In Search of Perfect Client Service

"If you don't like change, you're going to like irrelevance even less."

                             --General Eric Shinseki, then Army Chief of Staff

Courtesy of a tweet by my friend Gerry Riskin (who also blogs about this video here), comes this eye-opening (and if it doesn't open your eyes, you're dead) slide show prepared Beaton Research and Consulting.

Gerry's advice is to use this slideshow at the beginning of a partnership or practice group meeting.  But every lawyer, and certainly every leader, should be thinking about what this slideshow means for the practice of law in the United States.

Yesterday, I spoke to a group of mostly insurance defense lawyers.  Earlier, I wrote about Rio Tinto bringing in an Indian Legal Services Provider to lower costs.  Is it foreseeable that even the staid insurance world will be swept up in this frenetic pace of change?  How can it not be?

But certainly corporate America is caught up in this change, and it is dragging the legal world along with it.  Wake up.  Pay attention.  Or become irrelevant.

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An absolutely brilliant piece by Paul Lippe in today's AmLaw Daily makes the case that lawyers' belief that they will reduce risk by making choices that are conventional or appear safe is misplaced, especially in today's rapidly changing world.  Lippe's piece, Welcome to the Future: What Bill Belichick's Taste for Risk Can Teach Law Firms, uses Bill Belichick's recent decision to go for it on a fourth down and 2 in the waning minutes of the Patriot's game against the Colts as the starting point for his analysis. He does so after noting John Maynard Keynes classic observation (that seems perfectly directly at most lawyers, and certainly most managing partners), "Most people would rather fail conventionally than succeed unconventionally."  There is comfort in the herd, but you go through life no better than the herd.

Here's Paul's punchline:

Over time, the Belichicks who think through risk and make choices that can be second-guessed are better risk managers than the folks who always make conventional choices. And whether he was right or wrong, you can be pretty sure that Belichick (and other coaches watching) thought very carefully about when to punt and when not to after the loss. Conventional choices may minimize the possible harsh glare of criticism, but they also minimize learning.

The same reality is emerging in how lawyers manage their business and careers. I was on a panel recently with leaders from two large firms. When asked how they would respond to a hypothetical client seeking an alternate fee arrangement that involved some risk sharing, one replied, in essence, "If we completely understand what it is, and there's no risk for us, and we're assured our normal level of profitability, and everyone agrees, then we could consider it." The other leader replied "yes." Which one do you suppose thought through the alternate fee approach harder? Which one is more likely to learn and be in a position to manage risk more effectively?

As an aside, you have to love a lawyer who, when a client seeks "an alternative fee arrangement that involves some risk sharing" sharing responds by telling the client that so long as "there's no risk for us".  Wonder where he learned that definition of risk sharing. 

But to Paul's point, to be blind to the risk posed by staying with the herd, ignoring the perils that stand to decimate the herd, is hard to fathom.  Yet the insight of the definitionally-challenged leader only confirms that people can be blind to their world.

And Bill Belichick?  He's far too comfortable with risk to ever be a managing partner.  And even if he got there, his shelf life as managing partner would be considerably shorter than Eric Mangini's tenure with the Cleveland Browns.

 

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From AmLaw Daily:

 We used our annual survey of the heads of The Am Law 200 to ask questions about the changes they're seeing; 142 responded. . . . More than half the law firm heads report seeing a "fundamental shift" in the legal marketplace; only a quarter said they didn't.

This result is staggering.  Not because of the significance of the fundamental shift in the marketplace.  But what does it mean that 25% of the leaders of the largest law firms in the country do not see that which is patent?  Can there be a more sweeping indictment of the leadership in those firms?

The same article reports on the fundamental shift in client relationships, citing Microsoft's termination of its relationship with K & L Gates (and, yes, the Gates in the firm is related to the Gates in Microsoft) and reporting data on the number of corporate counsel who terminated firms in 2009. 

For those leaders who responded that they didn't smell the coffee, er, see a fundamental shift in the marketplace, the data on on the law firm terminations should be profoundly troubling. 

 

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ACC's Susan Hackett just posted Are Firms Tone Deaf? Why Push For Rate Increases In 2010?  Almost exactly one year ago, I asked the same question in my post The Economy And Rate Increases: Someone Is Not Listening. I had raised the issue in early October 2008.  As Susan's post makes clear, law firms are not learning.  Myopically focusing on one driver of revenue is only going to cause more pain as clients rail against those requests for "more."  The driver needs to be increasing margins.  Just as our clients focus relentlessly on margins, it's time law firms learn that they too need to do more with less.

 

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Did you ever notice how decisions seem to gain a momentum of their own?  A managing partner becomes enamored of an idea, and no one else spends time thinking about it.  Or, as is more frequently the case, a tough question, such as "Are we at the top of our game, or are we in decline?" never gets asked because the answer is assumed. 

This is not an academic exercise.  Jim Collins reveals in his book How The Mighty Fall that the inspiration for the book came from a question he was asked about a question he posed to a group of generals, CEOs and social sector leaders.  Here's the story:

I pondered and puzzled, and finally settled upon, Is America renewing its greatness, or is America dangerously on the cusp of falling from great to good?

                                             ************

At the break, the chief executive of one of American's most successful companies pulled me aside.  "I find our discussion fascinating, but I've been thinking about your question in the context of my company all morning," he mused.  "We've had tremendous success in recent years, and I worry about that.  And so, what I want to know is, How would you know?"

"What do you mean?" I asked.

"When you are at the top of the world, the most powerful nation on earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you're already on the path to decline.  So, how would you know?"

Collins wrote a book to respond to that question.  My question is this: who in your organization is asking that question?  And since most law firms have highly skilled paid professional advocates, if I were running a firm, I would give my best professional advocate the task of making the case that our firm was in decline.  Why?  Because if I couldn't win that argument against a good advocate, why should I believe he or she isn't right?  Then I need to ask what I can do about it.

Good questions.  Hard answers.  But as important, getting somebody to make the debate robust is worth its weight in gold.

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One of the explanations often offered by managing partners to explain why lawyers (really, their organizations) are so slow to change is lawyers' well-establish aversion to risk.  Change involves risk, to be sure, though the assumption implicit in the statement--that the status quo does not involve risk--is demonstrably untrue.  That debate, however, can be had another day.  Rather, I wanted to share something I read in Jim Collins' How The Mighty Fall about how to look at risk and whether it is "too much:"

Bill Gore, founder of W.L. Gore & Associates, articulated a helpful concept for decision making and risk taking, what he called the "waterline" principle.  Think of being on a ship, and imagine that any decision gone bad will blow a hole in the side of the ship.  If you blow a hole above the waterline (where the ship won't take on water and possibly sink), you can patch the hole, learn from the experience, and sail on.  But if you blow a hold below the waterline, you can find yourself facing gushers of water pouring in, pulling you to the ocean floor.  And if it's a big enough hole, you might go down really fast, just like some of the financial-company catastrophes in 2008.

Just as an example, it would be an imprudent firm not doing something in the fixed fee arena these days.  Do you have the whole firm start doing all of its work on a fixed fee?  That would be a "below the waterline" risk.  But doesn't it make sense to start somewhere and develop data and experience?  On a measure scale, that effort would be an above the waterline risk.

This is a simple but effective device for analyzing risk to your organization.

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"When you are at the top of the world, the most powerful nation on earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you're already on the path to decline.  So, how would you know?"

This question is the foundation of Jim Collins' new book, How The Mighty Fall.  The back cover contains this statement:

Whether you prevail or fail, endure or die, depends more what you do to yourself than on what the world does to you.

Between those two quotes is a heck of a book, one that every law firm leader should be reading. But Collins tells a story that illustrates the point of the book better than merely stating the point ever could:

On a cloudless August day in 2002, my wife, Joanne, and I set out to run the long uphill haul to Electric Pass, outside Aspen, Colorado, which starts at an altitude of about 9,800 feet and ends above 13,000 feet.  At about 11,000 feet, I capitulated to the thin air and slowed to a walk, while Joanne continued her uphill assault. As I emerged from the tree line, where thin air limits vegetation to scruffy shrubs and hardy mountain flowers, I spotted her far ahead in a bright-red sweatshirt, running from switchback to switchback toward the summit ridge.  Two months later, she received a diagnosis that would lead to two mastectomies.  I realized, in retrospect, that at the very moment she like the picture of health pounding her way up Electric Pass, she must have already been carrying the carcinoma.  That image of Joanne, looking healthy yet already sick, stuck in my mind and gave me a metaphor.

It takes something extraordinary to escape the tendencies that cause people to turn a blind eye to the warning signs, to excuse the signs of decline, to refuse to apply the critical analytical skills that most lawyers possess in such abundance.  Those that escape these tendencies have a chance to avoid the fall. 

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I was recently having a discussion with a friend of mine who is the Managing Partner of a firm I love and greatly respect. We were talking about Valorem’s Advisory Board and what a great experience its been for us. She lamented that she would love to create a similar board for her firm, but had run into resistance from some of her partners. Her comment got me thinking about the difference between having an ownership stake in an enterprise and controlling its operation, traditionally the function of enterprise management.

Perhaps dating back to those “olden days” (a phrase my kids use with me all the time) when men were men and partnerships were collegial and law was a profession instead of a business, our profession has been burdened with the notion of decision by consensus. That is, partners will hash an idea out and eventually a decision on the issue at hand will be made by general agreement. Sure, the legal documents provide for votes, but consensus is the favored approach.

As firms grew in size, the folly of this approach became apparent. Key decisions were delayed because “Bob” was traveling. Not all partners had the same appreciation for financial dynamics or client relations or other practice nuances, and only a few seemed to appreciate the “ways of the future.” Because no one was accountable, lots of things never got done. Some firms did, in fact, embrace concepts of enterprise management that would be recognizable in at least some business schools. Still others concentrated power in the hands of a few partners, although this approach typically has led to turf wars. The common denominator among most of these newer approaches is that they lack accountability. The absence of change amongst the managing partners in BigLaw during the last two years illustrates that essential failing in the management models of most firms.

Let’s look outside the law for a minute. Can anyone imagine Mabel Jacobs, an 82 year old retired homemaker who owns a few thousand shares of stock in Microsoft walking into Steve Ballmer’s office to talk about her views on what Microsoft should be doing over the next few years? About executive personnel decisions? About how it should use its working capital? Can you imagine a line of shareholders waiting to have similar discussions? Of course not. In the real world, we distinguish between ownership and management. Ballmer may be elected by the Board which is elected in turn by the shareholders, but once in, he makes decisions until the Board decides to remove him from his position.

Why should law firms view management differently? Yet partners routinely mistake ownership interest--a right to profits--with management.  In my own experience, I’ve seen the interest of former partners in management issues vary greatly according to their workload. Get close to a trial and suddenly the business of the law firm is irrelevant. Some people are not interested in the economic circumstances of the business world. Why on earth would we want them influencing marketing and pricing decisions? I've seen firms elevate their primary rainmaker with a thirst for power even though that person could neither management their way out of a paper bag or lead a firm to ice in the Arctic.  And why, as the pace of change accelerates to a speed that will shake foundations of virtually every enterprise, would any group of rational actors embrace of form of business management that is the antithesis of nimble and effective?

I am not, by the way, suggesting that every decision be concentrated in one person’s hands. Decisions like admission of new partners, merger, and other core issues ought to be discussed and voted upon. But a decision on whether to create an Advisory Board and who would be on it would never qualify as a core issue. Certainly an effective manager and leader will prize communication with his or her constituents, perhaps embracing what Tom Peters calls MBWA—management by walking around. But firms that tie the hands of their senior managers risk paralysis and unfortunately, obsolescence.  

 

 

 

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My friend Ed Reeser has written extensively, in blogs, Legal On Ramp posts and articles, on leadership issues in law school.  If you know Ed, you know that he is the kind of person who leads from the front and he is the kind of leader you love to follow wherever he goes.  So when he writes about leadership, I read very closely.   His latest piece, The Lost Art Of Leadership, published in today's Los Angeles Daily Journal, is worth a careful read.

Ed begins with one of my favorite Peter Drucker quotes, "Management is doing things right; leadership is doing the right things."  The gist of Ed's argument is that law firm leaders have failed this essential test of leadership; they have lost touch with the people that make up the firm, and in so doing have brought the firm to its knees.  People are the real key, and they are being sacrificed in the name of expediency.  According to Ed:

Partners in leadership positions are increasingly not leaders, but those with enough power to demand positions and allocate to themselves, and their friends, increasing shares of money and other rewards.  The confusion of the position of leader, with the fulfillment of the role of  a leader, has never been more apparent.  The short-term approach of present day law firm management appears to have more in common with a smash and grab visit to a Tiffany's counter than exercise of fiduciary concern for one's partners or a long-term responsibility for colleagues' careers.

Harsh, to be sure, but true?  This is an area where there is no "right" answer and no data to suggest an answer.  But let me share this anecdote.  I just returned from lunch with two of the leading and most respected law firm consultants in the world.  I assumed their business was booming because certainly in these trying times, leaders would be looking for insights and a sounding board to discuss new ideas and approaches to bring their firms back to economic rightness.  Nope, not happening.  I suppose its possible that firms really are seeking insights and fresh ideas, but have simply gone to other consultants.  Not likely though. Instead of saving careers and being a true leader, isn't it much easier to eliminate a few jobs and cut back on coffee?

At the end of the day, it is, perhaps, too much to expect that most people running law firms would act as true leaders.  Real leadership, after all, is really one of the rarest traits.  That is why we so marvel at it when we see it.

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John Kotter, author of A Sense Of Urgency and a professor at Harvard Business School. He is considered by many to be an authority on leadership and change.  Those words are not spoken often in the context of the business of law, so it is not surprising that Kotter's recent interview on the topic of leadership and change is in Inc. rather than a legal publication. But as a believer that what is good for business is good for legal business too, I wanted to draw attention to Kotter's discussion of urgency.

