The head of Squiman's corporate team was not to be messed with

The partner you want to avoid in the lift. Perhaps she’s the one with the really (really) bad temper. The table thumper. Maybe he’s the one who makes trainees cry. Is it the one who seems to have avoided any sort of diversity training at all?

Lots of law firms have at least one of these stereotypes. Hell, maybe you’re one yourself!

What I’m investigating today is bad partner behaviour. I don’t think the behaviour really needs much in the way of explanation beyond that in the paragraph above – let’s just define it as behaviour which is inconsistent with the firm’s values and which most people would view as unacceptable.

But this isn’t unique.  This behaviour happens in corporate life too, and the public sector, so why focus on law firm partners?

I believe there are a number of factors that make this type of behaviour harder to stamp out in law firms than in other organisations, and that’s what I’d like to explore.

Firstly, as I’ve discussed before, cultural change can be particularly hard in law firms, and many of the reasons why organisational change is difficult apply equally to changing individual behaviour.  However, when it comes to large scale change, it maybe that to effect change firms dedicate resources and engage particular external expertise if they don’t have it in-house – This type of focus is unlikely to be applied to changing the sorts of behaviour we are looking at here.

But perhaps linking this type of behaviour with culture change is too abstract. Maybe it’s just a simple people management issue? Call in the HR team?

Alas, this is often not as straight forward as it is in a corporate environment. Firstly, the partnership structure of the majority of law firms means that the problem partner is likely to be an owner of the business, and as a result have a certain amount of weight (actual and perceived) that comes with ownership. By contrast it’s unlikely at the moment that the HR Director will have equal status, although this may change in the years to come.

In practical terms this can mean firstly that junior lawyers and support staff might be less likely to report the unacceptable behaviour. Secondly, it may mean that the HR team are not as empowered as their peers in corporate environments. One structural observation I’ve made in larger firms is that often the HR Director is a relatively senior professional, brought in to advise on strategic issues (such as talent management), but that they are supported by a relatively junior team on the operational side of matters. Thus the HR personnel at the “sharp end” of behaviour complaints can often be outgunned by the partner in question.

So if the HR department has challenges, how about peer group management? Surely the partnership as a whole will quickly identify and deal with the problem behaviour?

Maybe, maybe not.

It certainly depends on the firm (which circles back to the earlier link to the firm’s culture), but in my experience this is something that partners find very difficult. Perhaps again the partnership structure and the idea of relative equality among the equity partners plays a part, but I suspect more likely it’s that a large proportion simply prefer to avoid the conflict and hassle associated with peer-group people management, and critically that they haven’t been given the skills and tools needed to do the job effectively.

Given that exiting a partner does typically remain more complex than removing an employee (particularly if the law firm want to avoid any subsequent legal action and bad publicity), the last factor should not be underestimated. Law firm partners, even in the biggest firms, have often received a limited amount of management training, particularly when you consider that managing professionals is known to be among the most challenging categories of people management (good reads here are “When Professionals Have to Lead” by Delong Gabarro and Lees, and “Aligning the Stars” by Tierny and Lorsch).

The lack of training and reluctance to head into what might be a difficult conflict (another great read is “Difficult Conversations” by Patton, Stone and Heane) can be compounded by the fact that resolution may not be swift, and often partners get little credit for this type of non-chargeable activity, no matter how valuable it is to the long term health of the firm.

Finally, and perhaps most importantly, let’s not overlook the elephant in the room. Economics. In reality, the reason the unacceptable behaviour has carried on for so long is often that the perpetrator is a rainmaker. Huge billings = lots of power. While this may seem cynical, it might be that the firm management are aware of the behaviour, and are prepared to tolerate it to realise the revenue stream from the partner in question. In other firms it may be less overt, and the problem simply manifests through the fact that the high billing partner just has a lot of power.

Plenty of reasons not to deal with the issue, but I think we all know that’s not the answer. Aside from all the direct consequences of this behaviour (potential claims, loss of productivity, morale damage etc), it maybe that the junior assistant who walks out of the door, is the managing partner of the future.

Related Articles

• Inside Straight: Managing People (abovethelaw.com)
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We all know death and taxes are certain. Have you also noticed there is a growing need to have mainstream documents notarized? As recent as a few years ago, common day documents such as simple permission slips for minors for a field trip to the museum  or rental agreements for college age students were simply signed by the  student, parent or guardian. Not so much any longer as many mundane forms now require the official stamp of notarization from your local friendly notary. Here at Andrew G. Gordon Inc., we are happy to help out any customer with our complimentary notary service. This service is also available to new visitors to our agency.

What is a notary, you ask?  A notary public is an official of integrity appointed by the state to serve the public as an impartial witness in performing a variety of official fraud-deterrent acts related to the signing of important documents. These official acts are called notarizations or notarial acts. Notaries are publicly commissioned as “ministerial” officials, meaning that they are expected to follow written rules without the exercise of significant personal discretion, as would be the case with a “judicial” official.

