Web 2.0 / Social Media Update

Periodically I take stock of my web 2.0 efforts, to ensure that I continue to derive value from the tools that matter and discard the rest.  Here's my latest appraisal: Blog - I've moved my professional commentary to this blog from my personal blog, which now allows me to maintain two personas.  Frankly, I don't mind mixing business with pleasure, as it were, and many of my readers have mentioned that an occasional family photo or recap of my basketball league provides insights into my personality that might not otherwie shine through.  Nevertheless, I made the split and it's working out well.

LinkedIn - I continue to maintain a robust profile, inviting or accepting invites from those I meet in business settings.  I have instant recall of perhaps 80% of my 463 contacts.  For the remainder I have to consult my notes to recall who they are.  It would be very helpful if LinkedIn allowed personalized annotation of the contact record itself.  Recently I've received several "Please introduce me to someone you know" and "Please introduce me to someone who knows someone I want to meet."  All but one request has come from a trusted source so I have happily complied.  I've met several job seekers who have indicated a desire to troll my contacts and ask for introductions, but not a single one has followed through.  Apparently cold calling still gives one pause, no matter what the form.

Facebook - I've spent significantly less time here since the recent upgrade which, to me at least, made it more difficult to navigate.  But I still drop in a few times a week.  This is mostly reserved for family, close friends, old friends getting back in touch and the occasional  business connection, now totaling 230.  I really wish FB allowed categorization of friends so I could accept invites from distant acquaintances but limit their access to my personal content.

Twitter - I'm a regular tweeter and reader, and careful readers will note the Twitter feed in the right column of this blog.  Twitter leads me to some of the most compelling articles, of both professional and personal interest, that I might not otherwise see.  It's also increased my visibility and allowed me to find others with like interests.  I will regularly tweet from conferences and speeches I attend, and eagerly read others' recaps of conferences I cannot attend.  I tend to amuse myself by posting personal updates alongside professional commentary, a habit which many disavow.  But as with my blog I tend to believe that injecting some of my personality makes things interesting.  Somehow I have attracted 364 followers, and I follow 233.  Twitter Grader ranks me 96.7 out of 100, though I'm still waiting for my gold star!

Google Reader - I monitor a large number of legal and news sources daily in Google's RSS reader.  This can become overwhelming, but I find it necessary to stay on top of what other thought leaders are saying and what trends are influencing our marketplace.  At the end of this post is a partial list of the professional sources I rely on.  I'm a voracious reader but years ago I found that I couldn't keep up with all the books I purchased until I overcame my reluctance to start a book unless I had time to finish it.  I also redefined "finished" to mean when I lost interest and not when I reached the end.  With that burden off my shoulders, I now read books and magazines and skim hundreds of articles and blog posts daily without the obsession of reading every word.  It's faster that way!

Legal OnRamp - This legal community has been around a couple years now and I'm starting to spend more time there.  As an alum of Counsel Connect, the early 90's online legal community launched by American Lawyer, I enjoy re-connecting with the brilliant minds discussing the fundamental changes taking place in the legal marketplace.  Whether it's a debate on the billable hour, the use of technology to automate routine tasks to lower costs for clients, substantive legal issues such as the American Law Institute's (ALI) proposed changes to the law for software contracts -- the point is savvy outside lawyers have an opportunity to demonstrate expertise to a captive audience of in-house counsel.

LMA Connect and the Lawmarketing listserve are two networks where I monitor and contribute commentary to the legal marketing community.  There is overlapping membership but often robust discussions.  Many law firm leaders might be surprised at the level of business expertise already residing within their firms today.

Classmates.com - I maintain a profile here, which is helpful solely to reconnect with school chums.  However my profile points visitors to Facebook and LinkedIn.

Sites I do not use:

Martindale Connected - I am an alum of Martindale and, quite evidently, a regular user of web 2.0 tools, but I have not been allowed to join so I have no opinion.

ABA's Legally Minded - I joined this community but can't find a reason to participate.

Plaxo, Naymz and Spoke - All are similar to LinkedIn, but other than accepting requests from others to connect I don't visit.

MySpace - My profile still exists but not even my young nieces visit any more.  It's all about Facebook.

