In Search of Perfect Client Service

Sill More on Client Service Interviews

Tom Kane of Legal Marketing Blog weighs in here.  His post's title aside, Tom most certainly is not part of the "peanut gallery."  Its a strong post.  Please read it.

Client Satisfaction Surveys--Still More To Think About

Latest in the series--Jim Hassert at Law Firm Business Development with Part 5 of his series on this most important topic.

Speed: The Essential Ingredient

I was absolutely stunned to read this post by Tom Collins, who writes morepartnerincome.  To set the stage, Tom tells this story:

The attorneys were talking about handling e-mail and phone calls.  The partner from the young firm bragged that he made a practice of always responding to e-mail the next day.  His practice was not to read e-mail until the morning after and then to respond to it.   He explained that it avoided interruptions to his work schedule during the day.  It was clear that he considered a next-day treatment to be “very responsive” to his clients.  The partner had given me his direct office phone number.   Since our lunch, I have had the occasion to call the same attorney on several occasions.   I always get his voice message system.  He has never actually answered his direct number.  As with e-mail, he consistently returns my calls the following day.

Tom then asks whether this is really responsive.  Of course he does not, but he wants to know what others think, and I have to take his bait.

How can people who are so out of touch with their clients still have clients to be out of touch with?  Geez, I am afraid to not respond to client inquiries within minutes.  When I am on trial, my secretary runs interference to find out if "later that night" is good enough or should someone else in the office handle the call? And she knows that if its critical, there are lunch and bathroom breaks during trial.  I know my clients like the fact that I respond like this--they tell me and they tell the people who conduct our satisfaction interviews.

But put my insecurities aside and let's think about this from the client's perspective (always a good place to start and finish, by the way).  Client Mary is sitting at her desk working away on a project that her CFO wants later that day.  A question comes up and she emails the lawyer referred to in Tom's post.  She doesn't write that this is life and death because she knows the lawyer is in his office, having spoken with him earlier in the morning.  All day long she waits for information she needs to complete her report to the CFO.  She waits.  And waits some more.

Still waiting.  The end of the day is approaching.  What is a client to do?  Wait for the lawyer in Tom's story and she hurts her career by turning a project in late to the CFO.  So she calls somebody else if she can, gets an immediate answer and timely finishes her project.  Who will she call the next time?

Clients call when they do for a reason.  Its their reason and, most of the time, it is an important reason.  You are the SERVICE PROVIDER.  It is your job to honor their reasons.

Think minutes, not hours and certainly not days.  And don't get me started again on voicemail.  Just check out this earlier post.

Bill Clinton: Bringing New Meaning To Client Service?

Hilarious post by Dan Hull following up on the news that Bill Clinton is eligible to reinstate his law degree. On behalf of his firm, Dan posts this ad:

WANTED: Of counsel for growing Pittsburgh-based boutique business law firm. Must have at least 8 years of highest level federal Exec. Branch experience, world-wide connections, Yale law degree, one year at Oxford, own money and people skills. Must be able to sell anything to anyone. And be originally from Hope, Arkansas. State government experience not required but preferred. United Nations experience also a big plus. You don't need to re-locate. Happy to set up the office for you. Wherever you want. Harlem or Chappaqua is okay. Or DC. You decide. You can work out of your house. Whatever. NOTE: No previous private law practice experience necessary. Not a problem--no problem at all. Excellent benefits package.

So I start thinking--Bill Clinton and client service.  The possibilities are endless.  But too easy.  So I'll refrain. But let your mind run wild. 

Client Satisfaction Surveys: The Team Conducting The Survey

Four posts today follow up on a conversation among Jim Hassert, Dan Hull and me.  For a summary, see this post.  The issue we discussed was whether the person conducting the satisfaction survey should be associated with the firm.  Jim followed up with some further thoughts today, reaching the conclusion that he was comfortable with his original opinion that someone from the firm should do the interview.  Dan Hull then posted that he was persuaded that Jim and I were right (putting aside for a moment the fact that I stated I no longer was sure that the interviews should be conducted by firm members).  Then Michelle Golden weighed in with a terrific post (even though she ignored my post on the topic!) in which she persuasively argues that the interviews should be conducted by a neutral third party. Dan Hull then threw up his hands!

As I said in my post, I was impressed with BTI Consulting's data-driven analysis:  "The most interesting things for me where its conclusions that outsiders can more effectively get the client's real feelings and that the number one question for determining client satisfaction is not a ranking on any kind of scale, but instead whether the client has referred the firm to someone else." At the moment, my feeling is that the lead should be an outsider, but that a senior partner should be present.  The insider can sense nuance that the outsider may not, and certainly the presence of the senior partner communicates both the importance the firm attaches to the process as well as the value of the client to the firm.  Completely outsourcing the process makes it appear to be a checkbook issue, clearly the wrong impression.

As a final note, I could not agree more strongly with Michelle Golden that these encounters should not be for marketing.  Talk about snatching defeat from the jaws of victory. 

Associate Pay Raises

I was just reading the Chicago Daily Law Bulletin.  Seems that Mayer Brown, DLA Piper and Latham are joining the growing tide of firms raising the starting salaries of their first year associates to $135,000.  Mark Jungers of Major Lindsey & Africa, a prominent recruiting firm, predicted that Kirkland, Sidley, Winston and McDermott will quickly follow suit.  I would be surprised if any of the top 10 or so Chicago firms hold the line.  The expectation is that there will be $10,000 bumps (in some cases "only" $5,000) to the salaries (or at least annual compensation) of all associates in the firm.

