Archive for the 'Client Teams' Category
As a follow up to my Moneyball and the Law series addressing whether statistical data is a better measure of law firm performance than subjective insight, I’m introducing a new framework that tests this hypothesis.
The Law Firm Performance Index™
To achieve the highest level of performance, law firms need to understand the outward-facing factors that impact the business of law. The LVS Law Firm Performance Index™ provides insight into these external drivers:
- The trends that generate or limit demand for specific types of legal services.
- The needs and decision-making process of potential buyers in a given market.
- The landscape of lawyers competing for the same clients.
Armed with this knowledge, law firms can develop and execute strategies based on objective rather than subjective evidence, reducing risks and increasing returns.
The Performance Indicators
Are you in demand?
Because of the dynamic nature of legal services, predicting demand in a given market is challenging. Legal matters typically fall into one of four categories: Commodity, Routine, Complex, Bet-the-Company. The largest volume of work falls into the first two categories while the most profitable work lies in the latter two.
A variety of trends impact the volume (amount) and nature (value) of legal services. The LVS Performance Index™ evaluates global, national and local trends to predict demand for different practices:
Who needs your services?
Corporate buyers of legal services vary based on business type, size and market reach. The buyer profile provides insight into the value (cost) of different types of legal needs. Size also impacts the way clients make decisions about whom to hire.
LVS segments the business market into five categories:
- Public Companies
- Large Private Companies (greater than $75 million in revenues)
- Mid-Sized Private Companies ($10-$75 million in revenues)
- Small business enterprises (less than $10 million revenues.
Pricing of legal services is generally associated with the level of risk and complexity of a matter. The larger the company, the more complexities in running the business and the greater the value of legal services that facilitate this process.
The business segment can also dictate how decisions about who to hire are made. Small companies make decisions quickly and rely heavily on referrals from trusted advisors when deciding who to hire. Large companies have more formal hiring processes, so firm brand and the ability to demonstrate and validate expertise is more important.
Can you get the business?
Law firms do not compete on an even playing field. The richest firms are getting richer. They are able to attract the best lawyers and win the highest volume of premium legal work.
At the same time, the firms that make up “Big Law” are increasingly segmented. A new tier of super-rich firms now controls the largest share of the premium legal services market. Large firms in the tier below are under increased pressure to compete for the premium work that remains. Trends impacting these firms have a trickle-down effect on other regional, local and solo firms.
Although these sub-groups will continue to evolve, Legal Vertical Strategies segments the law firm competitive landscape into five tiers:
|Tier 1||An emerging Global 25 law firms that LVS believes will ultimately control the legal market.|
|Tier 2||The remainder of the AmLaw 200 firms based on revenue.|
|Tier 3||Regional and other firms outside the AmLaw 200 with multi-city offices.|
|Tier 4||Single office/city law firms with more than four people.|
|Tier 5||Solo attorneys and firms with up to four people.|
What is your baseline competitive position?
The LVS Competitive Matrix pinpoints the relative competitive position of each tier of firm based on the type of client and value of work needed to achieve those goals.
Using the baseline competitive matrix, firms and individual attorneys can evaluate and adjust strategic goals and objectives based on market realities.
External dynamics impact how law firms will achieve these goals in many ways:
- The ability to generate business is dependent upon global, national and local trends that impact demand for legal services.
- Developing strong client relationships requires a deep understanding of the unique characteristics and demographics of businesses in the market.
- In order to demonstrate and differentiate to a client requires an in-depth knowledge of the competitive landscape.
- Operations, profitability and professional development are all dependent upon decisions that arise out of business creation, client relationships and competitive differentiation.
The Law Firm Performance Index provides the data firms and attorneys need to align external-facing strategies with the overall vision and culture of the firm. As with any index, the indicators will continue to evolve over time.
I’d like to hear from you. What external measure would you look at to predict law firm performance? In the meantime, I look forward to sharing in future posts the results of the work I do with clients who utilize this framework.
I was disappointed to miss this year’s ILTA conference but was lucky enough to attend a post mortem at yesterday’s San Diego Women in eDiscovery meeting. There, Saeid Ahmadian of Luce Forward provided a summary of the programs he attended.
One session focused on issues facing corporate IT. Their message: They have no one to talk to inside the law firms. In-house counsel talk to their internal teams. Outside counsel talk to their teams. But the folks who handle the data directly don’t talk to each other. And it’s causing problems.
DLA Piper’s Browning Marean , who spoke at ILTA on the topic of defensible e-discovery strategies, refers to this as the “Geek to Geek dance.” (That is with a capital G out of respect to those who talk in zeros and ones).
Saeid pointed to all the positive changes that are happening as corporations get smarter about their data. They are bringing more technology in house. They are hiring more IT. These are good things. “The less time we have to deal with client data, the more time we have to focus on legal issues.”
That said, he noted, both lawyers and their clients need to rethink the way they communicate with each other and bring in the data experts to have conversations with each other.
He is right. The real hurdles that need to be overcome are human. Lawyers who try to translate complex information about data to each other are playing a dangerous game of telephone. Depending on the attorneys involved, they understand most, some or none of the conversation. Even in the best scenario, a lot gets lost in translation.
The Geeks need to be talking to each other directly.
This needs to happen at the onset of every case. Better yet, the Geeks, or at least the chief Geek, should be integrated into the broader client development strategy. Set up a lunch or a meet and greet for the litigation support groups so they can learn from each other in advance of the next big piece of litigation.
Translated: Let your Geek talk to your client’s Geek.
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.
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.”
Oscar Wilde once said, “You know more than you think you know, just as you know less than you want to know.”
