Another law firm has motivated its associates to spend more time rather than less getting their work done. Kaye Scholer is paying upwards of $20,000 in additional bonuses to those who exceed 2,200 hours per year. The firm’s managing partner said this:
At Kaye Scholer, we strongly believe in rewarding our lawyers who not only meet, but regularly exceed, expectations. Every year there are some associates whose performance is truly outstanding, sacrificing from their personal lives to serve our firm and clients. We think it only appropriate that those associates receive a little extra at bonus time, which is why we instituted the two-tier bonus system four years ago, and continued it this year.
Let me offer an interpretation for their clients.
We haven’t figured out how to do work other than on an hourly basis, so we need lots more hours for the firm’s partners to take home their millions. So to squeeze out those hours from our clients, we’ll motivate our associates to spend more time on their matters. So even though our clients would benefit from a focus on efficiency and outcomes, that doesn’t help us–the partners–so we’ll just ignore that and keep doing what we’ve doing.
Kaye Scholer is, of course, not the only firm to use this approach. But they are public about it. I think most firms try to stay under the radar on this because the approach disfavors the firm’s cleints. By now, though, most clients that directly or indirectly support this approach are doing so knowingly and willingly, and there is nothing wrong with clients that want to overpay.
I am flabbergasted. I just opened up my first email this morning. It is from Joyce Smiley at JKS Company, and she sends a periodic report, also published online, Verbatim, What Clients Say. The lead paragraph states:
In a recent phone conversation with the name partner of a law firm, he claimed to be “skeptical” of conducting client satisfaction interviews. He compared the project to “going to the doctor for an unpleasant test” and would prefer to “put it off.”
The first thing that comes to my mind is the weekly ESPN segment, C’mon Man! Really? Such neanderthal views in 2013?
Llet’s start with the very basics. Your clients have views of your firm. They do–honestly. Your choice is to learn those views or not. The arguments in favor of not knowing are:
Okay, so there are no good arguments. There aren’t really any bad arguments either. So how about the arguments in favor of conducting client satisfaction interviews?
- Clients like them. A lot.
- They strengthen relationships, because talking about what can be done to improve relationships is what adults do.
- They identify weaknesses in your organization. Did you know that your star associate antagonizes the client’s staff? Maybe that is something you should know.
- They identify issues of concern on the client’s side. Did you know your client was becoming frustrated with the uncertainty in billing amounts and had tried a fixed fee firm–and liked it? Did you know your client had given work to an LPO and was happy with the outcome and thrilled with the cost?
There are many more reasons. But as I have said before, the existence of people like the name partner in Joyce Smiley’s post only makes life better for those who conduct such satisfaction surveys. Meanwhile, that partner is back in his office with his quill pen, rotary phone….
Chicago, IL-November 19, 2013
For the third consecutive year, Valorem Law Group has been named to BTI Consulting Group’s Client Service A-Team. Valorem was recognized in the Client Focus, Providing Value for the Dollar, Commitment to Help, Keeps Clients Informed, Handles Problems and Deals with Unexpected Changes categories. The results were reported in BTI’s Client Service A-Team report issued today.
BTI’s report is based on corporate counsel’s unprompted feedback during extensive interview. According to the Report, the Client Focus category recognizes Valorem’s “ability to deliver on [its] client’s targeted outcome,” usually an outcome driven by “business goals, budget constraints and client risk tolerance.” The Commitment to Help category reflects clients’ subjective judgment about a firm’s “emotional and financial investment in the relationship. Clients look for law firms whose commitment exceeds their own and who solve a problem instead of bill hours.” The Provides Value for the Dollar category recognizes firms that “communicate their value to clients by showing money saved, increased revenue streams, faster time to market and time saved, by documenting better outcomes. These same firms offer timely budget updates and scope changes.”
“Valorem is thrilled to be recognized in BTI’s report,” said firm co-founder Patrick Lamb. “It is especially gratifying that our recognition is based on unsolicited input from our clients,” Lamb said. “The report states that the categories in which we were recognized are ones clients consider among the most important but also most scarce among practitioners,” added co-founder Nicole Auerbach. “Since we place extraordinary emphasis on client service, we are pleased that our efforts have resonated with our clients,” added Auerbach.
