The view from the client’s side

Going through the stack of materials from my recent week of conferences, I was re-reading the notes I took at the Opening Plenary of the Canadian Corporate Counsel Association’s Spring Conference in Toronto, and thought you might be interested in some highlights from what was really a riveting panel discussion. The panelists, who offered valuable perspective on evolving client concerns and trends on the in-house side of the ledger, were:

  • Roger Fulton, EVP and GC of Canada’s Linamar Corporation,
  • Brad Brubaker Sr., SVP and GC of SAP America,
  • Ralph Ybema, President of the Hong Kong Corporate Counsel Association,
  • Peter Turner, CEO and GC of the Australian Corporate Lawyers Association, and
  • David McFadden, partner, Gowling Lafleur Henderson LLP, Toronto (chair).

Economic trends: North Americans Fulton and Brubaker spoke, as you might expect, about the anticipated impact of the recession, though they also pointed out that an economic downturn is a great time to locate and pounce on opportunities, including more efficient and better supply terms. Ybema and Turner, however, noted that in the Southern Hemisphere, the talk is not on recession but on China’s boiling economy, which has a far greater impact in that region. It’s easy to forget, wrapped up in our little bubble here in N.A., that the weather isn’t the same everywhere.

Litigation: As the recession gathers speed, legal departments can anticipate the usual uptick in litigation, especially on IP issues and with suppliers who are struggling to meet contractual obligations. In Asia, arbitration is strongly preferred for resolving disputes; Ybema noted that starting a lawsuit is an excellent way to end a business relationship there. Brubaker quipped, however, that in the U.S., litigation is often a good way to start one.

Risk management: All the panelists emphasized the importance of good, trusted personnel on the ground as a critical factor in good risk management. SAP manages risk in four steps: identify, quantify, prioritize and manage, but a “bottom-up” assessment process is also important. Brubaker noted that SAP workers in India were having problems getting to work, so the company set up an informal shuttle system; traditional RM tools would never have uncovered this. Fulton cited Toyota’s “go and see” policy to meet people and build relationships to improve risk management. Companies must be able to take risks, not simply avoid them: Legal’s job is to assess risk probability, and to offer unpopular opinions when necessary while still remaining a trusted strategic advisor.

In-house careers: Lawyers are becoming more involved in corporate decision-making, in part because most are fully integrated into the overall business strategy in terms of compliance, management and government relations. That’s terrific, except that successors to the GC position are becoming harder to find. Younger members of the department often leave, sometimes to run other departments with line function responsibility such as pensions or risk management, and sometimes because the high risk and heavy workload of the GC position can make it a less attractive position (the average tenure of GCs has dropped from 20 years to around four). Backgrounds in litigation or government relations have become as important as corporate experience when looking for GC positions.

There were all sorts of other interesting observations, especially about doing business in China — it would certainly be worth any law firm lawyer’s time to hear what these corporate counsel had to say. My impression is that too many firm lawyers attend these sorts of in-house counsel gatherings planning to talk, to create a marketing opportunity for their practices. Not enough, I think, go to these events to listen, gain the client’s perspective, and learn about what’s occupying his or her thoughts these days. Those who do will find themselves a serious step ahead of the competition.

NALP: the future of law firms

Back from a lengthy trip, I have a lot of catch-up blogging to do. Just to get the ball rolling, here are my speaking notes from last Friday’s plenary session at the NALP Annual Education Conference in Toronto, in case they’re of interest.

I was honoured to be part of a distinguished panel of speakers, moderated by Ida Abbott and including Ron Friedmann, Rick Matasar, Tim McManus and Vernā Myers, on the future of law firms. I’ll pick up on a few of the points raised during the wide-ranging 90-minute plenary later on, but for now, here’s what I prepared in advance: Continue Reading

There’s no such thing as work/life balance

There are a lot of reasons to dislike the term “work/life balance.” It’s grammatically absurd, for one thing, implying that work and life are two equal sides of a coin, which is a far more disturbing concept than any 2,500-hour billable target: work is part of life, not its opposite number. “Work/life balance” has also come to represent the great generational struggle between Boomer law firm partners and their Generation X/Y juniors, an oversimplification that reinforces labels and stereotypes when we need a better understanding of this far more complex dynamic.

But I think my primary difficulty with the term became clear to me after reading (with a hat tip to Legal Blog Watch for the link) this American Lawyer article by Denise Howell on work/life balance. There’s a lot of good stuff in the story, including the harsh reality behind producing even 1,800 billable hours a year (which at some firms these days is considered part-time work) and the gyrations large law firms now put themselves through to show their commitment to work/life balance (and the young lawyer attrition rates that demonstrate how these efforts continually fall short).