From the introduction to the interview:

Kotter believes there are two kinds of urgency -- and, like cholesterol, one is good and one is bad. The good kind is characterized by constant scrutiny of external promise and peril. It involves relentless focus on doing only those things that move the business forward in the marketplace and on doing them right now, if not sooner. The bad kind -- to which many companies have recently succumbed -- is panic driven and characterized by breathless activity that winds up producing nothing demonstrably new.

Kotter advises leaders to stamp out the bad urgency, which demoralizes and drains people, and use the -- dare we say it? -- opportunity of the economic crisis to remake their organizations with a lean and hungry look. And he encourages them to sustain that newfound urgency even when flush times return.

Kotter does not believe that actions of most business since the recession hit are positive:

Many companies probably think they're responding with urgency, and there are certainly a lot of people running around trying to come up with solutions. But most of that activity is going to be ineffectual, because it is driven by a fear of losing. It's not that gut-level determination to win and to make absolutely sure that they do something every single day to keep pushing that goal forward. That's true urgency.

The "frenetic activity" that seems to abound in large law firms these days (at the management level alas) is a sign of "false urgency."  With "true urgency," one expects to see change.

It is a most interesting interview, including Kotter's explanation for why, if the Klingons were attacking, he'd want Kirk in command, not Spock.  My take from it is that Kotter would not applaud the "leadership" coming from most law firms these days.

 

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I met Gini Dietrich on Twitter.  Gini is the CEO of Arment Dietrich, a public relations firm in Chicago.  Gini also is the primary author of the blog The Fight Against Destructive Spin.  In a recent post, Gini, an avid cyclist, recounted how she had been riding along with fellow cyclists talking about the Bears.  In the blink of an eye, she wiped out and was sliding along the bike path at 22 mph.  Thankfully, Gini is doing okay, but her experience led her to write a captivating post, Business Succession Plan: What Happens In An Emergency?  It is must reading for anyone running a business.

Succession planning is not the point I want to make here.  "What happens if ...?" planning is my point.  I think it is fair to say that no (does anyone know an exception?) BigLaw leader ever did any planning for a major recession.  They have been reacting to events in many cases.  Others have simply mimicked those who took action first.  But how many have learned a lesson and done planning for, say, a major further downturn, or a permanent change in how most clients expect a fee arrangement to be structured. 

There are hundreds of "what ifs" that could be considered.  With many, the conclusion will be that if "it" happens, the effect on your business will be negligible or that some modest change will take care of the issue.  But certain "ifs" will reveal themselves to be challenges to the core of your business, threatening the survival of the business or institution.  Aren't these things worth some thought?  Since we now know that the most unlikely events are possible and that change is certain, I think the amount of thought that should be devoted to these possibilities is more than some. 

I hope people learn from their mistakes.  I would be interested if anyone knows someone who can be help up as an example of this.

 

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I think the world of Dan Hull.  Smart, opinionated, tough-as-nails, erudite.  Great writer. Funny as hell. Plus we share an unwavering commitment to providing unsurpassed client service.  We don't see eye to eye on everything, though.  Dan still believes in the billable hour.  I have devote my life to proving it the bane of the legal universe.

Another issue on which we disagree is work life balance.  I read Dan's two recent posts, Work Life Balance Is Still A Dumb-ass Issue and Breaking news: I will name my next three children after Jack Welch and three thought immediately came to mind.  Dan believes there is an inherent conflict between being in a service profession and having a life outside that profession. 

Let me start with a point of agreement.  Ours is a service profession.  To excel and succeed, we must be devoted to our clients and their needs.  The relevant numbers for measuring devotion are 24/7/365, not 9 to 5. I am sure there is no light between my position on this and Dan's.

But Dan's writings on this suggest that work-life balance cannot be reconciled with 24/7/365.  Here are the thoughts that come to my mind: Hobson's choice v. Kobayashi Maru.  A Hobson's choice "is a free choice in which only one option is offered, and one may refuse to take that option. The choice is therefore between taking the option or not; take it or leave it."  I do not see the choice as a take it or leave it, one or the other.

I have been at a ballgame with my kids and had to respond to urgent emails from clients or step to a quiet area for a phone call.  I happily do so and my kids seem not to notice my momentary disengagement.  On occasion, I have had to work late to get something done to meet client's deadline.  I do so and neither my family nor I resent the need to do so.  But when client needs do not require my immediate attention, I have left work early to watch kid activities or see a school concert.  I am leaving on vacation shortly and while I will be reachable for important calls, the substantial bulk of my time will be spent with my family.  If those "balances" are good enough for me, they are good enough for all of my colleagues.  One can have both work life balance and be a true professional fully devoted to one's clients.

The Kobayashi Maru reference?  The Kobayashi Maru is a vessel at the heart of a simulation in the Star Trek series.  It presents the young officer with a no-win scenario. 

"James T. Kirk takes the test three times while at Starfleet Academy. Prior to his third attempt, Kirk surreptitiously reprograms the simulator so that it is possible to rescue the freighter. This fact finally comes out, later in the movie, as Kirk, Saavik and others appear marooned, near death. Saavik's response is, "Then you never faced that situation. Faced death." Kirk replies, "I don't believe in the no-win scenario." Despite having cheated, Kirk was awarded a commendation for "original thinking."

I may not ever receive a commendation for original thinking, and I most certainly am no James T. Kirk, but I'm not too keen on no-win scenarios either.  The client commitment v. work life balance conflict can most certainly be a win-win for all.

 

 

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Happy Birthday America.

Two hundred thirty three years ago, leaders decided that change not only was possible, but necessary.  Were they certain what change would bring?  Of course not.  But they did it anyway.

 

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Altman Weil has released the results of its 2009 Chief Legal Officer Survey.  To my mind, the most telling result is this:

The survey asked Chief Legal Officers (CLOs) to rate how much pressure corporations are putting on law firms to change the value proposition in legal service delivery, as opposed to simply cutting costs. CLOs responded across the board, with 25% rating the pressure as high – or between 8 and 10 on a zero to 10 scale; 37% rating the pressure in the mid-range at 5, 6 or 7; and 38% rating it low, between zero and 4.

However, when asked how serious law firms are about changing their delivery model, the answers were in sharp contrast. Only 5% of CLOs assessed law firms as highly serious, scoring them between 8 and 10. Twenty percent gave firms credit for some level of effort, rating them 5, 6 or 7. A full 75% rated law firms between zero and 4 on the scale, indicating little or no interest in change.

Wait, did I read that right?  "A full 75% of the CLOs rated law firms between zero and 4 on the scale, indicating little or no interest in change."  How is that possible?  CLO's put maximum pressure on their law firms and law firms don't respond.  NEWS FLASH to law firms not responding: IT'S TIME TO WAKE UP!

 

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Two years ago, Mike Dillon, GC of Sun Microsystems, observed in his post, The Way Of The Mastodon:

 My point is that the epoch of the current law firm model - which derives its profitability from growing scale and raising hourly rates - will soon be over. The firms that will survive and thrive are those that recognize this change and focus on how to maintain margins by focusing on efficiency.

Just last week, Dillon said he was shaking his head while reading a post reporting that law firms do not expect to make radical changes as a result of the economic downturn and related changes in the legal marketplace. In light of his earlier prophetic comments, his reaction that this feels "like whistling past the graveyard" should cause all but the most stubborn to at least pause.  According to Dillon:

The reality is that we are in the early stages of a seismic shift in the traditional cost and delivery model for legal services. I see it every day in my interactions with the law firms that support us and in my discussions with peers at other companies. This change is the result of three major factors: the current economic downturn, the rise of alternative legal service providers and the lifestyle choices of the newest members of our profession.

Dillon concludes his analysis with this thought for those who persist in propping up the status quo:

Change is always difficult. But, all of us in the legal profession - whether in-house or firm - need to embrace it. For as Benjamin Franklin once said: "When you're finished changing, you're finished."

While the tendency is to focus on BigLaw's resistance to change, the truth is that BigLaw merely reflects what is true about the profession as a whole.  Lawyers tend to fear change and are uncomfortable (to say the least) operating with unknowns and uncertainty.  Courage is not the absence of fear, it is overcoming your fear to act the may you should rather than instinctively.  Change can--and should--be your choice.  If you don't relish it, you need to figure out how to at least be comfortable with it.

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"Designing a nuclear powered aircraft carrier is a mindbendingly complex process."  I love that sentence--if only because of its understatement (and the use of "mindbendingly").  It is from a fascinating article at FastCompany.com, How Does The Navy Design The Nuclear Supercarrier Of The Future?  The answer, of course, is that one designs nuclear supercarriers with the help of virtual reality simulations.  It is crystal clear how this relates to the practice of law, right?

Not so clear?  Let me explain.

With every technological advancement, opportunities arise.  The article on supercarrier design discusses the change from the use of full-scale wooden models when the ships were last designed (a generation ago).  Wood models vs. virtual reality.  Change happens.  Sometimes its really big change.

When change happens in the real world, the legal world eventually catches up.  Can you imagine filing a brief that allows a judge to see in virtual reality what happened in the event at issue?  Can you imagine the ability to bring the parties together on the facts when you can see what transpired?  Maybe less lawsuits or quicker resolution.  Articles like the FastCompany supercarrier article have to be viewed as keys to unlock our imagination. 

Close your eyes.  Imagine.

 

 

 

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Here's a sentence that should scare the bejesus out of every inside lawyer:

"Other firms, however, are taking work they would typically farm out to contract lawyers and instead are giving it to associates who might not have much on their plates."

So says Raunn Ross of Agency Legal Staffing in Los Angeles.  Apparently, some firms are resorting to the argument that its better to have work done by experienced employees "who have a proven track record."  This is the gist of a Law360 article, Temp Attorneys Boon For Some, Liability For Others.

If you're an inside lawyer, you've got to wonder.  When assignments are being made in a law firm, say for document review, exactly how much consideration is given to the permanent associate's track record?  But more importantly, is the law firm so out of touch with the market for contract lawyers that it doesn't realize the number of high quality, high caliber lawyers who suddenly are on the market.

Once again, clients have to be saying to themselves, "with friends like this..."

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The title is Fred Bartlit's take on the recent decision by Pillsbury Winthrop to cut associate salaries between 10-20% based on utilization rates.  Fred's take is 'this guarantees that more associates will "make their quotas" and that clients will pay much more for no reason." (Fred's comments appear in a post on Legal On Ramp)

When I and others have suggested before that pressure to meet hours requirements breeds inflationary billing practices, some have resisted the idea.  In this environment, where meeting hours quotas can make the difference between having a good paying job and long term unemployment, I think the temptation to inflate hours will be irresistible for almost all but the most saintly or those so disenchanted with their job they are prepared to leave anyway.  Bear in mind that this kind of hours inflation does not have to be outright fraud, though I suspect we will encounter cases of this kind of behavior.  But most people will be more subtle:  who's to say whether it really should take 10 hours instead of 7 to research an issue or write a motion?  Or what about taking an extra deposition "just to be sure a fact is really a fact?"  There are almost countless ways motivated lawyers can "create hours" and, if your job depends on doing so, it is a fare bet that many (most?) will.

But Fred's point is more focused--why should the firm's clients have to pay for this, whether it be risk or reality?  This kind of policy is an extreme example of ignoring client service.  I'm not sure why a client would tolerate it.

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The AmLaw Daily contains a fascinating post, GCs, Law Firms And Flat Fee Arrangements: A Matter Of Trust.  One outside lawyer is quoted as saying that "the single biggest obstacle to flat fee arrangements is fear."  The reporter goes on to say that clients worry about the quality of work they will get and outside counsel worry that they will lose money if something unexpected happens. 

Most outside lawyers still don't get it.  Start with this:

At the conference, some outside counsel said companies have an obligation to ensure their firms don't lose money if a turn of events isn't due to the firm's negligence.

This is, at core, a view that clients must insure the firm's profitability.  The article does not suggest that outside lawyers worry that they will make a windfall if something unexpected happens that reduces the work they need to do  and increases their profit margin. So, for the outside lawyers, flat fees must be a win or break-even proposition for them to be acceptable.  How quaint.

This quaint view that their profits must be guaranteed infects many fee proposals.  Silvio DeCarli, DuPont's Chief Litigation Counsel, notes that DuPont frequently gets fixed fee proposals where the firm makes money if DuPont loses the case and makes even more money if the Company wins. 

As more firms try to offer alternative fees, clients should be wary of this "heads I win, tails I win more" approach to fee calculation.  Real partners win together, but they also lose together.

 

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I've mentioned my friend Dan Hull any number of times in my posts.  He is thoughtful, an extraordinary writer and someone who shares my passion for providing great service to our clients.  He sees things through the same client service prism I do.  I don't always agree with him, but when I don't, I devote a lot of time to thinking about why.  I don't want to miss an insight he has that I might have missed, leading to bad judgment in staking out a position.

Dan's What About Clients? blog contains a new post, The Scramble for Value, that asks whether the focus on new business models, work-life balance and other issues has caused us to lose sight of the importance of client service.  Dan frames the question much better than I ever could:

Lawyers are not special. We are servants, if often well-paid ones. Billing models, partnership structures, staffing alternatives, the care and feeding of associates, firm culture, collegiality--they mean nothing unless designed and maintained for clients' day-to-day needs. We are not royalty. We serve. We anticipate, prevent and solve client problems. Nothing more. Can we focus more on the real deal: the Art of the Client. What else is there?

