As I mentioned in a post earlier this fall, I publish a free e-newsletter called “Law21 Dispatch” every two months to about 2,800 readers. The content is exclusive to subscribers, but at the suggestion of some readers, I’ve decided to make it annual end-of-year practice to publish the best content from the previous year’s worth of editions. Subscribers will still benefit from a “head start” on the content of anywhere from several weeks to a full year.
Accordingly, here are (to my mind, anyway) the six best entries from “Law21 Dispatch” in 2017.
1. The Conversation
There’s a conversation that needs to take place within your law firm. Probably there are several, but we’ll start with one for the moment. You, as a leader in your firm, need to decide three things about this conversation.
First, you have to decide who needs to be approached and addressed. This person is almost certainly a partner, one who has delivered great value to the firm in the past and maybe even still does. But this person is also the cause of a serious problem.
- Possibly he’s behaving selfishly or maliciously towards colleagues and staff, whether he realizes it or not.
- Possibly she’s gripped the reins of a client relationship too tightly for too long, and her juniors are getting ready to quit the firm.
- Possibly he’s past the point when he should have reduced his day-to-day role in the firm or even retired altogether.
I think you know who this person is already. You might have numerous candidates, unfortunately.
Secondly, you need to decide who’s going to start the conversation. This person is also likely a partner, but could also be a senior staff member. This person speaks with authority, both formal (by virtue of his or her role) and informal (by virtue of his or her personality and past conduct). This person has to do something very difficult: broach the issue outlined above. I think you know who this person is, too. Probably, it’s you.
That’s daunting, which is why this conversation has been put off for so long. But I can tell you this: Nothing that occurs in the ensuing conversation will be as difficult as actually starting it. The conversation itself might actually be a great deal easier than you fear. Quite possibly, the person you need to speak with knows about the issue as well as you, but is too fearful or proud to broach the subject. Maybe they’re just waiting for someone they trust to raise it.
The third and final thing you need to decide is when to have this conversation. The answer to this question, at least, is easy. It’s today.
2. Use Multi-Generational Teams to Build Engagement
Law firm leaders seem to share a widespread challenge with their millennial lawyers. Firms are trying hard to engage their associates and junior partners in the larger affairs of the firm, to connect and coax them into leadership and business development roles, but with only limited success.
Some of this is rooted in real differences in personalities and priorities across generations. Many (though not all) millennial lawyers dislike making commitments that will reduce their leverage and leave them vulnerable to their employers. Self-confident and comfortable with mobility, they want to keep their options open and maintain fallback positions, so they tend to resist traditional pathways to power and to keep the firm at arm’s length. That makes them different from most senior partners; it does not make them wrong.
One way around this impasse is to cross your firm’s generational streams. I spoke with one managing partner recently who built multi-generational teams for business development, which have come to also provide informal mentoring and communication opportunities. Both younger and older eyes are opened by working in proximity with another generation that no longer seems so weird and unfathomable.
I think firms could go so far as to create “families” of lawyers born in different decades and assign them a strategic business issue to meet and hash out over coffee once a month. It’s a good way to introduce younger lawyers to enterprise-level concerns and opportunities; but smart firms will genuinely solicit their millennials’ views and build them into the firm’s plans. I’d also seek to build such teams between firms and clients, asking them to scope out an emerging industry issue and jointly advise leaders on both sides how to proceed.
Get your people talking and working across their generational divides. Boomers and millennials actually share a lot in common, especially an interest in serving clients. Start the process there and see where it takes you.
3. Reduce Your Law Firm’s Sales Vulnerability
Law firms have a salesforce problem.
A law firm’s salespeople, as you know, are its lawyers. This is problematic for a number of reasons, including the fact that most lawyers aren’t really cut out for sales and either resist the role or struggle with it. In turn, this makes those few lawyers who are good at sales disproportionately valuable to the firm, thereby creating an elite upper echelon within the partnership that skews compensation and damages collegiality. But that’s not even the biggest issue.
The real problem with the law firm sales process is that the customer relationships developed within this system are individualistic; that is, they belong to the lawyer rather than to the firm. If the selling lawyer leaves the firm, the expectation is that many if not most of the relationships will depart with him or her. The firm is vulnerable, strategically speaking, to its best salespeople, and both the firm and the lawyers know it.
Here’s how you start to solve this problem: Create revenue channels that are not dependent on individual lawyers, but on the firm as an enterprise. Technology-based legal services are the easiest way to achieve this, because they can be built and maintained by professional staff and can survive the loss of both staffers and lawyers. High-tech systems won’t demand a larger piece of the profits or threaten to cross the street to a rival firm. Here’s a list of law firms that have followed this route, compiled by Ron Friedmann.
But you don’t need to spend serious coin on advanced tech to achieve this goal. For example, invest in your firm’s library staff and knowledge resources to launch a subscription-based service by which your clients can engage your librarians to answer questions or undertake research. Or create and email a (paid) weekly industry intelligence bulletin tailored to each of your major markets. Allow your firm’s knowledge assets to face outward as well as inward, to provide services to clients as well as to lawyers.
