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:
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.
I’m a cynic, so usually read industry reports published by industry providers with a huge pinch of salt, but every now and then you get an exception to the rule. So is the case with BigHand’s recently published ‘The Legal Pricing & Budgeting Report’, which is full of really insightful information (so read it!).
Here are my 10 take-outs (NA = North America and UK = UK):-
From
The damning:
1.
To the surprising:
2.
3.
To some obvious:
4.
5.
And some knowns:
6.
7.
With a few, “What the?” (as in, only…)
8.
9.
With a great conclusion:
10.
As I said, as a rule I don’t recommended reading these types of reports as they typically are a waste of time; but this is one I have no problem saying “go read it!” – and if you have any thoughts/comments, post them in the comments section below!
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:-
Care and Connection
Trust and Honesty
Price and Value
Experience and Expertise
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:
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.
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!
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.
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.
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:-
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.
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.
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!
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.
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.
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!
‘What would be some of the things I would want to be looking out for in a law firm’s invoice?
So here’s a quick list of my 10 things, but feel free to add your own 🤪 :-
Being charged [for]:
Expenses/disbursement – especially if they are unaccounted for (and particularly on fixed fee matters)
Travel time – especially if your lawyer is in the same town/city as you
‘Reading in’ time – especially when a new lawyer joins the team because one of the original team members has resigned or left the team
Team meetings to discuss your case/matter
Multiple lawyers attending the same meeting – especially if they have different time eateries
‘Out of scope’ work without a corresponding change order
Block billing of numerous tasks without explanation
Promotions – charge-out rates being increased for lawyers on your case because they have gain an additional year of post-qualified experience without adding any additional value
‘Bill padding’/‘Rounding up’ – when your lawyer rounds their time up to the next billable unit
‘Stickiness’ – where senior lawyers are doing work on your file that could be easily have been done by more junior lawyers, but they do it because they need to meet their internal billable targets.have different time.
As I say, feel free to add some of your own in the comments.
My friend John Chisholm hit the big time last week, he made the front-cover of Issue No.5 2021 of Legal Business World. All joking aside, John’s article ‘Who subscribes to your law firm?‘ (starts on page 8) is a really good read.
One of the gems I took away from John’s article is what he calls: ‘The 5Cs of Value’, which are (in his words):
Comprehend value to clients.
Create value for clients.
Communicate the value you create.
Convince clients they must pay for value.
Capture value with strategic pricing based on value, not costs and effort.
These are really good cornerstones to have, even if you don’t subscribe to John’s views of value-based pricing (did you see what an did there 🤪).
In any event, if you are new to the concepts of subscription and value based pricing, read the article because you’ll get a lot out of it.
And if you want to know more about the important topic of value based pricing in law firms, call him – but make sure to extract as much value as you can from him!
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:
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.
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.
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.
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.
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.
As far as I’m aware, Apple has never allowed retailers to discount (or have any other say in) its products pricing.
Ever.
As far as I have understood it, Apple’s rational for this because it has always insisted that it – and it alone – has complete control over its pricing.
Why is this important?
In short, because while you will see retailers heavily discounting every other computer software and hardware manufacturers’ products during this year’s EOFY (lockdown) sales, no such offer is made on Apple products.
You don’t see red ink on Apple product price tags.
Ever.
So what can law firms learn from this approach?
Always understand the value you provide to your clients
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).
‘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:
Management (COO, CEO)
Business Development/Sales
Marketing
IT/Lawtech/Innovation
Pricing
LPM
Legal Design/LPI
KM/Precedents/PSL
HR
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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