Legal Business Development

Happy Thanksgiving

My next post will appear on Wednesday Dec 2.  In the meantime, don’t miss the free resources on our web page at www.legalbizdev.com/free.

Price wars

Around the time I started my recent survey on alternative fees, I had heard many accounts that a price war had broken out among large law firms, with some racing to the bottom to offer ever better deals.  So I decided to include this question in the first few surveys:

There is a lot of price pressure these days, and some say it is leading firms to bid on projects as loss leaders in a way that is not sustainable.  Have you seen any examples of this?

I asked the question of 15 large firms, and all 15 said yes.  I have never heard 15 lawyers agree on anything else before this.  Here are a few examples of what people said:

Some of our competitors across the country are doing work on an hourly rate that is drastically less than what they would ordinarily charge. Some firms will do all of the discovery in a case for free, and then take the case on a fee basis from there, or will charge half of their hourly rate for the first phase of the case. We’ve also heard about some firms that have actually said that they will do these motions that will probably occur during the course of the case for free, or they will do the motion work at 30%, or some other drastically discounted rate like that, because they’re really hungry to get work.

We have heard stories about well-established New York firms who have [told] clients that they will not be underbid. They will do [a case] for nothing [just so that they can] get in the door and show [the client] what they can do.

Some brand-name firms [are making] low-cost proposals that are very surprising.

In the last 18 months, there has been a fall off in patent filings, [so] some firms have a lot of excess capacity in this area.  With all those people sitting around, some [firms] are bidding in ways that are totally insane.

There were differences of opinion about why firms were bidding so aggressively.  The most common explanation was too much capacity:

Many firms are willing to discount their fees in order to keep people busy.  People do what they have to do; it’s a jungle out there.

[Some] firms have been doing private equity [but] there isn’t any [of that work] right now, so it’s either fire people or work for any money they can bring in at all.

There is something to be said about recovering 50 cents on the dollar when the alternative is to have idle people.

Some participants thought that other factors were behind the low bids, including lack of experience:

I have seen some dramatic underbidding, but I think it’s by people who do not know what they’re getting into.

Some firms are bidding alternative fee projects at very low costs.  These are loss leaders which cannot survive in the long term, but it’s not certain whether the firms are doing it on purpose or not.

Some firms may simply be treating the bid as a loss leader in the sense that they realize they may lose money.  Others are simply on a learning curve, trying to be responsive to the client's request.  Since many firms have not established the database that they need for truly rational alternative fees, people are taking risks that are not going to be sustainable.

[In one recent competition] another law firm bid a price which quite frankly we thought was not sustainable. And there are really only two or three answers as to why they did that. One is a loss leader. The second is sheer stupidity. And the third is a willingness to take an extraordinary risk.

There were mixed opinions about “loss leader” bids as a strategy for getting started with new clients:

They’re getting in with the client [and] the strategy may be effective.

I have never seen loss leader work lead to higher end work, and I have been at this a long time. Loss leaders just cause people to expect lower rates, rather than focusing on fair pricing for the value provided.

On a similar note, one participant said that low bidding firms may be creating some long-term problems for themselves:

There are some law firms that are pricing in a way that will make it difficult for them to sustain their [past] market position.  It is difficult to explain to an existing client who’s been very loyal to you why you would offer dramatically different pricing to new clients.

For more about The LegalBizDev Survey of Alternative Fees, see www.legalbizdev.com/survey.

New research on alternative billing: What it means to you

Are you trying to decide what to do about alternative billing, or whether you should be doing anything at all?  You have a lot of company, because important changes are taking place.

That’s why I recently conducted in-depth interviews with senior decision makers from 37 AmLaw 100 firms about what works best for alternative fees, and what does not work at all.  Participants included nine chairmen and managing partners, 16 executives (primarily CEOs, CFOs, and CMOs), and 22 senior partners, many of whom head alternative fee committees.

They provided an enormous amount of information on what law firms and inside counsel are doing to structure fixed and contingent fee arrangements in a sustainable way that makes business sense for both sides.  They also expressed a wide range of opinions about the future.  Every single participant believes that the use of alternative fees will go up, but there were dramatic disagreements about how much, and how – or even whether – alternative fees will change the way law firms operate.  

