June 2005

I consider Nat Slavin, the publisher of Corporate Legal Times, to be a friend.  But even if he were not, I would be a regular reader of Corporate Legal Times simply because every issue contains at least one nugget of insight that really makes me think and reevaluate what I believe, and most issues contain more than one.  The July 2005 issue is a great example of multiple nuggets.

Nat’s column is entitled “A New Economic Model For Law Firm Billing,” and his new model, while not that new, is presented in a way that is really intriguing.  The proposal is that law firms bill on a fixed fee basis on a quarterly basis.  The rationale for the model is the need for business people to bridge the gap between budgets and actual expenses.  The rationale is presented in the context of a public company that needs to forecast and make projections to manage Wall Street expectations.

As most who have read any this blog know, I am a staunch proponent of a modified fixed fee approach-fixed fee with a success incentive (either recovery of hold back or bonus) so law firms remain “interested” in the outcome.  Whereas Nat is looking at fixed fees for a given quarter, which allows a firm to make up any losses from the prior quarter, I have been advocated for a fixed fee on a given matter.  In the context of the business need for prediction, neither approach is on the money.  Nat’s approach fails because budges are set months in advance of a given quarter if not even more so.  During breakfast with a GC a week ago, he mentioned how he is now fixing his budget for 2006, and there is no line entry for new litigation.  The system evens out because litigation ends while other suits begin.  In this GC’s experience, things tend to even out.  My approach works on a micro, or matter, level, providing the grist for fixing a specific line item on a departmental budget.  But my approach does nothing on a macro level, which is where much of the budgetary pressure resides.  But Nat’s analysis that the gap between budgets and actual expenses has to be bridged is on the money, so my view must evolve from micro to macro, from matter budgeting to budgeting for groups of litigation.  We must move beyond matter focus to something broader.

I did say that there was more than one nugget in the July CLT.  Laura Stein, the General Counsel of The Clorox Co., authors the Inside Perspective column, which is entitled “Management Needs Lawyers It Can Trust.”  The article is about the trust relationship between inside counsel and management, but the lessons must be the same for outside counsel.  While Ms. Stein’s article does not mention fees per se, but she underscores the need to help management obtain business objectives in a cost-efficient manner.  Certainly this must include the budgetary process.  But as important, Ms. Stein underscores the importance of  a relationship built on trust.  And while a trust relationship between inside and outside counsel extends beyond fee issues, it certainly must include them.  The persistent failure to learn and understand the internal budget pressures faced by inside counsel and to respond in a manner that helps solve the problem rather than exacerbate it is certainly a cornerstone of a trusting relationship.

I’m not going to repeat all of the commentary about the “elevator speech” you need to have ready to give to anyone who asks what you do.  We all have experienced the need to have the “speech” ready and many of us have one at the ready.  But are we really ready?

I recently wrote out my “speech” and also looked at number of law firm web sites to see their “speech”.  My conclusion is that we need to take pity on the people who actually have to listen to our speeches.

Let me offer some examples of what I might say and how a prospect might react.  “I am a litigator.”  Most people don’t really know what a litigator is or does.  But clients know that “litigator” is a term that is so vanilla as to be meaningless.  Of the millions who would describe themselves as a litigator, how am I different?  Well, unlike many litigators, I actually try cases.  So then I try to distinguish myself from the many litigators who never venture into court by saying “I am a trial lawyer.”  Will my prospect think  I am one of those people who contribute heavily to the Democratic party?  Positing yourself as an adversary at worst or someone who can’t help at best is not a good way to go.  I try qualifying my speech by saying “I’m a business trial lawyer.”  Okay, so you work for businesses.  But  is trial skill the key attribute the prospect is looking for? Since 97% of all cases settle, it sounds as if I am  really suggesting I  only deal with 3% of the prospect’s problems?  I know I can contribute something of value on the other 97% though.  I am an effective negotiator, a good legal strategist able to secure dismissals on motion, and so on.  Plus, I know that clients don’t always view trials with the same warmth I do.  The business trial lawyer description doesn’t communicate the right message either.

What do others say?  I saw a small firm’s web site (under 20 lawyers) describe their expertise as including Tax Law,  International Trade and Transactions, Corporate Planning and Transactions , Intellectual Property (patents, trademarks, copyrights, trade secrets and licensing), Media and Communications Law,  Litigation,  Employment Law, Environmental Law, and Legislative Affairs.  How can a firm with less than 20 lawyers have the depth of expertise needed to practice in all these areas?  There are lawyers that do each of these things every day and are true specialists.  Putting aside the veracity of the claims, will they sound true? Should I try a longer speech putting in a description of more things I can do, more types of lawsuits that I have handled?  I have concluded that the risk of sounding like I am overselling is not worth it.