A partial list of my daily reading:

• Above the Law - David Lat's legal tabloid
• Adam Smith, Esq. - Bruce MacEwen's brilliant commentary on the intersection of law, business and economics. This is a must read
• Are You Writing This Down? - Legal marketing expert Lance Godard's excellent commentary
• The Becker-Posner Blog - Economist Gary Becker and Federal Judge Richard Posner offer commentary on issues of the day from an economist's perspective.  These are rich, deep, thoughtful insights which, admittedly, I often don't have the time or energy to fully absorb
• Bill's Blog - Incisive Media (formerly American Lawyer) CEO Bill Pollak's commentary. While orginally intended for his staff, his insights are applicable to others, and his informative style is one which many CEO's should emulate
• Business Development - Occasional legal marketing commentary by Peter Darling
• The Client Revolution - Jay Shephard is a practicing employment lawyer who promotes his innovative practice which doesn't bill by the hour, ever
• CMO 2.0 - Interviews with leading CMOs from multiple industries
• College of Law Practice Management - As an elected Fellow I like to see what my fellow, um, Fellows are up to. Turns out most of us with something to say do so on our own blogs so not a lot happening here
• The Common Scold - Veteran journalist and editor of Law Technology News, Monica Bay reports on legal technology, legal technologists, the Yankees and her varied other interests
• Cotterman on Compensation - I followed Altman Weil consultant Jim Cotterman's commentary long before I joined the firm.  There are few in the field with more experience on law firm compensation topics than Jim
• Decent Shred - Shy Alter, a Toronto-based law firm information and knowledge management expert, is someone I became aware of via Twitter
• Demand Trigger - Veteran sales coach Mike O'Horo's take on the legal profession
• The Dilbert Blog - Dilbert creator Scott Adam's quirky take on life through the eyes of an economist/humorist/cartoonist. He's also a fascinating writer
• Enlightened Tradition - Another law firm KM expert I've come to "know" via Twitter, Mark Gould hails from the UK and discusses organizational knowledge
• Erik J Heels Blog - My former colleague Erik is an IP lawyer, Internet pioneer and veteran legal technologist.  He's also a very interesting guy with a wide range of interests
• Freakonomics - The authors of the popular book discuss everyday issues through the eyes of economists
• Get Creative - COLPM member Merrilyn Astin Tarlton's take on law firm innovation
• InHouse Rants - An anonymous corporate lawyer discussing his dissatisfaction of outside counsel.  Dormant for quite some time, I guess he has nothing more to say
• In Search of Perfect Client Service - Patrick Lamb, the Chicago co-founder of innovative law firm, Valorem, discusses the disruptions in today's legal markets and how he and his colleagues have adopted a new approach
• Inhouse Access - Commentary from various inhouse counsel hosted by the Association of Corporate Counsel
• Inhouse Blog - News and Jobs for inhouse counsel, edited by Geoff Gussis, a private-practice lawyer in NJ
• Inside Legal - News and commentary on legal service providers and vendors, edited by the good folks at legal PR firm, Envision Agency
• Karasma Media - Legal social media marketer Kara Smith reports and opines on the legal issues of the day
• Larry Bodine Marketing Blog - Longtime legal marketer rants on topics of the day and promotes his services
• Law.com - The must-read site for legal news.  I pay particular attention to the legal technology feed
• Law Department Management - Rees Morrison's fantastic and robust blog for in-house counsel
• Law Firm Competitive Intelligence - CI guru and veteran legal marketer Ann Lee Gibson on topics related to law firm competitive intelligence and business development
• Law21 - Canadian lawyer and journalist Jordan Furlong publishes "dispatches from a legal profession on the brink."  This is a must read
• LawBeat - Veteran legal journalist turned academic, Mark Obbie "watches the journalists who watch the law"
• LawBizBlog - Ed Poll is a longtime lawyer, business development consultant, coach and author. He's been at this so long he coined (and trademarked!) the phrase "The Business of Law."  His award winning commentary is a must read
• Leadership for Lawyers - Veteran legal marketer Mark Beese is now consulting in the areas of law firm business development and law firm leadership development
• Legal 1-to-1 Marketing Blog - Bill Vannerson, a BigLaw KM and information technology expert, discusses the legal issues of the day
• Legal Blog Watch - Lawyers/Journalists Bob Ambrogi and Carolyn Elefant read and analyze legal blogs and websites of interest to the legal profession
• Legal Marketing Blog - Veteran legal marketer Tom Kane discusses legal issues of the day
• Legal Marketing Reader - Amy Campbell compiles and comments on legal marketing news and resources
• Legal Process Outsourcing - A discussion of outsourcing and offshoring news
• Legal Spend Management - TyMetrix, an e-billing provider, discusses topics related to law firm billing
• The Legal Thing - Notes from Mike Dillon, General Counsel of Sun Microsystems
• The Legal Watercooler - Insightful and timely commentary by veteran legal marketers Heather Milligan and Jayne Navarre
• LSSO Raindrops - A presently dormant but periodically rich source of commentary on law firm sales efforts
• Maddock on Marketing - Altman Weil consultant Biff Maddock, a veteran legal marketer, discussing topics relevant to marketing and business development
• Martindale-Hubbell Blog - As an alum I enjoy checking in now and again to celebrate the company's successes, and lament at its missteps... primarily driven not by the clever people at the helm of MH but by the inept navel-gazers at the parent company
• Next Generation Law - Kevin Thompson of Advanced Advocates, a platform for law students, discusses legal issues of the day
• The [non]Billable Hour - Matt Homann, innovational speaker, lawyer and consultant, discusses the changing practice of law
• Progressive Marketing - Mid-size law firm marketer Russell Lawson opines on topics of the day
• Real Lawyers Have Blogs - Kevin O'Keefe, an early adopter of legal technology and now blog evangelist, covers the world of legal blogs
• Rick Klau's Blog - My former colleague Rick is a lawyer, an internet pioneer, a legal technologist, a political activist, an early adopter of everything, and now a Google exec.  He's also a great guy
• Seth's Blog - By law every marketer must read Seth Godin. If you read it, you'll see why
• Set in Style - Mister Thorne (yes, that's his name) discusses legal writing.  A must read for legal writing and marketing
• Strategic Legal Technology - Veteran legal technologist Ron Friedmann discusses the intersection of technology and the business and practice of law.  This is a must read
• Thoughtful Legal Management - David Bilinsky advises the Law Society of British Columbia on practice management topics and edits the Law Practice Management magazine
• Wicker Park Group - Nat Slavin, former publisher of Corporate Legal Times (now Inside Counsel) and veteran legal marketer Laura Meherg and team discuss issues related to client feedback
• Wall Street Journal Law Blog - With all due respect to excellent veteran legal journalist Ashby Jones, this blog has become less cutting edge than it was a couple years ago.  But still a must read for legal news and commentary