When it comes to law firm marketing, the same can be said about your clients. In some ways you do know more than you think you know, although you may not have harnessed that information to benefit your practice. In other ways, if you haven’t taken the time to understand what makes your client base tick, you may know a lot less.
The more you can understand your clients, the greater the impact you will have on them.
A key to building strong, long-term client relationships, is to understand the trends, drivers and needs that impact client behavior.
Trends: What trends impact your clients’ legal needs? Trends typically fall into four categories: competitive, regulatory, technological, economic.
Drivers: How do your clients measure success? Success for business is often based on key metrics such as financial performance or shareholder value.
Needs: What keeps your clients up at night? Consider the risks they face with their current legal needs, costs considerations, the source of the problem, competitive pressures.
By taking a disciplined approach to studying the trends, drivers and needs of your clients, you will provide value to your client that goes beyond the specific legal matter you handle. This will position you for a greater share of work and help turn your clients into great referral sources.
For more lessons about client service teams, read, “Lessons from the Trenches: Client Service Teams.”
My first job was at TJ’s Big Boy Restaurant in Rochester, New York. It was here, at the age of 16, that I received my first formal training in client feedback.
As a hostess, when customers came up to pay their bill, it was my responsibility to collect and track feedback by asking, “How was your service today?” I then recorded the response on a form that I handed to the manager at the end of my shift. Every month, we received a report card and with specific areas in which we needed to improve.
What always struck me about that first job was that was the discipline that went into managing customer relations. They not only created a systematic way to collect feedback, they used that data to improve their business.
Like the restaurant business, the ability to deliver an exceptional service experience is central to the legal profession. Client feedback is perhaps the single most valuable investment a law firm can make to strengthen and expand existing client relationships.
But the reality is that too often lawyers give client feedback lip service. For some reason, lawyers have a hard time asking for feedback and an even harder time listening to that feedback once they receive it.
That is why I am a proponent of using a third-party to collect the feedback. A third party has the advantage of serving as an objective ear for the client. Equally important, a third party can help turn the feedback into action.
As my friend Ramona Cyr Whitley of Luce Forward tells her attorneys, “The only thing worse than not asking for client feedback is not doing anything once you’ve received it.” Client feedback is only as valuable as what you do with it.
At a global level, client feedback is the foundation for better understanding clients, making needed process changes across the firms and positioning your firm more effectively in the market.
At the individual client level, the feedback should become the basis for written action plans to strengthen and improve service going forward.
To read more about lessons learned from client service teams, check out my article, “Lessons from the Trenches: Client Service Teams.”
Next Time: Understanding your client.
If it is true, as I believe, that value-driven legal services and profitability are not mutually exclusive, then law firm client teams offer a first step toward achieving both.
Client teams come in many shapes and sizes. When I use the term Client Team, I am referring to an organized, disciplined approach to strengthen and expand existing client relationships. It is cross-disciplinary in that a team includes attorneys from multiple practice areas within a firm. It is also cross-functional in that the team assesses its ability to support the client from multiple perspectives – as a business advisor, account manager, systems analyst and staffing manager to name just a few.
The overall goals of a Client Service Team are to:
• Solidify existing relationships to retain/expand existing work.
• Identify opportunities and expand the work across practice groups.
• Increase profitability.
• Secure the client as a referral source.
Through these efforts, however, law firms strengthen their knowledge of their clients business and can better understand how key decisions are made. They learn the trends, drivers and needs that keep their client up at night.
Armed with this information and a strong relationship, law firms can open the much needed dialogue around billing, knowledge management and key processes. Lawyers don’t necessarily need to have all the answers, but understanding the challenges clients face are the first step toward solving them.
As law firms consider ways to transform their business model to address market demand (read—better service, more efficiency, predictable pricing), strategic client teams offer an important step in this direction.
Until I went to work for an electronic discovery company a few years ago, I never understood the concept of disruptive technology in the legal profession. It never occurred to me that lawyers would perceive as a negative something that has the potential to improve the way they do business.
Coming from a background in law firm client relationship management, I saw—and still see—an opportunity for law firms to adopt electronic discovery on a firmwide (“enterprise”) basis and use their ability to streamline document review as a client service strategy.
For a host of reasons, that didn’t happen. Instead, corporate legal departments saw how discovery technologies could provide them with more control over their documents and help them better manage outside counsel.
That’s not because general counsel are any more innovative than their law firm counterparts. Most GCs, if given a choice, would focus on the legal issues their company faces and ignore operational issues altogether. But corporate counsels don’t have a choice. They receive outside pressure to cut costs from the C-level suite and their boards. Technology is a normalization factor.
Law firm partners don’t have the benefit of that outside party looking in and applying pressure. It’s not that they don’t know the benefits technology has to offer. They just lack sufficient pressure to take the proactive steps. The sense of urgency hasn’t been there. They perceive the technology as disruptive.
Whether it is a document review platform, time-and-billing software or any other piece of technology, law firms need to start viewing technology the way their clients do.
Here are a few suggestions:
Incorporate technology into your client development strategy. When a client announces they are implementing a new piece of technology, find out why. Use the announcement as an opportunity to get client feedback. Ask why they chose the product; why they chose to bring it in house; whether the technology is part of a broader strategy and what that strategy is.
Ask for a seat at the table. If your client has a technology committee, ask if you can participate. It will give you the opportunity to better understand your client and the issues their executive or legal team faces. It will also give you an opportunity to provide value back to your firm.
Stop playing defense. If you think your client is making the wrong decision about their use of technology, play offense. Develop your firm’s technology value proposition and ask for an opportunity to demonstrate how you and your firm can do it better. There is not a GC in the world who wouldn’t listen to that conversation.
To me normalizing disruptive technology is as much about client relationship management as it is about matter management. There are only upsides for law firms in being part of that change.
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