About Valorem Law Group
Valorem Law Group is a business litigation firm with offices in Chicago and Silicon Valley. It was founded by BigLaw firm refugees who believe clients are entitled to budget certainty, extraordinary client service and to an unsurpassed commitment to help clients deal with cost pressures. Valorem is so committed to these goals that each invoice contains its unique Value Adjustment Line, which allows clients to change the payment due if they don’t believe they have received extraordinary value.
For more information visit www.valoremlaw.com or contact Patrick Lamb at 312-676-5460. Find Valorem on Facebook at “Valorem Law Group.”
Valorem Law Group’s Nicole Auerbach spends a lot of time talking to inside counsel. She has seen many who are leading major changes in their law departments, taking advantage of “the New Normal” to achieve unimagined savings for their companies. She also has met her fair share of inside lawyers who are handling things today the way they have for so many yestedays. It is this latter group of inside counsel who got Nicole wondering why more inside counsel are not demanding more change from their outside counsel. Check out Nicole’s post in Corporate Counsel Connect. And you can follow Nicole’s musings on Twitter @ValoremNic.
For reasons entirely unbeknownst to me, professors, law deans and others in law school frequently refer law school grads to me to suggest approaches to the legal workforce. Valorem doesn’t hire new law school graduates (or even recent ones), but I end up seeing an awful lot of resumes. I’ve put together a few thoughts here that may be of interest to recent graduates.
1. Put yourself in the shoes of the lawyer/firm. How many resumes do you think an average lawyer sees in a year. The total is likely to be in the hundreds. Resumes in one year blend together. When you consider that 99.9% of the resumes I have seen since 1983 when I got involved in the hiring process look exactly the same, you can better understand how resumes blend together. If yours looks just like 1000 others, why should I care? How can I possibly remember you?
2. Remember the grains of sand. Picture a person surveying a lovely sandy beach. You are a grain of sand. You might well be the finest grain of sand in the history of sand, but how do you expect the person surveying the beach to pick you out from amongst the trillions of other grains of sand? You can’t afford to appear to be like the other grains of sand.
3. If you aim to not offend anyone, you will impress no one. So many people, and virtually all law firms, are afraid of offending anyone. You create a persona stripped anything vaguely rough and unpolished and you end up stripping away the real you. Look at law firm websites–they are all so unbelievably vanilla. And so utterly BORING. You need to be the real you, the kind your friends see. You need to do something so different that it captures attention. A custom YouTube video presenting yourself? Why not? A parody to introduce yourself? Give it a shot. BE CREATIVE. A lot of prospective employers may be turned off. But you are far more likely to catch the eye of somebody that way. That’s a key to getting an interview and even more so getting an offer.
4. Understand the importance of “what’s in it for me?” When firms hire a prospect, particularly when smaller firms do, there is a very real “what is the value to us” that enters the hiring calculus. You need to make a business case for a decision to hire you. Not a business case for a firm to hire a new lawyer–the firm has already done that–but why the lawyer they hire should be you. You need to think like a business person, not like a lawyer on this one.
5. Understand that you are not a good writer. Most young lawyers I speak with talk about how well they write and how good they would be trying cases. Trust me, you are not a good writer. At least you’re not so much better than others I’ve seen that writing skills would drive that decision. When clients interview lawyers, quality is a given. You would not have made it the interview if the client didn’t think you were good enough. Likewise, good writing is a necessary skill set, but it is not sufficient. Understand and embrace that idea. On the flip side, your interest in trying cases is great, but my mother wants to try cases. Tell me instead about what you’ve done to master the forum. And by that, I don’t mean mock trials or other stuff in law school. How have you learned to think on your feet? To perform before an audience? To plot strategy like an elite senior military officer? And so on. There is a huge amount that goes into being a trial lawyer. Don’t be so condescending as to think you’ve mastered it based on handling a moot court case.
Remember, free advice may only be worth what you pay for it. But I hope something in this post sparks a helpful thought.