In this circumstance, I agree and disagree.  We are, as a profession, spending a lot of time talking about what "this" means for lawyers and how firms must alter their business models to survive, and so forth.  Not client centric at all, and regrettably so.  But at the same time, there is no discounting the fact that, in the main, service flows from the business model, or the business model acts as a levy and interferes with client service.  Not 100% of the time.  Not every lawyer.  Not every firm.  There are exceptions.  Notably, Dan's firm seems very much the exception, focusing on long term relationships and ensuring that bills reflect value.  But if we focus on the exceptions and lose sight of the norm, we miss too much.  Having seen both the hourly rate business model and the alternative fee model up close and personal, I am 100% convinced that the latter model provides more for our customers.   Not 100%, every firm every time, but much more so than the hourly rate model.  I've written about the reasons at length and won't run on here.  Time will tell, but in the meantime, as Dan suggests, let's keep our eye where it belongs: on our customers.

 

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There is a fascinating discussion going on in a Legal On Ramp forum under the same title as this post.  I am taking the liberty of quoting in its entirety a post by Fred Bartlit of Bartlit Beck, because it is so incredibly indicative of BigLaw's attitude about the current state of things:

Re:Innovation during the Downturn 2 Minutes ago

Here is the attitude of large traditional firms. "we know clients want change, but the large firm business model will not change" Morgan Lewis Chair is ‘Very Confident & Positive About the Future’ Law Practice Management Morgan Lewis Chair is ‘Very Confident & Positive About the Future’ Posted Mar 10, 2009, 08:06 pm CDT By Martha Neil "We're very confident and positive about the future," says Francis Milone, the chairman of Morgan Lewis & Bockius, in an interview today with the ABA Journal. As clients get bigger and seek legal advice about more complex issues, "I don't believe that large law firms are going to be disadvantaged," he says. "I think we're going to be in a strong position, frankly, going forward." But "I don't thing the business model is going to change," says Milone of BigLaw practice. "I think the client expectations are going to change--and they have been changing for several years now." Among other differences, corporate clients are more focused on value and costs today, he says, and "our big challenge" is delivering legal services "in the way that clients want them delivered." Sort of a "sure, clients want change, but screw them" state of mind

I've been writing a lot lately that large law firms are changing at the periphery with genius moves like eliminating coffee and terminating associates, but that so far none have demonstrated any real commitment to change their business model.  This post,  in a nutshell, explains why.  And Fred has hit the nail on the head with his characterization of the state of mind involved.

Addendum:  I neglected to include in my original post a brief comment on the Legal On Ramp Forums.  These include some of the most interesting, informed and insightful exchanges I regularly observe.  Kudos to LOR and the many forum participants.

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As I drove home from my morning Starbucks run, I was listening to an NPR story about the auto industry.  One President of Local Union in Pontiac, Michigan was saying that his local used to have 20,000 members, but now had only 1800.  "We went from counting our overtime hours to wondering whether we would even have a job, all in the space of two months," he said, trying to add emphasis to the precipitous decline in the industry.  Hmmmmm.  Really?  Apparently the entire auto industry, union included, needs to be indicted for being blind to the future.

I grew up in Detroit.  Unlike most of my friends and cousins, I was not a child of the auto industry.  Perhaps that gave me more of an outsider's view, but it was clear in the 1970s that the domestic auto industry was heading south.  And even if the guys who ran the industry were close enough to retirement that they didn't want to recognize the coming change, the next generation or the one after that surely should have.  The claim of surprise is an admission of lack of vision.

The parallels to the current situation in the legal profession are easy to see.  Commentators and others (see Fred Bartlit, for example) have been raising warning flags for years about the coming change in the industry.  Some commentators (Richard Susskind comes mind) see so far into the future that it's not surprising most don't follow.  But others who are on the leading edge of the curve (Gerry Riskin comes to mind) predicted precisely what is happening at a time when firms could have reacted responsibly.  Few, if any, did so.  And now, like the Local Union President, law firm leaders are claiming surprise.  Generally their comments include something about who could have predicted the demise of the capital markets?  Fellas (because there are few women who run major firms), the bursting of the housing bubble was being discussed for years as were the ramifications.  In your zeal to ride the profits per partner wave just a bit longer, you weren't listening.

Which brings me to the title of this post.  In the legal world, who is accountable?  In January 2008, I wrote about attending a leadership meeting with managing partners of some of the largest firms in the country.  No one was preparing for what happened.  Even this summer during the run-up to the ACC Value Challenge launch, leaders of major law firms were being dismissive of client concerns about value and cost.  The arrogance was stunning.  But not as stunning as the blindness to the economic fall-off. 

There have been many stories about lay-offs, the large law firm euphemism for terminations.  Strange, though, that there have been few stories about Managing Partners being laid off.  Indeed, only Cadwalader comes to mind.  Seems to me, though, that partners ought to hold someone to account.  The essential traits of leadership are vision and accountability.  Both seem to be in short supply in our industry.

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In my inaugural glog post (glog is my definition of guest blog post, I alluded to the issue of diversity and suggested that, in addition to driving change related to alternative fees, in-house counsel had the power (or at least some power) to drive change in this regard as well.

In late January, I had the honor of sitting on a panel about affinity groups and diversity initiatives in California with two fellow panelists (Macey Russell and Tiffani Lee). I qualified not only because I am a woman, but because I co-founded and ran the women's initiative in my former BigLaw firm from 2004 - 2008, and in 2008, formed an organization in Chicago called the Coalition of Women's Initiatives in Law Firms (Coalition for short) which now boasts 35 member firms and more than 80 firm delegates. The Coalition provides a forum to share  best practices, training, programming and policy ideas with the women running their own firm's initiatives. It's an effort to address issues collaboratively rather than individually (the old "power in numbers" and "why reinvent the wheel" adages).

Although "diversity" has taken a distant back seat to survival within law firms these days -- not because it’s a puzzle that has been solved, but rather, because when profits per partner fall, everything else takes a distant back seat-- I was struck by a question that came from a participant in the session, as well as by others not in attendance, but who joined in a discussion afterwards -- how can you tell whether firms are really committed to or are actually making progress with diversity? How do we distinguish window dressing from real change?  For what it's worth, here are my 2 cents on what is going on behind the diversity curtain:

1. To borrow a phrase from Justice Potter in Jacobellis v. Ohio, it is difficult to define what a commitment to diversity means, but "I know it when I see it."  Among other things, it includes: (a)  affinity groups and diversity initiatives that are driven by the attorneys, not mandated by marketing or management; (b) creative programming designed to address issues that the affinity members themselves think are important; and (3) real measurement of things that matter like percentage of work done by minorities and women on matters for the firm's top 10 clients by revenue or the top 10 revenue-generating matters by department.  It is also (4) evidence of shifting associates or partners around in an effort to capture greater diversity on even the firm's most important matters.

2. It’s the hard evidence.  Numbers.  And specific numbers.  It's not just the percentage of minority/women partners -- it's the percentage of minority/women EQUITY partners that matters.  Allowing firms to hide behind laudable numbers showing 20-25%  women and/or minority partners ignores the fact that in reality, among the equity partnership, the numbers are usually in the dismal single digits. The NALP, American Lawyer and other organizations who gather or utilize data from law firms but do not insist on a breakdown of equity and non-equity status are simply perpetuating the fallacy that great strides are being made at every level.  Remember - non-equity partners are not factored into the venerable "profit per partners" equation and are, like associates, mere overhead. 

3. Rather than asking for the number of minority and women partners or associates on key firm committees -- ask about the number of DIFFERENT minorities and women serving on DIFFERENT key committees.  In other words, if there are 5 key committees and  the same 3 women and  2 minority partners serve on all of them -- saying there are 25 minorities/women on key committees may be technically accurate, but disingenuous at best. 

4.  In BigLaw, it's all about revenue generated and hours billed. Speaking from experience -- and yes, this will draw the ire of many, and admittedly, this is a generalization --  women and men with families or significant outside commitments or interests are disproportionately negatively impacted by the measurement of hours billed, since the typical efficiency that emerges when trying to juggle work and other responsibilities is not only not valued in the law firm context, but it is penalized, as  more efficiency = less hours billed = less revenue generated for the firm (even if those same efficient hours got a winning result for the client). 

There are a whole host of studies and explanations as to why women and minorities, regardless of drive, success in practice and intelligence, are not as successful at developing business as their white male counterparts, and I won't even attempt to get into those here (see one of my favorite articles relating to women). 

What Can You Do? Suffice it to say that if you are an in-house lawyer and you really want to make change and strides for women and minorities -- (a) demand accountability and breakdowns of the number of hours spent by diverse attorneys and women on all of  your matters (and demand to see it on every bill) and (b) seek out and directly give x percentage of your work to women and minority attorneys.  Note, please, that I am not saying to give it to someone who isn't qualified -- I am simply saying, broaden your horizon when it comes to evaluating qualified recipients so that women and minorities are included in the mix on a regular basis.

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Time was, people produced things and stood behind them.  Slogans like "our name is your product" and similar sentiments were expressed as a means of assuring quality.  Those days are over.  But now it looks like the pendulum has swung in the opposite direction.  It's a sad day.

I stopped by a store at O'Hare airport moments ago to buy a pair of earbuds.  And the clerk informed that earbuds routinely failed so I should pay an extra $5 for a special guaranty that would allow me to return the apparently defective earbuds and exchange them for another pair of equally defective earbuds.  Companies have forgotten that warranties are useful for items that wear out, but EARBUDS?  I fear for the day when we'll be given the opportunity to pay a special fee to ensure against our restaurant food not being warm enough.  Or perhaps to guard against those notoriously defective toothpicks.

I hope professional service firms don't fall victim to this insanity, but I can see some large prestigious firm offering a fixed price in order to attract a piece of business, only to then suggest the client pay a fee for insurance against under-staffing.  Or some such nonsense.  Price should not be an excuse for shoddy work or defective products.  It's that simple. 

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My first memory of the importance of optics in law was the time I was standing with an in-house lawyer for a large waste company outside a waste transfer station in Brooklyn, New York.  We were going to be meeting with a senior partner from a large New York firm.  He arrived in a limousine, stepped out wearing a very expensive suit and tie (I'm sure the tie cost more than any suit I owned--I know for sure the shoes did!).  You could see him sniffing the air, he asked "What is THAT smell?"  The immediate reply from the in-house lawyer was "Money."  The odor was, of course, eau de waste.  Needless to say, the really rich senior partner was way out of place in a waste transfer station and clearly was not enjoying himself.  When the time for lunch arrived, he proposed taking his limousine to his club in Manhattan.  The in-house lawyer was thinking sandwiches in the office kitchen.  The partner made his excuses and left.  I had sandwiches and howled with laughter at the in-house lawyers impersonations of the rich partner.  Lesson learned--optics count.

Flash forward to November 2008 when the CEOs of the Big 3 Automakers flew their corporate jets to Washington to ask for a federal handout.  I authored a post on the auto chiefs being tone deaf, suggesting that firms asking to raise rates in the current economic environment were being equally tone deaf.

Let me plead guilty to mixing my metaphors.  But whether you are visual or auditory by nature, the point remains the same.  Now let me take it one step further.  If your invoices show limousine charges, hotel charges at The Peninsula instead of a Marriott, staying at an expensive hotel remote from your client's office rather than the more modestly priced hotel right across the street (a story told by a GC at a recent conference), hundred dollar per person dinners, flying first class and so on, you are, in your own way, acting like the Big 3 CEOs.  You are ignoring your audience. 

There was a sentenced used to describe the legendary George Halas of the Chicago Bears by those who negotiated player contracts with him: "he through nickels around like they were manhole covers."  Now that is a description we should all aspire to hear from our clients.

 

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Before founding Bartlit Beck in 1992, Fred Bartlit was "the man" at Kirkland & Ellis.  As big and impressive as K&E is now, it was that and more when Fred was there.  His departure to set up Bartlit Beck was big news.  Few have seen big firms, big clients and small firms and big clients as up close and personally as has Fred Bartlit.  So when he shares his insights on the thinking of big firms, the concerns clients have and on pricing for trial work, he's worth listening to--closely.

I've written before (here, for example) about Legal On Ramp.  I wrote more about it when Fred Bartlit joined LOR.  Since joining, Fred has been a frequent contributor in several outstanding discussions about the practice of law.  You need to be a member of LOR or join to get the full discussions, but I wanted to share some of his input:

Two decades ago I had an epiphany.

It dawned on me that the litigation market was an anomaly. All other markets drive competing business models. Dell and HP, for example.

But the litigation market, rather than being the driver of many different business models, was driven by, was both the creation and captive of a single business model: the "billable hour"

It seemed at the time obvious that there were alternative models which would much better serve the interests of both clients and trial lawyer. So, 16 years ago my partners and I started a law firm devoted to a superior business model.
We thought at the time that the advantages for both lawyers and clients were so dramatic that new models, including ours, would soon overwhelm the billable hour model.

We were wrong. We forgot the basic rule of paradigm shifts: "those who have done best under the old, wrong, paradigms are the last to see the need to change"
So, 5-6 years ago I gave up preaching our new model.

Now, with economic crisis, there are powerful new forces for change. As Rahm Emmanuel said "a crisis is a bad thing to waste".  Drucker's great book on innovation points out that much innovation over the years has been driven by major outside forces impacting a market and making the need for innovation much more striking and evident.

For these reasons, I have determined to use Legal On Ramp to restate the premises as we first saw them 20 years ago and have continued to drive our law firm.

Right away, you know you're getting a chance to hear some things that are based on meaningful experience and that Fred hasn't addressed publicly for a while.  Elsewhere, he says:

3. Why do I say "no metrics" - because in almost any market of such huge size, competitors would have detailed metrics on the costs to them of every task under the son. Almost NO ONE knows what tasks should cost done right. I usually ask meetings of General Counsel and other inside lawyers "what should it cost to prepare for and take the deposition of an economic expert in a 100million antitrust case", I get answers ranging from "$30,000 to $500,000 in the same room"

So, to me, we have a dramatically atypical situation facing us: a huge market that is not competitive, that does not foster innovation in business processes, and has NO useful metrics for comparing efficiencies of different competitors or calculating roughly what various aspects of litigation SHOULD cost.

and then:

Dead bang right. 18 years ago it finally dawned on me that, for example, 3 highly experienced partners will always do a much higher quality job than 20 associates, 4 junior partners, chief trial lawyer, etc WHY? Because it makes no sense to have people preparing a case for trial who have never seen a trial. Such novices will always waste huge $$$ doing "projects" that will never see light of day at trial or change anything. Likewise, a 3 person team of great trial experience means that knowledge is concentrated, not fragmented. It does no good if someone in the back of the courtroom knows the answer; the person on her feet must know it.

