208 posts categorized "Legal Business Trends"

September 10, 2014

Case Study: Update on LPM’s benefits at Bilzin Sumberg (Part 1 of 2)

Last December I wrote in this blog that “no law firm on the planet has achieved more LPM behavior change, more quickly or more efficiently” than Miami firm Bilzin Sumberg.  Since then, the firm’s LPM success has been featured by others in books and at conferences.

As explained in my book Legal Project Management, Pricing, and Alternative Fee Arrangements, their breakthroughs were built on a foundation of providing LegalBizDev’s individual coaching program to the majority of their partners (26 out of 51).  That coaching was completed in May 2013.  By then, the LPM had reached critical mass and had developed enough momentum that no more coaching was needed.  The partners themselves and Bilzin’s internal staff took ownership of moving the effort forward.

No one at Bilzin Sumberg would say that their LPM work is done.  As the chair of one AmLaw 200 firm put it in my new book Client Value and Law Firm Profitability:  “It’s an evolving process.  I don’t think there’s ever going to be a point at which you can say: ‘Now I’ve arrived.’”  But Bilzin Sumberg’s continuing experience provides valuable lessons in the best and most cost-effective ways to get started, and what happens next, so we will continue to update their results from time to time in posts like this.

Jon Chassen, a partner in the real estate group at Bilzin Sumberg, was one of the three lawyers in the firm’s original pilot test of LPM coaching at the beginning of 2012 with LegalBizDev principal Steve Barrett, and his success encouraged other partners to give it a try. Jon’s practice focuses on complex real estate deals  and on real estate deals with unusual twists. He often works closely with litigators to solve his clients’ problems, although he is not a litigator himself.

Jon says that a lot of things that he learned in the LegalBizDev coaching were similar to techniques that he had been trying to implement throughout his career.  The coaching crystallized and formalized these methods and techniques.

In Jon’s practice, LPM works best for larger transactions, where at the very outset, you need to design an engagement letter that spells out what you will and will not do for the client. “This way, the engagement letter guides the entire project. It establishes the scope of the project so that everyone in the transaction, outside lawyer and client, knows what role they will play. Then, as the transaction changes in unexpected ways, the engagement letter can be modified to reflect changing expectations.”

“Sometimes it’s relatively easy to anticipate that the scope of work will change and that the project will become larger or smaller than originally anticipated,” Jon says. “Sometimes, the changes are completely unanticipated. Either way, LPM techniques permit the lawyer and client to make changes pretty much on the run. I can now see at a glance who needs to be added to the team, who is dropping off the team, and so on. I see immediately when we’re at a fork in the road, and what the possible choices are at that decision point.”

“LPM also permits me to delegate more effectively. Since all the assignments to attorneys are made well in advance and carefully specified, I don’t need to be the funnel point on everything. If I have a lawyer working on a particular set of documents, I can trust that he or she will complete that assignment.”

“I am a bit technologically challenged in terms of creating charts and work flows. But with the use of LPM techniques and with people in the firm who can help me, I can now create these charts in a very useful manner. The chart will tell me what happens next. Who needs to get involved? LPM helps me come up with answers to those questions.”

Carter McDowell’s practice as a Bilzin Sumberg partner involves land use, zoning, environmental, and other regulatory approvals for major building projects, including regional malls, resort hotels, industrial complexes, professional buildings and marinas. Carter completed LegalBizDev’s three month coaching program in its second wave, after the pilot test.

“At the end of the day,” Carter says, “LPM is mostly about organization.”

“It enables you to step back and look at the process and compartmentalize it. It also enables you to look at it in the largest possible sense, from the very beginning.”

For one major project on South Beach that Carter has worked on, he made a very specific LPM outline of all the aspects of the project and of the budget associated with each aspect.

“We separated the project into several parts,” Carter says, “and we made several updates to each part as we went along. The government, after all, doesn’t take a linear path in granting approvals, so this LPM document has helped us plan each step. Our client used the LPM document on an ongoing basis.”

“In the South Beach project, there have already been seven hearings at which some sort of approval was granted, and two more approvals remain to be granted,” says Carter. “Each hearing is before a separate board. So the LPM document was helpful in documenting and managing the whole process.”

