In-House Counsel Analytics - What do they Measure and Why?

We're aware that some in-house counsel rely (willingly or unwillingly) on procurement officers to make or influence decisions about the selection of outside counsel.  We're also aware that some in-house counsel are as mystified about the changing marketplace as their outside counsel, so in lieu of making wise choices based on predictability, value and subject matter expertise they hire the largest brand-name firm willing to accept substantial discounts.  But while these extremes make for good copy, the reality is there are many excellent in-house legal departments and business managers engaged in informed buying. I have the pleasure to moderate a panel discussion of several of these thought leaders at an upcoming Ark conference event aptly titled "Business Intelligence and Analytics in the Legal Profession."  The conference will be held at the AMA Executive Conference Centre in New York City on Thursday, April 18, 2013.  The specific one-hour session for our topic, titled "How Corporate Legal Departments are Using Analytics to Measure the Value of the Products and Services They Buy," will commence at 1 PM ET.  I will be joined by James Partridge, Chief Counsel of Ally Financial; Bob Ingato, Executive Vice President, General Counsel & Secretary at CIT Group Inc.; and Anne Sonnen, Deputy General Counsel & Chief Administrative Officer, Legal, Corporate & Compliance Group at BMO Financial Group.  We will present and discuss several specific examples of how in-house counsel use analytics to measure and select outside counsel.

From the session description:

As legal departments learn to capitalize on data-driven business intelligence, the opportunity to save money on outside legal spend increases dramatically. It’s no secret, they are using objective data in order to negotiate rates, assess risk, measure skill level, efficiency, flexibility, outcomes—embracing (and using) big data to measure the value of the products and services they buy. Tactical measures have been taken to integrate matter management, e-billing, and reporting systems to access detailed performance information on outside counsel—leveraging “tools of empowerment” to take advantage of an increasingly competitive market for legal services. To compound the challenge for law firms, legal departments have also tapped procurement teams in some cases to assist in-house lawyers with defining the scope of projects, selecting the right suppliers, negotiating cost, and evaluating performance. The client has become quite sophisticated and squarely focused on harnessing the power of their data.

Please join us if you can.  Register here.  Many thanks to sponsors TyMetrix Legal Analytics, IntApp, kiiac, Sky Analytics, Recommind, Thomson Reuters and DF Tech.

Ten Things I'd Do Differently as a Law Firm CEO

There are many good reasons for law firms to adopt business practices from other industry segments.  As has been made abundantly clear, the laws of economics apply equally to law firms as to other businesses.  Faced with declining demand and an oversupply of providers, law firms are experiencing unprecedented downward price pressure and clients are aggressively seeking substitutes.  Law firm leaders who have reduced overhead to maintain profit margins have learned that this approach falters when adverse economic conditions persist.  Many law firm leaders now struggle with what to do next to survive.

 Alternative fee arrangements are still considered necessary evils, rarely embraced but reluctantly accepted upon client demands.  Growing top line revenue through lateral recruiting remains a risky proposition because there is no guarantee a lawyer's clients are as portable as the lawyer.  Too, a lesson most of us learned as teens applies to lateral love affairs:  the pretty girl too popular to commit to one guy is, statistically speaking, unlikely to stay with you for very long either.

Lawyers, not unlike their forbears in other industries facing massive upheaval, tend to do more of what they know rather than proactively seek change, and as a result simple techniques to improve client satisfaction and retention -- efforts that in other industries are generally called "sales" -- are discarded as unseemly or unnecessary for educated professionals to take on. Law firms are not mere factories, churning out countless replicas of a popular product.  Nor are they think tanks focused on producing thought leadership for academics to ponder.  But law firms are somewhere on that continuum, subject to market forces, facing changing client needs, price pressure from entrenched competitors and constant innovation from new entrants.

Few law firm leaders have sufficient experience to navigate this maze.  But there is hope.  Unlike the leaders of, say, print encyclopedias, whose business model was disrupted by the unprecedented speed and force of the Internet, law firm leaders have plenty of corollary lessons to draw on to chart a course from fear to prosperity.  To be clear, I don't believe a law firm should be run primarily as a business.  I've been a CEO of a publicly-traded company and I climbed the corporate ladder in divisions of private and public multi-national corporations and there is a common thread:  the business school maxim that earning a profit is the primary goal is interpreted primarily as a toxic quest for short-term profits above all else, including the long-term health of the business, typically because executive incentive plans are pegged to short-term profit measures.  

A law firm can generate a healthy profit, which is not a shameful goal, while simultaneously improving client satisfaction and work product quality, and building a sustainable culture for the long haul.  But how?

Here are ten ideas drawn from my own corporate experience that law firm leaders can embrace to improve the fortunes of their firms.