So, my ideal law firm is 55 partners, maybe 2-3 associate novices in training/mentoring. And, many of our biggest cases (we do almost nothing under $100 million at risk) are handled by 3 lawyers, all of whom have lst chair jury experience, and NO associates.

These are just tastes, appetizers really, to a main course discussion that is extraordinarily provocative.  Agree with Fred or not, if you read the discussion, your brain will be engaged.  And that is always a good thing.

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When legendary CBS Evening News Anchor Walter Cronkite announced his opposition to the Vietnam War in February 1968, President Lyndon Johnson is reported to have said, "That's it.  If I've lost Cronkite, I've lost middle America."  It was a turning point in the war.

Evan Chesler is a senior partner at Cravath, Swaine & Moore   Forbes Magazine just published a piece authored by Mr. Chesler titled "Kill The Billable Hour."   Here's a sample:

The billable hour makes no sense, not even for lawyers. If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.

There is nothing novel presented in Chesler's article.  But the fact that a Cravath partner is making the argument is, on some levels, newsworthy.  I'm not saying that the Chesler article will have the same impact as Cronkite's editorial.  I hope it does.   The AmLaw Daily thought the Chesler acknowledgment of the obvious was newsworthy enough to interview Mr. Chesler about it.  The article contained this insight:

Chesler says that he’s been raising this issue with clients and in private talks for the last few years. Thus far, he says that he has "just a few situations, in the single digits" with clients who have abandoned the billable hour. "There's a lot of inertia, a lot of the devil you know in this area," he says.

Inertia.  The devil you know.  More on "the devil" in a subsequent piece,  For now, let's celebrate the acknowledgment by a partner at one of the country's leading firms that the method they use to bill their clients is "nuts."  Welcome to the club, Mr. Chesler.

 

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The on-line version of LawPro Magazine, a publication for the Canadian Bar, contains a wonderful roundtable discussion about what firms should and should not do to ride out the economic storm.  The panel includes my good friend Gerry Riskin, always a sure sign that the panel is noteworthy.  Here's the link.

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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. | 1 Comments | Permalink |

Mistakes.  Everyone hates them, but everyone makes them.  The thing that separates great client service from lawyers looking for new clients is how you deal with them.  Some time ago, I provided a prescription for dealing with mistakes in my post, After The Mistake.  Noted blogger Jim Calloway picked up on my post here, which was special for me given Jim's stature in the blogging community. 

Given the importance of dealing with mistakes, I read with great interest Charles Green's post, Apologies, Forgiving and Forgiveness, in his Trust Matters blog.  Charles obviously is the real deal, so his writing is worthy of your attention.  He picks up on an article by Martha Beck, Always Apologize, Always Explain, in Oprah magazine.  Green's post picks up on an important issue--the expectation of forgiveness that frequently accompanies an apology, and how that expectation actually undermines the apology.  He writes:

It’s instructive that the ninth step of the Twelve Step program literature (you know, the one that pops up in Seinfeld and other sitcoms—the one about making amends), also doesn’t allude to forgiveness. In fact, none of the 12 steps do.

I think this is because Beck, and the 12-Step program, recognize that life is a messy business. To forgive, one has to have a very clean heart in the first place.  And we—I’ll be clean here and just say I—rarely do.

If I’m in a rush to forgive people, I most likely am still judging them for some harm they did to me.  If I’m consternated about being forgiven, well, that’s all about me; and apologies don’t come from a good place if they’re all about me.

Apologies should not be tainted by forgiving, or by seeking forgiveness.  Those have their place, but it’s elsewhere. 

A good apology tries to set aright something that you set awry by impinging on another’s will.  It’s only appropriate that the apology itself refrain from further imposition of will. Hence the separation from forgiving or forgiveness.

Thinking about this has made me wonder about whether law firms ever really discuss handling mistakes or, better yet, provide training to their lawyers.  Mistakes are such a taboo topic that most firms seem to operate on the premise that they only happen to other firms.  Yet every day we read about one firm or another being sued on account of matters that certainly appear like ones that could have been worked out.  Time to rethink the issue.

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My friend, Phil Harris from Jenner & Block, has authored an article, Confronting Race, that every lawyer in America should read.  Twice.  And leaders in major law firms should read it three times.  The article appears in the July 2007 issue of Chicago Lawyer (not related to American Lawyer; not available online).

The article begins with this thesis:

    "Most of us understand that disturbing attitudes about race and equality continue to plague our profession.  Statistics demonstrate the seriousness of the problem.  According to the Chicago Lawyer's annual surveys, in 1992 only 0.9% of the partners in large firms were black.  In the 2007 survey, that number had risen to only 1.8%.

Something is very wrong, and as leaders in our firms and good citizens, we need to address the problem in a direct, open, and honest way.  The disturbing attitudes and behavior we see in our law firms are exacerbated by the discomfort that we feel when discussing race.

                * * *
The problem is not that a hegemonic ideology of anti-racism discourages honest conversation about race.  Rather, it is a refusal by most members of the legal community to recognize that our practices, language, and institutional structures maintain and perpetuate racial boundaries.  We are not necessarily any worse than other professions in this regard.  But we can, and must, do better."

    While written by a Chicago attorney, a partner in a Chicago law firm, using statistics about partners in Chicago, the article is not about Chicago.  The issue is a national one, perhaps even a global one given a recent statistic I saw about the number of minority partners in top UK firms.  The issues Phil discusses transcend geography.  I believe they also transcend our profession, but that discussion is for another day, another forum.

Phil discusses the efforts many firms have made--making financial contributions to organizations that promote diversity; funding scholarships for minority law students; retaining diversity consultants; using creative approaches to identify and recruit black and other minority law students; and for some, discussing diversity with their clients.  Still, that 1.8% figure is rather stark, and while acknowledging the value of these steps, the article indicts our profession for maintaining "deeply embedded attitudes and behaviors" that result in two steps back for every two steps forward.

In my view, Phil breaks new ground when he says that the discussion he proposes must be premised on agreement that the end must result in black lawyers "exercising the same intellectual, cultural and institutional clout as their white peers."  In the preceding paragraph, I suggest that the article is in some respects an "indictment" of the profession.  I don't think Phil would necessarily agree with my use of that word--its not a terribly constructive word and his goal is a constructive one.  But the profession must be candid with itself--black lawyers, by and large, are not viewed as intellectually equal to white lawyers.  The evidence?  The article is filled with it.  For example, minority lawyers are expected to be rainmakers: there are virtually none in the ranks of the service partners at most firms.  Why?  Only the "smart" non-rainmakers get to stay as service partners.  I won't try to characterize all of the evidence that appears in the article, but I hope that many of us will be honest enough to accept the real possibility of our shortcomings.

The real issue is what do we do about it?  I hope the candid discussion Phil seeks happens:  if it does, some meaningful progress might result.  But the progress will require big firm leaders in particular to admit some painful truths.  What with all the focus these days on profits per partner, the leadership necessary to move forward on this issue seems to be in short supply.  My be is the article will be met with stultifying silence.

This issue is a critical one.  The Chicago Lawyer is a publication of limited circulation and limited geographic interest.  But since the issue is one of universal importance, please take the time to help circulate the article to law firm leaders, friends, and anyone else who might broaden the number of people who read this outstanding article.  Thanks. | 0 Comments | Permalink |

I received an email from Inside Counsel today announcing the July edition (which I received and wrote about yesterday).  I don't know if I missed this when I read the magazine, but the email contained this great quote:

          “When I talk to law firms, I have one hand on my wallet,”       
says William B. Solomon Jr., general counsel of GMAC. “With the pressure on firms to increase revenues, they don’t care very much about cost effectiveness.”

In my own hometown, Winston, Mayer Brown and Jenner all have announced outright dismissals or de-equitization of scores of partners.  Is there anyone who debates that this reflects an extraordinary amount of  pressure to increase revenues?  But the truth may be wholly irrelevant.  So long as clients believe it to be true, they will act as if it is.
   
    We know that great pressure can create things of great value, however.   Much has been written of late of the growing opportunities for what my friend Dan Hull refers to as "muscle boutiques."  But the fact is that these same difficult times create heroic opportunities for any big firm bold enough to adapt to the changed times.  But, alas, there is no evidence yet of any large firm having so bold a vision. | 0 Comments | Permalink |

The July 2007 edition of Inside Counsel just arrived.  This is the edition that has the results of the survey of General Counsel.  Fascinating reading.

First, the Lake Wobegon effect continues to be alive and well.  (I've covered the issue here, here and here.)  Only 19% of outside lawyers give their outside firms an "A" for overall performance (down from 21% last year and 22% in 2005).  Over 60% of the law firms give themselves an "A".   Almost 40% of surveyed in-house counsel believe law firms pad their bills.  Only 10% of outside lawyers share that belief.  Seventy percent of inside counsel disagree with the notion that law firms are actively seeking ways to reduce the cost of their services, while 56% of the outside lawyers believe firms are seeking to do so.  Almost 40% of the inside lawyers feel law firms make too much money; only 9% of the outside lawyers share that belief.  Just under 30% of inside counsel respondents believe the level of service provided by their law firms has improved over the past five years, while almost 70% of the firms agree that service has improved.

Some of the quotes in the survey report are instructive:

"Law firms can't say they are actively seeking ways to reduce costs and then pay incoming associates $160,000 per year."
                                                            Christine Helwick, GC,
                                                            California State University

"I always ask if we can have arrangements other than the hourly fee, but law firms shy away and offer reasons why it won't work."
                                                            Christian Na, GC,
                                                            Mitel Networks

"I hold my thumb on my outside firms.  It's very labor intensive on my side to prevent a runaway budget."
                                                       Paul Risner, General Counsel,
                                                       Boca Raton Community Hospital

There is little in this report that should help managing partners sleep well at night.  Save for one thing.  It appears that despite the increasing volume of complaints about matters of great importance, there is no epidemic of firms being fired.  But some day, inside counsel may realize that theirs is a buyers market. | 0 Comments | Permalink |

I have written many times about the central role culture plays in achieving, well, anything of consequence.  (See here, here, here, here, and here.)  Darci Riesenhuber,  a Transformation Architect with tompeters!company, has written a terrific article in the July Tom Peters Times about the importance of culture.  Here is a highlight:

"... employees will behave in accordance with their values, regardless of your business strategy. Hence, the reason culture must be aligned with strategy. If, for example, your aggressive, high growth business strategy creates an unstable environment that requires individuals to take risks, an individual valuing stability, security and consistency will feel anxious and begin to seek ways to remedy their discomfort. In some cases, they are able to adapt and learn the behaviors necessary to succeed. In others, the personal transformation is simply not possible and they fail. The best way to avoid this is to determine "fit" during the selection process. However, just as your strategy changes throughout the life of your business, so must your culture. Changing your culture is not impossible, as many would believe. You just have to carefully evaluate and adjust the factors that influence culture, such as your systems (reward, IT), structure (reporting, physical), policies, HR practices (selection, training), communication, leadership-style, etc ... As Tom says, "Culture change, that elusive goal, can be achieved one project at a time."

There is an old saying about the boat moving fastest when everyone is pulling their oar in the same direction.  If there is not cultural alignment within a firm, it is hard to see how it can operate at its best.

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Line from Bob Dylan:

"Don't be afraid not to follow the herd - because where the herd's gone, the food is already eaten."

Thanks to the folks at the Brand Builder  for their great post, Bob Dylan On Fresh Ideas & Innovation.

When you think about, it is important to be thankful for the herd.  Without the herd, there would only be individuals.  And when you sell yourself as someone special, you need the herd.





You need to decide who you are and what your firm is. 







If you're part of the herd, you don't need to worry about your navigational skills.

If you wonder about whether you have what it takes to leave the herd, take heed to this from the Brand Builder post:

"If you aren't already finding your own lush pastures, maybe it's time you stopped settling for someone else's scraps. Do something different. Take chances every once in a while. Innovate. Put original ideas into action. Try something new. Do something.

Get there first - or at least be among the first.

Life is too short - and green pastures are in far too short supply - for anyone, you included, to waste your time following the herd. It might seem like the safe thing to do, but trust me: It's a hard living, fighting over someone else's scraps, and in the long term, there's absolutely no future in it.

None.

Unless you like going hungry."

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"Put most bluntly, the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour."

So says Cisco General Counsel Mark Chandler in a recent speech, which is posted here. 

From the same speech:

My answer to this question is therefore simple: first, winners will be those who are able to standardize services to meet clients’ cost management and predictability needs where very good is good enough. Second, those who can differentiate themselves by providing the top notch of customized services, where that is needed, will also win. In some cases, one firm may be able to do both. But my bet is that despite the consolidation trend we’re seeing today, top quality boutiques will thrive while the cost structures of larger centralized firms will put them at risk.

This is a must read.  I'd love to have 20 minutes of Mark Chandler's time to discuss it.

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I have been spending considerable time trying to identify the character traits firms must have to succeed.  Here's my top ten list.  Feel free to add to it.

Discipline
Execution
Passion
An ability to be dispassionate
Commitment
Creativity
Excellence
Customer-focus
Comfort with Change and willingness to experiment
Maniacal effort to improve

I know that being both passionate and dispassionate appears paradoxical.  But I think not.  A firm must be passionate about something--that is what will distinguish it from its peers.  But in evaluating performance and making business decisions, it cannot drink its own Kool-Aid.  In areas where self-critical analysis is required, a firm must be dispassionate.

