legal services

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!

rws_01

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!

rws_01

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.

rws_01

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.

rws_01

Photo credit to Daniel McCullough on Unsplash

Two graphs chart the rapid ascent of the Legal Operations role

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

Background

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

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

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

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

Legal Operations: Where are we today?

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

The ACC Graph

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

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

Take that graph in for a second.

Now let’s give it some context.

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

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

Frankly, they’re a clever bunch.

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

The Gartner Graph

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

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

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

So what does this mean for law firms going forward?

The honest answer is, I don’t know.

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

Truth is, I don’t yet know.

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

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

res_01

The big squeeze is coming: Why it’s important to know if your practice is bespoke or precedent?

Hall Wang penned an interesting post on the Tom Spencer blog over the weekend that looked at two of the different types of consulting – Bespoke and Precedent (Bespoke and Precedent Driven – Understanding the Two Different Approaches to Consulting).

Wang explains the difference between the two as being:

Bespoke: This approach is like making a custom-tailored outfit whereby the focus is on what is unique about a client’s situation and then crafting a customized solution for the client. The mindset in this approach is to think about what might be possible to best fit the client’s needs.

Precedent driven: This approach is similar to the way you bake a cake using a cookbook; following the recipe, but making adjustments as time and available ingredients necessitate. The mindset is to find proven precedents and use them as a guide to provide reliable client recommendations.”

I like Wang’s terminology. I particularly like Wang’s use of ‘precedent driven‘ – an alternative to the stale and often misused ‘commoditised‘. It’s smart language, but I think it’s really important that lawyers and their support team understand the difference and workout which of the two their practice sits in.

So why is this even important?

Here’s the reason:- because if you operate a predominantly ‘precedent-based practice’, then you’re going to be feeling the forthcoming ‘big squeeze’ way more than is likely to be the case than if you run a bespoke practice.

What ‘big squeeze?’; my practice is already seeing an uptick in legal work you may be asking – see the latest Altman Weil ‘Law Firms in Transition 2019: Change Efforts Stalled in 2018 as Business Boomed‘ report for why this may be the case.

Well, as I recently blogged The State of Australian Corporate Law Departments Report 2019 has stated that “45% of Australian GCs are forecasting a decrease in their 2019 legal spend” – so ask yourself:- “Where is this massive savings going to come from?” Add to this the recent Thomson Reuters ‘Alternative Legal Services Provider Report‘ (February 2019) stat that

In just two years, revenues for alternative legal services providers have grown from $8.4 billion in 2015 to about $10.7 billion in 2017. This represents a compound annual growth rate of 12.9% over that period.

and it doesn’t take Einstein to tell you that a big (or bigger) squeeze is coming and that the middle – precedent-driven – market (where the majority of the market players sit) is going to be the epicentre of that big squeeze.

But knowing and understanding this is very important. It helps take you – as lawyers, business developers or leaders – a long way to understanding that in reality very few people want or need bespoke legal services; but what the really really really don’t want is a precedent legal service dressed up with a bespoke ‘full service’ price.

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

rws_01

Why most law firms don’t need to hire a Head of Pricing

Following a conversation I had recently with John Chisholm, I had reason to revisit Patrick Johansen’s website patrickonpricing.com and re-read both his Continuum of Fee Arrangements™ and his Roll Call of pricing professionals.

Let’s get controversial. Re-reading Patrick’s stuff it occurred to me that there are an awful lot of law firms have hired pricing experts (Patrick has over 300, but it wouldn’t surprise me if that number were closer to 500) on -most likely- really good money who, get this: don’t really need them.

Why do I say that?

Looking again at Patrick’s Continuum of Fee Arrangements, Patrick has sixteen different pricing options available for law firms to offer clients:

  1. Hourly – the ‘go to’ pricing option for law firms. But are hourly rates pricing or billing?
  2. Volume – nope, not a pricing mechanism. It’s a discount. Not even an alternative fee arrangement (AFA).
  3. Blended – isn’t that an hourly rate?
  4. Retainer (Periodic) – okay, now we are talking. Law firms may need some help from a pricing expert on this one. But wait up, how much of a law firm’s revenue is done on a retainer mechanism? Less than 5% would be my guess. Justify the cost of pricing expert on the books (as opposed to freelancing), unlikely.
  5. Capped – OMG don’t get me started on capped fees. Known as the “heads I lose, tails I lose” pricing mechanism for law firms. I understand why clients love capped fees, they cannot lose. But any pricing expert on a law firm’s books who recommends capped fees as an option deserves to be sacked immediately.
  6. Task – okay, but isn’t this really just a fixed fee?
  7. Flat (Transaction) – okay, but again: isn’t this really just a fixed fee?
  8. Phase – sounds like a fancy name for task to me!
  9. Fixed – Nirvana. Now we need a pricing expert.
  10. Contingency – implies it needs to be contingent on something.
  11. Portfolio – my view is that this is one of the most misunderstood and under-used of the various pricing options. I’m not sure there are many pricing experts in commercial law firms who do this well.
  12. Hybrid – yeah right. Are we talking cars now?
  13. Holdback – this isn’t pricing. This is a reward mechanism. I could do all the pricing calculations in the world, but if the legal team provide a rubbish service then the client will withhold a part of the fee.
  14. Risk Collar – is hourly billing with an up and downside calculation mechanism.
  15. Success/Bonus – again, performance related.
  16. Value – right, and how many law firms are really doing this? Few and far between. Hell, most law firms don’t even understand the ‘value’ they provide (see ‘discounts’ and google number one AFA offered by law firms). No, nice to say; but a very long way from getting it.

