January 2008

I’ve just added Cole Silver’s Legal Marketing Secrets to my list of Links.  You can read about Cole’s background and experience here.  Once you understand that he has been both lawyer and client, you’ll see that the wisdom on his blog is borne of broad experience.  If you haven’t already discovered Cole’s blog, you might benefit from spending some time with it.

Cole also has launced a unique audio program designed to help lawyers make more money, get more clients and enjoy their practice more.  He has interviewed hundreds of world renowned experts who share their insights.  The program contains thousands of ideas and insights.  I am  honored to have been included in audio series along with a great number of extraordinary people whom I greatly admire–Gerry Riskin, Harry Beckwith, Larry Bodine, Jim Hassett, Bruce Marcus, Dan Hull, Ed Poll, Kevin O’Keefe, Monica Goebel and so many more. You really need to check it out at http://www.Findcareersuccess.com.

I had an opportunity to participate in a panel led by Gerry Riskin at Hildebrandt’s 2008 Marketing Partner Forum.  As always, it was an outstanding event, perhaps the best in many years.  Congratulations to Tom Billington and his Hildebrandt colleagues for putting together such an outstanding and thought-provoking program.

I have had several requests to the slides I used as part of the Riskin program.  So here they are.

The idea of the Riskin session was to pretend that the panel was the management committee of a mid-sized law firm.  Dan DiPietro of Citibank was our banker and provided a somber (nee, depressing) view of 2008.  Sara Kraeski of Davis Graham & Stubbs spoke about the marketing challenges in times of extreme jeopardy.  Wendy Bernero of McKee Nelson spoke about the challenges and opportunities posed by the Clementi reforms in the UK, and I spoke about the technology challenges and opportunities firms face at the moment.  Gerry served as the Managing Partner pushing for specific strategy recommendations.  It was a fun session to participate in.

I’ve received a number of kind comments from people who attended, which I greatly appreciate.  I hope those who attended found the session as interesting as those kind enough to comment.

 

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.

Well, we  just finished our first full week.  Its already been a wild ride.

I don’t intend to have ISOPCS become a diary reporting on the events of Valorem Law Group, but VLG is, in many respects a Client Service laboratory where we are seeking to push the client service envelope.  But I wanted to use this space to acknowledge the many emails and calls we have received wishing us well and applauding our experiment.  We already received extensive coverage in the print  media and online.  For an example of the former, check out this story from the Chicago Daily Law Bulletin.  For an example of the latter, check on this story in the National Law Journal (web only; subscription required). 

We are deeply appreciative the good wishes and favorable comments so many have offered. 

But its just one week, and there is much left to do.  Actually, "much" is a dramatic understatement.  I’m off now and will be back soon.

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

Valorem (latin for value) represents the culmination of a great deal of thinking about how to respond to the needs of in-house counsel with litigation needs.  Valorem will be a litigation/problem-solving firm.  The people who are part of the initial venture are all highly accomplished trial lawyers.  But unlike some who get involved just to try a case, our goal is to use our experience to conduct discovery more efficiently and to leverage our comfort in the courtroom into better settlements for our clients.  Clients view trials, even ones that are won, with trepidation because of the cost and uncertainty.  We want to respond to that concern.  To the extent clients want to have an hourly-based fee arrangement, we’ll do so.  Our hourly rates are all going down from where they’ve been, and, shamelessly copying my friend Ralph Palumbo of Summit Law Group, each invoice will have a value adjustment line for clients to change the amounts due on a bill to make sure they believe they are getting fair value.  But our real goal is to move from hourly work to alternative fee work, whether contingency or fixed fee or some combination.  Plus each invoice will have that value adjustment line.  We are, after all, about value.

We have tried to rethink every part of the law firm experience.  For example, we are striving to drive individual ego out.  Again borrowing from Ralph, everyone will have the same size office–small.  Money will be spent on technology and collaborative spaces, not luxurious corner offices.  No one has their name on the door.  And no one person will own a client–compensation is not based on "my billings from my clients."  It will, instead, be based on how "we" do and, if we reach our objectives, how "we" do will be based on how our clients do.  The goal of all of this is to drive people into collaborative work spaces where we spend time brainstorming about ways to handle cases better, get better settlements, save our clients money, and so forth.  Rather than rely on a silo–the partner and his or her team–that clients typically hire, the fee arrangements should provide us the incentive to work together and have highly skilled trial lawyers thinking about how to redesign the box.

We are doing away with the traditional concept of "associates on a partnership track."  We don’t want to worry about paying new, inexperienced associates $160,000, plus benefits, and then trying to earn a profit from their labor while at the same time making clients pay for their training.  We will be aggressive consumers of contract legal services, using the lower hourly rates charged by those capable lawyers to either charge lower hourly rates or lower the overall cost of our service.  Likewise, we will make extensive use of technology, from mind-mapping software to financial control software that will allow real-time monitoring of costs.

Valorem’s goal is nothing short of revolutionizing the client-lawyer experience.  The new year promises to be very exciting for us!

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