In any event, I hope to hear from you on the traits you agree are essential and those you don't, as well as traits not on the list you feel should be. | 0 Comments | Permalink |

Mike Dillon is the General Counsel Counsel of Sun Microsystems.  He also blogs at The Legal Thing.  Because he is an inhouse lawyer, I want to know what he thinks, so I am a regular reader of his blog.  His post from Tuesday captured my attention.  The Way Of The Mastadon reflects Mike's views on the future of BigLaw--giant law firms trying to match their clients in size.  It is a must read.

Mike defines the real role of large firms:

My view is that law firms serve primarily as aggregators of specialized legal expertise. The premise has been that by combining multiple legal disciplines you can provide “one stop shopping” for current and prospective clients. This structure previously made sense. If you were an individual or business with a legal problem, it wasn't efficient nor effective to try to identify an individual attorney with the technical skills that you required. So, you would turn to a law firm and rely on them to direct you to the appropriate attorney within their firm to solve your issue.

Mike then identifies the core problem:

The problem is that this model relies on growth (the need to add additional attorneys) to maintain profitability rather than focusing on efficiency gains. In this respect, it is at odds with what I need as a client and General Counsel.

After discussing the ease of moving the "aggregation" function inhouse, Mike reaches this conclusion:

My point is that the epoch of the current law firm model - which derives its profitability from growing scale and raising hourly rates - will soon be over. The firms that will survive and thrive are those that recognize this change and focus on how to maintain margins by focusing on efficiency.

Oh how I hope you are right.  The movement seems slow, but at least there is movement.

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During a conference several months ago, I found myself doodling.  Pretty soon, the doodle turned into a note to myself.  "Who is the voice of the client?"  I put the note on my desk, and I find myself staring at every day.  In a law firm, who is the voice of the client?  Is the answer as simple as "I am?"  It can't be.  No lawyer can speak for the client day in and day out.  There are days when I am tired.  Distracted.  Not in the office.  There are many reasons why any one lawyer cannot be the sole voice of the client in a law firm.

Is the answer, then, that all lawyers must be the voice of the client?  I think not.  Too many lawyers, particularly younger ones, are looking out for their own careers.  Bill more hours and do better work and make partner, or speak for the client and risk the golden ring.

As I stare at my doodled note, I've come to the conclusion that we cannot rely on ourselves to speak our clients in a law firm environment.  The answer, it seems, lies in systems, not solely in people.  Law firms must design systems so that the client's interests, the client's voice, are spoken--loudly--internally as the firm conducts its business.

To be clear, I believe that the answer to the title question is not just systems, but that systems must supplement those individuals who truly are committed to clients.  I welcome reaction to this conclusion.  But in any event, I will be writing more later about the kinds of systems I believe are necessary. | 0 Comments | Permalink |

The Managing Partner of Morrison & Foerster, Keith Wetmore, is a fraternity brother.  Wettinger, as he was known at Northwestern in the the late 1970s, was a stellar President of the fraternity.  Because of our fraternal brotherhood, articles in which Keith is mentioned or quoted always catch my eye.  One gave me pause to think beyond the past, however.  Anyone following the profession knows starting salaries in major markets have climbed to $160,000.  Given the upward ripple, the bottom line hit for firms of any size is measured in the millions.  And I have written repeatedly that clients will pay the price for the increase, either in higher hourly rates or the sudden and mysterious need to spend more hours on the same matters.

So check this New York Lawyer article out (sub. req.).  In it, my friend Keith takes on the "who pays" issue directly.  From the article:

Morrison & Foerster Chairman Keith Wetmore said the costs of the $160,000 scale will be born internally — even if it comes from partners' profits.

"We will make a little less money this year," Wetmore said.

He also said his firm won't hike hours requirements or billing rates.

Its not that I don't believe Keith.  Its just that I can't fathom how he can pull it off--at least over the long run.  Given the pressures to report high earnings per partner for competitive reasons, the need to pay marketable partners at the market rate, and similar pressures, how can a partnership put itself in the position where it starts off several million dollars in the whole vis its competitors?  It wasn't as though Keith was infallible as President of the fraternity.  Maybe he just got it wrong here.  But if he can pull it off, more power to him.  I'll be watching--along with MoFo's clients.



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So I am flying to Houston, quietly reading the April/May issue of Law Practice magazine (see my next post).  I stop at 'FrontLines" to examine their survey.  The question--How do law firms arrive at their partner compensation decisions?--is pulled from an Altman Weil survey.  I just started laughing.  On a 4 point scale, with 1 being no importance and 4 being very important, personal fees collected and business origination (new clients) get the top marks of 2.5 each, with business origination (increase in volume) and business origination (new business/existing clients) arriving just behind at 2.25 (2 is of little importance and 3 is somewhat important).  Years in practice is ranked less than 1.  Hours recorded (apparently distinguished from hours actually worked) receives a rank of less than 2--less than "little importance."   Yeah, right.

Judging from the survey, there are no factors that are very important or even somewhat important.  Strikes me that the survey respondents were delusional.
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The announcement of increases in starting salaries for associates in large California law firms (up to $160,000) led to this law.com headline today:  Corporate Clients Take Note as More Firms Announce Associate Raises.  The mind just reels, doesn't it?

Here's the quote from the article that really caught my eye:

The rash of raises has some big-firm clients worried.

"There seems to be no end in sight," said James Hall, director of intellectual property at Silicon Valley's Quantum Corp. "At some point I think it has to impact how much I'll pay in legal services ... That money has to come from somewhere."

I don't know Mr. Hall.  I don't know his background.  But if he has any doubt that every plug nickel of those raises will be recovered from him and thus "impact" how much he pays in legal services, he doesn't have the fist damn clue how big law firms operate.  Big law firms are billion dollar businesses or billion-dollar wanna-be businesses.  Their first rule of business--PARTNERS DON'T PAY FOR ASSOCIATE  SALARY INCREASES.  If the money isn't coming from the partners, that only leaves the clients.  One way or another, Mr. Hall, you'll be paying.
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I'm a big fan of Jim Collins' book, Good To Great.  Look here, here, here and here for some posts that discuss the book.  In a twist on Good To Great, David Maister asks whether marketing consultants can help firms that have decided to eschew greatness and remain satisfied with Good.  His post is "Good To Good,"

I found the comments to be especially interesting, since most implicitly assume the desire to be great exists in every firm.  I firmly believe the contrary is so, though not all firms would admit that they have decided that good is good enough.  Certainly, some have.  But perhaps the greater number are the ones that pay lip service to greatness but refuse to take the steps necessary to be great.  I am not for an instant castigating firms for following this road--most are small firm where personal relationships trump other issues that may be roadblocks to greatness.  But the fact remains that there are precious few great firms in the world, far less than would be expected is those who claim to seek greatness actually did.

This made me wonder whether clients played a role in this issue.  I think they must.  If clients actually demanded greatness, there would be more movement to firms that actually achieved it, and thus far more pressure on firms to actually become great rather than merely talking about doing so.  But most clients don't leave their "go-to" firms even though few of them qualify as "great."  Why?  I think there are a mixture of reasons.  Personal relationships, to start.  The next is that good frequently is good enough.   And lastly, I believe clients are reluctant to rock the boat, in large measure because it is impossible to rock your boat without also rocking their own.  So the great middling of law firms continue to exist without real pressure to achieve greatness. | 0 Comments | Permalink |

Seth Godin got me thinking.  He does that to people.  He is, as he describes himself, an "agent of change."  And I like nothing better than change, so maybe that's why I am such a fan.  His recent post, Thrill seekers, divides people into two categories--thrill seekers and fear avoiders.  I can't better his description of the people in these categories, so let me just use his words:

Thrill seekers love growth. They most enjoy a day where they try something that was difficult, or--even better--said to be impossible, and then pull it off. Thrill seekers are great salespeople because they view every encounter as a chance to break some sort of record or have an interaction that is memorable.

Fear avoiders hate change. They want the world to stay just the way it is. They're happy being mediocre, because being mediocre means less threat/fear/change. They resent being pushed into the unknown, because the unknown is a scary place.

Seth than asks why not call them risk seekers and risk avoiders?  Good question. His answer?

So why not call them risk seekers and risk avoiders? Well, it used to be true. Seeking thrills was risky. But no longer. Now, of course, safe is risky. The horrible irony is that the fear avoiders are setting themselves up for big changes because they're confused. The safest thing they can do now, it turns out, is become a thrill seeker.

"Now, of course, safe is risky."  What a powerful insight.  Think about a child standing next to a merry-go-round.  Because its safe.  After all, centrifugal force will not cause you to fly off the merry-go-round if you aren't on it.  But now the merry-go-round is picking up speed and you have to get it on it or you won't survive the taunts of your friends.  The safe spot is now risky.  As the world changes and our business changes, safe is risky.  If fear paralyzes you because you are a fear avoider, you just stay the same in a world moving by at a faster and faster pace.  Safe, but ultimately sorry.

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Does anyone else think that clients are getting lost in all the discussion about the impact of the latest increases in associate salaries?

Uber-blogger Bruce MacEwen has a terrific post addressing the economics of the issue from the standpoint of the large firm.  So the debate rages about whether there are good, or at least sane, reasons for the increase.  One proffered reason is the desire to retain talented mid and senior associates, but Bruce offers an approach that would better accomplish that objective.

Bruce's post, and other pieces I've read (several of which are linked through his post), present the issue from the law firm's perspective, but I haven't seen anyone focus on this issue from the client's perspective.  More interestingly, I haven't seen anyone from any law firm that has suggested that their clients believe that salary increases are right way to solve the firm's business problem.  I wonder what firms would do if they had in-depth discussions with their clients about the issue.  My strong suspicion is that clients would urge the firms to try non-economic approaches.  I mean, after all, haven't some of the storied CEOs built immense employee goodwill and loyalty by steps other than mere salary increases?

By the way, don't the accounting and consulting industries face the same issue--growing demand and a static labor supply?  How are those industries responding?  I don't hear about the same salary issues in those industries. | 0 Comments | Permalink |

I recently wrote about the critical role firm culture plays in the success or failure of marketing initiatives.   In that same vein, I want to draw your attention to a recent post on  Tom Peters' blog on the same topic.  Juli Ann Reynolds (President and CEO of the Tom Peters Company) writes that:

 A beautifully crafted strategy can fail when the employees in various divisions within an organization clash. Logically, we think that strategy should drive behavior, but, in reality, it's the culture—underlying norms, values, belief systems—that dictates how effectively people work together.

The comments made to his post re-enforce the notion that culture is key.   Juli Ann ends her thoughtful post with this question:

How do you change this and bring culture into alignment with strategy?

In my view, the issue is more acute in the professional services field where the "herding cats"/"you're not the boss of me" mentality causes people to live in silos and feel free to change or not as they see fit.  So the question is there for all of us:

How can we cause the culture of our firms to change in a manner to allow our marketing programs to succeed on a grand scale?

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Seminars.  Blogs.  Creative people.  Great ideas.  Detailed plans.  If marketing was easy, everyone would be good at it.  But the disturbing sameness of law firm marketing and its disturbing ineffectiveness lead to all sorts of questions.  In the world of business, there are memorable marketing campaigns to play an instrumental role in the success of a product.  But one would be hard pressed to find a law firm marketing campaign that really launched a firm's success.  Have you ever wondered why?  I know I have.

I think I may have found an answer--culture.  A firm's culture manifests itself in behaviors, and those behaviors in the results that marketing plans are designed to change.  It follows that if you can change the identified behaviors, the results will change too.  But changing behavior is not an easy thing to do, and marketing plans, no matter how well thought through, are not able to change the behaviors at issue.  What causes behaviors?  Beliefs--mindsets.   Substantial research establishes the simple relationship between beliefs, which cause behaviors, which yield results.  So to change results, you have to start with the beliefs basic to the behaviors that need to change.

How do you change beliefs?  One obvious conclusion is that firm management must be strongly supportive of and involved with and significant plan.  But there has to be more.  Beliefs don't change by decree.  They change by virtue of modeled behavior, rewards (financial and otherwise), encouragement and follow through.  There are experts who help accomplish cultural change.  Professional assistance is always useful.  Without incredible commitment and follow through, though, one lesson is that trying something and failing may be worse than not trying at all.  Such failures only reenforce the futility of change.  Without open minds (not exactly a strength of lawyers), real change is unlikely. | 0 Comments | Permalink |

On August 30, 2006, the Wall Street Journal reported (pg. B1) that Holland & Knight was involved in a billing dispute with a client.  The article was reprinted in the September 4, 2006 issue of the Chicago Sun-Times: it is the firm's Chicago office that is embroiled in the dispute.  The details of the dispute are not of great moment, and in the interest of full disclosure, two of my partners (former Holland & Knight partners) are quoted in the article.  But while the details of this situation are not of moment, the article does beg the question of how a firm should handle a major billing issue with its client.

Let's assume one of the facts in the Holland & Knight story--a young partner claims that the billing partner, not involved in a piece of litigation--has dramatically overbilled the client for that matter.  From that, let's go to a place the Holland & Knight story does not go--that the young partner is threatening to make his complaint known to the client.  What should the firm do?

I have written previously about how to handle mistakes.   But that post involved errors in judgment, while this example involves an allegation of fraud.  Even if not true, the allegation itself can threaten the client relationship, with even the most loyal client wondering why the young partner made the allegations, and why.  It seems to me that simply denying the allegation is an incomplete response, potentially fatally so since it does not address the underlying questions that most certainly exist.

