December 2013

1.   Has your management mandated (or gently suggested) that you reduce your spend on litigation? Would it be a good career move if you achieved a reduction in total spend?

2.   Do your law firms spend more than the established budget?

3.   In 2013, were you unpleasantly surprised by a bill you received from litigation counsel?

4.   Do your cases have long cycles times? Do your cases tend to settle close to trial?

5.  Do your outside counsel leave no stone unturned without clearing that approach first?

6.   Do you (or your staff) have to spend time policing bills from your outside lawyers?

7.   Do you pay your outside firms the same amount whether they achieve your objectives or not?

8.   Did your outside firms raise their hourly rates for 2014?  Did they provide added value to justify the increases?

9.   Can you point to specific steps your outside counsel are taking to be more efficient in how they handle your cases?

10.  Do your volume discounts result in actual savings on total spend?

If you answer some or all of questions 1 through 8 with a “yes” or questions 9-10 with a “no,” you really should be exploring value fees.  When done right, such fees may help you reduce your spend by 30% or more.

 

Everybody wants the next great thing. Even us.

So we are a music store, who became an airline, who became a soft drink company, who became over 200 different businesses all over the planet united by one simple common thought:

We want to do what’s never been done before.

We want to create stuff that’s valuable. And honest. And is worth making in the first place.

We want to have fun while we’re doing it.

And we want our competitors to find us really , completely irritating.

Yeah, what he said.

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?

  1. Clients like them.  A lot.
  2. They strengthen relationships, because talking about what can be done to improve relationships is what adults do.
  3. 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.
  4. 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….