General business development issues

Report: Top growth strategies for law firms for the next three years

Last week saw the publication of the 14th edition of CommBank’s Legal Market Pulse report for 2021. What I recall starting out as a quarterly, then half-yearly, report, now looks to be permanently set as an annual publication (feel free to do a search of my previous posts on the CommBank report to see some of the history behind this).

Anyhow, the overriding message of this year’s Report is that the pandemic had little affect on overall profit growth at most Australian law firms (probably as a result of dramatically reduced costs). And with year-on-year median 12.1% growth in profit, on first look it appears that the profession is going great guns. Which, as someone who advises to the profession, is great news!

But where do law firms think growth will come from over the next 3 years?

How Australian law firms are looking to grow over the next 3 years?

Looking at page 11 of the Report, Australian law firms will primarily look at the following 11 ways to grow their firm’s revenue over the next 3 years:

  1. Marketing and business development activities
  2. Lateral hires from competitor firms
  3. Adopting new technologies
  4. Building/expanding referral networks
  5. Cross- and up-selling strategies
  6. Increasing fees
  7. New models of service delivery
  8. M&A activity
  9. Graduate intake
  10. Boutique/niche practices
  11. Diversified or non-traditional legal services
(more…)

From 996 to 1075 and a cap on billable hours – what’s going on?

If you missed it, last week TikTok owner Byte-dance announced that it was moving its employees away from their 996 work week to a new 1075 work week.

For the uninformed, which included me until last week, 9-9-6 required Byte-dance employees to work from 9am to 9pm 6 days a week. A time schedule that would make most lawyers blush. Fortunately for Byte-dance employees, their new – light-on – work schedule is 10-7-5, or from 10am to 7pm 5 days a week.

Clearly a step in the right direction when it comes to employee well-being and mental health.

Anyhow, I comment on this for three reasons:

  • First, Legal Cheek recently published a post that revealed the average working hours of junior lawyers in the UK. Of the 2,500 junior lawyers surveyed, junior lawyers at Kirkland & Ellis racked up the longest average working day, clocking on at a tardy 9:14am and off at 11:28pm. The survey is silent on whether this is a 5, 6 or 7 day week. I recommend you take a look at the full list, makes for rather sad reading (if junior lawyer mental health really is an issue of concern for the industry)
  • Second, last week the New York State Bar Association Task Force on Attorney Well-being suggested that there be a cap on billable hours at 1,800 hours per year.

The announcement had no less than Roy Strom comment on Bloomberg Law that:

Firms are too scared to impose a cap because it would be hard to hire the number of additional lawyers the cap would require. It would also put a huge dent in profits.

And

The billable hour serves as something of a measuring cup ambitious people pour themselves into. The unfortunate truth about Big Law is that it doesn’t have many alternative definitions of success.

If Roy’s comment is right, and it is an unfortunate truth that Big law has little alternative but to measure success by the amount of hours billed then, in my view, that is a really sad reflection of our industry. Because surely other metrics, such as the quality of the work provided and client satisfaction should have equal weighting. Not to mention churn and retention rates.

  • My third and last reason for commenting on all this is a personal one. I have long said that asking lawyers to work 2,000+ billable hours a year wasn’t a good thing – and there must be a reason why that is my most read post, so there is some comfort in seeing such an esteemed group as the New York Bar Association finally agree with me.

Have a great week all.

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Photo credit to Nathan Dumlao on Unsplash

‘5 Tips to deliver exceptional client services’

The Legal Marketing Association (LMA)’s Strategies + Voices blog has some great insights into what clients’ value in a recent post (16 September 2021) – ‘5 tips to deliver exceptional client service’ by Natasha Tucker.

The post starts out by stating that:

the tips shared are based on internal client feedback interviews and discussions conducted by the author with companies in the oil and gas, chemicals, banking and telecommunications industries in North America.

And the 5 ‘tips’ are:-

  1. Care and Connection
  2. Trust and Honesty
  3. Price and Value
  4. Experience and Expertise
  5. Team and Resourcing

I’l go on record as saying I thought Tucker’s post was excellent. It turned my mind, however, to whether we in Australia would consider the same criteria as being critical to the delivery of exceptional client service?