Change the governance model.  Let's first dispense with the arcane notion that a partnership is an effective or efficient management structure.  Notwithstanding any potential tax or liability benefits of the business form, it is ridiculous to believe that all partners should have an equal say in the operations of the business, particularly after an organization reaches a certain size.  Nor is a dictatorship acceptable, even when led by a benevolent leader, because such organizations lack sustainable business processes and falter when the leader inevitably departs. Identify a core leadership team at the firm and practice group level and give them the authority to lead.  Stop allowing the blowhard down the hall to substitute his childish behavior for sound business practices.  Stop crowd-sourcing important decisions.  Speed up the decision process by eliminating needless voices.  Let the lawyers practice law and the leaders lead.

Productize the offerings. Every law firm has products, we just choose the collective delusion that legal services are unique and non-repeatable actions.  Sure, some matters require unique tasks, but every legal matter includes tasks that have been done before, usually many times before.  Figure out which products -- or service offerings if you will -- the firm produces profitably and effectively and commit these to a repeatable series of actions.  Repeatability leads to improved profitability and improved quality by reducing variability.  And yes, there will still be plenty of unique matters that only highly-trained and creative minds can tackle.  If you can find a matter or task that's so unique that it's never been done before, bill for it by the hour.  Otherwise...

Strategic Pricing

Embrace strategic pricing.  Here's a revelation: clients will care less about the mechanics of your invoice, whether you bill by the hour, by the word or offer flat fees based on astrology charts, so long as the value delivered is commensurate with the price paid.  The practice of issuing invoices with “services rendered” didn’t die because clients grew smarter; it died because law firms grew stupider and adopted billing practices with perverse incentives.  The idea that a law firm might not need a fax machine if not for client demand, and therefore we charged $1 per page sent or received until the fax machine earned in excess of 100,000 times its cost was idiotic.  Thankfully, we learned the lesson and today don’t charge per email.  Or view legal research as a profit center… wait, what?   Learn what it costs the firm to produce and deliver its legal services.  Accept that there’s no “perfect” way to allocate overhead.  Determine the differential value your firm offers against the competition, if any.  Determine the client’s perceived value, if any.  Establish a price that covers your costs, delivers value and generates a profit.  If you can’t figure this out, hire a new finance team. If you can’t find a profitable price, focus on lowering your cost of delivery, not just your overhead. Or accept that the client may not place the same value on the offering that you do and find something else to offer that has greater value.

Reduce inefficiencies.  Law firms carry extraordinarily wasteful overhead.  If you want fine art in your Italian granite-tiled restroom, go for it.  If you want to sponsor every 5k run or splash your logo on every cocktail napkin offered and pretend it's a wise marketing investment, go for it.  But say no to the partner who demands his own graphic designer and high-capacity printing operation on the off chance he might leave a key proposal to the last second and need to run an after-hours-all-hands-on-deck fire drill to generate a boilerplate RFP response.  Stop running the same conflict checks on the same conflicted prospects, or their subsidiaries, by investing in a data cleanup operation, adding in corporate trees and linking your CRM system to your billing system and the conflicts database.  Improve your RFP win rate by requiring the lawyers adhere to best practices, instead of repeating the same mistakes.  Look at every single process in the firm's back office and find ways to eliminate redundant and wasteful steps.  Don't know how? Hire a firm that specializes in business process improvement (BPI) to do it for you, or to train you to do it.  Or hire a business process outsourcing firm (BPO) and let someone else manage your accounts payable function. On second thought, cease the silly sponsorships unless you secure a substantive speaking role and categorize the 5k run as a charitable donation or brand building exercise, not a business development activity.

Reduce the cost of goods sold.  The way to productize your offerings is to embrace legal project management and process improvement.  The techniques used to identify and reduce inefficiencies in the back office can be effectively applied to a legal practice.  When faced with flat or declining revenues, the sustainable way to maintain or grow profits and to defend against predatory competitors is to reduce costs at a faster rate.  If you've advised 100 clients on over 1,000 class action defense lawsuits, what are the specific factors correlated with defeating class certification?  If you've filed 500 appeals with the state's regulatory authority, what are the specific steps correlated with success?  Whether in litigation or transactions, there are repeatable steps on the critical path to success and excess steps that may be deemed helpful or necessary by risk-averse lawyers, but are not statistically relevant to risk-taking clients.  If all tasks in all matters are of high value to the client, then your realization rates would approach 100%.  If your realization rate is lower than 95% (or closer to the new normal of 85%) then by definition you are billing for steps that are either unnecessary or that the client deems unnecessary.  Learn how to talk to clients about budgets on every single matter -- how can you possibly employ strategic pricing otherwise?  Undergo a rigorous examination of your processes and develop project plans that reflect successful and profitable approaches.

