General Counsel Panel Says Lawyers "Spectacularly Bad"

At the Legal Marketing Association Annual Conference on April 6 at the Disney resort in Orlando, we heard again from a set of in-house counsel about their needs and advice for outside counsel.

• Stephen Kaplan, SVP, General Counsel, Connextions



• Jeff Novak, GC, AOL Paid Services



• John Lewis, Jr., Senior Managing Counsel, Litigaiton, Coca-Cola

They said that law firms are "spectacularly bad" at asking about the client's needs, but really good about talking about the law firm's capabilities.

They said cost is important because it represents risk and is actually part of the outcomes they measure.

They remember when law firms ask "what does a win look like for you?" This relationship continues to grow revenue for the law firm, and they "make us look good."

They recognize as novel the concept of a law firm saying "we know how to contain costs on our side, we can apply these same ideas to a client's costs."

They realize that the law firm is offering an partnership that transcends the vendor relationship when they educate the GC on a new role as a value-add, off the clock. They say it makes a difference in treatment of the lawyer/law firm: "We leverage vendors, put them under duress, drive their price down. We don't do that to partners."

When markets have mobile lawyers, after they move around and immediately want to command an audience on how great their law firm is now, GCs remark they have to remind the lawyer that they used to say these great things about the place they left. And GCs make a joke out of many of the claims law firms make about themselves. As for differentiation between law firm strengths, GCs say "A lot of firms struggle on the 'what else' question in pitches."

Learn who are you, what is your brand, give GCs the differentiators that make a difference to their companies and them.

Firms must realize that GCs do not believe they hire lawyers not firms. "If you haven't figured out how to make us clients of the firm, you are always risking the work moving. We want to be clients of firms who know our business, anticipate our needs and understand what we want out of our legal work."

"It's just not acceptable to come into a company looking for work and know nothing about us, it's intellectually lazy, when everything in the world now is an open book test."

It is painfully easy to stay up on a client's moves, executives and activities, they said. This is table stakes now, firms should know clients as well as they can throughout the relationship and that includes every member of the client legal team team.

GCs remark that diversity is not a moral imperative, it is just the way the world is. Not having a diverse workforce, and not to recognize it among clients, is "just plain dumb." This is about growing your firms, they say. It is evidence of a forward thinking, innovative legal firm. "The industry acts like a herd of wildebeests, moving together in almost every action" from associate salaries, law schools recruited, fees and partnership agreements. That is clear to GCs and it destroys the notion that there is anything that differentiates law firms one from another.

Good strategic and tactical marketing that reach GCs must convince them that there is a compelling reason to displace a current relationship. Example: One was sued in NY, and a law firm came to the company GC and said they'd like to represent the client in this case. They said they were so sure they would win, they had already drafted the motion and would do the engagement for a flat fee. And if they lost, the client didn't have to pay. That got their attention. Only specific and highly customized marketing is effective.

GCs think "the landscape is changing, client expectations are moving. To not adjust the business model is akin to the tree that stands stiff in the storm and gets snapped in two." The majority of legal work in not "life or death" for a company, and most matters can be done by any one of several dozen law firms. Firms have to be introspective about where their growth opportunities lie.

GCs have become very sophisticated at how they use data, especvially when insituting an electronic billing system where clients can discover errors that their law firms don't even catch. When law firms say that they don't have a method to analyze their work processes and create more efficient ones, it's a red flag. Having the capacity to do these things is essential to the client's work and revenue. In-house law functions are a cost that has to be managed, and that has to be part of a law firm's marketing to us. "This business is one size fits one." The things like the ACC Value Challenge are not the end of the conversation, they are just the beginning.

Your Honor Awards: Winning!

During the judging this year, co-chairs of the Legal Marketing Association Your Honor Awards asked the panelists to indicate submissions that would be interesting case studies for a conference audience.

Wold Theiss's Janet Nordstrom is Chief Strategy Officer of a 325 lawyer firm spread over mostly Europe with services among many former USSR states, that won in training category. The lawyers had never had business development training. Brought in corporate counsel from multi-national firms and ACC to teach lawyers what would be necessary to compete for business among this universe.