Some firms are aggressively bidding alternative fees to get new business, even when it means risking profits, to establish leadership positions in this growing market.  Other firms are taking a more conservative approach, and trying to assure that every deal is profitable on its own merits. 

This week I will be finishing the final analysis, and my complete report on the results will be published next month.  If you are still trying to determine what you should do about alternative fees, you will be particularly interested in the conclusion section summarizing “Tactics to Prepare for an Uncertain Future.”

If you pre-order your copy now for $395, we will immediately send you a .pdf of a 27-page Preview Edition.  Then when the complete report is published in December, we will ship your copy directly from the printer, the day it is released.

On Thursday December 10 at 1 PM EST, I will offer the first public presentation of the complete results in a webcast for West LegalEdcenter, “the nation's leading online continuing legal education (CLE) service” and a division of Thomson Reuters.  I will focus on our research findings regarding:

•    Differences between practice groups
•    Alternative fee revenue, now and in the future
•    What clients want
•    Aggressive vs. conservative bidding strategies
•    Nine common types of alternative fees, and how they are used
•    Expert predictions for the future
•    Recommendations for large law firms, for small ones, and for inside counsel

The webcast costs $135, and can be ordered through West LegalEdcenter.  After the webcast, if you decide to purchase the complete survey report by December 31, 2009, you will be given a $50 discount.

We also offer customized in-house presentations, workshops, and webinars to help lawyers decide:

•    When and how to discuss alternative fees with clients
•    How to bid and win the most profitable deals
•    How to manage projects to maximize profitability

For more information about a custom presentation designed to meet your firm’s needs, email us today.

Alternative Fees Demand Improved Project Management

This is a guest post by Steve Barrett, former CMO at Drinker Biddle, who recently joined LegalBizDev to help us meet the demand for alternative fees webinars, workshops, and consulting.

Alternative fees have been discussed with great frequency over the past 12 months, as the economic downslide has shifted buying power into clients’ hands in the legal industry.  Obviously, to implement alternative fees on a wide scale, a law firm must be willing to consider serious shifts away from the hourly rate culture of the past 50 years.  But, more importantly, law firms must commit to better understanding their own economics, to self-discipline and to a willingness to change to meet the marketplace’s new dimensions.

Over the course of developing its Survey of Alternative Fees of AmLaw 100 law firms, LegalBizDev surfaced many necessary prerequisites to success in implementing alternative fees, including:

1.  Systems – At billing and collection time, large firms all too often discover that their partners have made “rogue” or unapproved deals with clients.  Aside from surprise, these deals, whether explicit or tacit, can result in either costly write-offs or needless tensions with key clients.  One survey respondent cited a case in which a client was quoted a range of $120-$150K to handle a deal.  The client “hears $120K,” the project has run up $200K in hours when it’s ended, yet no one has communicated updates to scope with the client along the way, creating an embarrassing ex post facto “Oops” moment.

Law firms have always had many committees, yet in the important area of fiscal discipline, many firms only recently set up a method to screen and approve all off-hourly deals and monitor them as they progress.  The “Oops” write-offs happen all too frequently for organizations with nine-figure revenues.

2.  Tools – A surprising percentage of respondents admitted that they have never rigorously analyzed the financial outcomes of their past alternative fee client matters, either separately or taken as a whole.  More said that they were not able to “push several buttons” and receive a report on them.  A handful of progressive law firms have the tools and procedures to do so.  Law firms today have analytical tools (such as DataFusion’s IntelliStat or Redwood Analytics), with which they can slice and dice profitability, realization rates, efficiencies, etc., six ways from Sunday, but few are fully using their sophisticated capabilities.  Contemporary law firm accounting systems (e.g. Elite, Aderant, and Juris) all permit coding to be added at the client or matter number level to quickly provide reports on the financials of any or all alternative fee matters.  At the barest minimum, one designee can always keep an alternative fees matter inventory on a spreadsheet, to facilitate ready analysis.

3.  Cost Histories – Many firms mentioned that a good understanding of cost patterns has never been developed in their firms.  One said (paraphrasing) “We should know how much an ‘XYZ financing transaction’ typically costs, since we do hundreds of them every year.”  Another (again, paraphrasing) said “I can’t believe we don’t know the cost of a typical deposition, since we must do thousands a year.” 

