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In Search of Perfect Client Service

Why lawyers don't seem to get it

BigLaw: Another step in a relentless, vicious circle

Posted in Client Service, Commentary, Hourly Rates and Alternatives

When lost in the desert or a thick forest terrains devoid of landmarks people tend to walk in circles. Blindfolded people show the same tendency; lacking external reference points, they curve around in loops as tight as 66 feet (20 meters) in diameter, all the while believing they are walking in straight lines.

Livescience.com

This natural tendency appears to apply to law firms as well. Yesterday, Above The Law reported that yet another large law firm has raised the associate hours requirement as a result of salary increases awarded in 2016. So what does this mean?

Law firms do not have the ability to “just create more work,” so the extant work now has to support that many more hours.  Won’t clients just love that.  Now they will have to go on high alert to review invoices with that much more diligence (their favorite thing to do).  Then what happens?  Clients object to portions of the bill and resentment builds while firm realization decreases.  This has been going on, and firms, apparently, are not taking the hint.

Will this vicious circle ever end?

 

Dream big. Why not?

Posted in Commentary, General

As a young boy, I vividly remember following Bobby Kennedy’s Presidential campaign. Like his brother Jack, Bobby was greatly admired in my Irish-American household. His death was met with great sadness. I sat riveted during Teddy’s eulogy, and my mind was seized when he said this:

As he said many times, in many parts of this nation, to those he touched and who sought to touch him:

Some men see things as they are and say why.
I dream things that never were and say why not.

 

That quote was seared into my soul. I later learned those words were first used by George Bernard Shaw, in Act I of Back to Methuselah, where he wrote:You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”

The source of the words is not as important as the concept behind the words—being someone who dared to dream big, new things and asks why those dreams could not be realized.

I have never become the person to dream great big dreams like Bobby Kennedy did, but in my own little world, I have tried to dream about changes in law practice and ask why not. Dream to provide clients the knowledge of how much it will cost to handle their legal problem. Dream to improve quality through efficiency and disaggregation. Dream to help clients make informed decisions on acceptable risk/cost trade-offs. Dream to build a law firm that utilizes standard business practices instead of believing the laws of physics and economics don’t apply because lawyers are special. Dreaming to prevent legal problems from ever arising.

There are a few, a quixotic few, who have joined me in dreaming and attempting to turn the dream into reality. I quickly learned that dreaming together is much more powerful than dreaming alone.

Hierarchical structures make it difficult to dream together. Some dreams are silly. Some are unworkable. Some are misguided. You need people to help you learn which dreams are worth pursuing and which should not. Hierarchies make it difficult to “open up” and dream about things that never were. When you compete for power, there is a risk a competitor may use your dream to show you incapable or unfocused. When you lead people, some are concerned that dreaming will be seen by followers as a sign of weakness.

Maybe I am wrong, but why else are law departments structurally the same today as years gone by? Is the optimal structure? Are there no ways to improve it? Why have so few companies created deeply ingrained prevention cultures. Note I said companies, not law departments, although law departments are the logical origin of such cultural evolution.  I lack the in-house experience to answer these questions. Maybe Jeff Carr or Ken Grady or others can share their views.

The same questions can be asked of law firms. They all are essentially the same as when I started practicing law a lifetime ago. Sure, there is the occassional notable exception, but the search for exceptions is difficult.  I think no one honestly believes the structure of law firms is the best possible one.  But here we remain.

With so little change in our industry, I can only conclude we have failed to dream big dreams. Perhaps the challenge to dream big will fall to today’s young lawyers and law students.  Perhaps there are young partners who will act boldly when given an opportunity.  Perhaps there is a visionary leader about to emerge.  We can always hope.

I hope everyone in the legal profession will take a quiet few minutes sometime, and dream big dreams for the profession.  Then ask, why not.

Email etiquette: think about it from your client’s perspective.

Posted in Client Communications, Client Service, Commentary

I just spent a couple of minutes looking for the telephone number of someone who sent me an email.  No big deal, except that if it is your client’s time spent looking for your number, it is a big deal.  If you do something that wastes your client’s time, it suggests you have no idea how wasted second and minutes can quickly add up.  Don’t be the cause of the addition.  So here are a couple of quick tips:

  1. Include your phone number on every email.
  2. Think about your use of email real estate. If the case is Smith v. ABC, Inc. and you’re corresponding with an inhouse lawyer at ABC, he or she will know the case involves the company.  Think this doesn’t make a difference? Look at a client’s email in-box on a mobile device.  If you have to open an email to find out whether it is important, you’ve just wasted time.  Time that adds up.
  3. After the name of the matter, let the reader know if it is time sensitive. In other words, is your matter so important they have to look right then instead of focusing on other matters?  Or can your matter wait?
  4. Are you asking the reader to do something? Specify that in the re line of the email.  For example: Smith: URGENT: Signature needed.
  5. Learn the importance of BLUF—Bottom Line Up Front. Give your client the choice to read the detail or ignore it. Sometimes, a client just doesn’t care at that moment and you should not force them to read through the detail to get to the result.

