The good times rolled

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Posted in: Clients, Compensation, New Lawyers

A noteworthy item in the National Law Journal today, interesting for a bunch of reasons. The thrust of the article is that with a recession likely to arrive in 2008, associates at many top US firms are likely to see an end to the salary and bonus frenzy that has obsessed the legal press for the last year or so. (Starting first-year salaries of $180,000 and year-end bonuses approaching $55,000, in case you’re wondering.)

First of all, I had to smile at this explanatory sentence in the article: “Top firms, for the purposes of this article, compose a group of large New York-based law firms that, generally, copy one another in bonus structures.” That’s odd, because I thought top firms were the ones with lawyers who were, you know, extremely good at what they do and had the respect and loyalty of their clients. But apparently, top firms are the ones that are very big and do whatever the other very big firms do. This is the kind of muddled thinking that permeates too much legal journalism in the US and Canada both: mistaking the small fraction of huge firms retained by wealthy multinationals for the profession at large. The last time I checked the CBA database, lawyers in firms of 100 or more represented about a tenth of the legal population.

Secondly, the article talks up the coming recession, as has become widely fashionable lately and will, no doubt, soon become a refrain in presidential campaigns in the US and possible election calls in Canada. I don’t follow this topic especially closely, but it has seemed to me for a while that the booming economy we hear so much about has boomed for only a small percentage of the population, while real wages for a lot of working North Americans (including lawyers) have been stagnant or worse for awhile now. Banks may be hemorrhaging money in the wake of the subprime mortgage fiasco (and the imminent subprime credit card fiasco), but you could argue what we’re seeing is the financial sector coming down to earth and joining the rest of us. Of course, it’s the white-hot financial sector that has been driving “top firm” profits recently, so you can see how some white collars in those firms are now getting a little tight. (Gerry Riskin was on top of this months ago, at any rate.) Continue Reading

Amazon.law

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Posted in: Clients, Innovation, Technology

This post originally appeared as an article at Slaw on December 16, 2007.

If you’ve ever ordered an item from Amazon, you know that every time you log back in to the website, you’re greeted with a list of recommended books, CDs and DVDs. Amazon compiles this list based both on your product purchases and the pages you’ve recently browsed. Essentially, Amazon alters its understanding of and relationship with you every time you use its services — whether browsing, adding items to your shopping cart, or actually purchasing something. Every point of contact between you and Amazon is another data point that redefines the relationship’s fluid dynamic.

There’s a lesson here for lawyers, and with technology continuing to evolve at an astounding rate, it’s a lesson that lawyers can start implementing right now. Lawyers already can — and someday, they all will have to — tailor their interactions with clients in the same way.

In the Amazon.law era, all types of client behaviour and activity can be automatically recorded and used to create and constantly improve a multi-dimensional profile of the client. This profile in turn can guide the lawyer’s interactions with the client, from billing and communication to service delivery and business development. To some extent, the technological tools to do this, from database software to customer relations management, already exist. Continue Reading

What clients want

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Posted in: Clients, Competition, Innovation, Technology

What do lawyers sell? To this day, you’ll hear a lot of lawyers say, “The only thing I have to sell is my time.” That’s the wrong answer, not only because it encourages our unhealthy fixation on hourly billing, but also because most clients prefer to pay for as little of our time as possible.

It’s also wrong to say that “lawyers sell knowledge.” We used to make a living at that, because we were virtually the only ones who had access to legal knowledge, and scarcity produces demand. We knew what there was to know and could solve the problems people pay to have solved.

But the Internet has helped make basic legal knowledge ubiquitous, non-lawyer competitors have turned intermediate legal knowledge into marketable assets, and as our cover story on information overload makes clear, advanced legal knowledge — “knowing what there is to know” — is becoming a practical impossibility. Legal knowledge, per se, is an increasingly shaky foundation upon which to build a competitive business.