If you are asked for your driver’s license, please do not be offended. It is the duty of a notary to screen the signers of particularly sensitive instruments — such as property deeds, wills and powers of attorney — for their true identity, willingness to sign without duress or intimidation, and  awareness of the general import of the document. Some notarizations also require the notary to put the signer under an oath declaring under penalty of perjury that the information contained in a document is true and correct. Impartiality is the byword of the notary and the foundation of its public trust. Notaries are duty-bound not to act in situations where they have a personal interest. This means the notary cannot notarize a family member’s document.  The public trusts that the notary’s critical screening tasks have not been corrupted by self-interest. Impartiality dictates that a notary never refuse to serve a person due to race, nationality, religion, politics, sexual orientation or status as a non-customer.

Remember that Andrew G. Gordon, Inc. offers complimentary notary services to our clients or new visitors with appropriate documentation.  Stop by and we will be sure to assist you!

Katherine McCarthy
CPCU, Andrew G. Gordon, Inc.

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Andrew smiled at the World Cafe, safe in the knowledge he was absolutely, hundred percent, right

Anyway, one of the points that really made me stop and think was a passage around people fighting to prove they are right, and in particular pointing out that you may well win the argument, but in doing so, what has been the cost?

This seemed to resonate with me in my capacity as (former!) lawyer. It might be a stereotype, but lord knows lawyers do like to prove themselves right. Maybe it’s the type of people who are attracted to the law, maybe it’s the training and experiences that lawyers have, but if you put five lawyers in a room, I bet at least two of the five would argue black was white if the other three had already asserted that white was, in fact, white.

I started to think about this from two different angles. Firstly, developing the ideas in the book around the impact on relationships and individuals resulting from a dogmatic and “robust” approach to an argument. How many people have notionally “lost” an argument, and then (a) sat and simmered, wishing ill on the victor; and (b) not been convinced that they were in fact wrong anyway?

Given the turbulent nature of the legal market today, there are of course an increasing number of challenges that law firms and lawyers face, and if many of these end up in arguments and disagreements, what does this do to the web of relationships that underpins the organisation (which are of course critical in a knowledge-based organisation), as well as the morale and energy of those working there?

Often when a person expresses a point of view, if it is attacked, they will dig their heels in and defend their position more passionately, rather than take on board an alternative perspective.

Many of the classic negotiating texts (like “Getting to Yes“) are based on ways round this problem, and there is a heap of  research from the psychology of influence that can help explain this (Cialdini is one of my favourite authors here) – in essence society likes people to behave predictably. As a result many countries encourage people to behave consistently, and consequently once a point of view is stated, people will fight to defend it (and appear consistent) rather than change their mind.

This brings me on to my second stream of consciousness, which is based on a lot of Edward De Bono’s work around how people think in Western society. He aims a lot of criticism around our preference for “socratic argument”, where a selection between two competing ideas is made through knocking down the opposing viewpoint, rather than constructively exploring the issue and looking for alternatives.

In a law firm, where colleagues are often competing for resources, would it be possible to examine these challenges more collaboratively, or is that niave?

What if the disagreement is with a client? Or another team? Is the issue resolved with one party “right” and the other “wrong”? The dynamic is undoubtedly different from being across a negotiating table, but often the behaviour is very similar, and not everyone is a collaborative negotiator.

When working as an in-house counsel, when problems arose I was much less interested in pointing fingers, and more interested in sorting out the consequences quickly and effectively, working out how the problem arose (the framework in the book “Difficult Conversations” calls this assessing “contribution”) and then making sure we (collectively) avoided a re-run. I found this productive, and the external counsel took a similar problem-solving approach to drive a deeper relationship and more effective service delivery. I don’t pretend it was perfect, but I do believe it was an improvement on the blame game, even though I didn’t get as many opportunities to demonstrate I was right (which of course I was!).

I hope that has provoked some thinking and would be interested in any comments you may have. Please note however, that if you express a different opinion to me, you will be wrong and I will be right………

Related Articles

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Image via Wikipedia

Why is it that Law Firms are trying to frightened people into writing WILLS saying that it is Government Legislation.
What is it to do with whether one wants to make a WILL or not,it should be of your personal intention not the Government or a Lawyer who are only trying to fleece you of the few pennies that you might be left with at the end of the day.
One thing for sure they can kiss my backside on that one as only God I listened to, not these Bastards who force things upon you and think you should take it with a smile.

Bertie was not impressed with his owner, the managing partner's, approach to discipline and didn't think the partners in the law firm would respond well to offers of dog treats

Value Disciplines is a model created by Treacy and Wiersema, and as well as being one of my favourites that I studied at B-school, it is one which I have found really resonates with lawyers and law firm management (their book is called “the discipline of market leaders” and is well worth a read).

In very simplistic terms, the theory asserts that an organisation can succeed in its market place by excelling in one of three “value disciplines” (ideally coupled with also practising the other two value disciplines to the market standard).

