Law firm

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

Business Development image

…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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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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The pointlessness of the ‘billable hour’ set out in two charts

Overnight, Australia-time, the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Legal Executive Institute, relying on data from Thomson Reuters Peer Monitor, published the findings of its ‘2018 Report on the State of the Legal Market‘. Reviewing the performance of U.S. law firms in 2017, as well as looking at the trends expected in 2018, this annual report is typically the “first” big report publication of the year and so a trendsetter of where we may be going as an industry over the next 12 months.

As has been the case in other years, the first chart I typically like to see in this annual report is the one setting out ‘Collection Realization against Standard Rates by Law Firm Segment‘ – Chart 9 in this year’s publication – to hopefully give me an indication of how an industry that largely relies on increases in hourly rates each year to boost top-line revenue is fairing.

As you can see, yet again the results here can best be described as ‘disappointing’:

Chart 9

AM Law 100 firms are tracking an ever declining realised recoveries of circa 80 cents in the dollar. All others aren’t doing all that much better at circa 85 cents in the dollar.

Either way, those levels of realisation would have most bank managers in a panic. And the reason they don’t comes down to one small issue: in law firms this collection rate – other than telling you that the market doesn’t see your hourly value as highly as you do – is absolutely meaningless.

What it is, is pie in the sky internal budgetary metrics against market reality cash in the bank.

So we turn to my second “go-to” chart: ‘Collection Realization against Worked (Agreed) Rates‘. This year this is represented in Chart 10:

Chart 10

As the name suggests, what this chart is showing us is “Collected v Worked (Agreed)”. I’m   assuming the “agreed” here is upfront, and I’m accepting that the picture is far from perfect, but there is a far better flatline realisation rate here of 90-ish per cent, or 90 cents in the dollar.

So, what’s my take-out from the two charts?

If you want to try and get a better handle on your projected cashflow, no doubt better to have an upfront conversation with your client about how much you are going to be charging them – however that is (fixed fee, hourly rates, etc) – than having an arbitrary, and less and less meaningful, ‘billable hourly rate’.

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Pitching: ‘Show me don’t tell me’ – is video tendering the future?

Happy New Year to all and welcome to 2018!

One of the more interesting articles I read over the holiday period profiled a Dutch company called Pitchsome.

Heard of them?

Maybe, but I doubt many have.

But they may just end up being a catalyst for of one of the biggest changes to the legal industry in 2018 – namely, how we tender for work in the future.

Under the tagline, “Show, Don’t Tell,” Pitchsome’s business model is a simple one: Show me how your product works in a video and don’t write reams and reams of marketing bluff and expect me to read it in order for me find out what you can do for me/help me fix my problem.

Supporting this business model, the article states that:

Cisco’s Visual Networking Index says video will account for 80 percent of all consumer internet traffic by 2019.

And that got me thinking:

80% of all consumer internet traffic by 2019 will be Visual Networking + pretty much 100% of Government and 70+% of ASX Top100 companies have legal panels in place

so, how long will it be before these government departments/agencies and companies decide to replace the long and tedious word/excel document tender responses with video tenders that ask law firms to:

  • profile key team members,
  • white-board how the law firm can assist the client,
  • evidence how Legal Project Management can be used,
  • visually explain the steps in the pricing,
  • have client referee testimonials,
  • have video of the pro-bono and community activities the firm is involved in, and
  • have other examples of how the value adds being offered are being implemented by other clients in the tender’s industry sector?

Will never happen I’m hearing many in Australia reading this say. “It’s not professional”. “It’s nothing short an advert”, etc., etc.

But I’m left feeling: what, just what, would have happen to the industry if those of us who started down this path in 2008 (and those of you who were involved know exactly what I’m talking about) continued the journey?

It very well may have been disruptive. And that word is a real catchphrase at the moment.

So maybe, just maybe, we will be seeing video tendering by the end of 2019 – and that leaves me asking: what are you doing now to make sure you can met this need?

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Why asking someone to work 2,000 billable hours a year will kill their spirit

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According to a post by Casey Sullivan of Bloomberg, earlier this week US law firm Crowell & Moring announced that it would increase its billable hour requirement for associates, from 1,900 hours per year to 2,000 per year. This new target will take effect 1 September 2016, but on the plus side 50 pro bono hours will count as billable.

15 Years ago I would have cried out “all kudos to you”. Back then my yearly billable target for an English ‘Magic Circle’ firm was 1,400 hours and I flogged my guts out to achieve that. So if you can effectively put 50% of billables on top of what I was doing (and trust me when I say I wasn’t going home at least one day a week), then you’re a better person than I (or so I would have said then).

But if you really need validation of what asking someone to work 2,000 billable hours a year means, then I would like to recommend you read “The Truth about the Billable Hour” by no less an institution than Yale University. In that publication, Yale caution aspiring lawyers that if you are being asked to “bill” 2201 hour, you need to be “at work” (includes travel time and lunch, etc.) 3058.

Taking that further, from an Australian law perspective, if you are being asked to bill 2,000 hours a year then you need to bill 8.3 hours a day (assuming a 48 week year and you never get sick; which, if you are being asked to do this, you most likely will be). That means you are very likely going to need to be “in the office” around 12 hours a day – and that assumes no write-off by your partner or leakage.

But here’s the question: “What difference does this make?

I ask this because I wholly agree with the following comment my friend Kirsten Hodgson made when I posted a link to this article on LinkedIn:

“why would you reward the number of hours someone spends working? Surely it would be better to focus on how to deliver value smarter and more quickly. This doesn’t incentivize innovation or any type of process improvement.”

Exactly right, you’re measuring all the wrong things!

Leaving aside the Balance Scorecard argument, asking someone to do 2,000 billable hours a year doesn’t take into account:

  • client satisfaction
  • realisation (it’s a utilisation metric)
  • working smarter
  • innovation

or many other metrics.

And for those who may point out the benefits of this including 50 hours pro bono I say this: the Australian Pro Bono Centre National Pro Bono ‘Aspirational Target’ (ie, where we would like to get to), is 35 hours per lawyer per year.

But probably more importantly than all of this is this:

–  if you ask someone to do this, then you really leave them very little time to do anything else.

This really should be a concern, on the business front because you leave almost no time whatsoever to train them in the business of law – ie, you kill any entrepreneurial spirit they may have. And, crucially, the only metric that really counts to them is that all important 2,000 billable hours (keep in mind that like I was, they’re very young). Which for a profession that has the mental health issues we do, is not good.

For all of these reasons, I’m hoping no other law firm follows this. But sadly I think they will.

Oh, and if you are a law firm client reading this post you might just want to look up whether your local jurisdiction has a “Lemon Law” rule that applies to provision of a service.

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