General business development issues

“This is not just a stop-gap solution…”

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…or is it?

For the past couple of weeks, one of the most common themes I’ve been seeing about COVID-19, insofar as it relates to the legal profession, is how it has changed, and continues to change, the industry/profession. COVID-19, I’m being led to believe, is a “game changer”.

To this end, I have seen (and read) articles that I would not thought possible three to four months ago written about:

  • the changing nature of remote working in the profession, and
  • the importance of Zoom/Skype and Microsoft’s Teams,

to name but a few.

But I want us to stop here, take a step back, and ask: “Is this really likely to be the long-term outcome?

When I ask this, keep in mind that this is a profession that has fought tooth and nail to keep to the same business operating model for over 30 years (if not 100) despite having already recently lived through one of the worst global economic downturns of all time (the GFC).

So I ask: “What can we really say is different this time?

For sure we can say we have given our business continuity plans (BCPs) a tough workout. And, to be fair, I’d bet that even the most conservative of BCPs didn’t factor in a COVID-19 event.

And while we now know that most of our workforce can work remotely and, ironically enough, with the use of timesheets, we can also claim that they remain ‘productive’ whilst working from home – whatever that term may actually mean to a knowledge worker, does this truly foreshadow a change in the manner in which the industry is going to be managed?

My take is this:- while all of the above is true, it is taking place in circumstances that most of us had not predicted and many of us feel uncomfortable even being in (I’d bet there are very few people out there who are happy being locked up at home for four weeks – family or no family).

But this is a far cry from saying we will see the dawn of a ‘new normal’ whenever normality (whatever that may look like without a vaccine, which I am told is no sure thing) returns.

Because, while it’s critical that understanding our purpose is now more important than ever, and while we cannot hope to survive if we do not look to find the solutions our clients seek and need – which (as I mentioned last week) will be changing – in a post-COVID-19 world these will not necessarily bring about a change to the structure of how a law firm operates and is managed.

As any reader of this blog would know, it has been my long and strongly held view that to see real change to the business model of law, we need to start with the way in which we incentives and reward our partners and employees.

And to start this process we need to start to truly align our firm’s internal incentives/rewards to those of our customers so that we start to help create value for our customers. In short, our incentives/rewards must be aligned with our customers’ needs and incentives.

And yet nothing I have read in the thousands – possibly even tens of thousands – of words on how COVID-19 will change the legal profession has this even come close to being suggested or even discussed.

So my take from all of this is this:

If we want what we are currently going through to be truly more than a mere ‘stop-gap’ solution, if what we want from a post-COVID-19 world is true structural and ongoing change in the profession, then we need to start to have a conversation around the fact that the way in which we incentives and reward our staff is broken and worry a little less about where our staff are doing their job from.

And right now is the time to be having this conversation.

Failing which, all we really have is a stop-gap solution.

These are just my views, as always interested in your thoughts/views/feedback.

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18 questions to ask when analysing your client stickiness

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Recently I was listening to an encore episode of Season 2 of Scott McKain’s Project Distinct podcast on how to analysis your current client situation. In the podcast Scott suggests applying what he calls his ‘cub reporter’ questions to any stress test you undertake on the strength of your current client relationship, by asking:

  • How?
  • Why?
  • Who?
  • What?
  • When?
  • Where?

Applying Scott’s approach to law firm client relations has me asking some of the following foundation questions:

  1. How did the client hear about you?
  2. How well did you do when you first talk to the client about their problem?
  3. How serious are you about investing in this relationship?
  4. Why did your client need your services in the first place?
  5. Why did the client chose you?
  6. Why would they stay with you [over the competition]?
  7. Who [at the client] decides to send work to you?
  8. Who [from your firm] talks to that person?
  9. Who, from your firm, should be talking to that person [and is not]?
  10. What services [at your firm] are they using?
  11. What other services [at your firm] should they be using? 
  12. What would cause the client to change firms?
  13. When did you last talk to the client?
  14. When did the client last use your services?
  15. When is the client’s busy season (secondment opportunities?)?
  16. Where does your clients use your services (Their office? Your office? The internet? All of the above?)?
  17. Where can you improve the client experience?
  18. Where else could your clients use your services?

Hopefully a useful starting list and if you have not previously listened to Scott’s Project Distinct – a daily podcast that runs for a relatively short 10 minutes, I would like to strongly suggest you do.

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“Are you cold?” – a tale from the trenches

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Back in the mid 1990s, when I was first starting out in this profession we call “law”, I was putting my jacket on to go home. As I recall it was around 8.30 p.m., after what had been a long day. The partner I was working for at the time saw what I was doing and asked me:

“Are you cold?”

