Posted by: johnocunningham | May 20, 2015

Law Departments Grow While Shrinking Outside Counsel Budgets

The 2014 HBR Law Department Survey, as cited in the March issue of Today’s General Counsel, reports that 55 percent of law departments surveyed globally increased their internal staff of lawyers in the prior year. Also, 61 percent increased their total legal staff. Furthermore, a growing minority of law departments are jacking up their in-house litigation staff (28 percent vs. 21 percent in the prior year). Other in-house specialists are also on the rise in a minority of departments.

This affirms the trend reported in other surveys (including one cited on this blog just days ago) providing law firms with one more bit of evidence that they have to improve the perceived value of the services they deliver at the rates currently being charged.

Of course, there are still plenty of outside counsel delivering great value and being rewarded for doing so.

But these news items show that there is a growing value perception problem for law firms generally. In some cases, outside counsel might be delivering value, but not doing a good job of measuring it or communicating it. In others, they are just not delivering what the client perceives to be valuable. In both situations, law firm counsel needs to improve their communication with clients about what they really want and truly value.

That is part of the reason that I created a program on what GCs and C-Suiters want from outside counsel, examining what they value and what they disdain. Call if you are interested in hearing more about it.

 

Altman Weil, the global legal management consulting group, recently released the results of its 2015 Law Firms in Transition Survey, and there are at least a few nuggets of information that law firms might want to heed. Respondents to Altman Weil’s 7th annual survey included managing partners and chair-persons at 320 U.S. law firms.

Consistent with reports from other surveys, this one notes that non-traditional competitors present a growing threat to the share of work parceled out to law firms by clients. The fastest growing threat comes from in-house legal professionals, who are steadily increasing in number, but accounting firms, compliance consultants, tech providers and legal process outsourcers are also cutting into law firm work. As a result, 61 percent of firms say that overcapacity is now diluting their profitability.

What I find particularly interesting is that 63 percent of law firm leaders say they are not charting strategies for significant changes in legal service delivery, staffing, efficiency or pricing in the face of this increased competition because “Clients are not asking for it.”

HELLO?

When the client does NOT call you, but calls your non-law-firm competitor or just does the work themselves, that IS them asking for change.

Customers (aka “clients” by another name) don’t walk into a failing business and tell the management why they are not coming back anymore. They don’t ASK failing service or product providers for improvements or changes.

As I was taught long ago in the ultra-competitive retail and restaurant industries, customers vote with their feet and not with their voices. When their feet take them elsewhere, they have just told you that you flunked.

Interestingly, the survey reportedly found a strong correlation between strong financial performance by a firm and delegation of authority to firm leaders to make significant necessary changes.

Successful firms – those that will claim market share in the increasingly competitive environment of the future – must have strong and empowered leadership to be able to:

  1. Identify strategic ways of improving efficiency to increase value delivered;
  2. Identify the products and services clients really want; and
  3. Communicate to clients and prospects the ability to deliver those desired services and products in an efficient, value-driven way.

The process of identifying what clients want and telling them how you can deliver is necessarily a function of one’s ability to communicate with those clients, and many law firms clearly can use some help with that task.

Posted by: johnocunningham | May 11, 2015

Best Blogs of April: LawVision INSIGHTS

This is my 29th post in a series of monthly features that I have dubbed “Best of My Blog Roll.” The concept is simple – at the end of a month I peruse my own blog roll (see that column on the right) for material created by other bloggers that I think is most worthy of sharing with others, and then I report on it here.

For the month of April 2015, I have chosen to highlight, first and foremost, a clump of blog posts on the LawVision INSIGHTS blog, which has recently featured several posts per month of with a practical application.

The posts last month that I found particularly interesting were about:

  1. How you can change the outcome by changing the language in your professional services firm;
  2. The four W’s of business development – who, what, when and why; and
  3. Why it might be better to be “superfast” than “super-rich” as a law firm.

Another April post that I liked was one by Stephen Fairley on the Rainmaker Blog about “True Tales from Law Firm Intake Calls.” What I liked about this short post was that it highlighted the critical importance of the first step in law firm communications with a client. It also showed how a stumble on this first step is one from which you might not recover. As the post demonstrates, it is also a stumble that occurs too often for mere lack of attention to the client gateway into your professional services house, and it should not happen because it is so easy to prevent.

