Archive for August, 2010
If, as Cicero said, man is his own worst enemy, then partners are posing the biggest risk to the sustainability of large law firms. From my vantage point, individual attorney, practice group and other internal silos are preventing most firms from making needed change in the way they do business.
With the latest Hildebrant Baker Robbins Peer Monitor (Q2 2010) reporting that the outlook for the legal industry as flat, law firms can no longer expect economic improvement will solve their profitability challenges.
The report concludes:
“The challenge to firms will be in their willingess to innovate, experiment and change long-standing firm traditions in order to find new avenues of growth and profitability.”
The time is now for firms to address their proverbial enemy head on.
An article in the June issue of the Harvard Business Review suggests one of the best ways to force a change in thinking is to reorganize.
In “Change for Change’s Sake,” authors Freek Vermeulen, Phanish Puranam and Ranjay Gulati argue that by periodically reorienting organizations around different criterian, “the firm gets the best of both worlds.”
In one case, Cisco System changed its business unit structure (a.k.a. practice groups in the law firm world) into a centralized structure organized by function (e.g. marketing, sales, R&D).
The reorganization created new teams who were able to work together and exchange ideas with peers across the company. Because each member of the new team still maintained ties with their old networks, the knowledge base of each new team expanded as each team member had a set of trusted advisors they could call upon to validate ideas.
As a result, communication and collaboration increased across the company.
The authors argue:
“When a firm reorganizes in this way, the old networks and culture do not suddenly vanish; employees often maintain their old patterns of interaction for quite a while… so at least for the near term, employees cooperate along both informal and formal networks. As a consequence, the firm gets the best of both worlds.”
For law firms, new client development structures offer a way to reorganize attorneys to break existing silos and encourage the development of new relationships.
If attorneys are organized around practice groups, this may be the time to create industry or client teams. If a robust client team program is in place, consider creating new teams but comprised in a new way.
Law firms can no longer take a “wait and see” approach to profitability. Change is needed — if for no other reason that for the sake of it.
This is the final post of a five-part series on lessons learned from working with law firm client service teams. To learn more, check out my article, “Lessons from the Trenches: Law Firm Client Service Teams.“
Have you ever been stuck on the tarmac during an airline flight delay? To me, there is nothing more frustrating, especially when you can’t get any information about what the problem is and when they expect to have the situation resolved.
Two former colleagues of mine were in this situation a few years ago. As would be expected, when the flight delay was announced, a huge groan could be heard throughout the cabin.
Then the captain came on over the speaker. He said the flight had been delayed. He did not yet know why. He did not yet know for how long.
What he did do was promise to report back every 10 minutes to provide an update–even if the update was that he did not have any new information. And, he followed through on his promise.
My colleagues were amazed at the impact the captain had. The passengers immediately relaxed. They trusted that they would get accurate information. They felt like they were all in it together. All because of strong communication. (Okay, I think a round of free drinks was also involved).
Free drinks aside, communication is one of the simplest and often most overlooked areas of client service. Here are three easy ways to create lasting impressions with your client by providing consistent, ongoing communication.
1) Return Phone Calls Promptly. Responsiveness continues to be one of the single biggest complaints clients have about their lawyers. Return phone calls, preferably within an hour of receiving them. If that is not possible, be sure your voice mail and email indicate when you can expect a call back. Make the habit to return all calls at the end of the day, even if it is after hours.
2) Learn how your client likes to communicate and communicate that way. Some people are most responsive by phone, others by email, text or instant message. Instead of forcing your clients to adapt to your communication style, try adapting your style to theirs. By doing so, you will be recognized as being more responsive.
3) Maintain consistent, ongoing communication with your client during and after the engagement. This can be as simple as a weekly call to let them know there are no new developments but things are on track. It might also be a quarterly check-in to get feedback on how you are doing. Regardless, maintaining awareness with clients is the key to future business and great referrals.
As the pilot in the story above proves, communication isn’t always about letting people know something. Sometimes it is as simple as letting them you are working toward a solution.
So give your clients a call… Buying them a drink every once and awhile won’t hurt either.
Everything I know about business, I learned from my dog Star
The dog next door is one of the sweetest dogs I have ever met. Her name is Dakota and she is a chocolate brown Chesapeake Retriever.