What do these salary increases mean for firms and their clients?  Simple math will tell you that these "bumps" are multi-million dollar hits to the firms bottom lines.  There are, at the end of the day, only two choices.  Do the partners make less (while the associates are making more), or do clients pay more for the same work?  It does not require an advanced degree to know that the partners will not make less.

It is at times like this that the pressure to increase total hours is at its most intense.  Some firms may be forthright and acknowledge that hourly requirements will go up.  Others will do what what I have heard referred to a "manage hours up."  Other firms will increase rates.  But however it is accomplished, firms will capture this revenue from their clients.  All for the same work.

Has the value to the client increased?  Of course not. 

There has been so much negative buzz lately about value received, hourly rates, paying for associate training, and so forth.  This salary increase will do nothing but increase the economic pressures that drive wedges between clients and some of their lawyers.  Perhaps this will be the event that marks the death knell of the hourly rate.

David Maister joins blogosphere

David Maister, who inspired me with several presentations and inspires me with his books and articles, has joined the blogosphere.  He is blog is called Passion, People and Principles.  He explains the blog name this way:

The title of my blog derives from a comment made by Tom Peters who observed in his blog that ”...(it’s) interesting how all these gurus—e.g. Stan Davis, Gary Hamel, David Maister—come to put People & Passion first as they age. Hmmm…”

David certainly qualifies as a thought-leader in the client service and professional service firm management areas.  We are lucky to have him join the medium.

Branding? YES!

Dan Hull recently posted that "Law Firm Logos are Goofy, Useless, a Waste of Time and Money."  And then he promised to let us know what he really thinks about logos.  Seriously, Dan drew on a post from Tom Kane who writes the Legal Marketing Blog.  Tom's post on logos drew on a post by Bruce Allen of Marketing Catalyst.  Tom, in turn, drew on the thoughts of Dave Opton at Six-Figure Learnings  And so on.  All have informed my thinking about logos in specific and branding more generally.

I also have spent considerable time reading and thinking about Michelle Golden's insights on branding (Golden Practices).

I think I am ready to share my current thinking.  Logos by themselves probably mean very little.  That said, however, logos in the context of a meaningful branding program probably means a great deal.  A recent post by Dan Hull passed along the comments of a third year law student:

He asked a third-year law student in the audience if, based on websites, brochures and materials sent to law student recruits, she could differentiate between the many firms with which she was interviewing. She paused for a long time before answering. Finally, she responded as nicely as she could. "Frankly, based on the materials, all of you seem to be the exactly the same."

Based on comments like this and the relative ineffectiveness of law firm branding, it would be tempting to conclude that branding doesn't work.  But as you know, I believe that the world of business is a better source for answers to these "business of law" questions.  Unquestionably, the answer is that bad branding doesn't work.  Equally true is that good branding is a central factor in the success of the well-branded business.

What makes for good branding?  Well,  this post has gone on too long.  But the "what does it take question" will provide food for a number of future posts.

Short Summary Of 2006 Marketing Partner Forum

 

I returned yesterday from the 2006 Marketing Partner Forum.   I had the honor of serving on Thomson Legalworks' planning committee, so I am biased about the programming. But having acknowledged that, I do believe it was an excellent program.  Congrats to the Legalworks people who worked so hard.  The kudos you have received have been well-deserved.

On a personal level, I not only had the opportunity to watch Gerry Riskin present, but I was able to spend several hours speaking with him.  What a guy! Not only substantively impressive, but a terrific person.    I also had a chance to visit with Larry Bodine who was covering the event and has posted several entries about it.  I had a terrific discussion with Larry, and was filled-in on his exceptional background by a mutual friend.  Larry is a "substance guy" when it comes to legal marketing.  He has seen it from many different angles and few know the field better.  It was a great opportunity to hear his insights.

I also had the great honor to serve on a panel with Nat Slavin, my friend and publisher of Inside Counsel, and Bob Link, Chairman of Cadwalader, and Jolene Overbeck, CMO of Sherman & Sterling.  Not only did we present, but we spent considerable time talking informally about the industry and its future.  I also was fortunate to get insights from my friends Dennis Duggan and Ellis Mirsky and Mark Wasserman.    And  it was, as always, great to share time with my friends from ALM.

Next year's MPF will be next January at the Aviarra Four Seasons in North San Diego.

 

Is Rainmaking A Learned Skill Or A Natural Trait?

Larry Bodine summarized Dr. Larry Richard's presentation at the 2006 Marketing Partner Forum here.  Dr. Richard is the head of Hildebrandt's  Leadership & Organization Development Practice Group, which helps law firms and legal departments on people issues.  Since the early 1980’s, he has pioneered the application of psychology and other behavioral sciences to the improvement of leadership and management practices in the legal profession. Based on studies of numerous personality traits in lawyers as well as the general population, Dr. Richard has concluded that only 20% of lawyers are natural rainmakers.  As Larry Bodines summarizes, " an additional 55% of lawyers can learn to be rainmakers.  'They will make efforts to do marketing; so your goal should be to reduce their discomforts,' [Richard] said.  The remaining 25% are hopeless at marketing and should be ignored.  'The trick is to figure out who they are and not to waste time on them,' [Richard] said."