The last time I posted my reading list I received several excellent suggestions.  So please, tell me what you read that you find interesting and helpful for staying on top of the changing business of law.

Lockstep Compensation - Fair or Foul?

Today's Above the Law continues its recent theme of suggesting that law firm leaders are doing a disservice by culling associate ranks and rolling back associate compensation.  Further, ATL questions whether there really is a more equitable compensation arrangement than lockstep, which provides equal and increasing compensation to each incoming class of new lawyers.

"It seems to me that moving away from lockstep compensation necessarily leads to more subjective forms of salary advancement. The billable hour might be the bane of a lawyer's existence, but it is at least based on objective criteria. Will putting salary decisions in the hands of intra-firm politics and relationship building really lead to a "kinder and gentler" law firm? Or will it lead to an "eat-what-you-kill" approach that many partners complain about when it comes to their compensation structure?"

In a word, this is madness.  Let's alter our frame of reference, stop navel-gazing, and pretend that we're in the real world for a moment.  No one has a right to the status quo.  It's human nature to advance, and it's necessary to innovate to survive, because an upstart with a better mousetrap will eliminate demand for your offerings eventually. This isn't unfair, it's merely progress. As demand for legal services has plummeted, there is no sustainable financial incentive for law firms to continue paying associates at rates equated with the near-unlimited demand of yesterday.

