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7 posts from June 2005

June 28, 2005

And the survey says...

Is your law firm part of the 44% that satisfies your clients, or the 56% that does not?  The numbers come from a 2005 survey of Fortune 1000 corporate counsel conducted by the BTI Consulting Group.  44% is a higher satisfaction rate than BTI found in previous annual surveys, but clearly there’s plenty of room for improvement.

The dissatisfaction goes beyond minor irritants, it is associated with changes in revenue.  Within the last two years, 52% of Fortune 1000 firms fired one of their major law firms. 

But while some law firms were going down, others were going up.  One major theme in the current marketplace is convergence:  Fortune 1000 companies are using fewer firms to meet more of their needs.  76% now rely on a single primary law firm, up 30 points in the last 4 years (46% in 2001).

I found these figures and others in the free executive summary of “The Strategic Review and Outlook for the Legal Services Industry 2005,” which I downloaded from the publications section of BTI’s web page.  If I decide to dig deeper, including “client hot spots” to “find out which industries and practice areas are the best targets – and which are not,” I’ll pay $1,800 for the complete report

(In the interests of full disclosure, I’ve never met a single person at BTI.  I just thought their survey was interesting.)

June 24, 2005

Why you should worry

There are many things you could worry about:  homeland security, global warming, the housing bubble, and what will happen to Brad and Angelina.  But worrying begins at home, so I think you should focus on threats to your law firm.

At the recent LSSO conference, Doug Hoover of Thomson FindLaw described a survey of large law firm growth objectives.  Here are the top three: 

1) grow existing clients (91%)

2) acquire new clients (81%)

3) retain existing clients (75%)

From the perspective of a professional salesperson, #1 and #2 are in the right order, but the gap between them should be larger.  It is 20 times easier to grow an existing client than to find a new one.  (Or maybe 30 times easier, or 10 times, depending on which expert you ask.)  So most firms are right that they should indeed focus marketing on existing clients, at least at first.  But if 75% of large firms are going to work hard to retain existing clients, while 81% are trying to take these same clients away, lots of people are going to waste time and money.  Then they will fail. 

Redsox2_1 If you are worried about losing clients, the good news is that most attorneys hate selling, don’t do much, and, when they do try, they're not very good.  So if you just give key clients Red Sox tickets once in a while, that could be enough.  But the bad news is that some law firms are getting better at selling, and they are coming after your clients.  I think you should worry.

June 21, 2005

Networking when you're in a rush

Everybody knows that success in law – and in every other field – requires you to network.  But what does that mean exactly?  And if you’re not a natural, what’s the best way to get started?

Keith Ferrazzi answered these questions at the recent LSSO conference, by describing  principles from his recent book Never Eat Alone, including his concept of the “deep bump.”  It’s his way of building meaningful relationships when you don’t have much time, because you need to check your BlackBerry.  The idea is to jump start a relationship by providing a “fast slice of intimacy.” It’s all about taking risks and quickly revealing something about yourself to establish an emotional connection.  Very 2005.

For a quick demonstration of its power, he asked the audience to pair off and try it.  Sadly, I was a deep bump failure.  My attempt at light-heartedness set the wrong tone.   (“I was raised Irish Catholic,” I started out, “and we don’t do intimacy well, even with our families.”)  As soon we were given an option to switch to someone else for the next deep bump exercise, my partner took it.

But hey, that’s just me.  The crowd loved it.  And I’m planning to give the approach another chance.  When I saw how much the reviewers on Amazon loved the book, I ordered a copy.

So the key to networking is the same as the key to everything else in marketing and sales:  just do it.  One book or several can be a great way to get started.  My favorite is Bob Burg’s Endless Referrals.  It’s sold 100,000 copies so far, and still counting.

June 16, 2005

No A plus's, but lots of new business

Two years ago, Akin Gump had no client service teams. Now, according to Client Services Advisor Iris Jones, they have 50 official client service teams “to serve and strengthen relationships with every key firm client through team work, service, and responsiveness.”

The process revolves around 90 minute meetings in which clients are questioned about what has been good, and bad, about the relationship.  They are also asked about what they like and dislike in other law firms.  They are given the questions in advance, so that there are no surprises.  Given time to prepare, clients have been extremely candid.

At first, some attorneys resisted the process because they felt that their client relationships could not be improved, and they did not want to rock the boat.  But “so far, no one has said you get an A plus, and there’s nothing you can improve.”  Clients are thrilled to have these teams listen to their concerns and answer their questions.