So here are my thoughts:

  1. Care and Connection – absolutely spot on. Here in Australia this would come under the banner of ‘responsiveness’, but many of the points Tucker makes are echoed in Australia.
  2. Trust and Honesty – I would say this is a given here in Australia and not really talked about too much. Which is to say, in my experience, clients here don’t see trust and honesty as playing a big part in the perception of excellent client service delivery – because without it, you ain’t my law firm!
  3. Price and Value – I struggled with this one because clearly price is important. And many would argue it is critical to the perception that the client has received good value. But here’s the thing, in Australia ‘price’ is an after-fact – the lawyer’s invoice comes after the deal is completed. So while price certainly plays a retrospective role in whether the client received exceptional client service, it is not a real time barometer – the client could believe they were getting excellent service until they receive the invoice and see how much they paid for that service! So I’m going to disagree with this one.
  4. Experience and Expertise – again, I think this is increasingly a ‘given’ here in Australia. Sure it will have some effect on the delivery of client service, but the cases where it does will largely be the 1 to 2% of ‘top-end’ matters.
  5. Team and resourcing – absolutely critical.

Noting that it is easy to be critical without being helpful, here are a couple of issues that I see as being of increasing importance in the delivery of exceptional client service here in Australia:-

  1. Technology – increasingly clients want your technology to talk to their technology. If they want a Teams meeting and you say your internal systems only allow you to do Zoom meetings, they get frustrated. They are not getting exception client service. Likewise, while ‘client portals’ were all the rage 10 years ago, clients today want this information delivered in their tech echo-system and do not want to have to log-on to your platform to access this.
  2. Process – linked somewhat to technology, clients today look for clear processes from their firms. For example, large institutional clients want one bill per month – not 20 different bills for each of the various internal service lines in your firm that may have acted on their matters. Process however extends to other areas, such as Legal Project Managers, Client Account Managers – so-called ‘non-lawyers’ who can keep the lawyers honest and on track.
  3. Values – increasingly clients want to work with law firms who share their values, and they see this as part of the client service delivery. For example, if the client is passionate about the environment and your law firm doesn’t have a stance on this issue, then you’re likely going to have some issues. In short, in my view, the days of firms saying what they stand for has nothing to do with the service they provide are over – what you stand for is very much a part of the service you deliver in 2021!
  4. Mentorship – clients have always enjoyed working with law firms that are able to mentor the in-house team. What’s changed is that these days this is a formal – out in the open – discussion; and it includes the tough discussion about how law firms manage their own internal mentorship, staff wellbeing and overall happiness.
  5. Retained knowledge – this is a critical one to me. Most law firms have worked with clients for longer periods than the in-house legal team has. Their time with the client either pre-dates the creation of an in-house team or else General Counsel at the in-house team has moved on and that information has been lost. I cannot over emphasis therefore how important private practice law firms can be as the font of knowledge (for legal matters) for their client. But here’s the thing, at this level you are commercial confidants and so relying on legal conflicts as the rationale as to why you can act against a client will sure as Hell kill and perception of ‘exceptional client service’!

As always, the above represent my own thoughts and would love to hear yours in the comments below.

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This week’s photo credit is to Rohan Makhecha on Unsplash

Report: ‘Five simple steps to transform your firm’

Last week I spent some time reading Macquarie Bank’s recently published ‘Law 2024: the future of legal business’ report.

Overall it’s an interesting read and probably worth 45 or so minutes of your time (lots of graphics should mean it won’t take that much longer of your time), but it was the last section on ‘Five simple steps to transform your firm’ (which funny enough has very few graphics) that really grabbed my attention. I thought they were useful tips/insights to keep in mind, so I thought I would share them here:

  • Assess where your firm demonstrates value to clients – understanding where you provide value to a client will inform how you create a sustainable business model.
  • Implement innovative practices – finding opportunities where you can innovate processes within firms will keep it competitive over the long-term.
  • Harness the power of data and analytics – having a better knowledge of where your firm spends its time will help in understanding where potential client value can be added.
  • Construct, and embrace an employee value proposition – having a central purpose will go a long way towards unifying four generations of employees at very different stages of their careers.
  • Embrace diversity and inclusion – bringing a variety of perspectives to your firm will help in retaining your team at a time when loyalty is at premium.

Take a look at the report – let me know if you don’t agree with any of these or if you have any you would add, and enjoy your week!

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Photo by Nick Fewings on Unsplash

What 5 pieces of advice would you give your younger self?

My son was born 10 June 2021. Since then, I have been in lockdown for 10 weeks (just starting week 11), homeschooled all of term 3 (currently 8 weeks, start of week 9), have three children under the age of 7 at home 24/7 (including the newborn), and with two working parents to schedule this madhouse around!