The first value discipline is operational excellence.  In their original Harvard Business Review article (available here), they define this as “reliable services at competitive prices delivered with minimal difficulty”. This is an interesting model for law firms, as in my experience few law firms really look to compete on this basis (operational excellence is not simply about having low prices) and indeed as I’ve discussed previously, hourly rate billing has often encouraged inefficiency – arguably the polar opposite of operational excellence.

However, with the emergence of LPOs and the increasing number of law firms hiring Lean Six Sigma specialists, plus of course the imminent entrance in the UK market of alternate business structures, I think operational excellence is a strategy that is going to have increasing relevance to the legal profession, and the bar that represents the market level of operational excellence, is definitely going to rise.

The second value discipline is “product leadership” which is all about getting the leading edge services in the market. Here speed to market is critical, and as we saw with a plethora of Bribery Act offerings in the UK market, both from law firms but also the larger consultancies, some firms do this better than others.

As with operational excellence, I believe the discipline of product leadership is of growing importance to law firms as the market increases in competitive intensity. The struggle to differentiate is recognised and discussed by many management teams in law firms, and having a kit bag full of unique products and services, each with a strong value proposition, is a real asset in this battle.

The third value discipline is “customer intimacy”. Organisations that excel here have strong client relationships and are able to customise products and services to meet their precise needs. Now while this blog has *occasionally* suggested law firms could do more to listen to their clients (hey, I’m only trying to help!), I actually think this is the value discipline that many law firms practice well.

What this means in practice however, is that the benchmark for the industry in this value discipline becomes higher, and the challenge for firms who want to dominate their industry, is how to raise the bar and really become the market leader in client intimacy. One way to think about this is to investigate how far the client intimacy ethos permeates the firm’s entire operating model – in my experience often there are pockets of excellence in a firm, but often other areas where the standards are not so high.

However, one thing to ponder, is that one of the firms that I think does this best of all (a smaller City firm) is also the firm that put together the highly tailored tender response I mentioned in my post a couple of weeks ago on excellent responses to RFPs (requests for proposal)  for legal services. This suggests to me that the firm starts REALLY thinking about the client’s needs before they are even a client of the firm, which I think is a pretty good demonstration of really living that value discipline and the benefit it can bring the firm and its clients.

Related posts:

Are you high quality?

The size 0 law firm

The business analyst's office was a little off the beaten track

Now Santa Claus(e) is pretty busy at this time of year, arguably busier than even the most stressed managing partner. Sure, cash flow and chasing WIP may not be an issue, but he has millions of presents to procure and wrap, and then a logistics nightmare to contend with. His relentless focus on execution is impressive, but he certainly couldn’t deliver on time and on budget alone. The reindeer may get the media plaudits, but the unsung heroes are undoubtedly his legion of elves. Working quietly in the background, they make sure his ambitious plans are carried out, deal with last minute changes and generally keep things ticking over.

Maybe that’s what law firms need.

So, I started thinking, which elves could help law firms in 2011…….

1. The Sales Elf.

“Sales!” I hear you cry. Heresy! Burn him! But wait a second. Law firm business development has developed tremendously in the last decade and sales training by organisations like the PACE partnership and Huthwaite Fleming is now accepted as delivering solid business benefits. Yet I still see many business opportunities lost because a law firm doesn’t have the right sales capacity or capability. Business development directors in law firms are often in strategic or marketing-focussed roles and if they do have selling skills are rarely given the chance to use them.

Is employing a dedicated sales force going too far? Some may argue that culturally it’s a bridge too far and that professional services can’t be sold in that way? I’m not convinced. I think if you get the right fit between sales person and firm, that focus on generating new business and the skills that go with it, could really turbo charge a law firm’s performance.

2. The Analyst Elf

Outside of the very largest law firms, there is often a lack of internal business analysis capability.  There’s no shortage of raw information, with many firms taking an “arms race” approach to subscribing to market and business research services, yet often the same firms struggle to make best use of this information, with no dedicated resource to synthesise and analyse it.

For the firms looking to position themselves as experts in a particular sector, how helpful would it be to have some proprietary analysis of what was happening in that sector, and to use that to generate some real though leadership, rather than simply offering comment on a recent news item?

The skillsets needed are widely available – investment banks use them, management consultants use them, large accountancy practices use them and corporates certainly use them, yet in comparably size law firms, they are a rare species indeed.

3. The Process Elf

Talking to some legal sector recruitment specialists, this is a hot area. With downward pressure on price and the increasing rejection of the hourly rate billing model, law firms are looking for ways to maintain or improve service quality while at the same time reducing cost. Looks and smells like a Lean Six Sigma type project to me.

Process mapping and re-engineering are perhaps the most obvious quick wins, but actually having a dedicated resource to think about operational efficiency and help drive the personal and organisational change that is needed to deliver the results is essential and I don’t believe it will be achieved by someone doing the job in their “spare time”.

4. The Pricing Elf

On a recent tender exercise for a NYSE listed outsourcer the request for proposal document made it clear that the company did not wish to buy legal services on an hourly rate basis, and asked law firms for alternative pricing models for four different work types. The diversity of responses across the ten law firms was significant. Some were well advanced in their thinking, giving a variety of models, an explanation of the type of work and volumes that would make them work, and detailing how scope changes were managed. Others were being dragged kicking and screaming from their hourly-rate comfort zone, with vague promises to think about fixed price projects and retainers, provided certain caveats were discussed and agreed.

