Amazing Firms, Amazing Practices

RainToday.com created a special report  from 12 experts in pricing  professional services, including, I am honoured to say, yours truly.  You can download my article:

"Think of Services in Terms of Value – Not Rates" by Gerry Riskin (author: The Successful Lawyer)

or download the entire 39 page report including all 12 articles by visiting RainToday.com here.

Here is what RainToday.com has to say about its publication:

We've read a lot of advice about fee structure, and there are a lot of people who claim to know it all. But when you boil it all down — what's really important? What do you need to know?  What is the one piece of advice you need to get the fees you deserve?
The expert authors and advice includes:

1.  Convince the Buyer that Value-Based Fees are Best by Alan Weiss, Author, “Million Dollar Consulting”

2.  Price with Confidence! Follow These 10 Steps to Stop Leaving Money on the Table
- Mark Burton, Co-Founder and Vice President of Holden Advisors and Co-Author, “Pricing With Confidence: 10 Ways to Stop Leaving Money on the Table”

3.  A Magic Bullet? No, a Process
- Bruce W. Marcus, Marketing and Strategic Planning Consultant and Editor, The Marcus Letter on Professional Services Marketing

4.    The Best Kept Secret of the Selling World
- Jeff Thull, President and CEO, Prime Resource Group and Author, “Mastering the Complex Sale, The Prime Solution”

5,  If You Don’t Discuss Value, Expect to Discuss Hours
- Ronald J. Baker, Founder, VeraSage Institute and Author, “The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services”

6.  Take Courage: Demand Full Price (And seven steps to get you there)
- John Doehring, Senior Vice President, ZweigWhite
 
7.  Creating Value During the Sales Process
- Tom Snyder, Former CEO, Huthwaite

8.  Build the Relationship One Day at a Time
- Ron Worth, CEO, Society for Marketing Professional Services and Author, “A/E/C Marketing Fundamentals”

9.  Think of Services in Terms of Value – Not Rates
- Gerry Riskin, Co-Founder, Edge International

10.  Discounting Doesn’t Work
- Jeanne Urich, Managing Director, Service Performance Insight
 
11.  Over-Serve Your Best Clients
- Neil Fauerbach, Partner and Director of Business Development and Marketing, Smith & Gesteland, LLP and President, Association for Accounting Marketing

12.  Maximize the Value of Work to Your Clients and Your Firm
- Andrew Sobel, Founder, Andrew Sobel Advisors and Author, “Clients for Life” and “Making Rain”

Continue Reading Posted In Law Firm Economics, Law Firm Management, Law Related Publications
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Law Professor William D. Henderson (click on photo for bio)

Managing Partners and law firm H.R. Executives should contemplate the meaning of Indiana University School of Law's Prof. Bill Henderson's post: "How the 'Cravath System' Created the Bi-Modal Distribution."

Professor Henderson builds on the work of NALP (The National Association for Law Placement®, founded in 1971) who published this graph in 2007 referencing 2006 salaries their article called "A Picture Worth 1,000 Words":
 


Note how meaningless the Median is in helping any form set associate salaries.

Professor Henderson asks, among other things: "Are We Selling Results or Résumés?" which is the title of one of his papers in this area.  Here is a related excerpt:

"The Results or Résumés paper draws upon two pieces of market data to demonstrate that a large proportion of large corporate law firms have to re-evaluate their business models:  (1) stunning uniformity of associate entry level salaries amidst large, growing disparities in profits per partner; and (2) evidence that firms are becoming stratified by premium versus non-premium practice areas."

Professor Henderson also draws our attention to the unbelievable burden taken on by firms that are not the most profitable by showing a comparison between associate salaries and per partner profits as you move up the profitability curve:

Professor Henderson then explores the lateral partner mobility within the Am Law 2000 and in his words "teases out a relative hierarchy of practice areas"  According to Professor Henderson, the table below, which covers the 2000 to 2005 time period, orders legal specialty by differential profits per equity partner (PPP) between the firm a partner left and the firm he or she joined.

