Not so fast, in-house counsel, you've also got some work to do!

Amidst all the virtual ink directed at lawyers for being poor businesspeople, another equally compelling point is too-often missed:  clients, particularly in-house counsel, have quite a few shortcomings as well.  At the core of my consulting practice is connecting these dots:  just as in-house counsel are often unhappy with outside counsel, internal business clients are often unhappy with the in-house counsel.  While the struggling economy has given in-house counsel more influence over outside counsel (influence they've always had but haven't exercised), let's not pretend that in-house counsel always know the best way forward. My corporate career had the usual arc when it comes to legal matters.  Early on I was exposed to the legal department only via contract or NDA negotiations, or occasionally when some adverse action elsewhere in the business required us to sit through an in-house lawyer's lecture on, say, sexual harassment.   As I moved up the ladder, I consulted the legal department on terminations, intellectual property rights, an occasional threat from a disgruntled customer.  When I reached the boardroom as a senior executive and eventually as CEO, a role which carried budget responsibility for the legal department and involvement in outside counsel selection, I interacted quite often with the legal department on restructuring, complex joint ventures and acquisitions, major contract renegotiations and other more critical matters.

In my companies, it was typically only after key strategic decisions were made that we brought in the lawyers to help execute the strategy, for the simple reason that we had a lot of in-house lawyers who felt it was their responsibility to thwart our every attempt at business growth.  We called them collectively "the Department of No" and we knew which lawyers to avoid and which lawyers to request. Now, I've acknowledged that it was a failing on our part to miss the important role an excellent in-house lawyer can  play in the board room.  I was lucky enough to have such counselors in my later corporate roles and they were true business people first and lawyers second.  To be sure, these lawyers upheld every ethical and professional standard expected of practicing lawyers, but they did so in the context of helping us manage the ongoing risk any business faces, rather than approaching their role as primarily academic or perhaps achieving complete risk avoidance.

In the interests of equal time, here are some suggestions for how in-house lawyers can improve their game and become better partners and trusted advisers to their internal clients.  Outside counsel should also take heed, because the more your efforts align with the in-house counsel's goals, the more likely you are to be embraced as a trusted adviser rather than a hired gun.

Understand the business.  I've written of my disappointment that some corporate back office functional leaders (ahem, Human Resources) barely understand the business, and this negatively impacts their ability to do their job.  Not once, ever, did one of my in-house counsel ask to shadow me or my team for a day to learn our business from the ground up.  Several would dial in or sit in on executive leadership meetings, but often their entire contribution in an 8-hour meeting would be to provide a 5-minute update on a pending wrongful termination suit or the status of a bill making its way through Capitol Hill that might pose some challenges.  We were lucky enough not to have repeat litigation, but a B-school classmate of mine laments that his company faces the same lawsuit over and over, and it never seems to occur to the lawyers that perhaps there's a systemic issue upstream in the business that could be addressed to prevent future suits.  In my consulting practice I advise outside counsel to request a "factory tour," donning a hard hat and walking the floor of a client's business.  It's astonishing how often outside counsel return to say that the in-house lawyer who arranged the visit had never taken a tour previously.

Understand the company's risk profile.  This is sometimes challenging to explain, but let's start with the caveat that I would never advocate playing fast and loose with laws or regulations that govern a business.  But there's a lot about running a business that requires interpretation, and there's a lot about running a business that involves taking risk.  The in-house lawyers need to understand, and be comfortable with, the level of risk a company's executives are willing to take, within certain boundaries.  For example, it's not acceptable risk to allow a product out the door that continually fails safety tests, just to get it on shelves in time for holiday shoppers.  But it may be okay to enter new markets without a safety net if speed is of the essence.  Here's an example: we wanted to launch a new software product in Asia in the '90s, and we had to launch quickly or risk losing first-mover advantage to the competition. We asked the in-house counsel for a down and dirty approach to protecting our IP and launching within 3 months, and what we received -- with the help of some very expensive outside counsel -- was a proposal for 6-month project to protect our IP in every possible jurisdiction and papered in every possible way so as to minimize our risk.  Cooler heads prevailed and we settled on protecting our IP in those jurisdictions that had both a means and a will for enforcement (this was Asia in the '90s after all, where piracy was practically government sanctioned!) and the rest, well, we gambled that we could sell enough units to beat the competition before pirates started eating away at our profits.  In this case, the in-house counsel and the outside counsel viewed the risk very differently than the businesspeople.  We wanted to win in the market; they wanted to protect us at all costs.