In a world where the market is requiring different pricing models, and given the very (very) direct link between price and profit, doesn’t it make sense to address this seriously? Is setting up a pricing committee made up entirely of lawyers really the answer?

5. Other elves

The need to go and do my Christmas shopping precludes a longer discussion, but some other elves to think about – the change management elf, the project management elf, the product development  elf and the innovation elf.

This is likely to be the last post before Christmas, so if you are celebrating, have a great time and I hope you’re back here again, fully refreshed, for the New Year post, which may well tackle the classic New Year topic of (s)elf improvement!

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As a happy user of Dropbox and Rocket Matter, I strongly recommend that you take a look at Ben’s article from his interview with Larry Port of Rocket Matter. The article provides what you need to know about Dropbox and Rocket Matter integration.

From my perspective, this is important news for any lawyer who wants an integrated billing, database, and timekeeping solution. Again, MacLawyer comes out with great, practical, and timely news for those who care about technology in the legal field.

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Inspiration for the tender design was taken seriously at Scratchit & Co

When I think back to those responses that have really impressed evaluation panels (and not just me), I think the key word is “relevance”. The more effort the law firm puts into the document or presentation, in terms of tailoring it for the prospect’s specific needs, the stronger the submission.

The challenge for me is to give examples without giving away any trade secrets. So here goes.

One project that I put out to tender five years ago spanned around 15 European countries. The firm who won the project submitted a tremendous document that had a huge amount of material that really created value for our organisation. It had points for us to think about both for the project as a whole and for each country in the project scope.

This did two things. Firstly it showed that the law firm had experience of the areas of law we needed help with, in these particular countries. Secondly it give us a “heads up” of things we should be aware of, even if we didn’t select the law firm in question.

The other thing that the winning law firm did on that pitch, was make sure that all examples of experience were relevant (even down to tailoring CVs). The amount of responses I’ve seen where standard blocks of text and vanilla CVs have been appended on the back is huge, so when a firm goes to the trouble of really thinking about what the prospect organisation wants, it stands out a mile.

I’ve seen a similar approach taken at presentation stage. At a pitch I ran for financial services legal support, the winning firm gave a virtuoso presentation. The lead partner had asked some great questions early in the process, and had clearly spent significant time thinking about the issues we would face, and how best to deal with them. Rather that the presentation being a verbal version of the paper RFP response (which often happens, with firms taking the opportunity to spend an hour using extensive powerpoint to tell the prospect how good they are) the partner and his team took the evaluation panel through a mini-workshop, illustrating  points with war stories and other relevant examples.

We came out of the presentation with a much better understanding of the project, a good rapport with the law firm, and a clear action plan if we chose to work with that firm (we did).

Another area where firms can distinguish themselves is in the presentation of the document. I’ve seen a wide variety of creative approaches, from mocking-up a trade publication, through using corporate colours and imagery, to just some really nice, clear presentation (I respectfully refer people once again to Impact by Jon Moon and Presentation Zen Design by Gary Reynolds). Of course presentation is superficial, but it does make a difference, particularly if it makes the content easy to digest. It’s also another area where law firms can demonstrate they have thought about the particular client, rather than just plugged the information into the tender-team sausage factory.

So, it’s relevant, it adds value and it looks great?

Go forth and win!

Hi {firstname}:

It’s not easy to keep up with the tectonic shifts occurring in the legal industry today.

That’s what we’re for! Take advantage of our incredible free educational offerings:

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Thanks, and I look forward to hearing from you! If you have any questions, send me a message at kelley@rocketmatter.com or call 888.432.1529 x 107 between 9AM and 6PM EST.

Regards,

Kelley Nicholson | Product Specialist | Rocket Matter, LLC

Some people call me Eric, but all my close friends call me {firstname}. Kelley just happens to be one of those individuals. In return, I hope she’ll let me call her {productspecialist}.

These criticisms are absolutely valid and it is undoubtedly clients who are driving the nails into the coffin of the hourly rate.

Time's up for chargeable time

But I want to look at hourly rate from another angle, and investigate some of the problems it causes within law firms.

Starting with the most obvious, chargeable hours targets for lawyers. Still the numero uno metric for measuring law firm performance, and still causing associates heartache in so many ways.

The number (be it 1,400 p/a 1,800 p/a or if you’re at a US firm maybe 2,400 p/a) it’s still the main criteria that lawyers are judged in the performance management cycle. Many law firms talk a good game about recognising non-chargeable work and rewarding high performance outside of pure client work, but speaking to associates at some of these firms, this type of recognition only occurs once the chargeable hours box has been ticked.

• Want to have your business development truly recognised? Just make sure you hit your chargeable target.
• Want to spend some time studying an emerging area of law? Fine, as long as you hit your target.
• Like to spend some more time with clients, learning about their business? No problem, as long as it’s chargeable.
• Up for partnership? Better knock your hours target out of the park this year.
• Want to devote some time on pro-bono or other CSR initiatives? That’s great, do it at the end of the day when the timesheet is full.