This isn't about whether these young lawyers deserve such high pay. Who's to say? Sure, the starting salary is huge compared to the entry-level pay in other disciplines, but if demand is greater than the available labor it's a natural outcome. Notwithstanding the many law firm leaders who inflated associate compensation in an arguably misguided attempt to boost recruiting, if we're prepared to accept that graduates of top schools deserve high pay when in demand, we should accept that absent demand that pay will decrease.

As for lockstep compensation, there is nothing equitable at all about this.  Blanchard and Hersey pioneered the principles of situational leadership years ago.  A leader adapts to the circumstances and to the particular skills of each individual.  A person who must be micro-managed on one task may be left alone with confidence for another. A person who is an expert in one area may be a novice in a new area, and so must be managed differently in each instance. The inequity comes when leaders treat all workers equally. Why should an expert, whose contributions are measurably better, be treated and paid the same as a novice?  We may lament the sports superstar who shirks certain duties, but we can't quibble with paying him more than journeymen teammates who contribute substantially less to the Won/Loss column.

Law firm leaders who are able to measure the productivity of their associates should feel no hesitation at paying differential compensation.  Imagine the brilliant 2nd year associate who out-earns the 7th year senior associate based solely on her substantial contribution to a favorable outcome as defined by the client.  Is this measurable in billable hours?  Perhaps.  It's also likely that other subjective criteria will come into play.  Welcome to the real world.

Most businesses pay employees on a differential basis, typically based on performance.  Even employees starting new roles at the same time may receive different pay because one may have more work history or is a better negotiator.  Every so often HR professionals will embark upon a rationalization process but this is usually just a thinly-veiled cost-cutting exercise by management or a job protection exercise by HR.

The fact of the matter is few organizations even try to adhere to a lockstep compensation if they wish to incent innovative, customer-focused, winning behavior by their employees.

Is this done perfectly, where compensation is awarded based solely on measurable performance? Of course not. There are politics and favorites and poor data quality and short-sighted budget constraints which impair any organization's ability to act perfectly. But that's no reason not to try.

None of us can watch the demise of the US automotive industry and not feel compassion for the many displaced workers along the supply chain.  Similarly, there's nothing wrong with lamenting the loss of income and prestige experienced by BigLaw associates who are as capable today as they were yesterday.  The market is a tough teacher.  When demand returns, associate compensation will increase.

However, my suggestion to law firm leaders isn't to merely cut associate compensation and call it a day. It's time to take a good, hard look at the "business" of the firm.  Which practice leaders are in their roles due to longevity, political considerations or rainmaking ability?  These are generally poor indicators of success in a role that requires attention to detail, coaching others to success, long-range thinking, and an all day every day client focus.  Which practices or lawyers are not profitable, not lead generators or not part of the firm's legacy?  Why are they still here?  Does your compensation system not just incent but require cross-selling?  In other words, do lawyers receive a substantial portion of their compensation from generating work for others?  If the compensation system primarily rewards solo efforts, then are you better off as solos?

But before we say goodbye to lockstep compensation, let's remember that it's all about execution. Multiple types of compensation plans can achieve the desired result if implemented properly. So let's move off the red herring of associate compensation, either the amount or the structure, and focus on the real opportunity to thrive in a down economy:  help clients identify their business challenges, quantify the impact of not acting, and customize a solution to help them accomplish their objectives.  Few clients are overly concerned with the state of BigLaw; they have their own problems to deal with.  And they could use your help.

First Rule of Business: No Surprises!

In a recent post on his fantastic blog directed to corporate counsel, Rees Morrison describes the opening statement in a communication from a corporate General Counsel to his outside law firms:

On the first page of the JDS Uniphase guidelines for outside counsel gleams the distinctly un-lawyerly sentence "We hate surprises." That dramatic and clear statement leads off two paragraphs about the utter importance of prompt and full communication between law firms and the law department.

This lesson cannot possibly be repeated enough.

I've had the good fortune to lead businesses. It's hard to forecast revenues and expenses well in advance, it's hard to make progress when talented employees come and go, it's hard to make profits when those confounded competitors keep catching up or overtaking us! Each of these presents uncertainty. Uncertainty is a fact of business. Some have even found a way to quantify uncertainty so it can be incorporated into the business planning process (see here, but have Advil and a very good calculus textbook on hand).