So what can lawyers sell? Well, in the past few months, I’ve come across three firms (two Australian, one American) that have created online compliance and training programs for corporate clients. Employees log in and complete a series of lawyer-designed training modules that explain the legal and regulatory obligations in a given area, from employment law to corporate governance to privacy issues.

In the result, the client upgrades its employees’ competence, reduces its risk exposure, and can respond with detailed records to outside audits and reviews. The law firm earns a fee for the service while cementing its relationship with the client, and its lawyers spend their time on other value-building work rather than fielding phone inquiries or helping put out fires caused by poorly trained employees.

Doesn’t this mean the firm is billing fewer hours to the client? Why is the firm investing so much time and money in a project that will make clients rely less on lawyers? Ask these firms, and they’ll tell you: “It’s what the clients want. It allows them to meet their business needs.”

And that’s what lawyers must now sell: client empowerment. We must help clients, individual and organizational, to take greater responsibility for their legal lives — to develop “good legal habits” that prevent problems from developing. Doctors don’t just cure patients; they help them develop regimes to stay healthy in the first place. Why should lawyers be different?

Clients are ready to take more responsibility in their encounters with the law. Help them do that, and you’ll never want for work.
This post first appeared as the editorial in the October/November 2007 issue of National magazine.

Advocatus clienti

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Posted in: Clients, Innovation

The indispensable Bruce MacEwen writes another superb piece at Adam Smith, Esq., this time on the lessons law firms could learn about client relations from consumer packaged goods companies’ marketing strategies (short answer: a lot). This quote in particular grabbed my attention:

Focusing on clients means viewing the service your firm provides from their perspective and ensuring it’s aligned with what they really anticipate, need, and expect from a premier law firm. … At FedEx, it means that a key part of marketing’s job is “speaking up on the customer’s behalf and ensuring that what we have to say is taken seriously,” according to Mike Glenn, executive vice president of market development and corporate communications.

Wouldn’t it be great if a law firm adopted FedEx’s credo in real terms?

Imagine if a firm designated one senior lawyer to be the full-time representative and advocate of clients’ interests. This would be more than simply the “client relationship partner,” a position that might simply amount to the emergency contact who buys lunch once a month. I’m thinking of someone who actively, zealously advances the client’s cause, even to the point of full-blown irritation of the partnership. Continue Reading

Client empowerment

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Posted in: Clients, Innovation, Technology

The August 2007 edition of the Law Society Journal (New South Wales) talks about Nova Legal and Advisory, an incorporated legal business in Sydney consisting of both a traditional law firm and a corporate governance, compliance and risk management consulting firm. It’s the latter business that has come up with the innovative Nova Solutions, “an integrated online management tool for the governance infrastructure needs of organizations.”

As the article (membership required) explains, Nova Solutions is an online training and compliance program authored and maintained by the firm. Armed with the knowledge of clients’ legal needs in HR, compliance, governance and training, Nova’s lawyers worked with researchers, technical writers and tech people to create, says writer Julie Lewis,

“an intranet package tailored to each company, where users can click on a screen to see the company’s policies in relation to a range of regulatory and compliance issues, and click again to complete a training course to bring them up to speed on the company’s requirements in those areas.”

This is the third such online training and compliance service I’ve seen law firms provide (the Self-Administered Legal Training program at Blake Dawson Waldron and the Compliance Management System at Holland & Hart are the other two), not to mention Howrey LLP’s Virtual University for internal associate training. I wouldn’t be surprised if there are more, and I certainly expect this kind of service to flourish.

This is how lawyers will survive in the legal marketplace of the future: client empowerment. We will partner with clients, individual and organizational, and help them take greater responsibility for their legal lives — help them to develop “good legal habits” that prevent problems from developing. These online services don’t just provide an efficient, 24/7 means of providing clients with legal knowledge; they also anticipate and disable the kinds of issues that otherwise grow into full-blown legal headaches. Doctors don’t just cure patients; they also help them develop regimes to stay healthy in the first place. Why should lawyers be different?

