“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).

We provide value or you adjust the bill.

I recommend a thorough tour of their web site.

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)

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).

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?

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

"We called around to firms to find out whether associate salaries, called economically-irrational in some quarters, have finally (or, at least, for now) hit a ceiling. The answer seems to be yes."

The comments under the post range from:

"I think associates should just worry about keeping their jobs instead of clamoring for increases in salary"

to

"I expect salaries in NY will bump up to 190 before the end of the year. That will cause other cities to match. The following year NY will again bump to 230, and other cities will again follow. The pattern has been established, and there is no way to stop it. It’s pure economics. Plain and simple."

PUNCHLINE:  I am empathetic with recent grads who must repay large loans and face rampant inflation.  However, I believe the only thing that matters is "the client" because collectively the clients will drive demand and the parameters under which legal services are sold.  As the world flattens, clients' choices expend and as Cisco and GE and other powerful clients have clearly demonstrated, if the profession can't summon the imagination to change the equation clients will change the equation for them.  I reference two of my previous posts:

Offshoring in India Changing Legal Services in the West
OUTSOURCING: "Lawyers are service providers. We are not gods"

Image Credit:  The image in this post was copied from the original WSJ post

Footnote:  At the moment I am on assignment with a prominent South African law firm...  you should see how wide their eyes get at the mention of the scale of associate salaries referenced in this article.

I Irecommend that you visit (or revisit) Confidence - How Winning Streaks and Losing Streaks Begin and End by Harvard’s Rosabeth Moss Kanter. 

Rosabeth Moss Kanter's biography for those interested

Confidence is a road map that helps you react more constructively than you might otherwise have to the challenges you will face (like this deteriorating economy).  The losing streak is fraught with a disease whose symptoms will infect your people - they include::

• Stop communicating
• Criticize and blame
• Disrespect others
• Become isolated
• Focus inward
• Let inequalities develop and persist
• Lose initiative
• Forget goals and aspirations
• Spread negativity
• Deny Facts

• Accountability
• Collaboration
• Initiative

Check out Soundview Summaries and getAbstract.  If there are others, let me know.

PUNCHLINE:  Put Rosabeth Moss Kanter on your informal advisory team by buying the book or subscribing to one of the summary services above.  You cannot prevent the legal profession from having a losing streak here – but you can prevent your firm from having one.

I recommend that you read the entire Financial Times (FT) article dated January 22, 2008: The worst market crisis in 60 years.

This is not a new subject for me - see my August 3, 2007 post Doom and Gloom for the legal profession - it's coming with respect to which Valorem Law founder, Patrick Lamb, kindly called me "an awfully good soothsayer" in his January 19, 2008 post Will The Perfect Storm Fundamentally Alter The Foundation Of The Profession?

Citibank’s Law Group Head and friend, Dan DiPietro, seems to be singing in harmony with Mr. Soros.  Dan believes that US law firms may soon be battling unprecedented economic pressures.

As a law firm leader,  you need to ask yourself some hard questions.  My Edge International partner, Rob Millard, and I believe you need to: Recession-Proof your Law Firm and that Law firms must immediately prepare by reassessing their strategies in order to:

• minimize the potentially firm-threatening impact and
• capitalize on competitive opportunities