The ABA-developed UTBMS (Uniform Task-Based Management System) and LEDES (Legal Electronic Data Exchange Standard) matter coding systems have been in effect now for nearly a decade and a half, and many Fortune 500 companies have long required their law firms to code all their fee invoices using these systems, at least for litigation and bankruptcy matters.  Depositions (code: L330) can readily be coded and periodically aggregated and analyzed to better understand the average cost of, say, a “home-town defense deposition,” or an “out-of-town opponent deposition”  with but a modest effort by a capable analyst.

Originally created in 1995, LEDES is now more than just an e-billing format and standard.  Along the way it has added XML to its original ASCII format, and in 2006 a budgeting standard was approved by the LEDES Oversight Committee.  But the point is that the tools have been there, in the sensitive litigation area, for some time now, to cost out at least the ranges of certain types of litigation sub-units.  That’s the good news.  The bad news is that those same F500 companies that run convergence RFPs have been doing the analysis themselves for a decade.  One may soon expect law firms to be told what clients will pay per type of deposition, for example, just as health insurers dictate to providers what they’ll pay per x-ray or hip replacement.

Three questions to ask your most important clients

Back in the good old days, before the economy headed South, I wrote a number of posts about how important listening is to develop stronger relationships and new business.  I even posted suggestions to get clients doing more of the talking, including 34 questions for clients and prospects and 24 more questions to ask current clients.

When we coach lawyers on how to develop new business, we often refer to updated and expanded versions of those lists.  Given today’s cutthroat competition, we encourage lawyers to start with defensive marketing to protect their most important clients.  Here are three critical questions that we encourage lawyers to ask every important client:

1. On a scale from 1 to 10, how satisfied are you with our firm?

There are many ways to phrase effective questions about client satisfaction, but the best way is to ask for a numerical rating, which forces clarity and frankness.

We ask our own clients this question at the end of every program we deliver, and to be honest many shy away from giving a number.  The client is always right, so if they don’t want to be pinned down with a number, we go with the flow.  The important thing is to begin a genuine conversation about satisfaction, and to encourage clients to talk about the things you really need to hear, rather than more comfortable vague praise.

If clients do give you a number, there’s a good chance it will be lower than you expected.  I’ve written before about the Lake Wobegone effect, named after Garrison Keillor’s fictional community in which everyone thinks they are above average, and their ratings will be high.

The best place to see this effect in the legal community is in a series of surveys published in Inside Counsel magazine, comparing ratings of satisfaction from clients and the law firms who serve them.  In their most recent survey, 43% of lawyers thought they were earning an A for their work, but only 17% of their clients agreed.  So if you think you deserve an A, you’re probably wrong.

And if your client gives you an 8 or less on our 10-point scale, you need to do something about it.  As noted in my post about Fred Reichheld’s research on the loyalty effect, you might think that 8 out of 10 is a pretty good rating.  But it is not good enough to protect you from aggressive competitors.

2.  What could we do to increase our rating?

Ask this question even if you scored 10 out of 10.  It is impossible for a client to be too happy.

Be prepared with questions to probe how people really feel, such as asking which team members they like to work with, and which they don’t, or what could have been done differently in a recent matter, or how easy your firm is to do business with.  You might even work in some of the questions from previous lists in this blog, such as:

•    How well do we listen to your concerns?
•    How well do we understand your goals?
•    How well do we understand your industry?
•    Do we do a good job keeping you informed?
•    Do we explain legal issues in terms that are easy for non-lawyers to understand?
•    Do you perceive us as genuinely committed to your business success?
•    Do you perceive our lawyers as prompt, responsive, and accessible on short notice?
•    Are our billing statements accurate and complete?
•    Do our invoices include an appropriate level of detail?
•    Do you think our fees are fair and reasonable?

The important thing is to follow this conversation wherever it leads.  Resist the temptation to defend yourself; save that for a different meeting.  This time, just listen and learn what you could do better.