Allow access to the business people. There are plenty of GCs who do a fine job serving their internal clients' interests and who are, and should be, the primary contact point for outside counsel.  But there are others, as the anecdote above illustrates, who have a different mindset than their internal clients.  When I work with law firms on legal project management, I stress the importance of knowing the underlying business outcome we're solving for, not just the instant legal issue.  Therefore, it's imperative to get to know the businesspeople, not because we want to do an "end run" around the GC, but because for outside counsel to deliver it's critical to know what's at stake and how that perception differs among stakeholders.  The GC may not be involved in the "make vs. buy" discussion and so may not know when the cost of acquiring that start-up will be more costly than the company building its own version of the start-up's product.  So during due diligence when we find IP infringement, or environmental contamination at the target company headquarters, either of which requires costly remediation, the GC and outside counsel might start to remediate rather than adjust the scope and budget for the businesspeople, who might decide to walk away instead.  Outside counsel who use these relationships to try to avoid the GC deserve to have their hands slapped.  But GCs who inappropriately limit contact with businesspeople out of a misguided "gatekeeper" mentality or, worse, for their personal job security, should be slapped too.

Embrace continuous improvement.  I can't tell you how many weeks of my life (and how many sales!) have been lost waiting for the in-house lawyer to approve a non-disclosure agreement hung up on some unimportant point that we had conceded countless times previously, or how many negotiations went south because our in-house counsel was too jammed up to work quickly so the faster, nimbler competitor won the order.  We all understand time constraints caused by volume.  But businesspeople also recognize that activities occurring in high volume are ideal candidates for process improvement.  Mark Chandler has automated numerous functions in Cisco's law department using process mapping and technology solutions to eliminate unnecessary steps, speed cycle time and bring the legal function closer to the business objectives.  I've heard hundreds of similar anecdotes from less visible GCs during the many in-house counsel workshops my team produced.  The key difference is to treat the law department as a business function subject to the same business process improvement mindset found everywhere else in the business, and not treat it as "law firm lite," a not-uncommon default approach for lawyers trained as partners in big law firms.

Make decisions based on data.  Most law departments employ some electronic billing.  (If not, turn from your screen right now and pick up the phone and begin the process of implementing e-billing!)  Whether the in-house team relies on years of its own billing data, harvested from multiple firms across multiple matters, or whether it augments the analysis with data culled from an aggregated and anonymized data warehouse offered by the e-billing provider (here or here), the key takeaway is that there is sufficient information available to drive better decisions - from legal budgets, to risk exposure, from expected fallout during a restructuring to expected gains from a convergence effort, and so on.  Most businesses have analysts in the finance or strategy or marketing departments offering feedback and recommendations to the executives.  No law department should be without analysis, if not its own analyst.  (I am moderating an upcoming panel on this topic here).

Hire outside counsel based on expertise and value.  In 2009 when the CFO cut the law department budget by 30% and demanded the GC "do more with less" without incurring additional risk or delaying throughput and, by the way, added a clause to the GC's compensation scheme that tied his or her annual bonus to staying within the thinner budget, issues pertaining to legal spending became very personal very quickly.  Loyalty went out the door along with many firms whose relationship partners believed their client relationship was sacrosanct... and whose billing rates were therefore set accordingly.  As we've seen, law departments have aggressively taken the reigns of late.  But many GCs, rather than rely on data to inform their outside counsel decisions, take a shortcut and substitute discounts for analysis.  Wielding a large club and demanding discounts from favored suppliers is, sadly, a tactic that many businesses employ -- including law firms who have employed their own procurement function as their own fortunes have suffered.  But just as procurement isn't focused solely on low cost, GCs shouldn't mistake discounts for increased value.  Just as we advise outside counsel to partner with clients, the clients have to partner with outside counsel.  You can't ask for a legal budget if you won't share voluminous information about the matter, or set of matters, you need addressed.  You can't refuse payment for scope creep if you won't help define the scope up front.  It's a lot easier to conduct the analysis described above when there's full disclosure from both law firm and law department, and from this you will distinguish the capable firms from the wanna-bes, the firms whose subject matter expertise informs their pricing decisions from the predatory pricers, the firms measuring the relationship over the long haul from those looking to generate profit one matter at a time, and so on.

The key takeaway is that we're all in this together.  Listening to in-house counsel endlessly bash outside counsel is not productive if the in-house counsel aren't helping to craft solutions.  And while we businesspeople don't typically hold panel discussions at conferences where we bash the in-house law department, we're often just as unhappy with our lawyers, and we're just as obligated to step in to improve things.  Connecting the dots between the three parties isn't easy, especially with compensation plans and long history which seem to create zero-sum games -- when one party "wins" another has to "lose" -- but these are solvable problems.  I, for one, am eager to get started.  Who's with me?

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. – See more at: http://www.corcoranlawbizblog.com

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.

