The writing on the wall #6 – quality talent equals high price?

17 12 2014

Quality talent = high price?

As the economy picks up, the gladiators pick up their weapons in the fight for talent again. With a raft of restructurings in the past five years, now that work is picking up, there are structural gaps in the talent profile of a number of similar firms. Make no mistake that the recession was long and deep enough that some very good people were cut adrift. Some of these remain available to the big law firms, albeit that they may look at firms through different eyes (and as a result seek to negotiate a different type of employment relationship). However, plenty of talented lawyers have left the pool of potential employees. Many have found a more natural home in one of the many flexible resource pools that have grown significantly even during tough times, and these “nomadic lawyers” are less likely to be tempted back to the mothership.

The lever many firms will look to pull, will be the big red salary one – paying premium wages for the best talent, and making a business case on the basis of the work these lawyers will not only service but help bring in. The challenge of course is that the market has changed, with general counsel now being far more price sensitive.

If the clients are not willing to pay increased fees to pay for the influx of talent at premium wages, what gives?





Are you high quality? Really?

17 10 2010

The topic of quality of legal advice seems to come up a lot more frequently these days. Perhaps that’s a sign of a more competitive marketplace. Maybe it’s down to more discerning purchasers of legal services. Either way, the days when law firms could talk in general terms about providing a “quality service”, without any proof, are long gone.

I recall discussing the take over of the mighty Liverpool FC football club, with a U.S. Liverpool fan who is also an attorney. The subject turned to Slaughter & May, the law firm acting the club, and I assured my friend the club was in safe hands, as the name of the firm is synonymous with quality and the (albeit fairly brief) dealings I have had with them in my career had done nothing to change my perception.

The "Servqual" model does a good job in offering a framework to think about the gap between client expectation and management perceptions of client experience.

At first that got me thinking about brand, market perception, and the way firms communicate with clients and prospects, but a chance conversation with another senior lawyer about the nature of quality in law firms meant that this post took a different turn…..

My starting point was whether the word “quality” always has to refer to “high quality”.

In simple terms, I might not want to buy a Rolls Royce, and indeed if I choose to buy a mid-market family estate car (sadly representative of my requirements  at the moment!), then surely I am still entitled to expect a degree of quality.

The key point is that my expectation of quality will be different, but my perception of whether the supplier meets my quality expectations  will go a long way to determining what I communicate about my experience with the product (The “Servqual” model does a good job in offering a framework to think about the gap between client expectation and management perceptions of client experience).

This raises an important point. Taking the car analogy a step further, what if the car passed a number of rigorous production line checks before it left the factory, was subject to further inspection at the dealership, and then goes through a final barrage of tests before it is driven away. If those tests and checks are the right ones, and the product met the manufacturer’s specifications, does that guarantee quality?

The point I’m trying to draw out here, is that quality has both internal and external dimensions for lawyers, whether in private practice or in-house. Quality can mean different things to different people, and indeed can mean different things to a single person at different times.

For example, quality may mean technical excellence. It may mean a piece of drafting that simply can’t be improved. It may mean advice that is delivered with empathy and by a lawyer who genuinely cares about his or her client. It may mean some advice that is extremely commercial, and allows a business client to achieve their objective. Quality might have a compliance angle, in that the advice has complied with all regulatory or process requirements. Quality might mean not just meeting client expectations, but exceeding them?

One way of thinking about this is to start with CTQs, or “critical to quality” factors, which is tool from the six sigma methodology that is used to start an examination of a process by looking at what the client sees as the critical factors in determining the quality of the output (I wrote a bit more about this here: https://intelligentchallenge.wordpress.com/2010/04/13/delighted-by-a-lawyer/).

When it comes to quality, I would argue that clients are not the only stakeholders. Advice is also likely to need to meet certain internal thresholds and pass regulatory hurdles, irrespective of whether the client requires this.

Another angle to consider is the extent to which quality assurance in “hardwired” into your firm’s (or team’s) processes. What checks or audits are made during service delivery to pick up errors before they reach a client (at which point the error would become a “defect”)? Indeed do you know where errors are most likely to arise?

What feedback is taken at the point of, or after delivery, to investigate the client’s experience? While the net promoter score (“NPS”) metric is contraversial in some circles, many client focussed organisations in the corporate world (admittedly often serving consumers rather than business) live or die from their scores, but in my experience similar tools are not widely used in the legal profession.

“How was it for you?” may be a cliché, but understanding client expectations of quality upfront, and then asking directly for feedback as to how you did in meeting them after the event, can give hard data that offers lawyers a real chance to improve quality and to adjust/build processes to make these improvements permanent.