Another firm claims to be devoted to “working in their client interests.”  Well, that hardly sounds like a distinguishing factor.  Another claims to deliver value.  I have to confess that I haven’t seen a firm admit that it fails to deliver value.  I don’t mean to be trite, but the use of buzzwords doesn’t really make the “speech” effective.  But the notion of somehow communicating a client service orientation does make sense.  I just think it needs to be more subtle.

Back to my “litigator.”  Litigation is, at its core, just a means of resolving a dispute.  So what I really am is a “problem solver.”  I’m effective at it, and I am efficient.  I work at solving problems for businesses rather than for accused criminals, or people injured at work, for example.  What other traits do I bring to the table as a problem solver?  My best trait, in my judgment at least, is my creativity.  So, “I creatively, effectively and efficiently solve problems for businesses.”  But there’s more.  We are pushing alternative fees so we can help in-house counsel with their budgets and avoid the headaches associated with the hourly rate.  Now I’m trying this: “I creatively, effectively and efficiently  solve problems for businesses in a way that cures headaches for in-house counsel.”  And to tell them about my firm, I can add:  “I work in a firm of like-skilled people.”

My speech seems to describe what I do generally enough and in a different enough way that a prospect hearing it might ask a follow up question, starting the dialogue I was hoping for.  Am I being too generous when I listen to my own speech?  Are my ears too dulled by listening to my own music?  What do you think?

Even if you think I am full of [fill in the blank] about my own speech, hopefully this post may cause you to listen critically to your own.

I was talking to a client one day and he mentioned that he would be unavailable for several days because he was working on an acquisition.  I was happy to hear our client was growing and asked if he could tell me about the company being acquired.  He mentioned the name and when he heard me gag, he asked whether I had ever heard of the company.  I mentioned that I had run across them frequently in silica litigation.  Reading between the lines, he heard me asking him why on earth they were thinking of buying another company involved in mass tort litigation, which was completely contrary to their risk profile.

In the end, the acquisition did not happen.  The transactional lawyers had not done an exemplary job of due diligence.  Even though they knew the company was involved in silica litigation, they didn’t appreciate the extent of the problem, the myriad of related issues,or the disclosure issues created.  The upshot of the story is that I was added to the due diligence team.

This story happened more than a decade ago.  I find myself telling it to new clients and prospects to illustrate the potentially added value we can bring to them even though my colleagues and I now are just litigators.  The lessons one acquires over the course of a career are there to be shared.  And even if a client hasn’t hired you to handle a specific matter, my experience is that they are always willing to hear what experiences you’ve had that might help them avoid making mistakes made by others.  Good service, it seems to me, requires sharing the value of your experience when you see opportunities to help out. Even when you’re not directly asked.

Matt Homann has an interesting entry in his [non]billable hour blog, picking up a post from Howard Mann who writes a blog called Dig Tank.  The gist of the article was that Mr. Mann convinced his client to sit in his own lobby to see it from the eyes of a client.  The client-the President-didn’t like how things looked and didn’t like how uncomfortable the chairs were.

I have written before about Internal Audits.  Matt’s entry and the Howard Mann post show a great example of how the internal audit process can help change the way you view your own space. 

Uggghhhhhhhhhhh!  I hate it when these stock brokers call out of the blue, trying to sound like they’ve got the best deal in the world.  I can’t hang up fast enough.

You might be wondering how my encounters with cold callers is particularly relevant to client service.  When a broker calls me out the blue with a “tip,” it isn’t about me, it’s about him.  He doesn’t know what my investment portfolio looks like, what my risk tolerance is, or what my investment objectives are.  He doesn’t know, for example, whether I just dumped the stock he is pushing.  Since he doesn’t know anything about me, he isn’t really worried about what’s best for me.

How are our first encounters with prospective clients different?  I hear lawyers talk about the cases they tried years ago, or who they know or who they’ve worked with.  Straight resume material.  The only time the lawyer asks a question is when he notices that the client’s plate is cleaner than his and he needs the client to talk a bit so he can catch up.  Too frequently, though, the question asked is something akin to “so what do you think about my great accomplishments?”