With the market presenting uncertainty all day every day, the last thing business owners want is another surprise, particularly those that are self-generated, particularly from vendors and suppliers.

Most law firms add up revenues and expenses at the end of the year, and then decide whether to raise rates in the coming year. Problem is, the coming year has long since arrived when the rate increase notice is distributed in January or February. When's the best time to issue notices of rate increases? Late December? By Thanksgiving? In the corporate world, most managers have to submit all revenue and expenses for the coming year by the end of August, and several revisions will take place until we lock it down by early October. Anything past that date constitutes a surprise.

The same goes for budgets for ongoing matters. Predictability is often more important than absolute cost.  But sometimes costs exceed expectations. As a service provider, you shouldn't necessarily bear the brunt of overruns if your actions are in keeping with the assignment. But don't ever ever rely on the invoice to communicate the delta between actual and expected costs. Make a phone call. Make it long before the invoice is generated. Give the client as much runway to adjust accordingly. It may even impact their business decisions concerning how to proceed.

But it's not just about fees. We all know litigation is by nature unpredictable. That said, there is a finite set of potential outcomes. Each outcome has a financial and public relations cost. The savvy law firm helps its client identify and quantify the potential outcomes, within reasonable ranges. It's not just good client service, it also helps the client make better business decisions. As I've written elsewhere, most business owners don't consider legal issues in the same way that a law professor might, as an opportunity to explore fascinating areas of the law. It's merely risk management. What path gets me to my goal most expediently? Given my appetite for risk, what legal tactics further my business objectives? I may not even care about being "wrong" as long as the cost and PR impact are manageable. I don't want to be surprised if the legal tactics you advocate present unforeseen challenges.

By the way, if you're a lawyer and you don't explicitly know your client's appetite for risk, and how this shades his business decisions, and instead you provide advice based on what you feel is the "right" response to a legal issue, then you might very well be the next to receive a surprise.

Galileo Was Wrong: The Earth Revolves Around Lawyers!

In Biglaw, there's an established hierarchy: Partners are at the top of the heap, followed by junior partners, non-equity partners, senior associates, associates, paralegals and then staff (although some C-level administrators have risen to a more exalted status). Where do clients fit in? It depends. Sometimes they are listed in strategy documents as more important than the partners, but generally we know this not to be true. In actual fact, few law firms rely on client needs as their driving force. Law firms are law firm-centric. In fairness, the legal market is at the tail end of a cycle of near limitless demand for legal services. In a demand-rich market, existing clients and new clients will come calling no matter what you do, so it's hard to expect a change in behavior when it's so profitable to stay the course. But where clients are concerned, there is general agreement that the client's law department, represented by the General Counsel or Chief Legal Officer, is the appropriate focus of attention. By and large this works. Many business leaders aren't sophisticated enough to grasp the nuances of legal issues, so it's best to have a buffer between the businesspeople and the lawyers/counselors. I don't buy it.

I've had the good fortune to lead divisions of publicly-traded businesses, and I can't recall a single instance where I or my colleagues felt insufficiently equipped to address business or marketplace issues and as a result needed to turn to our in-house law department or outside counsel for insights. In fact the opposite was often true. In over a decade of boardroom participation, only a few enlightened colleagues of mine regularly invited the General Counsel or law department liaison to our strategy meetings. These were the same leaders who invited the head of HR to attend as well. The feeling was, it's important for everyone to understand what we're trying to accomplish as a business, and what challenges we face, so everyone can execute their function in accordance with the agreed-upon goals. Very rarely did the HR leader or the lawyers have a speaking role in the substantive discussions, though they were expected to provide updates on their functional areas. This is not a slight to the in-house lawyers or HR professionals. It's merely a fact. In any enterprise there are those who formulate strategy and those who execute. The legal department and the HR departments executed.

