Less than one percent of the overwhelming data gathered for business purposes actually gets analyzed, according to a recent piece in Harvard Business Review, entitled “The Business of Artificial Intelligence.”

Thus, it is no surprise that companies are turning to artificial intelligence (“AI”) to analyze that data, improving a wide variety of performance applications. Cognition and problem solving are particularly well-suited to AI. As noted in the article, AI has been used to optimize traffic flow through better timing on traffic signals, to do facial recognition for security purposes, and to improve customer retention and enhance customer purchases.

Given the proven performance capability of AI in a variety of applications, it is only a matter of time before law firms begin to utilize these capacities to improve processes, speed up performance, and connect better with clients and prospects.

Some leading-edge firms are experimenting with AI now, and I expect more will end up partnering with Google, Facebook, IBM or other AI developers to connect more frequently with prospects, sell more services to clients, and do more targeted marketing with higher return on investment. That is happening in other industries and there is no reason it can’t happen in the legal industry.

In the meantime, it is more important than ever to gather data – through one means or another – about what clients like or dislike, what prospects think, what makes clients buy legal services, and what makes them choose one provider over another. As the article points out, data-driven decisions are improving performance in every industry.

The legal industry is more slowly adapting to the age of data-driven business strategies, but that creates opportunity for the early adapters, who are going to enjoy a competitive edge as the data starts guiding them in the right directions.

 

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Posted by: johnocunningham | July 19, 2017

GC Clients Sharing Data on Law Firm Performance

The ABA Journal and The American Lawyer have taken notice of an announcement by 25 General Counsel from different companies – clients are dialing up the scrutiny and comparing notes on the quality and results of legal service provided by law firms.

In a short article, the ABA Journal noted that  “the general counsel will share data that includes law firm names, billing rates and arrangements, matter types and reviews of the work by the in-house counsel.”

The American Lawyer actually published the open letter from 25 General Counsel, announcing their plans. The list of signatories includes GCs from well-known companies such as PayPal, Keurig Green Mountain, Petco, Levi Strauss, Molson Coors, MasterCard and Sony Electronics.

In a piece that examined the consequences for the legal industry, the American Lawyer’s Roy Strom said that “one longer-term outcome of the AdvanceLaw project could be to convert a broader swath of corporate clients to new ways of managing outside counsel – skeptical lawyers may be persuaded by the power of data.”

Law firm practitioners would be well-advised to read about these developments and anticipate the future, which is moving in the direction of demand for better project management, continuous process improvement, and use of technology and other tools necessary to optimize service.

 

The ABA Journal is accepting nominations through July 30 for the best law blogs, legal websites  and social media on the internet.

Now would be a good time to click on the nominating page to tell them which legal sites you visit and why.

One of my favorite sites for lawyer rainmakers and legal marketers is the Cordell Parvin Blog.

Posted by: johnocunningham | July 9, 2017

Cybersecurity: A New and Growing Client Concern for Law Firms

As if the practice of law was not hard enough already, it appears that law firms have one more client concern that needs to be addressed, at least with some clients who are worried about cyber-security.

For the first time, I heard this concern raised on a panel of corporate General Counsel at this year’s LSSO RainDance conference.

I suppose it is not surprising, given that there has been a spate of stories in recent years about law firms being targeted for the information held in their archives. It is especially understandable that clients with valuable intellectual property and trade secrets would be careful in selecting outside counsel who can and do protect their cyber-walls.

Business development and marketing pitches may soon address this growing concern, and firms that have invested heavily in data protection technology, protocols and training would certainly do well to incorporate those commitments into client and prospect messaging.

Within one recent week, three big stories on this subject have popped up, including:

  1. An ABA Journal story questioning law firm preparedness
  2. An “Above the Law” story noting that 40 percent of firms don’t even know when an attempted attack has been made
  3. An IT Governance story asserting that 95 percent of law firms are not compliant with their own cyber-security policies

This is my 55th 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.

Reviewing blog posts for the month of June 2017, I have chosen to highlight the following three blog posts:

The graphic in Silvia Coulter’s post (the last one above) reminded me of the fact that clients can often be referred by your own employees… or not. I recall one particularly noteworthy instance when a receptionist-friend at a law firm told me she had referred an in-law with a thriving interstate business to another law firm (not her employer). When I asked her why she did not refer the client to her own employer, she chuckled, essentially saying that they had never seen her as anything more than a receptionist. By contrast, the lawyer to whom she made the referral was not only well-known for work in the prospect’s industry, he was always kind and friendly toward my friend. As the GC’s comments to Silvia Coulter demonstrate, good rainmakers are usually good at connecting with all kinds of people.