In an era when if a partner asked you to jump, you replied “how high?” – I got the message.

I sat down and got back to work.

Fast forward to today’s world

So why does this old war story from the trenches even matter in today’s world?

This story matters because of some press coverage here in Australia following recent investigations, etc, by Australia’s Fair Work Commission (FWC). The upshot of this (as I understand it, and I could be wrong) is that the FWC, rather ironically if you ask me, is looking at the number of hours junior lawyers are working to ensure they are being paid minimum wage.

As is often the case when the business of law model is under attack, the establishment fights back. In recent press coverage here in Australia this has included comments in the following two articles in the Australian Financial Review:

Long hours aren’t just for young lawyers in which John Denton (ex-CEO of Corrs) argues that:

  • lawyers should focus on what they offer clients rather than the time that it takes“,  (NB: not sure how clients being billed by the hour would take this comment), and that
  • the key as a profession should always be that it’s not about the hours, but about what the value you’re creating for your clients“, (absolutely right, but wait: how does this work with time-sheets) and that (the Great Escape)
  • You always have to be available, matters don’t come at orderly times“.

Welcome to the real world, law grads in which John Roskam (an executive director of the Institute of Public Affairs, a conservative think tank based in Melbourne, Australia – and so far as I can tell has never been a lawyer) basically says that if you don’t like being a hard working law grad or junior lawyer, then nobody is making you do it and go and go join the world of commerce where they work much harder (for the record, in my day it was the dot.com world).

So let’s put this into a little context for a second:

  • At the time of my little Are you cold? episode I worked for a Magic Circle firm and my annual billable target was 1,400 hours (1996).
  • The current version of Yale’s The Truth About The Billable Hour (which is from 2002) has it saying US firms typically ask junior lawyers to bill between 1,700 and 2,300 hours a year.
  • The Australian Financial Review recently (2018 from memory) had this number at 1,600 hours in its Partnership Review.

All of which has me wanting to say:

  • to Mr Roskam – we are not asking these kids to work as hard as we did. What we’re actually asking them to do is to work harder.  In some extreme cases, 300% harder! and
  • to Mr Denton – if billable hours really aren’t that important, and if it is all about the client, why do we even bother setting hourly billable targets that – and this is important – junior lawyers have no control over meeting and are almost completely at the mercy of their partner, consultant, special counsel, senior associate, associate, lawyer who also need to meet their annual billable targets?

And I’ll leave you with this: In case you are left wondering, it has been a long held view of mine that billable hour targets are unhealthy  and a really crappy way of working out law firm revenue budgets (side joke for the nerdy, every time someone leaves your team you have to budget re-forecast!).

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My sole 2020 prediction

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I once wrote a long blog post predicting what would happen in the year ahead (‘10 things that could happen in the Australian legal market in 2013‘). It was a train-wreck (many of these ‘future’ looking predictions we are still waiting to see 7 years later!) and I promised I would never do it again.

But I recently listened to a podcast about the role of AI and the future of “back office support” (a term I prefer to call Allied Professionals) [hint: we are all doomed to automation] in the legal industry that has promoted me to break my 7 year rule and make this bold prediction:

More allied professional jobs (Secretaries, HR, Marketing, Business Development, Finance etc) will be lost in the next 5 years to both on and off-shore outsourcing than will be lost to IA and innovation.

Now remember that my track-record is rubbish; so always interested to hear your thoughts/views/feedback.

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Is the legal industry undergoing its “Fosbury flop” moment?

Last week the Center on Ethics and the Legal Profession at the Georgetown University Law Center and Thomson Reuters Legal Executive Institute and Peer Monitor published their ‘2020 Report on the State of the Legal Market‘. This annual Report sets out the publishers’ views of the dominant trends impacting the legal market in the United States in 2019 and the key issues likely to influence the market in 2020 and beyond.

The Introduction of this year’s Report looks at ‘Incremental Improvement vs. Radical Change‘, as it might apply to the current state of the legal industry.

Drawing on the story of Dick Fosbury’s performance at the Mexico City Olympics in 1968, at which Fosbury stunned the world by setting a new Olympic record in the men’s high-jump event using a technique (the Fosbury flop) that had never been used in competition anywhere else previously, the Introduction to this year’s Report sets a great – and somewhat dramatic – backdrop to what it considers constitutes radical change against incremental change.

The Fosbury flop, without doubt, was radical change to a long held practice in 1968. But, post 1976, when all three medallist used the technique, it can also claim to be the victim of incremental improvement/change, as there hasn’t really been any great leap forward in high jump technique since.