3. Have you heard any interesting ideas from other law firms?

This can be a tricky question to ask, but you need to know what your competitors are doing.  If you ask the question directly at the start of a conversation, it may sound desperate or pathetic.  Plan instead to sneak up on it.

Start with industry chit chat.  When the client mentions another firm, ask “Have you talked to them lately?” and “What are they up to these days?”

If you can turn the conversation in this direction, I’ll bet you a nickel that at least one of your clients will report that she’s been talking to your competitors about alternative fees.  If you want to know more about that topic, see our Guide to Alternative Fees, which is free, and the research report on our Survey of Alternative Fees, which isn’t.

An AmLaw 100 senior executive talks about the implications of alternative fees

In the LegalBizDev Survey of Alternative Fees, AmLaw 100 chairmen, senior partners and C-level executives talked frankly about issues that will help and hinder the growth of alternative fees.

Here’s how one AmLaw 100 senior executive (who is also a lawyer) sees the future:

There are a lot of law firms that are sitting back and waiting for the world to return to the way it was in 2006 or 2007.  Our view is that the world is fundamentally changed....We think that there is a fundamental shift, and that the concept of clients being willing to pay for inefficiency is...unlikely to come back.

I think we are in the second inning of that development as an overall industry.  I think it is going to go significantly further along, and well beyond just the fact that we’re seeing clients taking advantage of the greater competition among law firms today....The days of paying $400 an hour for first-year associates to pore through documents on major litigation matters is largely gone.

In this expert’s opinion, alternative fees are an important part of this new environment, and can be used in almost any situation:

There really is something that will work for every client....[When we are] able to sit down in a very open dialogue with our clients regarding their needs, what works best for them, and what works best for us – including how staffing impacts our economics and how we focus on trying to put the right person on the right task at the right cost – we believe that we can tailor a fee arrangement that will work for our clients and will work for us.

Note that does not imply that the billable hour is dead, only that non-hourly billing will grow in importance:

I don’t foresee a world in which there will be no more hourly billing. There are a lot of circumstances where hourly billing makes a lot of sense. A lot of clients prefer...discounted hourly rates, even in many situations where we believe that a different model may be more in their interest. But I think that this overall sea change is leading to a world that sees less inefficiency being borne by the client and shifting more risk to the law firms.

Like the AmLaw 100 chairman quoted a few weeks ago, this expert believes that when alternative fees do grow, firms will need to operate differently, starting with the way they manage projects:

For most of the past decade, I was a senior executive at a publicly-traded real estate company. And I like to say that the two most important people we had in the company were the estimator and the project manager. And law firms historically have had no one play either of those roles. It’s very dangerous to move into a world of fixed fees if you don’t have somebody who’s capable of estimating and you don’t have somebody who’s capable of project managing it.

I think that a movement towards alternative fees without a cultural shift, and without putting tools in partners’ hands to effectively project manage, will have dire economic consequences to law firms. It’s a lot easier to come up with an alternative fee than it is to teach somebody to project-manage.

For more from this interview, and 36 other interviews from AmLaw 100 decision makers, order your copy of the LegalBizDev Survey of Alternative Fees or Download LegalBizDevSurveySummaryZ.  For background on the issues behind the survey, see the third edition of our free LegalBizDev Guide to Alternative Fees.

Alternative fees survey: Preview edition released today

Over the last few months, I interviewed chairmen, CEOs, CFOs, CMOs and senior partners at 37 AmLaw 100 firms about how they are using alternative fees.  (For background on the survey, including a list of the firms interviewed, see my recent progress report.)

The survey data will take a few months to analyze completely, and the final report will be published in December.  This morning, we released a 27-page .pdf Preview Edition describing initial findings, including:

•    While there has been a significant increase within the last year in the frequency of alternative fees, AmLaw 100 firms have many years of experience in structuring fixed and contingent billing arrangements.
•    78% of respondents said that alternative fees work well in every practice area.
•    There was significant disagreement about only one practice area: some felt alternative fees work well in litigation, others did not.
•    With experience, firms can predict the types of matters that will work best with alternative fees.
•    Every single survey participant predicted that AmLaw 100 firms will use alternative fees more often in the future.  However, there were dramatic disagreements about how much more often.
•    Estimates of the projected five year growth rate in alternative fee revenue ranged from 20% to 900%, with an average of 198%. 