1. Strong Leadership ??  In ancient times, the Cherokee Nation had one chief who would rule during times of peace; another during war. The need for hard, courageous decisions, even sacrifice, is common to both recessions and wars. In both, strong leadership is critical if hard decisions are to be taken and actually executed.
2. Ramp Up the Frequency of Financial Data Reporting   ??Things can change fast in a recession. Clients, under financial pressure themselves, terminate engagements. Revenues may contract. Debtor payment periods and write offs may deteriorate, putting pressure on liquidity. The firm’s key financial metrics must be monitored far more frequently than in boom times.
3. Make the Hard Decisions Humanely and Fast  ??Layoffs, if required, must be quick and humane not only to preserve capital, but also to get the firm past this trauma quickly and focused on working forward again. Continued employment of underperformers must be carefully assessed. Where the market is no longer buying specific services there are two choices: retool (quickly) or separate. (Do not misinterpret this as a suggestion to rush to lay off people though. Long-term considerations suggest this is a last resort option for all personnel except those who ought to have been asked to leave years ago.)
4. Get Practice Leaders and Client Team Leaders focused on short-term action plans  ??Actions must be executed more quickly than in “good times” and therefore designed for rapid implementation. Plans must be focused, systematic and disciplined. Those that will actually drive plans must be integrally involved in crafting them and managing their execution. Feedback and accountability measures are critical to ensure that the plans are executed, especially when they relate to the hard, courageous decisions (point 1.) Non-billable time becomes a valuable asset and must be actively managed to ensure that key tasks receive priority.
5. Involve Your Clients  ??In recessions, client mobility increases. Client needs evolve more quickly as new threats and opportunities emerge. Firms need to go beyond simply expressing empathy and assuring continuing loyalty. They need to actively position themselves to meet emerging key client needs. This cannot be done without actively discussing business (not just legal) issues with clients. If you don’t have client teams in place for your key clients, now would be a good time to start!
6. Manage Internal Expectations   Business as Usual Could Be Lethal??Remember the tale of the two frogs? The first is dropped into a bowl of hot water. It jumps out. The second is dropped into a bowl of cold water and slowly heated up. It doesn’t jump out and eventually dies. Similar procrastination has been the death of too many good firms. You need to explain internally what is being done to weather the recession and the likely impact on the financial positions of your people. This knowledge will motivate your people to do what is expected of them rather than default to “business as usual.”
7. This Too Shall Pass   Keep a Balance With Your Long Term Strategy??Think strategically about whether and where to cut short-term resources. Retaining some temporarily unprofitable practice areas and individuals may be advisable if they are important to your long-term goals. On the other hand, a recession is an excellent time to re-engineer or sever areas that have become less profitable but have been tolerated to avoid conflict.

Thanks again to Robert Millard for his collaboration on this. 

As always I appreciate your feedback.

Gary Wingens of Lowenstein Sandler and Frank Burch of DLA Piper listen to Dan DiPietro of Citibank forecasting a tough 2008 at the Army and Navy Club in Washington DC during The Edge International Managing Partners Strategy Summit

Last week, my Edge International partner Robert Millard and I hosted a very private, personal, invitation only, Strategy Summit for the Managing Partners of 10 law firms to explore:

•    key strategic issues facing law firms today

•    what law firms are doing to address these issues

•    what constitutes "best practice" in the law firm strategy process

The managing partners represented firms ranging from the largest in the world (DLA Piper) to a tiny, brand new firm with a highly innovative business model (Valorem Law Group.) It was a truly fascinating two days of strategic debate and solution building.

On the facilitation / faculty side, we were joined by guests Dan DiPietro of Citibank’s Law group and Michael Rynowecer, President of BTI Consulting Group of Boston. The venue was one of the most prestigious and historic venues in Washington DC: The Army and Navy Club, barely a block from the White House.

We are currently preparing to communicate learnings from the Summit in a special publication in February. Not everything will be covered. The summit included many candid exchanges between the managing partners, sometimes on quite sensitive issues. Arguably, this was by far the most valuable part of the summit. We have agreed that the Managing Partners themselves will be the final arbiters on what gets published and what does not.

Thank you very much to the managing partners that participated. In alphabetical order, they were:

Charles P. (Chuck) Adams, Jr., Managing Partner, Adams & Reese
Francis (Frank) Burch Jr., Joint Global Chief Executive Officer, DLA Piper
Nicolás Herrera, Managing Partner "Guyer & Regules" (Montevideo, Uruguay)
R. Steven Kestner, Executive Partner, Baker & Hostetler
Patrick Lamb, Chairman, Valorem Law Group
Don G. Lents, Chairman, Bryan Cave
Christopher Marston, Chief Executive Office, "Exemplar Law Partners"
Keith Vaughan, Managing Partner, Womble Carlyle Sandridge & Rice
Mark D. Wasserman, Managing Partner, Sutherland Asbill & Brennan (substituted for by Executive Partner Tom Gick on Day 2)
Gary M. Wingens Managing Partner Nominee, Lowenstein Sandler

Each invitation was extended based upon personal peer recommendation.  The event was not publicized beforehand.  Many of those invited reluctantly declined because of conflicts with their internal firm events, often related to compensation given the time of year.