Posted by: johnocunningham | June 30, 2017

Recent Survey Issues Clarion Calls to Lawyers

Law firm leaders are concerned with but not always reacting to a wide array of competitive threats that continue to grow in the legal service sector. That is one of the big takeaways I see in the 2017 Law Firms in Transition survey by legal consulting firm Altman Weil, which lawyers would be well-advised to read.

Some of the particularly noteworthy survey findings include:

  • Law firms are changing in reaction to the shifting marketplace, but not as quickly as they should
  • 62 percent of firms say non-equity partners are not busy enough with work
  • More than half of laterals are not meeting expectations for bringing in new business
  • Firms are using contract lawyers to meet bumps in demand or to help clients control legal costs, and old-fashioned stigmas about the use of contract lawyers are nearly extinct
  • Two-thirds of firms say they are losing work to growing in-house law departments, and 19 percent report losing business to non-law firm providers (I would add that the real figure would be much higher if firms had an accurate and comprehensive way of tracking this, since alternative providers, such as legal service tech providers, are growing exponentially)
  • 39 percent of respondents say they have made significant changes in pricing strategy, while another 17 percent are considering doing so (I would note that the growth in hiring of “pricing directors” is a clear indication of this trend)
  • Only 7.5 percent of firms have started to make some use of artificial intelligence resources (a very thin percentage compared to other industries)

The total picture that emerges from the report is, in my opinion, one that should have law firm partners seriously examining the business of legal service delivery. It is critical for firms to be at the top of their game in process development and improvement, project management, technological innovation, marketing, service and awareness of their clients’ preferences and concerns.

 

 

Posted by: johnocunningham | June 27, 2017

Professional Service Communications: The Art of the Apology

For professional service providers, there is perhaps no more challenging form of communication than the apology for something missed or done incorrectly.

As Lee Taft noted in his article, “A Toll on Lawyers,” published in the June 2017 edition of the Texas Bar Journal, doctors, lawyers and other professional service providers are often perfectionists, and “when a perfectionist makes a mistake, he or she feels guilt and fear.” Adding to the challenge of making an apology, clients and others who deal with professional service providers often expect them to be beyond reproach and always at the top of their game.

But all professionals are human, and nobody gets everything right.

So when something goes wrong, and it may or may not have been partly the result of your own professional oversight or misstep, how do you make an apology that sounds sincere and human without making an admission of liability? Or should you even try to do so?

As Taft pointed out in his article, and has been written on this blog, the power of a well-worded apology is immense. It can not only salvage a business or professional relationship and avert a lawsuit, it can help the perfectionist to avoid a scenario where a feeling of “guilt morphs into shame, and shame turns into isolation.” This is not a small consideration for lawyers at a time when (according to one study) 61 percent have concerns about anxiety and 21 percent admit to being problem drinkers (or substance abusers).

What further complicates matters is the law regarding apologies and admissions, which varies by jurisdiction. In some states, apologies are not admissible as evidence, but in others they may be admissible if they constitute admissions of fault.

If a professional attempts to walk the tightrope between apology and admission of liability, according to Taft, he or she can make matters worse, as so-called “partial apologies” that come without expression of any kind of responsibility have been shown to be worse than making no apology at all in the eyes of those to whom an apology is made.

So how does a lawyer express an apology for a bad outcome when he or she may be at least partially at fault, though liability and damage may be unclear?

Consider the hypothetical case of a lawyer who represents the buyer of a business, and fails to list certain assets in a schedule of acquisition, resulting in lack of clear title to the assets and possibly a dispute if the seller refuses to convey the assets because they were not explicitly made part of the deal. It might not be solely the lawyer’s fault, especially if the buyer’s and seller’s business representatives failed to make clear what the scope of their deal included, perhaps because of a mad rush to get things done. But in the hypothetical, the lawyer still feels he or she failed to get the parties to a clear “meeting of the minds” in writing.

In such a case, the lawyer might consider making a truthful statement of remorse, acknowledging some responsibility as part of the business team, promising to figure out what went wrong and fix it so that it does not happen again, and inviting an attempt at salvaging the relationship. Depending on the other facts involved and the applicable law, the counselor might say something like the following:

“I am so sorry that we failed to insure that you achieved all of your business objectives in this deal. I know how much of your life you put into your business, and you have my word that we will figure out how this happened and design a process to insure that it never happens again to you or any other client. We take great pride in assuring that all of our clients’ objectives are met, and so this outcome feels like a terrible defeat for us. Can we please preserve our valued relationship by offering to share the pain of this loss, perhaps for starters, by writing off the time we spent on due diligence related to X oversight, and working with you to figure out how we can all do better in the future?”

If the apology is sincere and well-received, it could quite possibly salvage the relationship, or at least avoid the unpleasant prospect of any angry client resorting to another lawyer to bring suit for damages. Law firms would do well to consider this approach at a time when firms are more frequently being sued by clients, and public sentiment is gaining for laws that require full disclosure of mistakes by professionals.