Finally, I would like to call attention to a thought-provoking post by Steven J. Harper at the Belly of the Beast. This post was entitled “Thinking Beyond the AmLaw 100 Rankings” and it examined five recently “stylish” trends among law firms that might not have worked out so well in practice.

 

Posted by: johnocunningham | May 1, 2015

Business Contacts in a Flash

I am always intrigued by new ways of working better, faster and more effectively. I was particularly intrigued when I reviewed an article in the Wall Street Journal that mentioned how some people are using a new program, known as Anki, that makes it easier to remember things using digital flashcards.

The idea of learning something by flipping through a series of flashcards on a phone screen while riding in a train, plane or cab, or waiting in a doctor’s office or wherever, seemed perfect for today’s busy lifestyle.

Apparently, some people have found this app particularly effective for improving recall of information about key business contacts or targets, such as their names, the nature of their businesses, the names of their staff or family members. This is a great exercise to perform before racing to a pitch or presentation in front of a client or target with whom you want to grow a business relationship.

I have not tried Anki yet for myself, but I welcome any feedback on this or similar programs that marketing and communications pros think are useful for learning about clients, prospects, industries or other important data.

Posted by: johnocunningham | April 24, 2015

Do Law Firms Need Help Communicating?

According to Bloomberg BNA, Aric Press, the long-time publisher and editor-in-chief for American Lawyer Media, has opened a new chapter in his career and he is betting on the belief that law firms need and are willing to purchase a lot more help with their communications.

In particular, Press is reportedly aiming to help law firms to have more and better conversations with clients and journalists while improving the authenticity, accuracy and effectiveness of their branding efforts.

What is striking to me about this report is the following: Aric Press spent a long time covering all of the news affecting all of the biggest law firms in America, and he is firmly convinced that one of the things law firms need most is help with understanding press communications, client communications and go-to-market messaging. This is quite a statement when you consider that law firms are full of brilliant people trained in the art of legally parsing words and, at least in theory, communicating with juries and judges.

Some of Press’s career insights, as reported to Bloomberg, are particularly poignant to me and should be to law firms, including:

  • Law firms that are unprepared for a crisis just circle the wagons and start firing at reporters who call them about something they prefer not to talk about;
  • The future belongs to law firms who understand their clients, stay close to them, and obsess over where they are headed and what they need to get there;
  • Clients buy value and not billable hours, and law firms need to focus on understanding what clients value (and value is not just discounts);
  • Law firms too often have not aligned their actions with the promise of their brand;
  • In an age of intense competition, more lawyers should be “paranoid” in a good way, not taking client relationships for granted and working harder to nurture them, protect them and get more out of them.

In my own experience, I see among lawyers an extraordinarily wide range of sophistication levels in understanding and communicating with clients and the outside world in general. Some lawyers have already identified the major challenges facing them with respect to communication, and some have even pushed for plans and strategies to improve those communications. But others remain mired in the archaic notion that lawyers need to focus 100 percent exclusively on the study and practice of law without involvement in other disciplines, such as marketing, PR, finance, technology, or cyber-security, all of which can make or break their competitiveness.

The art of professional communication is a discipline in itself, and lawyers can greatly improve their standing in the marketplace, as well as their relations with clients, press people, employees and others by engaging professional assistance with important communications.

Posted by: johnocunningham | April 20, 2015

Communication: Good Questions Pave the Way for Better Leadership

Some law firms have been improving their management and leadership skills by bringing guest lecturers or tutors in to speak with practice group leaders and other key partners. Some have even enrolled their leaders and future leaders in executive training courses to improve their leadership skills. But others still languish, assuming that leadership is more of a mantle and title than a skill which must be cultivated and learned.

But as every prized corporate client of every law firm knows, leadership and management skills do not come from “pedigree” or billing records. They involve focused efforts, serious communications and training that must be directed by organizational leaders. I have not seen any short publications or guides on the subject of how law firms can develop their leaders, but now Eric Seeger of Altman Weil, a reputable firm that provides management consulting services for legal organizations, has published a good and very brief piece about practice group leadership and communication. It is entitled “For Managing Partners: A Questionnaire for Your Practice Leaders.