“We actually prepared the LPM document as soon as our client acquired the property. It was that long ago.  The client had asked us to put together a list of the most likely tasks that needed to be accomplished. So we used the LPM document to prepare that and we have updated and expanded it on an ongoing basis.”

“The firm now has sophisticated budget software (ENGAGE). On this project, the financial department staff at the firm established the outline of the document before the current software was available. So in this case, I don’t manipulate the software myself. I do receive reports from the financial people. They have been very helpful and responsive.”

“The document has led us on more than one occasion to go back to the client and to say, Here’ s a hearing that we hadn’t anticipated, so we updated the budget to include that process.”

“The LPM process is working well to enable us to provide our clients with better service at a lower cost.  Some of the procedures that we documented repeat themselves in other projects, so I can reuse this outline for other clients and efficiently tailor it to fit their needs.”

 This post was written by Jim Hassett and Jonathan Groner.

 

September 03, 2014

Tip of the month: Increase the pace of change

According to the chairs, managing partners and leaders of AmLaw 200 firms interviewed for my new book Client Value and Law Firm Profitability,the faster firms act, the more likely they are to survive and prosper in today’s increasingly demanding marketplace.  In Altman Weil’s most recent Chief Legal Officers Survey, the top three things that clients want are improved budget forecasting, greater cost reduction, and more efficient legal project management (LPM). Since LPM will help meet the first two requests, you could say the top three things clients want are LPM, LPM, and more LPM. To date, the response at too many firms has been delay, delay, and more delay.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. This month’s tip is explained in detail in Chapter 7 of my new book.

 

August 27, 2014

LPM Case Study: Loeb & Loeb (Part 4 of 4)

Livia Kiser is a Chicago-based partner at Loeb & Loeb who represents defendants in consumer class actions, primarily those that relate to claims by consumers of a defect or a false claim about a product. She also reviews product advertising in advance to counsel clients on their advertising and what is likely to be a “red flag” for plaintiffs’ counsel.

Her LPM coaching, with Michelle Stein, focused on the litigation side of her practice. 

“This training has made me more cognizant of how to create and implement a realistic budget on every matter, even one that can seem historically hard to quantify or to control, such as a class action brought by a plaintiff,” Livia says. “Even for cases which are hard to predict, I have learned how to provide more accurate budgets, not only because it is important for internal business reasons, but these days clients understandably expect it.”

“I am very interested in strategies for how we can stick to a budget.  Will this particular task really take ten hours? Should we budget it for that amount of time? These are the kinds of questions LPM causes you to consider,” Livia says.

Livia says that as a partner and lead counsel, she is also required to get involved in planning the time of other attorneys such as associates. She says many associates don’t think about these issues until they become partners.  When the issues become relevant to them, they’re not prepared. LPM, Livia says, is not only about numbers and budgets; it’s about human beings.

Livia uses Excel to prepare budget documents – just garden-variety Excel that she’s already familiar with. She receives weekly updates on her projects from Stephanie Flitcroft and also speaks with Stephanie at least once a week, if not more often.

Stephanie reports that “We provide many ad hoc reports so that lawyers can compare budgets to actuals along the way.  If there is a variance, they can determine if it was caused by a change of scope or whether some timekeeper simply didn’t understand the requested task.  This allows them to deal with issues before they get too far off course.”

Livia says Stephanie and her team are involved both in ongoing client matters and in pitching new matters. They are also extremely helpful in working on alternative fee arrangements (AFAs). “We cost out all the scenarios that make sense before we propose an AFA,” Livia says, “and Stephanie helps provide the assumptions and ideas that we need.”

The more lawyers take this approach, the easier it gets.  As Andrea Danziger explained, “We endeavor to share the actual tools and templates that have come out of the coaching program, as well as others that we’ve developed for proposal bids. This has been a grass roots effort. We’ve tripled the number of people in the program since you first wrote about it, and we want to keep going, because the more lawyers incorporate LPM into their matters, the more the ideas spread.”

What does the future hold?  According to Deputy Chairman David Schaefer, “I think legal project management is going to become one of the core business skills of running a law firm. Even in situations where we still bill hourly, every client wants to know:  How much is this going to cost? How long is it going to take? What’s involved? It may take a few years, but it will become part and parcel of how we do business. Lawyers will be comfortable having those discussions. They will expect it. And I think that you’ll see an increasing growth within our firm, and other firms, of non-legal professionals who will take a bigger and bigger portion of these tasks under their wing.”