Dan Hull picked up on Larry Bodine's post here.  Dan takes issue with Dr. Richard's conclusions, writing:

My own sense (not a Hildebrandt study, of course) is that less than 20% of us--10% at most--can really put it together to be rainmakers. But I think that the remaining 90% can be taught to be marketing-oriented in very effective ways for both repeat and new business. Each lawyer can help and no lawyer should be given a pass. The discipline of getting everyone in the firm to be part of your marketing culture and making it stick is the hard part. Very few professional firms I know of have a client-focused or marketing culture. Even when they want it, they won't do "the work".

 

I was at Dr. Richard's presentation, and I have heard him present his data previously.  I also have had a chance to speak with him about it.  I agree with Dan's sentiment about "the remaining 90%" but have to say, respectfully of course, that I believe that he and Dr. Richard are speaking about slightly different things.  I suspect that when Dan refers to teaching lawyers to be "marketing-oriented", I suspect he is speaking about activities that go beyond what Larry Richard considers to be marketing.   For example, see this post from Marketing Catalyst discussing the difference between sales and marketing.  Dan's comments strike me as a discussion of marketing while Larry Richards appears more focused on sales.   Moreover, while I agree with Dan that no lawyer should be given a pass in creating a "client-focused" culture, there is a difference between having a client-focused culture and marketing that culture to prospects.

 

I encourage Dan and everyone else to find a chance to listen to Larry Richard speak.  He presents a huge volume of data in a very humorous way, but at the same time in a way that is compelling.  I, for one, find the data persuasive. 

My Marketing Partner Forum Speech Slides Attached

I spoke on smaller firms staying competitive in a changing environment.  My powerpoint is attached.

Marketing Partner Forum--Lamb Speech Slides

Its Not Price. Its Value.

Dan Hull has a good post on his What About Clients blog about price competition.  His approach is not to compete on price but instead to compete on service, not price.  His insight, which I cannot improve on in any way, is that "if clients come to you for price, they will leave you for price."

This thinking mirrors Tom Peters' view.  Tom has a great slide that he uses: "You can't compete with China on cost or Walmart on price."  So don't. Compete on value.

Good summary on Traits Clients Seek

Fascinating post by James Hassett of Law Firm Business Development summarizing a presentation by Paul Clifford at a recent New England Legal Marketing Association meeting. Clifford is a former managing partner at a mid-size Boston law firm.  Clifford's thesis is that the market for legal services is becoming more and more competitive.  Writes Hassett:

Many of the trends Paul discussed are driven by a single indisputable fact: “The market for legal services is becoming more and more competitive.” It’s a buyer’s market. As large clients continue to merge and industries continue to consolidate over the next few years, this will become even more true.

Hassett goes on to discuss Clifford's comments on the importance of listening, how critical client satisfaction interviews have become and how few firms actually do them, the speed of service, and the accessibility and responsiveness of the lawyers.  He also emphasized the importance of understanding the client's business. I've discussed each of these traits in prior posts.

But here is Clifford's winning line: “The biggest challenge is to get lawyers away from thinking like lawyers, and to start thinking like business people.”

Outsourcing Litigation Oversight

In December, I ran a post about outsourcing the legal function or at least parts of it (here).  My thesis was (and remains) that certain inside functions could be handled better by outside counsel on a fixed fee that would be competitive with or less than the cost of the inside lawyer).   The Wired GC has written a very interesting critique of this idea.  The first noteworthy comment is about benefits from the process of considering whether work could be outsourced:

Nevertheless, this process can have the effect of forcing the GC to take a hard look at what work is being done. Some may be outsourced to law firms. Some may be redistributed internally to lawyers, given to non-legal staff, or restructured using appropriate technology. And–possibly best of all–some work may no longer be done at all.

Frankly, these collateral benefits were ones I had not even considered.

Wired GC goes on to find some potential problems with the example I used, including the again increasing salaries for new associates and the fact that most lawyers would not like to "oversee" litigation being handled on an hourly rate by others. 

It is, quite obviously, impossible in short posts such as those in our blogs to provide a detailed proposal and analysis of the benefits of any significant idea, particularly those such as this one which are so very fact-specific.  But let me say this.  My use of the term "oversee" (as in "overseeing litigation") was a poor choice of words used to summarize the many responsibilities an inside lawyer has with respect to a lawsuit.  Issues such as budgets, settlements, insurance coverage, keeping business units apprised, setting reserves and so forth all are significant factors.  But I continue to believe my hypothesis is true--not for all but for many.  The functions I described above could be performed as well or better by a senior litigator whose salary prices her out of the marketplace for many inside counsel positions.  Why would a firm perform such work on a fixed fee akin to her what it would cost to handle these functions in-house?  Many firms (and I know this from my own experience) would be thrilled to do so to get a foot in the door.

I am thrilled that the Wired GC found my post worthy of comment.  I hope he and other inside lawyers find the idea worthy of consideration.

New Book by Ron Baker: Pricing On Purpose

Thanks to Michelle Golden at Golden Practices for her discussion of Ron Baker's new book, Pricing on Purpose.  The book is available here.  Baker is a thought leader in the area of value pricing, and I have rarely seen Michelle as worked up about a topic as she is in her post of the book.   I've already ordered it.

