In Search of Perfect Client Service

If you don't know this man, if you haven't heard his "last lecture," I urge you (when you have 76 minutes) to grab a box of tissues and watch it. 

In this picture, we're introduced to Sara Tucholsky (center) of Western Oregon University and Mallory Holtman (right) and Liz Wallace (left) of Central Washington University.  Sara hit her first home run in their game last Saturday--her first home run ever.  She missed first base and turned to go back to tag the base.  In doing so, she injured her knee and could not walk.  Under the rules, if any teammate touched her, she would be ruled out.  If she could not touch all the bases,  a pinch runner would be required and her hit would be ruled a single.

So what happened?  Holtman and Wallace confirmed with the umpire that there was no rule that prevented opposing players from aiding Tucholsky, and then picked her up and carried her around the bases, gently lowering her so she could touch each base.  Holtman and Wallace's team lost the game 4-2.

What do these two stories have to do with client service?  Nothing, really.  But there are lessons about character and honor in these stories.  And those two traits influence every aspect of our lives.  But more importantly, I just wanted people to feel good today, and these two stories surely have that effect.

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From today's Chicago Tribune Business Section:  Seven partners have left  Locke Lord Bissell & Liddell (catchy name, eh?) to create a new firm representing insurance companies in litigation.  The reason?  Pressure to increase hourly rates in this practice area by as much as 50%.

Locke Lord etc., etc. and so forth was formed by the merger of Locke Liddell and Lord Bissell in October 2007.  Interesting quote from Jerry Clements, reported to be chair of the merged firm (though there is no such name listed on the firm's website): "Any time you do a combination as significant as the one we did, you're unfortunately going to lose some people who don't fit anymore."  She added that some practices are "suffering from rate pressures."

My point is not to comment on the firm's business decisions, because clearly there are winners and losers in mergers of this sort.  Rather, the point is simply to note the acknowledgment that "pressure" on rates is a fact of life in firms like Locke Lord that aspire to compete in the top echelon.  Even in today's difficult economic times, that rate pressure exists.

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Ever since Gerry Riskin wrote his "Doom and Gloom" post last August, I have been paying much closer attention to the economy that I have before, especially to the factors Gerry highlighted in his post.  Regular readers know I have posted frequently on this topic, not only because I think the topic is generally important but also because writing about it makes me think about it.

Anyway, from today's paper.

1.    "The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for April fell deeper into recession territory, to 62.6 from 69.5 in March and below economists' median expectation of 63.2 in a Reuters poll.  The April result is the lowest since March 1982's 62.0, when the "stagflation" period of low growth and high inflation was an issue for Americans."

2.   Gas prices are now over $4.00 per gallon for premium in many locations.  Oil-producing nations are refusing to produce more oil.  Oil closed over $118 per barrel, almost double the price from a year ago.

3.  The stimulus package isn't going to stimulate much.  Most consumers expect to use it to pay higher food and gas price and to reduce debt.

4.  It costs so much to fuel up that the American Automobile Association is urging its members to leave their cars at home and take public transportation.  (For anyone who doesn't know, the AAA is the group that likes people to drive cars.)

5.   "The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam's Club, a division of Wal-Mart Stores Inc., called on Wednesday "recent supply and demand trends."

6.  Summer is coming.  Gas prices will be higher.  George Bush is unlikely to agree to a gas tax holiday or release oil from the strategic oil reserve.  The Beijing Olympics are coming, so there will be no slowing down in China, at least until then.

Does anyone see an end-game here?  I don't see any short-term change in the economic pressures on our clients.  Quite to the contrary.

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My partners and I have been touched--and surprised--by the many kind emails we've received from so many about our new website.  The substantial majority have been encouraging.  Many have offered constructive input, and we already have made many changes to the Valorem Law Group website based on input we've received.  It continues to be a work in progress.

We also want to acknowledge and extend our thanks to several people who featured us in recent posts.  Gerry Riskin, David Maister and Mike Myatt all have featured us in posts.  We're humbled to be recognized by such thought leaders.

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    You have to love the headline writers at the New York Times and the fun they have with Fed-speak.  Fed-speak is the language the Fed Chairman must use since he can't utter the R-word.  So Bernanke says today, "It now appears likely that real gross domestic product, or G.D.P., will not grow much, if at all, over the first half of 2008 and could even contract slightly.  We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies.”  The Times headline writers?  "Bernanke Nods At Possibility of Recession."

To quote my 13 year old son, "Ya think?" 

But to my mind, here was the more interest part of the report:

"While not endorsing any specific housing proposals, Mr. Bernanke made clear that the weakness in housing remained the single biggest drag on the prospects for an economic recovery and said that it was up to Congress to act."

These folks are missing the point.  Its not the foreclosures, at least not just the foreclosures.  Anyone who has tried to sell a house most anywhere in the country can tell you that prices are down 25-40% over a year ago.  (Anyone interested on a good deal in New Port Richey, Florida?)  Stopping foreclosures doesn't restore that lost wealth or borrowing base.  Yet Bernanke is predicting a mild recession and recovery in the second half of the year because of the President's stimulus package.  People get a few bucks and go to Walmart, which then ships the money to China.  Or they get their check and buy a tank of gas.  Wonder where that money goes?  All of this may temper the markets (how much wealth has everyone lost there?), but it won't alter the weakness of the dollar and it won't restore the lost wealth against which people have been borrowing to spend our way out of prior recessions.

I'm hoping I'm wrong here and to be sure there are tons people smarter than me on this and most other issues.  But this blog is directed at law firms, and one has to wonder when clients are going to feel comfortable enough to stop squeezing their law departments and outside counsel?  If it is a good long while (my bet), then the length of the recession is something people really need to worry about.  Because while BigLaw may expect to be able to offset lost deal revenue with increased litigation and bankruptcy work, there is a lot of anecdotal evidence that at least the litigation is not there this time.   And for all those who work at or run firms that don't measure their revenue in the hundreds of millions, the bankruptcy safety net may not be a safety net at all.

