When I retired from my law practice to coach lawyers, people (including some close to me) asked why I would give up my law practice at the very peak of my career. There were many reasons. One was I simply wanted to do something different and new.

When I retired from coaching at the end of last year, people asked why I was giving that up. I told one friend that either I was considered too old by law firms, or as I had thought for some time, they did not want to invest in the future.

Now that I am recruiting lawyers, I’m not surprised to find how few young partners have a portable book of business that would be attractive to a law firm. I’ve been told that law firms do not want to invest in young lawyers because firm leaders believe those lawyers will leave the firm. I believe the opposite is true. I believe investing in young lawyers will give those lawyers a reason to stay.

A few years ago I read Seth Godin’s blog: Cost Reduction for High End Markets.

The essence of the post is that if you cut costs, you become less remarkable and more like firms trying to serve the middle of the market. Seth says:

Go through all the ways you serve your customers and make them more expensive to execute, not less. Your loyalty and your market share will both grow. People who can afford to pay for service often choose to pay for service.

I rarely meet lawyers in a firm of any significant size who want to compete on price. Your law firm would likely want to increase revenue from your firm’s largest clients. Why would a client want to pay more (either higher rates or giving your firm more work) when they are getting less from your firm?

If you want to stand out from all the other law firms, take Seth Godin’s advice. If you are sitting around with lawyers in your practice group or office, brainstorm on what you can offer that will be more expensive for your firm to execute, but will make your firm more valuable to your clients, and in the end, increase revenue.

Last November Above the Law published an article titled: IN-HOUSE COUNSEL New Study: GCs Have Brought The Majority Of Work In-House.

I found this quote interesting:

51% of in-house legal teams report that more than half of their legal activities are now conducted internally. The biggest challenge in-house legal teams are trying to solve by bringing more legal services in-house is controlling costs, followed by completing tasks efficiently.

I am not surprised by the survey results. In 2018, the majority of clients want more and want to pay less. At the same time, they perceive their law firms are focused on what’s in it for the law firm rather than focused on what’s in it for the client.

In May, The American Lawyer published: Managing Partners’ Frustration Mounts as Law Firm Innovation Stagnates. 

A record 68.6 percent of leaders said the No. 1 reason they aren’t doing more to change their legal service delivery model is because partners resist efforts to change. That number has jumped from 44 percent in 2015, which made it the third most-cited reason that firms aren’t doing more to change.

Many law firm partners have made enough money to be content. They are not focused enough on what their clients want, need and in 2018, demand. I laugh at the vision of a law firm web page with the branding slogan:

“We Aren’t Innovative Or Efficient, But We Are No Worse Than Other Law Firms.”

So what can law firm leaders do about this?

Begin by focusing on your clients. Ask them to share with you ways you can deliver greater value. Listen to what they say and ask further questions.

When you are finished, gather a group of lawyers in your firm and brainstorm ideas on how to deliver greater value to clients. When you come up with a plan, figure out a way to make sure you are delivering greater value and continually ask for feedback from your clients.

And, finally…Reward Innovation and Efficiency.

 

In this post, I try to answer the question, what is possibly the best firm for you if you are looking for a change. If you are busy and want my idea right away skip to the bottom. Otherwise, here is some background information from my experience.

In 1976, when I left the United States Air Force after spending four years and eight months on active duty, I had many options.

  • I was offered two positions on the west coast in-house with government contractors (One of my best friends took one of the two offers and spent the rest of his career as an in-house lawyer.)
  • I was offered a position as an associate with a government contracts practice group in a large DC firm. (I turned it down, having spent the last few years litigating against lawyers in that firm and discovering the role of the junior associates.)
  • An associate position with what was then considered a mid-sized law firm in Roanoke, Virginia. (I took this one even though it paid far less than the other two opportunities and even paid less than I was making as a Captain in the Air Force.)