There are so many activities that create value in law firms, yet so few of them get real recognition in comparison to chargeable hours targets.

Note also that many of these activities above represent an investment in the future health of the firm (you may remember David Maister talked about the tension between short term firm hygiene and longer term health) as opposed to the short term focus on current revenue.

One of the consequences of this is that lawyers fit in all the additional work over and above what are sometimes very onerous chargeable hours targets, leading to the inevitable work/life issues which are a hot topic over at the Careerist right now (http://thecareerist.typepad.com/).

And yet more frustratingly still, chargeable hours as a key metric has so many flaws

• Do chargeable hours reflect the quality of work produced or client satisfaction? Nope
• Do chargeable hours demonstrate profitable work or good financial management? Afraid not.
• Do chargeable hours promote effective delegation and encourage senior lawyers to mentor train junior lawyers? Absolutely. Sorry, only joking.

I’m not necessarily suggesting the total abandonment of time recoirding. Indeed Peter Drucker, one of my favourite authors, talks about the importance of understanding where you spend your time in his brilliant book “The effective executive” which is one of the reasons I spent over three months as an inhouse lawyer recording my time. Also, capturing time utilised on client projects is important for calculating cost and determining profitability, and can also highlight development needs (if for example one lawyer takes 30% longer on a task than his or her peers).

But for as long as hourly rate billing and chargeable hours as the key metric continue staggering round like a zombie that just won’t die, I’ll continue wielding my personal chainsaw to send them to the grave!

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Many clients are asking for 20% lower overall legal costs, so forward-thinking firms are proactively trying to apply LPM (Legal Project Management) techniques to reduce the hours required on a file by 20% by eliminating waste and unnecessary legal steps, while still allowing them to retain the realization (profitability) on these hours.

An estimate of the legal fees is provided to the client up front, but a true AFA is not put in place.  There is, however, an agreement that any adjustments to estimated legal fees will be made with good reasons explained to the client as the file proceeds.  Clear, well-timed communication is key here.

If successful, the upshot of the above approach is that the client gets what they want by reducing overall legal costs by 20%, and the law firm gets to maintain its profitability.  Combine this with the client agreeing to provide a greater share of its work to the law firm, and you seal the deal.  The approach is simple, yet effective.   Neither side loses in this scenario, which I believe is a key for success. I call this approach “AFA Lite”.

Law firms can also use the above approach as a transition to a true AFA arrangement with the client in the future. This will happen when both parties are fully up to speed on the issues involved, and can then feel comfortable entering a trust-based, long-term AFA arrangement (strategic partnership).

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Value = Customer Profit – Price

I modified Ron’s formula slightly to illustrate the point of this post.  What this formula means is that the value you provide to your client equals the increase in customer profit resulting from your legal work and value added services minus the price you’re charging for your legal work.

With all the fuss over alternative billing lately, many have been talking about the need to cut costs and run lean operations in order to make money in the face of decreasing prices for legal work.

However, the drive to cut costs to match dropping prices for your work is in the end, I believe, a losing game.  There will always be someone who will undercut you on price, and there is no upside in this game.

Instead, you want to be the value leader, not the low-cost leader in today’s competitive legal environment. If you can achieve that, you will increase profits dramatically for both your client and your firm.

However, as the formula above indicates, the key is to focus on increasing your client’s profits first when adding value.  If you do, and you can demonstrate the impact this value has on your client’s bottom line, you will remove the pressure on price, thereby increasing your own profitability.

This is a complete rethink of the normal law firm approach to focus on their own profits first.  But if you think it through, you’ll realize that your efforts are best spent on increasing client profits first, as your profits will follow in due course, and dramatically so if you do it right.

How can you increase value?

First, talk to your clients to see what issues are keeping them up at night.  Ask them to explain their strategic vision and how you can help them achieve it.  There’s six key areas to focus on, as listed in the Law Firm Value Committee’s “51 Practical Ways For Law Firms to Add Value” list on the ACC Value Challenge website, which is an excellent place to start in the search for value.

Some of the highlights for adding value include:

- Assign professional project managers to manage large-scale engagements and teams.

- Institute a discipline such as “Lean” Six Sigma to monitor efficiencies in all areas of work.

- Create partner roles focused on driving change and enhancing the value and efficiency of client service.

- Publish your network of “known” counsel  in other jurisdictions and share it with top clients.

- Ask clients to share their own strategic visions, so the firm can properly plan, invest, staff, etc. to meet the future needs of its clients.

- Connect clients to other clients and entities in the firm’s network (at no charge).

- Engage a third-party consultant to conduct in-depth client satisfaction surveys.

- Assign a mid-level associate to work part-time at the client’s office for no charge.

- Request periodic access to meetings with the client’s business people to better understand the client’s business.

- Assign each of the firm’s summer clerks to work in the client’s law department for a week or two at no charge to the client.

