LegalBizDev

The latest post from Jim Hassett’s blog Legal Business Development.


Business development best practices: Follow up

This is one of a series of occasional posts summarizing the most important best practices from my book the Legal Business Development Quick Reference Guide which is now also available in a Kindle edition.

There’s no way around it: business development takes time. To build new business, you must follow up, week after week, month after month, and year after year.

In The Sales Bible (p. 197) Jeffrey Gitomer sums it up this way:

Most sales are made after the seventh no…It takes 5 to 10 exposures (follow-ups) to a prospect to make the first sale…[so] you’d better have what it takes to persevere through the follow-up process and not quit.

For many busy lawyers, the best way to assure that you will follow up is to “make an appointment with yourself” for one or two blocks of time that will be devoted to business development every week, such as 2-4 PM every Tuesday and Thursday. Put the time in Outlook or your weekly planner, and try to avoid scheduling anything else at that time. When something comes up that is more critical, as is sometimes inevitable, reschedule your marketing time.

We recommend setting this time block in the middle of the week, at a time when you are likely to be able to reach clients and prospects. If you think Mondays and Fridays are the best times to discuss new business with your clients, try it, track the results, and then decide.

It also helps to share your results with a colleague, a coach, or even a relative or friend. Simply knowing that someone else is watching will make you more likely to follow up.

Finally, you will need a good system for tracking To Dos.  Different lawyers prefer different approaches, and the best format is the one that contains the information you need, in a form that you will keep up to date.  My favorite is a simple list with three columns like this:

Who

Priority

To Do

Tom French

High

Hold telecon, based on key questions from the Quick Reference Guide 

COO at ABC Corp

High

If COO provides info for press release, finish a draft ASAP

Ms. Johanssen

Medium

Send agenda listing questions for the next meeting

Mary K.

Medium

Hold satisfaction interview

Tom S

Low

Call to set up a meeting

Falco Inc

Low

Meet in early June

This type of overt prioritizing will help you assure that if something simply doesn’t get done due to lack of time, it is likely to be the item that will have the least impact on the future of your practice.

Or better yet, use Outlook or any other program to keep your list.

And then don’t forget to actually follow up.  Week after week, month after month, and year after year.

      


Book excerpt: What should law firms do to improve profitability and LPM? (Part 4 of 4)

This series was adapted from my new book Client Value and Law Firm Profitability, which was published at the beginning of this month.

Given all the options and competing claims about LPM, what should a firm do to get started? Our answer is explained below at the end of this book: embrace experimentation and, as one of our clients put it, “just do something.” Start small, and find out what works for your firm.

Once you have grassroots support from influential internal champions, then you will be in a position to decide whether you might benefit from professional project management staff, depending on the unique needs of your practice area and your clients.

Remember that in this study’s ranking of LPM issues in Chapter 4, the two most critical were defining scope and communicating with clients. Neither can be delegated to project managers. Lawyers must first be committed to changing their approach before it makes sense to hire others to help them.

The big picture recommendations in the next section about starting “one practice group or lawyer at a time” include evidence that the development of internal champions and quick wins has proven its value in changing behavior in a wide variety of professions. So it is not surprising that a number of participants in this research cited the same approach:

I try to find an internal champion to move things forward. I worked with a partner in one department that bought into LPM and we gave a joint presentation on it. Word got out and another department asked to provide the same presentation to them. Many times once attorneys get a taste of LPM they get interested and want more. – Senior executive

We’ll have to have to have some guinea pig partners who are willing to try it and then be willing to testify as to how it has helped their numbers and their client relationships. – Senior partner

Because we’ve had some demonstrable LPM successes, enthusiasm for it is growing. – Senior executive

However, even with the support of champions, LPM is not quick or easy to implement. As one senior partner emphasized, there are no magic solutions:

Top management has to make it a priority and communicate it all the time, make it part of the culture. It will have to be ingrained in people, and it’s slow. When people use the tools and the resources, and they are successful, they will communicate their success to their partners. Others will want to use it, and LPM will work its way around. But that will take some time. We don’t know exactly how long it will take.

