« September 2008 | Main | November 2008 »

6 posts from October 2008

October 29, 2008

Roundtable report: Harvard Law and current trends in the profession

This month’s meeting of the Boston Legal Business Development Roundtable was the first time we invited an outside speaker.   Seven senior business development professionals from Boston’s largest firms talked with Dr. David Nersessian about his work as Executive Director of the Harvard Law School Program on the Legal Profession, and discussed recent trends as viewed from the academy and from the trenches. 

We began with a discussion of associates:  what, if anything, should law schools do to prepare them to develop new business?  And our answer was... well, there was no simple answer.

Law firms have wildly different ideas about how associates should be involved in developing new business, or even whether they should.  At one extreme, some firms see business development as the single most critical skill in any associate’s long term success.  At the other extreme, some firms honestly don’t want associates to think about business development, or anything else that distracts them from generating more revenue.  If an associate is billing 2400 hours, and encouraged to bill more, when exactly is she supposed to be developing new business?

For firms that do want associates developing business, law schools provide poor preparation.  In fact, some at our meeting said law schools don’t prepare associates to do many of the things that matter in their careers.  As one participant put it: “The irony of even a top tier legal education is how little it teaches about real world business issues, or core sales and marketing tools such as networking, asking probing questions that uncover pain, pipeline development, or building a brand--all skills that are arguably important to succeeding in a leading law firm in today's world.  Add that to the increasingly challenging economic model--higher associate salaries and less willingness among many leading clients to pay for their services--and you have some serious questions about the value early associates bring at all...they're highly compensated but ill equipped to develop or serve a market that doesn't want to pay for their services.”  (Note:  Every Roundtable participant reviewed this draft for accuracy before I posted it.  However, as in earlier blog posts about this Roundtable, I am not naming the individuals I quote, to protect confidentiality, and assure a frank and open discussion.)

“Associates have not been trained to understand their clients’ true needs,” said another, “and we lawyers see the world in narrow terms, with shadows everywhere.”  Clients don’t want to spend money preparing for highly improbable risks or theoretical complications.  They want someone who will take a hard headed, cost-effective approach to the most critical risks, and lawyers are not trained to think this way.  If I controlled the way lawyers are trained,” said one person, “I’d teach them how to put themselves in the shoes of the people who hire them.”  (I thought this comment was absolutely on the money, and it inspired me to buy a psychology text on how to train people to increase empathy.  More about that in a future post.)

There was also a discussion of the lowering of trust between partners and associates.  In the good old days, not that many years ago, an associate who started at a large firm had a reasonably good expectation of either staying there for life and being made an equity partner in seven years or so or moving on to a great position with a client or another firm.  These days it can take ten to twelve years to make partner in many firms, and the percentage of people who actually do so is way down. 

Then again, it is human nature to reminisce about the good old days.  The idea that the law used to be more of a profession and less of a business “probably could be traced back, generation by generation, to English practitioners in 15th century Chancery courts."  But as Miles Davis famously put it, “The world has always been about change.”

And there is no question that this is a time of change.  It’s no wonder that partners pay too little attention to associates.  Partners have their own problems.  What once felt like lifetime tenure can now be challenged by de-equitization, layoffs, or even the dissolution of firms with hundreds of lawyers and a century of history.   In a profession that is more mobile than ever, it is hard for anyone to find the time to build relationships

“The business model of many law firms is not aligned with the needs of clients,” said one participant.  Law firms make money by billing more hours.  A large litigation matter can create a feeding frenzy, in which firms create a money tree by throwing every available lawyer at the problem.  In a global market, clients need to cut back on legal costs, and also get more predictability in fees and general counsel are under enormous pressure to manage external firms.  The low trust that exists between associates and partners also exists between clients and their firms. 

One way or another, law firms must find better ways to understand and meet the needs of their clients.  Some data that will help will soon be released by the Harvard Program whose Corporate Purchasing Product, is the first academic study of “the ways in which S&P 500 legal departments assess, procure, and manage outside legal services.” The Program's research team is analyzing the results of “in-depth, 90+ minute interviews” with 45 general counsel in four key industries with significant legal needs (investment banking, commercial banking and savings, pharmaceutical and medical manufacturing, and petroleum), as well as detailed answers to written surveys completed by the chief legal officers of approximately 25% of the S&P 500 companies. 

When the results are released a few months from now, you will be among the first to know.

Announcing Train the Trainer workshops in December, February, and April

Do you help lawyers develop new business?  To increase your impact in these challenging economic times, sign up for our Train the Trainer workshop and learn how to adapt proven tools and techniques to your firm’s culture and needs.

Last June, we offered the first public Train the Trainer workshop in the legal marketing profession.  It sold out.  In September, we offered the second.  It sold out too.  So now we have scheduled the third, fourth and fifth sessions: by webinar December 10-11, by webinar February 3-4, and in Washington DC April 5. 