Emasculating Chief Marketing Officers Is Not A Good Thing

There seems to be a spate of examples of leadership failures and successes.  Having provided an example of bad leadership and one of good leadership, here is another example of bad leadership.  Thanks to Larry Bodine for this recent example in Larry Bodine's Legal Marketing Blog.  I left Larry a note--I would love to know which firm the story is about--we could start an over/under pool on how long the firm will survive before becoming merger fodder.  It continues to astound me that firms devote substantial resources to hiring top marketing officers and then do everything possible to emasculate them.  Michelle Golden kindly picked up on an earlier comment I had made and elaborated on it quite effectively in her Golden Practices.

Revisit Tom Kane's Top Ten Marketing List

Tom Kane  of Legal Marketing Blog kindly picked up on a couple of my recent posts and weaved them together in a way that had not occurred to me, but which makes great sense.  In the course of his post, he referred to his Top Ten Marketing Tips, which I did not recall reading.  So I searched, and WOW!  Some of his posts are true marketing, but others fall into the "great client service is great marketing" category, making it highly relevant here.  His list needs to be reposted, highlighted and repeated frequently.  Print it and tape it to your computer screen so you see it every day.  Here is it in truncated form--be sure to reach each post.

Tip 10:  Be Active in Organizations

Tip 9:  Network with Super-connectors--get to know and spend time with those people who are the kind of people who know everyone and love making introductions.

Tip 8:  Take A Reporter To Lunch

Tip 7:  Write Articles of Interest

Tip 6:  Talk It Up With More Speeches

Tip 5:  Communicate Often

Tip 4:  Offer To Make A Proposal

Tip 3:  Seek Client Feedback Often

Tip 2:  Entertain Your Clients

Tip 1:  Visit Your Clients

Its a great list.  I can't overemphasize the power of  Tips 1, 2 and 3.  Its hard to spend time with your clients, especially if your clients are "national" and not in your home town.  But its worth the investment to spend time with them.  Face time is more valuable than gold. 

Good Leadership Story

 

I've been writing more about leadership and execution lately because they are essential factors for success.  Bruce MacEwen at Adam Smith, Esq. has a good post about Clifford Chance's Peter Cornell that talks about these factors.

 

The One Question To Ask Clients When Doing Satisfaction Surveys

I've written several times about client surveys.  For example, here and here.  The case for conducting client surveys is so compelling that its hard to believe that there are firms that don't do them, let alone that the majority of firms don't do them.

I saw from this post by Dan Hull that his firm does client surveys and that he is thinking about methodology.  I also saw from his post that Jim Hassert at Law Firm Business Development has a series of posts about doing satisfaction surveys.  They are Part I, Part II and Part III.  Jim describes Akin Gump's experience and its manner of doing the surveys.  Interesting.

I have been doing client surveys for a decade.  With that experience, I believe the lawyers involved in serving the client should not be involved in the satisfaction survey.  Familiarity can inhibit candor.  I have always believed that the senior members of firm leadership should do the surveys since their presence underscores the importance of the process.  In December, however, I occasion to attend a breakfast meeting hosted by BTI Consulting Group.  BTI provides data-driven analyses of questions that vex law firm marketers.  The data and analysis relating to client surveys can be purchased here.  The most interesting things for me where its conclusions that outsiders can more effectively get the client's real feelings and that the number one question for determining client satisfaction is not a ranking on any kind of scale, but instead whether the client has referred the firm to someone else.  Referrals are the byproduct of true satisfaction.  For me, these two points were food for thought.

 

You have to work hard to get the "Eye-sparkle factor"

Tom Peters regularly speaks and writes about the importance of talent.  In his book Sixty, Tom writes in point 24 that "he/she who has the . . . best roster . . . rules."  A year ago, Tom told this story:

Some people's eyes have an engaging, infectious "sparkle." Some don't. Hire [only?] those who "have it"?

I was lecturing on "talent selection"—and the use of unconventional measures for so doing. At a break I made the following comment to a youthful Participant: "Suppose you & I were opening the restaurant of our dreams. We'd both put in $75,000 ... effectively our life's savings. We were 'betting the farm.' We had a great idea, a very good location, a terrific chef. Now the time had come to hire waiters & waitresses. Numerous applicants had satisfactory+ 'restaurant experience,' but several didn't. One young woman [man] in particular was a rank amateur—but had the most compelling 'sparkle' in her/his eye. How would that 'sparkle' rank in your hire-no hire consideration?" No great surprise, we both agreed, despite a 30-year experience differential, that the "sparkle" pretty much ruled. (Or some like measures—e.g., hustle, enthusiasm.)

At the same time, I was reading Larry Bossidy's book Execution: The Discipline of Getting Things Done.  Bossidy spends considerable time talking about the investment in interviewing he made as CEO of Honeywell.  Bossidy, himself, would make many of the calls to the candidate's references.  He writes:

Many CEOs have told me that my reference calls were different from most because I focused so much on the candidate's energy, implementation and accomplishments.  I ask, "How does he set priorities?  What qualities is he known for?  Does he include people in decision making?  What is his work ethic and his energy level?"  Those types of questions get at the person's real potential.

One question that I determined to ask candidates that I am interviewing--what makes you a good hire for us?  Candidates that talk about themselves without talking about the firm are missing the boat.  Great people help make great teams.