Today’s report also provides data on how firms track alternative fee revenue internally, and on their radical differences of opinion about the percent of AmLaw 100 revenue derived from alternative fees not just in the future, but even today.

The December complete report will tie these conflicting opinions to increasing differentiation among AmLaw 100 firms.  Some large firms are aggressively pursuing the development of alternative billing, while others are taking a much more conservative approach.

Since the survey interviews were anonymous, senior decision makers spoke frankly and openly about issues that will help and hinder the growth of alternative fees.  For example, here’s what one chairman said about law firm culture, associate salaries, and costs:

I think it hurts lawyers’ egos to suggest that all of the work that they do is not brain surgery. And then when you suggest that they might be able to get away with using people who are not junior brain surgeons, almost everyone will say, “Oh, no no no. To do my stuff, you really need to be a brain surgeon like me.” And it’s just ridiculous....I think that there’s an odd and irrational pride in wasting money. It’s gratifying for people to brag to their friends about how much they have to pay summer associates, and how much they pay starting associates, like “Isn’t this a crime? We’re paying young associates more than judges, but hey, they’re brilliant. They work for me.” And so it’s an odd situation. But I think we’ve been able to do that because the market has paid to deal with it. And that may all be over.

For more comments from another survey participant, see last week’s post.

When the December report is published, it will include a list of the most common types of alternative billing arrangements, and discuss when and how to use each.  It will also offer detailed guidance to those who want to increase the use of alternative billing, whether they work in a law department, a large firm, or a small one.

The total cost for the printed report plus the preview edition is $395 plus shipping ($5 in the US, $30 outside the US).  If you order your copy today, we will send you the Preview Edition pdf immediately, and ship the printed report directly from the printer the day it is released in December.  For more details and an order form, see the alternative fees section of our web page or Download LegalBizDevSurveySummaryZ.  For background on the issues behind the survey, see the third edition of our free LegalBizDev Guide to Alternative Fees.

Alternative fees survey: An AmLaw 100 chairman speaks frankly about RFPs and project management

Last week, I posted a progress report on our alternative fees survey.  This week’s post includes sample comments from one of our interviews.

When I asked the Chairman of one AmLaw 100 firm whether general counsel could improve the RFP process. he had some strong opinions about what is broken:

The RFP process is somewhat out of control...many RFP competitions are run on the "more process is better" theory.  They tend to require firms to put in a huge amount of effort to submit a lot of information which I’m not sure ends up being important in the decision-making process.

And it doesn’t necessarily change the behavior of the in-house legal staff...you go through all this, you get on the new, smaller list, and then you wake up and realize you are getting the same stuff you had before.  The relationship is not getting deeper and firms who are not ‘on the list’ are still getting work.. 

Most general counsel and chief legal officers don’t micromanage what their people do, so you find that people down the line are still using the same firms they’ve always been using.

We’re starting to pass on some RFPs, because they’re just not worth the effort. Common sense needs to be brought to the process.

Later, the interview turned to the question of how alternative fees will change the way large firms and their clients manage relationships and projects:

I think the profession needs to start looking at some fundamental questions. What kind of relationship do you want with your outside counsel? Is it transactional, or is it relationship-based? Are you doing an isolated engagement and looking primarily for the lowest price or are you trying to build an ongoing supplier relationship that is sustainable for both parties and can be improved through "partnering" - i.e., working together to improve service and reduce costs?

I think the greatest potential for improving the value of the services that legal departments and outside firms together provide to the ultimate client is to look at the whole process and re-engineer the parts that are working well and evaluate performance on a joint basis.  General counsel are appropriately critical when law firms do not perform well. But it is very difficult for a law firm to tell a client that a matter is not going well from a cost or process point of view because of what is going on in the legal department.

Assuming that alternative fee arrangements do increase in number and variety, I think both law firms and clients have a lot to learn about how to make them work well. Other fields have developed methodologies that work.  Lawyers should be willing to learn from them.  