Schaefer has also seen that the benefits of LPM go not just to clients, but also directly to the firm’s bottom line: “LPM has already protected our profitability in very significant ways. These days, lawyers are more prepared to provide accurate bids. We have better data and more reliable information. In the past, when we looked at a class of cases or of deals, and there was a fairly significant range between the high and the low, we really didn’t know why we had such a wide spread. Now we understand what the key considerations are. We can look for those at the outset of a matter, and try to address that with the client, rather than letting it catch everybody by surprise. And so I think that LPM has made our processes much, much better.”

 

This series was written by Jim Hassett and Jonathan Groner.

 

August 20, 2014

LPM Case Study: Loeb & Loeb (Part 3 of 4)

Ross Emmerman is a Chicago-based corporate and M&A lawyer at Loeb & Loeb who was coached by Fred Kinch.  Ross says that although many attorneys at the firm start out by considering LPM to be just one more thing that management wants them to engage in, Loeb & Loeb’s National Business Manager Stephanie Flitcroft has “taken the laboring oar” and helped the firm add a great deal to its capacities through the use of LPM. He is in constant touch with Stephanie and says he uses LPM tools at least twice a week.

Ross knows that the firm uses ENGAGE “behind the scenes,” but he works with easier to use Excel spreadsheets prepared by Stephanie.  (A sample format for a typical spreadsheet for a sell-side M&A transaction appeared in a previous post.)

From a practice standpoint, the most important aspect of LPM for Ross is that his sophisticated clients “understand that changes in scope are inherent in transactions” but matters still need to be on budget and on time. In comparing an attorney’s role with LPM to a general contractor’s role to a construction project, Ross mentioned that no builder would tell a prospective homeowner in advance that a new home would cost anywhere between $300,000 and $600,000; that is much too large a range and does not contain any analysis. A home builder would not be expected to have enough data to hit the number on the spot before all the variables were known, but bids would be expected to fall within a much smaller range, such as $420,000 to $450,000. In today’s marketplace for legal services, the same is true for predicting legal costs.

The essence, according to Ross, is not whether a firm uses Excel or ENGAGE or other software. What matters is the data that a firm retains and how the firm tracks and uses that data to come up with a reasonable advance analysis of the cost of each phase of a project. As a partner, he says, “I am accountable to the client,” and his ability to provide accurate estimates in advance is very helpful to creating and maintaining client relationships.

During the coaching, he not only developed more detailed budgets himself, but also sent out budget hours by task to the team members at the start of matters to get their input and buy-in. In the future, he expects that the team members will become accustomed to this process and may even be call upon to set the initial budgeted cost and time estimates.

Back in the old days, he says, lawyers simply did this by the seat of their pants, and no one knew where you were going with the deal or its costs. That is no longer acceptable. One of the reasons that better budgeting was not possible years ago was that firms did not retain their data for this purpose or kept their data in a “big lump,” with no effective way of breaking it down. Now Loeb & Loeb and other leading firms retain their data in a form that can be broken up into pieces as needed. They can then use the data “quickly and intelligently.”

Ross joined Loeb & Loeb in March 2013, and in his previous firm he had received LPM training. But LegalBizDev’s coaching was able to take him “from theory to practice.”

According to Andrea Danziger, Loeb & Loeb’s director of business development and practice management, a number of people who went through the program had similar experiences:   “Once they started working with a coach, they realized right away, I’ve been doing LPM all along. But now it’s more methodical and sophisticated, supported by new resources, including business managers, budgeting software, and the various reports that we run.  That makes lawyers much more confident to explain to clients how they will use LPM to manage a matter within budget, and communicate effectively about mutual expectations.”

This series was written by Jim Hassett and Jonathan Groner.

 

August 06, 2014

Tip of the month: Keep a written record of business development hours and progress, every week

What gets measured gets done.  Keeping a weekly list of how many hours you put into business development, and how many advances you achieved will help keep your business development effors moving forward.  Tracking behavior works for people who are increasing exercise or changing their diet, and it will work for you when you develop new business.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more information on improving results, see page 54 of my Legal Business Development Quick Reference Guide, which is now available in both paperback and Kindle editions.