Invest in knowledge management.  Back in the day, knowledge management (KM) meant writing summaries of notable briefs and memoranda and indexing and filing them away in a database for later retrieval in order to save time, which combined a task that no one liked with a result that no one wanted.  KM should be synonymous with a learning curve, or the economic principle that what we've done multiple times we can do more efficiently.  If your pricing analysis tells you the maximum market appetite for service X is $5,000,  then find ways to produce and deliver service X for far less than $5,000, relying on past experience to inform the process.  Poor leaders believe KM is a technology problem and will invest millions in tools that the lawyers happily ignore, but wise leaders recognize this as primarily a cultural problem.  Also, if you're lamenting the decline of associate training fully funded by clients, you'll be pleased to learn that a KM culture both accelerates and improves associate education.

Don't guess.  Forecast.  In countless practice group retreats I hear the same goal: "We'll grow the practice by 20% next year."  Yet inevitably there is little rigor applied to the target, let alone how to achieve it.  Businesses thrive on certainty and generally value repeatable revenue streams over one-time transactions, and corporate budgeting is a never-ending exercise to identify revenues and expenses.  No business can operate without a clear sense of its working capital, cash flow and resource needs.  Yet most law firms employ lagging indicators such as profits per partner to determine fiscal health.  That's like driving a car until the gas tank is empty to determine the gas tank's capacity, which is then retroactively applied to the prior day's agenda to see if we should have refilled the tank before embarking upon a series of errands or perhaps scheduled fewer errands.  Create and maintain a sales pipeline, applying simple methods to target the right prospects and predict not only future engagements but the resources needed, the likely cash flow and potential profits. Implement zero-based expense budgets and hold everyone accountable.  Measure the ROI of marketing investments, and not just the ad campaign but identify the partners whose entire "marketing" spend consists of taking the same clients or law school pals to sporting events with no discernible incremental business resulting from the expense.  Not sure how?  Select a client, any client, and ask them to walk you through their revenue and expense forecasting process.  But buckle in first, as it will be quite a jolt.

Measure client satisfaction constantly. There are many ways to do this.  Hire a consultant; send your managing partner on the road; ask your CMO to conduct interviews; conduct an annual satisfaction survey; conduct an end-of-matter survey after every matter.  Whatever you do and however you do it, study it, sustain it, and act on it.  Most law firms are "too busy" to systematically gather client feedback, naively believing good legal work speaks for itself.  Many who claim to care sit on findings that are too challenging to address, e.g., toxic rainmakers, institutional overbilling, etc.  Even those who measure client satisfaction effectively well tend to do so at too-infrequent intervals.  Take a cue from Disney, Ritz Carlton, even the local hairdresser -- know why clients hire you, know why they don't hire you, know why (and when!) they fire you, know what you do well and what you can improve.  Know these explicitly and implement programs specifically designed to improve performance.

Compensate for retention and profit.  Partner compensation is often described as the third-rail of law firm management.  We can talk all day long about changing the law firm model and improving client satisfaction, but nothing changes unless the partners are compensated for doing so.  Sadly, lawyers often must choose between personal wealth and client satisfaction.  Hogwash.  Partners will obviously act in their own self-interest when there is no alterntative. So let's give them some alternatives that tie improved compensation to improved client satisfaction.  Long-term client value always trumps short-term transactional profit. Huh? Said differently, satisfied clients will generate higher profits over a longer period by lowering the cost of sales (retaining existing clients is always less costly than acquiring new clients), because of a reduced learning curve (see above), because of steady utilization and because many-to-many relationships between firms and clients magnify these benefits.  Contrast this with over-billing a client on a single matter, generating short-term billable hours and high profit, but resulting in client defection and constant utilization peaks and valleys.  Huzzah, the partner hit her billable hours target... but was doing so good for the law firm?  Businesses deal with these compensation conundrums every day.  Do we reward the high-volume hunter salespeople who bring in the most new clients but also the most unhappy clients (because of a poor fit) and who require the highest commissions?  Or do we reward the farmers who nurture key clients over time but generate less incremental revenue?  Do we compensate more for selling high-margin products, often because there is little competition, or do we compensate more for selling low-margin high-potential products, because gaining market share is more critical?  Do we compensate for profits, even though salespeople have little influence on the cost of goods sold?  It may seem complex but relatively simple calculations can help us identify the optimal approach.  At present law firms tend to maximize one factor, originated hours.  By tweaking the formula, leaders can better recognize and reward lawyers who contribute at different points in the process.