Young lawyers were sponges, ready to learn. Took them to a remote site in Austria where they couldn't leave or access communication and distraction. Wrote two very difficult case studies. Did day and half pre-training on how to create value for client. Empowered the lawyers to devise solutions to the case studies, which would be judged by the in-house counsel as if in an RFP situation. At the end, panel of corporate counsel gave deep details on how to forge relationships that develop work for a lawyer.

Andrea Wood of Leonard, Street covered her winning entry in the online category, the launch of Dodd-Frank.com. Just seven marketing staff, but a strong business development culture, enabled a team effort to focus on this time-sensitive time-intensive project. One attorney reserves the domain on June 27 and presented the name to the marketing department.

They knew they could leverage the name, so June 30 it was decided to implement a blog. The bill was signed on July 21, 2010 and this mean it was a rapidly expiring opportunity, needed to do development and support with PR and other marketing. Budget was not identified. Firm had no prior blogging experience. Attorney did have time to devote to the project.

Stockpiled posts for ten days prior to launch. Sought a lot of suggestions for low cost providers. Meanwhile, supported the attorney's interest in his practice and took the project information to all other practice groups. Enlisted firm leadership, somewhat at their looking askance, but they trusted their business development team. Ultimately, eighteen lawyers were trained on blog writing and have posted nearly 300 pieces of information on the Dodd-Frank Act. Site launch was July 30.

Stephen Hastings of Fasken Martineau discussed firm's Best in Show winning entry in marketing on a shoestring, a bespoke marketing tool built on SharePoint. Called Symphonie, it is a repository of marketing and branding tools that can be worked on and is systematized firm-wide. Fact sheets, bios, photos, events are easy to access and adapt. Everyone can see everything. Also built a social networks internal feature.

Asking a Question? Bring An Answer.

Elizabeth Zabak of Carleton Fields, who was a presenter on leadership and professional development at the Masterminds pre-conference session during the 2011 Legal Marketing Association anual conference in Orlando, FL, discusses her takeaway from the interactive discussion with attendees.

Invest in Laterals When They Arrive

Deborah McMurray of Content Pilot attended the Masterminds pre-conference session at the 2011 Legal Marketing Association and learned that firms need to invest more heavily in the business development skill set for arriving laterals.

Jordon Furlong on Building the Perfect Beast

Jordon gives his takeaways for his Masterminds sesson on April 4 at the Legal Marketing Association annual conference in Orlando.

Read my post about his presentation here.

Leadership Roles Are Made Not Found

Elizabeth Zabak shared some best practices for law firm marketing leadership, ways in which to become a truly effective manager and mentor, at the Masterminds session at the Legal Marketing Association annual conference in Orlando today.

General characteristics for success operate in the new reality of there is no start time, people have to be effective right away. Marketers need to have grace under fire. Candidates have to be driven, smart, have good judgement. The successful hires show personal confidence and generosity. They have esprit de corps, lack of ego, behave with shared responsibility.

Questions at the interview to get beyond the resume

• What are you passionate about?
  
• How did you resolve a situation with a difficult person?
  
• What would you ask our managing partner in an interview?
  
• How do you handle competing deadlines?
  
• What do you wish you were better at?
  
• What kind of management brings out the best work in you?

What makes up high performing teams?

1. autonomy, mastery and a sense of purpose
   
2. intrinsic rewards vs. carrot and stick
   
3. earn loyalty and create a more talented team
   
4. develop clear expectations, clear messages
   
5. create a team, not a dictatorship

Developing and retaining talent

1. provide regular feedback and evaluation
   
2. project evaulations
   
3. "fan mail"
   
4. managing partners spread firm recognition emails
   
5. adults need 3:1 praise to criticism
   
6. be a strong role model
   
7. be a mentor and coach

Can The Law Firm Business Model Survive?

In the Economics and Profitability Masterminds session at the Legal Marketing Association conference, William T. Garcia, Strategic Initiatives at Howery and Mark Price, Director of Marketing of White and Williams, question the traditional model of law firm economics. We no longer live in the world of leverage on associates at the lowest level of law work, the world of clients unwilling to question price because low cost was equated with low quality, and a world of high volume low value work.