I took the opportunity in Roanoke, in part because I graduated from Virginia Tech, just 37 miles away. That was only a small part of my decision. I took the opportunity in Roanoke because I believed it offered me the greatest opportunity to control my own destiny.

For 20 years I proclaimed I would never be part of a large law firm because I didn’t want to be told what to do. Then, I joined one. In my first year, I doubled my collections because the firm had lawyers who could help my clients with work I could not do myself. By my third year, I had tripled my collections.

Our firm leaders were super conscious about where we stood in the AM Law 100. Giving them the benefit of the doubt, I could say that the higher we rose, the more each of us was making. I guess that part was nice, but the so-called prestige of our ranking was something that did not resonate with me.

Fast forward to my coaching career. In my 12 years coaching lawyers in US and Canada firms, I discovered there are many firms out there that have the resources I would have needed to serve my clients but have far lower overhead. I discovered I could have made almost double what I was paid in the big Am Law 100 law firm.

I know many of those firms and many of the managing partners of those firms. If you are a partner in an Am Law 100 firm, looking to make a change, take a look at firms half your size. Look at the bios of lawyers who would help serve your clients, or bring your current colleagues with you.

Now that I am helping partners select the right firm for them I thought back on how I had selected my last firm.

It was 1996, I had generated $1 Million in business that year (at the time that was considered a significant amount). I knew if I was with the right firm, I could add to that number and serve my clients better. I had just begun working for a client that was submitting a proposal to construct and install the E-ZPass toll collection system in New Jersey and some surrounding states.

When he found out I was considering changing firms, a managing partner of a fairly large firm in the city where I went to law school reached out to me. We had several discussions, during which I learned the firm compensated partners based on tiers. The managing partner said I would be placed in the second tier of compensation.

When he shared with me which lawyers in the firm were in the first and second tiers, I discovered I would be earning more money than any of my law school classmates who had spent their entire career with the firm. I decided, right or wrong, I would likely have a target on my back and some of my former law school classmates would resent an interloper making more money than them.

I moved to Dallas because my clients were working on projects throughout the United States and DFW airport had many non-stop flights a day to those cities. I did research on the large law firms.

 

I knew that the two largest Texas firms would not likely be interested in a construction law practice, even though the size and complexity of the legal work on the large highway construction projects were rapidly changing. Some large Texas firms had what they perceived to be construction law practices, but no one particular lawyer was totally focused on construction.

I made a list of what was important to me:

  1. The firm should be growing not declining
  2. The firm needed to have a platform to give me the opportunity to expand the work I was doing for construction contractors
  3. The firm should be entrepreneurial rather than focused on “institutional” clients
  4. The firm should be collegial and might even have a “no jerks (I used a different word at the time) policy”

I started talking to firms in Dallas. When I met with the chairman of Jenkens & Gilchrist, I didn’t need to go any further. David gave me an assignment. He said:

Cordell, pretend like resources are not an issue. I want you to prepare a business plan for me that will triple your book of business in three years.

I prepared the plan, and still have a copy. And, yes, I tripled my book of business in three years. I’m not sure that would have happened had I not been asked to prepare the plan.

I also met Mr. Gilchrist. He was a special man. As written in his obituary, Mr. Gilchrist was a true Texas gentleman. At a later point when Mr. Gilchrist and I were talking about firm values, he showed me something he had written many years before about the importance of Jenkens & Gilchrist lawyers focusing on their families.

P.S. A year after I joined Jenkens & Gilchrist, in January of 1998, the firm was on the front page of the National Law Journal. I believe the headline was something like: Fastest Growing Firm in the US. I was interviewed and asked why I joined the firm. I found my reply in the article below:

The January 1998 National Law Journal article on Jenkens noted the firm’s rapid addition of practice groups from different firms as the basis for its growth, saying that Laney “inspired these lawyers to dream Texas-size dreams.”

As many of you know, the growth that occurred later, specifically adding the Chicago office, led to the demise of the firm. See: Taxes and Death: The Rise and Demise of an American Law Firm.