One of these days we’ll see a law “firm” with no bricks, no mortar, no street address — just a full-scale online presence with which clients interact to reduce their legal exposure. Of course, there’s no guarantee that lawyers will be running it.

This post first appeared as a post at the College of Law Practice Management’s blog on September 18, 2007.

Dear client:

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Posted in: Clients

Probably you were expecting a greeting card from me — ‘tis the season, after all. The standard wintertime scene on the front, generic wishes inside for a joyful holiday, peace on earth, that sort of thing … you probably get one from your dry cleaners and your local MP, too.

Well, I’m not doing that this year. Instead, I thought I’d take this opportunity to pass along a few important things I think you ought to know.

First of all, I’m really delighted that you’ve retained me as your lawyer. Like the airlines say, you had your choice of many competitors, and I’m glad you came to my office rather than anyone else’s. You’ve been satisfied, and sometimes downright thrilled, with the good work I did for you. I’d like you to know that means a lot to me.

Secondly, I wanted to give you advance notice that I’m investing in some new software, which I expect will improve my efficiency and upgrade my practice overall. The software’s not cheap, but its price will be covered by the savings I expect to accrue, so I won’t be passing on the cost to you, and you’ll benefit from a higher quality of service.

Thirdly, I won’t be in the office as often next year. On the advice of friends and family, I’ll be taking more vacation time, including three straight weeks in the summer — I’ll make sure your interests are well-looked after by reliable colleagues in my absence. Why the extended time off? I finally figured out that no matter how important I might think I am to my clients, I’m the farthest thing from indispensable — we lawyers need to remind ourselves of that every so often. I’ll send you a postcard.

Finally, I’d like to give you my annual reminder that while I’m a good lawyer, I’m not a miracle worker. I can’t answer your question five minutes after you e-mail it to me. I can’t make your ex-supplier, ex-spouse or ex-employer behave rationally or treat you fairly. I can’t change the rules by which the law operates. And I can’t turn back the clock so that the whole thing never happened.

But here’s what I can do. I can deliver the insights and advice you need. I can help you plan a better life, business or career from here on out. I can be your trusted partner and advisor as you make important decisions. I can look after your interests and give you my best counsel, even if it’s something you don’t want to hear. I can keep your confidences and sympathize with your frustrations.

In short, you can count on me to be on your side, no matter what. Because I’m your lawyer.

Thanks again for the opportunity and the privilege to have you as a client. I’ll give you a call early in the new year to see how things are going and whether there’s anything I can help you with.

Oh, and have a joyful holiday. Peace on earth.

This post first appeared as the editorial in the December 2006 issue of National.

21st-century legal innovation

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Posted in: Clients, Competition, Innovation

This article was first posted at Slaw on September 25, 2006.

I had the great fortune to attend the annual meeting of the College of Law Practice Management in San Francisco earlier this month. The topic of the day was at the heart of 21st-century lawyering: innovation. Specifically, why lawyers aren’t very good at it.

One of the delegates made an important distinction at the start. When it comes to actual legal work, lawyers can innovate like crazy. Corporate lawyers have designed some of the most innovative (and profitable) financial instruments around; litigators are always finding new angles from which to argue cases, and so on. Where we have trouble innovating is in our two main professional mechanisms: practice management and client relations.

I’ll leave the first one alone — that’s a whole other steamship of fish — and go after the second: how lawyers relate to their clients and deliver services to them. It’s pretty apparent that lawyers’ relationships with clients could use, shall we say, a little sprucing up. Continue Reading

A to Z: 26 trends for the legal profession

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Posted in: Billing, Clients, Competition, Generations, Globalization, Innovation, Law School, Leadership, New Lawyers, Satisfaction, Technology

This article was co-authored with Mélanie Raymond, then-Senior Editor of National, and appeared as the cover story in the April/May 2006 edition of the magazine.

The legal profession is turning upside down, and many of the familiar landmarks are disappearing or bring replaced by brand-new structures. There are so many changes afoot that National’s editorial team could match each letter of the alphabet to a development that presents a threat — or an opportunity — for lawyers. Twenty-six trends, 26 letters: which ones matter the most to you?