As Anne Gallagher pointed out in her recent comment, a lawyer has to build a relationship with a prospective client.  How do you do that?  Ask questions!  Its about the client, not the lawyer.  You need to understand the client’s business. You need to understand the reporting structure.  The risk profile.  Business objectives.  Personal objectives.  Pet peeves.  Issues.  Problems.  The amount you need to know is not a one-lunch amount.  Its a month of lunches if not more.  Because a relationship isn’t built over one lunch, its built over time.  At the end, the unasked question you must answer is what needs of the client are you in a position to address.  Its not asking what you can do for the client.  Its knowing what solutions you can provide and discussing whether they are the right solutions for the client’s particular needs.

Don’t cold call. But more importantly, don’t treat opportunities to meet prospective clients like cold calls.

This morning, I was fortunate enough to have breakfast with Jeff Carr, General Counsel of FMC Technologies; Peter Jenkins, the President of Law Partnering Institute and founder of  the Law Department Consortium; and Steve Lauer, Director of Integrity Interactive.  Jeff is one the most outspoken proponents of aligning the economic interests of clients and their counsel, and he can legitimately claim to be one of the prophets who have moved the industry in this area.  Peter is on the cusp of really changing the management of mid-size law departments with the Law Department Consortium. Having served as in-house counsel for a number of years, Steve is now working at Integrity Interactive, the premier ethics and compliance partner to Global 2000 corporations. All were in town of the Corporate Counsel Superconference, sponsored by Corporate Legal Times.

I doubt I contributed a single meaningful thought during our 90 minutes, but I sure learned a lot.  Thanks to my friends for their insights.  I wouldn’t be surprised if one or two of the lessons from this morning find their way into this blog.

 

Many years ago, I did almost all of my work for two partners in a large firm.  They were good friends, but they could not have been more different to work for.  But what I am today, I am in large measure because of them.  Once, I was traveling with one of the partners and we were talking over cocktails.  The partner told me I was the best associate that had ever worked for him.  I asked how he had reached that conclusion.  His answer was something that has stuck with me since: “I never wake up in the middle of night thinking about cases you’re working on.” 

Another time, I was having cocktails with my other mentor, and I asked how I was doing.  He said “you give me what I need to be able to do my job well.”  When I told him about his partner’s comments over cocktails, he laughed and said if I did for him the things that I did for his friend, he would never sleep a wink.  The key to my success, he said, was knowing what I needed to do for one was not the same as what I needed to do for the other. 

The point of these two stories is not to relive my glory years as an associate, although Bruce Springsteen wrote a great song about doing so.  Rather, the point is that there was no recipe that either of my mentors had for judging me. And there was no recipe I had for providing the service that either them wanted.

Years later, in his outstanding book What Clients Love, Harry Beckwith wrote:

Ask loyal clients of any company why they remain loyal, and they will give one answer more than all others combined.  Do they mention excellence, quality, skill or price?  Not often.  They answer “comfort.”

Beckwith’s book is filled with tips that help create comfort.  But as with my mentors, what creates comfort for one client will differ from that which provides comfort for another.  The hard part about being a service-oriented lawyer  is to learn what it takes for each client to be comfortable, and then do everything possible to provide it.  Read voraciously about what it takes to provide great service, but do not succumb to the theories of any one writer or consultant.  Great service is personalized service.  Great service is unique service.

Anne Gallagher of Extreme Marketing comments that one of her favorite authors on professional services (probably herself or her equally insightful partner, Merry Neitlich) “says that when marketing is done right, ‘sales’ becomes superfluous.  Think this means that relationship selling is about developing and deepening relationships rather than using traditional ‘closing’ techniques to get commitment.”  Agree or disagree?

On a very general level, its hard to disagree with the comment.  Many inside counsel say that they hire “the lawyer,” not her law firm.  Those that do hire the lawyer tend to hire someone they know and like.  Like any other relationship, the deeper and stronger it is, the more likely it is to be productive.  I wholeheartedly support the idea of building relationships, so much so that I suggested (and my partners agreed) that a portion of our compensation be based on relationship building efforts (rather than actual clients delivered to the firm).  I so firmly believe that building relationships will pay off, I am prepared to tie compensation to the effort not the result.