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Work with Intelligent Challenge

30 12 2016

Intelligent Challenge is also the name of my executive coaching and consulting business for large law firms and in-house legal team.

Intelligent Challenges works with law firms and lawyers to increase effectiveness through a blend of strategic consulting and executive coaching.

The strategic support helps law firms understand their current and future market, changing client needs and operating models. The executive coaching helps leaders become laser focused on the key priorities required to deliver their strategic objectives.

Consulting projects for law firms include business case development for a consulting practice, creating and implementing a product development infrastructure, leading workshops on what value and quality mean for clients, developing and delivering training on process re-engineering and transaction management.

Executive coaching engagements include board members, practice and sector group heads for top 50 law firms and senior in-house counsel.

Contact mark@intelligentchallenge.com for more details





The end of the beginning

5 12 2011

This is a post about endings. It has two main parts.

Firstly, the legal profession, and my thoughts on where we are in the evolution of the legal services market.

Secondly this blog, and where it’s going (if you don’t give two hoots about this, stop after the first section – that’s fine by me).

Is this the end?

I started writing this post almost exactly two years since I started blogging, and the amount of change in the legal profession in that time has been phenomenal. It’s as though much of the innovation and drive that has been missing from so many parts of the profession for decades has suddenly been discovered and injected into its flabby buttocks.

Yet it really only is just beginning.

My first couple of posts were about how change was coming and that the increasing pace of the market meant traditional ways of formulating strategy were unlikely to be fast enough for law firms to be successful in the new world.

As the changes that were on the horizon became reality, there was no shortage of material to write about – outsourcing, new business models, technology,  the need for innovation and differentiation, and the even more pressing drive for efficiency and (truly) effective strategy. As fast as I could write, real world examples appeared in the press:

The speculation about the possibility of UK law firms attracting external investment and the potential that brought began to become reality with the emergence of new law firm franchise models and the well publicised investment in Quality Solicitors (mentioned above). Much of the focus in this area was on consumer focussed legal services, but in the world of commercial law, pricing models continued to vex the profession, with pressure on profits resulting from a growing rejection of the billable hour model and a re-examination of what value really means in the world of legal services.

Irrespective of whether lawyers were working in the world of business or consumer legal services, traditional career paths were breaking down and new options were emerging. This in turn has triggered a debate about how fit for purpose current legal training is – and, in particular, against the current economic backdrop, whether training as a lawyer is a sensible career choice.

Massive change, in the space of two years.

This change will undoubtedly continue, and in my view will accelerate. For the agile, entrepreneurial firms and lawyers, and those new entrants with the assets and appetite for success, this is a time of great opportunity. For those law firms struggling to change, sitting on the fence, or burying their head, the end may not be as far off as you think.

So for those law firms, I do think this is the beginning of the end, but for many more this is the end of the beginning.

Let your creativity and courage take centre stage and sieze the opportunities that will emerge.

Just do something.

And so to this blog.

After two years, around 100 posts and over 35,000 views, it feels like it’s time for a change.

Time to sit back and watch the market – watch new business models and legal service providers emerge and challenge old ways of thinking.

Time to listen to new voices and examine the new perspectives that will undoubtedly join the more established commentators.

Time to reflect on the fantastic comments and feedback on the blog thus far.

Is this the end?

Who knows.

I feel I have a book brewing, and it maybe that a break from the blog helps me get it written.

It may be that some of the developments in the profession get me blogging again sooner than expected.

Time will tell.

But for now, it’s goodbye and thanks for reading. If you’re a new visitor, take some time to explore the links in this post. If you’re a regular, thanks so much for your support. You are the reason I’ve been writing, and I sincerely hope you’ve found some of my posts helpful.

 

Postscript – how the year turned out.

For the curious and any of my regular readers who return in a fit of nostalgia, WordPress sent me some interesting facts and figures about the blog which I thought I’d share:

  • The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 28,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 10 sold-out performances for that many people to see it.
  • The busiest day of the year was January 18th with 2,870 views. The most popular post that day was You are wrong. I am right..
  • Top search terms were:  intelligent challenge, value disciplines, chargeable hours, and identify the best value discipline.

  • Most visitors came from The United States. The United Kingdom & Netherlands were not far behind.
  • Top referring sites were wordpress, twitter and linkedin

Thanks again for visiting.





The legal market place – carnage or opportunity?

7 10 2011

When you look at the legal marketplace, what do you see?

With the implementation of the far reaching Legal Services Act finally happening in the UK (albeit with some fairly significant delays in related regulation), it seems the right time to step back and assess the state of the market.

