Post #668 – Wednesday, June 12, 2013

The Outgoing Firm Leader’s Script

In a recent discussion with a soon-to-retire managing partner, I discussed a number of substantive issues he need to discuss with his successor including how he needed to handle communications with his various partners after he passed on the baton. Here is the script he prepared for himself to communicate to his successor:

“I’ll always be here to help you, but you should expect that some of our beloved partners are probably going to go around you and come to me whenever you make an unpopular decision. And, if you are doing your job as our new firm leader, as I know you will, this is guaranteed to happen. I want you to be confident that I am not going to respond, in any way, to any complaints, so don't let the prospect of my responding, impact your decision making. Even if you choose to fire someone who has worked closely with me for many years, you should proceed to take that action. And rest assured that if I don’t agree with some course of action or observe you doing something contrary to the way I did it, I would not go to any partner to voice my feelings. This is now your firm to lead and you may call upon me should you ever feel the need for a sounding board.”

If you are facing a firm leadership transition or even having a new office managing partner taking the reins of one of your larger offices, please have a look at: www.first100daysmasterclass.com. The next program is scheduled for August 15th at the University of Chicago and we are now accepting registrations. Have a look at the day’s agenda, the distinguished faculty, the testimonials, the extensive course materials, the follow-up support and your total satisfaction guarantee.

Post #667 – Saturday, June 1, 2013

It’s Time For Law Practice Management 2.0

Join me September 26 at the University of Chicago where I will be Chairing and Presenting at an important Conference on how to reach the next level in practice group management.

Building and maintaining highly effective practice management structures is perhaps the greatest challenge facing law firms today. Tasked with learning how to adapt and embrace new economic realities, sophisticated and demanding clients, constrained fee increases and a real need for practical efficiency - practice and industry team leaders have an ever-increasingly critical role to play in the future success and profitability of their firms. Ark Group’s Law Firm Practice Management 2.0 is about taking practice management to the next level and reengineering it for profitability - designed to help identify and implement the structural necessities for effective practice management in today's complex and competitive environment.

Other speakers include:

Stephen Pike, Firm Managing Partner, Gowling Lafleur Henderson

Kristin Sudholz, Chief Value Officer, Drinker Biddle & Reath

John Ferko, Director of Strategic Pricing & Practice Management, Miles & Stockbridge

Frank LaManna, Chief Operating Officer, Thompson Hine

Patrick Johansen, Director of Business Development, Brinks Hofer Gilson & Leone

Steven Petrie, Chief Strategy Officer, Faegre Baker Daniels

Susan Brelus, Chief Marketing Officer, Thompson Hine

Tea Hoffmann, Chief Strategy Officer, Parker Poe

Click HERE for full details and registration

Post #665 – Tuesday, May 21, 2013

Efficiency is Not THE Competitive Advantage

My latest co-authored article (with good friend and colleague Ed Reeser) appeared in last week’s San Francisco Daily Journal. In it we reported that . . .

Efficiency in any firm, in and of itself, is not the competitive advantage. There is a big difference between being efficient and being effective. It’s not that becoming more efficient lacks importance, but far too many firms only seem to be investing significant time and resources about being more efficient – at the expense of being effective.

You may be interested in reading what we have to say about: efficiency at producing commodity work; efficiency at pricing services; efficiency in generating net operating income; and efficiency in satisfying clients.

To download your copy – click here

In the final analysis . . . Are you being efficient or being effective, or do you even know?

Is your efficiency directed to the operation of the business and generating net revenue gains, or the consumption of your human resources for redistribution of a stagnant income pool, and thus hastening the demise of your firm? It isn’t enough to be efficient on the right things, it is critical not to be efficient at doing the wrong things.

Rant #664 – Friday, May 10, 2013

Critiquing Your Strategic Plan

I recently had the opportunity to review and critique a law firm’s strategic plan and present my findings to the firm’s management committee. This was a plan that I had not been involved in helping formulate and a plan that was about to be presented to the partnership for approval. The document I received was essentially four pages comprised of the firm’s Mission, Vision statement, 5 big-picture Goals with 28 Action steps and a number of concluding milestones identified to measure performance results.