So what has this all to do with the legal industry?

Well, it’s like this, probably since the mid-1980s the legal industry has undergone a series of incremental improvements, without really being the subject of any radical change. But, as the Report eludes, the last 12 to 18 months in the legal industry may have seen a shift here. The re-emergence of the Big 4, growth of legal tech, alternative legal service providers suggest a cusp of radical change is on the horizon (if it hasn’t already arrived).

So has it?

Well, I’m not so sure. Let’s take a look at some of the graphics in the report:

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The graphic above looks at leverage of lawyers in US firms. Aside from the ‘Midsize’ firms, where a type of diamond is forming, the AM Law 100 and 200 look like very traditional law firm pyramids to me.

1 This second graph looks numbers of hours worked per lawyer and this looks to have flat-lined since the GFC in 2008. So no real change there.

4This third – and last – graphic looks at collection realization against agreed worked and, again, has pretty much flat-lined over the past 5 years at a relatively horrid 89.5%.

Collectively these three graphics paint a rather sad story to me. There may be change in the industry. But it is far from radical. And one may argue it really hasn’t even been that incremental post 2008; with the caveat that you also need to be mindful that not all industry segments are now equal, as some are clearly more equal that others!

As always though, read the Report as I’d be interested in your thoughts/views/feedback.

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Peak Load – The Rise of the Contractor Lawyer in Private Practice Law Firms

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We have seen a rise in the use of contractors in more senior legal practitioner roles in recent years. This has been supported by firms moving to introduce their own contract legal businesses to manage fluctuations in workflow.”

Marc Totaro – National Manager, Professional Services Business & Private Banking; Commonwealth Bank of Australia

Earlier this month the Commonwealth Bank published the 2019 edition of its Legal Market Pulse. While the Report relates specifically to law firms and the legal industry in Australia, it contains a number of take-outs and trends that I believe can be applied more broadly across the global industry that is ‘legal services’.

One of these, as the quote from Marc Totaro above indicates, is the documented rise in the Report in the use of contractors within law firms themselves.

Until recently I had not seen much traction with suppliers of legally qualified contractors cracking the private practice market. Don’t get me wrong, I knew who Crowd & Co were and I had read about the arrangement between Lawyers on Demand and DLA Piper. But the actual use of contractors to back-stop in private practice hadn’t really registered with me.  Part of the reason for my scepticism here had been centred around the issue of:

Why would law firms with relatively poor utilisation rates want or need the use of contractors?

My thinking here changed though following a conversation I had with Katherine Thomas, CEO of Free Range Lawyers and  ex-Vario (Pinsent Masons). Katherine assured me – and convinced me – that the tide was changing and that law firms were now making use of access to highly skilled contractors for both locums and projects as part of their core HR strategy. And when I got to thinking about it a little more I realised that poor utilisation rates would actually be a really good reason why you would want to have access to contractors at it would give you greater flexibility in managing your teams’ resourcing.

In any event, the Commbank Report would appear to provide anecdotal evidence to Katherine’s views in that law firms are indeed making greater use of contractors. What’s probably more encouraging – from Katherine’s financial point of view – though is the fact that biggest area of year-on-year increase in usage is at the Senior Associate/Senior Lawyer (4+ years) level.

And in my view, the contractor trend is probably one of the biggest insights to come out of this Report – although others are writing a lot more around others things contain in the Report so make sure you read it!

Now if only I had been smart enough to read that market trend!

As always though, interested in your thoughts/views/feedback.

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Which would you prefer: the customer you attract, or the customer you pursue?

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This blog post is based on a #2020futureoflawthought I posted last week on social media – ‘Who pays you better, the client you attract or the client you pursue?’.

It occurs to me that law firms are much more willing – and even better resourced – to pursue customers than they are to attract them. We have dedicated pursue customer resources to hand – such as bids, tenders and pursuits teams. And we are willing to offer discounts and other ‘value adds’ to new customers that we would never think of offering to existing and loyal customers.

And what do we get for throwing all these resources and efforts in to pursuing customers?

If we are honest, and have a really good bid/tender/pursuit team to call on, somewhere between 50%-70% win conversion rate! Which is not to say that conversion rate is profitable, because in many cases to get us across the line it isn’t!

Create distinction

Recently I started listening to Scott McKain’s daily ‘Project Distinction podcast. It’s a great podcast that lasts around 10 minutes; around the same time as I made my social media post, Scott ran a week long series on how the ‘hard sell’ had had its day (the $55 million dollar ‘lost’ sale is a funny listen and a serious lesson in to why the 7 touches sales method is dead IMO).