Given the very positive feedback from the participating Managing Partners, we will certainly host similar events in the future.  If you are interested in being invited and are willing to recommend other firm leaders with whom you would like to explore timely issues, please let me or my Edge partner Rob Millard know.

Your legal blog has been selected by the ABA Journal as one of the 100 best websites for lawyers, by lawyers. Congratulations!

I liked this even more:

“Our list of the 100 best lawyer blogs is the cream of the crop from our directory of more than 1,500 blawgs in dozens of categories, including blawgs focused on almost every state, law school and major federal court in the nation.”

I appreciate the ABA a lot - they are the publisher of my book The Successful Lawyer and my audio program by the same name.

Here's what I don't like:

My friend mentor and blog provider Kevin O'Keefe has it mainly right in his post Law Blog vanity contests : ABA adds to the silliness

PUNCHLINE:  I am truly honoured by finding myself in the top 100 - make no mistake about that.  But why would I seek votes - there are many great blogs out there including ones that are not in the top 100 (and some that are in the top 100 are way too commercial for my taste - where the bloggers sell sell sell).  So I don't seek your vote - but do appreciate your dropping by or subscribing by email or even better by RSS feed.  I would like to think, my reader, that you and I have something in common.  We enjoy different points of view and variety.  I think some of my posts have been stronger than others - some more interesting than others.  So please keep visiting Amazing Firms Amazing Practices but continually look around and find other blogs that appeal to you and scan for a useful post now and then.  I trust you to do that by yourself without the blessing of any third party - I don't even think the winner of a popularity contest deserves your patronage more than a blog that might be more obscure but have data or a point of view you are interested in.

I think this is my least interesting blog to date but I felt compelled to write it so thanks for reading - and a reminder - don't vote for me (if you click the "vote for this blog" link above it will take you to a place worth contemplating for a few seconds before you return to the fires that burn on your desk.)

Here’s the actual quote: 

Lawyers are smart, but this herd mentality seems absolutely irrational, economically speaking — and not because the compensation is too high. The top law firms have been stuck in copycat mode for years. As soon as one of them raises salaries for associates, the others fall in line almost immediately.

Later in the article NYT asks: 

But think about this for a moment: Is there any other business in which every competitor matches salaries and bonuses almost identically?

In response to:

Evan R. Chesler, Cravath’s presiding partner, told The New York Times last month that the firm had originally wanted to “thank our lawyers for the hard work this year and the good year we’ve had.”

NYT offered:

It’s a nice thought but somewhat specious. Partners at law firms are a notoriously greedy bunch — that’s why they accept so few new partners — making it hard to believe that they are willing to part with their money so easily. I suggest there is something else at play: Law firms match bonuses to secure bragging rights.

My View:  Given the economic challenges the legal profession is about to face I believe large salary increases and bonuses are risky…  a handful of firms can play the game because they have spectacular revenues to encroach upon but if the main stream gets caught in this game we are going to see casualties.  Over my many years of working with law firms globally there is a season you want to avoid like the plague – that’s “shrinking pie” season (when the cycle leaves less for partners to share).  Everything becomes more painful – rewarding stars means starving others and laying partners off (or de-equitizing) requires more courage because the world is a lot tougher for those who are being disenfranchised.  Somehow when the pie shrinks, a very negative game of dominos ensues.  Huge associate salaries and bonuses accelerate the shrinking of the partner pie which I argue has its perils.