While this leadership “starter kit” is clearly not intended to be an comprehensive program for improving management and leadership communication, it does pose a series of excellent power questions for engaging leaders in serious thought about what their objectives are and how they can accomplish them. If a firm’s leadership is struggling with “where to begin” on leadership discussions, I would recommend reading this piece.

There are plenty of other more in-depth resources out there for improving leadership and management skills, but it is most important to take that first step toward better management by simply developing conscious discussion and communication about organizational goals, strategies and use of resources. The framing of good questions, a lawyerly skill, can be put to good use in sharpening organizational communication and focus in productive ways.

Posted by: johnocunningham | April 16, 2015

Grading Autonomy Of “Non-lawyer” Professionals In Law Firms

Whether your firm has less than 100 lawyers or more than 500, it likely gives its professional administrators the same level of autonomy. That is what the data suggests in a recent survey conducted by professional service consulting firm Altman Weil (based on 5o responses from administrators and fewer than 10 participating management level lawyers).

Perhaps the most interesting result of this survey is found in the nearly 10 percent of administrators (from IT, marketing and other functions) who reported that they have complete autonomy to make decisions in their area of expertise when zero law firm partners agreed with that conclusion.

By contrast, ALL of the responding lawyers said that administrative professionals had less than the full confidence of the partnership, suggesting that individual partners could over-ride their decisions to some extent (giving admins an average rating of 6.5 on the autonomy scale, where 1 represents very little autonomy to make decisions and 10 represents total autonomy) so some admins are blissfully unaware of their relative lack of authority.

On the other hand, some admins said they have absolutely no autonomy and no confidence placed in them to make decisions, and nearly one-third see themselves as having a 4 or less on the autonomy scale. More than 40 percent scored their own autonomy as 6 or less, suggesting that admins see most law firm partners holding very tightly to the reins and not letting go.

The sample size was admittedly small, but the results seem to resonate with numerous anecdotal reports among “non-lawyer” professionals, who commonly say that they are paid well, and treated respectfully, but too often second-guessed or just disregarded when it comes to their professional opinions. The obvious question arising from these observations is: Why pay so much money to these marketing, finance and technical pros if you are going to ignore or not even seek their professional advice?

As an outside consultant, I also see a varying degree to which firms look to me for strategic advice or just “made to order” finished products. In my experience, the firms that know how to collaborate with their in-house and outside professionals reap the benefits of doing so. These are the firms who are claiming market share and growing their revenues (other than through mere acquisitions). The firms that don’t collaborate, but issue orders from the ivory legal tower are much more likely to be struggling with or oblivious to unfamiliar customer demands in a fast-changing world, writhing in fear and wondering what happened to “the good old days” when services rendered bills were paid without question and competition was not so keen.

Posted by: johnocunningham | April 7, 2015

Best Blogs of March: Business Development Tips

This is my 28th post in a series of monthly features that I have dubbed “Best of My Blog Roll.” The concept is simple – at the end of a month I peruse my own blog roll (see that column on the right) for material created by other bloggers that I think is most worthy of sharing with others, and then I report on it here.

For the month of March 2015, I have chosen to highlight some posts from different blogs on the topic of business development.

First, I am calling attention to a nice summary by Craig Brown of the “Least Effective Ways to Bring New Business Into Your Law Firm” posted on the Law Vision INSIGHTS blog.

I like the idea of summarizing the common mistakes in business development because lots of those mistakes are sort of default behaviors for busy lawyers who see marketing and business development as a little something you do without much forethought when you have “extra” time. Just by doing the opposite of what is reflexive and bad, lawyers can greatly improve their client development – sort of a George Costanza “do the opposite” of what is instinctive approach.

Second, I would like to call attention to a nice post entitled “Identify a Problem: Offer a Solution” by Cordell Parvin on his blog.

In my own experience as a General Counsel, I never declined to meet with a total stranger who informed me that he had a solution for a problem that commonly plagued my industry or specifically plagued my business. I was always impressed when someone took the time to figure out what the problems in my world likely were, and even brought me a ready-made solution.

My favorite example of this involves a lawyer who identified how my multi-state company could save millions of dollars per year by opting out of the workers compensation in two states with rapidly rising comp costs that allowed opt-outs. We opted out, forced questionable plaintiffs with questionable doctors to sue us, and purchased a very reasonably priced “catastrophic” layer of insurance coverage for those cases of genuine harm with significant damages. In the first few years after we opted out, we saved the millions of dollars projected (and then some) and I was not only happy to pay a legal bill in the tens of thousands of dollars related to the opt-out, I also referred my counsel to others who could benefit from his services.