Require leadership and management training.  There are terms and concepts above that may be unfamiliar to law firm leaders.  Indeed, many successful business leaders have strengths in some areas but not in others.  It doesn't require an MBA to lead a successful business, but it helps to be consciously competent.  In other words, know why you're successful and how to repeat it.  Many law firms and their leaders have been unconsciously competent for a long time -- successful, to be sure, but no one is quite sure why.  We believed it was because we were good lawyers offering necessary services at a fair, albeit supremely profitable, price.  But as it turns out, years of unlimited demand for legal services may have been more of a factor than our own efforts -- and when that demand disappeared, our best efforts failed.  I sat in a law firm executive committee meeting recently where the partners struggled to understand the nuances of corporate finance so they could better manage the inherent risk of alternative fees.  They were stunned to learn that others could understand, even explain, their law firm business model quite clearly.  They were more stunned to learn that by treating non-hourly fees as a risk to be minimized, they had eschewed significant profits on several sizable matters.  Your own mileage may vary.  But you don't have to do it on your own.  There are educated people who are willing to teach law firm leaders these techniques, and there are many who are eager to join firms to demonstrate from the inside. Stop treating the law firm leadership track as a hobby.  Stop hiring administrators whose primary asset is not rocking the boat.  Cast aside, or at least gently nudge, the unqualified or uninterested from the corner office and replace them with committed leaders -- at the firm-wide and practice group level -- who have or will learn new skills and who will employ experts to advise them along the way.

Contrary to what you may have heard, the law firm model isn't dead.  Nor is law firm growth.  But law firms and law firm leaders stubbornly adhering to outdated models are gasping for their last breath.  The modern law firm can thrive, but not if we pretend it's still 2007.  Or 1995.  Or 1975.  The future is now.  You can't do nothing.  Are you ready to lead?

Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney, and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, an American Lawyer Fellow, and a member of the Hall of Fame and past president of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. A sought-after speaker and writer, he also authors Corcoran’s Business of Law blog. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.

Connecting the Dots: Carrying Costs, Outsourcing, Contract Lawyers and Working from Home

Within hours of publishing my article reacting to Yahoo's reversal of a longstanding work-from-home policy, I was engaged in a lively debate with a law firm managing partner regarding the benefits of a distributed workforce. He posed a simple question, one that I didn't fully address in my earlier article:  Why would a law firm allow any employees to work offsite when collaboration and, more importantly, instant availability when clients call, is so critical? Interestingly, many of his points mirrored those of another law firm managing partner from a separate discussion last week who scoffed at the mere notion of using contract lawyers or outsourcing in his firm, for fear that quality would suffer. The two issues are very much related and I appreciate the opportunity to connect the dots.

Companies are in the business of making cars or furniture or software or bed linens or rust-resistant rivets used on ocean liners or x-ray film or lunch meat or ships in bottles or countless other offerings. Most businesses find forays into non-core areas dilutive to earnings, so they hire others to mow the lawn at the company headquarters and manage the company cafeteria or make the coating that they apply to the rivets and so on. Every business eventually encounters a need for legal advice yet few have lawyers on staff. And those companies with enough scale to have in-house lawyers generally hire quarterbacks to manage outside specialists rather than to hire one lawyer for every specialized legal need they might ever encounter.  In a word, the legal needs are outsourced -- first to in-house counsel, when available, and then to outside counsel. The primary reason for existence for most, if not all, law firms is to serve as an outsourcing provider to clients who do not have and do not want to maintain this function as a core competency.

So the law firm leaders who immediately dismiss outsourcing as a tool in their own arsenal are short-sighted. If it weren't for outsourcing, many lawyers would not be nearly as gainfully employed. The reason outsourcing works is a simple economics term: carrying costs.  There is a recurring cost to establish and maintain any function, and some services are needed frequently enough that incurring this cost as overhead is more desirable than hiring one-off experts. But not every business reaches the same conclusion for each function. Some hire salespeople, others use third-party channel providers; some hire accounts receivables clerks, others rely on an outside agency to perform this task; some hire a full-time marketer, others bring in experts on an as-needed project basis.  Sometimes this "make vs. buy" decision is straightforward, other times the addition of an FTE (full-time employee or equivalent) is a big deal that requires deeper analysis.

Yet many law firm partners, especially in Biglaw, have become enamored with the idea of the "instantly hot" water supply -- you know the kind, no matter which faucet or what time of day, the moment you turn it on you get hot water without delay. "The ability to mobilize instantly and staff a complex matter literally overnight is our greatest asset," reported one law firm leader in an interview I conducted several years ago.  In layman's terms, law firms are like the supermarket with 20 checkout lanes, with every lane staffed and open at all hours, every day, all year, regardless of demand, just in case a client might call.  Upon closer inspection, however, we might find the law firm's checkout lanes staffed by guys who normally collect shopping carts in the parking lot, stockroom clerks, butchers and bakers, in addition to specially trained cashiers. This is the result of hiring untrained associates and making them available as a general resource to any partner that needs a body.