Having said that, I also take the view that “sales” is nothing more than helping people meet a need or solve a problem.  No matter what you think, sales in professional services will never be like a used car salesman’s approach or the cold call from a large investment house.  If your goal is to help someone meet a need, you necessarily have to know what needs they have do some thinking about what solutions may work.  But I am not prepared to trust marketing to cause the client or prospect to make the right decision.  You do not live or work in a vacuum.  Others are trying to build the same relationships you are, and some might be further along in the process.  To the extent that “sales” includes “asking for the business” and utilizing some techniques to ensure that the call come to you instead of a competitor, I’m all for sales.

Here’s an example.  I grew up in an environment where associates heard from day 1 that if you don’t ask for business, you won’t get it, and that lesson has stuck with me.  Years ago, I was marketing a client-paying a visit to the office to visit with my contacts.  Just that day, a class action complaint had come in.  It was a big piece of work.  I remembered my lesson and asked for the case, and used some very basic “closing” techniques and left that day with the case in my briefcase.

So my real response to Anne’s comment is that I don’t think marketing really displaces sales.  In professional services I think good marketing and good sales really are the same thing with slightly different points of emphasis.

I ran across the Revenue Roundtable blog the other day.  The Roundtable is made up a panel of experts, who describe their mission this way: 

“The Revenue Roundtable team’s saying is “Be practical, or be quiet.” So, head off to academia if you want to read jargon-laden management theory. Stick with us if you want specific advice on marketing strategy, lead generation, managing a complex sale, and expanding your business with your existing customers. And that’s just the start.”

With that as an introduction, I wanted to highlight an interesting Roundtable article titled How to Sell More–Back to Basics, which contained a mixed bunch of sports metaphors (“home runs and moving the ball down the field”).  But the punch line is pure wisdom:

“This particular sales manager loved to say “Kevin, if you want to be good at sales, remember it’s all about blocking and tackling!” In sales, “blocking and tackling” is actually three activities:

1. Connecting with people
2. Asking questions
3. Getting commitment

If you don’t do these things you will not develop the relationships needed to make sales. You won’t discover how you can be of service to anyone. And you’ll never close the deal. It’s that simple. Blocking and tackling.”

He then goes on to say that his list of three really boils down to one:  Be of Service.  Good discussion of what service is-helping others get what they want.  But then they screw it up by asking  “what do you consider the basics of selling in your organization?”  We know what the fundamental is (“blocking and tackling”)-service.  The better question is what we consider the elements of service?  Sometimes its hard to discern elements but easy to know good service when you see it, so let’s also ask for examples of good service.  LET’S HAVE A DISCUSSION!  COMMENTS ARE GOOD!

Much has been written here and elsewhere about the utter significant problems inherent in the billable hour system.  Indeed, there seems to be something meaningful happening, if only rhetorically.  The question remains, when will conduct match rhetoric?  When will inside counsel begin to insist on budgets with meaning, on alternative fees, on their counsel having skin in the game?  When will outside counsel offer, and really push, alternative fee arrangements that are mutually beneficial?  When will we be sufficiently motivated to take that first step into the unknown?

Tom Peters has an interesting entry today about Steve Jobs and his commencement address at Stanford.  The entire address can be read here, but the gist of the speech is captured in Tom’s slides.  Speaking of the importance of work in our lives, Jobs says:

” Sometimes life’s going to hit you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love, and that is as true for work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work, and the only way to do great work is to love what you do. If you haven’t found it yet, keep looking, and don’t settle. As with all matters of the heart, you’ll know when you find it, and like any great relationship it just gets better and better as the years roll on.  So keep looking. Don’t settle.”

Having told us of the importance our job plays in our lives, Jobs has a few words of advice on how to do our jobs in a manner that is personally rewarding:

“But someday, not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it’s quite true. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice, heart and intuition. They somehow already know what you truly want to become. Everything else is Secondary.”

Having told us of the importance of our jobs and the need to do things our way (think, Frank Sinatra singing “My Way”), Jobs concludes with this:

“Stuart and his team put out several issues of the The Whole Earth Catalogue, and then when it had run its course, they put out a final issue. It was the mid-Seventies and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath were the words, “Stay hungry, stay foolish.” It was their farewell message as they signed off. “Stay hungry, stay foolish.” And I have always wished that for myself, and now, as you graduate to begin anew, I wish that for you. Stay hungry, stay foolish.”

Maybe we don’t need to be out there on the lunatic fringe (to quote Jack Welch), but then again, maybe what seems bold today will seem as mainstream as Apple just a few years from now.