July 30, 2014

Five questions to ask lawyers before they begin LPM coaching

You won’t get a second chance to make a first impression, so if your first legal project management (LPM) program is not well designed and executed, it may be quite some time before there is a second one.

We have consistently found that the most effective way to change LPM behavior and build momentum within a firm is for motivated attorneys to directly experience immediate benefits and then become internal champions who spread the word. And the most efficient way for lawyers to experience those benefits is to work one-on-one with a legal project management coach.

Who should be coached first?  We recommend starting with the motivated: lawyers who are open to new ideas and who have the most to gain. They could be the key partners who are responsible for new alternative fee arrangements. Or they might be relationship partners who are worried about protecting business with key clients who are looking for greater efficiency. Or maybe an entire practice group is considering new checklists, templates and processes to improve its competitive position.

The exact individuals and groups will vary from firm to firm. But in every case, the best lawyers to start with are those who are open-minded about change and efficiency, in a position to benefit when it works, and influential enough to quickly spread the word of their success.

That’s the model we used when we began working with Hanson Bridgett a Northern California law firm with more than 150 attorneys that has launched many new initiatives to increase client satisfaction by providing greater value, including several focusing on project management.  As Managing Partner Andrew G. Giacomini put it:  “The legal marketplace is changing, and as a result Hanson Bridgett is making a significant commitment to what we are calling 'Pricing to Client Value':  fairly pricing the creative scope of work and efficiently delivering what's most important to the client.”

Last August, we began an LPM pilot program test with eleven of their lawyers, who were split between our two most popular programs.  Five lawyers completed three months of individual coaching, and six others were enrolled in a just-in-time training program that began with a group workshop and also included one month of coaching. 

Based on the testimony of the first group, firm management was interested in expanding the program, so the firm was faced with the task of identifying the candidates who would provide the greatest return on investment.

Program leaders Garner Weng – a partner who participated in the pilot program -- and Chris Fryer – their IT Director and internal project management guru -- developed a very brief questionnaire to pick the best candidates.  When we saw the questionnaire, our first question was:  Why didn’t we think of that?  Our second question was:  Could we share it with others through this blog?

They said yes, so here are the five questions Hanson Bridgett asked, emphasizing the need for each lawyer to provide specific and concrete examples:

  1. Have you used any flat-fee or other alternative-fee arrangements in the past?
  2. Are you willing to commit at least 2-4 hours per week to your participation in this program?
  3. Describe two challenges you commonly face in managing your work.
  4. What benefits or skills do you hope to gain by participation in our project management coaching program? 
  5. With greater or improved use of project management, describe the impact or long-term benefit you hope to achieve for the firm or on behalf of firm clients.

Hanson Bridgett used the results to select ten more lawyers to begin a LegalBizDev coaching program in April.  It is a hybrid which combines the just-in-time workshop with two to three months of coaching.  We will describe the results of these programs in future case study posts.

July 16, 2014

Research update: What clients should do to increase value (Part 2 of 2)

This post previews results from my book Client Value and Law Firm Profitability, which will be published in October, and can be pre-ordered now for a 25% discount.

 

The second most important client issue raised by research participants was the need for more transparency and better communication. Lawyers are trained to hold their cards close to their vest, and there are many situations where that is exactly the right thing to do. But when clients are trying to establish a long-term partnership with a law firm, secretiveness does not help.  Here are quotes from five different firms highlighting the problem: 

The pricing and delivery process needs to be transparent. Clients and firms need to be forthright when they come to the table. The client needs to declare what they’re trying to achieve and how they want to achieve it and the law firm needs to be transparent about what they can do and how much they need to charge. It’s too often a negotiation when it should be a collaboration. You need to figure out if you can service the work in an economically meaningful way… so that we’re not trying to squeeze the last nickel out of each other.

The more information the law firm has, the better their budget, the better the flat fee. If we get really spotty information, then we’re grasping to come up with something. And sometimes you know clients have the information, they’re just not sharing it for whatever reason.

Clients have to communicate with us about what’s important to them, what they want us to do, what they don’t want us to do. Otherwise, alternative pricing becomes impossible.