The Value Of Vigorous Debate

I'll admit it:  I was a high school and college debater.  Those were formative years and many lessons I learned have stayed with me.  Perhaps the most important is the value of vigorous debate.  Looking for ways to defeat your colleagues' arguments.  We believed that if an argument could survive our practice, it had an excellent chance to survive in the tournaments when rounds were won and lost for real.  The arguments about arguments were loud, raucous and at times vicious.  But never personal.  After arguing like crazy, we were still best friends.

I was reminded of this lesson as I continue to read Execution: The Discipline of Getting Things Done.  Larry Bossidy and Ram Charan make the point that as a leader, "you're trying to promote the ability to intellectually debate important points.  It doesn't matter who wins and who loses.  The fact that the debate happened and resolution occurred is good in itself."

I think that is going too far.  Debate points by themselves don't count for anything in the real world.  But the ability of crisp intellectual critique of an idea is bound to expose weaknesses in the idea, lead to a better idea or generate confidence in the new idea.  Each of these is an inherently valuable outcome.

Blogging serves this purpose outside law firms.  But inside firms, I don't hear much about vigorous debate about firm matters.  Shouldn't there be?

Four Realities of Value Based Pricing--The Second Reality

In November, I began a discussion of value-based pricing. I had clipped a piece that discussed the "four realities" of value pricing but had omitted to clip the name of the author.  I now know that it was Mike McLaughlin of Guerrilla Marketing for Consultants.  Now that I can attribute the material to Mike, I'd like to continue the discussion today focusing on his second reality:

Reality #2: Clients are reluctant to leave their comfort zone.

For decades clients have used the simplicity of the hourly rate to help make decisions on choosing consultants. The hourly or fixed rate gives clients an apples-to-apples comparison—at least on price—of their alternatives.

Sure, the firm with the lowest hourly rate isn’t always the winner, but clients like having a standard measuring stick. Consultants know that old habits die hard, and that the hourly rate or fixed-fee pricing won’t go away quietly.

Many clients need a powerful incentive to budge them from old habits. After all, if a client can hire a consultant on a fixed-fee basis to help reduce manufacturing costs, for example, what would motivate that client to pay a value-based fee, which is likely to be higher?

 

“You have to demonstrate a dramatic difference in measurable results as compared to the rest of the pack...”

The answer is reflected in just about everything you do, from marketing and selling to delivery. You need to rethink your marketing communication, sales approach, and your value proposition to effectively convert clients to a value-based billing approach.

You have to demonstrate a dramatic difference in measurable results as compared to the rest of the pack or your clients will head right back to their comfort zone—the hourly rate.

I have struggled with this concept.  I absolutely agree with the premise--old habits die hard.  But I am a litigator--how do we discuss "value" in the concept of litigating a case.  If the case could potentially cost a client $100,000 to defend, and there is a 10% chance of a $1 million dollar verdict, perhaps the value is $200,000.  But how does one distinguish--really distinguish--between a 10% and 20% chance of a certain result?  That difference--$100,000--might be real money to some.  As long as we are left with these kinds of vagaries, I have reservations about a company moving to "value" pricing for litigation.  Certainly budget considerations might drive the litigant to something other than hourly rate payments.

Invitation To Ralph Palumbo To Join Blogosphere

From time to time, I have the opportunity to provide examples of great client service or innovative thinking in the area.  Today, I want to highlight the work of Ralph Palumbo of the The Summit Law Group in Seattle.  The firm has a great story to tell:

 We formed Summit Law Group to revolutionize the way legal services are provided to law firm customers. Most law firms provide legal services in the same way that they did 25 years ago. Those firms focus on lawyers, not customers. Their practice model relies on large numbers of people billing large numbers of hours, often without regard for the value of the work to the customer.

We reject that model. We believe that the market for legal services has dramatically changed in the last decade. Our mission is to think creatively and proactively in formulating the most effective and efficient solutions to your legal needs.

Here's the example of focusing on the client that I really like:

 Summit Law Group’s value adjustment line is a cornerstone of our billing approach. We empower each of our customers with the right to adjust our billing, upward or downward, based on our customer’s perception of the value received, not ours.

How many of us trust our clients enough to give them this discretion?  Ralph is a leading thinker in the area of client service.  To my knowledge, he is not an active blogger.  But we all would benefit it he were.  Ralph, consider this an invitation.

NBA Centers Illustrate The Value Of Being Big

The Greatest American Lawyer has a very interesting post titled "Being Big Provides No Intrinsic Value To The Client At All." GAL posits this question:

 So what value is there to the client in being big? Oh sure, big law has developed a method to bill clients more hours and to drive its own internal revenue stream. There is no question that big law is the singularly perfect business model for that. But, I am talking about the client. I am talking about providing value to the client. Value defined as efficiency. Value defined as skill. Value defined as the best legal resource per dollar. I can't think of a single advantage that big law has on those issues. Can you?

Dan Hull picked up the same theme here.  I thought I might pick up on the discussion and try to answer the question, at least from my perspective.

Let me provide a bit information about me that no doubt colors my thinking.  When I left law school, I joined a firm of 70 lawyers, firmly "mid-sized" by then-existing Chicago standards.  That firm grew and grew, and by the time I left 18 years later, it was about 400 lawyers in 5 cities.  I joined a "boutique" litigation firm of 30 lawyers where I have been for the last 5 years.  I've never seen life as a solo or even a firm as small as Dan's.