For details, download this file: Download TrainTrainerWorkshopAnnounce2008MX.pdf .  It explains why past sessions have been attended by senior business development professionals from firms with a total of over 8,000 lawyers.

October 22, 2008

Down economy, Part 8: What to do if your revenue goes down

Last January, I wrote a post entitled “The first thing lawyers should do in a recession.”  Now that the recession is really here, it’s time to think about the second thing to do, and the third.   This week’s post reviews a total of six steps lawyers should take when their revenue is headed down:

1. Plan for the worst
2. Commit at least two to five hours per week to business development
3. Track the time you actually spend each week
4. Start with defensive marketing to protect your current clients 
5. Increase the efficiency of your search for new clients
6. Don’t stop

Step 1. Plan for the worst

In the October 13 issue of Business Week (p. 108), Jack and Suzy Welch advised business owners to “Plan as if the downturn will be longer and harsher than you think... In a rocky environment, timidity can be very risky...”  It may be human nature to expect things to get better, but that’s not good business practice.  In terms of marketing, planning for the worst means you should assume that competitors will be trying to take away your clients, and that when you look for new clients it will take a long time. 

2. Commit at least two to five hours per week to business development

One fundamental law of marketing is that if you spend no time, you will get no results.  The best business development plan in the world will produce nothing unless you follow up, week after week after week.

As you begin a business development program, it is important to be realistic about the number of hours you will spend.  The amount of time you budget will determine what you should do, and what you should not.  It may make sense to fly to another city to meet a former client if you can average ten hours per week, but if you only plan to average two hours per week this is unlikely to be the best way to spend them.

When we coach lawyers, we insist on a commitment of two to five hours per week.  In this economy, you’d be foolish to put in less.  The more, the better.

Step 3. Track the time you actually spend each week

The road to hell is paved with good intentions, so you will need to track the time you actually succeed in devoting to business development, each and every week.  You may be tempted to track hours once a month instead of once a week.  Do not succumb to this temptation. 

In our coaching, we often recommend that lawyers work with their admins to maintain a simple spreadsheet keeping track of the totals, every single week.  That makes it much easier for lawyers to correct their course when they inevitable fall behind.

4. Start with defensive marketing to protect your current clients 

I’ve written several posts in the past about the current need to increase defensive marketing, and exactly how to begin with current clients.

Every lawyer should take these steps as soon as possible.  Even if the recession has not affected you, other lawyers are feeling the pressure, and they are coming after your clients.

5. Improve your search for new clients

This is by far the hardest item on the list, and could easily be the subject of another ten or twenty posts.

If you only have a few hours a week, it’s easy to waste them on the wrong activities.  For example, I have started hearing about lawyers who are using their newly non-billable time to scurry around responding to RFPs, without any realistic idea of how to win.  In my post on RFPs - When and how to compete , I quoted Ann Lee Gibson’s view that typical win rates across the legal industry are “very small, probably no larger than 5%.”  In other words, unless you know how to win the RFP game, 19 times out of 20 you will lose.

More generally, as I explained in my post on why lawyers should ignore good ideas, “Lawyers are much too busy to spend time on ideas that are only good.  To maximize the chances of success, each individual must focus on the very best ideas for their practice, their personality, and their schedule.”

The most efficient way to find the best ideas is with professional help.  Your firm has probably spent a lot of time and money building an internal marketing department.  Don’t just use them to order basketball tickets and collect resumes for your RFP responses.  Sit down with a marketer you trust and ask what they think would work best for your practice.  You don’t have to follow their advice, but it’s silly not to ask.

And if you want still more advice, consider a professional coach.  I know just the place to find some great ones

6. Don’t stop

According to Citibank, in the first six months of 2008 average hours billed per lawyer dropped 5.5 percent. Why not devote those extra hours to developing new business?

I often say marketing is the hardest work you can do in a suit, so don’t expect instant results.  But if you stay with it, prioritize relentlessly, and follow professional advice, you will get new clients.  Maybe not as many as you’d like, or as soon, but you will get them.  Who knows:  maybe the down economy will be a blessing in disguise.  Maybe you’ll find that you’re not only good at this, you actually like it.  The way the profession is headed, the best way to protect your future is to increase your personal book of business.

October 15, 2008

What clients want, according to Ram Charan

In the new book, What the Customer Wants You to Know, Ram Charan describes how the internet and the global economy are changing the way customers think, and what it means to people who sell. 

The basic issue is that clients “are under enormous pressure to deliver value to their clients and their shareholders.  They are compelled to use the newfound power of transparency and overcapacity to drive down prices...”  The result is that the traditional tools of business development – “long-term relationships... golf games, skybox seats, and theater outings...” – are losing their power (p. 4).

While Charan does not talk directly about the legal profession, lawyers have certainly seen these forces at work in many ways, including price pressure from procurement departments, the increasing importance of RFPs, and the unrelenting demand for increased value

To succeed in this changing game, Charan says that sellers must find better ways to help their clients.  “No longer do you measure your own success first.  Instead you measure how well customers are doing with your help.” (p. 6)  This will require a solid understanding of how your clients make money now and how they will make more money in the future. 