For example, in the world of construction, architects and engineers and contractors have been working on a fixed price or non-time and materials for a long time. There is a body of learning about how to estimate, how to contract, how to define scope, how to manage changes, how to allocate risk, and how to manage fee disputes, delays, changes in scope, and so on.  This could probably be adapted to the legal profession, without our having to go through the long history of disputes, litigation and losses that the construction industry did to get to the current state of the art.

Lawyers and their clients will need to learn to be more careful and disciplined about  making fee deals: defining scope, managing changes in scope, dealing with changed circumstances, dealing with the impact of client delay and...managing the contractual relationships. The same can be said of managing the project.  Some legal projects are massive and yet the level of skill applied to managing them - not the legal content, but just managing the project - is not at the level that is practiced in other professions....

The art of managing a large project also requires an eye on the relationships and the ultimate goals.  For example, the best project managers I have seen in the international project field understand the need for some give and take.  An ability to reach quick and practical agreements is far preferable to a consistently contentious relationship which generally increases costs and produces unsatisfactory results.

I think we’ve all had experiences over the years with in-house counsel who are too easy on us, those who are reasonable to deal with, those who stand up for what their companies need and understand what their law firms need, and those who are just not good managers....A lack of skills in project and relationship management on the part of either in-house counsel or the project leaders in a law firm can increase cost and reduce the quality of outcomes.  I believe both sides could use more training in these areas.

For more from this interview, and 36 other interviews from AmLaw 100 decision makers, order your copy of the LegalBizDev Survey of Alternative Fees or Download LegalBizDevSurveySummaryZ.  For background on the issues behind the survey, see the third edition of our free LegalBizDev Guide to Alternative Fees.

Progress report: The LegalBizDev survey of alternative fees

Last week, I completed the final interview in our survey of how AmLaw 100 firms are using alternative fees, and what they expect in the future.  I talked to 9 chairmen and managing partners, 16 executives including CEOs, CFOs, and CMOs, and 22 senior partners, many of whom headed their firm’s alternative fee committee.  Thirty seven firms participated:

Akin Gump
Alston & Bird
Baker Hostetler
Blank Rome
Bryan Cave
Chadbourne & Parke
Dickstein Shapiro
DLA Piper
Dorsey
Drinker Biddle
Duane Morris
Foley & Lardner
Goodwin Procter
Greenberg Traurig
Haynes and Boone
Jones Day
Mayer Brown
McDermott Will & Emery
McGuireWoods
Morgan Lewis
Nixon Peabody
O'Melveny & Meyers
Orrick
Patton Boggs
Pepper Hamilton
Perkins Coie
Pillsbury
Proskauer Rose
Reed Smith
Seyfarth
Sheppard Mullin
Shook, Hardy & Bacon
Sonnenschein
Steptoe & Johnson
Sutherland
WilmerHale
Womble Carlyle

To me, the most amazing thing about the survey is the simple fact that so many high-level decision-makers from multi-million and multi-billion dollar firms participated in this research.  All will receive a free copy of our report, but it wasn’t because they wanted to save $395 that they took the time.  They took the time because they feel strongly about these issues and saw the survey as a way to advance their firm’s initiatives in this area.

I recently discussed some of my initial findings with an AmLaw 100 CMO who had not participated in the survey.  He skeptically asked whether a self-selected group of volunteers could provide good data about general trends.  As a recovering Ph.D., I said the sample may or may not be “good” in the eyes of the National Science Foundation, but there can be absolutely no question that this is the best data that is currently available, based on the richness of the interviews, the number of firms that participated, and the seniority of the respondents.

As mentioned in my August progress report, participants had complete editorial control over what was released.  All quotes will be anonymous, and no statement will be linked to any particular firm. 

Lawyers are accustomed to protecting clients’ confidentiality and sharing little information.  This discretion and even secretiveness is at the heart of law firm culture, and often carries over when firms are asked about how they conduct business. 

Our survey provided a platform that made it easy for firm leaders to communicate openly with clients and with colleagues about this important topic, without being quoted by name.  And it worked.  You can see that not just in the seniority of the people that we were able to interview, but also in the frankness of what they said.  A sample interview from one chairman will appear in this blog next week.

We are just starting to analyze the responses, but this survey has already proved something that I have suspected for a long time: there is an enormous amount of alternative fee progress and innovation going on at AmLaw 100 firms, beneath the radar. 