Marketing Your Law Practice With a Blog - once more from the top

In a recent law firm retreat, the partners and I discussed tactics to help boost the profile of some excellent lawyers who seem to be overlooked regularly by the various ratings and rankings publications. My first observation was that, like it or not, the ratings and rankings publications have a process to identify and evaluate notable lawyers, and the firm's refusal to play along (or more accurately, its complete ignorance of the process) puts them at a disadvantage as compared to competing firms who invest a lot of time and energy in courting the publications' editors.  The fact is, for some firms ratings and rankings publications are good investments, and for other firms there is no greater waste of time.  (More of my thoughts here).  But whether the goal is increased visibility by publishers or increased visibility by prospective clients, there are some overlapping tactics.

When I asked what speaking and writing engagements the lawyers pursued, I was told that it wasn't a focus.  It's not a truism of course that all speaking and writing engagements are wise marketing tactics, but for this firm -- at this time, and in its particular niche -- there's a clear opportunity to increase its visibility with the target market.  The firm's greatest challenge is inclusion into the consideration set, a fancy marketing term for "the list of firms that are top of mind when a prospective clients thinks about potential firms to help with a specific matter."  I did some quick research and learned that there is no other law firm publishing a blog on this firm's specific niche practice, at least not on their coast, so I suggested we think about starting a blog.

I shouldn't have been surprised after working with lawyers for all these years, but the blank looks from nearly everyone assembled led me to believe that their familiarity with blogs was on par with their familiarity with the Large Hadron Collider -- sure, they'd heard the name, seen a news article or two, but had no idea the relevance to their firm or practice.  With that in mind, I offer this article from the archives.  Portions of this article were published in the Marketing the Law Firm newsletter, an American Lawyer publication, and republished in syndication by Law.com and various American Lawyer regional publications, back in 2010 (see a review here).  Even then the topic of blogging as a marketing tactic was old news to some law firms, but with the understanding that many lawyers pride themselves more on keeping up with developments in the law rather than developments in marketing tactics, I offer it again.  A blog isn't a replacement for in-person networking, delivering fantastic client service or becoming known in your legal community in order to generate referrals.  Blogging is a complement to these activities.  Enjoy!

Marketing Your Law Practice With a Blog

The primary objectives for networking by lawyers and other business professionals are to increase visibility and demonstrate credibility with clients, potential clients and peers. In a world where the claim of expertise is often indistinguishable, at least on the surface, from actual expertise, it’s critical to clearly exhibit subject matter expertise to the target market. Instead, so many lawyers fall into the trap of describing their attributes and accomplishments as a proxy for demonstrating expertise.

A more compelling approach is to find ways to clearly demonstrate that expertise. In this article, we discuss a subject that is at once overplayed and misunderstood: the art and practice of blogging. To those not paying attention in recent years, a blog — short for Weblog — is a commentary published online with no barrier to entry other than a keyboard, an Internet connection and something useful to say. (However, in some cases that last item is in short supply!) A blog is in many ways an improvement to the rules of traditional publishing because anyone can author and publish a blog, the content can be short or long, simple or complex, the topic can be limited to a narrow subject area or cover a wide range of topics, it can be published on any schedule, or no schedule at all, and the format invites commentary and interactive dialog. Imagine having the opportunity to chat at length with the authors of your favorite books, a process that can bring you into the topics on a more visceral level than merely reading can accomplish. As a result of this interactive nature, and this simplicity, and the low barriers to entry, many legal professionals regularly publish blogs on a wide variety of topics.

Should You?

First, let’s discuss the mechanics. Most new technologies can appear daunting at first, so while publishing a blog can appear complex, it’s actually quite simple. To publish a blog, one needs a blog platform, which is roughly analogous to selecting a word-processing application. There are several free platforms, including Blogger, an application offered by Google; WordPress; and Typepad. Each has some unique characteristics but each essentially serves as a writing platform with one-click ability to publish to the Web. Each platform allows customization of the resulting blog Web page, ranging from a very simple text-heavy, one-column, chronologically-ordered presentation to a graphic-rich presentation offering archives, indexes, keyword searches and multiple “widgets.” The latter are optional components offering added functionality, and there’s a wide variety from which to choose to customize one’s presentation.

A blog can be “hosted” by one of these providers, or an author can choose to host his or her own blog — though if you’re like most of us and you don’t know what this means or where to go to do your own hosting, then the turnkey operation offered by most blogging platforms may be sufficient. Wherever the blog is hosted, it’s beneficial to secure a custom Web site address and enhanced Web traffic reporting, among other options. Here again the turnkey solutions offered by blog platforms are an easy starting place, and by delegating all of the technical issues the new blog author can focus solely on generating content.

What Kind of Content?