Those familiar with my writings know that I am a huge fan of Jordan Furlong. His thinking is illuminating and his writing is extraordinary. Jordan, who is both a partner with Edge International and a consultant with Stem Legal, has teamed with Stem Legal’s Founder Steve Matthews to produce Content Marketing and Publishing Strategies for Law Firms. The book is a quick read–it is only 75 pages–but don’t let the length of the book mislead you about the value of its content. In five chapters, Jordan and Steve cover strategy, content, distribution, culture and metrics. They include several case studies that help illustrate the points they are making. While Valorem’s inclusion as a case study may color my strong feelings about the value of Content Marketing, Jordan’s and Steve’s stature in the legal community and the history of their thoughtful contributions more than justifies a trip to the website to take a look at the book and judge for yourself.
Michael Rynowecer writes as “The Mad Clientist” and his latest post, Outtakes for the Client Service Laboratory makes you wonder just what kind of drug-induced haze so many seem to live in. Take these two examples:
- A partner in an AmLaw 50 law firm conducted a client feedback interview with a large client. This same partner sent a single, separate invoice for the time for the interview—$1,042—clearly labeled as such.
- “I received a call from someone (one of my attorneys) who asked me if I wanted them to do something for me. I said, ‘No’ and they billed me $400 for the phone call.”
–General Counsel, Fortune 1000 Retailer
Is it possible for lawyer to be so desperate for billable hours that he or she would do something quite as stupid as done either of these examples? Or is it just good old-fashioned dumber-than-a-box-of-rocks stuff?
The latest insight from my partner, Nicole Auerbach, in her monthly feature, Insights From The Corner Office (even though she voluntarily gave up her corner office for more windows and a better view):
It is commonly held that people with mentors progress faster and are more satisfied with their careers than those without mentors. It will probably come as no surprise to learn that women are less likely to be mentored in the work place than men. Perhaps this is because people are inherently drawn to those who remind them of themselves, and men still hold the majority of positions that would lend themselves to being a “mentor.” Couple that with the often-unspoken issues that can arise when a more-senior man spends one-on-one time with a younger woman, and we can see why many women may never have what they would call a “true” mentor. Does that mean upward mobility is impossible? Not at all.
There is no reason why there can’t be a conglomeration of people who end up serving as mentors. In fact, if we acknowledge that one person rarely exhibits all of the traits that we most want to emulate, the idea of a patchwork mentor becomes that much more appealing. Looking back, that’s exactly what I had.
Read the rest of Nicole’s post at The Legal Balance. You can also catch her wit and wisdom in her periodic tweets, @ValoremNic.
My partner Nicole Auerbach, proud owner of a middle office, recounts the lessons learned when she voluntarily gave up her corner office, and also those from some other risks she’s taken along the way. This is her story, as first posted in The Legal Balance.
A Middle Office with a View
BY NICOLE NEHAMA AUERBACH
I am honored to have been asked to write this monthly column, “Insights from the Corner Office” for the relaunch of The Legal Balance, but full disclosure is in order: I don’t have a corner office. Idid have a corner office, but a middle office opened up that had two great windows, including one with a view of Buckingham Fountain.
So I moved.
There was a risk that people might perceive me as less powerful without my corner office, but truthfully, I couldn’t be happier.
My office move dovetails well with The Legal Balance’s theme for this month—risk taking. As I’ve gotten older (I just celebrated another birthday; they seem to speed up as we age) I’ve realized that so many things we learned growing up—“Don’t talk about yourself or your accomplishments; that’s unbecoming,” or “Good things will happen to those who wait”—were probably good advice … during the era of Jane Austen. But in today’s world, while good things sometimes do happen to those who wait, they happen a lot quicker for those who aren’t standing around hoping the stars and the moon will align. And truthfully, while it would be nice if our accomplishments were automatically emblazoned on big lapel buttons so we wouldn’t have to brag, it’s clear that’s not happening, either. Instead, getting ahead requires some action and, also, a willingness to take risks.