Third, I am calling attention to a blog post on “Pricing Power” at Adam Smith, Esq. because, as the post demonstrates, firms that pay attention to “right-pricing” for the market can make more clients happy while earning more dollars.

In the honorable mention category, I would like to share two other posts on unrelated topics.

In “Five Tips for a Successful Photo Shoot” on the Clockwork Design Group blog, you can find some great simple, practical pointers for getting better photos for your website, blog, paid advertisements, brochures or other publications. I think this is particularly valuable to law firms because so many have photo-art that demonstrates insufficient attention to detail and objectives. See, for example, my post entitled, “Why Do Most Super Lawyers Look Super Dull?

Finally, I want to share a link to a string of posts by Steven J. Harper, author of the “Belly of the Beast.” Harper was a big-firm partner for years, and has written some compelling material about what it is like to practice “inside the belly of the beast.” But this year, his posts have focused on something much more personal and gripping – his own battle with pancreatic cancer. He describes what it is like to be a cancer patient in the “system” and makes some interesting observations on the similarities between the problems affecting legal practice and medical practice, which are leaving clients and patients feeling like products in a mechanized assembly line.

Hats off to all of the posters who shared something worth reading in March.

Posted by: johnocunningham | March 29, 2015

Following Your Clients on Twitter

If I were preparing for a meeting with a client or prospect, I would want to be “inside of their head” before that meeting, and I can think of no easier way to accomplish that than through social media, checking out their postings on LinkedIn, Twitter and other social media platforms.

For Twitter in particular, there is an easy tool you can use on CEO.com to check:

  • Fortune 500 CEOs with the most frequent tweets;
  • Fortune 500 CEOs with the most followers; and
  • Fortune 500 CEOs who are most active on Twitter.

Of course, you can always research on Google who it is that occupies the other C-suites of your client or prospect before meeting with them, and similarly, check out their tweets and their other social media posts to see what occupies their thoughts.

You can also check out who they follow to get a good idea of what interests them, an effective tool even if they do not tweet or post to social media very often themselves.

Frankly, I am amazed to see that more than a dozen Fortune 500 CEOs have fewer than 1,000 followers. Just a glimpse inside of their minds – for free – is worth the time it takes to see what they have to say.

 

Posted by: johnocunningham | March 14, 2015

Adaptation of IBM’s Watson Now Answers Legal Questions

A Canadian company has announced that it will introduce a “digital legal advisor” to the world’s law firms. Its name is ROSS (which actually doesn’t stand for anything) and it was derived from a commercially available Watson API (“application programming interface”).

Watson, of course, is the name of the IBM cognitive system that learns from its own programming, and it is best known for beating the all-time scoring champions in “Jeopardy” and defeating legendary chess masters around the world.

You just ask ROSS a question, as you would ask another human being, and it responds with relevant legal information after analyzing all the legal data and reasoning found in whatever court cases, agency rulings, legislation and administrative rules are in its programming.

The developers of the system say it is not designed to replace lawyers, but to facilitate their work by rapidly locating and recalling relevant legal data.

It will be interesting to see how law firms and lawyers react. I suspect that one or more state bars will consider filing suit against Watson for the unauthorized practice of law, a silly and futile attempt to block technological progress that could make the law more affordable for everyone.

But there will also be forward-thinking law firms eager to provide more “value” to their clients, who will seize upon ROSS and other future adaptations of Watson to provide faster, cheaper and more thorough legal analysis while relieving their associates of the drudge work of sifting through Shepherd citations and volumes of statutes, regulations and case reporters for countless hours in the legal library.

Those firms that integrate successful adaptations of Watson and other emerging technologies into their work process will claim more market share from clients who grow to love rapid, complete and inexpensive legal analysis, and clients will start sending them more and more work.

Of course, some well-capitalized corporate clients with their own legal departments will start to bring Watson-like technologies in-house, but law firms who serve those clients will still be needed to navigate agency processes and local courts while shedding light on anything that might be missing from relevant artificial intelligence databases or systems used by the clients.

For more on this story, check out “Watson Takes the Stand” at TheAtlantic.com.

 

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