Core competence: 6 new skills now required of lawyers

Up till now, the necessary and sufficient skill set for lawyers has looked something like this (in alphabetical order):

  • Analytical ability
  • Attention to detail
  • Logical reasoning
  • Persuasiveness
  • Sound judgment
  • Writing ability (okay, that one’s apparently optional for some)

This list doesn’t include such characteristics as knowledge of the law, courtroom presence, or integrity — these aren’t “skills,” per se, so much as information one acquires or basic elements of one’s character. Even innovation, which I prize so highly, is first and foremost an attitude and willingness to think and act differently.

Rather, I’m concerned here with actual skill: a ready proficiency or applied ability acquired and developed through training and experience. Your degree of character, diligence and intelligence are innate characteristics; skills are what you acquire through their application. If you possessed these six skills in sufficient abundance, you were fully qualified to practise law.

Well, not anymore. From this point onwards, while these skills remain necessary, they’re no longer sufficient: they constitute only half of the set necessary to practise law competently, effectively and competitively. Here’s the new six-pack, the other half of tomorrow’s — no, today’s — minimum skills kit for lawyers (again in alphabetical order). Continue Reading

Talking to ourselves

American Lawyer magazine has released the 2008 edition of its A-List — its ranking of the firms that “best embody what it means to be a success in the legal community.” If you’d like to know about the cream of this particular crop, here’s the top 20 (registration required).

To produce the A-List, American Lawyer takes results from three of its own scorecards (revenue per lawyer, pro bono commitments and associate satisfaction) and one from the Minority Law Journal (diversity) and crunches them to get an overall score. RPL and pro bono scores are doubled, then added to the raw satisfaction and diversity numbers: (RPL score x 2) + (PB score x 2) + AS score + D score.

Now, it seems to me that, at the great majority of law firms, the relationship among these four criteria could be better estimated as (RPL score x 9) + (AS x 1) + (PB x 0.5) + (D x 0.2). So if a firm has managed to generate equivalent ratings in both RPL and pro bono or associate satisfaction, I’m inclined to think it’s done a pretty good job of figuring out the system, just as law schools have done with the US News and World Report law school rankings. And I think that recruits (for whom the A-List is surely intended) who believe that these firms have managed to magically balance big profit with big commitment will end up disappointed.

But anyway, what bothers me more about the A-List is that it’s yet another lawyer or law firm ranking tool that gathers its data from lawyers or law firms themselves. The AmLaw 100 does it, too. So does Avvo. So do almost all the legal periodical surveys that rate lawyers in a particular practice area or region. Most legal profession ratings and rankings are heavily or entirely influenced by lawyers’ opinions of themselves. That makes for a nice echo chamber effect, but it doesn’t tell us much about which lawyers and law firms are most effective at what (presumably) we’re here for: to provide legal services to clients. Continue Reading

Conflicts and the law of unintended consequences

The Recorder reports this morning on the rising number of law firm requests that clients sign broad advance waivers (or blanket waivers) that would allow the firms to act against those clients on future unrelated matters. Firms, looking to maximize the amount of business they can take on, are trying everything they can think of to get around conflict of interest rules. Clients, reasonably enough, won’t sign anything that could impair their interests down the road if they can help it.

Clients’ responses to these requests vary according to the size and leverage of both firm and client. Large clients routinely blow them off, because they can — the lawyers need their business more than the clients need these particular lawyers. Smaller clients have less leverage, so if they want to hire big firms, they pretty much have to live by the terms those firms dictate. I can see a couple of trends emerging from this, neither of which is good for large firms and both of which reflect the unintended consequences of size.

First, when a firm is so big that it has to go begging for the right to sue the client in future, the client will correctly diagnose this as a vulnerability that can be exploited. Instead of simply refusing these requests, clients will start calculating just how much (or little) they actually risk by granting such a waiver, and how much the firm has to gain by it. The client might then say to the firm, “Sure, we’ll grant you the waiver — and in return, you’ll knock 15% off all your fees and pick up the costs of a new extranet system.” Large firms’ vulnerability to conflicts is going to cost them at the bargaining table. Continue Reading

Innovation requires clients to step up

Bruce MacEwen at Adam Smith Esq. reports on a presentation he attended at Allen & Overy’s New York office titled “Innovation in Legal Service Delivery,” featuring high-profile law firm lawyers, in-house counsel and consultants. The gist of the event and his article is that innovation of this type is still very much wanted and isn’t nearly the hopeless cause many like to believe. As a certified aficionado of legal marketplace innovation, I agree on both counts.