I have come to believe that firms are a lot like NBA Centers.  Great teams frequently are built around great centers--Bill Russell, Wilt Chamberlain, Kareem, Shaq, to name a few.  But not all great teams have great centers--take the Chicago Bulls of the 1990s.  Remember such luminaries as Will Perdue, Stacy King, Bill Wennington?  Probably not.  Michael and Scottie did not need a great center to have a great team. But even centers like the great ones I named have limited value in certain situations.  When North Carolina played four corners offense, who remembers their centers?  When the game is run and gun, the big guys barely have time to get up and down the floor before the game is coming back the other way.

The point of this is that "there is a season for everything."  Big firms do have their place.  When corporations have huge, immediate problems, they frequently don't have time to seek out great virtual teams or joint ventures of smaller firms.  They need highly educated, well-trained bodies immediately.  Big firms can provide that resource.  Likewise, when a corporation wants to consolidate its work in order to obtain a better overall fee, big firms have the breadth of skill to be able to offer the client what it needs.  When a transaction is complicated and involves tax, real estate, finance, benefits, labor and corporate issues, big firms tend to be the places that have people with expertise in all of those disciplines.

It used to be that people went to big firm because they had library resources unavailable to the small firm or solo.  In those days of old, big firms had the secretaries who could crank out multiple drafts of briefs, lawyers who could "cite check" and bodies who could search out answers to interrogatories while drafting similar requests so numerous that they could just overwhelm the smaller adversary.  With the advent of the computer and its ubiquity, those advantages are of historical consequence only.

One other thing remains, though it too is changing in my view, however slowly.  That is the "safety" factor.  People buy comfort.  People buy political security.  I've heard it said that no one was ever fired for hiring Skadden, at least not until the bill arrived.  But it is inescapably that where consequences matter, there is safety in size, at least if you're retaining Shaq or Kareem.  There isn't great security in retaining Will Perdue.

What does all this yammering mean? It means that there is no single right answer to GAL's question.  It means that some big firms are as worthless as a slow, uncoordinated giant who can't score, rebound or play defense.  It means that the elite big firms will continue to provide riches to their partners.  It means that sophisticated clients will look beyond size and focus on the team.  Being from Chicago, I'll stack Michael and Scottie's teams against any. 

For me, I believe that the best answer is better explained using a military metaphor.  Sometimes the number of boots on the ground matter.  That's why we have the Army and Marines.  Sometimes, and almost always for the really tough problems, you're better off with an elite Navy Seal Team or the Delta Force. Small and elite is where you get the best of the best.

Cutting Inside Counsel: Perfect Opportunity For Fixed Fee Agreements

About I month ago, I wrote about "Outsourcing The Legal Function."  Today, I was reading this article at law.com about five questions law firms face for 2006.  The fifth question is whether client relationships are more critical than ever.  The author observes that "according to a recent law firm study by BTI, the vast majority of companies are shrinking their in-house counsel team, in part because they believe this will cut costs."  I attended the seminar where BTI first presented this data, which is very strong.  The reason, BTI believes, for this phenomenon is that reducing inhouse body count cuts inhouse costs, and that these numbers are more important for General Counsel than outside counsel spend. 

Whether the reasoning reflects the truth of the situation, it is inescapable the General Counsel should be thinking about outsourcing parts of the legal function.  Certainly the work can be handled by outside counsel.  For example, if a company has a lawyer overseeing litigation, any work she is doing likely could be done as an outside lawyer.  In terms of the value of the work, that value is fixed--what was the all-in cost for the inside lawyer?  Might the law firm be able to provide superior service?  Possibly, especially if the outside firm has the breadth of talent to manage (not necessarily handle) litigation with greater expertise brought to bear.  And quite possibly, someone more senior to the inside lawyer will make better judgments about tactical and strategic matters.  Experience does count for something after all.

With this said, I wonder why more General Counsel are not considering outsourcing as a solution.

Another example of lack of accountability hurting a firm

I read every post Gerry Riskin makes.  When I saw a post that began . . .

It's their funeral...

. . . I was truly worried that somebody close to Gerry had died.  But instead I read about the death of common sense at Dorsey & Whitney's London office.  Please read the story which is about "socially dysfunctional, destructive lawyers in their midst."   But focus on the comment made by Gerry's wife:  "Sometimes my wife Bethany really nails the point - her reaction was: Dysfunctional people with power are going to have to realize that their behaviour simply is not anonymous anymore."

My question is this:  what were the ramifications for this indefensible, destructive behavior?  Too often, firms see the green that comes from the adding up of those "7.5 hours" and simply turns its back.  If no price is demanded, none is paid.  That response is incredibly short-sighted, but incredibly common.  Firms need to remember that episodes like this are like biopsy results showing a treatable malignancy.  You need to operate fast, but he patient can be saved.  But if you wait and hope for a recovery, none is likely. 

The Importance Of Execution

On January 2nd, I wrote about the importance of execution, juxtaposing the notion against the many posts talking about New Year's resolutions.  In my post, I recommended reading Execution: The Discipline Of Getting Things Done, noting that Tom Peters had recommended the book on his blog.  Tom has now posted about his favorite "biz book" for 2005.  Here is what he had to say:

" My choice as my favorite Biz Book of 2005 is Execution: The Discipline of Getting Things Done, by Larry Bossidy (& Ram Charan). Fact is, it's a 2002 book, but I just read it word-by-word this year as I prepared to do a gig with Bossidy. Amazingly it is, as I see it, the 1st & only book wholly devoted to "getting things done," and the 1st and only book that suggests the there is a describable, "systematic" "discipline" (and "culture") of getting things done. I'm doing a seminar on change in a few weeks, and when the Client asked me for a pre-reading assignment I bypassed my books and recommended Bossidy/Execution."