We've all been frustrated when forced to wait in line at a supermarket, everyone crowding into three checkout lanes while 17 remain closed. While this memory is vivid, the statistical reality is that we rarely face this delay at our busier stores because they employ statistical modeling called "queuing theory" to estimate peak and slack times, and they staff accordingly. No supermarket would be profitable if it incurred the carrying costs of staffing every checkout lane at all hours, and it would be similarly unprofitable if it constantly forced buyers to wait, which would drive buyers to seek alternatives.

What does this mean for our law firm leaders?  Clients do indeed call and request assistance on a moment's notice. But why not explore a model that allows the firm to quickly access scores, even hundreds, of well-trained, specialized, experienced lawyers, some of whom are nearby, some of whom are remote, all of whom are connected via high-speed Internet access to phones, computers and possibly video, but who prefer not to embrace the daily life of a Biglaw associate?  The carrying costs of the combined salaries, benefits, real estate, equipment, subsidized food and late night transportation of associate employees are enormous compared to the $0 carrying cost of for contract lawyers.  In some cases there will be higher transactional costs ramping up contract lawyers, but as the outsourcing providers have demonstrated beyond any doubt to in-house counsel who regularly hire them, the higher up-front cost is more than recovered by improving the quality of the work product and the reduction in repetitive rewrites, among other factors.  And, by the way, the traditional associate locked in the library for hours on end conducting research isn't collaborating as much as we think she is.

Now, before the ATL crowd overreacts, I'm not advocating the elimination of associates on the law firm payroll. But I am suggesting that many of the unhappy and unproductive associates who are on the payroll today would enjoy doing creative and challenging work from the comfort of their own home office, without the many distractions incumbent in working every day in a law firm, especially if making partner isn't in their future.

It's simple economics. Savvy law firm leaders long ago recognized the wisdom of outsourcing non-core back office functions. The progressive leaders have begun to embrace the use of work-from-home lawyers, contract lawyers and outsourcing firms to provide "instantly hot" services with lower carrying costs, and found that this approach can provide access to greater experience and more productive lawyers too. Whether or not you embrace a work-from-home policy that reduces your overhead while increasing productivity, or establish a network of contract lawyers to serve on a moment's notice, or contract with an outsourcing provider to fill specific needs on an ongoing basis, is a decision only you can make and only after reasoned analysis. You can cling to the notion that quality only results from the Ivy League-to-Biglaw-partner-track staffing model, and you can cling to the notion that 20 open checkout lanes at 3 AM is a wise allocation of resources, or you can apply some established business analytics to your own enterprise and make informed decisions. The choice is yours... until your clients make the choice for you.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

The Work from Home Calculus: Productivity + Inequality - Collaboration + Quality of Life - Cost

Yahoo's newish CEO, Marissa Mayer, recently reversed the company policy that allowed, even encouraged, employees to work from home.  This action has generated a lot of news copy, both for and against, and as is now the norm the masses are weighing in via social media.  Most views I've read tend to be stridently for or against working from home, with little middle ground:  one camp assumes such a policy encourages lazy people to watch Ellen all day while the hard workers toil; the other camp assumes such a policy extracts more output from workers who no longer know when the workday ends.  There are endless variations on the theme.  I first worked remotely in 1991 while living outside Boston for a Denver-based company, and since then I've seen every permutation and combination of work-from-home policy and I've seen both experienced and novice executives fumble with managing in such an environment.  My view is that such a policy is a simple study in microeconomics:  if you're clear what outcome you're solving for, the correct policy is easier to choose.  Wearing my former CEO hat, here are the issues I think about when deciding whether an employee may work from home. Inequality - Let's tackle this right up front. Few businesses can operate 100% virtually. This means that, sooner or later, some people will have to be centrally located and won't have the option to work remotely. Get over it. Your H.R. professionals will quake at the notion of treating employees inequitably, but that's just one of many reasons H.R. professionals rarely end up as CEO. The fact is, treating everyone the same is a stupid idea. Hersey and Blanchard in their Situational Leadership theory posit that people have to be managed differently based on their individual skill set and the task at hand. One person might need to be micro-managed for a task that another person can handle unsupervised.   As I've discussed previously, too often managers make decisions out of a misguided sense of fairness, whether it's cutting all budgets proportionally during down times without regard to profit contribution, or, in this case, refusing to allow a work-from-home policy because if we can't offer it everyone, then we can't offer it at all. Simply put, good leaders focus on what's right for the business and what's right for the individual, and when you have to break ranks and treat someone differently in order to achieve a better outcome, and you can do so without imposing undue hardships on the business, you act.