Denise also suggests that lawyers had work/life balance figured out pretty well in the 1970s, when a law firm lawyer could take an entire month off to go river-rafting with his family. My sense, though, is that law wasn’t the only line of work where saner hours prevailed nigh on 40 years ago.

It seems to me that North American business and industry in general led relatively uncomplicated lives back then in terms of pressure and competition, and so could proceed at what we now view as a somewhat leisurely pace. Right up until the early 1970s, North Americans could work about as hard they felt like and still rule the economic roost.

Then came oil shocks, Asian competition, the rise of the microcomputer, free-trade agreements, labour mobility, technology explosions, globalization, and the Internet. And within the space of a few decades, our work culture changed from moderate to frenetic. Continue Reading

The perils of client interviews

Via Larry Bodine comes this Legal Intelligencer article about law firm Ballard Spahr Andrews & Ingersoll, which has hired a 30-year veteran journalist to be a full-time client interviewer, asking clients about their needs, perspectives and complaints about the firm’s services. It’s a good, innovative idea, not least because it involves a tactic that too few law firms embrace: bringing in professionals from other fields. In particular, firms could benefit by adding more media expertise to their marketing and client relations departments, including print, TV, and especially online and new media. But that’s a story for another day.

What really struck me when reading this article was the question: what is the firm actually going to do with the information gathered through the interview process? The client has given up time and energy to speak frankly and at length about its relationship with the firm — what is the firm doing to respond? This is an especially important question in light of studies that show clients who fill out surveys or otherwise reply to feedback requests have heightened expectations of future interactions with the firm: having been asked for their thoughts, they expect those thoughts to have an impact or be implemented in some way.

Ballard Spahr will shortly have reams of data from their top 300 clients (aside: “top 300” clients? I don’t think so. Do you have 300 best friends?), all of which will dutifully be circulated to the management team and to the key contact lawyers for each client. That’s the easy and fun part — everyone likes to learn what other people think about them, especially when it’s good. But what actions is the firm prepared to actually take based upon that data, especially when it’s not so good? Is anybody going to prioritize and follow up on the implementation of client suggestions, in particular the difficult or challenging ones, in the midst of the constant fire-dousing and unrelenting billing pressures of your average law firm?

Any firm that makes a point of collecting client data is also going to have to appoint a senior lawyer to ensure that at least some of what clients are asking for actually gets done. This lawyer would be charged with reporting to the management team what actions have been taken to follow through on what the client talked about in the three, six and 12 months following any given feedback session. Call it a Director of Feedback Compliance, or the Advocatus Clienti I wrote about a while ago, but this enforcement position is critical if busy, independent-minded lawyers are going to take seriously the obligation to digest and implement the results of client interviews.

Law firms put a fair bit of pressure on their marketing professionals to show ROI on marketing; I’d be more interested in knowing the ROI on client communications. Interviewing clients is a great idea, but unless the suggestions they make are fulfilled with real change in how the firm and its lawyers operate, it’s not only a waste of time and money, it’s also raising client expectations that will never be met, which will only cause bigger problems down the line.

Frankly, I’d appoint the Compliance Director first and hire the interviewer later — create the structure for feedback follow-through first, then collect the feedback. Real change only happens when serious enforcement measures are attached to it.

Client-based lawyer ratings

I haven’t written before now about Avvo, the online lawyer rating system that generated so much controversy when it was first launched last year. Most of what you need to know about the site can be found in this collection of articles at Legal Blog Watch, but in a nutshell: Avvo provides a numerical rating for lawyers based on a number of factors drawn from state bar records, court records, peer reviews and lawyers themselves. Avvo can rate lawyers with or without their permission, and does not reveal the nature of the mathematical model used to calculate the ratings.

Avvo got off to a rough start, publishing ratings for dead lawyers and ranking convicted felons above law school deans. These beta-launch problems helped support Avvo’s many critics and formed the basis for a class-action lawsuit. But the lawsuit was dismissed (although the judge was hardly complimentary of the defendant), Avvo continued to expand its reach and work on refining its system, and the company has now apparently made enough progress to start winning over previous skeptics like Robert Ambrogi and Kevin O’Keefe.

I don’t have particularly strong feelings about Avvo one way or the other. On the one hand, I’m supportive of virtually any initiative that tries to provide more information about lawyers to the legal services consumer — reliable third-party assessments would be much more helpful than narrow, one-way lawyer advertising campaigns. And I instinctively rally to the side of anything that shakes up the profession’s status quo and makes lawyers a little uncomfortable.