All of which is to say, I have been remiss in not blogging for a while, but hopefully you get the picture.

Anyhow, during this time of madness I came across an interesting article by Bhavisha Mistry on the Legal Cheek blog – ‘5 pieces of advice I’d give to my younger self’. Bhavisha is a College of Legal Practice programme committee member trying to help out aspiring lawyers.

Bhavisha’s article got me thinking, ‘What 5 pieces of advice would I give my younger self?’. So, here goes my attempt at an answer:

  1. Expect the unexpected: Having been through the Asian Financial Crisis (1997/1998), the dot.com bubble bust (2001), SARS (2002), the Global Financial Crisis (2008) and now COVID (2019), one thing I can tell you is that the ‘unexpected’ happens on a pretty regular basis. Plan for it and always have a ‘Plan B’, because there are likely going to be more uncertain days than certain.
  2. Back yourself: If you’re starting out in this profession, you’re just about to go through some of the most boring and mundane [very long] days of your life. Having been a massive over-achiever up to this part of your life, you will now go through an apprenticeship that will make you question why you bothered. You’ll hear a lot of comments about “paying attention to detail”. All I can say is:- back yourself and stick with it. There will be challenges. There will be dark days when you question your sanity. But back yourself, because you are here for a reason – and never, ever, be willing to compromise on your personal values to please your peers.
  3. Always be willing to learn new things: While the profession of law probably hasn’t changed all that much since the days of Charles Dickens, the business of law is changing all the time. Always be willing to learn new skills that help you improve how you conduct the business of law – whether that be Legal Project Management (LPM), Design Thinking, AI or whatever fad is still to come our way. Read. Listen to podcasts. Attend webinars/seminars/conferences. And be willing to pay for this if you need to.
  4. Business Development and Marketing are important skills: Following on from 3, know how to market yourself in a P2P (person-to-person) industry is important. Look at your customer buying journey/cycle. See where you need to be and when – and that may be on LinkedIn, but equally it may be having your hair-cut on Saturday when the barber/hairdresser is busy with friendly chat. It could be talking to other lawyers (for referrals), but equally it could mean staying well from them. But having an understanding of this is critical, because it will help you with one of the most important skills you need to succeed in this business: the ability to build relationships with people – both internally [in your firm] and externally.
  5. Budgets are a joke: I’ll leave the best for last, when you start out at a firm you’ll be assigned a budget. That budget is likely going to be 4+ times what you are being paid. It is going to look like a lot of money. You a probably going to think: “If I had that much money I could buy an apartment”. Here’s the thing, these budgets are meaningless. Why do I say they are meaningless? Because at this stage of your career, you’ll have no control over whether you can achieve budget. You’ll have no control over whether you can achieve utilisation. So, if anyone from Finance or Management says you are not making budget, refer them to your supervising partner – because that’s where the buck stops!

As always, the above represent my own thoughts only and would love to hear yours in the comments below.

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“Too many kids are doing law” – 10 non-legal jobs you can do in a law firm with a law degree

In 2018, on Canberra radio 2CC, the then Prime Minister of Australia Malcom Turnbull said:

“I actively discourage kids from doing law unless they actually want to be lawyers”.

Although maybe not apparently obvious (unless you are able to tie-in the relevance of the title of this post), Mr Turnbull’s comments were in reference to the number of students opting to study law here in Australia (where law remains part of a 5 year double degree) without any real desire to enter the profession.

As someone who had gone through the (admittedly English 3-year LLB undergraduate degree) university system in the early 1990s, I once heard it said that there were more students studying law than there were lawyers with practising certificates in England and Wales.

But here’s the thing, nearly all of us who had done our research (pre internet of things days), knew it. Most of us knew that a training contract was a far-off dream, especially as Student Loans were starting to kick-in.

Many didn’t even want to work in a Magic Circle firm – high street conveyancing was okay.

So are there too many people studying law?

Almost everyone I studied law with saw a law degree not only as a path to practising law but also as both an intellectual challenge and a gateway degree to better opportunities.

When considering that remark, keep in mind this was an era where having skills like a university degree (let alone one in law) allowed us to go overseas and work/travel (in my case that was 12 years in Asia and 14 years in Australia and I have still yet to see the inside of a court in England and Wales in any professional capacity).

So why am writing about all this now?

A couple of weeks ago The Law Society Gazette (England and Wales) wrote an article titled ‘Quarter of law grads face unemployment after university‘.