Productivity - Studies have shown that people are generally more productive when outside distractions are minimized.  I'd provide a few references here, but it doesn't take a double blind study to agree that limiting the interruptions of phone calls, sneezing co-workers, lengthy commutes, endless status meetings, emails, periodic fire alarm drills and long lunch breaks can lead to increased focus and output. In fact, as many companies have learned, those who work from home often fail to adhere to regular work schedules and often work far more than if they were sitting in an office or cubicle for 7.5 hours each day. But the key is to recognize which tasks can benefit from prolonged and isolated focus, and which tasks are unsuitable. I can't answer that for you, but I have enjoyed success asking my various teams to conduct a self-assessment and recommend which of their jobs could be performed remotely, and I've been pleasantly surprised at the candor and objectivity. And at the risk of beating a dead horse, I have rarely been impressed with my H.R. staff's assessments, primarily because so few of them understand the business, let alone individual job designs or tasks. Will some of your employees occasionally watch television, or duck out for a dentist appointment? Of course. But no workplace, even those with an open floor plan, prohibitions against personal phone calls and restricted access to social media, is fully productive at all times.  Also, if you or your managers are unable to hire responsible adults, then I question your own competence.

Collaboration - Technology exists that fosters virtual collaboration, whether it's the awe-inspiring Cisco Telepresence video-conference system, the document management systems allowing simultaneous annotation by multiple parties or business-oriented social media like Chatter or Yammer (although let's not get carried away with our virtual tools!)  Trouble is, many organizations invest in technology as if its presence alone will somehow change behaviors. The fact is, where there is a culture of collaboration, people will find ways, even inelegant non-technology ways, to interact; where there is no culture of collaboration, no technology will solve the problem (One example, law firm CRM, a technology asked to solve a problem lawyers refuse to acknowledge; here's another).  Some who work remotely will suffer from the lack of creativity and innovation sparked by interaction with others -- often spontaneous and unscripted and unrelated to the given task.  Salespeople who primarily operate independently and in the field, but who periodically need more brochures or contracts reviewed, can typically do so without ever setting foot in an office. Programmers who are constantly sharing code or who regularly need input from other teams writing code sets immediately upstream or downstream tend to perform worse when they delay collaboration until pre-set meeting times rather than simply getting up and walking two rows over to compare notes. Again, you'll have to assess the importance of collaboration in your own organizations, but don't underestimate its importance, even in jobs that don't ostensibly appear to benefit from it.

Cost - A former colleague of mine substantially raised his profile and career prospects by spearheading a controversial initiative to close all regional offices and send employees home to work, saving millions of dollars in office leases, equipment and presumed lost productivity from employee commute times.  Like many organizations, we talked of long-term strategy in our annual reports but spent most of the year focused on short-term performance, and make no mistake we saved a lot of money and boosted earnings for a few years through this initiative.  But be sure to focus on the net savings, once the transition costs are calculated. For example, in our case we had to purchase desktop computers or laptops for scores of employees, reimburse in full or in part for an extra phone line (this was before ubiquitous high speed internet access), and reimburse for hotel meeting rooms and countless Starbucks for confabs of small groups who needed to interact regularly. Our savings were still substantial, but your mileage may vary.  An economist might also point out that one man's cost savings is another man's cost shifting. For example, those who regularly visited customers were now required by IRS guidelines to treat their first and last appointments of the day as a commute, which is not typically a reimbursable business expense. The company saved a few bucks in the short run, but the employees devised ingenious solutions to limit their personal outlay by re-arranging their days (and impairing their productivity) in ways that we didn't anticipate. (For more on the cost savings vs. cost shifting debate, see this health care example.)

Quality of Life - An employee who was facing some troubling family health issues and who needed to be home approached me and asked if he could work from home.  The nature of the work he performed for me was pricing analysis, forecasting and modeling, and he could access all systems from home and join meetings by phone or, with sufficient time to plan, in person.  He was far too valuable to lose, and his remote working arrangement posed no burden to the company (other than feelings of inequity from other cubicle-bound colleagues), so I agreed.  For quite some time he was able to attend to his family issues and deliver a quality work product.  When his situation changed, he returned to the office, grateful to his forward-thinking employers for the opportunity.  Without question, the loss of income would have burdened him as would the loss of his specialized expertise have burdened us. It was an optimal arrangement.  For me, even when I was a HQ-based executive, I periodically worked from home in order to avoid the stress of my harrowing hour-plus commute on the highways of New Jersey.  Simple common sense suggests that, all else being equal, a happier employee is a more productive, stable employee.