Whenever I look at some firm’s strategic plan there are usually three components that I examine:

* The “Process” for how the plan was developed;

* The specific “Content” of the plan – the ‘macro’ big picture strokes and especially the ‘micro’ specific how-to action plans; and finally,

* The implementation or execution schematic

Now I don’t think it’s fair or effective to simply be a critic. I think one should offer some thought provoking stimulation that has the firm assessing their own work to determine whether it meets expectations. I’m reminded of something the legendary father of modern management, Peter Drucker once said: “One does not begin with answers, one begins by asking, ‘What are our questions?’” The notion that questions may at times be more valuable than answers is counterintuitive. But I find that our ability to reflect upon our answers to good questions is an opportunity to reframe the challenges in front of us.

I therefore posed a number of questions to these management committee members. Here are some which you might find helpful for critiquing your own strategic plan.

PROCESS Questions:

* To what extent were partners involved, such that they can see their individual fingerprint somewhere on the final plan, and thereby enhance buy-in?

* How many clients (and prospects) were interviewed such that some components of the plan reflect the current thinking, views, and opinions of your clients?

CONTENT Questions:

* What aspects of your Mission and Vision would stimulate your lawyers to get excited about the firm’s future?

* Where are the specific growth niches that have been identified and are going to be pursued in each of your conventional and industry practice areas?

* How does the firm plan to effectively and profitably respond to clients continually wanting ‘more-for-less’ and transition from pricing differently to working differently?

* What aspects of this plan are future-oriented in that they look to how the profession might likely evolve by 2017 and propose specific steps to get to the future first?

* What are you doing or contemplating that would meaningful differentiate you from your peer firms?

* What are your non-negotiable standards of performance – what aspects of this plan are you absolutely prepared to enforce?

* What are you doing, or contemplating in this plan that you would regard as truly innovative?

IMPLEMENTATION Questions

* Do your people really understand what is involved and how long it will take to implement some of these specific action steps?

Rant #663 – Wednesday, May 1, 2013

Does Your Practice Group Really Have A Strategy?

I read with interest, a guest posting on the Harvard website authored by Freek Vermeulen a noted business strategy professor at the London Business School entitled, “Corporate Strategy Is a Fool’s Errand.” In it, Professor Vermeulen claims:

“Most corporations (law firms in our context) consist of multiple divisions (read that to mean practice or industry groups), which set their own strategy – what we generally refer to as "business strategy." But more often than not, these divisions have very little to do with one another. Take Philips Electronics with its lighting, medical equipment, and consumer electronics divisions; ThyssenKrupp with its steel, elevators, and engineering services units; or smaller companies such as Trinity Mirror, which offers newspapers, printing, and digital services. They may not be like the big conglomerates of the 1960s — you can see how their portfolio of somewhat related business came about — but, in reality, the various divisions and business units do operate completely independently from one another. Yet corporate top management invariably tries hard to force each unit into an overarching strategy. It endeavors to stimulate cooperation across divisions, sets up corporate shared services, and gives a lot of lip service to creating "cross-divisional synergies." I say, don't go there; don't even try.”

Now what is striking about the professor’s observations is how closely they parallel the real world of strategic planning as it occurs in most law firms. Few firms recognize that what they are really managing is not one homogenous firm, but a portfolio of different businesses. And it logically follows that what you need to do to nurture, market and grow an employment and labor practice is very different from a commercial litigation practice – or a health care practice from an energy and natural resources practice.

My observation is that too many law firms develop a firm strategic plan with little real meaningful input from the various practice groups and then send the partnership approved document to each of the practice leaders with a request that they develop some kind of written plan of their own, specifically designed to support implementation of the firm’s plan.

“Each practice group leader shall prepare and be accountable to an annual group business plan that establishes practice group goals and objectives consistent with the firm’s strategic plan.”