- Create client service teams of lawyers and staff who serve that client and meet quarterly or monthly to discuss the client’s business, current and potential matters, changes at the client, trends in the client’s industry, etc.

- Commit to clear and transparent fee structures by showing the client what tasks are required at each step in the process of the matter, the timekeeper who will perform those tasks and the allotted time for each.

- Engage clients in the training process and invite them to make presentations and have dialogue with associates about the in-house/outside counsel relationship.

- Create a training program where associates work at the client’s facility to learn the in-house perspective.

- Develop a client dashboard that includes metrics, in addition to a 360-degree view of all matters.

- Use e-billing systems to track performance against metrics.

-  Set up an extranet for on-line training that is available to both the firm and the firm’s clients.

Admittedly, this is a big firm perspective on in-house counsel’s perception of value, as the Law Firm Value Committee is comprised mainly of large US law firm lawyers.  However, there are many good ideas here for small and midsize firms as well.

From the small and midsize law firm perspective, there is much you can do to add value.  One of the most effective ways to add value is to refer your contacts and their business to your clients to add to their top line.  Some of the most successful lawyers I know do that regularly, and their clients rarely question them on the price of their legal services.  As the value you provide to the client increases, the less important price becomes.  The only thing that matters is the net benefit of your value minus the cost of your legal services.  This value will translate into client profits at some point, and that’s what the client really wants from your relationship.

It doesn’t have to be a short-term profit add, either.  The client is as interested in a long-term, strategic partnership as you are.  In fact, the more you are around on a flat fee or portfolio billing basis, the more comfortable the client will be in calling you and getting your advice on their next big litigation file or acquisition.  You want to be available when the client calls you, before he or she calls your competitor.  So the closer you can get to the client and provide value added services like those listed above, the more likely your share of the client’s legal business will grow over time.  And that’s the ultimate goal for most law firms, as your profits will ultimately grow with your clients.

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Avoiding Facebook? This insightful article by Lawyerist explains why a Facebook account is essential for practicing law today.

Lawyers who are not on Facebook are missing out on critical opportunities to network for referrals, research defendants and potential jury members, market their law firms, and vet potential legal hires and current associates.

For those lawyers who still need persuading, here, in no specific order, are the top six reasons why lawyers should be on Facebook:

1. Facebook can bring you referrals and clients by helping you to reconnect with old classmates, colleagues, and friends through direct contact both formal (messages) and informal (wall posts), events, and interest groups

Read the rest of the reasons on Lawyerist.com

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Some will say that lawyers won’t listen to someone who isn’t a lawyer regarding management issues.  However, many lawyers are now realizing that they need to streamline their operations further as clients push them on the rates side and squeeze their profit margins further.  I would suggest that more lawyers need to become aware of the option to outsource these functions as well,  given the increasing demands from clients to keep costs down and provide better and faster service.  It also recognizes the need for law firms to focus on their core competency of providing legal services.

One of the main reasons to consider levering business functions is to increase profitability.  This requires that you focus on how leverage of business functions can operate in your firm to release your fee earners from administrative tasks.  Your opportunity costs can be great if you have several partners involved in management and administration functions, when they could instead be doing more productive things with their time.  Things such as getting new, highly profitable work, working on high-end files or performing high level R & D to add value to the firm’s knowledge banks and improve firm profitability.  At $400 to $1,000 per hour opportunity cost, you’d be far better off levering those admin tasks to an experienced COO or Executive Director who could do the job more effectively and efficiently.  Your “real” bottom line will grow substantially after allowing for these recovered opportunity costs .

In a recent survey I conducted with COO’s and Executive Directors of midsize and large US and Canadian law firms, I found that more firms are also looking seriously at outsourcing facilities management, document production,  systems, human resources and marketing functions.  Whole administrative departments are not only being outsourced, but are also being shared with other midsize firms.  This tactic allows midsize firms to compete for much larger files than they’d normally have  a chance at and both firms can benefit from the arrangement.  It’s just another way for firms to extend their reach to be competitive without having to merge or add extra offices, and avoid all the costs and potential heartaches that an ill-thought out merger can entail.

Orrick is an example of a firm that successfully “outsourced” all of their administrative support functions such as HR, marketing, systems, facilities management and document production to a single support center office in West Virginia.  Their global network of offices can access the admin services they need from this Global Operations Center on a 24/7/365 basis.  Through this change, Orrick has reduced administrative costs while improving the quality of these support services.

CMS Cameron McKenna in the UK is the first major law firm to outsource its entire business support function to an outside party, including IT, HR, finance, business development, communications, knowledge management, facilities management and administration services.  This is a major development/experiment and is being watched with great interest by many other firms.

Another administrative service to consider for outsourcing is the search function, such as due diligence, title search, etc.  Why firms have their paralegals do these functions is curious to me.  Paralegals should be focused on higher end legal file functions, and searches should ideally be delegated to clerical staff or outsourced to a dedicated search firm.