Some firms will find it valuable to hire professional project managers to support lawyers’ efforts, as in this quote from one chair:

We’re going to start hiring different people to manage the non-legal aspects of the practice, not the relationships. That’s what has to be done. Lawyers are notoriously bad managers. You could be a fabulous trial lawyer but not be able to get your hours in on time or bill on time. You might not be able to collect on the bill. With all these different components, it’s better to look to a project manager on accounts receivable, on AFAs, on collections, rather than the lawyer.

Another firm chair that has gone down this path has been very satisfied with the results:

I think that project management skills are absolutely critical to achieving value and managing well, which is why we have people who actually make this their life’s calling. People who are certified project managers, who are trained in it, who actually know what it means when you talk about Agile Scrum, as opposed to somebody thinking it’s a flexible rugby player. Project management is a profession, and the people in the profession need to understand how the legal business works, how lawyers think. How you would manage a project at IBM is not the same way you would manage a project in a large law firm. But when we have good project managers working as part of the client service delivery team with the clients, clients love it. They just love it. It adds so much value, it’s unbelievable.

(Agile Scrum is an approach to project management that starts from the assumption that customers often change their minds about what they want and need as a project proceeds. It therefore replaces extended upfront planning with rapid development of partial solutions which can be tried out on clients and adapted until they meet true needs. Many professionals believe that this will become an increasingly common approach to LPM as it evolves.)

There can be little doubt that the trend of using LPM professionals will continue to grow, especially in large firms. It is also safe to predict that the level of LPM sophistication needed to compete effectively will continue to increase.

In the next few years, the most interesting developments in LPM are likely to involve moving away from traditional project management models to cutting edge alternatives. For example, in one of the most widely quoted texts on LPM, Robert Wysocki talks at length about how traditional project management solutions apply only when the client’s goal is clear and the steps required for a solution are clear. In many legal matters, neither precise client goals nor complete solutions are known at the start. These complex and ambiguous situations will therefore require the more modern LPM approaches explained in Wysocki’s text, notably Agile project management that is derived from the “Agile Manifesto” signed in 2001 by 17 influential software developers and says in part:

We are uncovering better ways of developing [products] by doing it and helping others do it. Through this work we have come to value:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiations
  • Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more.

Agile project management is an iterative trial and error process that focuses on continuous improvement and responding rapidly to situations when they change in order to minimize the total work required.

But before firms can get to that level of sophistication, they need to start with the basics. And as one chairman in our research summed it up:

Most of our clients are no better at understanding or applying legal project management than we are. But in the future, the fact that you can actually do something on time and within budget is going to become an important indicator of whether or not you really are a good lawyer.

A pdf of this entire series can be downloaded from Altman Weil Direct, where it originally appeared.

 
      


Book excerpt: What should law firms do to improve profitability and LPM? (Part 3 of 4)

This series was adapted from my new book Client Value and Law Firm Profitability, which was published at the beginning of this month.

As law firms struggle with internal pressure to retain and improve profitability and external pressure to satisfy client demand for greater value, one tactic has risen to the top of most law firm lists: legal project management.

As discussed previously in this blog, the field of LPM is so new that experts have spent quite a bit of time arguing about what it does and does not include. If you accept the very broad definition that we have been using for the last several years—LPM adapts proven management techniques to the legal profession to help lawyers achieve their business goals, including increasing client value and protecting profitability—it is easy to see that the vast majority of law firms could benefit from implementing LPM in some form.

Which brings us back to the question of exactly how to do that. Educating is relatively easy, but changing behavior is very hard. It is also the central problem in legal project management. The Association of Corporate Counsel and the ABA conducted a meeting a few years ago, “at which leaders of corporate and law firm litigation departments rolled up their sleeves and tackled the complex issues surrounding present day concepts of value in litigation.” In an ACC Docket article summarizing the event, the authors noted that progress will not be based on improved understanding or increased knowledge. Instead, “The challenge is change/behavior management.”  It’s not a question of knowing what to do, it’s a question of getting lawyers to do it.