I don’t hear a lot of partners or clients initiating honest and open conversations with each other. Most in-house counsel are former law firm counsel and they’re reluctant to have a candid conversation about the relationship. Not enough of them talk about their challenges and the pressures on their department, or explore openly with their law firm partners how they could work more effectively. It’s almost easier to avoid that conversation and instead get fed up and switch law firms.

Clients are as afraid as we are about bills. They have budgets and they’re worried we’re going to blow them. But they’re like us in thinking that if they don’t talk about it, maybe it will go away. When they’re willing to say up front, “Give me a scope on this. How much are you thinking?” they get better value.

A previous post about this research emphasized the importance of better project management by law firms. However, to maximize results you must increase efficiency on both sides of the table. Greater value demands that in-house departments, too, embrace legal project management.  Below are unusually frank comments from four firms that made this point (anonymously):  

When you’re working on a fixed fee or a sophisticated alternative fee, clients have to change how they deal with their outside counsel. If you’re going to do all their work for a million dollars and they keep you on the phone every day for hours with questions, they’re going to burn up all the value they could get and we’re going to be unhappy. So those kinds of things need to be real partnerships. Some clients get it and other clients don’t.

Clients, too, have to shed the restraints of thinking in billable hours. They want a deal, cost certainty, the best value. That doesn’t mean throwing everything you can think of into the shopping cart. If the client wants to micromanage and review drafts and revise drafts and do it again and get it to somebody else for revision, it makes the AFA much more challenging.

We get clients who don’t give the appropriate time for a matter, and there are a bunch of clients who are just managing the matter to reduce the fee, like insurance companies. They say they’re not going to pay for an internal meeting, which is pretty short-sighted. You need people to talk. I think some people are just trying to show their bosses they beat up their lawyer…. Clients have to work more as a team with their lawyers and not make it as adversarial as they sometimes do. It doesn’t engender loyalty either way.

Like firms, clients too can be inefficient. They can be bureaucratic and take a long time to make decisions. If it takes them 90 days to decide about a settlement, a lot of fees may have been incurred. You may have a trial date in six months, and you can’t say we’re going to take 90 days off while the client is deciding.

Similar issues came up several years ago, when I published the LegalBizDev Survey of Alternative Fees and the chair of one AmLaw 100 firm remarked:

It is very difficult for a law firm to tell a client that a matter is not going well because of what is going on in the legal department. I think we’ve all had experiences over the years with in-house counsel 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.

After reviewing a draft of this report, Michael Roster, co-chair of the ACC Value Challenge Committee, had some related advice for clients:

The most important thing clients can often do to increase value is to get out of the way. Stop micro-managing. Stop insisting on memos that aren’t important to the ultimate client, that is, the relevant business unit. Harness firms more effectively for their legal expertise. One of my former partners confirms that client cost could easily be reduced at least a third if both sides simply focused on what matters.

Each of these issues – better definitions of scope, increased transparency, and improved in-house LPM – reflects the need for clients to consider ways to improve their role and their relationships. They may also represent an opportunity for law firms to start some of the difficult discussions mentioned above. Outside counsel should try to be a little more courageous and assertive in raising these issues tactfully and repeatedly, rather than rely 100% on in-house counsel to get it on their own.

July 09, 2014

Research update: What clients should do to increase value (Part 1 of 2)

This post previews results from my book Client Value and Law Firm Profitability, which will be published in October, and can be pre-ordered now for a 25% discount.

Over the past year, I have interviewed managing partners, chairs, senior partners and executives from AmLaw 200 firms about how to meet client demands for greater value while protecting profitability. 

The 50 firms who were interviewed are listed on our web page, but I agreed to keep the name of every individual I spoke to confidential, and gave them complete editorial control over what appears in print. (In fact, participants are currently reviewing a Preview Edition of our final report, to insure its accuracy.)  This approach enabled senior decision makers to speak frankly and openly about highly sensitive issues. The research provided a platform that made it easy for firm leaders to say what they really think, since they would not be quoted by name.

Most of the book focuses on internal operations:  what has worked and what hasn’t in such areas as measuring and managing profitability, legal project management, software, new staff positions in pricing, contract attorneys and more.