Another option for small and midsize firms is to outsource all of their administrative functions to companies like MCG Management Counsel Group in Toronto or Cameron Management Services Group in Calgary (no relation).  These companies can handle all of your administrative and business functions so you can focus on practising law.  I’ve heard this option works very well for some small and midsize firms.

The latest option for outsourcing administrative functions is Face2Face Solicitors in the UK, which provides franchisee solicitor firms with centralized back-office systems – including accounts, IT and regulatory compliance – and central marketing and business development, to enable lawyers to focus on the legal work.  See here for more info.

Outsourcing can done at many levels in law firms and is being experimented with in different ways by forward-thinking firms.  You can theoretically outsource any business function.  One partner I knew once jokingly suggested that he’d like to see his firm’s entire Management Committee outsourced.  Okay, that’s pushing the outsourcing concept a bit, but considering the minutiae that many Management Committees get involved with, perhaps it’s not such a farfetched idea!

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Angie's attempt to turn herself outside in to help with product development ended in disaster

Over the past few years I’ve spoken with a number of people in the profession  about product development, and have met varying responses, ranging from “we sell services, not products, and legal services don’t change so we don’t need any development”, to “how do we do that?” and finally “it’s a great product with a strong value proposition, you should meet the product manager”. Ok, so I exaggerated the last one, but not by much.

I’ve written about the need for innovation in law firms a number of times, but here my message is different.  One of the challenges law firms have in the way they approach the market, is they think “inside out” i.e. what capabilities do we have that we can sell (never mind if anyone wants to buy them or not).  I’ve often wondered about the reason for this, and when I was hammering through the reading for my MBA dissertation on law firm strategy, I came across some suggestions that this may be because lawyers have traditionally prided themselves on the quality of their work, viewing this as the critical success factor in the profession as well as a source of intellectual pride, and as result were disproportionately internally focussed.

However, it wasn’t until I read Tuned in (by Craig Stull, Phil Myers and David Meerman Scott) that I realised this phenomenon was just as common (or at least nearly as common!) in plenty of other businesses.  The book (which is a good read) explains that good product development starts with “outside in” thinking, which in legal terms means with the client. This makes absolute sense to me; if you are developing a product, it’s surely best to develop one that meets a market need.

Let me give you an example; I can remember being in-house just before the credit crunch really took effect. Many large companies were looking at restructuring and were going to need employment law advice. The in-house lawyers knew they could pick up the phone and get the advice they needed from their regular employment law advisors (no doubt at a competitive hourly rate), but how many times did the phone ring with a law firm pro-actively offering a nicely packaged restructuring service?

I’m talking about a service that gave me the advice I wanted, nicely presented, with a clear defined price. A service that the person calling could concisely and effectively explain the benefits and crucially, how it was different from other advice I might get on the subject.

Needless to say the phone didn’t ring much. Or indeed at all.

Now I don’t pretend this is easy: it’s not. You have to be close to clients and understand their industry to spot the market need. You have to be prepared to fail: it maybe you have a great product, but don’t get to market quickly enough. Maybe you get the product right but the price wrong. But to quote a cognitive hypnotherapist I met last week “there is no failure, only feedback”.

The ever changing nature of the law can be a blessing in that new market needs arise frequently. Why not turn yourself from inside out to outside in, and see if you can spot one?

In an unusual move, plaintiffs in Arrendondo v. Delano Farms Company, No. CV F 09-1247 LJO DLB, 2010 WL 3212000 (E.D. Cal. Aug. 10, 2010), sought and were granted a temporary restraining order.  Plaintiffs filed an Application pursuant to  Fed. R. Civ. P. 65 requesting a Temporary Restraining Order (“TRO”) against defendant Delano Farms Company to restrain potential retaliation and threats to witnesses and putative class members by defendant.  The Application was supported by declarations of three witnesses and potential class members who heard threats by a supervisor of Delano Farms as well as declarations from Jessica Arciniega and Thomas P. Lynch, attorneys representing plaintiffs, and Aida Sotelo, a paralegal who investigated the threats.

The putative class action alleges federal and state law wage and hour violations and claims pursuant to the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. § 1801 et seq.  The proposed class consists of all agricultural employees who are or have been employed, and who have worked one or more shifts as non-exempt hourly and/or piece rate workers for the Defendant Delano Farms.  The court described the parties as “engaged in heated contested discovery involving class certification.”

In their TRO application, Plaintiffs alleged that the supervisors of the employer defendant threatened employees and putative class members with termination and/or not being rehired for further seasonal work if the employee participates in the litigation. Plaintiffs, putative class members, and potential witnesses alleged they are fearful of retaliation based on their belief that Defendant Delano Farms, through actions of supervisors and agents, will retaliate or continue to retaliate against them for pursuing their claims and participating in this lawsuit against Defendant Delano Farms.