I strongly recommend that you read Professor Henderson's entire post but I think the best is yet to come as evidenced by the final paragraph in his post:

"Fortunately, the Results or Résumés paper lays out a solution for any law firm willing to try something new.  The psychological barriers, however, are much larger than the logistical or financial.  I will blog on this topic in a subsequent post."

Thank you also to my friend Bruce MacEwen of Adam Smith, Esq. for his excellent post on this topic: THE BI-MODAL STARTING SALARY DISTRIBUTION and the ABA post: ‘Cravath Model’ that Created Have and Have-Not Law Grads Could Implode

PUNCHLINE:  The legal profession resists change for good reasons and bad.  As always, it won't be the legal profession initiating the change - our clients will do that for us.  The fundamental question is whether your firm will be among those to first respond to these issues and from that gain well-deserved competitive advantage.  Stay tuned.

Posted In Law Firm Economics, Law Firm Human Resources, Law Firm Management, Law Firm Strategy, Law Firm Training, The Legal Profession
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Stephanie West Allen breaks a story that we will look back on in ten years as groundbreaking.  Have a look (click on the image for Stephanie's post):



PUNCHLINE:  I can relate having lived in a virtual world for many years.  Lawyers in most firms seem to resist the virtual world in favour of the comfort of bricks and mortar and "proximity" - working with someone on the next floor seems easy enough but in another city?  Many still have trouble with that one.  Perhaps the virtual law firm model is decades away from being mainstream but large multi-office firms should take some lessons from this model now. Posted In Law Firm Innovation, Law Firm Management
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What is your initial reaction to the title of this blog post?  I thought it was daft… until I read the complete post by Susan Cramm on June 25, 2008 on her Harvard Business Blog: Having IT Your Way.

Here is an excerpt from her blog post:

Over the past decade, IT organizations have worked hard to improve services and in turn increase IT’s impact on the business. But in the quest to deliver great service, IT actually may have been disabling rather than enabling the enterprise.

How? In two ways. First, continual hand-holding leads to a loss of precious time that could be devoted to more important activities. Second, helping others who can help themselves circumvents learning. It lets them off the hook and alleviates their sense of responsibility. And ultimately it slows down progress as communication is constantly being run through an intermediary. In delegation lingo, this is called taking on someone else’s monkey.

PUNCHLINE:   Based on my observations in the firms I serve around the world, I would say that too many lawyers pride themselves on their IT incompetencies believing that it makes them somehow charming and brilliant.  I say they might as well be sneaking into the firm at night and taking cash out of the safe.  The costs associated with that attitude include:

• poorer client service by failing to capitalize on the efficiencies technology offers
• competitive disadvantage (clients do not find incompetency charming ever)
• wasted IT personnel time
• distracting and therefore delaying or discouraging the latest IT initiatives
• <I’ll bet the IT folks out there can add lots to this list>

Allow me to transpose one of Susan’s comments for Managing Partners and CIO’s in the legal profession:

Pleasing partners shouldn't be IT’s ultimate goal (or that of the Managing Partner). Rather, the ultimate goal of the Managing Partner and the CIO is to ensure the success of the firm. Help IT serve you and the firm by making sure that IT isn’t doing anything for individuals that they can, and should, do for themselves.

Posted In Knowledge Management, Law Firm Innovation, Law Firm Technology, Law Firm Training
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Tom Peters on the Definition of Leadership from Tom Peters on Vimeo.

Whether you are Firm Chair, Managing Parter, Practice Group Leader, Industry Group Leader or Client Team Leader, I believe 3 minutes and 53 seconds will prove a useful catalyst for your thought.  Posted In Law Firm Leadership
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To download this article, click on an image or this link. Posted In Law Firm Economics, Law Firm Management
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As Nicole Nehama Auerbach joins Valorem, she says:

“I saw Valorem as a once-in-a-lifetime opportunity to really make a difference in the way litigation is handled... I was captivated by the firm’s commitment to provide real value to business clients, and, in particular, its emphasis on alternative fees. Alternative fees are more important than ever to clients as the economy fluctuates and rates continue their upward march. Traditional law firms have been slow to recognize the need to satisfy their clients’ economic concerns."