Talking to people in the profession about this, from partners to in-house lawyers, business development directors to IT professionals, through to trainees and law students, one thing is clear.

There is no single opinion on the state of the market right now.

In fact, nothing could be further from the truth.

Opinions are strong and polarised.

Is the glass half empty or half full?

The world of pain

One group see the profession as an industry in decline.

Painful struggles with increasing firm overdrafts and personal debt are symptomatic of underlying structural problems with the profession, and the cash flow challenges facing many firms are just another indicator that it’s time to get out before the interest rates rise and bankruptcy looms large.

With lawyers at both small and large law firms working harder than ever, increasing competition from overseas firms and LPOs becoming more visible, and constant talk of a new wave of competition, does not fill them with hope that easier times are ahead.

Small firms worry about hyper efficient, large scale competitors with a resource base, national reach, consumer brand and technology platform  that they simply can’t match. Large firms worry about transactions being disaggregated and large chunks of profitable work being placed with legal service providers with a cheaper cost base. Mid-sized firms talk about being squeezed, with larger firms looking for work in new markets just to keep their associates busy while they weather the current economic storm, and about smaller, more agile firms  punching above their weight.

These people can often see the need for change, but despair of the pace of change in many law firms, pointing out that the culture and consensual nature of partnership often make decisions glacial when they need to be made at the speed of the digital world we now live in.

They look at the management of their firm, and question whether they have the right skills and experience to thrive in such a turbulent environment. Management themselves wonder how they can free themselves from operational fire-fighting to spend time focussing on the strategic questions that will define their firm’s future.

The lawyers lower down the pyramid see equity structures remaining in some firms that encourage low performing partners to sit back and coast, while the best talent works their asses off and often still finds it impossible to break into the club.

Below them are a generation of students who have made a huge financial and personal commitment to enter the profession, and are finding training contracts like gold dust. Those that are lucky enough to find work may be confronted by suggestions that the legal training system is in need of reform and is not equipping graduates with the skills they need to excel in the profession and exceed client and colleague’s expectation.

They may also be confronted with a linear career path, and find that if that’s one they are willing to follow, then the demands made by the firm are at odds with a generation Y philosophy that puts greater emphasis on work/life balance.

Those who see the world in these terms often point to clients showing less loyalty and who have ever increasing expectations in terms of service standards, yet in the same breath are looking to pay less for that service. A widespread rejection of the hourly rate billing model leaves many firms struggling to come up with a viable alternative and without the capability to re-engineer their business model to support these new fee structures.

The downward fee pressure squeezes profit margins further, and even after several rounds of morale-sapping restructurings and redundancies, with economic growth in the core western markets slow at best, there’s no end in sight.

Pretty grim huh?

Now those that know me know that I’m on balance, a pretty upbeat person, so let’s try and bring a bit of balance to the picture.

There are plenty of people out there in the profession who don’t think like that. Who see the current time of change as tremendously exciting. These are the people who see

A world of opportunity

First and foremost they see an incredibly profitable sector that has weathered an unprecedented recession and shown real resilience with relatively few high profile casualties.

They see businesses with the ability to offer a broad portfolio of services that add real value to clients at critical points in their lives or organisational existence. Many of these services are counter cyclical (helping manage difficult economic conditions) and many of which allow the lawyer to genuinely claim that coveted position of trusted advisor.

It’s not hard to point to law firms that have access to senior people at some of the best and biggest companies in the world and advise some of the most influential people who are shaping society.

For those in the UK, having a core competency in the English language and the common law system that underpins many other legal markets means firms are well placed to support global businesses and expand intro higher growth international markets (as indeed many UK firms have done very successfully).

While there would be an acknowledgement that the bar for client acquisition and retention is being constantly raised (particularly by increasingly sophisticated business development professionals and practices) this is raising standards in the profession and represents progress. There is still a huge opportunity to win by being ahead of this curve and setting the pace.

For those with one eye on the future, advocates of the profession will point out that the chance of a career offering not just the potential to earn big bucks, but one that can offer a lifetime of intellectual challenge and stimulation, will always attract its fair share of top talent, and that the training and development opportunities within law firms have improved massively over the last ten years.

Those who see opportunity see the ability to innovate as being a genuine source of competitive advantage, and are looking at technology, process and efficiency as ways of maintaining and indeed improving profitability in a fast changing market. The ability to change quickly is a key enabler, and they recruit the people with the ability to adapt and thrive to make this a reality.

They also see that market consolidation can offers opportunities. Low price acquisitions, the ability to pick and chose individual teams, to make strategic acquisitions of particular clients or relationships, and the clearing out of some of the noise in the market place.