Perhaps even worse, in many instances I see the marketing department distribute their “template” to all of the practice group leaders to help them develop their plans. I saw another one of these templates the other day. This one was being distributed within a fairly sophisticated, 500+ lawyer firm, with offices from coast to coast, and to be completed by each of their national industry groups. It included questions like:

* what are the key objectives for the group?

* what are the KM / CLE objectives for the coming year?

* what are the marketing and business development plans for the coming year?

* what resources can the firm provide to assist with these objectives?

* what is the competitive environment for the group from a national perspective?

* what are the opportunities and the threats that the group sees nationally?

* what new ideas is the group considering for the coming year?

* what are the longer term goals for the group over the next 3 years and should anything be put in place now to reach those goals?

The more successful firms have each of their groups work on developing their own strategic direction, separate and apart from the firm’s plan but included as part of the overall firm direction. It may be just my view, but I think that we have a very long way to go in many of our firms before we get to anything that even resembles a sophisticated strategic plan . . . and that is before we have even begun the sad discussion about how much of these plans ever gets implemented.

Post #662 – Wednesday, April 24, 2013

8 Things Consultants Will Never Say

I came across this article today, authored by Jeff Haden (columnist for INC magazine) and which should be required reading for every managing partner and anyone holding themselves out to be a consultant:

Hiring the right consultant is tough, especially since in most cases there is no physical “product” to evaluate. You often have to decide whether promises like “We can!” and “We will!” are likely to come true. Aside from due diligence like checking credentials and references, your decision largely rests on what a consultant says – and on what you believe. Here are eight things you’ll almost never hear a consultant say, especially during the wining and dining phase. If you find one who does, consider it a great sign:

“Implementation will be more disruptive than you hope.” All projects are disruptive. In fact, the best projects are often hugely disruptive, as well they should — you’re making changes. A consultant who downplays the disruption factor is inexperienced or fibbing. A consultant who doesn’t sugarcoat things up front is much more likely to shoot straight during the rest of the engagement.

“I don’t know.” Consultants love to know. Can you blame them? A consultant’s job is to provide answers, especially answers you don’t have. A consultant willing to say, “I don’t know, let’s figure it out,” is more likely to take a collaborative approach than one who pretends to be omniscient.

“No solution is ever turn-key.” There are no turn-key solutions unless the consultant is providing very simple equipment, hardware or applications. Even then some amount of training and process modification is usually necessary. There will always be more involved on your end than you expect, so the more you know ahead of time, the better your plan, and the more likely you’ll end up on-budget and on time.

“I’m not sure I understand the requirements.” Some consultants love fuzzy requirements because “misunderstandings” or “gaps” create wiggle room later. Good consultants want to know as much as possible since the better they understand your expectations the easier it is to deliver those expectations. T

“You don’t need us to do that.” (My Favorite!) Great consultants are willing to point out ways clients can save money. Losing a little revenue is better than losing clients who realize they purchased services they didn’t need. Great consultants operate just like you do; they try to build long-term business relationships.

“Your team is telling me something different — let’s sort things out.” What you want and what your colleagues want, can be two very different things. Look for a consultant who tries to reconcile various perspectives and needs so the project scope is clearly defined. A clearly defined project protects you.

“We’ll want to come back a month or so later, at no charge, just to see how things turned out.” All consultants focus on successful project completion. The problem is some feel “successful completion” means “final payment.” Good consultants care about how the project turned out for you. The best consultant I hired stopped by or called every three months to check in. Great for us, but something in it for him too: Identifying problems helped him improve his processes.

“No.” Rarely can a consultant provide everything you request for the price and schedule you need. “No” is disappointing but is often the answer you most need to hear up front. Would you rather create a plan based on reality or on empty promises?

Some consultants work on the “agree now, modify later” principle. Find one who doesn’t.

Rant #660 – Monday, April 1, 2013

Once More On Cross-Selling

The other day on the Managing Partner discussion site (LinkedIn) I came across a posting wherein some member was informing us all that “cross-selling within law firms is broken” and lecturing the readers that “If a firm is truly serious, an organizational system should be put in place, driven by the management board, to facilitate the process straight from the top.”