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   In August, Gerry Riskin wrote his prediction that Doom and Gloom was in our future.  I asked Gerry if he would share the factors that informed his prediction.  He listed these:

    Currency fluctuations
    Price of oil
    Price of precious metals
    Increase and decrease in “real” jobs
    Geographic location of those jobs
    Political stability of job locations
    Foreign relations as they affect business
    Balance of Trade between countries and regions
    Housing markets (not just prices – but demand)
    Auto market (demand)
    Credit levels (or should I say “debt levels”)
    Interest rates (they are not falling, in fact, get ready…)
    The advent of the largely unregulated Hedge Fund industry
    The establishment pensions that invest in Hedge Funds
    The Domino effect – how one indicator impacts many others

In January, Gerry wrote on this topic again, Recession-Proof your Law Firm.  In that post, he drew on the comment of George Soros that we were facing "recession or worse," many would even acknowledge that we are in a recession.  The scary thing, however, was Soros" concern about the possibility of "or worse." 

The third in the Riskin trilogy is Gerry's March 17 post, asking the question "What do Bear Stearns and Enron have in common?"  The punchline in Gerry's post?   His conclusion that "this trumps my wildest speculation about how erratic the economy may become."

Even those who disagreed with Gerry in August cannot ignore the dramatic downturn in the economy that we have witnessed in the months that followed.  But here's the problem from my vantage point.  I don't see a trigger for a recovery.  The past few recessions have benefited from consumer-driven recoveries.  In December 2001, Business Week wrote:

BUT THEREIN LIES A PROBLEM for the recovery. The NBER's four key indicators highlight an important atypical pattern of this recession. The bureau noted that "continuing fast growth in productivity and sharp declines in the prices of imports, especially oil, raised purchasing power while employment was falling." This rise in household buying power--even as the three other NBER indicators fall--will continue to sustain spending in coming months.

But that won't happen this time.  Consumers are losing wealth (and their primary source of borrowing power) because of the precipitous decline in housing prices.  The high price of oil, and hence gasoline, is consuming a larger share of household income, directly and indirectly as others feel the burden of higher energy costs.  Oil prices will not decline thanks in large measure the growing demand from China and India.  Debt rates are higher than ever before, meaning less ability to borrow.  Add the weakness to the dollar to the mix (meaning we pay more for imported products). And with the Fed flooding the market with easy credit to sustain the financial system, the dollar will not soon strengthen. 

This bad news has profound ramifications for our profession, especially on the pricing front.  Our clients are the industries that are suffering through this recession.  Legal departments (especially, since they are cost centers) will face enormous pressures to cut back on expenditures.  That pressure promises to grow more, not less.  And because much of the low-hanging cost-control fruit already has been picked, more and more drastic approaches to fee control will be the order of the day. 

As always, thanks to my friend Gerry Riskin for inspiring me to think more and more deeply than I would ever do on my own.

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Michael Maslanka, a lawyer from Texas, authored an article in Texas Lawyer that popped up on law.com today.  The article advises GCs to treat legal fees the same way executives treat business issues.  Beginning with the premise that increased associate salaries are akin to a rise in the company's raw materials, Maslanka writes:

Don't belabor the rise -- the cost of a company's raw materials goes up just like a firm's. Instead, GCs should treat legal fees just like the C-level execs down the hall treat business issues that cross their desks.

He then provides five helpful rules.  Its certainly not an exhaustive list and it ignores the inherent conflict between a client's economic objectives and those of lawyers who bill hourly.  But my point here is simply to offer one thought expanding on the article--those lawyers who fall behind their clients' thinking on pricing issues are destined to play catch-up for a long time.  Perhaps to the point of trying to get a client back in the door once he or she has found joy elsewhere.

There is no bigger issue today than pricing.  Every business is feeling the pinch in the worsening economy.  You're either part of the problem or part of the solution.  There is no middle ground.

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In the post just below this one, I wrote about the associate turnover problem confronting BigLaw.  As I was writing, I thought about the wonderful opportunity that problem creates for firms like Valorem.  If you were thinking of purchasing a lamp, and were given a choice, would you rather pay $300 for the lamp or $150?  It's not a trick question.  And, of course, the answer is obvious.

It is precisely the rapid turnover of associates at large law firms that allow firms like Valorem to offer those very same associates--not ones "just like those at big firms, but the ones who just left big firms" --at about half their original price.  And because firms like Valorem are forced to find cost-effective technology or other solutions to the problems Big Firms address by throwing hundreds of high-priced and dissatisfied associates at them, these immensely talented lawyers have a change to do the things that turn them, rapidly in most cases, into outstanding lawyers who are realizing the potential that led the big firms to hire them in the first place.

As a result, what's emerging is this paradox:  the best and the brightest leave the high priced big law firms in search of an alternative that provides better alternatives.  They find it, receive better training and better opportunities to develop, and actually do develop.  They develop so much they are actually better and more experienced than their former colleagues, many of whom are still reviewing documents manually, slowly and at great expense to the client.  The departed, meanwhile, have learned how to solve problems for their clients in a more creative, efficient way.

Which one of these provides the greater return on client fees?

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By some measurements, 50% of new associates leave their high-paid jobs at AmLaw 200 firms within 4 years.  Two-thirds of these departures of the associate's choice, not the firm's.  And the reason for such departures, in the main, is that associates are given drudge work with no real responsibility.  Training is not provided.  Associates are not incorporated into a team, have no understanding of case strategy and aren't wanted by clients.  

So writes former GE General Counsel Ben Heineman, Jr. and David Wilkins, the Kirkland & Ellis Professor of Law and director of the Program on the Legal Profession and Center on Lawyers and the Professional Services Industry at Harvard Law School.  Heineman now is distinguished senior fellow in the Harvard program.  Heineman is widely credited with transforming the GC position into the powerhouse position it is today and certainly transformed GE's law department into one of the very best in corporate America.  His insights command attention.