To which I posed a question on social media:

‘Do universities have a duty of care to ensure their students have real work prospects before accepting them onto their undergraduate program?

I think they do, but from many of the responses I received others think otherwise.

Maybe it’s a generational thing, but I believe that if you pay 10s if not 100s of thousand of dollars to do a 5-year undergraduate degree in law, you should have some level of reassurance there is a reasonable chance you can actually be a lawyer. After all, on grades you should be in top 5% or so of students in the country.

10 ‘non-legal’ roles you can do in a law firm with a law degree

On the chance you do happen to do a 5 year law degree, don’t want to be a politician/diplomat and actually want to work in a law firm who aren’t offering you a Training Contract, then here’s my list of 10 alternative ‘non-legal’ roles you can do in a law firm with a law degree:

  1. Management (COO, CEO)
  2. Business Development/Sales
  3. Marketing
  4. IT/Lawtech/Innovation
  5. Pricing
  6. LPM
  7. Legal Design/LPI
  8. KM/Precedents/PSL
  9. HR
  10. Learning & Development

(NB: the use of ‘non-legal’ here is deliberate)

As always, the above represent my own thoughts only and would love to hear yours.

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What does the future hold for the role of legal secretaries in the modern law firm?

Over the past few weeks I have been reading, with some concern, the level of redundancies being made of legal secretaries at law firms around the world. It’s almost as if COVID has proven this role to be surplus to requirement. And with the recent growth in voice transcription services and other technology related advancements, along with a growing desire (read: “at long last they trust us”) to work from home within the profession, this trend – in team restructuring – should probably not be too surprising.

Yet I’m very concerned with the direction this is taking.

Why?

Well, in part, on the issue of legal secretaries being asked to take redundancies, a spokesperson for UK-based for Dechert recently told The Law Society Gazette that:

‘To better support our clients and lawyers we are restructuring our secretarial support function in London to a hub model which will include more specialised skills.’

While I support this firm’s attempts to retain as much of its ‘secretarial support’ (read full article to see that) as possible – and while this firm’s comments on the issue of secretarial redundancies are by no means unique to it, I also think everyone commenting on this may be missing a fundamental point in the role legal secretaries play in law firms.

For those of you who may not know it, I have been a bit of a journey-man during my 25 years in the profession. During that time I have worked in-house at 8 different law firms across Australasia. These firms have varied in size and reach from large international law firms to local national firms. I have also consulted, at varying points, to dozens of others. And in all these firms, the legal secretaries have shared common traits – many of which have transcended what might be considered a ‘traditional’ (if there ever was such a thing) secretarial role.

In my experience , these have included being:

  • practice group/service line/team manager
  • receptionist
  • book-keeper
  • time entry keeper
  • finance officer
  • accounts payable clerk
  • accounts receivable clerk
  • debt recovery agent
  • marketing consultant
  • business development advisor
  • human resources office
  • people and culture officer (leave dates anyone?)
  • events officer
  • hospitality (coffee and lunch) manager
  • laundry collection point
  • massuer
  • mental health therapist

There are so many other roles I could add to that list – not least of which is ‘mentor’ to the junior lawyers of today who will be their bosses of tomorrow – but I think you get my point.

Legal secretaries are front-line. They are font-line so far as clients are concerned – because that’s essentially who the client talks to 90% of the time. They are front-line for anyone working in the business of a law firm because, frankly, you will never get access to a partner without going through their secretary.

More importantly, the role of legal secretary is the engine room of a law firm. They have retained knowledge of the firm and its relationship with clients that transcend lateral partner movements and succession plans.

Redefine the role description, absolutely. Make it redundant- NEVER!

As always, the above represent my own thoughts only and would love to hear yours.

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Photo credit to Daniel McCullough on Unsplash

Two graphs chart the rapid ascent of the Legal Operations role

There’s a saying that overnight successes take 20 years to happen. I generally agree with that; it is rare indeed to come across a true overnight success. With the incredible ascent of the Legal Operations role within the legal ecosystem over the past five years, I am, however, willing to make an exception to this saying.

Background

CLOC – the Corporate Legal Operations Consortium – was co-founded by Mary O’Carroll and Betsi Roach in 2016. From my background reading I understand Mary and Betsi started CLOC as quasi book club membership group for quirky people with a legal operations title or elements of legal operation within their role.