Yes clients are demanding “more for less” but that’s a common refrain across all business these days – the change facing the profession is not unique and in  many other industries there are organisations that came out as big winners.

A somewhat simplistic categorisation, but I urge you to reflect – which messages resonate most, and critically, what are you going to do about it?





Why sorry is the hardest word

14 09 2011

I had a very interesting conversation with a colleague yesterday around a workshop he was facilitating for a fairly sizeable group of lawyers. As part of the discussion he asked the question “how many of you have ever been the subject of a client complaint”.

Our subsequent discussion centred around the fact that the solitary hand that was raised did not seem representative of the either the statistical probability of the number of complaints from the group (there was probably well over 150 years of cumulative PQE in the room) or the amount of unspoken discomfort in the room.

Adam readied himself to discuss his drafting mistake with the head of department

I’ve written before about why lawyers find it difficult to admit they are wrong (a training based on hiding weaknesses in your client’s arguments and exploiting your opponents, and a pathological fear of negligence claims), but the point I want to explore here is how much harder it is to deal with the consequences of a mistake, if you can’t admit it in the first place.

My starting point is that mistakes will happen. I don’t care how good you are as a lawyer or a law firm, while legal advice is predominantly a human activity (as opposed to automated or process based), the human factor remains fallible.

You, me, none of us are perfect.

Now of course you can minimise the risk of mistakes – quality checks, supervision, training, best practice etc, but at the moment I’ve yet to come across any law firm partner that can hand on heart tell me the firm has not made a single mistake in the past 12 months.

And as work becomes more complex and has to be done at ever increasing speed, the possibility of mistakes may well increase.

So mistakes are going to happen. The question is, how are you going to deal with them?

The majority of larger law firms and corporate legal departments have some type of relationship. Some are more transactional than others, but I’ll make an assumption that the mistake happens in the context of some type of broader relationship, not least because that’s when both parties are likely to care more about it.

My experience both in law firms and in-house tells me firms can deal with mistakes really well, or get it spectacularly wrong.

Let’s deal with some classic unhelpful responses ( Twitter would categorise these law firm #custservfails) first:

  • Refusing to the acknowledge the problem – “advising around it” – effectively providing remedial advice to sort out the problem before the consequences become significance (“I see your point, we’ll add some additional wording in here, just to clarify that”)
  • Blaming the client – implicitly or explicitly (“well, if they’d given us clearer instructions this never would have happened”)
  • Glossing over the problem (“lucky we caught that in an early draft”).
  • Sorting the problem out without any sign of good grace or contrition (“leave it with us”)

Perhaps my favourite example was a conversation I had with a law firm where I’d had a repeated breach of my company’s outside counsel policy (which explained among other things, who in the business could instruct external lawyers, and what involvement the legal department had to have with a matter). After the third clear breach since I drew the point to their attention, I asked for a meeting with the relationship partner to get to the bottom of the issue.

I have to admit to being amazed when the partner turned up with two of his peers from different departments, with a clear plan to try and turn the meeting into a cross-sell pitch. I was certainly expecting the “S-word”, but it wasn’t “sales”.

  • No apology.
  • No self-awareness.
  • No more instructions.

But it’s not all doom and gloom. Several firms I worked with were very good at managing the occasional mishap.

One of the most telling signs was where the law firms brought a mistake to my attention, particularly as there was a chance the error might not have got noticed. For example, I’ve had that happen when there was no chance at all of me noticing, because the error arose as a result of a translation from Arabic (where the law firm had arranged the translation).

This builds a huge amount of confidence, and in every case where that has happened, the firm also presented an explanation of why the problem arose, and (critically) a plan to make sure it didn’t happen again. Viewed in this light, problems can be an opportunity to improve the service for the future, and build genuine trust with the relationship.

To me, as a client, that open dialogue is critical.

It works both ways too. Rather than bitch and moan about poor service (which can be more than a simple mistake, as it involves performance measured against expectations, which in some cases may not be explicit), I believe it’s in both parties’ interest for the client to raise the matter with a law firm, and to do so in a clear and specific manner which allows the firm to take action.

I’ve done that in situations where this has helped the law firm have difficult performance management discussions with under-performing staff and also improve processes that have benefitted multiple clients.

Now if this sounds like some sort of rose-tinted utopia, let me be clear – it’s not. Not all of these conversations are easy, (“Difficult conversations – how to discuss what matters most” is a great read by the way) and at times can be uncomfortable, but I do believe that putting in the effort beats the alternative for both parties – a dysfunctional relationship benefits no-one.