In this research, the managing partner of one firm that invested heavily in education but failed to see much behavior change had this to say:

Project management will probably have the longest-term positive impact, but it’s been the biggest challenge, because it’s something that hasn’t been easily absorbed by a lot of the lawyers. When busy lawyers start scrambling around, the inefficiency creeps right up. At our firm, project management has not met expectations. But it’s improving, and I do think long term it will have a really big impact.

If there is one thing that participants in this survey agreed on, it is that it is difficult to get lawyers to use LPM, as seen in these comments from five more firms:

Project management is not natural to lawyers. We’ve always been trained to get the case done well to win, but now we also have to get the case done efficiently, and that is not part of the natural toolkit for most people. – Managing partner

Getting people to manage engagements is very difficult in this business. So we’re at the discussion rather than the implementation stage. – Chair

We’ve done a better job on the front end, on the developing and pricing piece. Where I don’t think we’re doing as much as we could is on the legal project management end, thinking about whether there are more efficient ways to actually complete certain kinds of work. – Senior executive

We have clients, especially in litigation and corporate, who are saying we need to implement LPM. But it’s hard to get our lawyers off the dime. – Senior partner

I think that it will require a lot of work, and daily support from the top, not just lip service from the partner team twice a year. – Senior executive

Given that the formal field of LPM is so young, and that many lawyers resist its fundamental ideas, it is not surprising that there are still disagreements about what approach to implementation works best. Several major vendors—including my company—offer different solutions. Each believes strongly in its own approach and frankly has a vested interest in proving its effectiveness.

Generally, implementation approaches fall into three broad categories: training, coaching, and law firm staff. Of course, these are not mutually exclusive and many firms use all three, along with software, as described in the next section. All of these approaches can have positive effects. The hard question that every firm faces is one of cost-effectiveness: which approach will produce the greatest impact today for the lowest cost.

Historically, most firms have started with some type of training. Lawyers love precedent, so when Dechert announced in 2010 that it had trained its partners in LPM, a number of firms jumped in to do the same thing. This led to some great press releases about how these training programs proved that firms were committed to LPM, but precious little in the way of results. Consider these comments from three firms that invested in extensive LPM training programs:

Every shareholder and top level associate has had a full day of project management training. I’d like to tell you that they use it, but they don’t. – Chair

Training raised awareness, but I think it will take a longer campaign to significantly move the needle in terms of our ability to change the way we do business. – Managing partner

I don’t want to say it’s stillborn, because that’s too fatalistic, but it has not taken hold like I had hoped it would. I think that there are some attorneys who probably are using it in their own way, but as an institutional concept it has really been put on a back burner. – Senior executive

It took a few years for it to become clear that training every lawyer in the firm was not a cost effective way to go, and that led people to less ambitious programs such as short sessions of “awareness training” that set stage and identified the lawyers who need to dig in more deeply.

In our experience, the most effective way for firms to build LPM momentum is not with large group training, but rather with one-to-one coaching for influential partners to enable them to directly experience the benefits of LPM. As a result, they will become internal champions who will lead efforts to adapt LPM to the particular needs of their firms, practice groups, and clients.

A pdf of this entire series can be downloaded from Altman Weil Direct, where it originally appeared.

      


Book excerpt: What should law firms do to improve profitability and LPM? (Part 2 of 4)

This series was adapted from my new book Client Value and Law Firm Profitability, which was published today.

The key to success is to come up with information and systems that increase the behaviors that are of greatest benefit to the firm. But it isn’t easy:

When you start digging into profitability at the matter level, you get set back. You can make the numbers say whatever you want, but did you consider headcount or overhead? Some of the offices might not be as busy so you want to spread the work to them. We’re willing to take a little hit. There’s a big picture we’re trying to achieve, and when we’ve tried to get into the weeds a little bit too much, it can backfire because we get bogged down with some of this stuff. So my idea is to take the long view. It’s very difficult to understand profitability at the matter level, and in some ways that’s a misguided approach because there are just so many factors to take into account. If you can slowly start to chip away at all these areas, then that will have a beneficial improvement upon your profitability. It’s all about improving your portfolio. – Senior executive