Bruce ends his post by asking a central question: “How shall we continue these discussions? Are they best conducted in law firm-sponsored colloquies such as this? Under the auspices of a legal publication such as The American Lawyer? At dispassionate fora and conferences put together by and hosted at a law school?” I have a couple of thoughts to offer here.

First, the conversation should continue wherever and whenever it can take root and flourish, especially in the blawgosphere, as part of a continuing effort to draw in as many decision-makers, and generate as great a sense of urgency around this subject, as we can. Legal services delivery innovation captures the imagination of lawyers at the grassroots level — at what event speaker Paul Lippe called the “immensely strong pockets of innovation” in law firms. Tapping into those pockets, through online and other vehicles, will multiply and magnify the volume and impact of that conversation.

But secondly, and more importantly, the effort to lionize innovation in the law needs more than law firm colloquia, legal periodical articles or law school efforts, helpful as all these would be. It requires more than the excellent College of Law Practice Management’s Innovaction Awards or the Financial Times’ legal innovation series. Innovation in legal services delivery will not succeed unless clients get seriously and deeply involved in the process. Continue Reading

The danger of discounted rates

At the risk of being mistaken for an Ayn Rand devotee, one of my favourite moments in The Incredibles comes when Helen (Elastigirl) is admonishing her son Dash, who’s upset because he’s not allowed to use the super-speed that makes him special. “Everyone’s special, Dash,” says Helen, to which Dash mutters under his breath: “That’s another way of saying no one is.”

I thought of that line when I read the results of a fees and pricing benchmark survey published by RainToday.com (HT to The Greatest American Lawyer via Legal Blog Watch). Headlining the uniformly interesting results was the observation that 78% of all firms discount their rates (a startling 89% of firms with ten lawyers or more) from what they’ve advertised or initially advised the client. The average discount is 9.9%.

When everyone is discounting their rates, then no one is.

When you hear “alternative billing” discussed by lawyers and clients today, what’s being talked about most frequently is rate discounts: the lawyer knocks X percentage or Y dollars off the “going rate” in order to satisfy a client demand. The client is happy because she feels she carries enough influence to force a fee break; if she’s in-house, she can report to her bosses that she haggled the lawyer down from the starting rate, thereby proving her negotiating acumen and hard-line position on costs.

The lawyer’s happy too, for a bunch of reasons. The rate is not nearly as important as the number of hours he can bill, which has a far greater impact on the final tally and is anyway the criteria that the partnership cares about most. Moreover, any halfway clever lawyer builds into his rate the distinct possibility of future discount, ensuring that the final actual rate doesn’t plunge too deeply below what he actually wants to make. And of course, the most important thing is to actually get the work and strengthen the relationship, to ensure more work in future. In this light, the rate is a card the lawyer can afford to play early and easily when negotiating the overall agreement to produce legal work.

This lovely scenario grows problematic, of course, when discounting becomes so ubiquitous that it loses its cachet as a real benefit to the client. Continue Reading

Twittering your clients

Every so often, a topic explodes into the legal blogosphere and gets everyone talking. We’re seeing one of those explosions right now, thanks to Twitter. If you haven’t heard of Twitter, or if you have but you’re not sure just what it is, you can read the Wikipedia entry for a general backgrounder. If you’re looking for the lawyer’s angle on Twitter, I strongly recommend this article by Steve Matthews at Stem Legal, (and check out Steve’s ingenious legal tweet site, Legal Voices), but there’s great stuff in recent blog entries by Doug Cornelius, Connie Crosby and Kevin O’Keefe too, to name just a few.

Unlike all these folks, though, and many more lawyers besides, I’m not on Twitter — not yet, anyway. This isn’t because I don’t see the value, which most certainly is there from a marketing or micro-blogging perspective (not to mention emergency communication uses). My primary obstacle to Twittering is that I don’t have a wireless PDA or Blackberry, and, the good Lord willing, I never will — I’m quite happy to be unburdened by the expectation of 24/7 reachability.

There’s also the problem of limited time and attention: I’m barely able to to get through the morning newspaper, and the only magazine I subscribe to (The Economist) can go unread for weeks at a time — if I subscribed to Twitter, I’d very probably miss most of the traffic. But maybe most fundamentally, I just don’t have enough interesting things to say that often. This blog is about it, folks. Status updates at home would look like “Refusing Claire’s entreaties to watch another episode of The Backyardigans,” while tweets at work would be a fairly constant stream of “Editing another article.” I think the world can get along without that, and maybe the Internet ecosphere would benefit too.

