January 2012

Some clients make you love working for them.  They make you want to excel.  They bring out the best you have to offer.  DSW is one such client, and I just have to share the experience we had yesterday.

In December, we won a trial for DSW.  It was the company’s first trial–they want to sell shoes and make people happy, not fight with landlords, after all.  But some fights can’t be avoided, and ours was one of them.  Yesterday was our time to celebrate.  The first thing they did was give us a tour of their space.  It is a fantastic space in a rennovated WWII aircraft production facility.  It has a SOHO feel to it, lots of open space, lots of places to get together and talk.  I had been to the facility several times, but one of my colleagues had not, and I just kept smiling as I heard him say “wow” over and over.  Having said my share of “wows” out loud the first time I was there, I was now “cool” and just kept saying “wow” in my head.

One of the first “wows” comes when you see that every office is the same size–small–and totally functional, not glitz.  This includes the CEO’s office, which looks just like everybody else’s.  Egos get checked at the door–when you walk in, its about the shared objecitve of selling shoes and making customers love DSW.  If that’s not your mindset, you soon see the door going in the other direction.

But here’s what really got me.  Right up front, you see a bold, clear, unequivocal statement of the company’s values: What you can’t see from the picture is that everybody has signed the wall, making, if you will, a collective contract with each other.  The leadership of the Company has just rolled out another value–passion.  And the passion is evident–you feel it was people do their jobs.  These values just permeate the facility.  It is apparent that every element of design, of organization, of operation, all are in harmony with these values (and the new one).  And if there is any doubt about whether this approach works in a tough economy, check out DSW’s performance.  It’s now a $2 billion dollar company.

As we walk around, we encountered this sign outside the General Counsel’s office:I am reminded of Captain Jean-Luc Picard’s way of saying simply, “make it so.”  There is a “can-do” feeling that permeates the place.  Those feelings start at the top and are consciously created.  People get measured against them, just like we were measured against the company’s values.  We heard several ideas for how we can do our job better.  As one of my colleagues remarked, ” I would go through hell for these guys.”  I couldn’t agree more.

After business was finished, we had dinner.  As we were getting ready to sit down, David and Bill provided us gift cards for every employee and member of our firm.  “Even though you three were at the trial, we know that everybody contributes to the result.” Wow.  I would be surprised if any person at Valorem ever buys a pair of shoes anywhere else.

It is possible to design passion, to instill a desire to please, to create customers that feel like they are part of the enterprise.  My hat is off to DSW and to my friends Bill and David.  We could not be prouder to be part of your team.

I loved this post by Matt Homann suggesting lawyers score their client service on the quality of the client’s experience as well as the quality of the result.  Matt’s “scorecard” is included at left.  Matt’s suggestion is to ask your clients to show where you fit in the quality of experience/quality of result chart and that if you’re not in the upper right quadrant, you need to get to work.

Matt’s idea is spot on.  I offer a subtle amplification to Matt’s suggestion, though, and that is for the lawyers providing the service to chart out how they think a client will score them and then ask the client.  The comparison will show whether the lawyers are “getting it” from the client’s perspective.

Coming February 7, Uncommon Service was featured today in the Daily Stat.  Here is the write up on the book from the HBR store:

Most companies treat service as a low-priority business operation, keeping it out of the spotlight until a customer complains. Then service gets to make a brief appearance – for as long as it takes to calm the customer down and fix whatever foul-up jeopardized the relationship. In Uncommon Service, Frances Frei and Anne Morriss show how, in a volatile economy where the old rules of strategic advantage no longer hold true, service must become a competitive weapon, not a damage-control function. That means weaving service tightly into every core decision your company makes. The authors reveal a transformed view of service, presenting an operating model built on tough choices organizations must make: (1) How do customers define “excellence” in your offering? Is it convenience? Friendliness? Flexible choices? Price?, (2) How will you get paid for that excellence? Will you charge customers more? Get them to handle more service tasks themselves?, (3) How will you empower your employees to deliver excellence? What will your recruiting, selection, training, and job design practices look like? What about your organizational culture?, and (4) How will you get your customers to behave? For example, what do you need to do to get them to treat your employees with respect? Do you need to make it easier for them to use new technology? Practical and engaging, Uncommon Service makes a powerful case for a new and systematic approach to service as a means of boosting productivity, profitability, and competitive advantage.

The book certainly looks worthwhile, but even if you don’t invest in the book, you should be reflecting on the questions asked in the sales blurb.

I got an email today that is proof that mass emailers don’t care a bit about who receives the emails.  The mass email, on behalf of Smart WebParts, offered this enticement:

Smart Time moves timekeeping into a new era, finally offering timekeepers a way to keep up with today’s hypermobile, multitasking work environments. In this new reality, small increments of work are forgotten and often go unbooked, cumulatively costing firms big money.

The email offers the chance to participate in a webinar where you can learn “[h]ow Smart Time reinvents timekeeping.”  As if we needed that!

So what we have is a tool law firms deploy so they can bill even more to their already unhappy clients for not doing any additional work and providing no additional value.  I don’t mean to focus on Smart WebParts (reminds me of “pieces is pieces”) since there are other companies offering the same types of products, but firms that deploy tools like this are utterly tone deaf or just don’t give a damn about their clients.

UPDATE:  I just received another email from Smart WebParts (still thinking “pieces is pieces”).  At first I thought they were responding to this post, but then saw it was another mass email (you can see it here).  The email contains 5 predictions for attorney timekeeping in 2012.  They are:

1.  Mobility will change timekeeping, leading Smart WebParts to believe more people will rely on mobile timekeeping solutions.