But Dakota works alone. She does not like other dogs — even my dog Star. She tolerates Star, but after a few minutes she turns away or starts a fight. She’s like that with most of the dogs in the neighborhood. As a result, not many people stop to give her attention. When her owner goes away, she has to stay by herself. We’d love to bring her to our house, but she can’t because she doesn’t play well with Star.
It’s kind of sad. All the neighborhood dogs like to stop in our yard to play with Star. They run wild on the lawns throughout the neighborhood while Dakota is stuck behind the fence barking. It’s not that she doesn’t get love and attention, but she could get so much more.
I see more and more lawyers in law firms behaving like Dakota. Firms that have great breadth and diversity of talent can’t generate significant new revenue because their lawyers decide to go it alone instead of working collaboratively. I’ve watched partners at firms destroy the culture all because they want to get what they can get for themselves and not take any responsibility for the growth of the firm as a whole.
I understand the risk of partnership. I understand the fear that comes with sharing personal relationships without any guarantee of reciprocation. But isn’t the point of partnership that the whole is greater than the sum of its parts? If you don’t want to share your knowledge, your relationships, your experience, why become a partner at all?
Law firms are in a tough predicament. The traditional law firm business model is under great stress. Changes in fee structures, improved business process and technology integration are all needed if law firms are going to thrive in the way they have historically. But none of those changes are going to work if lawyers don’t pull out of their silos and start working together.
Given the choice, wouldn’t you rather be a Star?
Relationship management touches every aspect of the business—from how you answer the phone to how you bill your clients. Create a client service policy for your firm and make sure every person on staff understands their role in relationship management.
Effective client service teams analyze their existing client relationships across every functional unit of the organization. Here are a few things to consider:
Staffing: Where ever possible, try to staff a team that mirrors that of the client and encourage everyone to develop relationships with their counterparts at the organization. Positive impressions don’t rest in the hands of a single person. Everyone on the team should be part of strengthening the client relationship.
Billing: Evaluate your billing process from the standpoint of your client. Do your bills go to the right internal contact? Are they formatted in a way that makes it easy for your client to process? Or do your bills frustrate your clients by providing too little or too much detail? If you don’t know the answers to these questions, ask.
Marketing: First impressions today are not always in person. They are online, often before any face-to-face interaction takes place. Today, a firm’s website is where a first impression is established. What does your website say about the firm? Is the content up to date? Does the look and feel of the site reflect the strongest attributes of the firm? For more on this topic, read, “When is a website more than a website?”
IT: Bring your IT professionals into the client team fold and evaluate what resources are available to support the goals of the team. Look at what internal resources you currently leverage to improve the overall efficiency in the way you work. Client extranets, simple project management software and experience databases can provide invaluable differentiators to support the development of the client relationship.
For more information about client relationship management, check out my article, “Lessons from the Trenches: Client Service Teams.”
It is a buyer’s market out there.
Over the last two years, more than 5,700 lawyers have lost their jobs. The demand for many types of legal services is down. Competition for high-demand legal services has never been greater.
Being a good lawyer is no longer good enough. How you demonstrate value is equally important.
Law firms who understand their business processes — how they lawyer — and use that knowledge to streamline the way they work have a powerful advantage over those who don’t.
When I refer to business process, I’m talking about looking at the discreet services lawyers provide and understanding what steps go in to providing that service and for what cost. While there may be no “one size fits all” process, there are certain steps that happen every time and there are variables — most of which are known but not always predictable.
With an understanding of how lawyers in the firm work, it becomes easier to assess costs and evaluate ways to improve efficiency and effectiveness across the firm. And, it sets the foundation for sometimes difficult conversations about timelines, communication expectations and fees.
The ability to communicate the workflow of a case or a transaction helps simplify the management of client expectations. Consider the power of providing a client — at the onset of a matter — with a high level overview of what steps are involved, explaining the absolutes and discussing unknowns. Additionally, you can tee up sometimes challenging conversations about timelines, communication expectations, and fees.
Beyond communication, a more advanced understanding of the business process also provides the foundation for developing value-based billing arrangements. The desire for pricing predictability is well established in 2010. For law firms, the key to responding to this need, is to understand the cost of their own business. Documenting the business process of common matters is the first step.
To learn more about the benefits of client service teams, check out my article, “Client Service Teams: Lessons from the Trenches.”