But one chapter focuses on participants’ answers to this question:  “To maximize value in a sustainable way, do clients need to change the way they work with law firms?”  98% said yes they do. 

Today’s post describes the single most important thing clients should do to increase the value they receive:  Better define objectives and scope at the beginning of each matter.

However, before we begin, it is important to note that several participants noted an important caveat: the client is always right.  In fact, as one firm chair put it, these days,

Clients can do whatever the hell they want to.

A senior executive from another firm put it a bit more diplomatically:

If law firms are sitting back saying, “Well we’re in the right and we’re just going to wait it out, and clients need to be doing this or that,” I wouldn’t want to bet on that horse.

The underlying problem is that the legal profession is in the middle of a period of historic change, and both clients and law firms are still finding their way:

I think there have been some false starts in the in-house world, things that have been tried and have not really worked out.

The belief that clients have this figured out, and if these darned law firms would just get on board, everybody would be in a better spot, is, I think, a complete mischaracterization. Take a look at some of the RFPs. It’s just laughable, the questions that are being asked. We have to come together as an industry to do a better job of defining value and doing things that will help relationships on both sides.

In our view, this respondent really hit the nail on the head:

Clients only need to change if they perceive that a change is necessary for them to either reduce their cost or to improve their outcome.

That is the answer to the client-is-always-right quandary. Clients only need to change if firms can persuade them that it’s in their own interest. It puts the burden on firms to think through how to raise these issues diplomatically and persuasively enough so the client sees the benefit.

While no respondent claimed to have a roadmap for conducting these difficult discussions, the discussions below of problematic client attitudes, policies, and practices suggest that the best place to start is with this key issue: Define objectives and scope at the beginning of each matter.

In a previous post about this research, I quoted evidence that the most important thing law firms can do to increase efficiency is to start each engagement by getting a better sense of the client’s objectives and what is inside and outside the scope of a particular engagement.

The fault lies not just with law firms but also with clients who fail to spend enough time thinking through what they need vs. what they want, how much they are willing to pay for what they want, and communicating those decisions to their law firms.

As one chair put it:

If there was one single thing that clients could do to make it easier to assure their satisfaction, it would be to help me identify at the outset of the project what the client would consider to be success. What would make them smile? So many things evolve from that. How do I spend my time on that objective? How do we structure our fee arrangement so that we are providing value to the client? What sort of communication does the client want from me?

Many other respondents echoed this concern:

Often, what we’re hired to do is not clear, and so we have a lot of people sitting around, treating all of this as research of documents, and it turns out that’s not what the client really wanted. Then they change what they want.

We can certainly reduce the cost, but clients have to jointly work with us to figure out what it is they want us to do less of in order to meet their expense goals. You can’t do scorched-earth approaches to matters at reduced fees.

It’s important for clients to really understand upfront what they’re willing to spend and how far they’re willing to go. You can try to explain as things are going on, but if a client didn’t anticipate something would take so much time, it’s hard to explain it when you’re in the middle of the process.

Our biggest issues are in getting our partners and our clients to sit down to properly scope and budget prior to a project. Clients want lower cost, but they want to do it the way they’ve always done it. When you sit down and talk to a client about the practical nuts and bolts, things work out great. When our partners dismiss the conversation or the client doesn’t have time, that’s where we have some matter management issues.

Some clients understand that working with the lawyer in advance makes it easier to get what the client wants, at their price, time, and so on. Others are a harder sell. Some general counsel communicate better than others and know what outside counsel is saying. Others misunderstand, which can create inefficiency.

Next week, in Part 2, I will talk about two additional things clients should do: increase transparency about client needs, and improve in-house project management.

 

May 28, 2014

Business development best practices: Prioritize relentlessly

Since business development is more important than ever for lawyers, over the next few months I will be posting occasional summaries of best practices from my book the Legal Business Development Quick Reference Guide.  This is the first and most important.

When lawyers ask us for the single most important piece of advice in legal business development, the answer is simple: Ignore good ideas. You must prioritize relentlessly.

Before we started working with lawyers, my company coached professional salespeople. Those clients spent 60 to 80 hours per week living, breathing, and acting on sales. The lawyers we work with these days often struggle to find two or three hours per week that they can devote to business development on a consistent and predictable basis.

