In Search of Perfect Client Service

Good writing: Breaking From Useless Traditions

Good writing is good writing.  Or is it.  Dan Hull had a terrific post on how we write for our clients.   I posted a comment, suggesting good writing knew no venue, and it shouldn't matter whether the writing was a pleading or a letter.  Or, as I just posted, an invoice.  Communications are effective when they are clear, concise and direct.

Dan has just responded to my comment with another very thoughtful post.  In this post, he notes that the norm in many courts is to use enough legalese to fill a truck.  After considering the value of piecemeal change, he issues this challenge to himself and the rest of us: 

"Doesn't changing legal writing to just clear and simple writing come down to to leadership? Maybe I should start setting a better example. Why not buck the traditions 100%--whether it's writing to courts, to clients or to other lawyers--and never use those expressions again? Ever."

That sound you hear coming from my office is loud clapping.  A standing ovation for Dan.  Hooray!  I will be with you every step of the way.

Actually, a confession.  I practice in a lot of different states. I can't remember all the terms some courts get their kicks from.  I don't know what a demurrer is, but I do know what a motion to dismiss is.  So I use words I know.  A simple mind yields simple writing.  I'm lucky in that respect.

Under promise and over deliver is not simply falling over the goal line--its blowing through the back of the endzone!

Interesting post by Dan Hull taking issue with the "under promise and over deliver" philosophy of client service.  As I understand Dan's argument, the philosophy doesn't apply to lawyers because client expectations are so low that "over delivering" doesn't really accomplish much.  Sort of like being the tallest midget.

Dan's argument continues that lawyers really need to change the way people think about lawyers by "communicating in all aspects of your work that you care deeply about your lawyering for them, you want to serve their interests on an ongoing basis and that it's a privilege to be their lawyer."

I guess I don't see the difference here. The "under promise and over deliver" philosophy is not a suggestion to promise "2" and deliver "3".  It is a philosophy that says deliver something that defies expectations, not merely surpasses them.  Its not a negotiated set of expectations, but rather a belief that doing something radically different--better--than what is expected is the surest way to draw positive attention to yourself.  Its Harry Beckwith 101.

The Ability To Serve

Many of you know I spent the last month and half in Los Angeles on trial (non-suit against my client!).  So I'm catching up on a lot of reading that I missed.  This morning, I've been reading several weeks worth of the Chicago Daily Law Bulletin.  The December 1, 2005 issue contains a reprint of a Wall Street Journal article entitled "As more cases settle, firms seek pro bono work to hone associates' courtroom skills."  It leads with this paragraph:

"Marc R. Kadish, a partner at Mayer, Brown, Rowe & Maw LLP, recently made an offer to federal judges in Chicago, where the law firm is based: The 1,300 member firm would represent, pro bono, any prisoner with a case set for trial who didn't already have counsel."

The article discusses the inability of lawyers at big firms to develop trial skills and suggests that this is a recent phenomenon.  Actually, the problem has been around for some time.  I worked at a very large law firm before law school and was working on a large antitrust case that went to trial.  Two of the partners on the case had never tried a case before, and both had been with that firm for more than 14 years.  At my former firm, a number of people in the litigation area never tried a case during my 18 tenure with the firm.  I don't think these two experiences are atypical.

When it comes time to retain lawyers for litigation, clients need to know what they are getting.  A litigator--someone who settles cases and files motions--is different than a trial lawyer.  Make no mistake about it, your adversary will know which type of lawyer is on the case.  They know that a capable trial lawyer is a far more formidable adversary.  This issue, which requires some candor from law firms, is one that should be fronted with clients.  They should not be allowed to assume to just because a lawyer can talk a good game, they actually know how to play it.

Remember, David beat Goliath, not the other way around

Nice posts by Tom Kane and Dan Hull about a topic close to my heart. Both talk about the fact that GCs do, in fact, hire smaller law firms.