Anyway, my primary interest in Twitter is to wonder if there are lawyer applications beyond marketing and publishing, and I think there might be. I’d be interested in seeing how lawyers use Twitter as a client communications tool. Twitter offers lawyers the chance to issue instant, real-time statements wherever they are, to clients who avail themselves of the Twitter service (and more of them do every day). Here are some ways that might deliver value to clients: Continue Reading

Burn your newsletters

Ah, the law firm newsletter. The simplest and humblest of law firm communication vehicles – a collection of lawyer-written articles on new statutory or case law developments, bundled together into a stiff, saddle-stitched document that’s mailed out to clients on a regular basis (or more recently, placed online and e-mailed). What could be a safer and more broadly acceptable marketing tool? Well, there’s the problem, really.

The necessity and effectiveness of law firm newsletters have been long overrated. Partly this is because the content is written by lawyers, and is therefore a reliably tortuous read. Partly it’s because a general legal update is of limited interest and use to clients, who don’t really have time for FYI documents that don’t deal directly with an immediately relevant matter.

But mostly, I think, it’s because law firms have never given newsletters the attention, support and priority to be anything other than pretty mediocre and indistinguishable from one another (if I took the banner off two random law firm newsletters and switched them around, could you tell the difference?) That’s because firms don’t take newsletters seriously as publications in their own right.

Law firms sometimes seem to think their newsletters, print or e-mail, are competing only against other law firm newsletters for clients’ attention. They’re not. They’re competing against every business and industry publication their clients read, usually produced by large publishing companies with decades of experience. Unlike law firms, these companies don’t regard their periodicals as a sideline, a nice marketing tool – they treat them the same way law firms treat their work product, as the lifeline of their businesses. So it’s not surprising that in this competition, law firms are outgunned from the start.

Have you read any of the top publications in your clients’ industry sector? Gerry Riskin used to ask this question at managing partners’ conferences, and would get only a few hands raised in affirmation. If you did read them, and you compared them to the newsletters law firms produce for the same client audience, you’d feel embarrassed for the firms. The leading industry publications receive focused editorial direction and excellent quality control, are written by experienced staffers or freelancers, and are professionally designed and produced with high-quality magazine stock (or web architecture), art design and imagery. Law firm newsletters, it can safely be said, don’t and aren’t. Continue Reading

Life after lawyers

We need to start thinking about what the post-lawyer justice system is going to look like.

I can see how this might be an absurd or even heretical notion to some people. But there’s reason to believe that lawyers won’t be an essential part of the legal system in the future — and if so, our profession has to come to grips with what would mean, for us and for society generally.

I’m thinking about this because we’re preparing our cover story for National’s June issue, on the problems faced by family courts across Canada (and quite likely, in other jurisdictions) caused by self-represented litigants. if you’ve been inside one of these courts lately, you know what these problems are: backlogged dockets, mistreated witnesses, judges obliged to act as de facto counsel, wasted court time — and paying clients in the middle of it, wondering why they bothered to hire a lawyer since their spouse is doing nicely without one.

But here’s the problem: it’s been like this for more than a decade. We wrote about the pro se crisis in an October 1999 cover story titled “Who needs a lawyer?” (Sorry, no link — this was the Pleistocene Era, Net-wise.) And at a certain point, crisis becomes commonplace: we simply adjust to it. I think we’re perilously close to that stage in family law right now — people are getting used to the idea that family justice is a lawyer-optional event.

I’m coming to think that family law is the canary in the coal mine. Every day, more things that used to be the exclusive bailiwick of lawyers are automated, down-marketed and commoditized by non-lawyers. You already know this if your practice involves transactional matters like wills and real estate. But the pro se trend in family court shows that litigators aren’t immune either — as if the rise of mediation didn’t make that clear years ago.

We still talk about how we can “fix the problem” of people going without legal representation. But there are two big elephants in the room that few lawyers seem interested in talking about. The first is that the cost of retaining our services makes us largely inaccessible to all but the rich and the very poor, and that as long as we operate in a rarefied, self-regulated, protected marketplace, those costs are not going to fall.