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. This requires relentless prioritization, and constantly returning to the question, “What should I do today to increase new business?”

For example, it’s good marketing advice to volunteer for a bar association committee. It’s an easy and enjoyable way to develop new relationships that could lead to business in the future. But it is usually better advice to skip the bar association and volunteer instead in an industry organization whose members are potential clients. That way, the relationships you develop will lead to more new business, more quickly.

Even that is probably not the best advice. For most lawyers, the best place to start is with current clients. If you would have averaged an hour per week on that committee, spend it instead on your top clients. Take them to lunch. Listen. Find out what they want. Give them more. Do things for free.

But don’t make those client lunch reservations just yet, because there are no generic answers to the question of what’s best. Maybe in your unique situation the bar association would be best. Or maybe none of these three are right for you and you need to go in a different direction.

You must prioritize relentlessly and keep returning to the question, “What should I do today to increase new business?” Place the highest priority on tasks that are most likely to yield the type of clients you want to work with, and the types of matters you prefer to focus on.

For example, I often talk to lawyers who are writing articles or books in their marketing time. As a man who spends a lot of time writing, I obviously think that writing can be a good way to increase visibility. But there are several important caveats. First of all, writing is way too much fun for some of us, and it’s easy to write things that do not serve the central marketing purpose. Second, by itself publication is unlikely to bring in new business. To be an effective marketing tactic, writing must be used to build relationships, one person at a time. (One example: send copies of your article to key contacts, each with a short written note.)  Third and most important: you must consider what else you could be doing with that time. If an article takes 10 hours to write, what else could you do with those 10 marketing hours? Would you get more results with current clients, or by strengthening relationships with people you already know?

Another example: Before a lawyer decides whether to attend a networking meeting, she should realistically assess how many hours it will require, including preparing, following up, and even driving to and from the meeting. Suppose a particular networking meeting requires an investment of five hours. She must then ask whether the meeting is the best possible way to spend that time. Would five hours be likely to produce greater results if she instead offered a free meeting to a current client to understand what they value most about current services, and what could be improved? What about sending personalized emails to 20 people she already knows, just to stay top of mind? Or re-establishing contact with a few friends from law school who now work for large corporations?

Still another example: many lawyers put considerable effort into responding to RFPs, without any realistic idea of the likelihood of success, or even what they should do to win. According to consultant Ann Lee Gibson, typical RFP 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. Does that sound like the best use of your time?

The same type of prioritization should be applied to a firm’s marketing tactics. Consider your firm’s last marketing event. What was its impact on new business? Could the firm have achieved greater results if all that time and money had been used differently? Suppose that you outlined a step-by-step sales program to build relationships with a short list of decision makers and/or industry gurus. Or suppose you had redirected those resources to support individual meetings with people the lawyers already knew, focused on broadening contacts in a particular industry segment. Would the results have been greater?

Of course, business developers in every profession ask questions like these every day. What’s different about working with lawyers is that we must ask them more frequently and more rigorously, because lawyers have so little time.

You must start with enough planning to make sure you are don’t waste your time taking people to lunch who are unlikely to ever hire your firm or introduce you to others who will.

But once a basic plan is in place it is time to come up with a list of activities and get started trying them out. Review things that have worked in the past for you, for your partners, and for other firms. Do this quickly. Because every minute you spend planning is a minute you are not following up with clients.

Many lawyers would rather read about marketing than pick up the phone and call a client. If you are one of them, you must fight that tendency, and spend as little time as you can on studying.

Just jump right in and try something. And when you do, keep a written record of what you tried, and what worked. If you track short-term activity and results, you will be more likely to follow up consistently.

Developing new business is like going on a diet: There is no sense starting unless you plan to stay with it.

 

May 21, 2014

The most important findings from Altman Weil’s new survey

What’s wrong with this picture? 

In the 2014 Law Firms in Transition Survey which Altman Weil released a few days ago, 304 managing partners and chairs of US firms with more than 50 lawyers were given a list of legal market trends and asked “Which do you think are temporary and which will be permanent?” 94% rated “focus on improved practice efficiency” as permanent, in a tie for the number one permanent change with “more commoditized legal work.”