The article's title sums up the dilemma facing corporate America: Big Firm associates are a "Lost Generation."  The article, "The Lost Generation?",  appears in the March 2008 issue of Corporate Counsel magazine.  Heineman and Wilkins put the real onus for change on the firms, conclude that firms must radically change the way they develop associates, while still acknowledging that corporate clients must be part of the change.  Here is part of their conclusion:

But the primary responsibility for professional development rests ultimately with big firms, which need explicit cooperation from their corporate clients.  They must address the paradox of ever-higher associate compensation and ever-shorter tenure.  The answer is not late-night dinners from The Palm on silver servers.  It is a stimulating, mind-expanding experience at the beginning of their professional careers that treats associates as adults, gives them responsibility, and, most of all, communicates the intellectual and practical excitement of confronting the significant issues that the best partners enjoy.  This challenging culture of professional service, more than pure dollars, can help firms become employers of choice. 

From my vantage point, this answer is wishful thinking.  The turnover problem has existed for decades.  And firms have simply chosen to throw more money at the problem, as they do confronting man problems.  The legal field has never been a particularly innovative one, so why expect that to change?  One former partner once compared the notion of changing a firm's ingrained way of thinking to the difficulty of "turning an aircraft carrier around in parking lot."

When discussing hourly rate issues, I have frequently said that clients must demand before firms will respond.  I think the same will be true with respect to this problem.

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I have had several requests to post an update on Valorem.  Is it working?  What have I learned? 

It is working.  I've learned a lot.  Thanks for asking.

Okay, that's a pretty thin answer.  But humor is really important in a start-up.  We were fortunate to start with a full plate of work.  We issued a press release to announce our formation and got huge coverage in the press, especially the electronic press.  That press resulted in a number of calls, which have led to some new work.  We're now in a position to think about hiring another lawyer.

One thing I've learned about a start-up is that client work is only one piece of the puzzle.  There's so much to do, from space planning to technology implementation to marketing and everything in between.  More than once, we've resorted to the image of a one-armed paper hanger.

We expect another senior partner-level person to be joining us in about 6 weeks or so, which ought to coincide with the launch of our full web-site (we've a one-page temporary site up now) and some new marketing efforts as well.  Time and energy permitting. 

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With all the recent hub-bub about great writing and speechifying, my friends at What About Clients? showed great timing with yesterday's piece on great writing.  After providing a rock-solid example of good editing of an overally legalistic contract, Dan Hull concluded with this imagery:

    Either [editing alternative] would save trees, ink and space, be more to the point--and would help diminish the image of the self-important "I'm-special" lawyer rocking back and forth in his chair and talking to himself like a mental patient.

I'll never be able to read bad writing by a lawyer without this imaging seizing my brain.  Thanks Dan.

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Sometimes things go viral.  Sometime ago, I wrote about a slideshow set to music that became known as "Did You Know."  The show has been viewed well over two million times.  Earlier this week, I was emailed a link to a song about Barack Obama.  This is a song written and recorded after Obama gave a speech following the New Hampshire primary vote on January 8th.  I have no idea how many people have seen this song on Dipdive, but I checked it on on YouTube. Over 5 million people have viewed the song in its various downloads.  (Interestingly, only 250,000 have seen the actual speech on YouTube.)  It took a week or so for the song to be written and a couple of more days to record it and edit, so the song has been on YouTube for less than 3 weeks--and it has more than 5 million hits.  Viral.

Without regard to the political issues, the question that I've been pondering is what makes something go viral?  I don't recall any briefs, Supreme Court or not, that have gotten this kind of play.  I don't know of any law firm websites that have gone viral (even just within the legal community).  Why is that, I wonder.  Do we focus on precision and "technically correct" at the expense of soul and effectiveness?  Have any of us created a presentation as interesting and compelling as Steve Jobs' launch of the I-phone?  Though we specialize as communicators, are we more puff than real?

I am going to spend some time pondering this.  But I would love to hear what you think about it.

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Is it here?  To be sure, predicting any storm, let alone the Perfect Storm, is a perilous undertaking.  But the stars sure look to be lining up like never before.  So take a pinch of salt, throw it over your left shoulder, sit back and let me explain.

Remember back in August when Gerry Riskin predicted bad times were ahead for the profession?  His words were "doom and gloom."  If you look at the specific factors he listed as the underpinning for his conclusion, he looks like an awfully good soothsayer.  Add some recent data to the mix.  This past week, I participated in a Managing Partners Summit and listened to Dan DiPietro, head of Citibank's Law Firm Group, share his data on 2007 and predictions for 2008.  Two days later, I was a panel with Dan at Hildebrandt's Marketing Partner Forum, so I have heard his data twice in a short period.  It sank in the first time.  It sent chills down my spine the second.  Short story--2008 is not likely to be a year lawyers look back at fondly.

There's more from my last week that fits in here.  I was fortunate enough to have lunch with Susan Hackett, the General Counsel of Association of Corporate Counsel.  She spoke to me about how angry her members are with outside counsel.  Angry!  Not shockingly, the things giving rise to the anger are the things you would guess--rising salaries for starting associates and the ripple effect, the impact of those salary increases on their fees, and law firms more focused on their business than that of their clients.  (To this latter point, I believe that it is not wrong for a Managing Partner to be more focused on his or her firm's business than that of the firm's clients.  It's just a mistake to let your clients believe that to be true.)

If law firms heard all of this and were lining up to abandon billable hours, provide far greater service and generate more value for the clients, the storm would pass with some positive results and little damage.  But what I heard this week is that large and mid-size firms seem to think this is "just another minor meteorlogical event."  They could be right--these law firm leaders are, after all, really smart people.  But the wild card here is the economy--back to Gerry Riskin's prediction.  And its not just how the economic downturn will hurt firms.  Its how the economic downturn will hurt the firm's clients with (and this is where Dan DiPietro's data comes in) not many more things to do to drive up productivity without increasing legal spend.  But the client's won't have the economic option to increase legal spend--to the contrary, many clients will face CEO demands to dramatically lower legal spend.  And too many firms are not ready to respond in a meaningful way.