There are also times where the scale of the screw up is so monumental, that the relationship simply can’t be saved (for example the reputation damage to the law firm within the client business is so great that the in-house lawyer would lose the confidence of his or her clients by using the firm again), but those cases are few and far between.

In most cases, starting an open, honest and productive dialogue is the best way forward, and saying “sorry” might be a good place to start.





How to find an extra 1,000 hours a year

6 09 2011

I have a confession to make.

The partners were surprised to see Fiona set fire to the firm's library in the name of productivity

I’m an information junkie. All my life I’ve been a voracious consumer of books, magazines and newspapers.

From burying my nose in novels as a child, through reading 3-4 books a week when commuting as a lawyer, to teaching myself to speed-read early in my legal career to keep on top of fast moving professional development, books have never been far away.

Indeed I wrote about how reading more widely can help a lawyer become more rounded and get a wider perspective that can enhance their thinking and advice (and I stand by that idea!).

So what’s the problem?

Well, the quantity, quality and ease of access to information  is so high these days, that reading can take up a disproportionate amount of time.

It’s possible to spend so much time reading, that experiencing life and reflecting on it can take a back seat.

I took some time to reflect on this challenge on a recent holiday, and realised that I was bombarding myself with information pretty much from the moment I open my eyes. Does some or any of this sound familiar…

  • Wake up. Check smartphone for urgent emails
  • Waiting for train – check news and sport headlines on smartphone, check twitter and facebook feeds
  • On train – read newspaper on Kindle, when done move onto ebook (usually business or personal development)
  • Work – check Google reader feeds, work reading, twitter while waiting for meetings, walking to get lunch etc
  • Train home – read ebook (business or personal development)
  • Before bed – read ebook or physical book (could be work or fiction)
  • Repeat.

Aside from the enjoyment I got from reading (an important factor not to gloss over in this discussion), it was apparent that my mind was whirring constantly from the moment the alarm went at 5am. My sense was that while this definitely had benefits in terms of the sheer amount of knowledge I was accumulating (much of which has been very useful), it was also draining a lot of mental energy and limiting the headspace I had for thinking and reflecting, and on balance the negatives were beginning to outweigh the positives.

As the Tao Te Ching says (verse 48) “learning is daily accumulating, the Way is daily diminishing”  (and yes I realise that’s a quote from a book!).

Sometimes less is more.

So I decided to do an experiment – I’d go on an information diet.

The first thing I did was cut out reading a daily newspaper. I’ve read a newspaper pretty much every day for the last twenty years. Give or take a few minutes, it takes me about 30 minutes to read the whole thing in my very methodical way. News headlines, sport, UK news, overseas news, business news, features and culture. Bish bash bosh.

Now giving this up might seem a small step, but psychologically I wondered what the effect would be – would it hamper my ability to hold conversations in the office? What about at social events? Would I go to meetings and find I didn’t know what people were talking about? Would this damage my personal competitive advantage? Would I become (perish the thought) less interesting?

The reality – important news found me. I didn’t have a complete news black out – quick checks on the BBC mobile news, trends from Twitter, and of course conversations have so far (four months and counting) brought me all the news I seem to need.

What I didn’t anticipate is that where I have needed to find out about something (and this has been very rare), simply asking the person who’s raised the issue to tell me what’s happened had led to some rich conversations and elicited opinions I might not have got if I’d already known the detail.

The other thing I noticed, is that when I pick up a newspaper, I now see how much news there is that really has no impact on my life (in any capacity), which is generally depressing, but which  I would have consumed anyway in my pre-information diet days.

On a similar note, a former journalist I met with last week mentioned that he was continually frustrated by his inability to block out which contestants are currently appearing on Celebrity Big Brother because despite his total lack of interest in the subject, it seeps into his consciousness through the media.

So far so good. I’d reclaimed three and a half hours of time per week (182 hours a year  sounds more impressive!). Assuming I used that time wisely, that was a real productivity boost.

The next step was to stop reading other books.

So for the last three and a half months, the only book I’ve looked at (which I mentioned in my post The Tao of Law Firm Strategy) has been the Tao Te Ching – the classic Chinese text which is best described as a cross between philosophy and poetry. Read for five minutes, ponder for an hour.

So for all intents and purposes, my reading has gone from say 3 hours a day, to zero. That’s over 1,000 hours a year. Or one and a half months.

Pretty drastic? Maybe.

Permanent? Don’t know.

One of the important points (in my eyes anyway) is that not only have I reduced the information I take in, but I’ve chosen not to replace that activity with another. It’s just white space and  I definitely appreciate the extra time I now have to think things through (work and personal) and also just be.

There are times when less is definitely more.