I made the move from very large to boutique firm, so I have seen this from both sides.  The best way for me to discuss this issue is to use a military analogy.  Sometimes, you do need the Army and Marines.  But sometimes, its better to use Navy Seals or Delta Force.  There are strategic reasons to pick the small, elite force rather than the large force.  Most cases don't require the large force, and hiring the large firm for the routine case is an invitation to overstaffing, overbilling, overlitigating.

I agree with Dan's comment that a client is far more likely to get high quality client service from a boutique than from a large firm.  Small firms can much more easily create the institutional focus on service necessary to provide quality service.

And Increasing Associate To Partner Leverage Benefits Clients Exactly How?

Was flying home from New York this afternoon catching up on some reading.  The November 28 issue of The National Law Journal had an article entitled "A hot topic: associate to partner leverage."  The article focused on several Los Angeles firms who are consciously seeking to increase the number of associates in order to increase the partner's profits.  I started laughing to myself as I was reading.

A piece of free advice.  If you are going to add associates (which does not automatically translate to more work), don't advertise that fact to your clients.  They already don't think they need the headcount they have on their matters.  And certainly don't brag about your brilliant strategy.  That is like throwing cold water at your clients.

It is clear the firms that continue to focus on leverage on stuck in the old way--looking at hours and hourly rates and not figuring out new ways to enhance profitability.  The slower big firms move, the better as far as I am concerned.

How Will Corporate Lawyers Respond To An Invitation To Sleep With The Enemy?

Every month my firm publishes an "Outside Perspective" article in Corporate Counsel magazine.  My partner Jim Morsch wrote this month's article on "Thinking Like Plaintiffs  About Revenue Enhancing Litigation."  Jim has made a lot of money for corporate clients and I wanted to see what he had to say to so I could try to convince my clients to talk to him about "positive revenue litigation." 

On my way to Jim's article, however, I ran across an "Outside Perspective" piece offered by Barry Cohen, called "Sleeping With The Enemy: Why Hiring A Plaintiff's Firm Can Be Smart Business."  Mr. Cohen, a Florida plaintiff's lawyer, makes the argument that many plaintiff's lawyers are really good trial lawyers, that some corporations have hired plaintiff's lawyers for business litigation, and that its good for corporations because plaintiff's lawyers are used to working under contingency fee arrangements.  This piece relied heavily on Ron Perelman's $1.4 billion verdict against Morgan Stanley.  Of course, Mr. Cohen doesn't say that the Perelman case was worked up by Jenner & Block and that the result was aided immeansurably my Morgan Stanley's discovery failings, which ultimately led to the judge telling the jury to assume the plaintiff's complaint was true and that all Mr. Perelman had to prove was the amount of his damages.  Even a defense lawyer would do okay under such favorable conditions. It is interesting that Mr. Cohen didn't mention the case where famed Texas personal injury lawyer Mark Lanier represented Kelly Moore Paint Company in a suit against Union Carbide, which had supplied Kelly Moore wth asbestos fibers incorporated into Kelly Moore products.  Even with Mr. Lanier's prodigious skills, highly capably "corporate" counsel won the case for Union Carbide.

The Cohen "Outside Perspective" piece follows on the heals of several articles about other plaintiff's firms starting to market to corporations, based on same set of arguments. I have bitten my tongue on this topic--until now.  First, I absolutely agree that there are some terrific trial lawyers who represent personal injury plaintiffs.  Some really bad ones too, as well as a lot of really mediocre trial lawyers.  Just as there are some outstanding trial lawyers who represent business interests, and some terrible and mediocre ones as well.  Trial skill and savvy is not a by-product of which side one represents.  It is a set of skills that some have and some don't.  Many lawyers try to differentiate themselves from other corporate lawyers by distinguishing between being a trial lawyer and a litigator.  The point is that a client needs to hire the necessary skill set.

But where the plaintiff's lawyers argument really falls down is on client service.  Personal injury lawyers have clients in name only.  The victims they represent are not like a corporate general counsel or chief litigation counsel who are skilled lawyers in their own right and know the business intimately.  Personal Injury lawyers don't have to be responsive to client needs the way lawyers do who represent corporations.  And finally, plaintiff's personal injury lawyers are't the only ones who are willing to work on a contingency fee arrangement.