Your own calculus may differ.  To me this is a fairly straight-forward linear programming equation.  Factor in the things that matter to you - cost, quality of life, productivity, collaboration, equality, etc. - weight the factors accordingly, determine specifically what you're solving for, and do the math.  If cost savings is what matters most, you may choose a different path than someone focused on employee retention or someone focused on a short-term max productivity to push a product out the door.  And don't invite the contribution of the silly protectors of the status quo, the H.R. staff, unless they can add demonstrable value.  Whatever you choose, make it a rational choice based on a variety of factors.  And if you choose to conduct this analysis at home on your comfy recliner while watching funny daytime TV, you have my blessing.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, click here or contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

Language Viruses - Improving Results Through Language

I recently attended a leadership workshop hosted by the Legal Marketing Association on behalf of its current and incoming chapter and international volunteer board leaders.  Beth Ruske, managing partner of Tiara International LLC and co-founder of ClearSpace LLC, spoke to the group about producing results as a True Leader, with particular emphasis on improving results through language.  Beth’s remarks were adapted from the work of Fernando Flores’ “The Effect of Communication.”  I found Beth's presentation fascinating.  I searched for more background afterward and discovered some excellent insights about Flores’ work from Matthew Budd and Larry Rothstein in their “You Are What You Say.”  I’ve summarized some key takeaways here. Flores believes there’s a fundamental connection between language and actions, and what we say strongly influences how we feel and how others around us feel.  Language used effectively can overcome challenges and biases, change moods and physiology, create positive outlooks and ambition.  Used poorly, language can have long-reaching and long-lasting negative effects, to ourselves and others.  Without delving into the psychological aspects of Flores’ work, it’s safe to say that many of us fall short of effective communication because our language is imprecise – what we say is not what others hear, and vice versa.

Flores identified several “linguistic viruses” that infiltrate our daily speech, creating confusion rather than clarity, impeding collaboration and causing frustration.  By better understanding the common mistakes we make when communicating with others, leaders can improve their effectiveness in establishing a vision and creating momentum toward achieving the vision.

Here then, are the top 10 language viruses.  Some refer to more precise language; others refer to better communication in sticky but predictable situations.

1.      NOT MAKING REQUESTS

We want or need something from someone else, but we don't ask for it. Why? For some of us, this fear of asking is to avoid feeling rejected. In sales training parlance, overcoming “call reluctance” involves understanding that a no to a request is just that  -- a ­no to the requested action, not a rejection of the person.

Others fail to ask for fear that others will deem them incompetent. Anyone who has presented to a group of lawyers on a topic out of the lawyers' comfort zone knows that they will generally not ask questions if subordinates are in the room, or if the answer might be so obvious as simply asking might make the lawyers look silly.  In reality, those with true comfort in their position often have no fear of asking questions.

And others fail to make requests because they fear imposing on others.  In fact, many people thrive on helping others and being asked to contribute is a high form of flattery as it acknowledges another’s capabilities.

 2.    LIVING WITH UNCOMMUNICATED EXPECTATIONS

Countless cartoons have played out this theme, where one spouse has an entire two-sided argument in his or her head while the other spouse is blissfully unaware. Whether at home or at the office, sooner or later we all feel that someone else “should have known” what we wanted, or we’re faced with someone taking us to task for not taking some action that was obviously needed.

This variation of "not requesting" happens when someone has a vision for what others should do, but doesn’t express this thought as a request.  Inevitably, when others don't do what we expect, we're disappointed, resentful and angry.

3.    MAKING UNCLEAR REQUESTS

Imagine the basketball coach exhorting his players to “help out on defense” when facing a superior team. Does this mean I should leave my opponent open while I double-team another opponent? Does this mean I should guard the opponent closest to me, expecting one of my teammates to switch and cover my assigned opponent?  Coaches know that vague advice leads to poor play, so good coaches give specific guidelines on playing help defense.

Many requests at home or at the office rely on vague language.  There’s as much wiggle room when asking a teen to “be home at a reasonable hour” as there is when asking a colleague to “take a look at this and let me know what you think.”

Asking very specific questions is not insulting because it allows both to have a shared vision of the expected outcome.  It’s not enough to have the desired outcome in our own minds; we must express this outcome to others so they share the vision.  Beth offered some excellent advice to guide us: Every request should include some form of “will you…” and “by when” to ensure clarity on what is requested and when it’s due.

4.      NOT OBSERVING THE MOOD OF YOUR REQUESTS

Our demeanor when asking questions shapes the outcome.  If every request is a command, subordinates will be compelled to complete the request but they are unlikely to go the extra mile.  Others who are not required to act may choose not to when faced with a demanding and commanding request style.

By contrast, pleading desperately for help is unlikely to foster the desired outcome long-term.  Many will help you once, even twice, but obtaining help from others out of a sense of guilt is not sustainable.  This is, incidentally, why charities see a steep drop off from contributors who become weary of incessant solicitations.

Be aware of your demeanor, and the recipient’s, when asking.  The old adage still applies: you will catch more flies with honey than with vinegar.

5.      PROMISING EVEN WHEN YOU AREN'T CLEAR WHAT WAS REQUESTED

In the hierarchical structure of a law firm, when a partner requests something of an associate or staff member, there is little room for saying no.  Unfortunately, at times there is also little room for requesting clarification.  It’s the responsibility of the receiving party to clarify when the request is vague.  Clarifying an outcome that is unclear is not a sign of weakness.  In fact, it’s a sign of thoroughness and attention to detail.