You know the old saying that firms are never fired, they just aren't hired for new matters?  If the Perfect Storm develops, 2008 could turn out to be the year that the old saying was put to rest and firings became prevalent.

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On January 1, 2008, Valorem Law Group, LLC will officially open its doors.  

And with the rise of Valorem, I am back in the blogosphere, ramped up and ready to go!

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Very powerful post by my good friend Gerry Riskin in his great blog, Amazing Firms, Amazing Practices.    The post, Doom and Gloom for the legal profession--it's coming, contains Gerry's prediction that "our legal profession is in for very rough times."  Gerry is very much a "glass-half-full" person, so reaching this conclusion in spite of his optimistic nature, should cause every one to take a deep breath and spend time contemplating Gerry's post and suggestions.

I am left with this question for my friend:  what are the things you see that give rise to your concern?  And are they tied to the next U.S. election or is that merely a benchmark for when you think the problems will be apparent?

UPDATE:  Gerry Riskin responds:

Patrick Lamb posted the following comment both here and on his own popular blog: In Search of Perfect Client Service in his post: Gerry Riskin's Forecast: Stormy Times Ahead.

I think he deserves a response:

Patrick’s comment/question:    Gerry--very powerful post.  Not one that I disagree with at all, but can you share with us the signs you see that lead you to this conclusion?  And are the elections tied to result or simply a benchmark for the time by which you think the changes will be apparent?  Ciao.

My response:  The US election is a process that sees powerful interest groups exercising their discretion in a manner which will increase the probability of their preferred candidate(s) being elected.  As a result, a temporary and indeed unsustainable economic climate may be manifested.   I think things get very real about six months after US presidential elections.  With outcomes certain, interest groups lose their motivation in a hurry – at least for a while.   As for the indicators themselves, I am afraid to start because where do I finish?  However, here are some things to examine:

    Currency fluctuations
    Price of oil
    Price of precious metals
    Increase and decrease in “real” jobs
    Geographic location of those jobs
    Political stability of job locations
    Foreign relations as they affect business
    Balance of Trade between countries and regions
    Housing markets (not just prices – but demand)
    Auto market (demand)
    Credit levels (or should I say “debt levels”)
    Interest rates (they are not falling, in fact, get ready…)
    The advent of the largely unregulated Hedge Fund industry
    The establishment pensions that invest in Hedge Funds
    The Domino effect – how one indicator impacts many others

And specific to the legal profession:
   
    The disparity between views of General Counsel and Outside Law Firms
    Associate starting salaries (and consequential impact on all salaries)
    “De-equitization of partners” trend
    “Law firms going public” (anticipated) trend
    The obsession by partners on remuneration
    The expectation of continued increasing revenues, PPP and PPL
    The surrealism of the financial expectations of new lawyers
    Comments from Citigroup’s law firm market specialists

Disclaimer:  Yes, I obtained a business degree before law and yes I studied economics and yes I subscribe to reliable publications like The Economist but I do not profess to be able to predict the stock market or future currency fluctuations.  In fact, I will admit that my post is based to a large extent on a hunch – intuition (I read Blink by Malcolm Gladwell so maybe this is OK).

Punchline:  If there were a fund that invested in the legal profession worldwide (at least in the western world) I am not a buyer – I might even summon the courage to put some money at risk by “selling short”.

In closing, perhaps not you, Patrick but there are many who will think I am completely wrong – I not only respect their right to hold that view, I hope that their view prevails.  I post this because if there I seven a significant possibility I am right, as stated in my original post:  “My message to Managing Partners is not to become pessimistic but simply to have a contingency plan in place.”

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   A friend of mine passed along this quote from Scott Turow (apparently from a recent ABA Journal article);

     "One reason that dollars times hours continues to prevail is because its hard to devise a fair alternative.  Columbus setting out from Spain, destined, in some minds, to sail off the end of the Earth, probably had a better idea what he was headed for that either a lawyer or a client at the inception of a piece of litigation."

Turow, a former federal prosecutor and now a partner at Sonnenschein, is the well-known author of such classics as One L, The Burden of Proof and Reversible Errors.  He makes a good point--we spend a lot of time talking about the problem with the hourly rate system, but preciously little time talking about solutions other than abstractly.  Part of the problem is context.  It is hard to talk specifically about alternatives not tied in some fashion to the billable hour without a specific lawsuit to use as a point of reference.  I think the dialog would benefit greatly from a focus on specific case studies.

For example, in talking about "value billing" as it relates to a single lawsuit, how does one determine the value to the client?  I am guessing that most clients would begin by guessing the cost to litigate the issue using an hourly rate system and then look at how things stack up to that option.  But I invite people like Ron Baker and others more schooled in this than I am to provide case studies so that we can enhance the dialog on solutions.   Staying with the Columbus metaphor, perhaps we can then compare the solutions to how the crew must  have felt when they landed on one of the Bahama islands.

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One of the really fun things about being in the world of blogs is happening on an old post.  And its even more fun when that post is just as vibrant today as when it first appeared.  I just had that experience.  Michelle Golden writes Golden Practices.  Michelle is one of my favorites, and I happened on her post, What Innovation Really Looks Like.  Michelle makes this point, as true today as when she first wrote it in 2005:

What I really want to get at is that most of us who work in and consult within the professions do bang our heads against the wall at times (no offense to any of my beloved clients...) because of the high level of complacency that exists for "good enough" or, in the case of some firms, "almost good."

Michelle then picks up on a great post by the legendary Seth Godin, from Seth's Blog, Understanding Local Max.   Local Max looks like this:
and is described by Seth Godin this way:

    "Everyone starts at that dot at the bottom left corner. You're not succeeding because you haven't started yet.

Then you try something. If it works, you end up at point A.

A is where you see results as the direct output of a strategy and hard work. A is the job you got after investing in an MBA. A is the sales you got after running an ad.

Of course, being a success-oriented capitalist, that's not enough. So you do more. You push and hone and optimize until you end up at the Local Max. The Local Max is where your efforts really pay off.