2.  Time capture will become a “must have” for every firm.

3.  Time capture will support legal project management.  Hmmm.  Sounds like hours driving the bus rather than value.

4.  Firms will get serious about due date compliance.  Late time entry can hardly be relied upon to be accurate.

5.  Firms will get serious about risk management and timekeeping.

Boy, I bet clients get a warm and fuzzy feeling about their law firms when they read about the focus firms bring to their timekeeping issues.

I saw a post on a LinkedIn discussion on alternative fees that made me wonder ….

For transactions, we almost always give the client a choice of a fixed fee or an hourly rate. If they don’t immediately see the difference (and most do), we explain to them that our fixed fee is based on experience and that we have added a premium to our time estimate to reflect our risk. They quite consistently choose the fixed fee.

This reminded me of a conversation I had with a General Counsel who told me he rejected proposed fixed fees that followed this line of thinking because the risk of going over the average was just as great as the risk of being under the average (after all, it is an average).  He thought it unfair that the firm protected itself on its risk at the client’s expense with no similar protection to the client.

Perhaps things are different in the transactional world, or perhaps the clients accepting the fee described in the quote are willing to pay a premium for budget certainty, but there seems to little in the way of pressure for lawyers to become more efficient if cost-plus prices are simply locked into place in this manner.

What do you think?

I got a kick out of a post at Above The Law, Associate Bonus Watch: Dechert’s Bonus Is Contingent On Something That Sure Sounds Like Billable HoursThe unstated but unmistakeable conclusion from the memo is that even firms that say hours aren’t important place disproportionate importance on billable hours.  ATL quotes one tipster saying:

To cut through the crap, bonus amounts are determined based on your hours. If you meet certain pre-determined hours thresholds substantially over the 2000 requirement (it is 2000 in New York, not 1950) you will get a larger bonus.

The full Dechert memo is attached to the post, and I encourage to read it and judge for yourself whether the firm is rewarding associates for meeting some hours target.  It seems to me an inescapable conclusion.  If that’s what those inside Dechert believe, that is what the associates will look to deliver.  Firms just don’t get (or care) that these bonus systems are perhaps the single biggest factor (well, perhaps the biggest factor is job security) driving associate behavior, just as rewarding partners on the amount of their billings (rather than profitability) is a huge factor in driving partner behaviors that are antithetical to the clients’ desire for value and efficiency.

My partners and I are pleased to announce that patent litigator Marty Lefevour has joined our number (formal bio here).  Marty has a wealth of experience, both as an inside lawyer and as a partner at Katten Muchin.  The subject matter of the litigation has been quite diverse, including software and internet-based technologies, financial exchange trading technologies, banking transaction technologies, medical devices, gasoline pumping technologies, cell phone communications and broadcast technologies.  Like our friend Dave Bohrer at Confluence Law Partners, Marty is going to help Valorem bring value fees to those involved in patent litigation.  We are very excited to have a person of Marty’s caliber join our team.

I just read a terrific post on the Harvard Business Review Blog Network, To Inspire Innovation, Get a Muse.  Michael Schrage starts his post with this:

Yves Saint Laurent and Pablo Picasso — brilliant entrepreneurs as well as celebrated artistes — claimed inspiration from muses.So, apparently, did Steve Jobs. Perhaps the newly-knighted Sir Jonathan Ive has one, too. Creative dynamos have always sought the frisson of the divine revelatory spark. So they look to a muse for energy inspiration. Does your business — should your innovators — have a muse?

The post is worth reading, but the question is worthy of discussion on its own.  Some people may be creative even when acting in a solitary mode.  Others–and my guess is that most others–experience their moments of creativity and innovation when working with someone who triggers the spark (that’s the technical term) that is the genesis of the creative moment.

If you suspect there is merit to this notion, you may want to read Working Together by Michael Eisner.  I received my copy from my muse.

From the world of sports:

A dispute over contract language that affects seven fired Jacksonville Jaguars assistant coaches for over $3 million may have been one of the factors that led to the dismissal of Paul Vance, the team’s senior vice president of football operations and general counsel, according to league sources.

A source said the dispute is over an amount of money between $3.5 million and $4 million.

The seven assistants had signed extensions in 2010 and the club believed it was for two years that would expire at the end of the 2011 season. However, the applicable clause in dispute states, “shall terminate on the later of January 31, 2012 or the day after the Jaguars’ last football game of the 2012 season and playoffs…”

Consequently, the assistant coaches want to be compensated for the 2012 season, especially if they remain unemployed. Those coaches’ specific names have not been confirmed.

Vance, who was dismissed Sunday as the team’s senior vice president of football operations and general counsel, called it an incorrect reference and that it “should have read the 2011 NFL season.” Vance termed it an error and “there was no intent on your part or our part of the club to establish a contract for the 2012 season,” according to a correspondence acquired by ESPN that was sent to the coaches.

Currently, the dispute remains between the club and the coaches, but without resolution could end up as a formal grievance filed with the league office, sources said.

So the terminated General Counsel believes, as I understand it that the reference to “2012 season and playoffs” really should have read “2011 season and playoffs”.  This reading certainly seems plausible since, if the reference was really to the 2012 season, which doesn’t start until next September, there is no way January 31, 2012 could ever be “earlier.”  But the whole problem could have been avoided had someone carefully proofed the document.

I offer this as much as a reminder to myself as anything else.  Whatever strengths I may have as a lawyer, being a naturally good proofreader isn’t one of them.  The challenge for those of us who are challenged in this area is to redouble our efforts.  Hopefully examples like this serve as motivation.

Great post by Jay Shepherd on “modest” rate increases.  You know that any post that begins “If you see lawyers with their arms in slings, it’s probably from too much patting themselves on their backs” is going to be a good post.  Jay notes that rates have gone up 10% since 2009 during a massive recession.  Hardly seems right.