Within a very short period of time, CLOC had set parameters around what they called the ‘Core 12’ skill-sets/roles of a Legal Operations professional. These include:

  1. Business Intelligence
  2. Financial Management
  3. Firm & Vendor Management
  4. Information Governance
  5. Knowledge Management
  6. Organization Optimization & Health
  7. Practice Operations
  8. Project/Program Management
  9. Service Delivery Models
  10. Strategic Planning
  11. Technology
  12. Training & Development

So far, so good. Nothing too exciting about this.

Legal Operations: Where are we today?

‘Fast’ forward (if you can) six years and CLOC and the role of Legal Operations has a massive global footprint, as evidenced by the release of two reports in that past month that clearly highlight the rapid ascent of this role within in-house legal teams.

The ACC Graph

The first was the ‘2020 Legal Operations Maturity Benchmarking Report‘, published by the Association of Corporate Counsel (ACC) in partnership with Wolters Kluwer Legal & Regulatory.

This Report contains the following telling graph – the massive increase in the percentage of [legal] departments with at least one legal operations professional.

Take that graph in for a second.

Now let’s give it some context.

In 2020, just before COVID, when discussing CLOC and its role in ‘Episode 27: Legal Operation is it the new legal business game changer‘ of The Legalpreneurs Sandbox, the panel of presenters at the Centre for Legal Innovation (lead by the wonderful Terri Mottershead), took the best past of an hour explaining who CLOC where and what the Legal Operations role was.

This is in no way a negative comment on the Centre – far from it. They are a leading edge think-tank of highly knowledgeable people talking an audience that know what is going on at the forefront of legal innovation.

Frankly, they’re a clever bunch.

And yet, even for them, the ascent of this ‘Legal Operations’ role was – not to put too fine a point on it – mind-blowing.

The Gartner Graph

So we come to the second graph, which comes from a Gartner report that I read earlier today.

Again, this graph blows my mind. But, in this case, so far as I am concerned, the mind-blowing detail isn’t in the astronomical rise of Legal Operations role (which I think relies heavily on the ACC graph above), as it is in the number of so-called ‘non-lawyers’ who are doing this role.

If the growth in that yellow box doesn’t have you shaking your head, go back and take another look at the skill in CLOC’s Core 12 above. Then tell yourself that a ‘non-lawyer’ is in charge of those skills.

So what does this mean for law firms going forward?

The honest answer is, I don’t know.

I have yet to to decide exactly where the role of Legal Operations fits. Clearly this is an important role that will have a significant role to play in the day-to-day running of a legal team. But how do the tasks of Firm Vendor Management, Service Delivery Models and Strategic Planning fit with the role Procurement plays?

Truth is, I don’t yet know.

What these charts do show me though is that the role of Legal Operations here is to stay. We best get used to. And we best get used to working with them. So make sure it a discussion topic within your firm. And, I suspect you will actually be seeing this role playing out in your firm – with a ‘non-lawyer’ in charge!

As always, the above represent my own thoughts only and would love to hear yours.

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Survey clearly shows law firms who their biggest competitor really is – their client!

I have long held (see this post from September 2017 [‘Do you know who your competitors are?‘] and this post from July 2014 [‘5 steps to take when you client becomes your biggest competitor‘]) that in a hyper competitive legal market, your client – and not any of your more traditional law firm competitors in private practice – is actually the biggest competitor you face when trying to win new work.

Given this, it should come as no surprise that I found the graph below in the recent (September 2020) Gartner publication ‘2021 Legal Planning & Budgeting – Preview: State of the Legal Function‘ of interesting:

Take note all you private practice lawyers, in a three year period between 2018 and 2020, ‘The ratio of legal spend in-house vs outside‘ moved from 50.2% / 49.8% in 2018 to 57% / 43% in 2020.

That equates to a 13% swing of legal spend in-house over this timespan.

In a period when legal spend on outside lawyers actually grew! (Probably providing a false sense of security!).

And, these numbers pre-date COVID. So it is highly likely this movement of work in-house has, and will continue to, grown.

So, next time your firm is doing a SWAT and/or Competitor Analysis, make sure to keep some room for the biggest competitor out there – your client!

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Happy Australia Day

Happy Australia Day for all of us who celebrate it.

For this week’s post I thought I would share with you a quote from the recent ‘2021 Report on the Legal Market‘ by Georgetown Law and Thomson Reuters:

“One of the most effective strategies for managing the costs of external [legal] services may, however, be tied to a significant change in the organisation and management of corporate legal departments themselves.”

For those of you out there who think this presents a great opportunity for law firms, I refer you to this post and to this.

Have a great day – enjoy the bbq, and most importantly stay safe!

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