law firm management

‘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

#ICYMI – Weekly Digest Issue 279

This week’s Digest was sent out to subscribers earlier today.

Theme of the Big 3 this week was tenders, with me highlighting:-

Other notable standouts this week were:-

For someone who has been in this game as long as I, surprise of the week was:-

As usual, great amount of content in this week’s wrap so check it out here. And if you don’t already subscribe and want to, you can do that here.

Have a great weekend all!

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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

#ICYMI – Weekly Digest Issue 278

This week’s Digest has been sent out to subscribers. Some of my highlight’s from the week were:

There has been so much great content this week – check it all out here.

If you don’t already, you can subscribe here.

Have a great weekend all!

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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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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

When does the law of supply and demand not apply? – when you’re running a law firm of course!

The Law of Supply and Demand
The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. The theory defines what effect the relationship between the availability of a particular product and the desire (or demand) for that product has on its price. Generally, low supply and high demand increase price and vice versa.

Results published in Peer Monitor’s Q2 2020 Report last week suggest that the broader economy has a lot to learn from running a law firm.

Why would I say this?

Well, what would you think would be the logical outcome from:

  • Average demand for legal services decreasing by 5.9%, and
  • Productivity across all fee earners declining by 7.2%?

In normal circumstances you would be given credit for thinking that prices would come down, or at least hold firm. But as we know, running a law firm is anything but normal circumstances because as the Report goes on to state:

  • Average worked rate charged across the market was 5.2% higher than at the same point last year.

That’s worth repeating: Higher! 5.2% Higher!

If you are wondering how that can even be possible, the answer is relatively simple: ‘partners [of law firms] have begun completing a higher proportion of [the] work by volume.

I would be the first to admit that one possible reason why this [partners doing more of the work in a leverage model – see my post here on leverage] can be the case is because the type of work being done by law firms has become far more complex since the onset of COVID-19 and this requires more grey-haired advice with a higher proportion of leverage at partner level. After all, none of us have lived through a pandemic of this nature and so there really isn’t much precedent for young lawyers to go looking for and so partners and senior lawyers are needing to be more hands on when it comes to file time.

But the cynic in me also thinks that’s a likely to be load of rubbish. Law firms (like many in the economy I will add) have been furloughing staff and making staff redundant during the pandemic. On the flip-side, budgeted number of billable hours for individual lawyers do not appear to have been reduced (other than pro-rata to the number of days lawyers may need to be taking off).

And so we find ourselves in this position where individual billable hour targets still need to be met, but overall demand for legal services is falling.

So what happens when this happens?

If we learnt anything from the data of Great Recession it is this:

In times of signifiant economic downturn, holding individuals to individual budgets results in an upstreaming of work.

  • Partners will hoard work in an attempt met their budget first
  • Special Counsel will hoard work in an attempt to met their budget second
  • Senior Associates will hoard work in an attempt to met their budget third.

And if you are outside of the gold, silver or bronze medal positions you’re pretty stuffed!

So what can we do about this?

For those sitting around wondering what can be doe about this, the answer is appears to be pretty clear – do away with individual utlisation and budgetary targets. Even in the best of years these so-called budgets are arbitrary in determining law firm profitability (primarily because they work on an opportunity cost profit basis rather than a real in the bank profit analysis), but more importantly because they create silos – individuals in law firms with personal incentives that outweighs those of the group/society.

And, they sustain bad behaviour in firms – ‘me’ over ‘us’.

But critically, firms that work like this create ‘Motels for Lawyers’ – not law firms.

As always, the above just represent my own thoughts and would love to hear your thoughts.

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Photo credit Alexander Mils on Unsplash

Does your firm use data as a profitability management tool?

AW LFT 1

I’ve just finished reading the latest Altman Weil ‘Law Firms in Transition 2020‘ report.

With all things COVID the Report (as it has done in any event for the past decade) makes for interesting reading.

But, the response(s) to one of the questions in this year’s Report  I found particularly concerning.

When asked:

“Which of the following statements describes your firm’s use of profitability data as a management tool?”*

16.2% of respondents replied:

“We don’t want to use the data because it is potentially controversial or divisive.”

16.2% of respondents believe sharing and using data in 2020 can be ‘potentially controversial or divisive.’

I find that rather sad.

And don’t even get me started on how it is possible that over 13% of respondents don’t even know how to use the data!

As always, the above just represent my own thoughts and always interested to hear the views of others.

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* see page 50 of the Report

[This post first appeared on my LinkedIn feed Thursday 2 July 2020]

‘Annuity Revenue’ – who wouldn’t crave some financial certainty in current circumstances?

Annuity revenue – a predictable revenue stream from new or existing customers who buy products and services associated with new or previously purchased products. 

As the Managing Partner of a law firm today, what would you say if I walked into your office and told you that I could:

  • provide you with a guaranteed monthly revenue income,
  • with a product that creates loyal customers, and
  • where those customers become – at no additional cost to you – brand champions and refer your services to their network, free of charge, via the Holy Grail of marketing – positive ‘word of mouth’ referrals.

Sounds great doesn’t it. Almost too good to be true.

Well all I can say is that if you were anything like one of the Managing Partners servicing customers who responded to the Pitcher Partners recent ‘Legal Survey 2020 Report‘, that’s exactly what you would be saying: “thanks, but no thanks we are happy with the billable hour”.