6.      NOT DECLINING REQUESTS

This is easy to explain.  We can’t accept every request lest we become overburdened and ineffective.  Many say yes for fear that saying no will disappoint the requester.  But imagine the requester who is disappointed with an insufficient outcome, or an outcome that comes too late to be helpful.  Avoid this disappointment by not over-promising and under-delivering.

7.      BREAKING PROMISES WITHOUT TAKING CARE: UNDERMINING TRUST

It’s unfortunately not uncommon for some who are extraordinarily overburdened to put their heads in the sand and hope deadlines go away.  Not surprisingly this rarely works!  But hiding from responsibility takes many forms, it’s not always as obvious as shirking responsibility.

A common complaint from in-house counsel is that outside counsel aren’t responsive.  Outside counsel may feel this is unjust, as they are working dutifully on the client’s matter but don’t yet have “the answer.”  To clients, managing expectations is about communicating progress, confirming that we’re on track for established deadlines and providing early warning when something goes awry.  What frustrates clients more than anything is surprise.  If lawyers were to give advance warning when the matter is trending over budget or some new uncertainty has occurred, the client can adjust plans beforehand.  Adjusting after the fact is always much more challenging.

When commitments need to be broken, it’s critical to be up front and open, apologize for the impact, offer a new commitment and help fix any mess that results.  It is fairly uncommon for those who break commitments to do so elegantly, so handling the situation with care can still be a positive differentiator.

8.       TREATING OPINIONS OR ASSESSMENTS AS FACTS

As I write this during a presidential election season, my voice mail and email inbox and Facebook wall are full of political ads, commentary, solicitations and diatribes.  In politics and in religion, many have an absolute conviction in their beliefs but are unable to objectively quantify and prove to others the merits of their position.  This is a desirable outcome of a free society, notwithstanding the noise pollution in election years.

However, imagine the same mindset applied to more mundane business or family issues.  When one is convinced an opinion is fact, it can create dissension.  “We must double down and invest more in this product if we want to win in the market” and “What we need more than anything else is more rainmakers” and “I believe we spend too much already so I’m going to vote no on this funding proposal” and “Our clients want more of X, not Y” and countless other conversations take place every day in businesses and law firms.  When held up to scrutiny, many assertions lack a factual basis, but strength of will or organizational authority can often overcome lack of facts.

But that doesn’t make it right.  As we’ve learned in politics, you may not be able to convince others they’re wrong.  But we can do a better job of ensuring that our views are grounded in fact, not opinion.

9.       MAKING ASSESSMENTS WITHOUT RIGOROUS GROUNDING

Not all judgments can be supported by incontrovertible facts.  Still, there should be a certain rigor applied in making a case even when some of the facts are missing or in dispute.  Evidence and supporting documentation are always more helpful than mere opinion.

I recall a new CEO sitting through a review of our company’s technology spending.  We had spent five years investing in significant technology upgrades that automated multiple manual systems, improved quality and increased logistical supply chain throughput.  We had substantially reduced overall operating expenses and improved profits through strategic technology investments.  The new CEO spent just a few minutes reviewing the coming year budget submission before opining, “It feels like we spend too much on technology. I think companies this size should spend less. Please take another pass at the budget and reduce the spend considerably.”

We would have welcomed benchmark studies that put our technology spending in context.  We would have welcomed a healthy debate on the substantial improvements we had made, which perhaps to a more seasoned eye should have resulted in even greater profits.  What we didn’t welcome was a poorly supported argument that impaired the new CEO’s credibility.  And once credibility is lost, it’s hard to regain.

10.    MAKING FANTASY AFFIRMATIONS AND DECLARATIONS

I’ve spent a lot of time in law firm practice group retreats discussing business development strategy.  I’ve never characterized them as fantasy, but I’m quite familiar with the unreasonable, unsupported and improbable declarations that mark such occasions:  “We will grow the practice by 25% next year by bringing in new clients and getting more work with existing clients.”  Flores treats such assertions as fantasies when the goal itself is unreasonable and there is not even a vague plan to achieve it.  The outcome won’t produce itself.

Contrast the fantasy with a realistic declaration, perhaps a reality that doesn’t yet exist but is attainable through a series of reasonable steps.  It’s a bit distant now, but the assertion in 1962 by President John F. Kennedy that the US would put a man on the moon by the end of the decade was grounded in the country’s then-current science and technological capabilities, even though to the average observer it seemed outlandish.  As such, it may have been a stretch goal but it certainly wasn’t fantasy.

Timothy B. Corcoran delivers keynote presentations and conducts workshops to help lawyers, in-house counsel and legal service providers profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.