So you try harder. And you end up at point B. Point B is a bummer. Point B is backwards. Point B is where the outcome of more effort against your strategy doesn't return better results. So you retreat. You go back to your Local Max.

And that is where most people stay. Most people get stuck at the Local Max because changing strategy in any direction (this is really a 3D chart, but I've smushed it to make it easier) leads to poorer results."

The key, however, is to break out from Local Max.  The breakout looks like this:

and is described like this:

Local Max isn't actually that great when you realize that Big Max is not particularly far away.

The problem is that to get to Big Max, you need to go through step C, which is a horrible and scary place to be.

....

If your market is changing, this idea is even more important to understand. That's because changing markets are always surfacing new Big Max points, and the only way to get to them is to go through the pain (yes, it's painful) of point C.

You can't reinvent yourself and your organization until you deal with the fear of point C, and that's hard to do without talking about it. I think the benefit of the Local Max curve is that it makes it easy for you and your team to have the conversation.

The Big Max theory makes sense to me.  I believe that most of us sell ourselves short.  We have more within us but we hold back, perhaps from fear of failure, perhaps from fear of greatness.  Or maybe both.  But I am not sure I believe that we "have to" go through Point C.  The painful experience of Point C may well be a liberating experience that results in some moving to Big Max.  But why must one experience it.  If you know you are destined to experience pain without change, can you not bypass experiencing it?  Can you not learn from other's mistakes?  Seth Godin has move on from this issue, but I would love to find out whether be believes pain must be actually felt.  In her post, Michelle Golden had this to say:

"Big Max" is the innovation you bring to your clients. AND your firm.

Innovative firms strategize on how to get through C and on to Big Max."

I wonder if by "get through" she meant  "experience Point C" or "navigate around it."  I'll have to ask her.

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    I recently posted (again) on the Lake Wobegon effect, the phenomenon that results in law firms chronically overestimating the quality of the relationship the firms have with their clients.  (See This Just In: General Counsel Less Than Thrilled With Their Outside Counsel.)  I am honored that two noted bloggers have picked up on the post and added some suggestions that those who wish to combat the phenomenon should study.

Edge International partner Rob Millard suggested that "when contemplating a law firm strategy formulation process, [firms] go out into the market and test empirically what your clients' perceptions of your services are."  Rob further suggested that the testing be both qualitative as well as quantitative, and that any reliance on internal perceptions be heavily discounted in light of the data on the Lake Wobegon effect.  Rob's full post is his terrific blog, The Adventure Of Strategy.  Those who read my blog regularly know that there is no bigger fan of Edge, and I am humbled by Rob's reference to my post.

Arnie Herz (Go Blue!) writes the insanely great legal sanity blog.  His post, "how can law firms fix their client service problems?," also offered some solutions to the Lake Wobegon effect discussed in my post.  Arnie notes the most difficult problem is admitting that a problem exists.  Arnie then references a series of questions (here and here) posted by friend Jim Hassett, who writes Legal Business Development.  Thanks, Arnie, for using Jim's posts to bring focus to possible solutions.

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I'm confused.

I've been described as an "out-of-the-box" thinker.  I took that as a positive.  But then I was reading Harry Beckwith's You, Inc.  Harry writes:

        "Your box--your way of thinking, working and living--has worked for you.  Its the box in which you were born, a product of the DNA with which you were encoded.  You  can change your box about as easily as you can alter the shape of your head.

       You are methodical or mercurial; you are lateral or linear; you tend to be inward, or outward.  But from birth, you are who you are.  It's a pretty good box--the box in which you have operated forever.

    Don't try to think outside your box; its too hard.  Instead, grow it."

Fast forward.  I just finished reading a book recommended by my coach, Leadership and Self-Deception: Getting Out Of The Box.  Written by The Arbinger Institute, the book is the story of how being in the box is a bad thing.  The "box" is where you focus on yourself, not others (spouse, children, colleague, client, etc.).  From the book:

Self-betrayal is how we enter the box.  Self-betrayal is:

1.  An act contrary to what I feel I should do for another is called an act of self-betrayal. 
2.  When I betray myself, I begin to see the world in a way that justifies my self-betrayal.
3.  When I see a self-justifying world, my view of reality becomes distorted.
4.  So--when I betray myself, I enter the box.

It is a most compelling book, especially if you are at all prone to self-analysis.

But you see the rub.  One book says being in the box is good.  The other book says being in the box is bad.  For me, the "box" has become an amorphism--useless.

Perhaps we can try a different approach.  Every person needs to have a few (and I mean a very few) core principles.  For example, integrity would be a good core principle.  Each person also needs to have a core principle about change--be change inevitable and positive and therefore something to be welcomed; or change being something that should be resisted when a positive or "right" environment is obtained.  From there, I suggest moving to reverse engineering, asking these simple questions:

         1.   What do you want to happen? 
         2.   Who must be involved to make it so? 
         3.   What will cause that person want to give you what you seek?         
         4.   How do I get there from where I am now--in other words, how can
                I help facilitate the cause?

In the context of Leadership and Self-Deception, the gist is that you will be more effective and more objective  in your interpersonal interactions if you focus on the other person.  The box doesn't matter anymore.

For me, the issue is no longer to be in the box or not.  The metaphor is a limiting one.  Perhaps it is for you as well.

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Sometimes great client service is passing along a tip or a tool.  Here's one from me.

One tool that trial lawyers love to use is mock trials.  You get a panel of mock jurors together and you try your case in some format that allows you test arguments, themes, witnesses, exhibits or whatever you want to put under the microscope.  The downside to the process is its incredible cost.  Juryvoice has an answer to that problem.  For less than
$1000, you can get the benefits of a mock trial, with jurors drawn from your jurisdiction.  Here's what Juryvoice has to say about its jurors:

Online jurors must live in the jurisdiction of the venue where the online mock trial will be conducted.
JuryVoice™ requires that each juror lives in the jurisdiction where you choose to conduct the online mock trial. It is generally ideal to conduct your mock trial in the venue where the case is filed. The attitudes and beliefs that persist in that geographic environment are a product of the environment and culture of the local area. These attitudes and beliefs have a direct and significant influence on the outcome of your case.
 