That said, there are clear and obvious limitations to how useful a numerical rating system can be for lawyers. I like Amazon reviews and Consumer Reports rankings as much as the next person, and I’m the first to say that lawyers would benefit from more exposure to the pressures of the consumer marketplace. But hiring a lawyer is not the same as buying a car or a plasma TV — you can’t reduce all that a lawyer brings to the table to a simple ten-point rating. Partly that’s because people aren’t objects and shouldn’t be treated as such, but also because every person’s interaction with a lawyer will be different, based on personality mix, the nature of the case, the timing of the relationship, and a host of other factors.

And this leads me to what I think is the most important thing about Avvo ratings: they’re not client-based. Avvo’s mathematical model crunches information only from public records and lawyer submissions; client ratings aren’t poured into the mix, though they are provided as additional data points. But such ratings and reviews are still relatively few and far between at Avvo, so what the site really provides is an undisclosed mathematical model’s estimation of how highly a lawyer should be regarded. That’s better than no information at all, or relying on what the lawyer alone feels like telling you, but not better enough to win me over. Continue Reading

No matter what, manage expectations

Nothing is more critical to the success of your relationship with clients than managing expectations,  because expectations are enormously important to how people feel and behave. Among other things, as three recent articles explain, they relate closely to:

Price: Robert Ambrogi at Legal Blog Watch reports on a study that shows people enjoy wine more when they believe it to be more expensive, and that they find energy drinks less useful when they’re provided at a discount.

Performance: The Economist relates that athletes given morphine two days in a row and a placebo on the third day feel the same painkiller effect all three days.

Information: Guy Kawasaki links to a study that says the more information consumers have about a product, the less they enjoy it, because they’re less able to use their imaginations and engage in wishful thinking about a product’s effect.

Expectations correlate directly with satisfaction — it’s human nature to be happy relative to the degree of happiness anticipated. That’s how significant are your earliest dealings with a client, including numerous encounters before the client actually calls or shows up at your office. Here are just some of the ways clients’ expectations are shaped:

1. Your web profile: Obviously, this includes your web page,  especially your photo, biography, list of achievements, community work and personal data. But more broadly, it includes everything about you that comes up in a Google search, including where you show up on the Net, who’s talking about you, and what they’re saying. Steve Matthews has written a great article on this subject that will appear in the March 2008 issue of National. Continue Reading

Seeing justice through clients’ eyes

At the moment, I’m working on a paper about professionalism in the law, tying it closely to lawyers’ mandate to serve the best interests of others, including clients and the public. I thought you might be interested in this brief excerpt; I’d certainly be interested in your thoughts about it in return:

There is a fundamental disconnect between how lawyers view the justice system and how clients view it. Lawyers are trained, from the first day of law school, to get the right result, no matter what. We are steeped in the idea that justice must always be done and must always be seen to be done, whatever the costs.

The underlying theory of the common-law adversarial system reflects this: two learned advocates, zealously advancing their clients’ cause, will produce for an independent judge the means by which the correct result can be identified and proclaimed. The costs involved in reaching this result, in terms of time, money and impact on people’s lives, are, from the lawyer’s point of view, of secondary importance to the overarching goal of the system: justice must be done.

To see an illustration of this philosophy, consider the discovery process, a major contributor to the length and cost of trials. (Needed reforms to the process were endorsed by former Ontario Associate Chief Justice of Ontario Coulter Osborne in his recent civil justice report.)

Lawyers are trained to believe that anything that can be construed as potentially evidentiary should be made available for them to sift through. Inclined by both nature and training to be thorough to the point of perfectionism, lawyers want access to every stone for the purpose of turning it over. Similarly inclined towards risk aversion, lawyers fear missing any relevant point, no matter how small, and are accordingly driven to ensure that every box has been checked. The result is a massive overabundance of attention to the trees and too little regard for the forest. Continue Reading

Ten years from now

Eversheds, one of a small handful of really innovative large law firms out there (most of them in London), has released a report predicting the future of the legal profession in 2018. (Hat tip to Legal Blog Watch.) The linked press release provides the highlight: more commoditization of legal work, more fee pressures from clients, another stay of execution for the billable hour, and the continued reality that working in a very large law firm takes up most of your time. (Fill out this form for a copy.)

I tend to agree with Carolyn at LBW that this forecast doesn’t seem to differ a whole lot from the legal world in 2008. And I’m a little amused that the “Law Firm of the 21st Century,” as Eversheds bills it, is located in 2018. If you took a 1918 partnership as the model for 20st-century law firms, you’d find quite a lot of variation from one end of the century to the other. (Although, admittedly, not quite as much as you might like.) Still, it’s interesting that Eversheds took on the trouble and expense of this project — it’s not the kind of thing you do for fun. If, as I expect, it was part of a planning exercise for the firm’s near- and mid-term future, it’s not a bad idea.