Market forces:

• new recruits are ready for high value work now


• low availability of high volume low value work


• clients no longer willing to pay for it


• rate increases vs. rate of inflation


• clients unwilling to accept annual rate increases


• disaggregation of law services, more client management responsibility


• rate negotiations and discounting


• perceptions of the legal industry


• expectations re: technology expectations

Levers of profitability

• capacity


• utilizaton


• rate


• realizaton

Billable hours - as capacity increases, compensation expense increases rate is allocated by individual lawyer.

Project fee model - as capacity increases, compensation expense can increase OR time per project can decrease rate is allocated by project. Smart law firms will add back capacity at the lowest possible cost.

Good marketers will talk to their attorneys about AFAs as producing a lower payment risk. More collectible because payment is coming in on front or as retainer, reducing time needed by attorney to collect.

For AFAs, firms will need to continue to pipeline associates to partners, but focus on outsourcing low value work or staff based work in order to expand and contract through non-employees.

Bringing Value to the Client Relationship

Law firms can't avoid adapting to the changing marketplace. One which has lead the thinking and development on alternative fees has been Drinker Biddle of Philadelphia.

John Byrne, CMO, and Kristin Sudholz, Chief Value Officer, of Drinker Biddle & Reath spoke to the audience of Masterminds at the 2011 Legal Marketing Annual Conference (#LMA11) in Orlando, FL. They point out that the one determinant condition of AFAs that make them work for law firms is scope. The dialog with clients about their goals and views of value for specific ordinary course of business or commodity work is the way to start.

Law firms need to have a resource within a law firm who can work through the AFA scenarios prior to them eing introduced to a client. Data is important, but a financial team who is willing to play ball is key. There has to be a management editct to bring any and all proposals through the review process where these team members get a chance to apply their analysis.

Fee Models other than Hourly:

• fixed fees


• capped fees


• retainers


• milestone formula


• tax-based billing


• blended fees


• volume discounts


• secondments


• value billing

Analyisis after billing is crucial to gauge whether the engagement satisfied the needs of the firm and clients. There will be some where losses occur on either side, the law firm will over work the matter or the clients will over pay. There is more non-billable work among lawyers to get the return. And you probably will never get rid of "shadow billing" as a way to see if the engagement is "making money."

Building the Perfect Beast

Jordan Furlong of Edge International says that the economy is not turning around and the we have entered a time of new realities for law firms.

What's going on?

Segmentation

is going on in legal work, and is becoming stratified. Each strata will have different price points and different relationship needs.

Mission critical work, from the client point of view, is work they wish they did not have to award. Clients think it definitely matters who they hire and they want the best...skills and reputation, for protection of the decision. Money is no object.

Ordinary course of business, where they need a lawyer, but it doesn't really matter who they hire to do this work. Their biggest leverage is the cost.

Commodity work, may not need a lawyer, but if they can get the work done for the right price and the lawyer is who does it, that's fine.

Law firms must decide in which tier they should be, and they all can't be in the mission critical work. The area of need is too small. If the firm doesn't choose a segment, the market will choose one for them.

Another trend is the development of alternative providers of legal services, and may not actually have a lawyer involved.

Some focused on small and consumer legal services. Low risk work.

Legal process outsourcing companies, usually based outside of North America (India, for example) who do "entry level" legal work that might have gone to associates. Can cut 85% of cost, and they do the work well. Law firms see these as competition. Clients see them as options.

What to do?

Invest in systems.

Abandon the clock.

• clients care about outcomes
  
• clients care about price
  
• the rest is irrelevant

Rethink legal talent

• law schools are built to produce teachers of law
  
• grades are a poor metric of lawyer success

LMA 25: Destination Disney

Next week, I will be blogging from the Legal Marketing Association's 2011 Annual Conference, the 25th annual, being held at the Disney Yacht and Beach Club Resort. I'll be serving with Beth Cuzzone of Goulston on the Monday Masterminds day-long deep dive into business development, alternative fees and leadership. Watch this space for information from Masterminds and the two-day conference following.