Pitcher Partners - Billing Methods

The fact that the billable hour remains the ‘go to’ method of billing (not the same as pricing) for Australian law firms and their customers does not, in and of itself, surprise me. I must admit, however, to being a little surprised with the 1% increase in this billing method (up from 58% to 59%) year-on-year.

Given the times (even pre Covid-19), I was also a little surprised to see that both ‘fixed fee’ and ‘value-based’ pricing remain relatively static (although it should be added that from what I could see the report lacks a definition of ‘value-based’, probably purposely so).

To me this represents a massive lack of foresight on the part of law firms and a significant lost opportunity.

In much the same way as software as a service (SaaS) companies have come to realise that one-off payments around shrink wrap contracts were not servicing the long-term financial interests of the company (unless it’s a legacy product that will no longer be supported), the time has come for law firms (and professional services firms more broadly) to realise that if we want to maximise revenue and, potentially, profit we need to rethink how we generate that revenue.

One alternative that the likes of Ron Baker and Mark Stiving have been banging the drum about for some time is ‘subscription based pricing’.

The benefits of adopting a subscription based pricing model

I have posted previously on this blog about the benefits of subscription based pricing (see here), but leaving all that aside for a second; as Amy Gallo wrote way back in October 2014 in the Harvard Business Review (see ‘The Value of Keeping the Right Customers) with the acquisition costs of acquiring new customers running being between 5 and 25 times more expensive than servicing existing customers, it makes economic and financial sense to find, and keep, the right customers.

How you price this is probably the most important step along that path.

The weakness of having billable hours as your default billing method is that you are pricing to the transaction. Whereas one of the greatest benefits of the subscription based pricing model – or even a retainer based pricing model if you must at the start- is that you start thinking about pricing the customer or even the portfolio.

In other words, you start to think about the customer and their needs first. And for an industry that always talks about the customer being at the centre of everything we do, doesn’t it makes sense that our pricing structure reflect this claim?

But it also makes sense internally, because it:

  • is smarter pricing
  • leads to smarter collaboration
  • moves you away from seasonal end of financial and calendar year pressures, and
  • helps remove any discussion around the ‘commodity’ tag.

Not to say, in these COVID-19 times, when you are talking working capital facilities with your bank, it provides you with a guaranteed annuity revenue stream.

Now who would not want that comfort right now?!

These just represent my thoughts though and always interested to hear your views.

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Report: 45% of Australian GCs are forecasting a decrease in their 2019 legal spend – How is this going to be achieved?

The State of Australian Corporate Law Departments Report 2019 – a joint publication between Thomson Reuters and Acritas – was published earlier this month. With more than 2,000 telephone interviews conducted and 73 interviews with Senior Legal Counsel based in Australia taking place, the sample for this report is robust. And while the usual rhetoric around “more for less” is reflected throughout the Report, one of the standouts is that Australian GCs are forecasting 45% projected budget cuts (over 2018 we have to assume):-

budget cuts

To put that into context, that almost twice the global average.

In a time when we have Royal Commissions being announced almost weekly, and compliance issues are on the front pages of the papers daily, you have to wonder where and how these savings are going to be achieved.

As to the ‘where’, given how much ‘top-end’ reputational compliance work that’s happening in Australia at the moment, and how little cost savings can be made from the margins in low-end commoditised work, you’d have to assume the most likely area will be in the mid-level contract drafting/negotiation/management space [the space in which about 30 out of the top 40 firms in Australia play].

As to the ‘how’, having read the Report my take is that Australian GCs will look to achieve this through:

  • innovation
  • panels, and
  • the elephant in the room

Innovation

‘Innovation’ has been a buzzword in the Australian legal world for over a decade. And, as one of the first jurisdictions to legislation the incorporation of law firms, to many outside Australia our system has been one of envy.

But when you ask Australian GCs to rate the innovation of Australian law firms, only 35% feel they’re working with service providers they find modern and innovative.

innovation

From where I sit this means that 65% of Australian GCs don’t think you’re really doing all that much in the innovation space!

Legal Panels

Led by procurement, the dreaded ‘legal panel’s’ stated aim is to achieve:

  • cost efficiencies and predictability
  • relationship building (de facto another way of cost savings)
  • less administrative burden
  • quality [of work]
  • responsiveness
  • access to experts, and
  • value adds on offer

All great and noble aims if you are looking for a 45% cost saving year-on-year – until you take a closer look at the reality:-

panels

This chart is from the ‘GC Thought Leaders Experiment‘ and it clearly indicates that having a panel in place isn’t saving you anything! Add to that lateral hire movement over the past 5 years, and I very much doubt any of the metrics of having a panel are being met.

It’s worth noting here that swimming against the tide of rationalising panels to fragment legal spend is A Verona Dorch – Peabody’s Energy’s Chief Legal Officer who stated (on the issue of appointing panels) that:

Expanding the pool allowed me to insert a few more midsize and non-money center firms than I otherwise could have. And that’s been incredibly helpful—just a few months in, I’m noticing that those firms are extra eager to impress and put forth their top talent.

So maybe, just maybe, if you get it right there is something to be said for legal panels – only not in the form we currently have them.

The elephant in the room

And so we come to the elephant in the room, where a lot of these savings are likely to be found:

40% of Australian in-house buyers of legal services have used alternative legal service providers (“ALSP”) for support on legal matters, and over half of those who used an ALSP did so as they felt it was a more affordable option.

Private practice we are on notice.

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

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