Good email etiquette is easy.  It just requires you to put yourself in your client’s shoes for a minute.

An example of where elite businesses go, but law firms fear to tread

Posted in Commentary, General

The title is simple enough: success = experimentation.  Here is Peter Diamandis’ thesis:

Today’s most successful companies, the ones that are “crushing it,” started as a series of crazy ideas, followed by experiments to test just how viable those ideas might be.

Experimentation is a crucial mechanism for driving breakthroughs in any organization.

If you want to create a successful, hyper-growth company, you’ve got to focus on empowering your teams to rapidly experiment.

The key is building a culture of experimentation.

The only constant is change, and the rate of change is increasing.

Ultimately, standing still equals death, and the only way to succeed is to be constantly experimenting and innovating (think of it as Darwinian evolution in hyperspeed).

Hyper-growth and experimentation are very closely linked.

Jeff Bezos likes to say, “Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day…”

Is there a law firm, anywhere, that has built such a culture?  Doubtful.  But there should be.

Econ 101: If you increase expenses more than you increase revenue, profits will be lower

Posted in Commentary, Leadership and Management

You just can’t make this stuff up.  A recent ABA Journal article, Some law firm leaders question associate pay hikes amid tepid year, caught my eye. The Peer Monitor report stated:

Firms were squeezed by a perfect storm of slumping demand and rising headcount.

The ABA Journal article reports:

The economic forces have led some law firm leaders to question widespread associate salary hikes that raised starting pay to $180,000, according to Gretta Rusanow, head of advisory services at Citi Private Bank.

But here’s the money quote:

The associate pay hike is creating pressure for law firms that raised salaries for competitive, rather than performance, reasons, Rusanow writes in the Am Law Daily. “In our conversations with firm leaders,” she wrote “many express bafflement as to why so many firms adopted the increases when their productivity and profitability results couldn’t support them.

Firms may not have control over demand (arguable), but they have control over headcount and compensation.  It is pretty fundamental (perhaps day 1 of Econ 101) that if you raise expenses–like headcount and compensation–without a like increase in revenue, profits will decrease.  Were law firm leaders assuming growth in demand despite all the data that suggested?

I fully expect the reaction to this loss of profit will be to further increase rates to try to drive revenue.  (Now picture law firm managing partners with their heads buried in the sand over the caption “Addressing those pesky realization issues.”)

Links to my Art of Value podcast with Kirk Bowman

Posted in Pricing, Trends and Innovations, Uncategorized, Value Tips

Lamb--Art of ValueKirk Bowman has become one of the leading voices on value billing. Kirk produces the “Art of Value” podcast. He has interviewed an range of people who have offered so many great ideas on value, pricing and billing, including Ed Kless, Michele Golden, Peter Carayannis, the great Ron Baker, John Chisholm, and so many others whose names I did not recognize but who taught me so much. So I was honored to be invited to participate in a podcast, which you can find here. Thanks Kirk!  And if you are interested in value and value billing, you owe it yourself to listen to Kirk’s podcasts.

A personal reminder about the value of experience

Posted in Commentary, General

On Saturday, I was sitting in my home office and I heard an episodic beeping sound that sounded like a smoke detector with a battery that needed replacing.  I checked all the smoke detectors and none were chirping, so I continued my investigation.  I eventually discovered that the float trigger on our sump pump had failed.  I thought about waiting to call a plumber during the week when I would be charged normal rates, but the beeping was incessant and annoying.  So I figured this would be a good DIY project, and off to the local Home Depot I went.

Two and half hours after I successfully (I hope!) installed a new float trigger, I sat back and thought for a minute about how long it would have taken a  plumber to complete the chore.  I decided that a semi-experienced plumber could have completed the task in 15 – 30 minutes.  Using the longer time estimate, my pride in having completed the task evaporated when I realized it took me 5 times longer (at best!) to do so.  Plus I am left with the lingering uncertainty that I did it right!

The application of this to my on-going discussions about value billing and the value of experience is, I hope, obvious. Experience counts for much.  Experience creates greater value.  Or at least comfort that the best possible job was done.  But what is clear that that time, as in many instances, bears an inverse relationship with quality.