But when the same survey asked “Has your firm significantly changed its strategic approach to the efficiency of legal delivery?” 35% said no and 26% said it was “under consideration” (code words for we have a committee that could decide any year now).  In other words, only 39% of US firms have started to take action to deal with the most important change in their profession.

If you read the entire 131 page report (which can be downloaded for free), the good news is that there are many signs that law firm leaders increasingly understand that the world has changed and they must adapt.  The bad news is that so few have started doing anything.

If you are a regular reader of this blog you will not be surprised to learn that the first section I turned to was on legal project management.  I LOVED Altman Weil’s conclusion (p. viii) so much that I will quote the whole thing:

Invest in Legal Project Management

Perhaps no other long-term initiative will do more to support staffing innovation, pricing innovation, efficient delivery of services, improvements in margin and reductions in overhead than true project management training. It’s important to distinguish between a one or two day seminar which will not produce much long term value, and a systematic, hands-on approach that instills fundamental operational change. Firms that give their people the right kind of tools and training in this area will create new efficiencies for clients, improve profitability of matters, and create significant competitive advantage.

This underlines a point we have been writing about for years: traditional training to educate lawyers to understand LPM will not change behavior, any more than understanding how to run a marathon will enable you to complete one.  Behavior change requires practice, whether it’s through the kinds of coaching programs we offer, or other real-life hands-on approaches.  The point is, you need to do it, not talk about it.

This conclusion has also been supported by our research on Client Value and Law Firm Profitability, which will be published in a few months.  When I interviewed managing partners, chairs, and senior partners and managers from 50 AmLaw 200 firms, here’s what the managing partner of one firm that invested heavily in LPM education had to say:

I think project management probably will have the longest-term positive impact, but it’s been the biggest challenge, because it’s something that hasn’t been easily absorbed by a lot of the lawyers. When busy lawyers start scrambling around, the inefficiency creeps right up.

A few years ago, traditional training in LPM became the rage in a number of firms.  Several got to put out some great press releases describing themselves as leaders of the new LPM movement. But from everything we have heard, this education had little impact on the way anybody practiced law.  What has worked is one-to-one coaching, as described in my book Legal Project Management, Pricing and Alternative Fee Arrangements.  (A free copy of the chapter on LPM case studies can be downloaded from our web page.)

Does it matter how quickly firms move to increase efficiency and provide greater value?  In our study 85% said that firms that move more quickly in providing value will gain a competitive advantage.  Some respondents thought this was a life and death matter.  As one managing partner said:

I think the firms that are most effective are going to do well, and I don’t think everybody will survive. In the last several years, there have been several firms that went away. And I believe that’s going to continue.

A senior partner at another firm put it this way:

I think the market’s going to shake itself out. I think firms that can’t deliver more value will fail.

If that’s not scary enough, there’s more.  I have saved the most frightening news for last. 

In my opinion, the most revealing question in Altman Weil’s entire research was one that was just added to the survey this year for the first time: “Which of the following is a greater driver of decision-making in your law firm in 2014: Long-term investment in new pricing and service delivery strategies to lock in your most valuable clients or short-term profitability to lock in your most valuable partners?” An astonishing 44% are looking inward at their own partners rather than outward at their clients.

As Tom Clay, the primary author of the Altman Weil survey, noted in our research report:  “If a law firm cannot attract and retain good clients, nothing else matters.” At a moment in history when so many clients are demanding more value, it can be business suicide to focus on partners before clients.

The obvious explanation is that with all the lateral movement between firms, management is afraid that if they don’t focus on partners first, big rainmakers will jump ship and take their books of business with them.

But forward-looking firms are taking a longer view.  In our study, one chair noted that in his AmLaw 100 firm some rainmakers were the very people who were slowing down progress.  As he put it:   

To be perfectly honest, some of the partners in our firm who don’t get it, don’t want to get it. They’ve got a big book of business, and they would prefer us to just leave them alone. Law firms get very nervous about this, because they worry that these big, bad actors are going to take their big, bad book of business and go elsewhere. I say “Don’t let the door hit you on the butt on the way out,” because that’s not the culture that we’re trying to build. As long as we continue to reward bad behavior, we’re going to continue to get bad behavior.

Full disclosure: LegalBizDev is a strategic alliance partner of Altman Weil.  More disclosure: I began praising their annual surveys several years before we formed that relationship.