Earlier this month, Forbes magazine contributor, Mark Cohen, a lawyer with a distinguished 40-years of practice under his belt, penned an article entitled, “Are Law Firms Becoming Obsolete?”

Cohen contended that “the traditional partnership model was designed for the practice of law, not the delivery of legal services,” adding that “a growing body of evidence points to advancing obsolescence of the incumbent partnership model.” In particular, he cited findings from the 2017 Georgetown Legal Report, which found that corporate legal buyers are directing more work away from large law firms. Ordinary legal consumers are also turning more frequently to non-traditional vehicles of legal service delivery, such as LegalZoom and Rocket Lawyer.

The article pointed out that corporate clients are not necessarily dismissing law firms, but are “disaggregating” tasks once handled entirely by firms. They are outsourcing litigation discovery tasks, hiring contract lawyers to meet temporary surges in demand, and using technology to accomplish contract reviews and other discreet items on their “to do” lists. Thus, firms are still surviving, but they are increasingly forced to de-equitize partners, reduce staff, and cut costs to preserve the Holy Grail of profits-per-partner.

Cohen argued that the law firm partnership model was designed for the benefit of partners, and not for clients, so it is not equipped to meet new and accelerating demands for technological innovation, efficiency and value.

His most searing commentary included the following assertions about law firms:

  • (1) they face growing client dissatisfaction and have failed to address it;
  • (2) they have insufficient knowledge of the client’s business;
  • (3) they have high, unpredictable costs;
  • (4) they have an economic model that is inefficient and fails to assess appropriate value per task from the client perspective;
  • (5) they too often fail to deploy technology to streamline operations and provide enterprise solutions;
  • (6) they have an absence of process improvement and project management;
  • (7) they have a transactional approach to client matters rather than one that provides enterprise solutions; and
  • (8) they are too often guilty of poor customer service.

Actually, I think law firms are listening to clients more now than they ever have, though improvements are still needed. Firms are also innovating, as previously cited on this blog. 

But the clarion call is getting louder for changes in legal service delivery, and firms that are answering the call will only benefit by communicating to the marketplace about the value they deliver to clients, the innovations they are using to improve service and cost, and the technological tools and methodologies they are employing to stay ahead of the competition.

If firms cannot constantly refine and improve on legal service costs and delivery times, there will be a natural increase in the flow of investment capital into artificial intelligence solutions and other technology vehicles for legal service that will ultimately prove out Cohen’s thesis.

Law firms must not only communicate the client-driven imperative for change internally, they must demonstrate and communicate to the marketplace how they are answering the call for change, and leading the way in legal service delivery innovation.

Posted by: johnocunningham | June 9, 2017

Coolest New Tool for Creating a Business Development Pipeline

There were a lot of great presentations on the state of the art and the future of legal service delivery and legal marketing at the 2017 LSSO RainDance conference, but one of the coolest demonstrations on a piece of practical and simple technology was by David Ackert of Practice Pipeline.

David saw a need in law firms and created a simple software program to solve it. He recognized that 73 percent of law firms have some kind of CRM (client relationship management) software, but less than 5 percent of lawyers are actually using it. He figured out that lawyers don’t use it because the interface is too complex, or the data entry takes too much time, or there is simply no system to prompt them what to do.

So he hired a programmer and crafted his own tailor-made solution for law firm users. David’s system is so simple it is genius. It depicts colored tiles for each client, prospect or referral source for each lawyer, and it offers up prompts for BD activities corresponding to each tile. Thus, a lawyer using the system is easily prompted to invite someone to coffee or lunch, send them articles or birthday notes, visit them for sales presentations or invite them to events, and more.

Then the system scores your BD activity – by volume and recency – and it compares your score to other lawyers in the firm (so you know if you are falling behind or keeping pace with your peers). It also prompts you to prepare for or follow up on activities you have scheduled. A green tile means you have more than a week to prepare for a BD activity with a given contact, a yellow tile means you are coming due, and a red tile means you are on or have missed a deadline.

The system also allows lawyers to see what others in the firm are doing with the same clients, targets or referral sources, so as to improve collaboration, and it gives you a chance to see which BD activities and which lawyers are getting return on activity investment.

As a result of this simplicity, utilization rates for this system are 75 percent, which is more than 70 percent better than typical CRM programs alone.

For a nice video overview of this system, check out this YouTube video. 

This is my 54th 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.

Reviewing blog posts for the month of May 2017, I have chosen to highlight the following blog posts related to blogging, content marketing and story-telling:

Finally, I want to also give a shout out to Sue Ella Prodonovich for her blog post on “Seven Things Your Associates Would Change About Your Firm” because she has highlighted some things that corporate clients have pointed to, as well as associates, about the need for better and faster training, development and apprenticeship of associate lawyers.

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