The online jury resembles the demographic composition of the population that resides in the venue’s jurisdiction.
JuryVoice™ screens online juror candidates based on gender, age, and ethnicity to align the mock jury with the general population of the chosen jurisdiction. If the venue that you choose is primarily comprised of a specific group, JuryVoice™ will adjust the composition of the online jury to appropriately represent this group.

Juryvoice pricing is listed here.

This tip is courtesy of the extraordinary Ralph Palumbo of The Summit Law Group in Seattle. 

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I was honored to co-chair a recent seminar sponsored by Harris Martin.  My co-chair, Gil Purcell from the Bay Area, is an accomplished lawyer and thought-provoking speaker.  During a discussion about jury selection, he played a presentation that just knocked me over.  While absolutely applicable to jury selection, the points made in the presentation are even more profound when considered in the context of the the profession and our clients.

After the seminar, I learned that the presentation was the child of Karl Fisch, a teacher at Arapahoe High School in Colorado.  Fisch writes a blog called The Fischbowl, which is worth looking at if you are interested in your children's education.  His original presentation was school-specific.  A professor at the University of Minnesota remixed the presentation, removing school-specific references. 

The result is a brilliant piece of work, found here.

Put aside the questions raised about our education system.  Put aside the questions raised about electronic evidence issues, or job security.  Think for a moment about how businesses will operate in this environment, and the impact those pressures will have on law firms serving those business clients.

The Did You Know presentation accomplishes in seven minutes what Tom Friedman accomplishes in 400 plus pages in his brilliant work, The World is Flat.  The pressures to operate globally are growing exponentially, even for the smallest businesses.  Cost control pressures will continue to grow, unabated.  In short order, firms that are tied to anything--large numbers of people, big lease investments, technology platforms that do not permit on-a-dime movement, etc. will go the way of the dinosaur.  The future, it seems to me, will belong to firms that can build virtual teams, assemble the talent needed for a particular case and then different talent for the next case.

Tom Peters frequently writes about the growing inability of large businesses to move fast enough to adapt to the pace of change in today's world.  I, for one, believe his opinion will apply equally to law firms.

What do you think?

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Just posted in the Wall Street Journal Law Blog:  a prediction that 2007 will bring "lots more associates," lots more hours and more revenue for law firms.   These are conclusions from Citibank's soon-to-be-released Managing Partner Confidence Index.  The Journal's post attaches several slides from the Index.  So we have an expectation of more hours from a record number of associates, being paid record salaries by their firms, which have raised hourly rates to cover the record salaries. 

When you read stories like this, did you ever wonder where those additional hours for the current and record number of new associates come from?  Do firms have some hidden reservoir of hours that they can unleash on demand?  Of course not.  Does the notion of "make-work" ever creep into your thoughts when wondering about such things?  How can it not?  Sure, some firms may have more work, but measuring classes of new associates by the hundreds cannot be the answer, since it is unlikely that the "new work" is at the low end of the ladder.

What is so disturbing about articles and blog posts like those provide by WSJ is the absence of any discussion about clients of the law firms surveyed.  It is almost as if the firms view themselves as independent of their clients, where the firm's economic interests are the trump card. 

I'm thinking of starting an over/under pool on when clients wake up and smell what they are actually being fed by their large firm service providers.  Anyone care to hazard a guess?

PS--Check out the reaction of Susan Hackett, General Counsel of the Association of Corporate Counsel here.

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As I mentioned in my last post, Bruce MacEwen had asked his Adam Smith, Esq. readers to vote in a poll on the value of Profits Per Equity Partner (PEP).  As of now, fully half of those participating voted that PEP was of no value and another 20% said that while the number was at one point informative, it has outlived its usefulness.  By my count, that's 70% rejecting PEP as a useful tool.  I would be inclined to bet that Bruce's readers are among the more financially literate in the profession, which puts some real muscle in this result.

On the other side of the fence?  Ed Poll.  Check Ed's thinking here.  While I usually find myself agreeing with Ed, that is not the case on this issue.  I just posted a comment explaining myself.  But here was the punchline:  Two firms with identical PEP.  One has massive unfunded retirement liabilities and the other does not.  Are they equally healthy?  Of course not.  Now adjust the example.  One firm has PEP of $1.5 million and massive unfunded retirement liabilities.  The other has PEP of $1.1 million but its retirement liabilities are fully funded.  Which is healthier?  Which is a better bet for the future?  The one with lower PEP.  The number just doesn't show anything about a firm that any savvy partner needs to know before deciding to move her practice.

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I recently expressed some frustration with use of Profits Per Partner or Profits Per Equity Partner as a benchmark for firm performance.  Bruce MacEwen takes the issue further in today's Adam Smith, Esq. post "Is PEP The Proper Measure Of Success?"  Bruce cites a piece by Guy Beringer, a senior partner at Allen & Overy, published on the firm's website.  Mr. Beringer expresses this conclusion:

    It is my belief that PEP is not merely an inappropriate star by which to navigate, it is in fact a dangerous and undesirable metric for the legal profession to follow.

Bruce MacEwen concurs with this judgment:

From an economic and financial perspective, PEP is a consummately manipulable figure, even more slithery than a public corporation's quarterly earnings releases, but the hyping of which (as with quarterly earnings) can lead to a variety of antisocial behaviors with toxic unintended consequences.

Bruce then follows with a discussion of alternatives, which I heartily recommend.  He ends with a poll to elicit his readers' views on the issue.  I look forward to seeing the results.

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Larry Bodine's post on his discussion with Mayer Brown's Director of Global Communications, Doug Kramer, got me thinking.  In case you missed it, Mayer Brown fired 45 partners--men and women who have sacrificed for the firm and who have families to feed and kids to put through college.  The reason?  Well, Mayer Brown's profits per partner were only $1.1 million per partner.  "When we rank 51st, well behind our peers, it raises a big issue in terms of attracting top talent and keeping it," Kramer said.  Kramer went on to say that  "we badly want to keep our best talent and attract the best talent, and PPP is a key metric that the marketplace looks at.  So when we’re 51st compared with other firms that we’re just as good as, we had to take decisive action."