I try not to predict the future if I can help it — whenever I’ve done so in the past, I usually wind up looking ridiculous, and so do most people who try to play Nostradamus. As Ron points out in the comments at LBW, there are always completely unforeseeable trends that emerge on a global scale and skew predictions completely off course. Just as an example, check out this video from 1967 that predicts, with remarkable prescience, high-tech shopping in 1999, but assumes gender roles and interior decorating will have changed not an iota.

So I’ll only make one prediction based on the Eversheds report, specifically on the sharp disagreement between lawyers and clients about the sustainability of legal costs (clients think it’s a problem, lawyers don’t). No disconnect between purchasers and vendors on any important matter, especially regarding costs, goes unresolved for very long. Lawyers who don’t take clients’ concerns seriously, especially regarding costs, aren’t going to enjoy 2018 very much.

Marketing is about the client

Late last year, in my column at Slaw, I posited the idea of lawyers adopting a client partnership model based on Amazon.com’s customer relationship approach. One of my suggestions was to track a client’s use of the electronic newsletters that law firms send out and use the data to tailor their services to that client accordingly:

If a client receives a general business and corporate e-newsletter but only clicks on and reads the articles pertaining to entrepreneurship while ignoring the items on competition law, her copy of the e-news can be automatically customized to include more of the former and less of the latter. Not only that, but the client’s browsing interest is added to her profile and could prompt a phone call from the lawyer inviting her to a venture capital seminar.

I was pretty delighted, then, to read this article from Law Firm, Inc. this morning, which led off with an anecdote about a Houston law firm’s marketing director and her innovative use of the firm’s existing but underutilized Customer Relations Management software:

She set the CRM system so that whenever the firm e-mailed clients a newsletter, it tracked which articles were opened by which recipients. This enabled Horn to home in on the topics that were most interesting to specific clients. She then centered her marketing efforts around these hot issues — a client alert devoted to climate change, for instance, or a seminar on intellectual property. The result: The more focused her marketing efforts became, the more phone calls the firm’s partners received. “We’ve sent out more than 500 items this year — newsletters, invitations to conferences and so on,” says Horn. “At least 10 percent have directly produced work.”

But this innovation success story, unfortunately, was one of the few reported in the article’s comprehensive survey of the state of marketing and business development at the 200 largest American law firms by revenue. The overall sense emerging from the article is that most law firm marketing is like a car stuck in deep mud, with the Chief Marketing Officer pressing hard on the gas pedal but unable to make much headway. Here are some of the reasons for (and effects of) all the tire-spinning: Continue Reading

If I had two billion dollars

There is persuasive authority for the proposition that if I had a million dollars, I’d buy your love. So what would I be able to buy with two billion dollars? Apparently, a whole lot of wide-eyed attention and breathless commentary from various legal media outlets. That’s pretty much all I’ve seen over the last few days after Latham & Watkins, DLA Piper and Skadden Arps each announced that it had broken the $2 billion revenue barrier in 2007.

Now, if this is the sort of thing you like, then the foregoing links will give you more than enough to pass the weekend, what with the debates over total firm revenue versus profit per partner versus profit per equity partner, each metric relatively able or unable to determine the richest and/or most profitable large law firm in the world. For myself, I’d like to step back here and suggest that the more we obsess over law firms’ enormous revenue or profit figures, the farther away we travel from why we’re in this gig in the first place.

It bears repeating that lawyers, like the laws that enable their businesses, exist for the purposes of clients, not the other way around. I constantly see lawyers get that formula backwards, viewing clients primarily as a means to their own ends rather than as ends in themselves. Our profession is deeply immersed in the concept of clients as sources of work, suppliers of problems, lifelines of status, fonts of revenue — as entities from whom we receive, rather than to whom we give. A lot of lawyers, subconsciously or otherwise, regard clients as holding value only insofar as they provide us with the raw material of lawyering.

Kant could have told you how categorically important it is to treat people as ends in themselves, that striving to enable another’s dignity and happiness is the overriding purpose of human relationships. That, fundamentally, is why law remains an important calling and (done right) an immensely fulfilling vocation. It’s no coincidence that law, medicine and ministry — each centered on alleviating unhappiness and enhancing the human condition — were the first three lines of work to be considered “professions.” If we want to understand what we mean by professionalism, we need to remember where the word came from. Continue Reading