Read the entire article: Lawyers Compete, Except in Bonuses

PUNCHLINE:  I wish Mo Fo and Cavaney every success.  I offer the polite caution, however, that I have watched some very talented, intelligent and accomplished individuals who were not themselves lawyers get devoured in the law firm environment by the ferocious independence of many individual partners who felt quite comfortable in their belief that a non-lawyer could not possibly handle the job and that criticism could be heaped upon him (or her) in abundance.   Having said that, I am aware of several notable successes where non-lawyers have maneuvered the maze with aplomb and have gained the internal respect that has allowed them to get on with the job.  Pat Cavaney’s impressive background will help a lot but it won’t be enough without some serious help from the firm’s senior leadership and a lot of skill on his part - which he likely possesses based on the following (published by Techie Evangelist while he was Senior Vice President at Hewlett-Packard):

As Senior Vice President, Pat Cavaney is responsible for Global Delivery Operations & Information Technology for Technology Services, Technology Solutions Group. In this role, Cavaney manages the Global Delivery Program Office; the Group Information Office (IT + R&D); the Engagement PMO; Customer Operations; Applications Services Delivery; Total Customer Experience, Quality, and Business Process Management; and Compliance & Maturity Assessment.

Prior to his current role, Cavaney managed the implementation of the company’s merger integration plans for the services businesses of HP and Compaq. The scope of this effort encompassed all HP Services functions and lines of business including Customer Support, Consulting & Integration, and Managed Services.

Cavaney also served as the Worldwide General Manager of HP Education Services. He was responsible for managing HP’s broad portfolio of learning services that help businesses enhance knowledge and skills and improve business performance.

With a career spanning more than 20 years, Cavaney’s prior experience includes serving as the Worldwide General Manager of the HP Services Year 2000 Program. He was responsible for directing the sales, marketing, delivery, and administration efforts of HP Services to ensure the Y2K readiness of HP product offerings and customer support infrastructure.

Born in Pasadena, California, Cavaney holds a bachelor’s degree in finance and a master’s degree in business administration from the University of Southern California. He is based in Palo Alto, California.

I believe the legal profession has much to gain by importing talent from outside and I wish Mo Fo and Pat Cavaney every success.

Thank you to the ABA Journal for serving as a source for this post - see their November 20th article:  Non-Lawyer Now at Helm of 1,000-Attorney Law Firm

The article alluded to a variety of perks including money, candied apples, milkshakes, car discounts, valet services, wine, office parties, in-office gourmet meals on silver platters, nap rooms, child care, emergency nanny services, sabbaticals and even an occasional masseuse.

Perhaps this was the most important perk mentioned:

Fried, Frank, Harris, Shriver & Jacobson, a 600-lawyer firm based in New York, offers employees a service akin to a personal issues coach and psychotherapist through a deal with Corporate Counseling Associates of Manhattan. The consulting firm has a battery of staff psychologists and social workers to provide advice on issues including stress, anxiety, depression and divorce.

While many companies have offered employee assistance programs over the years, few have Ph.D. psychologists on staff.

A spokeswoman for Fried, Frank, Paula Zirinsky, said, “We want employees to be successful in their personal as well as their work lives.”

PUNCHLINE:  Some of my law-firm clients have very serious challenges dealing with individuals for whom "psychological intervention" should be mandatory.  In these severe cases, ostensibly productive members of the firm are causing harm to client relationships and firm personnel with long term costs that are hugely underestimated by their firms.  Perhaps offering such perks is a way to make it just a little easier to address these firm-threatening challenges.

Read the entire article...  perhaps your firm can offer many of the perks mentioned - most are not that expensive and I'll bet the return on investment would be healthy indeed (pun intended).

This in the face of:

"Baton-wielding police fought with lawyers outside courthouses in Islamabad and Lahore again Tuesday, arresting dozens more as they enforced Pakistani President Pervez Musharraf's crackdown on judicial activism."

The above from CNN Story: "Pakistan's courts in lockdown"

The Canadian Bar Association has condemned Pakistan:

CBA Condemns Arrests of Lawyers in Pakistan and Calls for Return to Rule of Law 

The American Bar Association (President) has this to say:

ABA President William H. Neukom Urges Restoration of Justice to Pakistani People

I have found nothing (yet) on the web site of The Law Society of England and Wales.

My view:  When lawyers stand up to a dictator who suspends the rule of law, then it is the finest imaginable "judicial activism".  If Musharraf's actions are tolerated, say goodbye to liberty.