Associé (Partnership)

It’s always been the Holy Grail, the ultimate goal for lawyers starting out in private practice It has been considered the final step in a lawyer’s transition from simply an employee to a partner. But this is all changing, thanks to systematic and generational change.

Equity partnerships (partnership without capital investments or draws), salaried associate, permanent or advisory associate — new forms of quasi-partnership are born every year. The journey to the associate level is accelerated in some firms, delayed in others. Methods vary from one firm to another, from one individual to another.

And increasingly, there are lawyers who choose to not aspire to partner status at all — for whom client development, firm management, and the additional responsibilities that go along with being a partner hold little or no appeal. Will partnership become obsolete? No, but flexibility, rather than tradition, will rule this ancient institution from now on.

Runners-up: Asia, Latin America Continue Reading

We mean business

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Posted in: Clients, Competition, Law School

I’ve been in legal journalism for more than ten years now, so I’ve heard pretty much all the clichés about the law (I’m guilty of having used more than a few myself).

My current favourite is the lament, “Law isn’t a profession anymore; it’s a business.” Lawyering is at least 400 years old, and I’m willing to bet that veteran lawyers were carping about this back in 1606, too:

“The honour of our calling’s much abused;
My time’s misspent in making clients pay.
The law is aught my eldest son should choose;
‘Tis but a petty busy-ness today.”

The increasing commoditization of legal services alerts us to the rising competitive tide that subjects lawyers to the vagaries of competition and client demands, just like any other business. But some lawyers would rather bad-mouth their insolent clients and try to ban their upstart competitors than accept the reality of the modern marketplace and look for ways to profit from the opportunities it presents.

The law is a business. It’s a professional business, to be sure, infused with high standards, strict ethics, a sense of vocation, and a duty of community service, all of which set it apart from other careers. But it’s absurd to pretend that the wonderful professionalism of law somehow makes its business side unnecessary, unseemly or unworthy of attention.

Many lawyers, of course, have an ingrained aversion to business. I’m certainly not the only one who entered law school with an undergrad degree rich in Arts courses and bereft of Business and Science offerings, along with a résumé that leaned heavily on summer jobs and our nation’s food services industry. Even my friends with B.Comms say that their degrees don’t help them find clients, manage business relationships or keep the overhead in check.

Accordingly, since law school teaches nothing about running a business and most Bar admissions courses offer little beyond Trust Accounting 101, it’s no wonder many of us end up uncomfortable with the demands of making a living as a lawyer. I’ll bet the growing number of “mature students,” who enter law school with years of work experience, will be the ones best positioned in future to ward off competitive threats.

In the meantime, legal organizations of all stripes could (and some already do) help by offering business training to lawyers, building their confidence and shortening the learning curve. When lawyers start to acquire and implement basic competitive tactics, then “commoditization” will have a much better chance of someday being relegated to the cliché bin itself.

This post originally appeared as the editorial in the March 2006 issue of National magazine.

Change, competition and clients

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Posted in: Clients, Competition

The pace of change in and around the legal profession these days can’t really be overstated. The external marketplace of legal services is transforming itself daily — vast numbers of non-lawyers are now supplying legal services to clients, who have more knowledge and leverage than ever before. Simultaneously, young lawyers are redrawing the internal map of the profession, forcing cultural change in the practice of law on a nationwide scale.

Whether we like it or not, major change is coming to the legal profession. We can’t stop the change, and we’d waste time and resources trying. What we need to do is understand the full breadth of what’s happening, quickly consider our options, and plot a course that best serves the long-term interests of lawyers — and of clients.

Maybe it’s a little late to start, but from here on in, we have to consider clients in every plan we make for the future of our profession. We have to think about what services clients want, how they want these services delivered, how much they will pay for them, and how they want that price to be set.

Lawyers have been long accustomed to deciding most of those things unilaterally. Not anymore.

This post originally appeared as the editorial in the July/August 2005 issue of National magazine.