The real challenge is to use our profitability tool in a way that motivates all of the partners to their maximum effort toward profitability, without creating the wrong sorts of behaviors, like hoarding work or fighting unduly over origination credits. – Chair

Many firms are getting serious about training their lawyers to think differently about revenue, discounts, and profitability:

Our firm has really invested a lot of effort in arming ourselves with the tools to try and deal with understanding profitability. – Chair

Our CFO visits offices and trains people on profitability. – Managing partner

We fully intend to educate our attorney base to be more aware of these things. In particular, when attorneys approach our AFA subcommittee with a project that involves an AFA, part of the response is to address the profitability of that proposal and to explain to them when the particular pricing doesn’t make sense for us to take it on. – Senior partner

Left to their own devices, most lawyers are probably at a 5, on a 1 to 10 scale of understanding. But we educate them up to a 9. So it’s something in the middle. We have a very keenly-focused financial accounting regimen at the firm that is constantly preaching this, that all work and all books of business and all new clients are not the same. And consequently, our lawyers have a better than average instinct on this. At the end of the day, our pricing reflects this because we don’t give our lawyers total carte blanche to open up a new client at a new rate. We encourage them to bring in the clients, but then we work with them very closely as to whether that client at that rate makes sense. And sometimes it’s very timekeeper-dependent, what kind of leverage we’re going to have on the assignment. – Chair

In summary, while there is still much uncertainty about the most effective tactics, there can be no doubt that firms are increasingly focusing on questions such as:

  • How should our firm define profitability?
  • How should we communicate this definition to our lawyers?
  • How should we train lawyers to manage legal matters more profitably?
  • How should we compensate lawyers for bringing in and managing more profitable work?

Of these, the last question is by far the hardest. It is simply not possible to create a compensation system that makes everyone happy. The trick is to figure out which lawyers are most essential to the continued health of your firm, and how much do you need to pay them to keep them from leaving. Basically, my advice is to ask around and find the best compensation consultant you can. You’re going to need help.  (This is not an advertisement. LegalBizDev does not provide compensation consulting. It’s too hard.)

Last year, an AmLaw 100 firm that was just beginning to think seriously about those questions invited me to speak at a practice group leader meeting about pricing trends. When one participant asked what I thought was the most critical issue, I said it was determining the difference between low prices that are acceptable and prices that are simply too low to make business sense for that firm. “Where do you draw that line in the sand?” I asked. The chairman replied, “We don’t even know where the sand is.”

But that was then. Now that same firm has a number of new pricing and management initiatives in place and a new pricing director. Clearly, firms are making progress. It is just very, very hard.

A pdf of this entire series can be downloaded from Altman Weil Direct, where it originally appeared.

 
      


Today’s publication of my new book Client Value and Law Firm Profitability

For months, I have been writing in this blog about my new book Client Value and Law Firm Profitability.  Today, it is available on our web page for $95, with volume discounts on orders of two or more copies. The book can also be ordered from Amazon, in both paperback and Kindle editions.

Here is part of the press release that came out with the book:

About two-thirds of the time, when legal clients say they want “greater value,” law firm leaders believe it is nothing more than a request to pay less. Although profitability is essential to law firms’ success and survival, about one-quarter of major law firms don’t measure it formally but only assess it intuitively. For those that do measure profitability, the two most consistently effective ways to preserve it are legal project management and adding new staffing in pricing, value, and related areas. 

 These are just a few of the findings of a study of law firm leaders I conducted in 2013 and 2014 for my new book Client Value and Law Firm Profitability, which is being released today. I confidentially interviewed law firm leaders from 50 AmLaw 200 firms. Forty-two percent were chairs or managing partners, and the rest were senior partners and executives.

Since the participants in the study were promised that they would not be quoted by name, they were unusually frank in their responses, including the law firm chairman who said that “lawyers are about as dumb as you could possibly be about understanding how our product is made. The lawyers who understand how to make it and who can manage that process efficiently are going to be the winners.”

The interviewees also felt free to speak about both the business problems they face and possible solutions, like the managing partner who noted that “I have a $10 million practice. But that could be a disaster for a firm, because it could cost them $11 million to get $10 million. But nobody ever talks about it that way.”

 
      



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