The second is that a family court system with fewer lawyers and more self-represented parties is, no question, slow, inefficient, lopsided and chaotic. But you know what? It still works. Courtrooms still open their doors every morning, support is still mandated, and custody is still awarded — with or without lawyers’ involvement. We should be extremely nervous about the message that’s sending to the general population about just how indispensable we really are.

Lawyers are now a luxury good, but we increasingly deal in commoditized services. If you want to know where that disconnect leads, drop by your local family court sometime.

Why your client’s generation matters

In one of last week’s posts, I talked about inter-generational tension within some law firms and how it can undermine these firms’ succession planning efforts. But as important as it is not to alienate good young talent through something as silly as generational resentment, law firms that are clueless about demographic differences risk an even more damaging effect: alienating good young clients.

Law firm leaders who complain about the values of their Gen-Y lawyers need to remember that there are a lot of Gen-Y clients out there, too. On the corporate side, Millennials are playing key roles in many forward-looking industries like life sciences, biotechnology, new media, offshoring, financial innovations, and more. On the individual side, Millennials are buying houses, drawing up wills, getting married (and divorced) and starting up small businesses. Thanks to their affluent Boomer parents, they’re not short on funds, and there’s more of them out there every year. But if a law firm can’t even relate to its own Millennial lawyers, how can it realistically expect to gain the confidence of Millennial clients?

This isn’t just about Generation Y, though — this crosses all generations and touches on fundamental issues of marketing and client care. Part of really understanding your clients (something every successful firm has to do) is understanding the demographic leanings and preferences with which every client comes equipped — and having understood them, incorporating them into your strategies both for dealing with these clients and for seeking out new ones.

It’s more than just not sending the earnest Boomer to talk up the jaded Gen-X entrepreneur, or leaving the presumptuous Millennial alone with the distant Silent retiree. It’s about crafting a complete range of tactical approaches to clients — talent selection, methods of communication, service delivery vehicles, etc. — designed to increase a particular client’s engagement, comfort level, and resonance with the firm. Obviously, you can’t tell everything about clients from their year of birth, but generational influences are real, and they need to be factored into all manner of communication, from initial marketing efforts to ongoing service delivery.

Susan Cartier Liebel discusses these important points in a post at Build a Solo Practice LLC about generational relations in the law, which in turn refers to a Copyblogger post by James Chartrand that provides a quick-and-dirty summary of generational attributes. The upshot of James’ article is that marketing and publicity materials need to be targeted to customers in part depending on their generational influences. One of the points of Susan’s article is that this is especially true in lawyers’ relations with clients. Both posts make excellent points that lawyers should read and take to heart when framing how they deal with clients and designing the tailored vehicles by which they communicate to them.

Lawsuit investment and the limits of innovation

As you probably know by now, I’m a big fan of innovation in the law. But there’s good innovation and there’s bad innovation, and what’s emerging in the litigation field in the US and the UK looks to me like it belongs in the latter category.

LegalWeek reports that UK hedge funds are lining up to provide funding for lawsuits. This idea in itself isn’t breaking news: several US companies, often backed by massive hedge funds, already provide financing for plaintiffs in personal injury suits — and arguably, contingency fee arrangements in class actions accomplish the same end, providing funding in return for a piece of the expected damages award. Hedge fund investments in plaintiffs’ lawsuits has recently spread to the UK. But this newest British development contains a twist: the investors are looking to finance the defendant.

Here’s how LegalWeek‘s Editor’s Blog explains it:

The investor is likely to be a hedge fund or special situations fund looking to make high-risk investments. The investor gets a fee or premium and effectively offers to fund a substantial chunk of the defendants’ liability. The attraction for defendants is hedging and managing their exposure, despite higher upfront costs. And by introducing an outside investor that will look at a legal opinion to gauge the merits and risks of the claim, a company can effectively put a ‘market price’ on their litigation risk.

The concept of a market in plaintiffs’ lawsuits has its supporters, who contend that the benefits include creating a more level playing field between plaintiffs and defendants and bringing market-driven risk assessments to evaluate lawsuits’ chance of success. Opponents cite concerns about champerty and maintenance, though it seems to me these prohibitions have not been pursued enthusiastically by governing bodies and have lost some of their force over time (lawsuit investors argue that they’re not instigating lawsuits, which is forbidden, but financing suits already underway, which seems a distinction bordering on the specious).

There are access-to-justice arguments in favour of allowing plaintiffs to seek financial backing to bring a claim and sharing the rewards with those who do so, and reasonable people can differ on this. But when defendants start looking for investors as well, I start getting worried. Continue Reading