Scott is also the author of ‘Create Distinction’, a book I have just started reading on the back of his daily podcasts that I have really enjoyed.

Anyhow, both Scott’s podcast and what I have read of his book so far have made me come to the realisation that the traditional law firm approach of pursuing a customer is actually the wrong way of doing things. Instead of pursuing customers with great value adds and discounts, we need to get much better at attracting customers – to our areas of expertise and to our superior service delivery.

Become a person of interest
Timely Andrew Sobel – one of the greats in my opinion – also touched on the issue of attracting versus pursuing customers in his blog post last week: ‘C-Suite Strategies Part IV: Become an Irresistible Person of Interest’.

In the post Andrew asks:

What if, however, the situation were reversed, and senior executives were *drawn to you*? What if, instead of you waiting in the long line outside their office, they were waiting in a line to meet *you*?

Fair question: what indeed?

Andrew then sets out six ‘strategies’ (more like ‘tips’ in my opinion) on how to become a person of interest, that include:

  1. Sharpen your expertise while expanding your knowledge breadth
  2. Develop your thought leadership
  3. Be seen as someone who is at the crossroads of the marketplace
  4. Become a person with interests
  5. Build an eclectic network
  6. Develop, manifest, and communicate your core beliefs and values

Something to think about this week then: would you prefer to be attracting or pursuing customers?

As always though, interested in your thoughts/views/feedback.

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Does your law firm use personas in its tender response preparation?

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I first came across the use of “personas”, in the buying-cycle, in ‘This is Service Design Doing’ by Marc Stinkdorn, Edgar Hormess, Markus, Adam Lawrence, and Jakob Schneider. This is one of those books that have a pivotal impact on your thinking and go directly into your Top 20 reading recommendations.

But it has been a while since I last picked the book up. And so when I was reading ‘Personas – A Simple Introduction’ by Rikke Dam and Two Siang  this week (as material for this week‘s newsletter)  it brought me immediately back to Service Design Doing; especially, or probably more particularly, who Dam and Siang define “persona” as being:

Personas are fictional characters, which you create based upon your research in order to represent the different user types that might use your service, product, site, or brand in a similar way. Creating personas will help you to understand your users’ needs, experiences, behaviours and goals. Creating personas can help you step out of yourself. It can help you to recognise that different people have different needs and expectations, and it can also help you to identify with the user you’re designing for.

How many law firm business development / tender / pitch / pursuit / etc professionals use this concept  in their bid/no bid process? Not many would be my guess.

But think of the benefits of your law firm role playing (or at least giving a chair to) the following personas in any tender “bid/no bid” discussion:

  • the Procurement person’s persona
  • the Legal operations person’s persona (increasingly) – CLOC / ACC and the growth of legal operations
  • the Client/user persona
  • the Client/payer persona
  • the GC persona
  • the CFO persona
  • the CEO persona
  • the In-house lawyers persona
  • the Business Managers persona

And the list can go on and on.

If your firm played this game, do you think you might start to get a little better at wining tenders?

As always though, interested in your thoughts/views/feedback.

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How to spot a bad client and knowing when you should fire them

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I’ve long been a fan of Ron Baker’s ‘Baker’s Law: Bad Customers Drive Out Good Customers’. His comment that:

By viewing your firm as an airplane with a fixed amount of seats, you will begin to adapt your capacity to those customers who appreciate—and are willing to pay for—your value proposition.

is spot on.

But it really wasn’t until last week, when I read an article in smallbiztrends.com, that I’d come across a comprehensive checklist of ways to identify those bad customers from the good ones.

The article –  ‘How to Spot Bad Customers – and How to Deal with Them’ – sets out ’10 Ways to Identify a Bad Customer’. They’re great and should be pinned on every lawyers homepage:

  1. They Don’t Pay On-Time (Or Ever)
  2. They Don’t Pay Enough (Or Don’t Want To Pay)
  3. They Have Unclear or Changing Demands
  4. They Want ALL the Attention
  5. They Aren’t Available
  6. They Aren’t Honest
  7. They are Abusive or Threaten Your Staff
  8. They Make Unreasonable Demands
  9. They Complain to Anyone Who Will Listen
  10. They Don’t Listen to You

How many of us can identify with most, if not all of these!?!?

It’s a great post. As is Baker’s. Read them (while noting that there is a 13 year gap between the two posts and not a lot has changed!)!

As always though, interested in your thoughts/views/feedback.

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