This got me thinking.  Is PPP really the metric partners look at when moving firms, or is it just a convenient statistic for American Lawyer to use to "rank" firms.  Seriously, If publicly traded companies manipulated their stock prices the way major law firms manipulate their profits per partner numbers, every senior corporate executive would get to do the perp-walk and the chance to spend a few years at Danbury Minimum Security prison.  PPP is a joke.  And what's more of a joke, lawyers either are so stupid that they can't see behind the manipulation or they know how meaningless the statistic is, in which case law firm managers are fools for running their firms based on a bogey everyone knows is so malleable.  Seriously, senior firm managers really have to ask themselves, if a prospective partner is attracted to them because of their PPP and doesn't know how the firm's "stock price" is so easily manipulated, do they really want such a fool as a partner?  And if partners choose to move to firms based on factors other than PPP, then why are law firm managers so myopic that they don't focus on the truly relevant factors?

Kramer tries to justifies Mayer Brown's move by saying clients are offering empathy.  Don't take that too far.  They've all had to cut employees.  That doesn't mean they don't laugh behind your back at the legal industry's amateurish economics.  (Haven't we all heard clients lamenting the very profit per partner altar Mayer Brown just paid homage to when faced with another round of staggering hourly rate increases?)

My perception?  Mayer Brown just killed whatever semblance of institutional loyalty that might have existed.

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I am back on line.

I wanted to take a moment to thank everyone who sent me emails or posted comments to my prior post about my Dad's passing.  Those notes and comments were an incredible source of support to me and to my Mom and sister, with whom I shared them.  I have chosen not to have any of those comments published.  The sentiments and words of solace and wisdom are better left private. I hope you understand.  I do not have the words to adequately convey my great appreciation to all of you.  But know that my family joins me in saying thank you to all of you.

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I begin by asking you to forgive me this entry.  It has nothing to do with client service or the management of law firms.  But it has everything to do with who I am as a person.  And it is a measure of how important this blog is to me that I turn to it when I have something like this to share.

My dad died an hour ago.  I am stuck at O'Hare waiting for a plane to get to Florida to be with my Mom.  Because of the weather problems in Chicago this week, I won't get to Tampa until tomorrow morning.  My Dad had been suffering, ravaged by both Parkinson's and Alzheimer's, and he was out of it.  But the finality of it hurts.  And after 56 years of marriage, my Mom hurts all the while knowing that my Dad is in a better place.  And it pains me to hear her in pain.

My Dad was not a great person in a Churchillian manner.  He was a great person in the salt-of-the-earth-solid-midwestern-stock manner.  He went to church, he paid his taxes. He voted in every election, and while he loved politics, he disliked politicians.  He was a great friend.  But most of all, he honored my Mother, and he was a great father.  My parenting skills will never be as good as his.  And as much a wordsmith as I am, he was not.  He struggled to find the right words, but he always communicated exactly what needed to be said.  He was humble and not at all prone to self-promotion.  I guess that says something about my Mother.  Or that certain traits skip generations.

Allow me one story about my Dad.  My wife and I were talking about adopting kids since we seemed unable to have children of our own.  I am very proud of my Irish bloodlines, and I had a hard time embracing adoption because my child's blood would not be my own.  I told my Dad of my struggle and he looked at me and said, "Being a father is not about your heart, its about your soul."  I now am the proud father of 3 adopted children and 1 biological child.  Every time I look at one of my kids, I thank God I was the son of a wise man.

So, to my Dad, I pray the old Irish prayer with a bit of a twist:  May the wind be at your back.  May you step lightly.  And now that God has you in the palm of  His hand, please ask him to bless your family as we struggle to cope with the absence of such a great man.

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Monica Bay said to see the movie, so I did. Actually, I have wanted to but just haven't gotten to it.  I watched it last night.  This is a "must see" movie.  In is impossible to watch the movie and not believe that we are killing ourselves.  A true call to arms.  The science, the statistics and the photographic evidence are ever so compelling.  And Al Gore does a great job.  If he had campaigned like he presents in the movie, he would have won a landslide.

Bottom line:  If you haven't already done so, please see this movie.  And let me know what you think.

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Ford yesterday announced that it would offer layoff packages to all 75,000 of its North American laborers, and that it expected to reduce white collar headcount by 6,000. It is hard to believe that the law department will be immune from this layoff pressure; certainly it will not be immune from the pressure to cut costs. If anyone has any great ideas on how Ford Legal can do more with less--or at least dramatically cut costs--now would be a good time to make your ideas known.

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The September 1, 2006 New York Times has a fascinating article on associate compensation increases.  The news of the salary increases is old, but the article fascinates me because of this:

The inevitable issue for clients as well as the firms is whether higher salaries are reflected in increased hourly rates. But Michael J. Gillespie, a partner at Debevoise & Plimpton, another law firm based in New York, said: "There's not really a connection between salary levels and hourly rates. We set salaries at whatever is necessary to attract and retain the best associates. We set hourly rates by client demand and market conditions based on firms operating at our level in the market."

Frankly, the first thing I would do if I was a Debevoise client is fire the firm.  No one remotely associated with law firms or the practice of law will ever believe that there is no connection between salary levels and hourly rates.  Shame on them for even trying to plug that lame rationale.

For years, top New York firms have paid more to attract top talent.  And, as the article makes clear, the demand for top talent is growing while the number of graduates of top law schools remains constant.  But with a 72% attrition rate, it doesn't require the business acumen of Jack Welch to realize the answer to the manpower and development issue lies not with the compensation issue, but with the reliance on hourly rates and the up-or-out structure employed by major law firms.  When I see firms taking meaningful steps to move away from those two related features, I'll be writing here recommending that clients take a close look at a firm that "gets it."