It’s also made me much more conscious of where I choose to focus – Davenport wrote a great book called The Attention Economy about the value of attention (related article  at Brainpickings if you’re interested), and having some extra time and space to allow you to step back and re-prioritise is surely a good thing.

So what’s the reading end-game for me?

Well, I think I will welcome books back into my life at some point, although I feel no rush to do it right now. When I do I think I’ll be more selective about what I read – to offer me greater benefit that the space I’ve freed up, it’s going to have to be quite a book!

So for busy lawyers, while I can’t free you from the tyranny of the timesheets (the market will do that in time…), by limiting the amount of information you take in outside the office, you might find yourself more productive.

Just don’t spend the time you’re freed up watching television. Please!

 





Lawyers – Just. Do. Something.

30 08 2011

It seems like there was some sort of psychic alignment in the UK legal blogging community last week.

James took a break from his corporate finance practice and went down to the firm's somewhat impressive atrium to think about what was happening in his market

As the news came rolling in on changes facing the UK market (Neil Rose’s site Legal Futures is often a good place to start), the Entrepreneur Lawyer   Chrissie Lightfoot wrote a great post about the disruption and fear facing the profession. Julian Summerhayes then followed up with a thought provoking piece on the need to avoid apathy in client relationships.

All the time my mind was whirring with two related themes – massive change, and the need to do something.

The first message that I really (really) want to get across is that change in the profession is happening NOW. I mean right now.

Many of the lawyers who are waiting for the full implementation of the Legal Services Act with a “let’s just wait and see” attitude are either deliberately burying their heads in the sand, or are sleepwalking through a time of significant change, leading to both opportunities and threats.

Just look at the recent headlines:

Take a step back and take a fresh look.

This is change that’s happening right now.

It’s not round the corner.

It’s not things that might happen.

It’s happening.

Now.

The other point that’s really important to grasp, is that the change is affecting the whole profession. It’s not just a B2C issue, there is fundamental change going on all through the profession. From the sole practitioner whose livelihood is threatened by consumers being offered quicker, cheaper and easier solutions from competitors that didn’t exist three years ago, to the multi-million pound law firm facing disaggregation of the large scale projects that used to be the foundation of the partner’s seven figure salary. The change is real and far-reaching.

Finally, please trust me when I say that there is much, much more going on which is not public at the moment.

Since I left practice as a lawyer, I’ve been fortunate to be involved in the profession in a number of different roles, including consultant and LPO provider. Some of the conversations I’ve had with law firms, in-house teams and other consultants have shown me that there is some really forward thinking going on in the background, leading to business models being re-engineered and investment being secured.

So why are so many firms not doing anything?

Well, putting aside the difficulty many law firms have with change generally (which I’ve written about before), and some of the negative behaviours driven by the hourly rate billing model,  I think there are a number of other reasons why it’s not top of mind for every law firm partner.

The first is that there are more pressing short term challenges. Cash flow being one of them. The last two to three years (depending on the make up of your practice) has been incredibly tough, and amidst the restructurings and insolvencies, there are plenty of firms that quietly weathered the initial storm but  are finding things getting harder and harder as the road out of recession continues to be a slow one. Whether it’s cash flow, refinancing or opportunities for consolidation, short term survival is often the top priority.

Another reason is that it’s just plain difficult. The market is moving at a tremendous rate now, with new competitors, new technology and regulatory change coming in waves. Just keeping on track of the environment is tough enough, let alone analysing it and working out how to respond. Many firms don’t have strategy experience in-house (and there was a great article this week on how forcing strategy work on non-strategic thinkers doesn’t often work out) and I suspect many just don’t know where to start.

But whatever the reason, now is the time to act. The speed of business these days is too fast to wait and see.

Much has been written about the change in the product development world and the speed to market imperative (“fail fast”) – how it’s no longer realistic to test extensively to get a product perfect before launching.

The parallel I’d draw here is that now is not the time to assess the market to nth degree, and then craft a perfect strategy over the coming months, before pulling together a detailed project plan and implementing through the annual budget cycle. All of these steps may well have merit, but given how fast the market is moving, it’s more than likely that by the time you’re done, you’ll be too late. The opportunities (of which I believe there are many) will have passed, or the threats manifested.

So to wrap up, now’s the time to act. Block out an afternoon and at least do some thinking, or if you’re not at the thinking stage, some sensing to find out what’s happening in your market segments. Then take the lead and turn thinking and dialogue into action.





The in-house law firm – the future of corporate law departments?

20 07 2011

I’m a big fan of Tom Peters. Not just because he genuinely interacts with his followers on Twitter, not just because he’s passionate about what he writes about, and not just because he presents (presentations, books) in some pretty cool ways. I’m a fan because he has some great ideas.