At the same time, simply offering to make an adjustment to the bill almost seems to validate the charge by the young partner, so that approach is not the preferred one either.  While potentially expensive, the response I propose is based on the notion that our integrity and credibility are traits that can never have an associated price tag.  With that as the premise, someone from the firm must be in the client's office as swiftly as humanly possible.  The issue must be identified candidly and the obvious distress to the firm and the client must be recognized.  The client must be assured that its confidence in the law firm and its lawyers is the firm's paramount objective, and to that end, the firm is prepared to refund the entirety of the fee paid by the client if, after investigation, there is any doubt on either side about the integrity of the bills and the billing process.  The firm should then volunteer to submit the entirety of its bill to examination by a neutral party agreeable to the client, with the firm to bear the entire expense.

There may perhaps be other ideas on how to retain the client's trust without putting the entirety of the fee at risk.  Perhaps the client herself will be the source of ideas, and most certainly the query should be made.

There remains the obvious personnel issue.  While retaining the whistleblower may be distasteful, terminating him sends a powerful and negative message.  To the extent there is merit to the claimed breach of trust, the person responsible to the lapse may need to leave, but at a minimum cannot be left in a position where the firm's integrity can again be compromised. 

To the extent the matter has become public, as in the Holland & Knight story, it seems to me that the matter must be addressed publicly and that the firm's clients need to be individually reassured that such behavior is an aberration and is not tolerated at the firm.  Toward this end, actions will always speak louder than words.

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Gerry Riskin just recommended that we all read "legendary Merrilyn Astin Tarlton's new blog."  Merrilyn's blog is named Blank Piece Of Paper and a box of crayons. Gerry's recommendation is all I need, so I immediately took a look.  Blank Piece of Paper is very impressive.  I just smiled when I read Merrilyn's entry "How DARE he?" in which she writes about some research presented by innovation expert Eric Mankin.  After much research, Mankin has concluded that "law firms may be some of the least innovative organizations in the US economy."  There's a shocker.

After looking (with tongue firmly planted in her cheek) at some claimed innovations by law firms, Tarlton writes:

No, Mankin's right.  Innovation is hard to do in a law firm. . . .or a bar association. . . or a legal department.  Virtually anywhere that lawyers hang out in numbers.  It doesn't make them bad.  Just hard to move.

Just as David Maister's (of ALL people!!) remarks about law firms being impossible to manage stirred discussion and stress, so will Mankin's thoughts - hopefully - serve as food for thought and fuel for change.  Regardless of how long it takes to make it happen.

What do you think?  Is it possible to "think differently" in a law firm?

I'd like to think so, but I'm one of those creatures who likes to have some evidence to support my conclusions.  And frankly, that evidence is hard to come by.

Having said that, I don't believe that the past must be prologue to the future.  I think the business case for "thinking differently" and really innovating is getting stronger by the day.  Read books like The World Is Flat and it is impossible to conclude that the world as we know it is changing daily and leaps and bounds (if not more) and that innovation and creativity will be necessary simply to survive in this new, ever changing world.  Tom Peters has a favorite slide in which he quotes General Eric Shinseki, former Chief of Staff of the US Army: "If you don't like change, you'll like irrelevance even less."  Amen, General.

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This just in from law.com--Big Firm Associate Pay Soars By $10K in 2006.  I actually made up the part about clients dancing in the streets.  Weeping at their desks is probably more like it.  I've written before about how these massive costs are passed along to clients with no corresponding increase in value provided, so I won't repeat myself.

Why did I include this in the "Leadership and Management" category?  Because of a quote that appears on the article--"It can be ironically self-defeating, " said Ward Bower, a principal at Altman Weil.  His point--salaries compress so the incentive to stay diminishes over time.  Combine that increased incentive with the already troubling statistics on attrition--78% turnover--and its little wonder that associate satisfaction has rocketed to the top of the list of management challenges.  Knee-jerk salary increases appear not to be the answer.

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Tony and Jim know greatness.  Tony knows that out of all the cereals in the cereal aisle at the grocery store, only one is "Greeeaaaattt!"  And Jim learned through rigorous study that of the scores of companies in the study group, a mere 11 qualified for the Good To Great moniker.  Greatness is rare, and that's as it should be.

Rare achievements are, almost by definition, ones borne of extraordinary effort combined with a measure of good fortune.  Lance Armstrong's seven Tour de France victories.  Roger Clemens 341 wins (and counting).  Michael Jordan's six NBA championships.  Accomplishments borne of extraordinary effort, single-minded focus and a measure of luck. Each of us has the ability to control the level of commitment.  And there certainly is a measure of truth to a comment made by Thomas Jefferson--"I'm a great believer in luck, and I find the harder I work the more I have of it."

There is a wonderful statement by Jim Collins, found on the back of his monograph "Good To Great And The Social Sectors:  "Greatness is not a function of circumstance.  Greatness, it turn out, is largely a matter of conscious choice, and discipline."

The relevance of this to great client service?  Conscious choice, and discipline.  It's not just the bus.  Its not just leadership.  Its the brutal confrontation of facts, using technology right, exercising rigor in decision-making and having the discipline to execute.  Focusing on one part of the recipe with indifference to the others is like ordering a steak with sides and having a meal of mashed potatoes and mushrooms.  If you miss the meat, the meal suffers.

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  On July 27, I posted some comments about the "Bus Metaphor" from Jim Collins' outstanding book, Good To Great.  My post inspired Michelle Golden to post a comment.   Michelle's original post questioned the applicability of the bus metaphor to professional service firms given their differences from the businesses studied in Jim's seminal work.   Utterly serendipitously, I was in the book store at O'Hare and picked up a copy of Jim Collins' monograph "Good To Great And The Social Sectors."

While there are differences between professional service firms and the social sectors, the problems confronted by the latter certainly are closely related to those confronted by the former.  I will not try to distill Jim Collins' monograph to a sentence or two, but at 35 pages, it is a quick and compelling read.  But the moral of the story is that Collins' research leads him to conclude that the G2G principles are applicable outside the business context.  And from that, I maintain my belief that the principles are fully applicable to professional service firms.

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Harry Beckwith's Invisible Ink column for July had some interesting thoughts worthy of consideration.  First, Harry noted that 80% of surveyed companies said they delivered a "superior experience" to their customer.  The customers, on the other hand, said 8% of companies delivered a superior experience.  This gap, which Harry (and others) label The Lake Wobegon Effect, exists with the delivery of legal services too.  Survey after survey confirms a similar gap in perception between lawyer and client.

Harry defines The Lake Wobegon Effect thusly:

Humans are prone to Overconfidence Bias: we consistently think we are better than we are. That assumption, and the complacency it encourages, explains why companies everywhere are failing to satisfy people's growing demands.

Harry also notes that the comparison clients make is not to your competition but to the best service providers.  Again from Harry:

Customers do not measure companies like yours against your competitors. They measure you against the best providers: Jet Blue, Starbucks, Federal Express and Four Seasons Hotels. If a coffee shop staffed by kids overcharging us for coffee can deliver a superior experience, customers have decided, why can't everyone?

Harry provides some suggestions, which are worthy of consideration, essentially taking small steps to be sure you are moving and involving the "alphas,"  the top executives.

Here's my question:  Why does The Lake Wobegon Effect exist among lawyers?  We hear frequently that we are hyper-critical, tend toward analysis-paralysis, etc., but I've never heard that we are bad at those things.  Instead, our whole life's orientation is toward being good at those things.  But if we're at all good, how can we be so blind as to think we are providing an exceptional service experience when the ultimate judge of that issue has determined that we are not?  Is the answer simply that we are only good judges of reality when we look outward?  Or is it that our skill is really in the world of the hypothetical--"this might not work because"--rather than in a more concrete setting?

What's the answer for a firm wanting to know if it is really providing the best possible client experience?  At this point, it seems clear that an external judge is necessary.  But one not afraid of delivering bad news.

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I was cruising through my Bloglines feeds and stopped at Golden Practices (nicely redesigned).  Michelle Golden is one of my favorite bloggers.  That's why I was so surprised by how much I disagreed with her post on The 'Good To Great' Bus Metaphor.  For those of you who have been on vacation for the last five years, Good to Great, authored by Jim Collins, has overtaken In Search of Excellence as the all-time best-selling business book.  In G2G, Jim Collins studies 11 companies that were transformed from ordinary performers (vs. the market) over a 15 year period to companies that outperformed the market by at least a factor of 3 over a later 15 year period.  Collins and his team studied those turn-arounds, including comparing each company to a well-known and regarded direct comparison company.  Collins identified a small number of factors that the data establish as instrumental in the change from good to great.

One of the factors is "First Who ... Then What."  In Collins' words:  "We expected that good-to-great leaders would begin by setting a new vision and strategy.  We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats--and then figured out where to drive it.  The old adage "People are your most important asset" turns out to be wrong.  People are not your most important asset.  The right people are."

Michelle had run across a post by Phil Gott that appears to take issue with the merit of Collins' conclusions as applied to professional service firms.  Following Gott's lead, Michelle concludes her post with this point:

'Tis true that, as Gott shows us, firms are built a bit backwards. Accountants would say we've "backed into" our passenger list and varied routes. My Grandpa used to say, "Do your feet smell and does your nose run? Then you're built backwards!"

Can we at least agree that we need our long term strategy first (destination and routes) before we determine if we have the infrastructure (fleet and drivers) to get there?

Maybe more people will come along for the ride (passengers) when we've established those first four things. Could this be a clue how to resolve the growing problems in recruiting and retention?

Unless I am misreading this, I see Michelle as asking if we can agree that Collins' finding isn't really applicable to professional service firms, that unlike his good-to-great firms, professional service firms can set vision and strategy before getting the right people on the bus.  I feel compelled to respond.

First, Collins' discussion of "right people" is about the executive core, not production workers, middle management and maintenance crews.  Its the leaders, not the followers. So I don't see this finding being at all relevant to recruiting and retention.  Those people don't yet have seats on Collins' bus.   Second, I would need to see data from professional service firms that have gone from good to great that shows Collins' findings don't apply for me to jump to that conclusion.  The fact that there are so few and that it is so hard to do is perfectly consistent with the fact that out of a universe of more than 1000 companies (all companies that were ever part of the Fortune 500 during the period 1965 to 1995), only 11 made the move from good to great!  The same difficulty will be experienced by professional service firms!

In a number of things I've read, I've seen people argue that because Collins' findings are counter-intuitive or because they are so hard to apply (where do we sign up for Level 5 leadership classes?), they just can't be true.  Me?  I look at the findings just the other way:  Because moving from good to great is so hard (as evidenced by the discovery of just 11 businesses that did so), it is a certainty that most firms will fail to make the move.  But its their failure not that Collins is wrong that explains why most firms don't make the move.

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As I noted in a post a couple of days ago, I had taken a respite from blogging for a few weeks.  As I read posts that interested me, I saved them, thinking I would be able to go back and use them as fodder for future posts.  One unexpected but interesting byproduct of this practice is linking certain posts together even though the author wrote them many days or weeks apart.  Michelle Golden has two such posts that struck a chord with me.

Just two days ago, Michelle wrote "Fly On The Wall #3: 'We Don't Have The Right People.'"  Michelle writes that "it's funny but smaller firms tend to find themselves in a cycle of hiring multiple people with similar personality types--whatever it is the hiring persons are most drawn to. And seldom do people in CPA firms seem to hire or retain those who are more aggressive, assertive, confident, whatever... than they are. (I think this is not as prevalent in law or larger firms.)"

The same phenomenon occurs in law firms.  While lawyers (at least litigators) are paid professional advocates, they (and this is true for most lawyers) are resistant to change.  That's actually an understatement.  Experimentation is not in their vocabulary.  Any change that does occur can only happen (i) if it is so incremental as to be inconsequential; and (ii) only after the idea has been analyzed to death.

But read this in conjunction with Michelle's "Fear The 'Known' -Dissolve Complacency" post.  Michelle writes here that "complacency is something firm leaders despise in their businesses, but it's something that needs much more than short-term plans to correct. Strategic plans, compensation systems, and an annual retreat are helpful tools, but they are not the foundation."

Actually, complacency is something that firm leaders should  fear, but most don't--because they are not the right people for that position.  Firm leaders in most firms come from the same type of people Michelle writes about in her We Don't Have The Right People post. 

In his seminal work Good To Great, Jim Collins writes the importance of  having the right people on board the bus, but also about having the right people in the right seats on the bus.  It is unlikely a firm populated by partners adverse to change will produce a dissolve-complacency-style leader.  Whatever the reason proffered, the fear of change, of the unknown, usually will prevail.  Sometimes the stars align for meaningful change, but "once in a month of Sundays" aptly describes the frequency.

This isn't to say that every change is the answer.  Some experiments fail.  Some change-oriented leaders fail.  And some change-oriented people aren't real leaders.  But there is certain truth in the apt saying 'nothing ventured, nothing gained.'  It is certainty that a good firm will never become great simply by letting time pass.

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The post is here.  My only comment--"Amen."

The solution? Perhaps found in Gerry Riskin's "The Seven Immutable Laws Of Change Management." See my post on Gerry's remarkable work here.

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I had no more than blinked after finishing my post on Tom Friedman's book when I ran across this post by Rob Millard, author of The Adventure of Strategy.  Rob highlighted the findings of Accenture in an article called Making The Trend Your Friend.   Among the key findings:

3. The Accelerating Pace of Globalization

The pace of globalization and its effects have increased dramatically because of ubiquitous information connectivity. When major business functions, from production to sales, can be performed almost anywhere, it presents companies with unprecedented opportunities for both cost optimization and brand extension.

5. An Increasingly Complex and Fragile Business Environment

As business solutions and services become more elegant and complex, they also become more fragile and susceptible to business failure and security risks. With ever-larger infrastructures with more components, more things can go wrong. High mobility and extended customer reach increase the possible points of attack for those seeking to breach both information and physical security.