On a number of occasions where we gathered with the board or executive team of an acquisition target in a secret location to discuss a business combination, we always invited the lawyers because there were items on the checklist that only they could handle. But they otherwise didn't speak much. When outside lawyers were invited, they sat next to the in-house lawyers and spoke even less. Again, none of this is meant to demean the important role lawyers play in doing deals, but the point is they were there to identify and quantify risks in executing the deal so the business people could incorporate this into the financials, or choose to build versus buy if the risk was too great. We never asked for a go/no-go decision, and we didn't ask for exhaustive explanations of the legal issues in play. We asked about the obstacles, the techniques to overcome the obstacles, and the cost of doing so -- and not the legal cost, i.e., the legal bills, but the cost to proceed. For example, I wouldn't want to know how much the law firm will charge to counsel us on new regulations; I wanted to know how complying with new regulations would impact the cash flow projections. Again, the point is, on the business side we rarely think of things in legal terms, but in terms of how legal issues impact our ability to proceed.

In point of fact, the earth does not revolve around the lawyers.

I met recently with the managing partner of a well-established mid-size firm. I was advised that he was brilliant, an incomparable mind in a firm of brilliant minds, which led to his status as the firm's leading rainmaker for a generation. Indeed I found him charming, engaging and clearly of high intellect. But his "secret" approach to winning business is simple and he knows it: he discusses business issues with his prospects and clients, always looking at things from a business perspective rather than a legal perspective. As a result, he has become a trusted business advisor to his clients, not merely a lawyer. This partner is held in high esteem by his colleagues, but many find his approach mystical and unconventional. I find it to be perfectly in keeping with the sentiment expressed above. Business executives don't need legal advice; they need to identify and quantify how legal issues will impact business decisions. This managing partner is concerned that not enough of his young lawyers get this point. I think he's right.

You may have heard about the brilliant dialog taking place on Legal OnRamp regarding the hoped-for demise of the billable hour, which picks up the gauntlet thrown down by ACC in its Value Challenge to change the in-house counsel/outside counsel dynamic. Along these same lines, a very smart colleague of mine, Ron Friedman, recently wrote a short discourse positing how a corporate CEO and his CFO likely came to the conclusion that finally, after years of waiting for the law department to reign in legal spending, it was time to change the game. It's a clever piece and you should read it. My only quibble is the premise for the conversation:

CFO: We need to talk about how much we spend on legal. Since our fiscal year ends in November, I usually have time over the holidays to do some real thinking. This year, I read up on the legal market. It’s not pretty. And I’m not sure our general counsel is the solution.

CEO: Ok, you catch me at a good time. Yeah, I agree our GC is not controlling costs. What can we do?

CFO: Legal costs keep going up, both in absolute dollars and as a percent of revenue. Other cost centers – HR, Marketing, Facilities, and even my own Finance department – have driven costs down as a percent of revenue. Sure, we face more regulations and law suits. But give me a break. Lots of articles report on in-house lawyers complaining about costs. The GC response? Precious little beyond begging for discounts.

CEO: You’re preaching to choir. I hear lots of complaining about legal costs. The whole legal thing is like that movie Ground Hog Day with an even worse twist. Every day is the same but nothing ever improves, lawyers don’t learn from re-plays. It’s hard to figure out how a whole economic sector got so stuck.

CFO: Actually, it’s easy to see why we’re stuck. Who buys legal services? Lawyers. Where do our lawyers come from? The law firms we retain. Do our lawyers think the same as our outside firms? Yes. Are lawyers trained to manage? No. What do our inhouse lawyers do? Lawyering, not managing. So we’re stuck with buyers who share the same bad traits as our suppliers and who travel in the same circles. The hard question is how to get the system unstuck.

In my experience, it's very unlikely that a CEO and CFO would frame the issue in terms of the evolution taking place in the legal industry any more than we'd investigate changes in coffee bean production when looking for cost savings from the company's hospitality vendors. More likely the annual (more often quarterly and lately even monthly) exercise to identify and reign in uncontrolled costs will eventually paint the legal department as the only function unable to provide and stick to a budget. I've written before about how division heads are required to submit revenues and costs 18 months in advance, incorporating whatever uncertainty we can and notwithstanding exogenous events we're held to these targets, and for acquisition or new product business cases we're often held to 5 to 8 year cash flow projections. However, we routinely receive reports from the legal department indicating that they can't provide even a broad range for legal costs for the usual transactional items, e.g., immigration, employment, real estate, etc., let alone pinpoint complex litigation or M&A costs. So a more plausible premise for the discourse above might be:

CEO: Have we identified the cost centers that have unallocated funding and swept them of all but the costs linked to our strategic priorities?

