The value of discipline (sort of)

28 12 2010

With the New Year approaching, given the title of this post, you may be expecting a post on all he productivity benefits that can flow from self-discipline coupled with some suggestions for New Year’s resolutions. But no. I’m combining the D-word with one of my favourite words, “value”, to bring you a little morsel that I hope you can chew over until 2011.

Bertie was not impressed with his owner, the managing partner's, approach to discipline and didn't think the partners in the law firm would respond well to offers of dog treats

Value Disciplines is a model created by Treacy and Wiersema, and as well as being one of my favourites that I studied at B-school, it is one which I have found really resonates with lawyers and law firm management (their book is called “the discipline of market leaders” and is well worth a read).

In very simplistic terms, the theory asserts that an organisation can succeed in its market place by excelling in one of three “value disciplines” (ideally coupled with also practising the other two value disciplines to the market standard).

The first value discipline is operational excellence.  In their original Harvard Business Review article (available here), they define this as “reliable services at competitive prices delivered with minimal difficulty”. This is an interesting model for law firms, as in my experience few law firms really look to compete on this basis (operational excellence is not simply about having low prices) and indeed as I’ve discussed previously, hourly rate billing has often encouraged inefficiency – arguably the polar opposite of operational excellence.

However, with the emergence of LPOs and the increasing number of law firms hiring Lean Six Sigma specialists, plus of course the imminent entrance in the UK market of alternate business structures, I think operational excellence is a strategy that is going to have increasing relevance to the legal profession, and the bar that represents the market level of operational excellence, is definitely going to rise.

The second value discipline is “product leadership” which is all about getting the leading edge services in the market. Here speed to market is critical, and as we saw with a plethora of Bribery Act offerings in the UK market, both from law firms but also the larger consultancies, some firms do this better than others.

As with operational excellence, I believe the discipline of product leadership is of growing importance to law firms as the market increases in competitive intensity. The struggle to differentiate is recognised and discussed by many management teams in law firms, and having a kit bag full of unique products and services, each with a strong value proposition, is a real asset in this battle.

The third value discipline is “customer intimacy”. Organisations that excel here have strong client relationships and are able to customise products and services to meet their precise needs. Now while this blog has *occasionally* suggested law firms could do more to listen to their clients (hey, I’m only trying to help!), I actually think this is the value discipline that many law firms practice well.

What this means in practice however, is that the benchmark for the industry in this value discipline becomes higher, and the challenge for firms who want to dominate their industry, is how to raise the bar and really become the market leader in client intimacy. One way to think about this is to investigate how far the client intimacy ethos permeates the firm’s entire operating model – in my experience often there are pockets of excellence in a firm, but often other areas where the standards are not so high.

However, one thing to ponder, is that one of the firms that I think does this best of all (a smaller City firm) is also the firm that put together the highly tailored tender response I mentioned in my post a couple of weeks ago on excellent responses to RFPs (requests for proposal)  for legal services. This suggests to me that the firm starts REALLY thinking about the client’s needs before they are even a client of the firm, which I think is a pretty good demonstration of really living that value discipline and the benefit it can bring the firm and its clients.


Related posts:

Are you high quality?

The size 0 law firm

Law firm elves (the missing skillsets)

20 12 2010

As snow continues to bathe the United Kingdom in its cold fluffiness, and our transport infrastructure predictably fails to cope, I’ve had plenty of time  to think up a suitably Christmassy post for this festive week.

The business analyst's office was a little off the beaten track

Now Santa Claus(e) is pretty busy at this time of year, arguably busier than even the most stressed managing partner. Sure, cash flow and chasing WIP may not be an issue, but he has millions of presents to procure and wrap, and then a logistics nightmare to contend with. His relentless focus on execution is impressive, but he certainly couldn’t deliver on time and on budget alone. The reindeer may get the media plaudits, but the unsung heroes are undoubtedly his legion of elves. Working quietly in the background, they make sure his ambitious plans are carried out, deal with last minute changes and generally keep things ticking over.

Maybe that’s what law firms need.

So, I started thinking, which elves could help law firms in 2011…….

1. The Sales Elf.

“Sales!” I hear you cry. Heresy! Burn him! But wait a second. Law firm business development has developed tremendously in the last decade and sales training by organisations like the PACE partnership and Huthwaite Fleming is now accepted as delivering solid business benefits. Yet I still see many business opportunities lost because a law firm doesn’t have the right sales capacity or capability. Business development directors in law firms are often in strategic or marketing-focussed roles and if they do have selling skills are rarely given the chance to use them.

Is employing a dedicated sales force going too far? Some may argue that culturally it’s a bridge too far and that professional services can’t be sold in that way? I’m not convinced. I think if you get the right fit between sales person and firm, that focus on generating new business and the skills that go with it, could really turbo charge a law firm’s performance.