Valorem Law Group represents a head on assault on the billable hour.  Here's an excerpt from thier new web site:


The top ten list…

1. We are all refugees of elite BigLaw firms;
2. We are skilled courtroom lawyers, in practice and at heart;
3. We are revolutionaries and risk-takers, entrepreneurs at heart;
4. We bring a single-mindedness to the notion of client service;
5. We believe you are entitled to budget certainty, to a real and realized commitment to help you deal with the cost pressures you face;
6. We believe that the practice of law is an art, not a science;
7. We believe in collaboration and hold the team rather than the individual sacrosanct;
8. We love technology and efficiency -- the more red tape we hack through, the better;
9. We take our work very seriously -- ourselves, not so much;
10. We are real people, with supportive spouses and wonderful kids (who, at least today, appear to really like us).

They even have the audacity to say this:

We provide value or you adjust the bill.

I recommend a thorough tour of their web site.

My Opinion:  Don't bet against these people - they are proven champions as individuals and together they are going to disturb the peace of the billable hour.  I say BRAVO!!  The leader is Patrick Lamb (center in photo above) - learn even more at his famous blog: In Search of Client Service

Posted In Law Firm Innovation, The Legal Profession
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General Mills' Roderick Palmore

According to Roderick Palmore, executive vice president, general counsel and chief compliance and risk management officer at General Mills Inc:

"The statistics speak for themselves.  They say our progress in the profession has been disappointing."

Attention Managing Partners:

More than 100 general counsel executives of Fortune 500 companies and managing partners of U.S. law firms are convening next month in an effort to come up with specific ways to improve diversity in the legal profession Managing Partners

The 100 GC’s (in addition to Palmore from general Mills), will include the likes of

General Mills Inc.
The Boeing Co.
Prudential Financial Inc.
Microsoft Corp.
Johnson & Johnson
Tyson Foods Inc.
The Coca-Cola Co.
Bank of America Corp.

See the full story at Law.com in Amanda Bronstad’s piece today called GCs and Law Firm Managing Partners to Convene Over Diversity (also the source of Palmore's photo in this post) Posted In Law Firm Diversity, Law Firm Human Resources
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The Services Safari Blog posted this yesterday:

Calling all Lawyers... The Bear Stearns Collapse

The following is an excerpt:

Shareholder litigants are going to be talking about this one tonight and tomorrow. Let's recap the fall of Bear Stearns stock price and market value the last year:

Stock price last year: $159/share - market cap: $18.76 billion
Stock price last week: $69.75/share - market cap: $8.23 billion
Stock price Friday: $30/share - market cap: $4.04 billion
Acquisition price Sunday: $2/share - market cap: $236 million

The post ends with:

Are criminal indictments in the future?

Punchline:  this trumps my wildest speculation about how erratic the economy may become.  Managing Partners:  Are the appropriate practice group and industry teams watching all economic indicators (formal and informal) and reporting to you frequently (a la #4 in my January 24 post: Recession-Proof your Law Firm).
Posted In Law Firm Economics, Law Firm Strategy
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Answer Your Outsourcing Questions

• Why do some corporations and law firms outsource legal work while others do not?
• What ethical issues arise in outsourcing legal services?
• Who is doing the outsourced work and what qualifications do they have?
• What type of legal work is being outsourced? What are the concerns regarding the outsourcing of patent drafting and patent searches?
• What impact, if any, will legal outsourcing have on the elite guild nature of the U.S. legal profession?

The International Out-Sourcing and the Legal Profession conference will be held on April 25, 2008 at the UC Berkeley School of Law.

I suggest you decide whether your firm can afford not to have someone attend.

For more information, contact The Institute for Global Challenges and the Law at  the University of California, Berkeley School of Law:

Telephone: 510.642.7830
Fax: 510.643.2362           
email:GCL@law.berkeley.edu

Registration is a modest $150.

For questions or to register by phone, please contact Emily Arntz: 510-642-7830

To see a full description on line, go to the Institute for Global Challenges and Law

Posted In Law Firm Outsourcing, Law Firm Technology
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