Plaintiffs attorneys are great marketers--we've all seen the plethora of television commericals.  I, for one, believe that most corporations will be smart enough to know good schtick when they hear it.  Sleeping with the enemy may be okay in the movies, but in real life it tends to get you killed.

After Hours Training?

Tom Peters just made an interesting post on leadership.  His piece includes this most interesting observation:

Can leadership be "taught"? Oh yes. But as the USMA, USNA, Sandhurst and Parris Island demonstrate, not as a sideline. Effective leadership in the private sector or the military is an occupation, a preoccupation, a trade, a craft, an obsession ... and must be studied and practiced accordingly. For God's sake, it takes six long years to train a halfway decent graduate engineer in formulaic technical skills. Why should we expect to "pick up" leadership skills "on the side" at a B.School or corporate "university"? Fat damned chance.

I’ve made this observation before in the context of budgeting and client service.  Training people in things that are important, be it to the operation of your business or dealing with your clients, cannot be a mere afterthought.  Few, if any, law firms provide real education and effective training in these areas.  They should. Failing to make things that are important to your business an “occupation, a preoccupation, a trade, a craft, an obsession” is a big failing. 

The Annual Rite Of Passage: Raising Rates

Check out this post on Law.com. Brenda Sandburg of The American Lawyer reports that amongst the Amlaw 200:

• Billing rates will continue to go up. Fifty-three percent of respondents expect to increase billing rates by 5 percent or less; 46 percent anticipate raising them by more than 5 percent.

• Profits will keep rising, too. Sixty-eight percent of respondents expect profits per partner to grow more than 5 percent; 27 percent think profits per partner growth will be 5 percent or lower.

Its amazing—99% of law firms “expect” to raise rates, nearly half by more than 5%.  Did they ask their clients?  Are their clients raising their prices?  How many of their client legal departments are facing cut-backs or cost constraints?

At the same time, profits per partner are going up.  More than 2/3 think the PPP will go up more than 5%.  I wonder how their clients feel about that.

I will say that this might be misleading, akin to a peacock showing off its tail feathers.  Impressive, but not relevant.  How many of these firms will be offering discounts that more than offset the increase?  How many “negotiate” the bill on top of the discounts?

As I have said before, the system is phony.  Maybe this is the year some clients will wake up and smell the coffee.

 

You Get What You Pay For, But Only To A Point

From Rees Morrison in his Law Department Management blawg, a reference to and old favorite of mine, the USF&G study showing money saved by using more expensive lawyers.  The description:  

In 1992, the insurance company USF&G evaluated its 250 law firms and dropped 100 of them. It replaced those firms, not with more $80 average an hour firms but with national firms whose average billing rates were over $200 an hour (mercy me!).

At the time, the insurer was paying 10 percent of its litigation budget for claims to law firms and 90 percent to claimants. A little over a year later, the company estimated it had saved $15 million on law firms and $35 million on claims payments!

Query: if higher-billing rate, and thus presumably better-quality lawyers produce such eye-popping savings in total claims litigation costs, why has there been only one float in this parade?

In my view, the right curve for this experiment is probably a bell curve.  After rates get to a certain point, the quality of outcome doesn’t improve, at least not by much.  That is typically the point where a client enters into a “comfort” analysis—ie, you never get second guessed if you retain Skadden (unless of course cost is a factor). 

Peter Drucker

I’ve been carrying around some information on Peter Drucker and intended to write an entry about his profound contributions to the business world.  But I was catching up on some blawg reading and ran across Bruce MacEwen’s thoughtful comments in his Adam Smith, Esq. blawg and I realized I could not improvde on what he had to say.  I found this description particularly apropos:

Drucker's views stemmed from his focus not on corporations in the abstract, or buildings and machines, processes and systems, not in creating elaborate economic or managerial theories:  Drucker's focus was on people. Management's job was to chart a course and get out of the way. People were not an expense but a resource.

It seems like a lifetime of contribution deserves more, but we should all raise our glasses to Peter Drucker.