Corporate counsel Sedgwick took his boss' advice to "be a rock star" seriously as he began to address the board meeting

If you look back to his book “Re-imagine, business excellence in a disruptive age”, which was written nearly a decade ago, so much of it remains fresh and inspiring (and you should buy a copy if you’ve not seen it – it was required reading by my General Counsel when I was an in-house lawyer!).

But there’s one concept, right at the heart of the book, that seems more appropriate than ever in the legal marketplace right now. Tom describes the principle as “From cost centre to stardom – the professional service firm (PSF) transformation”.

Let me outline some of the detail behind this principle, and then I’ll tell you why I think it’s SO relevant right now.

Tom starts by ranting (his words!) that aiming to improve departmental efficiency and effectiveness is no longer enough. Heard about effectiveness and efficiency in the context of corporate law departments recently? It’s the opening paragraph of pretty much every report about General Counsel these days. Hell, I’ve written about it myself!

He goes on to assert that working 50 hour weeks in a cost centre is not sustainable – rote work will be outsourced  and the core that remains will be the traditional domain of the PSF – the accumulation and application of creative intellectual capital. With the amount of publicity the legal process outsourcing business is getting these days, this shouldn’t seem far fetched for General Counsel either.

So what’s the solution? Tom breaks it down into the following four key parts, to which I’ve added a law department spin.

  1. Outsource it – if the work can’t be done economically or the law department isn’t demonstrably great at it, outsource it.
  2. Now in a legal department this might be “volume work” which can be systemised and done off-shore cheaply, or it might be more complex but the legal team doesn’t have the skills in-house to do a great job, in which case the work might be passed to a retained law firm (or even another internal department).
  3. Productise it – if the work can be done in-house, break it into a “product” that someone will pay for. Now for lawyers care needs to be taken here as while there are certainly plenty of tasks that internal clients will pay for (doing deals, litigating etc), there are some jobs where the key beneficiaries may be the shareholders who won’t have a notional budget to cross-charge. The key point to me however is that the work creates real, demonstrable value for the organisation.
  4. Web-ify it – Tom challenges us to put everything (policies, procedures, contracts) on the web. Now many lawyers will no doubt be holding up their hands in horror here, but the reality is that this concept is already starting to take hold in the more progressive corporate legal departments. Use up a lot of bandwidth drafting standard sales contracts for the business? Take instructions, do a first draft, internal client reviews and makes changes, lawyer reviews changes, lawyer clarifies, lawyer redrafts, internal client reviews….. you get the picture. How much time has that taken? What’s the internal client satisfaction score looking like? Never mind that of the lawyer or the external client. By contrast, how about this – automate the document, internal client follows online guidance and prepares good quality first draft, lawyer reviews and amends, internal client sends document out.
  5. If it’s great, celebrate it. This to me has two important themes. The first is about communicating value to the business. There are plenty of legal departments that are really good at this, and are highly valued by their business colleagues. But there are plenty who don’t communicate success and value, and in my view they need to start. The second theme Tom mentions is more interesting – if an in-house legal team can become genuinely world class, could they start to provide services outside their company?
This is the idea that got me starting thinking about this topic.
With the Legal Services Act allowing non-lawyer ownership of law firms, is it conceivable that some in-house teams might think of converting to a law firm?
At a recent conference for in-house lawyers, the very progressive GC of a company with a global brand indicated that he was thinking using this type of framework to provide legal services to the company franchisees. Another GC joined the debate and floated the idea of pooling compliance resources with other companies in the industry – sharing the overhead for work that was mandatory but provided the company with little competitive advantage.
This is a time when radical thinking is possible. Sure, there are undoubtedly regulatory questions to answer, and professional ethics issues to resolve, but what is clear is that the future can look very different.
The obvious question is how this might it affect your legal team? Tom talks about “Exciting [legal] departments selling their creative services far beyond the company’s border”.
The more interesting question is how might it affect law firms? Will they find themselves competing with their clients? What about collaboration opportunities.

As Tom would say – to improve is not enough, now is the time to transform.





A shiny new law firm

30 06 2011

With deregulation of the market looming here in the UK, opinion varies wildly over what the likely impact will be.

  • Some speak of decimation of the high street, and the end of the traditional law firm as we know it.
  • Others are more conservative and see a simple acceleration of the move from a traditional profession to a collection of more business orientated organisations.
  • Some see different changes in different market segments, underpinned by core drivers such as the increasing role of technology, globalisation, vertical market focus and more specialisation driven by a need to differentiate.
  • Finally, some bury their heads in the sand, unwilling or unable to contemplate large scale change in a profession that once was conservative and safe.