Your firm should be selling entrepreneurially as well as individually. Start finding ways to diversify your sales team and reduce your sales vulnerability.
4. On What Criteria Do Your Clients Rate You?
Lawyers and law firms have grown accustomed to being assessed and ranked. But the assessment methods to which they’re accustomed have been pretty friendly up until now. Third-party rating agencies, “best lawyer” lists, industry awards — all these entities profit from lawyers’ tendency to preen and law firms’ desire to burnish their profiles. If you need validation as a lawyer, there’s no shortage of services to provide it to you, at a price.
But the new assessment systems now flourishing in the legal market are not friendly to law firms — at best, they’re coldly neutral. Corporate clients are starting to develop their own law firm evaluation systems, using data that they’ve collected (including through the fascinating AdvanceLaw GC Experiment) and criteria that match their own priorities.
For a sample, read about the comprehensive assessment and feedback system Google has rolled out to its patent law firms — of which there are now notably fewer than when the process began. Google’s key metrics are based on the “management triangle” — quantity, cost, and quality — each of which is defined according to the company’s interests, not law firms’. Expect to see a lot more of this in the years to come.
Here’s an unassailable fact: your clients evaluate your firm every day, formally or informally, and the combined impact of those evaluations dictates whether they will keep hiring you. Any firm that doesn’t know its primary clients’ law firm assessment criteria is courting danger. If your firm is in that category, rectify that immediately. Discover the terms upon which your clients evaluate your firm — and if, somehow, they haven’t yet developed those terms, offer to help them do so.
5. Flex Lawyers vs. Fixed Lawyers
The Big 4 accounting firms are moving on the legal market in interesting ways. Take PriceWaterhouseCoopers, which not only has opened a standalone law firm in Washington, offering non-US law advice to American clients, but also has just launched an on-demand flexible lawyering service for clients in the UK. This latter move is worth a closer look.
Some law firms have already blazed the flex trail, of course. Berwin Leighton Paisner (Lawyers On Demand), Allen & Overy (Peerpoint), Eversheds Sutherland (Agile), and Fenwick & West (Flex) are among the firms that have created flex-time lawyer platforms. There are also several standalone flex-lawyer businesses, including Axiom, Elevate, Conduit, and Caravel. And “purpose-built” or “virtual” firms like Taylor English and FisherBroyles are active in this space as well. PwC’s entry marks the newest phase in this development.
What we’re experiencing here is the start of a potentially major shift in lawyers’ usage patterns. Many associates, mostly but not exclusively millennials, have no interest in equity partnership and want more control over their work lives (and more than a few partners feel the same way). At the same time, many law firms recognize that the decline in demand for billable work is probably permanent, and that they can no longer sustain large rosters of full-time lawyers to be leveraged. These two trends are pulling the legal market in the same direction.
I think we’re seeing the emergence of two complementary models for accessing lawyers’ services: the “flex-lawyer” option and the “fixed-lawyer” option. The former is suitable for specialized, short-term, or project retainers; the latter works well for major, long-term, relationship-based retainers. Clients like having several options available for their diverse legal needs, which suggests that both these models should thrive.
So the question is, which is better for you? Some firms will reject the flex model altogether and remain steadfastly “fixed,” while others will shift to an entirely project-based workforce. Most firms, though, will wind up somewhere in the middle, maintaining a core of fixed lawyers complemented by a taxi squad of flex talent offsite. Ask your partners where they think your firm should wind up on this spectrum, and why they think so. That should trigger some very interesting conversations.
6. Bringing R&D to Your Law Firm
R&D in law firms is now a reality. Akerman, Ashurst, Dentons, and Kennedys are among at least 20 major law firms that have either developed an internal research and development capacity or have partnered with an outside provider for their R&D needs. But you shouldn’t consider R&D to be only for huge or deep-pocketed firms. Any firm can conduct R&D, and most should.
Law firm R&D is really about forecasting how the firm will be making money three or five or ten years down the road, on the assumption (more relevant than ever) that the legal market’s needs and circumstances will change significantly over that time. It’s about developing new services for existing clients, discovering nascent markets for tomorrow’s firm to enter, and identifying new technologies that will change the way legal services are created and delivered.
Your firm, no matter its size or focus, would benefit from that. But how do you persuade partners, infamously reluctant to divert or dilute their profits, to support this idea?
Equity partners, more so than corporate shareholders, often think in terms of risks rather than opportunities. So consider presenting an R&D initiative as a type of “hedge” against market changes, a way to mitigate the impact of an unexpected turn of events. If a key client disappeared, how would we replace it? If a new market emerged, how could we ensure our rivals don’t break into it first? If a new technology could change everything, how do we make sure we’re the changers, not the changed?
Keep the practicalities of an R&D initiative simple, too. Maybe request a very small percentage of annual profits be dedicated to a “laboratory,” staffed by millennial lawyers but overseen by a respected senior partner, with a mandate to identify a certain number of opportunities each year, prioritize those opportunities, and recommend them to the partnership, which must choose at least one project to fund.
Legal R&D is real. Tell your partners, and ask them whether they want to be the ones sidelined by someone else’s discovery, or the ones doing the sidelining.