value

#BizDevTip: Develop Value Groups

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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).

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$180K for a First-Year Associate – so what!

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One of the big news items this week has been the decision by Cravath, Swaine & Moore to raise its starting salaries for first year associates to $180,000. Cries of “Not worth it!” and “What value do first year associates provide clients?” (answer: probably none) can be heard from all four corners of the planet.

My view on this though is so what? I don’t really care what you pay your first year associates. In the same way I don’t really care what you pay your other associates or partners. Nor do I really care what your rent is costing you.

Unless, that is, I get to thinking that: I am the one paying for all this. In which case, I suddenly become very interested.

But here’s the thing: I’d only really start to think that I’m the one paying for all your luxuries – the boat you have moored at the marina, the sports car you drive, the house you live in, the first year associate you can call on day and night – if I didn’t value the service you provide me. In other words: If I didn’t think I was getting value for money.

So if you’re one of the many private practitioners questioning the move by Cravath, Swaine & Moore, my only comment/question is this:

If you are providing your clients with a value for money service offering – and you are able to communicate this, why should it bother you?

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What do clients value most when dealing with their lawyers?

Last week I posted on the recent publication of the 2016 LexisNexis Bellwether Report (this year titled ‘The Riddle of Perception’) – with specific reference to the disconnect within the Report between opportunities lawyers identify and approaches they plan to take.

Looking at the Report further, when asked: “How do you rate the service given/received in terms of value for money?” – 30 % of lawyers thought they offered “excellent” value for money, whereas only 8% of clients agreed.

Probably more worryingly, 46% (almost half!) of law firms believed they provided a “very good” service, and only 19% of clients agreed.

And of extreme concern to law firms? – 32% (or almost a third!) of clients thought the service provide by law firms was “average“, whereas [not too surprisingly] only 5% of law firms agreed.

 

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Clearly a disparity remains between the service that lawyers believe they are providing and those that clients feel they are receiving.

And herein lies the problem: as we all know, “value” is subjective, in the eye of the recipient. In other words, it really doesn’t matter what “value” law firms believe they are delivering, but what the client believes they are receiving trumps all.

So, “What do clients value most when dealing with lawyers?“:-

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Well, fortunately that question is answered in the Report too.

Takeout from this?

Just because a lawyer agrees to provide a discount doesn’t mean they’re providing greater value!

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“Bill clients, get money”

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In my spare time, I’m a keen amateur photographer (note, I didn’t say “good” 🙂 ). Anyhow, because of this interest I follow a number of photography related blogs which, every now and then, include posts that crossover into my professional life.

A post I read this morning from the DIYphotography website (I say “from” because I use feedly as my rss feeder and read all my morning updates on the Ziner app) is just such a post. Titled, ‘3 Vital Tips To Help You Set Your Photography Pricing‘ by Gannon Burgett, the post takes up a call by Sue Bryce that:

“You can’t price yourself when you have no self worth.”

and goes onto suggest that photographers follow the approach of photographers Sue Bryce and Tiffany Angeles and, I quote,:

  1. Charge what you’re worth – be confident in your abilities and know what it is you offer, both in terms of products and aesthetics
  2. Never set yourself at market value – part of knowing what it is you offer helps you better understand what it is you can charge. Don’t base your price purely off of competition. Don’t be afraid to charge more.
  3. Value yourself and your work – this is more all-encompassing than a specific tip, but without the confidence and self-value, it’s going to be a much tougher job to set your pricing.

Amazingly simple and straightforward advice that many lawyers could benefit from – a fact brought home to me in the very next post in my Ziner app, ‘The deep discount attorney and other cautionary tales‘ by Carala Del Bove on the LexisNexis Business of Law blog.

In this post, Del Bove quotes from real life case studies Ms Ann Guinn cites of lawyers willing to offer discounts to clients because, to quote:

“it just felt greedy to me [not to].”

In the post Ms Guinn offers the following two pieces of advice I wanted to share:

“Don’t try to get into your clients’ heads, cautions Ms. Guinn. In other words, don’t let your clients determine the value of your work.”

rather, discuss this with them upfront when you are first asked to quote on the instruction; and

“Instead of worrying about what discounting legal fees will mean for your client, think about what it will mean to you as a small business owner.”

All in all, two excellent posts on understanding the value of the service you provide clients and the dangers you face if you don’t price, bill and collect revenue on your work appropriately.

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ps – I’d also like to credit Ms Guinn with the title of this post.

Some thoughts on ‘value’

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One of the biggest challenges we face in any professional services organisation is both an understanding of, and an ability to communicate, the value of the service we provide.

To some, “value”…

“…is the difference between a prospective customer’s evaluation of the benefits and costs of one product when compared with others. Value may also be expressed as a straightforward relationship between perceived benefits and perceived costs: Value = Benefits / Cost.”

To others, “value”…

“…is like beauty; it’s in the eye of the beholder (the payer)…it’s not measured by internal costs or profit levels.”

To my mind though, one of the nicest pieces written about the challenges humans face in understanding the value they provide comes from the Japanese artist Mariya Suzuki, who wrote recently:

“I wasn’t very aware of the value of my work until a short while ago. If you asked me about it I would just have said “it’s just a drawing” but now I realise that to get to make that drawing I have invested many years and practice. It wasn’t until people told me not to give everything away for free.

Today, in my starting career as an illustrator, I try to value my work much more.”

Trying to “value my work much more” – getting a better understanding of the overall value my product or service brings to the equation – seems like a good starting point to me.

A quick test to help determine if you’re providing value to your client

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In today’s legal world you often here people talking about “doing more for less” and/or that they are providing “value” to their clients, without much of an explanation as to what constitutes “value” – with the best shot usually being:

value, like beauty, is in the eye of the beholder“.

Indeed many thousands, if not millions, of words have been written about making sure you “add value” – not to be confused with “added value”, which is a whole different subject – but very few of those written words have made any real attempt [from what I can see] to try and nail down a definition of “value” from a client’s point of view.

And while there is little doubt that every single person’s definition of value will be different – and in many cases, each individual person’s definition of value will alter depending on the circumstances they face at the time they are asked to define “value” to them – the following two-part questionnaire suggested by Nathaniel Slavin (of Wicker Park Group) in his recent post on the Bloomberg Big Law Business website, ‘The Perception of Value Differs Among Clients‘, probably goes closer than anything I’ve seen so far to answering this conundrum:

  1. Does my lawyer understand how I define success and all the myriad components that impact that success?; and
  2. Do they accomplish that goal in a manner, financially and otherwise, that helps us further our business goals?

And if, as a private practising lawyer, you can answer “yes” to both those questions – while you cannot be certain you are delivering “value” – you can be pretty sure you are delivering overall client satisfaction levels that are going to get you as close as you can possibly get to a modern day definition of “delivering value to your client“.