2. The Analyst Elf

Outside of the very largest law firms, there is often a lack of internal business analysis capability.  There’s no shortage of raw information, with many firms taking an “arms race” approach to subscribing to market and business research services, yet often the same firms struggle to make best use of this information, with no dedicated resource to synthesise and analyse it.

For the firms looking to position themselves as experts in a particular sector, how helpful would it be to have some proprietary analysis of what was happening in that sector, and to use that to generate some real though leadership, rather than simply offering comment on a recent news item?

The skillsets needed are widely available – investment banks use them, management consultants use them, large accountancy practices use them and corporates certainly use them, yet in comparably size law firms, they are a rare species indeed.

3. The Process Elf

Talking to some legal sector recruitment specialists, this is a hot area. With downward pressure on price and the increasing rejection of the hourly rate billing model, law firms are looking for ways to maintain or improve service quality while at the same time reducing cost. Looks and smells like a Lean Six Sigma type project to me.

Process mapping and re-engineering are perhaps the most obvious quick wins, but actually having a dedicated resource to think about operational efficiency and help drive the personal and organisational change that is needed to deliver the results is essential and I don’t believe it will be achieved by someone doing the job in their “spare time”.

4. The Pricing Elf

On a recent tender exercise for a NYSE listed outsourcer the request for proposal document made it clear that the company did not wish to buy legal services on an hourly rate basis, and asked law firms for alternative pricing models for four different work types. The diversity of responses across the ten law firms was significant. Some were well advanced in their thinking, giving a variety of models, an explanation of the type of work and volumes that would make them work, and detailing how scope changes were managed. Others were being dragged kicking and screaming from their hourly-rate comfort zone, with vague promises to think about fixed price projects and retainers, provided certain caveats were discussed and agreed.

In a world where the market is requiring different pricing models, and given the very (very) direct link between price and profit, doesn’t it make sense to address this seriously? Is setting up a pricing committee made up entirely of lawyers really the answer?

5. Other elves

The need to go and do my Christmas shopping precludes a longer discussion, but some other elves to think about – the change management elf, the project management elf, the product development  elf and the innovation elf.

This is likely to be the last post before Christmas, so if you are celebrating, have a great time and I hope you’re back here again, fully refreshed, for the New Year post, which may well tackle the classic New Year topic of (s)elf improvement!

The beautiful ones (law firm responses to tenders)

13 12 2010

Aware that often the third part of a trilogy can be a disappointment (think Return of the Jedi….) I want to finish my musings on how law firms respond to tenders on a high. In the previous two posts (here and here) I’ve looked at some of the mistakes I’ve seen when evaluating law firm responses to RFPs (requests for proposals), now it’s time to celebrate some of the goodness!

Inspiration for the tender design was taken seriously at Scratchit & Co

When I think back to those responses that have really impressed evaluation panels (and not just me), I think the key word is “relevance”. The more effort the law firm puts into the document or presentation, in terms of tailoring it for the prospect’s specific needs, the stronger the submission.

The challenge for me is to give examples without giving away any trade secrets. So here goes.

One project that I put out to tender five years ago spanned around 15 European countries. The firm who won the project submitted a tremendous document that had a huge amount of material that really created value for our organisation. It had points for us to think about both for the project as a whole and for each country in the project scope.

This did two things. Firstly it showed that the law firm had experience of the areas of law we needed help with, in these particular countries. Secondly it give us a “heads up” of things we should be aware of, even if we didn’t select the law firm in question.

The other thing that the winning law firm did on that pitch, was make sure that all examples of experience were relevant (even down to tailoring CVs). The amount of responses I’ve seen where standard blocks of text and vanilla CVs have been appended on the back is huge, so when a firm goes to the trouble of really thinking about what the prospect organisation wants, it stands out a mile.

I’ve seen a similar approach taken at presentation stage. At a pitch I ran for financial services legal support, the winning firm gave a virtuoso presentation. The lead partner had asked some great questions early in the process, and had clearly spent significant time thinking about the issues we would face, and how best to deal with them. Rather that the presentation being a verbal version of the paper RFP response (which often happens, with firms taking the opportunity to spend an hour using extensive powerpoint to tell the prospect how good they are) the partner and his team took the evaluation panel through a mini-workshop, illustrating  points with war stories and other relevant examples.

We came out of the presentation with a much better understanding of the project, a good rapport with the law firm, and a clear action plan if we chose to work with that firm (we did).