The biggest risk I have taken in my career is, without question, the one that has delivered the most reward. In 2008, I decided (after a lot of hand wringing and soul searching) to leave my comfortable partnership position at the large firm where I had practiced for nearly 15 years to start a new firm with new partners and a new model, handling litigation using alternative-fee arrangements. There is no question that the anxiety associated with this move was huge, but so was the amount of excitement and the energy we had in launching Valorem. While I know that hindsight is 20/20, if you had asked me just a few weeks into the endeavor—at a time when I didn’t know if we’d be around in five months, let alone five years—I would have said that the risk was well worth taking because it gave me affirmative control over my destiny. That’s a hard lesson to learn, because a lot of risks don’t pan out in the end. But I think that lawyers, and often women because of the way we were raised, tend to miss great opportunities because they are risk-averse and simply afraid to fail.
Having control over your own destiny is often the key to being happier and more satisfied with your career. But if you’re doing something because you chose to do it, that is exponentially more rewarding than doing something simply because it’s part of some master plan that you think society has made for you.
And don’t forget: Risk comes in a lot of different sizes, so if you are ultra-conservative, start with a small one—a risk that will make absolutely no difference if it doesn’t go well. Then try to build up to larger ones that may ultimately shape your destiny. Who knows—someday, you may end up in the middle office with the good view.
Or, if you prefer, the corner office.
Nicole Nehama Auerbach’s office isn’t in the corner, but it’s still nice. Nicole is a founding member ofValorem Law Group, a litigation firm solving its clients’ issues using alternative-fee arrangements. She also co-founded the Coalition of Women’s Initiatives in Law.
With his permission, I want to share with you a note I received from Ken Grady, the former General Counsel of Wolverine World Wide, Inc. and architect of the astonishingly successful Wolverine law department and its accomplishments in recent years. The topic I was discussing with Ken and others was whether Value Based Fees alone were enough to help law departments become high achievement groups. The discussion was part of our preparation for the most recent session of the Association of Corporate Counsel’s superbly designed Legal Services Management program. Ken’s perspective as a General Counsel who went through the change process is so valuable. I hope you find his insights as valuable as I do.
I think we are seeing in many ways that VBB alone is not going to carry the day. If the law firm provides services the exact same way under a VBB arrangement as it does under a billable hour arrangement, nothing has changed – as Pat says, there is no risk sharing. GC’s complain that law firms aren’t presenting them with really viable VBB options, so they default to billable hour – discounted fees. Law firms complain that when they present VBBs, clients won’t do them and default to billable hour – discounted fees. This is true even at the firms that are leading the way in doing VBB and implementing PM and other changes.
Distributed change – redoing the corporate legal world where no one firm or company has the power to force through change – is more difficult than changing a single company (obviously). In the absence of a killer app or service that drives the change, it will be slow, uneven and lack clear direction. This isn’t new, it is the same thing that has happened in other industries at other times. It is new in the legal industry, and it is remarkable in the legal industry because it is so visible for an industry that considers one or two major changes every 100 years to be fast enough.
All of the tools and techniques we teach will help in the short term, but the tipping point – the real moment for change – will happen when someone shows that using model “X” results in meaningful change at such a level that there is no going back. [Excuse the self-promotion] In the last five years, while our company has grown revenue by 60%, the Legal Department has reduced legal spending from that 5-year old starting point by 12%. We are spending 12% less than we did five years ago to support a company with several new product lines, expanded geography, etc., etc. that is 60% larger and significantly more complex. We did it by combining the tools and techniques we teach. But, the real tipping point would have been if we had cut our legal spending by 50%.
With a few notable exceptions, major law firms are not going to try to reinvent their profit model (assuming they have the wisdom to know how) to help clients cut costs by 50% while allowing the law firm to continue generating revenues and profits as it has done in the past. Since clients aren’t pushing, most competitors aren’t doing it, and there is tremendous risk in trying to do it – why bother? The disrupters will be (as they mostly are) start ups who have nothing vested to lose and who can try new models while adaptively changing fairly quickly.
On the client side, those disrupters so far simply don’t have the geographic, subject area and expertise scope to do what we need in a broad enough way to meet the 50% reduction challenge. They tend to be grouped around litigation (U.S.), small localized transactions, and volume/repetitive work. While there is some market for that work, larger companies need the broader universe and scale to really drive down spending (versus moderating its growth and achieving efficiencies in spending).