Did I choose the right firm? Yes and no.

I believe it was the perfect fit for me to expand relationships with existing clients and provide help in other practice areas. The firm had the platform, and resources weren’t an issue for me. I enjoyed being a part of a firm that was growing.

But, our firm grew in a way that caused its demise. I had opportunites to leave and join two firms that were among the largest in the world. I turned them down and started my coaching work. I suspect that had the firm not acquired the tax practice in Chicago I might still be practicing law in the Dallas Fountain Place office.

 

When I practiced law I often wondered why the client who had hired me to get them out of a tough jam at great expense, had not hired me to help them avoid getting into the jam at far less expense.

Today, I wonder why law firms do not hire me, or anyone else to do client development coaching for their lawyers to make sure they get it.

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Some time ago, I found the answer to my questions in a Fast Company article by Dan and Chip Heath titled: Turning Vitamins Into Aspirin: Consumers and the “Felt Need” As the Heaths point out:

If entrepreneurs want to succeed, as venture capitalists like to say, they’d better be selling aspirin rather than vitamins. Vitamins are nice; they’re healthy. But aspirin cures your pain; it’s not a nice-to-have, it’s a must-have.

I know that when I practiced law, clients were more willing to pay for the “must haves’ than they were to pay for the “nice-to-haves.”

The same is true in my current work with lawyers and law firms. Sad as it may seem, many law firms view developing the next generation of rainmakers as a “nice-to-have” rather than a “must have.” I guess they assume their baby boomer lawyers will never retire.

Likewise, when the economy is tough, law firms cut training and development of their lawyers because it goes from a “must have” to a “nice to have.” Thus, even though developing the next generation of outstanding lawyer rainmakers is “nice-to-have” not a “must-have” for the near future.

One irony in all this: My best construction law clients were the ones who hired me to do “nice-to-have” legal work and now my best law firms and the best lawyers for whom I work hire me to help with “nice-to-have” goals.

One other irony: The primary way I got hired for “must have” work was by creating content to help clients avoid the “must have” problem.

I have a question for you. What will happen to your law firm when the vast majority of baby boomers retire? Have you developed the next generation of rainmakers?

Have you ever failed to meet a client’s expectations? I can think of no worse feeling.

How do you avoid it? The key is to establish the expectations right from the start. When I practiced law, I met with clients for pre-project planning and did not charge for the time.

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If you want to avoid the problem begin each project with a planning session. Here are some of the planning questions for the agenda:

  1. What is the budget for the work?
  2. Does the client expect the billing to be level during the project?
  3. How does the client want the project staffed?
  4. What client representatives will be working on the project?
  5. Are there any time sensitive issues?
  6. How does the client want its bill?
  7. How often does the client want a status report and in what format?
  8. What are the clients goals for the project?
  9. How does the project fit into the overall business objectives and strategy?
  10. Does the client want to take a hard line in the matter or not?
  11. Would the client like to have an extranet site set up for the project documents?

Over years of experience I learned what my construction clients liked and did not like about their experiences with law firms. I decided we would put together a Construction Law Client Service Goals based on what I had been told. After I drafted the document I had several clients review it and offer suggestions. Then I used it in my planning sessions.

To those of you who subscribe by email and got one yesterday afternoon for my latest Practical Lawyer Article, I apologize. I was trying to post it on my own and not only did I mess up the post, I also messed up by not doing it the way so you wouldn’t get an email.

I posted correctly last time, but…this time I needed help from Joyce. She told me the two things I messed up so if you want to read my latest Practical Lawyer Article, you’ll find it here.

If you ever read Jim Collins book: Good to Great, you know where I got the bus analogy.

If you have never read the book, here is a Fast Company article he wrote that summarizes the book pretty well: Good to Great.

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Collins says:

Most people assume that great bus drivers (read: business leaders) immediately start the journey by announcing to the people on the bus where they’re going—by setting a new direction or by articulating a fresh corporate vision.