GE, like McDonalds, is outsourcing some corporate functions. How soon before it happens with law departments?

Posted in Commentary, Trends and Innovations

My last post recounted McDonalds’ creation of its own ad agency and posited the question whether bespoke law firms could be far behind.  Enter GE.  Yes, that GE.

According to CFO.com, GE is transferring about 600 of its tax professionals to PwC:

Reacting to what it sees as increasing uncertainty about tax rules in the United States and the rest of the world, PwC will hire more than 600 lawyers and public accountants from General Electric’s tax team and incorporate GE’s tax technologies and processes. In exchange, GE will get to shed salaries while still benefiting from the expertise of its legacy team.

The deal was further described:

Although GE declines to say what costs it will shed in the deal, Gosk said in the release that the company is “pleased to advance our longtime relationship with PwC in a way that provides an opportunity for other leading companies to tap into the world’s best tax team while providing outstanding career opportunities for those legacy GE professionals.”

Under the five-year agreement, which is slated to take effect April 1, PwC will be adding accountants, lawyers, and other tax professional from GE’s corporate division and the company’s other businesses, including GE Capital. About 20 corporate tax employees will stay on at GE to work on consolidated financial reporting, mergers and acquisitions, and other strategic efforts, along with managing the PwC relationship. An additional 250 tax employees will remain with company to service GE’s individual businesses.

The arrangement was struck after GE “looked to reevaluate the optimum delivery of these critical global tax services now and into the future,” the PwC press release said. “The new Global Enterprise Tax Solutions team will sit within PwC Tax and will provide managed services not only to GE but also to other PwC clients as well.”

So we have lawyers and others going to PWC.  The interesting part is that PWC plans to leverage the GE professionals to provide services to other clients, and GE will share in the revenue stream.

In the space of a week, we see two examples of major companies designing solutions to address ordinary corporate needs that involve custom designing a solution outside the company.  Shedding headcount is a positive for most companies and the idea of better leveraging what were corporate assets has to be enticing.  The question remains, when do law departments dip their toe in this trend.

McDonalds creates its own ad agency. Can bespoke law firms be far behind?

Posted in Client Service, Commentary, Trends and Innovations

Several years ago, I was part of a proposal to a large tech company to create a custom, build-to-suit, build-to-serve law firm to handle the company’s IP work.  The company showed interest, but ultimately it was too big a leap to make.

That was then.  Crain’s Chicago Business is reporting today on an ad created by “Omnicom’s We Are Unlimited, which was created and tailored for McDonald’s in late 2016 after a competitive review.”  So we have a piece of Omnicom now devoted exclusively to McDonald’s.  The question, obviously, is whether this foreshadows things to come.

When clients complain about their [fill-in the blank–ad agencies, law firms, accounting firms, engineering firms, etc.], one possible answer is “build-to-suit.”  The concept works incredibly well in the real estate area.  Why would it not work with a custom built law firm (or whatever)?  The answer is, it will.  It will just take one committed client to make it so.

Valorem turns 9!

Posted in Commentary, General

9th-birthday

 

 

Today, my partners and I celebrate Valorem’s 9th birthday.

When you celebrate a big birthday like this, you have to turn to the Chairman of the Board for insight. One of my favorite Frank songs is “That’s Life.”  While not perfect for the occassion (the message would be better if it were written in the first person plural), the gist of the song is the Valorem story.

“That’s Life”

That’s life (that’s life), that’s what all the people say
You’re ridin’ high in April, shot down in May
But I know I’m gonna change that tune
When I’m back on top, back on top in JuneI said that’s life (that’s life), and as funny as it may seem
Some people get their kicks stompin’ on a dream
But I don’t let it, let it get me down
’cause this fine old world, it keeps spinnin’ around

I’ve been a puppet, a pauper, a pirate, a poet, a pawn and a king
I’ve been up and down and over and out and I know one thing
Each time I find myself flat on my face
I pick myself up and get back in the race

That’s life (that’s life), I tell you I can’t deny it
I thought of quitting, baby, but my heart just ain’t gonna buy it
And if I didn’t think it was worth one single try
I’d jump right on a big bird and then I’d fly

I’ve been a puppet, a pauper, a pirate, a poet, a pawn and a king
I’ve been up and down and over and out and I know one thing
Each time I find myself layin’ flat on my face
I just pick myself up and get back in the race

That’s life (that’s life), that’s life and I can’t deny it
Many times I thought of cuttin’ out but my heart won’t buy it
But if there’s nothin’ shakin’ come this here July
I’m gonna roll myself up in a big ball a-and die

My, my!