Akin Gump has already seen substantial increases in business by assuring satisfaction, and making clients aware of the firm’s expertise in other areas.  In one case, a client “was on deathwatch,” and the client service team showed up the day before they were about to move to a different firm.  They saved the relationship, and the business.

The focus is not on revenue, it’s on meeting client goals. “This is a people business, it’s all about relationships and connectedness. And “when you meet client goals, the revenue will come.”

June 15, 2005

Legal roadkill

In her keynote presentation on “The State of the Industry” at the June 2005 Legal Sales and Service Organization conference, Monica Bay said that the legal profession is undergoing a profound sea change, and over the next few years “we’ll see a lot of roadkill.”

While some attorneys still believe that “the only lawyers who sell are slimy personal injury folks,” others are grudgingly wondering if they need to do more. And a few are leading the charge into the new world of legal selling, including the firms that sent lawyers to this conference. Social forces from the internet to the aging of all the boomers make change inevitable and irresistible.

Among the effects: “The billable hour is dead.” All right, she admitted, that’s a bit of hyperbole, but the days of the three word legal bill (“for services rendered”) are definitely numbered. Clients want more transparency in bills, and more service at a lower cost. If you do not offer these things, your competitors will. General counsels demand accountability, and we are even starting to see the first cracks in the legal caste system.

One key trend: the rise of surveys to measure satisfaction, and teams to increase it.  As she summed it up near the end of her talk: “Any firm that is not doing client satisfaction surveys had better start playing more golf.”

(Monica also described the many positive effects of her blog and others, which is why I started this one the next day.)

How many hours should lawyers set aside for selling?

If you were a partner at Graydon, Head & Ritchey, the 2005 strategic plan would require you to spend at least 200 hours in direct selling.  That means meeting with clients and prospects to better understand their needs.  Marketing tasks such as writing articles or conducting seminars are not counted towards direct selling time.  The target for associates is at least 50 hours in 2005. 

In the first few months of this plan, the firm has already generated revenue from these meetings, and (almost) everyone is enthusiastic about the approach.  A more formal and systematic study will be conducted at the end of the year to count the total number of meetings, the effect on revenue, and other metrics.

When I provide coaching to insurance agents and other professional sales people, the biggest challenge for many is trying to get enough meetings.  So after her talk at the 2005 Legal Sales and Service Organization conference, I asked Connie Cook Laug if their lawyers were having trouble.  I was surprised to hear that most lawyers were getting all the meetings that they could handle, and having a good time doing it. 80% are on track to meet the 2005 targets.   

The explanation is simple:  most are building stronger relationships with people they already know.  Clients are thrilled at the unbilled meeting time and lunches, and lawyers love this kind of low key selling.  Sales experts would agree that in most firms, this is also the best place to start, since it’s a lot easier to grow revenue with existing clients than to find new ones.   It will be interesting to see what happens if they maximize market share with their current client base, and the attorneys are forced to go after cooler leads, or even try a little cold calling.

A multi-million dollar fee

In the past, Tyco used 167 different law firms for product liability cases.  About nine months ago, they switched to oneShook, Hardy & Bacon.

The good news for Shook, Hardy & Bacon is a multi-million dollar fee for the 18 month contract.  The (potentially) bad news is that it's a flat rate, with holdbacks and "a large bonus" contingent on meeting extraordinarily detailed objectives.

At this year's LSSO conference, Jim Michalowicz, Tyco's Litigation Program Manager described the process they used to pick a winner from 26 responses to their RFP.  The criteria seemed pretty mathematical to me, and drew heavily on Jim's background as a Six Sigma Black Belt.  Interestingly, the winner was one of the few firms that had not done business with Tyco before.

The benefits to Tyco are immediate and apparent.  They estimate the savings at about 30%.  They've gone from about 250 sometimes unpredictable bills per month to one perfectly predictable bill.  They also have seen evidence of other benefits, especially in reduced case cycle time.  "Cases with no merit are getting dismissed much more quickly."

The bottom line for Shook, Hardy & Bacon?  They are only half way through the deal, so it's too soon to tell.  One Tyco goal was to structure an agreement that benefits both firms, as the basis for a solid business relationship.   I have no way of knowing whether this will be acheived, but I do know that Tyco will do well.