9. A Growing Public Demand for More Corporate Transparency and Better Governance and Accountability

Calls for stricter accounting and reporting standards and more transparency are coming not just from regulators but from employees and shareholders as well. Shareholders are also now routinely pressing companies about their environmental records, hiring and firing practices, fair trade policies and charitable contributions. A number of online business practices have come under public scrutiny as well. Even companies less vulnerable to these possible actions will face an increasing need to conduct themselves in accordance with emerging national and global standards.

But number 1, in my view, is this finding:

6. Shorter Time Frames for Decision Making

The increasing pace and complexity of business today means managing almost moment to moment, with an eye on both cost optimization and the quality of business performance. But many managers find themselves either unable to access the data needed to inform their decisions fast enough through their legacy IT systems, or overwhelmed by the amount of data available to them.

Those who respond to these forces will succeed.  Those who don't . . .

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If you haven't read The World Is Flat by Thomas Friedman, run--don't walk--to the nearest bookstore to get a copy.  Friedman is a multiple winner of the Pulitzer Prize for his work columnist for the New York Times,  and is immensely respected.  This book focuses on the globalization of our economy and the impact this force is having on virtually every business.  We've seen some of this in the legal profession--outsourcing document reviews, for example, but if this book doesn't stimulate your imagination, nothing will.

The world is changing.  Rapidly.  And if  law firms doesn't change with it, those law firms will soon be only memories.

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  Gerry Riskin is brilliant.  He is a gifted thinker, but even more significantly, he has the uncanny ability to express important and bold thoughts with such clarity that even the most skeptical find themselves moving to precisely the conclusion Gerry has reached.  I have seen him accomplish this with large audiences.  I have seen him do this with small groups.  I have been fortunate enough to see him do this with an audience of one (me) over a wonderful dinner, aided by a terrific bottle of wine.  And those that have read this blog before know that I routinely tout posts that Gerry makes in his great blog, Amazing Firms, Amazing Practices. 

So what's new?  Gerry has published, in separate entries, "The Seven Immutable Laws Of Change Management."  These are must read entries, and they are worthy of being incorporated into your thinking and acting.  Another exceptional contribution from my friend Gerry.  Here are the links:

Law 1, Law 2, Law 3, Law 4, Law 5, Law 6, Law 7

I hope you get as much from them as I did.

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And 8,784 in leap years. (If my math isn't clear, its 24 hours per day, 365 days per year, plus another day every four years.)

After reading Gerry Riskin's post "The Wall Street Journal Blasts Law Firms Salaries Arms Race" and Bruce MacEwen's post "Associate Salaries: The Great Debate," I couldn't resist weighing in on the topic.  There are, of course, many angles from which to view this subject.  From the standpoint of the elite law firms, they look at salary as a principal means of competing for their share of the pool of "top talent"--that is, law review students from the top law schools.  The pool is not growing, but the competition for those students is.  Hence, rising salaries.

If one begins with the proposition that partners at large law firms want each new class of associates to generate profit, or at least not operate at a loss, and if we further accept the proposition that there is some limit on the hourly rate a client will pay for people who have no experience and add little to the value the client receives, then we must accept the proposition that there are practical limits to salary competition.  Not that we're there yet.  But since revenue generation in firms is a matter of rate times hours, the practical reality is that increasing salaries will increase the number of hours associates are expected to work.  No, there will not be an announce increase in the number of expected hours.  That would be bad PR.  Hours will simply be "managed up."

From the client's standpoint, this means more work done on the same matters or more hours billed doing the same work.  Neither result is positive.

From my standpoint, this form of competition has a trade-off for clients. Sure, the top law firms can better compete for top talent.  But top law school talent is a lot like the draft of athletes in professional sports.  The highest draft spots do not always produce the top talent.  Start with Tom Brady and then continue with the scores of other examples.  The same is true in the legal world.  Big New York firms use the demand for top talent to perpetuate the myth that they have the corner on talent, and that PR works to a significant albeit eroding degree, but savvy consumers are now looking to those firms as useful only for exceptional matters, where the Board wants name comfort. 

Aside from that PR value, I believe that better training, reduced turnover and greater investments in associates will produce better results for smart firms.  And in the meantime, chalk about another strike against an economic system based on time rather than value.

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

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

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

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

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

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

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

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

 

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

 

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

It's their funeral...

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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Eschewing the time-honored maxim of "location, location, location," The Wired GC continues his analysis of the importance (or lack thereof) of office location in a world where most client interaction occurs in the client's office, or at least somewhere other than the lawyer's office.  The post, bearing the sublime title "What Face Means For Place," addresses the question "why do most firms in large cities persist in putting all their people in pricey high-rise space under long-term leases?"  None of the common answers survive The Wired GC's pithy commentary.  The post goes on to suggest some alternatives that no doubt will be the subject of much conversation. 

Here's a statement in the post that every managing partner should memorize:

I'm sure I don't understand all the intricacies of space selection and design of the modern law firm. But when I see firms jockeying for a new "signature" building, and later submitting their interior design to magazines for their annual awards, I know one thing: I've never retained a firm on the basis of its offices. And I have to think that the overhead costs inherent in the current space model are a big driver of higher rates and higher billable hour quotas. And I have decided against retaining more than one firm because of these factors.

Perhaps the driving factors on space should be minimizing cost, maximizing operating efficiency and teamwork and creating a desire to leave the office and go visit clients.

I want to relate one true observation.  The most effective office design I every saw was an open room, where the CEO and Chief Acquisition Officer had the desks in the center of the room, facing each other.  Other desks encircled this power center, with the most junior people being the ones closest to the windows but farthest away from the CEO.  There wasn't much time spent on personal calls or mindlessly surfing the internet.  There was, by contrast, a lot of time spent bouncing ideas off colleagues.  And when meetings needed to be in private, the many conference rooms were utilized.

But to get back to the topic at hand, The Wired GC's point that the price of the law firm's office (location, location, location) becomes a substantial factor in high hourly rates is a truth that cannot be escaped.  I ask this of discerning inside counsel:  Do you ever hold a firm's toney location and expensive offices against them?

And to underscore the point I made yesterday, the right place for meeting your client is your client's office.  Her convenience, not yours.  Your nickel, not his.  Your investment in the relationship.  Your chance to learn more about her business and the demands on her time.  Your chance to figure out more ways to help.  Its all about the client, not your trendy offices with the expensive artwork.

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The Greatest American Lawyer contains a very thoughtful post on the issue of whether law firms will ever lead change in the manner services are provided to clients. The GAL posits that  "[i]t has been suggested that until clients demand that law firms deliver lower cost and higher quality services, law firms will not be motivated to act. While there may be something to this notion, I am not buying it."  The GAL concludes with this:

So, what needs to change in the legal market in order to for innovation to ensue? Does the change have to come from the client side? It is my belief that law firms and lawyers will have to employ traditional marketing and sales people who can go out into the market without the demands and pressures of having to bill time or work for clients on important matters and evangelize what they are doing. Without a marketing and sales force, the reach of any particular law firm to distinguish themselves in the market and reach new clients is extremely limited. The market must be educated as to how and why the flattening of the world and the availability of technology can revolutionize the way law is practiced. Without this important piece of the puzzle, the legal market will continue to be the caboose of the global train of innovation and technology adoption. 

I'm not sure I can agree.  The implication of GAL's post is that there really isn't competition now for business.  That certainly isn't true.  In my view, the problem remains one of economic incentive.  Law firms have no reason to embrace technology or the efficiencies it creates more than is minimally necessary because technology costs them money and doesn't generate revenue. Clients make the hiring decision and law firms offer what they think the client needs from them, and no more.  If clients demanded the types of efficiencies GAL discusses ("do this or you are fired") and followed through by hiring only those who provided the innovation, the level of innovation would increase dramatically because it would be the price to play.  Now it isn't.  I leave with this thought:  if clients don't insist on change now, why will they hire based on that differentiator if the pitch is made by a professional seller?

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I am certain that there is no single formula for success, but a recent post by Tom Peters sums up the key ingredients as well as anyone.  The post is linked here, but I've taken the liberty of quoting it for convenience:

Chip Bell to Tom Peters (12.20.2005): "If you were asked to be the keynote speaking coach to a new company CEO eager to do a great job, what is the one thing you would advise the CEO
to do (or not do)?"

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My December American Lawyer arrived today.  As I always do, I turned to Aric Press' column.  Aric is the Editor-in-Chief of American Lawyer.  If there is anyone more attuned to the state of the profession, I would be surprised.  Aric's column is about the results the survey of the Am Law 200.  One of the questions asked this year was about the number of firms that lamented their loss of associates.  Aric writes:

The days when associates would hang around confident that they would snare a partnership are long gone -- and are not coming back.  Now may who linger stay only until their student loans are under control, and then they map a quick exit.  Firms complain bitterly that these young lawyers are leaving before the firms can fully recoup their investments in them.  They have no one to blame but themselves.  The profitability model is built on churn, and even the cream resent getting battered into butter.

Great prose (a hallmark of Aric's column) but very insightful as well (another hallmark).  Large firms losing associates need to look in a mirror.  Otherwise, its like the rancher opening the barn door and then complaining that the horses are running out the door. 

But my mission here is not to tell large firms how to run themselves--its to talk about client service.  There is no mistaking the significant role associates play on most matters.  Clients need to ask themselves whether they want to create teams where integral players are looking for the exit.  At what cost to the client is the associate's departure?

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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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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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I have long been intrigued by the concept of Six Sigma.  Ever since reading "Jack Welch and the GE Way," I've wondered how law firms could use the concept to improve their service. In this vein, I've also spent time with Lean Six Sigma For Service.  I've always thought myself somewhat the loner in my thinking on this, however.  For that reason, I was delighted to see this post in More Partner Income. Some of the wisdom of the post:

Can Six Sigma work in a law firm? The answer is, of course.  But a Six Sigma vision can only come from the firm's recognized "leader".  It can only thrive in an environment of constant change-recognition that excellence can only be achieved through change. It must place the client's wants and desires first. It must believe to its very core that when the firm improves the success of their customer, it improves the law firm's success as well. It must be willing to honestly determine what its clients want and be prepared to deliver it. Those wants may be at odds with the law firm's traditions but if you break those traditions in favor of the client-you will have a superior competitive advantage.  If you do so while eliminating deviations from client expectations, your competitive position will be unassailable.

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I've written about listening before. But it is of fundamental importance that every good post on the topic needs to be highlighted.  Tom Kane over The Legal Marketing Blog has just such a post.  Some great thoughts on how to handle face to face client meetings:

- Tell your staff person to hold all calls (if there are exceptions, let client know up front),
- Let client know they have your full, uninterrupted attention (except as noted),
- Look at the client while they talk,
- Take notes, and frequently summarize your understanding of what client said, and
- At the conclusion of meeting, ask client if there is anything they want to say or ask - then pause for a period of time to give them a chance to respond.

I especially liked this advice, about something said by Jay Foonberg:  "As his father told him, with two ears and one mouth, you should listen twice as much as you speak. Good advice."

My question for law firms is this:  When a skill is so demonstrably important to your business, why do you fail to provide training on how to do it better?

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I just read an interesting post on Michelle Golden's Golden Practices weblog about voicemail message content.  It made me wonder, however, about the best use of voicemail.   In an age where secretaries are become scarcer or are working for 73 professionals at the same time, it is pretty common that you bypass humans when you call someone and get that person's voicemail.  Almost all voicemail messages tell you how to escape, but odds are when you try, you only end up with someone else's voicemail.  Sometimes it drives me crazy.

One form of message is that "let me tell you where I am and what I am doing each and every day" kind of message.  Other's don't even bother with a message.  You get the annoying system message interrupted by the person saying their own name, sounding like they are stretched out on a torture rack just about to have their entrails ripped from their body.  Or there is the general "I am away from my desk" message that frequently adds options like "or I am out of the office doing really important stuff for somebody else so that I don't have time to talk to you."

My own thought on voicemail is this.  I make sure my secretary answer my phone.  A lot of times, its a client calling while I am discussing nothing of moment with a colleague.  I want the client's call to trump, and only a person answering the phone can do that.  If I am busy, I want my secretary to find out when the best time for me to call back is.  Or if its an emergency, I want her to interrupt me or find someone else to handle the emergency right then.  MY THESIS:  GOOD CLIENT SERVICE MANDATES THAT THE CHOICE TO LEAVE A VOICEMAIL MESSAGE BE THE CLIENT'S CHOICE, NOT A DEFAULT RESULT BECAUSE NO ONE EVER PICKS UP THE PHONE!

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With due regard to the author of a book by the same name, I believe that in today's corporate environment, one person cannot service a client alone.  It takes a team.  For example, while I am away on trial, my colleagues are doing yeoman work for "my" (really, our) clients and I am lucky to be working with people who are so willing to jump into help out.  With this as framework, I read with great interest Gerry Riskin's post Witmer thinks some lawyers just fertilize the queen.  Gerry read Larry Bodine's post on comments by Neil Wittmer, Ph. D. and takes considerable umbrage with Dr. Wittmer's thoughts.

The issue boils down to this:

"According to Witmer, the grinders and drones lack the essential personality elements to develop new business. You cannot change their personalities, and they may be unable to change themselves."

Witmer's theory is that the "drones" (I agree with Gerry that it is a most unfortunate choice of terms) should be left in their offices to "do the work" that other lawyers bring in.  Gerry's view is that

It is not personality that drives the client attraction process, but a combination of what the lawyer does and the skill to convey it - skill that almost every lawyer has or is quite capable of acquiring. If you look closely at a law firm's top rainmakers, you will notice a wide diversity of personalities.

While there is a lot of team-oriented work in a law firm, in many cases the client is choosing the surgeon for the operation - the more specialized the work, the less relevant the personality. If heaven forbid, a dear one needed brain surgery, the doctor's personality is probably the last factor for consideration. (I will yield that in an undifferentiated commodity market personality is far more important but most top firms keep that work to a minimum in favor of specialty work.)