If I were to rank firms on their alternative fee innovation based on their replies to this survey, the list would look very, very different from the lists I’ve seen based on published articles.

But I won’t be publishing any lists comparing firms, because that wasn’t the purpose of the research, and all interviews were confidential.  The report I publish in December will describe a wide range of opinions about how alternative fees are being used now, and how they will be used in the future.  The table of contents is likely to evolve as the data is analyzed.  Here is our working draft:

Executive summary
About the survey
    Background and goals
    Defining alternative fees
    How participants were selected and interviewed
    Who participated?
    Alternative fee use
An idea whose time has come?
    Historical perspective
    Differences between practice groups
    Estimating the percent of AmLaw 100 revenue from alternative fees
    Measuring the percent of each firm’s revenue from alternative fees
Bidding strategies
    Sharing risk
    The aggressive approach
    The conservative approach
    How firms manage the bidding process
The most common types of alternative fees
    When to use alternative fees
    Differences of opinion about shadow billing
    Risk collars
    Portfolio fixed fees
    Fixed fee menus
    Fixed fees for a single engagement
    Retainers
    Holdbacks and success fees
    Full contingency arrangements
    Fee caps
What do clients want?
    Do most GCs want true alternatives or hourly discounts?
    Lower cost
    Predictability
    Reduced time
    Other goals
Advice to in-house counsel
    How to improve RFPs
    The need for information
    The need for partnership
    The need for trust
    What else can General Counsel do?
Advice to law firms
    Benefits of alternative fees
    Marketing
    Lowering cost
    Defining scope
    Increasing efficiency
    Maintaining quality
    Maximizing profitability
    The need for matter management
The future
    Differences of opinion about the coming change
    Increasing differentiation between firms
Recommendations
    For in-house counsel
    For law firms

If you would like to pre-order a copy of the final report today, we will send you the survey directly from the printer, the day it is released in December.  We will also send you a PDF preview of key conclusions in October.  The total cost for the final report and the PDF preview is $395.  For more details and an order form, see the alternative fees section of our web page or Download LegalBizDevSurveySummaryZ.

Should law firms spend more on business development?

If you’ve been reading this blog for a while, you know my answer: Law firms that want to survive in an increasingly competitive environment must indeed invest more time and money in business development.

But don’t just take my word for it.  Consider what these experts are saying:

In the last few months, law firms have become increasingly aware that training lawyers in marketing and business development is a key way to drive business....Business development is one of the few marketing areas where law firm executives are most willing to increase spending. Nearly 70% said they planned to provide more marketing coaching to lawyers.

--Wall Street Journal, May 20, 2009

71 percent of law firms responding to a major survey plan to expand their business development efforts this year, despite a recession that has driven them to significant cost cutting measures, including layoffs.

--Incisive Legal Intelligence Fifth Annual Law Firm Business Development Practices Survey

While general branding campaigns may be less of a focus right now, marketing initiatives such as business development training still remain popular, law firm marketing executives say....The value of a new web site or brochure can't be measured in dollars, but business coaching and training for attorneys can be more clearly converted into money.

--AmLaw Daily

Of course, it’s not at all surprising that law firms would ramp up their business development efforts. After more than a decade of consistent growth, profits plunged in 2008 and layoffs and pay cuts followed close behind. Once the work stopped falling into their laps, a realization set in: attorneys don’t know how to market. They need to be taught business development skills -- and fast -- in order to hold on to existing clients and meet prospects.

--Leigh George

…one of the characteristics of most of the law firms that are now in deep trouble is that they badly under-invested in the development of business, marketing, and practice management skills in associates.

--Norman Clark

Executive coaches report steady demand for their services despite the recession....In a down economy, it’s particularly important to have someone on your side. Instead of 10 client opportunities this year, there might be five. You have to make each one count.

--Wall Street Journal, August 25, 2009

Lawyers have time on their hands, so put it to good use with increased focus on client development, client teams, and appropriate business development training.

--Hildebrandt Special Client Advisory

My thanks to Craig Brown for calling my attention to several of these quotes.  To be honest, Craig is a competitor.  But he’s one of the best.