Simon paused a second to consider a future without his office in the most prestigious street in the City. Then he went back to work because the thought was just too horrible

So, against that backdrop, the question I ask you today looks at the changing market from a different perspective. If you were a new market entrant, free from the constraints and history of existing law firms, what would you do differently to build a successful legal service provider?

Here are some thoughts to get you started….

1. Real Estate

For a start, I wouldn’t invest vast amounts of capital in plush, city-centre offices. Sure, there’s definitely a need for an accessible meeting place both for internal and client meetings, and the space should be highly functional and consistent with the brand. But no massive atrium, no marble or fountains, and definitely not hundreds of expensive people crammed into premium real estate with the sort of eye watering rent that causes agonised soul searching within two years of every rent review.

I’m not saying all law firms should be virtual, and I’m not saying that firms should be central, but there are plenty of big, impressive organisations that work just fine without all their people in a building in a premium post code. A firm’s cost base matters, and people and property make up a pretty hefty chunk of a law firm’s cost base – avoiding the big numbers here could make a huge difference to long term profitability.

2. Technology infrastructure

Often years of under-investment, and a patchwork of applications and networking have meant maintaining and upgrading law firm systems is a nightmare. The ability to add a new application, device or method of access can be hugely time consuming and expensive. Being free of that legacy a new law firm could start afresh with proven, enterprise class software platform, that had an open architecture to allow maximum interoperability and future proofing.

The march to the cloud seems unstoppable at the moment, despite the fact that within the profession questions remain around resilience and security. Whatever the choice, a new entrant could have a fully functioning platform and a clean set of data to reside within it, all without the pain of a huge data cleanse and migration project.

3. Resource profile

Freed from the current business model of gearing and billable hours, a new law firm could sit back and work out what resources it really needed to service the work it was planning to generate.

How many partner level people does the firm really need? Are they managing client relationships, project managing or providing complex/strategic advice? If they are not doing the high grade legal work, are their other professionals who could do the work better or to a similar standard but cheaper? What is the right blend of junior lawyers? Would supervision and quality control be a separate function? What about training? What other skills would you bring to the organisation? Project management? Process expertise? Social media and digital marketing experience? Lower cost legal resource?

There are so many options, and the right combination would of course depend on the firm and the type and volume of work, but I think it’s fair to say that not many firms would start with a large number of equity partners, add a bunch of assistant lawyers and trainees to generate the fees to pay them, and then add a support infrastructure around them.

4. Corporate structure

The benefits of the partnership are clear. Consensual decision making, meaning everyone (well, the partners anyway) has a voice and feels heard. Sharing the profits gives not just a built in performance incentive, but a shared sense of ownership and responsibility. All this builds a tremendous sense of trust and an atmosphere that fosters collaboration.

What?

Your law firm doesn’t work like that?

Really?

Particularly as firms have got bigger and the pace of business has increased, the partnership model has begun to creak a little. Granted, some firms have it cracked, but I’d wager a lot more struggle. Slow decision making, turf wars, those at the top of the lockstep enjoying rewards that they perhaps haven’t fully contributed to and difficulties removing underperformers are not uncommon.

For a new firm I’d think very hard about keeping ownership and management separate, and use a structure that encouraged fast decisions and business agility. Incentives would follow the corporate model, and be performance based (which of course offers a huge amount of options, and can be tailored depending on what behaviours management wish to drive).

5. Sales force

Some lawyers can sell. They are really, really good at it. A great many however cannot.

I’m a huge fan of sales professionals – they generate the revenue that drives the business. Yes I know that other people do the delivery (lawyers in law firms), but first things first, you have to win work to do it.

Now other than the best of the best, the chances are that a lawyer is not as good at selling as a salesperson – and why would they be? The salesperson wouldn’t likely do much of a job advising on the TUPE provisions of an outsourcing deal. So surely if you accept the need to sell legal services, you’d get the best people to do it. It’s likely as well that not only might a salesperson have a lower base salary (although if good can more than make up for it through commission), but it would also free up the lawyers to do what they are best at, and generate the fees from the work that the sales people have won.

A law firm with a professional, well trained and motivated sales force would be a serious force to be reckoned with.

So what?

I know, I know – you’ve already got a law firm thank you very much. And you can’t relocate, rip out the IT and employ an awesome sales force. But, that doesn’t mean you can’t pause a minute to think about these issues, not just in terms of your own firm, but in relation to changes your competitors may make, or crucially what impact a well capitalised competitor might have if they adopted some of these ideas…..