My view is decidely closer to Gerry's, but not as extreme.  As I said above, I believe it takes a village to serve a client.  That said, I don't see room on the team for people who cannot develop a relationship with a client and instill confidence.  Talent and personality are minimum traits for everyone in law firm.

Beyond the client service issue, there is room for everyone to market.  Marketing is not just sales, and it is not necessarily face to face.  But someone needs to generate articles that the rainmaker can bring to a prospect's attention.  Someone needs to put content on the web site.  And so forth.  We have not yet arrived at the place in life where law firms are nothing more than groups of individual silos.  It takes a village (but not a metropolis!).

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Visiting recently with a former colleague, I was reminded of a scenario that plays out all too frequently in multi-office firms.  Relationship lawyers, faced with pressure from above to "cross sell," try to introduce their clients to partners in the firm's new office in (pick a city) or the latest lateral hire in (pick a city).  In most cases, and as was the case in the story being told, the referring partner had no relationship with his new partner and no understanding of how good a lawyer the new partner was.  I wonder how the client felt in these circumstances.  Perhaps she felt the way people do when confronted the notorious used car salesman- "buy this car.  I don't anything about who drove it or how it was driven, but its a great car."   Then the tires fall off on the way home.  Makes me wonder whether cross-selling a new office, new partner or new practice group is ever good for the client and whether any success stories are only a matter of chance.

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I spend a lot of time at O'Hare Airport.  So I spend a lot of time at the bookstore in Terminal 3.  And I happened to run across Jeffrey Gitomer's Little Red Book of Selling.  It was nicely packaged.  It looked small enough to read on my short flight, so I bought it.  I have to admit that I don't know who Jeffrey Gitomer is.  He may be huge in the marketing or selling field, but I don't know who he is.  I bought the book on a lark.  I am glad I did.

There's not a lot of what I would call "new material" in the book.  But he packages good messages better than most, and reinforces some important lessons.  Since I just posted on passion a week ago (less than a week before I bought the book), I found these statements particularly compelling:

Passion is the fulcrum point of selling.  No passion.  No sales.

And this one:

If you're not on fire, you'll lose to someone who is.

Passion is not everything, but there is nothing without it.

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    I read somewhere that McDonald's does not deal directly with companies that manufacture its cups.  Instead, it has a "cup company" handle all of its cup issues, including purchases.  The reason, as I recall the article, is that McDonald's is not a cup company and dealing with cup issues, prices, etc. is not a core competency.  It deals with a company for which such issues are a core competency.

    "Fascinating, Pat," I can hear some of you saying, "but what the heck does this have to do with the practice of law in general and client service in particular."  A lot, actually.

    First, check on "The Cisco Way" in this month's ABA Journal.com.  It is a story, on one hand, about a client driving change in the way its outside counsel work.  I've long believed (and written) that major changes in the profession occur on a widespread basis only because clients demand the changes.  But beyond that issue, think about opportunities created by this change.  Mark Chandler, the GC of Cisco, states in the article: "In the past you would say, 'I hope there's one firm big enough to do it all for me.  Not anymore. Now technology lets you pick and choose and bring together the best in each area." There's a focus on being best in an area. 

   If you want to play with the big dogs, you're going to have become a "cup company."  That is, a firm so good at something the big dogs need that they are better off turning to you to do it.  But I believe it goes beyond just the big dogs.  Mid-size and even smaller companies will have to access themselves whether the return on their legal service dollar is as high as it should be.  Is it cost-effective for an inside lawyer to do everything, even if he or she doesn't have the background, experience or training for certain things?  Or will the company be better off if the inside lawyer focuses on the areas where he or she can provide maximum return and outsource the rest of the legal department function?  The McDonald's "cup company" concept has a place at the table for a lot of businesses.

 

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Gerry Riskin, author of the Amazing Firms, Amazing Practices blog picked up on a recent Wall Street Journal article about how depositions require a skill set that leaders don't use in their normal job.  The post is worth your reading.  Gerry takes the issue from one of deposition training and makes an interesting observation about how the skill sets lawyers rely on to succeed in their profession really hurt the management of the business of the law firm.  According to Gerry:

Lawyers must be highly critical and analytical when creating or improving documents or winding their way through the strategy of litigation. These are essential behaviors for lawyering but lousy for managing or being managed. Therefore, unless attorneys become aware of their propensities, they will bring this mode of behavior into all they do, including how they react to management, whether firm-wide or at the practice-group, industry-group or client-team level. Support professionals like Chief Marketing Officers walk away from encounters bewildered and frustrated by these strange (to them) lawyering behaviors that people outside the profession rarely exhibit (especially in corporate settings).

My friends have heard me make this same point, albeit less effectively than Gerry.  I've tried to draw on the lawyer's propensity for doing things only after every possible risk has been analyzed and planned out of the matter under consideration.  Of course, dealing with every possible issue in this manner usually leaves reading the Sunday paper as the only non-contentious course.  Businesses take risks, lawyers avoid them.  Its not a comfortable mix.  Add in the out-dated legal structure of most firms, and you have the "herding cats" problem that has been discussed elsewhere.  Gerry puts it this way:

Leadership requires "followership" which means that the more an internal meeting resembles a deposition ("examination for discovery" in many jurisdictions) the less productive the business meeting will be.

"Followership" is not a normal attribute of many lawyers.  In the business world, it is the norm.  Even people with leadership skills know how to follow.  The chain-of-command is not a notion limited the military.  Presidents are higher up the ladder than Vice Presidents.  Organizational charts and reporting structures can take on too much importance, but they do have value.  The help identify the ultimate leader. 

Law firms should consider hierarchy: it could actually help improve performance.  Hierarchy would help lawyers focus on what they ought to be focusing on-providing great service to the firm's clients.  The business people should be doing the business and calling on the practicing lawyers when appropriate and needed.  This avoids the "too many cooks in the kitchen/herding cats" problem.

If you read Gerry's post, you know he believes it can be done.  I am not that sanguine about the problem.  I look forward to being able to talk to Gerry about his experiences that lead him to his viewpoint.

 

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Ed Poll, who writes LawBiz Blog, makes some interesting points about succession planning in his July 20 post, Keeping Clients After A Lawyer Retires.  Among the many valuable points Ed raises are:

- Have the rainmakers introduce younger partners to their client contacts
- Build teams around the top 20 clients, and to let the client know they have a team.
- Actively start cross-selling the top 20 clients. For more info see Larry Bodine's webinar: Best Practices Of Cross Marketing and Selling New Services To Clients.

I would add to this list.  First, merely introducing younger partners to clients is not enough.  Younger partners need to be featured, given opportunities to excel for the client and then "bragged on" by the senior partner.  If the senior partner doesn't show respect, trust and admiration for the younger partner, why should the client?  Second, I believe the client should be involved in the discussion.  Many of the rainmakers don't want to suggest to the client that they won't be there to service the client.  But the fact is that the clients themselves think about how deep a firm's bench is, what would happen if the senior partner became unavailable, etc.  They view the issue as a business problem and I think it benefits the relationship to let clients know you are thinking about their needs beyond any specific case.  Finally, I think everyone in the firm needs to know who the "successor" is for any given client. Some choices might be difficult ones, but any issues regarding the choice are better addressed when the rainmaker is still around to resolve them.

Its clear how this approach benefits the law firm: the loss of a major client cuts deep, particularly for smaller firms.  But why is this important from the client's perspective?  How much institutional knowledge has the client already paid for?  What would the cost be to replace that knowledge?  In some niche practices, there may not be a real alternative.  It is as much in the client's interest as it is in the law firm's interest to have a plan to cover anticipated departures as well as unanticipated ones.  McDonald's lost two CEO's to sudden death or illness in one year.  It happens, and there is no excuse to be caught short.

 

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Its that time of the year.  Young adults (for the most part), most with no experience in the business world and none practicing law, arrive at their chosen law firms to begin several weeks of fun, merriment, and just enough work to get an offer.  Ahh, heck, I don't want to overstate it.  Some law firms make their summer associates really work.  For the law firms, its a time to shine and really impress these potential future partners.  Each firm wants the cream of the law school crop to choose them.

But what does the client see?  To start with, they know that summer associates don't have experience and can't work unsupervised.  They know that only the highest quality work product will suffice.  If they've worked inside big firms, they know there is a scramble right before the summer associates arrive to come up with enough assignments.  They know that some significant portion of the assignments are make-work.  That is, assignments that would not be done if the summer associate was not there to do it.  They see an unconscionable billing rate assigned to this person.  And often times, they see a bill for the work performed by this the inexperienced, untrained, not-yet-a-lawyer student.

Several years ago, Butler Rubin did away with our summer program.  Economics and client service were not the only reasons, but they were important ones.  The issue goes obviously beyond one firm, and really requires a systemic change.

Isn't it time to start thinking about apprenticeships?

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I know for a fact that there are lawyers in many firms who "get it" when it comes to client service, but whose firms don't.  In my experience and and from discussions with many in-house counsel, there aren't many firms that "get it" on an institutional level.  From where I sit, the difference is one of leadership.  If a leader is thoroughly committed to client service, it is more likely that the firm will show evidence of "getting it" as well.

Why the focus on leadership?  Some lawyers may focus on client service as a means of enhancing relationships that generate revenue for the firm and compensation for them.  But others not similarly motivated or invested may not.  Leaders can provide examples for everyone and set the tone by rewarding client service focus at all levels.  The powerful message is hard for others to miss.

Equally important, however, is the leader's direction to teaching, training and mentoring.  Client service can be taught, and it is the leader's obligation to make sure the firm devotes the necessary resources to a quality education program.  From teaching receptionists how to answer phones, to effective use of phone mail, email, blackberries and other internal features, to eliciting input from the firm's clients on their personal preferences, it is the leader who provides the impetus for such actions.

The other key aspect of quality leadership is his or her attitude toward mistakes.  Law is a human endeavor, so mistakes will be made.  It is the leader who sets the attitude toward mistakes.  Viewing mistakes negatively drives mistakes underground, hidden from discovery (an punishment).  Instead, mistakes must be welcomed as a chance to improve relationships.  This isn't to say that there should never be negative consequences from mistakes, but good faith errors will be made and need to be recognized, pointed out to clients and turned into learning opportunities for everyone.  Its obvious to see how a weak or ineffective leader could fail to set the right tone on the issue of mistakes.

 

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No, not billable hour kind of time.  Rather, the importance of time to think.

Changing how you do business, or changing with whom you do business are not easy decisions.  The decisions have to be justified, sometimes to people who have become your friends, to your CFO or even the CEO.  In other words, the decisions have to be thoughtful and deliberate.  Those characteristics more often than not demand time.  But what is one thing most striking in its scarcity in the lives of most in-house counsel?  Time.

So what does this mean?  For one thing, it means that movement to alternative fees and replacement of lawyers will be a slow process.  Second, it means that a succinct, compelling case for change needs to be made when marketing your interest in alternative fees.  And finally, it means that inside counsel will have to decide the real priority associated with obtaining the advantages of alternative fees.

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Forgive me for interrupting my report on the Corporate Counsel cruise, but "breaking news" sometimes takes precedence.

Larry Bodine ran an item today in his blog entitled "If a Law Firm Were Run Like Southwest Airlines."  The piece was based on a description provided by Deborah Ackerman, the GC of Southwest. The dream Southwest firm has these characteristics:

• Would be the low-cost producer
• Focus on clients as customers and not as a legal matter
• Have no layoffs
• Have an annual chili cook-off
• Have a tradition of fun. Halloween is a major holiday at the headquarters, and everyone comes to work in a costume, including the CEO.
• Relax the dress code.
• Be family-oriented. There is no expensive artwork on the walls of SWA. Instead there are pictures of employees with their families, pets and hobbies.
• Display "brag boards" everywhere where employees can put up notes about their own and their kids' accomplishments. Have many employee recognition programs.
• Establish an Employee Catastrophic Fund to help employees in cases of an uninsured loss or serious illness.
• Communicate in a timely fashion to employees.
• Senior partners give hugs and praise from to staff as a daily occurrence.

It seems like Southwest has ignored the distinction between the things it takes to have happy employees and the things employees do to make their customers happy.  I believe in having happy, motivated employees.  But that is not an end.  The end is to have happy, well-served customers.  Larry writes about his great experience flying Southwest to Las Vegas and how fun the flight was.  In other words, the customer's experience was good.  Law firms, like every other service provider, need to keep their eyes on the prize-customer satisfaction.  Without that, nothing else really matters.  At least not over the long haul.

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I am a big fan a accountability.  There is a lot that doesn't happen when no one is accountable.  Create a committee and there will be a bunch of meetings.  Tell someone they are responsible and will be rewarded ("carrot"), punished ("stick") or both ("carrot and stick"), and something will get done. In my experience, the busier someone is, the more likely the carrot alone will not work.  Why, you might ask, is this relevant to client service.

So often, no one at law firms is accountable for key issues such as diversity, client service, using technology for the client's benefit or restructuring billing arrangements to reflect the value of the service to the client.  I've seen this firsthand and talked about it with a number of people inside law firms and inside corporate legal departments. In this vein, I thought Robin Sparkman's Editor's Note in the May issue of Corporate Counsel was so very interesting.  She notes that its rare for law firms to be fired because of poor track records in diversity, technology offerings or use of alternative fee arrangements.  She mused that too often corporate counsel's complaints in these areas are mere "window-dressing" and that "if in-house lawyers continue to huff and puff without really meaning it, its hard for law firms to take them seriously ...."

Maybe in-house lawyers have used the carrot ("more business") when they should be using the stick ("no business").  Growing up, I was taught that "money talks and bullshit walks-in more polite language, the stick works and the carrot doesn't.  Unless my life experience is radically at odds with the way the world really works, broad, industry-wide change will occur when business moves to those who walk the walk instead of jaw boning.

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