My thanks to The Wired GC for bringing the article to my attention.  With a great graphic, the Wired One's post is priceless,

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From the Saturday, September 2, 2006 Business section of the Chicago Tribune--  J.C. Penny decided to move its $400  million advertising account from DDB to Saatchi & Saatchi after Pennys' CEO heard Saatchi's Kevin Roberts speak when promoting his new book, "Lovemarks: The Future Beyond Brands."  As the Tribune reports, "Ullman was so impressed with Roberts and his ideas about making deep emotional connections with customers that he directed Pennys' chief marketing officer to find out more. Thus began a courtship that resulted Friday in the surprising news . . . ."

I'm tempted to end with some trite rhetorical question about whether Pennys' lawyers are reading this book today, but that would ignore the profundity of Penny's decision.  DDB had orchestrated an ad campaign that resulted in Pennys' stock moving from $14 to $65 a share, and increased sales of over $1 billion.  Their ad campaigns had been award-winning.  So the decision to move the entire account to an agency with little experience in marketing apparel and no experience in the mid-priced retail segment says a great deal about the compelling nature of Roberts' "lovemark" theories.

What happens in the business world foreshadows what happens in the legal world.  So I leave with this rhetorical question:  Are lawyers creating their own lovemarks? 

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Good trial lawyers always "war game" their trials.  "If this happens, here's what I'll do."  I use "visioning" as a tool to prepare for cross examination, trying to imagine every answer to every question so I can "see" what I will do in response, or decide I don't want to incur the risk of going down the wrong road.  Good trial lawyers spend many hours preparing for each hour they spend in court.

The same is true for good appellate lawyers.  And while I don't have occasion to see them practice their craft, I suspect the same is true of all good lawyers in whatever discipline they practice.  Study, research, think, plan, practice, rehearse, and then do it all over again.

Which leads me to two questions.  If these kinds of efforts are the ones that are necessary for success in our practice, why don't we employ them in our efforts to develop and serve clients?  And why don't we employ them in our efforts to lead and manage our firms?  Both of these areas are critical to the success of any enterprise, and yet time and again I hear about or witness lawyers who don't prepare for these two critical functions with the same thoroughness that they demand of themselves before going to court.  Is it because they don't really believe marketing and management are really that important.  Do they think they're natural leaders, managers and rainmakers so that preparation isn't necessary? 

Lest there be any doubt about what I believe, I am certain that every task one performs, whether it be conducting a trial, marketing to a prospect or managing a law firm, benefits immensely, perhaps immeasurably, from careful preparation, study, rehearsal and thought.  Those performing these tasks owe their colleagues that level of commitment.

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I just read David Maister's back-to-back posts--The Keynote Speech Charade and The Power of One.  The juxtaposition of the two really got me thinking. 

In The Power of One, David recounts attending a graduation where Tom Wolfe gave the commencement address.  Wolfe's theme was that "that the world has frequently been changed profoundly through words, offered by an individual without an institution to back them up."  As an individual who lives in the world of words who does not have an institution to back him up, David inspired by this concept.  David also was reminded "of Peter Drucker's often quoted message that, in business and elsewhere, nothing ever happens except when it is created by 'a monomaniac on a mission'." 

Alone this is a powerful message.  But the next post, The Keynote Speech Charade, drove the point home.  David explains that he receives many offers to be a keynote speaker, but that many of the organizations requesting him want him to be "entertaining, informative, stimulating and motivating."  Effective, however, is another issue entirely.  According to David:

What they don't seem to want is anything that specifically addresses the way they run their firm or the real-world changes they are really trying to make. They don't, it seems, want anything that appears challenging, provocative, controversial or potentially divisive. They don't REALLY want to address the topics they ask their speakers to talk about.

For example, I recently received an enquiry asking me to speak about the topic of a book of mine, TRUE PROFESSIONALISM, and convey to the audience the importance of living up to the organization's "sacred values." They wanted me to be inspiring. However, when I asked if I could take votes at the meeting as to how well everyone thought the organization was currently living it's values, the organizers were terrified - "No, that would stir up things too much!" they said.

David uses this story to discuss the value that organizations miss out on because they lack the courage to make their meetings effective.  I was reminded of the story about the couple who was discussing therapy.  She wanted it to be effective, knowing that it would be painful along the way.  He only wanted it to be painless.  Because they couldn't agree on the goal, the lowest common denominator trumped.

After reading these two posts, I was left to wonder how many organizations are willing to confront the discomfort the one must endure to move forward.  How do you instill a willingness to embrace change as a welcome and necessary, indeed critical, part of an organization's soul?  Can Drucker's Monomaniac On A Mission succeed in changing a staid culture?  And if so, at what price?

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Tom Mighell, a leading technology thinker and noted blogger, penned an article for Law Practice Today listing 12 law marketing blogs in the article titled  "The Strongest Links."   Tom chose my blog as one of the twelve listed in his article.  To be listed along with the likes of my friends Gerry Riskin, Michelle Golden and Dan Hull, as well as noted luminaries Tom Kane, Larry Bodine, Ed Wesemann and the inestimable David Maister is an extraordinary honor. I am indebted to Tom.

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Great post by Bruce MacEwen (author of the extraordinary Adam Smith, Esq.) on the Business Week article highlighting the performance of Nucor.  The full Business Week story is here.

The numbers tell an amazing story:  a 387% return to shareholders over the past 5 years, handily beating almost all other companies on the S&P Index.  Here's a statistic I found amazing--66% of an average worker's pay is based on performance. As a result, Nucor workers earn almost $30,000 more per year than their counterparts at US Steel.

The real story, however, lies behind the numbers.  The culture actually empowers line workers, rewards true teamwork, invests all employees in the business and eliminates the hierarchical command-and-control structure that dominates so much of American business.  At times when companies like General Motors and Ford are desperately in need of fresh thinking, the Nucor story stand out all the more.  Its an inspiring business success story, and the benefits to such creative thinking in our profession are readily apparent.

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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.

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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.

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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.

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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.

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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.

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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.

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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. 

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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.

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