In fact, leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.

It is incredibly hard to build something when you have the wrong people on the bus. I know. I experienced it.

I led my construction law practice group and came to a point where I knew we had two income partners who were the wrong people on the bus. They weren’t happy, they weren’t productive and they were dragging down the rest of us.

Each month I received management reports and the production of one of those partners lagged behind. He was a knowledgeable construction lawyer, and even though we had lots of work, he didn’t step to the plate to take on more of it.

Finally after hearing month after month that I had to do something about his performance, I fired him. At that point I was told I didn’t have the authority to fire an income partner. That was the first I had heard that.

I look back now and think about what I could have done differently. I found an interesting Entrepreneur article: 9 Ways to Manage Underperforming Employees. Each idea was a good one I wish I had tried, especially:

5. Create performance goals together.

I’m not sure my underperforming partner would have done it. But, if by chance he did, then it would be his expected performance, not something dictated by me.

Short, of getting them off the bus, how do you handle a lawyer in your firm or group who is underperforming?

I was recently asked to make a prediction about law firms for 2016. What do you suppose I predicted?

I doubt you would guess it because I may be one of the few people who see that it is happening.

So, with that here’s what I predicted:

In 2016 law firms will experience greater problems with succession as more baby boomer lawyers retire or slow down and fewer junior lawyers have been trained, coached, mentored on the client development skills necessary to take their place.

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I think it’s a big issue. Before I left my law firm, now 11 years ago, I mentioned to our leadership that all but one of the top lawyers in our firm were over 55. I was friends with many of them and I knew that some of them had not saved for their retirement.

At the same time I suggested that the firm have me coach our brand new partners and present programs to others on client development. As you know that led to what I am doing now.

Last year I wrote briefly about this issue. See: Light My Fire: Motivating and Developing Your Next Generation and What’s Wrong With Many Law Firm Partners?

Some firms started years ago by lawyers my age are developing the next generation of rainmakers. Other firms don’t seem to care what happens to their firm after they are gone. I hope your firm is the first type not the second.

In 2016, I will be coaching more lawyers than I coached in 2015, so it seems more firms are thinking about this.

I posted the first blog referenced above the day I was giving the Light My Fire presentation. If the subject of business succession interests you, take a look at the Prezi slides from my presentation.

 

Leila Rafi and Elder Marques are two McCarthy Tétrault  Toronto partners I coached a couple of years ago. You might recall they wrote a guest post here a year ago. Fast Forward: What Will You Be Doing in 2020?

Because I greatly value their ideas, I asked them to write another guest post. Here is what they had to say about The Client Revolution.

Leila and Elder

Measuring time by the billable hour has always been a cornerstone of the legal profession – not only for charging clients, but also assessing lawyer productivity and significantly impacting compensation. Accordingly, when clients started to question the billable hour, they raised concerns that have had a revolutionary effect on the way legal work is done, measured and valued. These issues are at the heart of how law firms do work for clients and the methodology used to incentivize their lawyers.

How should law firms respond?

First, they should make sure that they are giving clients more value for their money. For some clients, this may mean complimentary seminars for their business leaders and the use of office space; for others it may mean secondments to help address gaps among in-house legal teams, or entering into creative fixed-fee arrangements that permit ad hoc advice in key areas.

Second, they need to be bold about re-thinking what they do. The lawyers and firms that will truly excel in the profession are those that will think creatively about the way they actually help their clients solve problems. As a starting point, there are three questions that lawyers need to ask themselves in dealing with clients:

  1. What problems do we help our clients solve?
  2. Who do we need to work with to solve those problems?
  3. How can we do it most efficiently?

Understanding Challenges from the Client’s Perspective

Clients have always come to their lawyers for solutions to legal issues. Increasingly, those issues have become more complex depending on the nature of a client’s business. Some of that increasing complexity is because of changes to public policy – for example, regulatory changes – while in other cases it’s caused by technological change or public expectations about transparency and accountability.