Based on the foregoing, the Court finds that at this point in the litigation, pending the holding of a preliminary injunction hearing, the plaintiffs are likely to succeed on the underlying wage and hour claims, that the balance of the equities tip in favor of the plaintiffs, and that a temporary restraining order is in the public interest. Moreover, it is likely there will be irreparable injury to the plaintiffs, putative class members, and potential witnesses involved in Arrendondo v. Delano Farms Company if Defendant Delano Farms Company, and supervisors are permitted to continue their alleged party and witness intimidation and related conduct in that: (a) the plaintiff’s prosecution of their case is likely to be chilled; (b) the plaintiff’s investigation of their claims, and identification of class members, now pending against Delano Farms are likely to be chilled; (c) current Delano Farms employees are likely to be deterred from exercising their rights; and (d) the plaintiffs, putative class members and potential witnesses are likely to suffer damage.

The court issued “a narrowly tailored TRO”, required only a $1,000 bond.

The judge is Hon. Lawrence J. O’Neill.

By CHARLES H. JUNG

As internet users, the online visitors turn to the convenience and travel-expense-savings of the Internet in order to compare lawyers and law firms. With this reality, all lawyers should be marketing themselves via the web.

Read more

1. Management

Too many firms try to run as democracies where partners have full say on which clients they work for and the type of work they do.  They’re not accountable for their actions and effectively act as solo practitioners.  This is a sure recipe for mediocrity and substandard profitability. You need to centralize management with a Managing Partner assigned the authority to screen all significant new clients for potential profitability, say no to high credit risks, and impact partner compensation to ensure all partners are accountable for their actions and performance.  The Managing Partner will also direct strategic planning and execute the Firm Plan.

2. People

You need the right people. Many firms have ill-defined partnership entry criteria and even less understanding of what it takes to remain a partner.  As a result, you end up with mediocre people and risk losing your best people to your competitors.  You need to have high-performing people to move the firm forward and achieve your firm goals and profitability targets.  Ensure your top performers are paid what they’re worth. Define partnership entry and retention criteria and enforce these criteria regularly.

3. Clients

You need to be constantly pruning your client base and upgrading your clients.  Studies show that  80% of your profits come from 20% of your clients.  You need to figure out who these high profit clients are and how to get more work from these clients. At the same time, you need to review and replace low profit clients with better opportunities.  Get a list of your top 50 clients and start reviewing them for profitability and ask them if they’re satisfied.  Do some client satisfaction interviews and you’ll generate more work from your most profitable clients simply by going through the interview process.

4. Vision

You need the “right” vision and a process for initiating strategic planning on an ongoing basis.  Start with a strategic planning process involving all partners and facilitate the creation of a new Vision and Firm Plan.  This will help direct your efforts in the most effective way and will help  increase profitability dramatically if you get all  partners to “buy in” to the new Vision.

5. Systems

You need to reward partners for cash in, not billings.  Many firms focus on volume without looking at the quality of the work being brought in and worked on.  You need to examine realization and profitability of all your clients.  To do that, you need a system to quickly determine profitability of clients and practice areas and services provided.  You also need to determine your cost per billable hour and create strategies to reduce costs and increase your profit margins.

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If you are looking for some writings on legal research and writing, hit the jump to the Cornell Law Library’s list of legal research and writing guides (link here). The categories break down as follows:

1. GENERAL WORKS ON LEGAL WRITING AND LEGAL STYLE
2. GENERAL STYLE MANUALS
3. CITATION GUIDES
4. WORKS ON BRIEF WRITING AND ORAL ADVOCACY
5. WORKS ON INSTRUMENT DRAFTING
6. WORKS ON LEGAL RESEARCH

The categories above are links to the actual sections. While it is a “selected” and not a “comprehensive” list, there is more than enough to fill your office bookshelf!

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In the 1990′s, the MDP discussion was very hot as law firms reacted to the possibility that accounting firms might steal their legal business as they developed global MDP consulting firms. In some cases, this led to law firms expanding into national and international legal firms to prepare for battle with the accountants. The opportunity was there for law firms to capitalize on global MDP consulting business as well. Alas, Enron came along and the accounting firms sold off their consulting subsidiaries due to conflicts with their audit client base. Law firms then quickly forgot about the MDP issue and went back to focusing on their core legal business.

However, it’s now possible for law firms in most countries to build their own MDP’s to gain market share from global consulting firms and accounting firms. The British Columbia and  UK regulation changes simply highlight this potential even more. The downturn in the economy provides a perfect opportunity for law firms to gain market share in previously unexplored markets and gain from the potential synergies of combining legal practice with other professional disciplines.

Will law firms be proactive and take advantage of the huge opportunity they have available to them now? Let’s hope so.

Ideally, your attorneys should be doing the sales.  However, most attorneys aren’t trained in sales and don’t do a good job of it.  I have also seen law firm partners in action who spend virtually all their time on sales and networking activities and are the most highly paid partners in their firms if they get results. If you build the culture to allow this to happen, your young attorneys will recognize this and will be inspired to build their practices rapidly through standard sales techniques.

I know of one large US law firm that bought the rights to a generic sales training course, made only minor edits for law firm use, and now presents it as standard fare to all their attorneys. More firms are starting to recognize the need to develop their young attorneys’ business development and sales skills early on, given the increasing competition for clients in today’s rapidly changing legal environment.