If you click now, you can be reading this book by Monday.  It's worth paying for expedited delivery.  All the great ideas in the world don't amount to a hill of beans if the rubber doesn't hit the road.  (I think we should have a contest to see who can mix the most metaphors in a single sentence.)  Seriously, if Tom Peters says its so, its at least worth reading.

Good discussions about Branding

Dan Hull has a good summary of some inter-linking discussions involving Michelle Golden  (a second post here) and Tom Kane, along with some comments of his own. This summary follows up on Dan's post here about the comments of a third year law student at the recent Renaissance Weekend in Charleston, South Carolina. Add to this, Larry Bodine (now enjoying the Tucson weather) just posted about the lack of differentiation among law firm web sites.

I love these discussions.  They reflect something so fundamental about the way lawyers think and view the world.  As a profession, we are conservative, change resistant, risk averse and incredibly unimaginative.  Sheep-like in terms of how we follow each other.  We're herded together, as a group, only there is no shepard leading us to safety.  Generally, when it comes to traits businessmen take for granted, lawyers are not gifted.

Here's one way these characteristics manifest themselves.  Hire a gifted marketing director, and then try to substitute the lawyer's judgment for the marketing director's.  Because we lawyers know so much.

Clients: Are You A Big Fish In The Pond?

Are you really important to your law firm?  If not, might you be better off by being a premier client at a different firm?

Those are two questions raised by Rees Morrison's post "Be primary to a regional firm rather than tertiary to a national powerhouse" in his Law Department Management blog.  His conclusion:

If your revenue accounts for a significant portion of a law firm’s billings, or even the largest chunk of a major partner’s billings, you will be treated with respect, deference, and extra efforts. If the same amount of gold rarely gets caught in the sieve of a huge firm or a huge biller, your prospects will be much worse.

Rees doesn't answer the questions he poses.  I will, however, because this is the dirty little secret of big law firms. Not every lawyer in every large firm is an exceptional lawyer.  Some are very average.  Some associates are less than average, and some are so unconcerned with their career at the firm that they are not willing to go the extra mile.  There are times, and at times they are frequent, where limited resources have to be allocated.  Not enough associates.  Or a choice between a good associate and one who is not as good.  Same with paralegals.  A partner facing a choice between trying a case for a huge client and trying a case for a smaller client.  Who gets "handed off"?  Anyone who has worked at a large firm has countless examples where smaller clients received short shrift. Its like making sausage--if you don't talk about it, maybe you can ignore the process while you're being served.

There are great law firms that are smaller than the major firms.  There are elegant boutiques where your business would make you the dominant client.  Those are the places to be.

Six Sigma Not A Popular Tool Among Amlaw 200: What would Jack Welch think?

Altman Weil did a survey of the Amlaw 200.  Sixty three firms responded.  The survey is available from Altman Weil and it is discussed in the January 2006 issue of American Lawyer.  The survey covers many areas and I will be discussing it in other posts, but one topic addressed was use of Six Sigma by these firms.

Three firms, 5.1%, had utilized Six Sigma.  Five firms, 8.5%, have not used Six Sigma but plan to in the future.  Fifty one firms, or 86.4%, have not used Six Sigma and have no plans to do so.  Given the success achieved by many companies who have implemented Six Sigma, I was inclined to be surprised that more had not tried it.  Then I remembered that these were law firms.  Populated by lawyers.  The people most resistant to change assembled in a single profession.  Oh well.

For what its worth, of the three firms that had tried Six Sigma, one found its experience "very successful," another found its experience "successful," and the third found its experience "neutral."

Annual Blawg Awards--New Category Needed

Supposedly being relentlessly focused on client service and trying always to be looking at things from the perspective of a client, I'm ashamed to admit that this wasn't my idea.  But it is a good one.  We need to add a "Best Inhouse Counsel Blawg" for all future award ceremonies.  Those blawgs focusing on the needs and interests of inside counsel would be eligible.  Anyone disagree?

 

The importance of proofreading

This story illustrates, humorously, why you should proofread your invoices very carefully.

The Essence of Leadership

I write from time to time on issues of leadership. Some might wonder what leadership has to do with client service.  In my view, the answer is "everything."  I was struck some time ago by a slide provided by Tom Peters.  The quote he uses is this:  "Management has a lot to do with answers.  Leadership is a function of questions. And the first question for a leader always is "what do we intend to be?'  Not what are we going to do, but what do we intend to be."  If the answer to that question does not somehow involve a fanatical commitment to client service, your firm will never have what it takes to provide great client service. For this reason, leadership is central to the issue addressed in this blog.

If you are interested in leadership, read this article from Harvard Business School on-line publication Working Knowledge.  There is a great definition of a leader: "Leaders are "people who leave their footprints in their areas of passion." The other critical lesson is the explanation of what leaders do:

In a sense, great leaders have to be ambidextrous. On the one hand, they have to be able to execute capably within the current business paradigm, "the way we do business." On the other hand, they must be able to reflect on the current paradigm, find ways to fundamentally improve it, and manage the large-scale change to a successful conclusion. You need two hands, and a lot of commitment, to change the propeller on the airplane in mid-flight, but that capability is the essence of successful leadership.

