help to reduce to operation cost of leaving resources idle. 6.) Lack of adoption of proper technology due to changes in the working environment results to loss of potential clients. Problem statement: Clients will always want to move with time, for instance with the increased use of mobile computing, customers would expect most communication to be made to them through short messages, calls and emails. Failure of the firm to adopt and implement technological changes may force clients to seek services from other firms. The law firm should adopt the best technological platform and some well trained personnel to facilitate efficient communication to the clients in a timely manner. For instance, the firm should dedicate some computers and a cell phones to the customer service departments to have prompt communication to clients. 7.) Variation of the nature of cases presented and the way they are solved by different lawyers poses a challenge on how compensation can be made. Problem statement: The lawyers may complain on the nature of compensation because the compensation system my not consider special compensation as different cases have different magnitudes. Complaints from lawyers may also affect the normal operations of the firm. This problem can be solved by having the human resource managers clarifying the expected salaries for various levels and departments in order to avoid future complains from lawyers. Also there is a need for the firm to develop bonus scheme for most performing lawyer. 8. ) There is no clear communication between different departments in the law firms. Problem statement: In situations where there is a need to make references from other departments, lawyers are faced with the challenge of getting the accurate communication in timely manner. In order to ensure a swift communication, the law firm needs to create effective and reliable network within the firm. For example, the firm can implement use local area network to make communication easier and secure within the firm. 9.) There is no proper procedure of storing the filed cases for future references. Problem statement: Most cases are handled and stored in manual files making it difficult to retrieve them for future similar cases in a timely manner. The firm needs to store the filed cases electronically and also have backups on various storage media for easier retrieval for future references. 10.) Some lawyers deliver low quality services to clients resulting into loss of cases in courts of law. Problem statement: In some scenarios the clients may complain of not being satisfied with the services offered to them. For instance, a case where a client is promised of quality interpretation of legal matters and ends ups losing a case in the court of law results to unsatisfied clients who may decide to seek services from other firm. To solve this problem, the firm should have periodic refresher training for lawyers to ensure quality service is offered to the clients. This will ensure high quality services are offered to clients all the time thereby not only maintaining the current clientele base but expanding it manifold. REFERENCES 1. http://legalsolutions.thomsonreuters.com/law-products/news- views/corporate- counsel/law-3- 0-the- challenges-facing-legal-leadership 2. http://blogs.siliconindia.com/Managementexcellence/OPERATIONS-MANAGEMENT- ISSUES-bid- 3Yka1GqO81330270.html 3. https://www.olmsteadassoc.com/resource-center/law- firm-management- characteristics- of-successful- law-firms- basic-building-blocks/
Jammies in Sandwood sells bars of exotic soap made by Glister Soaps Ltd. They pay Glister Soaps Ltd. $2.00 for each bar of soap Jammies sells. Jammies has experienced very strong sales since the first of the year, averaging 300 soap bars a month at a price of $5.00 a bar from January through March. Encountering such strong sales, Jammies increased the price of Glister Soaps Ltd. to $6.00 in April. They sold 200 bars of Glister Soaps Ltd. in April. At $6.00 a bar, is Jammies pricing the soap at a level that maximizes their profits? Why or why not?
Total Revenue (TR) earned by Jammies per month (30 days per month) = $5.00 * 300 = $1,500 Hence TR earned from January to March (3 months) = $1,500 * 3 = $4,500. Total Cost (TC) borne by Jammies per month (payment to Glister Soaps Ltd.) = $2.00 * 300 = $600 Hence TC borne by Jammies from January to March (3 months) = $600 * 3 = $1,800 Thus Profit (π) earned by Jammies = 4500 – 1800 = $2,700 TR of Jammies in April = 6 * 200 = $1,200 TC for Jammies in April = 2 * 200 = $400 Hence TR of Jmmies for 4 months (January to April) = 4,500 + 1,200 = $5,700 TC for Jammies for 4 months (January to April) = 1,800 + 400 = $2,200 Marginal Revenue (MR) for Jammies = 5700 – 4500 = $1,200 Marginal Cost (MC) for Jammies = 2200 – 1800 = $400 The profit – maximization condition for the firm requires MR = MC. However, according to the workings, MR > MC. Hence, the profits are NOT maximized for Jammies. EXTRA WORKING NOTES: In order to find the optimum price P, we have to use the formula: P = MR [1 – (1∕e)] where e = Price elasticity of demand (PED). Now e = Proportionate change in quantity ∕ Proportionate change in price = (200 – 300 / 300) ∕ (6 – 5) / 5 = - (1 / 3) ∕ (1 / 5) = - 5 ∕ 3 ≈ -2 Thus P = 1200 [1 – (1 / 2)] = (1200 * 0.5) = 600. Hence P = MR = MC = 600 would be the optimal condition for profit maximization.
Eagle Electric Co. of Hague has to evaluate two alternatives in order to replace a robotic welder. Machine X having a fixed cost of $75,000 for the 1st year and a variable cost of $16 along with a capacity of 18,000 units per year. On the other hand, Machine Y is slow as compared to Machine X and it has a speed of one-half of X's, however its fixed cost is only $60,000 and the variable cost is higher i.e. $20 per unit. Expected sale price is $28 per unit. Compute the following on the basis of the given information- 1. )) For both the machines, what is the point of indifference (crossover point) in units? 2. )) What is the range of units for which Machine X will be preferred? 3. )) What is the range of units for which Machine Y will be preferred?
1. )) Point of indifference in units for the two machines- At crossover point, the total cost of using either options (X or Y) are equal. Total cost of X=Total cost of Y Cost of X= Fixed cost ($75,000) + [Variable cost ($16)*Units produced (p)] =75,000+ 16p Cost of Y= Fixed cost ($60,000) + [Variable cost ($20)*Units produced (p)] = 60,000+ 20p We add all relevant costs of both options. The speed of production is not important here because we are considering the costs alone and the company may or not reach the capacity of the machines. The price of units is constant to both X and Y so including it on both sides have no effect to the equation. Cost of X= Cost of Y 75,000+ 16p= 60,000+20p 75,000-60,000= 20p- 16p 15,000= 4p P=3,750 this is the crossover point. If the company has the intention of producing 3,750 units, either option can be adopted. Crossover point= 3,750 units. ____________________________________________________________________ 2. )) Range of units of Preference for MACHINE X- Units above the crossover point, Machine X is preferable that is; 3,750 and above but, the machine has a capacity of 18,000 units. The range is; 3,750 to 18,000 units. ____________________________________________________________________ 3. )) Range of units of Preference for MACHINE Y- Units below the crossover point, machine Y is preferable that is 3,750 and below. This machine has speed half that of Y which equals to 9,000 units. The crossover point is below the capacity so it is not a consideration. The range is; 1 to 3,750 units.