As Lou Eccleston, the former president of Thomson Financial, put it: “If you can’t impact the customer’s performance in a positive way, then you’re going to be a commodity product and you’re going to get commodity prices.” (p. 22)

To accomplish this, Charan says, you need to understand key clients in depth, including their opportunities, customers, competitors, and how they make decisions.  Not to mention their culture, values, goals, and priorities.

That sounds like an enormous investment of time and energy, and it is.  But in the current economy Charan argues that the only alternative is to lower your rates.  And then lower them some more, when your competitors cut theirs.

For professional sales teams, Charan recommends creating a Value Account Plan for each client that defines business benefits “in quantitative measures such as cost reduction, revenue growth and cash flow improvement, and qualitative measures such as sustainable market share and brand image.” (p. 51)

I don’t expect law firms will go that far any time soon, but the good news is they don’t have to.  In selling, you just need to be a little better than your competitors. As long as your competitors focus on maximizing the number of hours they bill associates at the highest possible rate, it should be easy to provide more value than they do.

 RamCharan1 A digression about Ram Charan:  If you are curious about the lifestyle of super-consultants, don’t miss the Fortune magazine article “The strange existence of Ram Charan.” It calls him “the most influential consultant alive,” but you could say Charan is homeless.  If that term applies to someone who earns up to $20,000 per day for his services and spends most nights at five star hotels.  Charan does not have a wife or children.  But he does have an assistant who FedExes him a box of clean clothes every Monday, Wednesday and Friday.  “They toss in toothpaste, razors, shampoo, a shined pair of 9½ EEEE shoes, whatever he needs (‘He doesn't buy anything himself,’)... the box comes back two days later filled with dirty laundry.”  Near the end of the article, Charan told the Fortune writer that he is so tired of people asking about his home that he finally got an apartment in Dallas.  But when the writer asks when Charan will move in, he replies “Maybe never."

October 08, 2008

The down economy, Part 7: A tip for legal marketers

I was saving the post below for November’s “tip of the month.”  But when I read The Boston Globe yesterday morning, I decided that it couldn’t wait. 

Maybe it was the page one headline “Worldwide Worry.”  Or maybe it was the article that said, “All around the world, you can hear the squeal of businesses putting the brakes on expenses.”  Or maybe it wasn’t The Globe at all, just the cumulative effect of the law firm layoffs and other bad news I quoted in Part 6 of this series. 

Most readers of this blog probably agree with me that when billable hours go down, law firms should increase their business development spending to maximize the results lawyers will get from their new found marketing time.   But not everyone sees it that way.  Some partners will want to cut the marketing budget, and you will need evidence to make your case.

So the tip is simple:  Collect evidence that YOUR marketing is related to new business, and make sure everyone in the firm knows about it.

If you don’t have evidence yet, start looking today.  Do what we do in our coaching.  Whenever you hear about a new engagement, say something like this:   “Business is not a science experiment so it’s impossible to prove what caused a particular piece of new business.  But what do you think?  Did our marketing have anything to do with it?” 

If they say no, move on to the next lawyer.  But when someone says yes, verify the details, then spread the word.  Write memos.  Tell people in the halls.  Whisper in the managing partner’s ear.  Use all your professional skills to market your marketing.

Now here’s a prediction to go with the tip:  The more sales training and coaching your department does, the easier it will be to find evidence that it is working.  It’s easy for lawyers to see the link between a piece of advice and new business that comes in the next week.  It’s much harder to see the link to an ad, a press release, or a web page upgrade that happened weeks or months ago.

That’s one of the reasons Mark Greene, the chief marketing officer at Nixon Peabody gave this advice when we spoke together on a panel at LMA New England a few months ago:   “I recommend that in a down economy firms put at least as much stress on sales and sales coaching as they ever have.”  (For more, see Part 2.) 

And if you want to increase the proportion of time you spend coaching, or get more results from the coaching you already do, here’s another tip:  consider LegalBizDev’s internal certification program, our external coaching programs and our other products and services.  If you’d like to know more, email us or give me a call at 800-498-7246.  

October 01, 2008

Marketing tip of the month: Meet with a top client to discuss the economy

What are you going to do this month to increase new business?

How about meeting with a top client to ask how the economy is affecting their business?

Explain that there will be no charge for your time, and make sure they understand you are giving them something for free.  Why free?  Because they are such an important client, and because you want to provide more value.

Ideally, meet face to face in the client’s office (not yours) or meet for lunch.  If that’s not practical, schedule a telecon “off the clock.” 

Go in to the meeting with a two or three central questions, and a few extras.  (For sample questions, see previous posts in this blog, my book, or The LegalBizDev Success Kit.)

Then listen and learn.

Do not try to direct the conversation to legal needs.  Your client will take care of that, if she wants to go in that direction.

At an absolute minimum, you will increase client satisfaction and accomplish some defensive marketing.  And you might even walk away with some new business.