Another area where firms can distinguish themselves is in the presentation of the document. I’ve seen a wide variety of creative approaches, from mocking-up a trade publication, through using corporate colours and imagery, to just some really nice, clear presentation (I respectfully refer people once again to Impact by Jon Moon and Presentation Zen Design by Gary Reynolds). Of course presentation is superficial, but it does make a difference, particularly if it makes the content easy to digest. It’s also another area where law firms can demonstrate they have thought about the particular client, rather than just plugged the information into the tender-team sausage factory.

So, it’s relevant, it adds value and it looks great?

Go forth and win!

The bad ones (tales from tenders part II)

5 12 2010

Last week’s post on law firm responses to RFPs (requests for proposal) drew good numbers and prompted some interesting discussion (it’s here if you missed it). I promised I’d follow up the horror stories with some thoughts on what makes both a good and a bad response.

Senior corporate counsel Kevin Ratmiester looked forward to spending his weekend reviewing law firm tender documents

Moving from the terrible to the merely unimpressive, there are some fairly common boo-boos (at least in my book they are boo-boos) that show up time and time again. None of them are fatal, but at the same time they can take the sheen off a response and given the hard work that goes into these documents, it seems a shame not to pick up maximum points!

The first is inconsistency between sections. This is most common when the sections cover different practice areas or different offices (for example on a global pitch) of a law firm. When drafting documents for clients, lawyers are very skilled at ensuring consistency of language and making sure the document reads well. With RFP response often there are sections which have very clearly got different authors and have taken totally different approaches to a common question, giving the document a really disjointed feel, and giving the impression that the two teams don’t really talk to each other. This one is pretty easily remedied and a response that gets it right feels much more aligned and cohesive, which is I suspect what most clients would want from their advisors.

The second common one, is peppering a response with a huge amount of examples which are only slightly relevant, if at all. Let me be clear, very similar work for either similar clients or marquee clients are very instructive and helpful in demonstrating that the law firm has real experience, but too often the examples are not well chosen or their relevance not fully explained. This leads to a high “so what?” factor, particularly by the non-lawyer members of evaluation panels.

One of the real challenges for law firms in these processes is the need to stand out. Many RFP responses are just, well, a bit bland. I don’t have any real silver bullets to explain how to avoid this, but the really good responses (which I’ll look at next week) manage to convey both a real sense of effort with the document, and a genuine hunger for the work. The less impressive ones feel like they’ve just come out of the RFP response sausage factory. For example, a tender I recently ran asked for a firm’s competitive advantage for particular type of work. One response (from an incumbent law firm) answered this simply by saying “we work for you so we know your business”. Well, that’s great, and it may well be true, but the fact that the company I was working with was running a tender process suggests that they were looking at their options for a reason, suggesting this existing knowledge may not be enough? It left me wondering if this was their only source of competitive advantage (and let’s be honest it’s not the hardest barrier to entry to overcome), and if so how they ever won any new business!

Conveying enthusiasm and setting the firm apart from its competitors is difficult; so perhaps a useful step is to get someone in the firm not connected with the tender to read through objectively and see how compelling the document is before it goes out of the door to try and assess how well the team have done specifically in making a distinctive, compelling document.

A personal preference I’ll share with you (and I know other in-house lawyers do take a different view here) is that I’m not a fan of over-reliance on directory awards and quotes. While these type of rankings and verbatims can provide some much needed third party validation, having been on the end of directory research many times both in law firms and as a client reference, the quality of the researchers can vary hugely in my experience, and I wouldn’t necessarily put too much weight on a host of glowing quotes.

Perhaps more useful are client references and direct client quotes. There have been a couple of occasions where I have asked for references and a firm has declined to provide them, which doesn’t send off a strong message, even if the reasons for declining are sound. An engaging, and honest reference (particularly one who will talk honestly about the law firm’s weaknesses as well as their strengths) can do the law firm the power of good, and I would encourage law firms to grow their base of champions who will fulfil this role. Generally speaking, people who have received a really good service from a law firm will be happy to talk about it, and while of course conscious of the need to respect the time of these advocates, I often find these discussions (whichever role I am playing) can be mutually beneficial.

Finally, length. Less is more.


Less is more.

Now the client needs to take some responsibility here, but bear in mind that an evaluation panel will often include senior execs who may not have shaped the process and may only have a marginal interest in proceedings even though they may be important contributors to the decision making process (see Miller Heiman’s Strategic Selling for a classic discussion of buyer roles). This people are likely to have neither the time or the inclination to wade through five or six thirty page documents, so do try and keep it readable and concise, or if you are bound by the process to provide a lot of detail, write in such a way as to convey the key points early and clearly (Chip and Dan Heath talk about how to do this in “Made to Stick“).

So next time will be the good guys – some general approaches (without of course compromising and confidences or giving away trade secrets) that press the right buttons. In the meantime, good luck with your tenders.