So looking at this list I ask myself: “How much science is involved in pricing legal services?”. And the answer I come up with is: “Not a lot”.

Taking all this on board, I get why law firms hire ‘pricing experts’ out of accounting teams. And maybe that’s where the real opportunity is being missed.

But trust me, for all but two or three of the above pricing options, you don’t need a pricing expert – you need an accountant. So don’t waste your money hiring one.

rws_01

Survey: The role pricing specialists play [or don’t] in RFP responses

Last week the USA’s J Johnson Executive Search, Inc and the UK’s Totum published their combined ‘RFP Survey Responses: U.S. and U.K. Data 2016‘.

A fairly evenly distributed demographic of large (defined as being 600+ lawyers), mid-sized (defined as being 100-600 lawyers) and small (up to 100 lawyers, for the U.S. only) law firm respondents, insights from the survey include time spent responding to RFPs, persons within firms charged with project managing responses, as well as tools and expertise made available to responding teams, in both the U.S. and the U.K.

As with most surveys of this nature however, it is the role that pricing plays that typically grabs my attention and given this survey’s combined U.S. and U.K. perspective even more so in this case.

Given ongoing market pressures, it should surprise no one that responses of “strong” from the U.S. (58%) and the U.K. (64%) to the question of what current “price pressure” for proposal & RFPs were fairly similar.

rws-5

 

A little more surprising to me was the difference in responses between the U.S. (40%) and the U.K. (60%) to the question “when developing proposals and RFPs, I have easy access to” the answer was “pricing guides/professionals“.

 

rws-7

 

Now don’t get me wrong, even these days I think it is particularly progressive and somewhat comforting to know that 60% of my colleagues in the U.K. have access to some sort of “pricing guide/professional”.

Until, that is, you get to see who actually gets to sign-off (i.e., the “decision maker”) on the all important issue of pricing in RFPs in the U.K.. Here, and I kid you not, the response in the U.K. of “pricing specialist” (that same person who 60% claim to have some form of access to – either via guides or in person) was 5%.

I think that is worth repeating – 5%.

Put into context, that means in the U.K. pricing in your RFP is more likely to be signed off by Marketing & BD (9%) or Finance (14%). Indeed, in the U.K., “It varies” is likely to have more of a say on final pricing in the RFP response than the so-called pricing specialist.

rws-4

I’m not so sure why the results of this particular survey so surprise me. After all, time and time again survey results show that we typically say one thing about pricing, but do quite another.

What I will say though is this: if you have access to a pricing specialist, and pricing by your pricing specialist is being determined in 5% or less of your RFP responses, my guess is going to be one of two things: (a) you have no idea if you are making money from your RFP “wins”, or (b) more likely, you are leaving money on the table big time!

RWS_01

* images should be enlargeable, apologies if they appear a little blurred.

#BizDevTip: Develop Value Groups

Business Development image

Over toast and coffee this morning I read a cracking post on the LexisNexis Business of Law Blog by Carla Del Bove titled “Understanding the Science Behind How Clients Think“. The post provides some good tips for law firm business developers and marketers, but includes an absolute gem of a tip: “Develop Value Groups” (number 2 in the list), which Carla Del Bove describes as being:

“A value group is simply a group of influential business professionals (e.g. CFOs of major corporations or office managers of the top five consulting firms across the country, etc.) who meet either quarterly, or three times a year and share a common interest.

The first step involves figuring out who the firm’s target group is and then finding a common theme that draws them in and keeps them engaged. Some examples of this include: inviting members of the group to a prestigious event or using a prominent key note speaker for meetings. Most important, they say, is there needs to be a clear purpose for getting together and participants need to get some value out of the meeting. Lastly, they agree, value groups are less about quantity as they are about quality.”

Really useful tip by Carla that I thought I would pass on to you. Make sure you read the rest of Carla’s post and if you would like to get updates on other business development and marketing related material I read each week, feel free to sign up to my free weekly Mail Chimp update (or email me if you want to be added to the subscriber list).

RWS_01

How long before we see a ‘Red Team’ service in #Auslaw?

Business Development image

Of note overnight (OZ time) was news that Bernero & Press (Wendy Bernero and Aric Press) have launched a service called: ‘The Red Team’.  Described as being “A Lifeline for Marketing and Business Development Departments” the aim of The Red Team is to provide:

“…high-quality, experienced marketing, communications, and business development professionals to law firms on a project basis or to fill temporary needs.”

Sounds very similar to the sort of lawyer placement service we are seeing from the likes of Crowd & Co here in Australia, only in this case the target market is specifically support services.

I have to say that outsourcing back office services such as marketing and business development was something I saw becoming popular in Asia during the Asian Financial Crisis in late 1998 and I have often wondered when we would see such a move take hold in the West.

Today may just be that day.

RWS_01