CFO: All but the legal department. They claim there are too many uncertainties to fix a budget beyond headcount costs, and even these may fluctuate depending on the volume of legal work.

CEO: Hogwash. Give them another chance to establish a budget using a decision tree or Bayesean analysis or whatever methods they feel are appropriate, incorporating the risks and complexity of our strategic priorities. If they can't do it, assign them a fixed reduction percentage and then tie the GC's bonus to achieving the funding envelope.

CFO: Done.

If this conversation hasn't occurred in the board room of most companies in recent months, it will. In a recent interview a colleague conducted with a General Counsel, we learned that the GC was given a mandate by his CEO to reduce legal spending by 70%.  Ouch!  If you're a law firm partner, are you ready to help your client identify and quantify the risks associated with his organization's business strategy? Do you understand that if you are unable to participate in this discussion, there are many other law firms who are gearing up for this exact conversation? What will you be doing instead?

I Stink, You Stink, We All Stink - A Note On Accepting Responsibility

Lots of noise lately about the billable hour, the dissatisfaction of corporate counsel, the awkwardness of every idle lawyer calling long dormant clients "just to say hello." Actually, only the volume has increased; these are the same discussions that have taken place for years. It's true in every business, and no less true in the practice of law: if you don't like the service, don't return.

I once attended an excellent training class (shout out to the American Management Association) about 6 months after my promotion to manager after years as an individual contributor. The instructor gave the class a simple assignment. Take a clean white sheet of paper. Turn it sideways. Along the left margin list the names of your employees. Along the top list the competencies (skills) expected of the employees. At the intersection of each name and competency, rate your employees' performance as great, average or poor.

We gleefully went about the task, amidst snickering like "Boy, it turns out all my people stink" and "I wish I could get new people." As young managers heady with the wisdom bestowed on youth, we were as confident in our competence as we were dismissive of our employees. For most of us, there was no bell curve: most of our employees were poor performers in most categories.

Then the instructor dropped the bomb.

He characterized the grid as less an indictment of our employees than a report card of our own skills as managers. If we know what it takes to succeed in the roles, and we know which employees are not performing to expectation, then as managers we have an obligation to address the situation by providing the tools, training or alternatives so the employees can succeed. It's not just sensible, it's our fiduciary obligation as managers of the firm.

I can assure you, the room was silent as those of us who gave such poor grades to our employees realized we had just been our own harshest critics.

The object lesson is that if you know what the problem is and you don't do anything about it, then you're complicit in the outcome.

If the local pizzeria consistently forgets the mushrooms but you keep going back, whose fault is that? If your doctor continually disrespects the value of your time and makes you wait 45 minutes after your scheduled appointment, why are you surprised? If you encounter the same slow service every time you walk into your local electronics retailer, then why not find a new retailer?

I'm not alone in enjoying the horror stories of terrible service committed by law firms against their in-house counsel clientele. I've moderated countess roundtables of corporate counsel and outside lawyers and I've been the instigator in asking for juicy anecdotes to liven up the "law firm bashing" session. In fact, there's one fantastic corporate lawyer who has spoken on several panels with me. Whether true or apocryphal, she has the most outrageous stories of outside counsel blunders and so I keep inviting her.

But this begs the question. Has she gotten any better at hiring outside counsel over the years? Does she fail so spectacularly in instructing her outside law firms that the outrageous outcomes should come as no surprise? Those that bemoan the billable hour, do they have such low standing in their organization that they can't negotiate an alternative structure and then defend this to the business owners? Is the average corporate counsel so lacking in credibility that when a deal goes sour his job hinges not upon the merits of the deal (or lack thereof!) but upon the brand name of the outside firm he hired -- a name that in all likelihood (with apologies to Biglaw lawyers everywhere) most business owners don't know or care to know?

We're in this together. It's nice to see the usual dialog finding so many new venues. But these aren't new problems. Corporate counsel are as invested in finding a new model as outside counsel. Whether the billable hour is dead, I don't know (Bruce MacEwen has a perspective). But like that new manager grading his employees, are we ready to take responsibility for implementing the change we know is needed?

Let's all take out a clean white sheet of paper and find out.