 

Think of it this way: Someday your current job will be a line entry on your resume. Under the entry, you'll have two or three bullets to describe your major accomplishments. "Did a good job of doing what always was done" can't be one of them.

"Doing a good job of doing what always was done" is the ante; it's what you have to do to keep the job. The bullets, your major accomplishments, come on top. They are your successes at changing the current paradigm, and this is how you showcase your leadership.

By the way, there is a lot of power in reflecting at the beginning of a new job on what you want the two or three bullets to be, and deliberately setting about building them over the course of your job tenure. Otherwise, you run the risk of having them simply be the incidental byproduct of what opportunities happened to come your way.

  The result of quality leadership is success.  The failure of leadership generally leads to failure on a broader scale.  The article explains:

Some companies have a culture of relentless, almost compulsive, improvement. No matter how good the company is, it should be doing better. It reminds me of a Smithsonian exhibit on American ingenuity, "If We're So Good, Why Aren't We Better?"

By contrast, other companies are smugly stuck in the past. I remember one vice president telling me that his company was doing everything right because "if there were a better way, we would have found it, and we'd be doing it."

The lesson: When you have the lead, step on the gas. After all, that's how you got there.

Law firms are not usually places where great leaders are found.  They are structured in an "anti-leadership" form, creating a "herding cats" problem.  I'll write more on the structure issue later, but the importance of developing a leader should be evident from the HBS story.

GC Technology Wish List

With thanks to Dennis Kennedy who posted about this article on Between Lawyers, I would be remiss if I didn't highlight the article by two inhouse lawyers in Legal Technology.  The Article is simply called "GC Tech Wish List For 2006."  The list is short, but important.  As we move into 2006, the authors state that " corporate counsel (and general counsel in particular) will increasingly look to technology to meet demands for faster and more cost-effective legal work."  The list:

1.  Faster Communication." When every teenager has instant electronic access to two dozen friends, how long should a GC wait to hear back from her outside counsel? Even a brief acknowledgment that a message has been received is reassuring."

I find it hard to believe that this is a technology issue as much as it is a mind issue. It is so easy to be responsive these days that failure to be responsive is a matter of intent or foolishness.

2. Extranets." Law firms increasingly are providing extranets for clients with password-authorized Internet access to certain information on the firm's Web site. Law firm extranets permit outside lawyers to collaborate with clients and in-house counsel on tasks such as research, document drafting, discovery review and developing litigation strategy. They also can be set up to allow clients access to review documents, billing data, or the progress of on-going matters."

3.  Billing Software.  " How long will it be before all lawyers undertake e-billing?"

'nuff said.

4.  Document Management Software. 

5.  Electronic Data Discovery Software.    "One of the most pressing problems facing corporate counsel is compliance with electronic data discovery requests in litigation, regulatory or administrative actions. The days are long gone when discovery requests could be met by pulling some files, photocopying some documents and Bates-stamping into the evening. The volume of electronic records grows every year, and courts are more and more exacting and demanding in the EDD requirements they impose."

I posted about this precise issue here.  Lawyers focused on their clients' needs need to be ahead of the curve on this issue.

6. Document Assembly/Contract Process Software. For a terrific discussion of this topic, see Dennis Kennedy's post here.

This wish list should be target list for law firms.

Thanks To So Many

Dan Hull made a flattering comment about my blawg in his What About Clients, and I am thankful for his kind comment and the fact that he made it publicly.  Dan was thoughtful to include a link to the Blawg Review Awards 2005 where In Search of Perfect Client Service was (based on one person's view) named Best Practice Management Blawg.  While gratified that someone other than my mother thinks highly of my efforts, I've been exposed to too many gifted blawgers to think that my blawg is anything other than one good one among many terrific ones.

A number of people, through their inspiration, commentary, time, or just encouragement helped me in 2005.  I owe them a great deal. While this list is no doubt incomplete, I do want to thank Dan Hull, Dennis Kennedy, Gerry Riskin, Larry Bodine, Matt Homann, Tom Kane, Michelle Golden, Monica Bay, The Wired GC and The Greatest American Lawyer.  And a special note of thanks to Ernie the Attorney, who endured so much this year and so powerfully shared his experiences.  My great thanks for your help and inspiration in 2005 and best wishes to all for a great 2006.

Execute Those Resolutions

Happy New Year everyone!

I've been reading a number of great blawg entries about New Year's resolutions.  Tom Mighell over at Between Lawyers writes about New Year's Tech Resolutions (a great list, I might add).  Michelle Golden in her Golden Practices with some great insight about "saying no" in 2006.  Tom Kane at LegalMarketingBlog telling all firms to make sure they have a web site.  And no list would be complete without mentioning Matt Homann's many posts on New Year's resolutions in his terrific the [non]billable hour.  You need to read his entire December 2005 archive to catch all his sage counsel.  There are so many more.  And virtually all have great advice.

I am going to suggest but one resolution.  Read Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan.  Tom Peters recommended it here and I read it over the holidays.  Outstanding book.  The subtitle of the book says everything.  Thinking great thoughts without ensuring they are effectively implemented is a recipe for failure.  Its a quick read.  Resolve to read the book.  Resolve to follow the wisdom of the authors.  If you do, you'll look back on 2006 as a great year.