New research on client value and law firm profitability
A few weeks ago, I began interviewing AmLaw 100 chairmen, managing partners, and senior partners and staff for a study entitled: “Client value and law firm profitability: Insights from AmLaw 100 leaders.” This new research is exploring what works best in today’s legal marketplace to protect profitability, and what does not. Our goal is to provide clients and others with advice on how to achieve greater value in a sustainable way that makes business sense for both sides.
Research on topics like this is usually conducted with questionnaires distributed over the web. In contrast, this study is based on confidential in-depth interviews with law firm leaders. It is a follow-up to our widely quoted LegalBizDev Survey of Alternative Fees, which used a similar approach a few years ago.
I am conducting every interview myself, in an open-ended discussion of what works and what does not, focusing on the areas of greatest interest to each firm. The interview questions are sent in advance, and telecons are strictly limited to 30 minutes, unless a participant wants to talk for longer.
The name of every individual who participates in the research will be confidential, and all quotes will be anonymous. In addition, participants will have complete editorial control over what appears in print. Each will be sent a transcript or summary of their interview before anything is published, and will have the option to change any details or wording before publication, or to withdraw from the study.
When this confidential approach was used in the LegalBizDev Survey of Alternative Fees, it enabled senior decision makers to speak frankly and openly. That research provided a platform that made it easy for firm leaders to tell clients and others what they really think, without being quoted by name.
This study was designed with the help of the LegalBizDev Research Advisory Board, eleven thought leaders in the field:
Toby Brown, Director of Strategic Pricing and Analytics, Akin Gump
Tom Clay, Principal, Altman Weil
Vince Cordo, Global Director of Client Value, Reed Smith
Lisa Damon, Managing Partner, Seyfarth Shaw
Stuart Dodds, Director of Global Pricing and Legal Project Management, Baker & McKenzie
Sam Goldblatt, Partner, Nixon Peabody
Jim Kalyvas, Partner, Foley & Lardner
Kelly Milius, AFA Professional Support Lawyer, Perkins Coie
Richard Rosenblatt, Operations Partner – Labor & Employment Practice Group, Morgan Lewis
Michael Roster, Co-Chair of ACC Value Challenge Steering Committee and former Managing Partner LA office, Morrison & Foerster
Amar Sarwal, Vice President and Chief Legal Strategist, Association of Corporate Counsel
The final report of the study’s findings will be published next year. It will include a list of the AmLaw 100 firms that chose to participate in the research, but it will not name the individuals who were interviewed. After an initial analysis of results, a decision will be made about whether to extend this study to include the AmLaw 200, or to complete a separate study of the AmLaw second hundred at a different time. Previews of the report will also appear from time to time in this blog.
I’ve only completed a few interviews so far, so it’s much too early to be talking about trends. But when I asked people about the relative importance of our eight key issues in legal project management, I’ve already been surprised by the emphasis on the need for better communication. Yes lawyers need better budgets and better risk assessment and better engagement letters, but most of all they need to talk to their clients.
As one senior partner put it:
Client communication is the area that requires the most improvement and the one that has the potentially greatest impact for us, even though obviously, good budgeting and good project management are crucial. [Lawyers must say to clients:] ‘Here’s what this should cost. Here’s how you can help us keep it within this cost. Here are the things that could really knock it off the rails. Let’s be sure we are in accord on some of the assumptions that are built into this budget or fix the arrangement. And then we’re going to talk to you along the way and tell you if we’re maybe getting off track.’
The Chairman of another AmLaw 100 firm made a similar point in different words:
The thing that provides the greatest value to the client is constant communication and responsiveness. And I’m not talking about emails…. It is so much better to be in constant telephone communication or breakfast meetings or lunch meetings, or just visiting. What we’re trying to do is not just deal with litigation. We’re trying to prevent litigation... If we succeed in that, we’re going to have even more clients.