The advent of social media has completely transformed the management of reputation, branding and stakeholder relations. Technological changes are disrupting traditional business models in a range of industries. Clients still need legal advice first and foremost, but more than ever lawyers must really understand their clients’ businesses, and the environments in which they operate.

Who Lawyers Work with to Solve those Problems

Never before has playing nice in the sandbox been so important. Many legal problems cross borders or have high-risk shareholder, stakeholder and public relations implications that cause in-house counsel a lot of anxiety. To be equipped to handle such matters, lawyers can’t work in a vacuum.

As a result, depending on the deal, case or issue at hand, lawyers need to consider whether they need to bring in other advisors to provide a client with a comprehensive solution. Such advisors can include colleagues in other practice areas of the same firm, and outside specialists like media and communications specialists, government relations experts, forensic accountants, consultants or other law firms.

Doing it All Efficiently

Expensive”. That’s the phrase typically associated with “lawyers”. Add some more professional advisors, and it only gets worse….. Lawyers must be pro-active in developing workable cross-functional teams where tasks aren’t duplicated and time is not wasted.

Clients should never pay for duplication, so each member of an advisory team (internal and external) needs to have clarity on their role. Project management tools can be applied to create and control budgets and costs and steer the work product towards what the client wants. All the foregoing help to meet a client’s expectations and bring innovation to fee arrangements. Ongoing communication among the team and with the client is key to nurturing the trusted advisory role.

What Next?

If law firms are to be prepared for this future of collaboration and problem-solving, they need to:

  1. Ensure that they truly understand the industries in which their clients operate.
  2. Develop effective relationships with other professional advisory firms and be prepared to collaborate, including by looking at alternative fee arrangements.
  3. Reward lawyers who demonstrate the skill set that fosters collaboration, both internally and externally.

Lawyers need to inspire clients. The way of the future is incentivizing lawyers to be industry-savvy, collaborative and creative in their client focus. Like it or not, the revolution is happening and it’s up to lawyers to ensure that they are ready and remain relevant.

What do you think?

 

For several years, my trusty assistant Joyce and I ate lunch almost every Tuesday at one of our favorite restaurants. It was a Tex-Mex Grill in far north Dallas.

We traditionally dined there on Tuesday because the restaurant features “Double Punch Tuesdays” and we get two punches on our card. When we have 10, punches we get a free meal (up to a certain $$ amount), and with 20 punches we get two free meals.

Several months ago after we were seated I noticed we had been handed new menus. I was excited to check out what they had added to the menu.

As I skimmed through the new menu, I found the restaurant had not added any new dishes. Instead,  I found substantial price increases (some as much as 20%) on the same items.

The longer I looked at the menu and realized I would be charged an additional $2.00 for one of my favorite lunch items, the more bothered I became.Finally, I looked at Joyce and suggested that we go somewhere else for lunch. She agreed and we were out of there and on the road in a jiffy.

We never went back, not even on Tuesdays. Why? no one explained to us why the restaurant had raised prices and why the price increase was so dramatic.

I remember the leaders in my old law firm demanding that I raise my rates each year. I hated the idea and protested.

I told the leaders that just because we had entered a new year, that was not reason enough to increase rates. My clients would want to know why.  Had I become smarter by being a year older? Could I do their legal work more efficiently because I had gone from 31 to 32 years of experience?

I asked the firm leaders to give me the “talking points” to explain why my rates would be higher going forward. Needless to say, I never received anything I could share with clients. I refused to raise my rates and told firm leaders I would just work harder.

I left a fine restaurant and may not return simply because the restaurant had raised prices without explaining how we would get more for our money, or the circumstances that made the price increases necessary.

Unless your firm is the “best in the world” and price is no object for your clients, when you raise your rates and provide nothing more than you provided before, you will alienate many clients, some of whom may leave you.