So what sort of content is suitable for a blog? Herein lies the beauty of blogging. While a litigator who has developed a niche specialization in products liability for furniture manufacturing may have some difficulty finding a traditional forum for a series of articles on the topic, a blog offers unlimited flexibility. And while there may be multiple bloggers opining on case law changes in the State of California and the Commonwealth of Pennsylvania, each may have as unique a perspective on the topic as do sports commentators when broadcasting a major sporting event. Some blog authors choose to write in-depth, substantive well-researched articles, whereas others offer limited commentary on breaking news, as evidenced by the wide range of blogs addressing recent Supreme Court rulings. Some bloggers generate minimal new creative work, and instead summarize or consolidate headlines on a narrow subject matter.

How often?

Some blog authors are prolific, publishing several times a week, even several times each day. Others take weeks to offer new commentary. Sadly, many blogs launch with great fanfare and expectations, but fizzle out after a while because the contributing author, or authors, finds it difficult to carve out sufficient time on a regular basis to publish new items. And just as an out-of-date “What’s New” page on a traditional Web site is a terrible message to send (you knew this, didn’t you?), a blog that hasn’t been updated in months perhaps sends the message that the author has less expertise than promised. But there’s a balance and a pace to be achieved, as with a long distance runner who must be careful not to tire too quickly.

Marketing

By publishing a blog, a lawyer can create and/or change market perceptions. Some lawyers with long experience have a difficult time growing their practice outside their natural geographic or personal networking borders. Others invested time developing a reputation some years prior and do little marketing now, but as client loyalty wanes and market dynamics interrupt longstanding law firm/client relationships, a veteran lawyer with a steady book of business can be suddenly faced with competitive threats from all sides. It can be cost- and time-prohibitive to market one’s practice on a regional, national or even global scale. But one compelling aspect of authoring a blog is the simplicity of generating broad awareness amongst a target market on a wide geographic scale. After all, with the Internet qualified buyers everywhere potentially have access.

A lawyer who authors commentary on a regular basis in an area of law in which she or he has useful information to impart can quickly become well-known. The viral nature of the Internet, or in other words, the ability for one to quickly share interesting content with others, can quickly lead to ever-growing concentric circles of readers. Naturally, a blog author with hundreds, even thousands, of regular readers will be afforded more respect as an expert than one who toils silently in the corner office, relying on referrals and word of mouth alone to generate new business.

Expertise

A very common concern many lawyers express when discussing blogs is how frequently supposed non-experts hold themselves out to be experts. Set aside for a moment the use of “expert” as a term of art indicating the achievement of certain qualifications that are recognized by the Bar. In the vernacular, an expert is one deemed to be capable of providing informed counsel on topics relevant to the buyer. More than a few television weather broadcasters are not trained meteorologists; more than a few talk show therapists have no training in medicine or psychology or psychiatry. So it should come as no surprise that a lawyer with five years’ experience in a practice may be seen as a peer to a lawyer with 25 years’ experience, based primarily on perceptions shaped by visibility, visibility influenced by a well-read blog.

Now, of course the goal isn’t to use a blog as a platform to hold oneself out as something one is not. But the simplicity of incorporating a blog into one’s business development toolkit allows lawyers who are in the early stages of a learning curve to have equal opportunity as those who have long mastered the subject. In the end, those with clear, concise, authoritative and easy-to-read prose will outshine those who have little to say. In this way, the world of blog publishing is self-regulating.

Outsourcing

Some firms outsource blog content to expert writers from outside the firm or from within, and the lawyer reviews the work before publication. While this can be an efficient way to generate regular content — which is by far the most challenging aspect of maintaining a blog — one critical element that is lost in such an approach is “voice.” The most popular bloggers insert their own personalities into their writing, and it’s as much the style as the content which attracts and retains readers. When a blog becomes a sterile conduit for corporate speak or legalease, then it may impart information but fail to attract a loyal following.  In addition to content, one can outsource the entire blog setup and technology.  As an independent consultant, I don't promote individual products or services but it may be helpful to look at some of the more notable providers in the space, many of whom are led by friends of mine (here and here and here and here and here and here and here and here and here -- this last one provides generous strategic and technology support for the blog you're reading!).

Conclusion

There are many marketing and business development tactics competing for busy lawyers’ time. There is a constant struggle to network to one’s target market. Blogs have proven to be an effective tactic to establish subject matter expertise, and the Internet search engines which are designed to promote sites with frequently updated content can help reach a target audience on a scale that other networking tactics, and traditional publishing venues, may not. But publishing a blog requires discipline, a regular influx of new ideas, and desire. With these, plus a simple and easy-to-use blog publishing platform, any lawyer can achieve credibility and visibility with ease.

© 2010 American Lawyer Media, reprinted with permission

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.

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.