I couldn’t contain myself . . . I was compelled to rant:

I could easily wallpaper my offices with all of the articles that have been written over the past twenty years on cross-selling, and yet the behavior doesn’t ever seem to change. And firm leadership taking control or issuing ultimatums hasn’t worked in the past and is unlikely to work going forward.

Here are two observations worth exploring.

One is that I rarely see cross-selling being quite such an issue within industry groups. Industry groups, by their nature, tend to focus much deeper into all of the various legal issues that clients face, such that it never feel like you are “selling” anything; but rather endeavoring to prevent or solve the client’s problems. But unfortunately, we still tend to structure our firms based on what we studied at law school rather than what the client wants – us to really know their business.

The second may lie in understanding how to motivate competent and conscientious lawyers. The process that is most often used in cross “selling” is that firm management asks the members of some practice group to go to the other groups and “tell them what you do” because instinctively we know that product knowledge (knowing what the other lawyers in our firm actually do for our clients) is pathetic!

The only shortcoming to this approach is that I do not, frankly, have the patience to listen to you ramble on about all of the various services that your group provides. And I don’t really understand most of it either. What would get my attention though, is if you could:

(1) succinctly identify only ONE hot, topical legal issue that my clients might be facing now or in the very near future;

(2) identify the type of client (perhaps by number of employees) that this issue is most likely to impact;

(3) tell me in a very brief manner why and how this issue is going to impact my client;

(4) tell me what the downside or consequences might be if my client does not take some remedial or proactive action; and

(5) give me a written cheat-sheet/script on what I should say to my client to make them aware of this issue (because frankly, I didn’t go to law school for all those years to now come across like some used-car salesman and I don’t know what to say to my client so as not to embarrass myself).

In other words, give me the tools to look competent in serving the best interests of my clients and I “might” be more interested in engaging in your cross-selling crap!

Rant #657 – Monday, March 25, 2013

How You Present Your Distinctiveness Makes a Difference

During an interview with a prospective client you are asked to briefly describe what differentiates you or your firm from your other competitors. At that moment your overwhelming goal is to present some distinctive factors that impress this prospect; so you begin to list some accomplishments. You tell this prospect about how Chambers has ranked your firm among the first tier providers in Health Care, about how your practice group has more bio-science PhDs than any other in the region; and how you currently serve four of the largest five regional hospitals. And then, almost as an after-thought you mention that you have also just recruited a leading lawyer in the area of IP and expect to be growing that practice. Not yet an impressive accomplishment, but since this company is likely to have intellectual property issues, you figure mentioning that you are moving ahead in this area is better than saying nothing at all.

Or is it?

According to the work of Dr. Heidi Grant Halvorson, a social psychologist who researches, writes, and speaks about the science of motivation – it isn’t. You’ve just fallen victim to a phenomenon that she says psychologists have recently discovered, called the “Presenter’s Paradox.” It’s a fascinating example of how our instincts about presenting – ourselves, our firms, or our service offerings – can be surprisingly bad.

In essence, our erroneous assumption is this: when we present a prospect with a list of our accomplishments (or with a bundle of services), that they will see what we’re offering additively. If our Chambers rating, our PhDs and our hospital clients are all a “10” on the scale of impressiveness, and our burgeoning commitment to IP is a “2,” then we reason that added together, this is a 10 + 10 + 10 + 2, or a “32” in impressiveness. So it makes sense to mention your minimal IP experience to the overall picture. We just assume that more is better.

Only more is not in fact better to the prospective client.

Research shows that this is not how other people see what we’re offering. They don’t add up the impressiveness, they average it. They look at the package as a whole, rather than focusing on the individual parts. To them, this is a (10+ 10+ 10+ 2)/4 package, or an “8” in impressiveness. And if you had left off the bit about your IP initiative, you would have had a (10 + 10+ 10)/3, or a “10” in impressiveness. So even though logically it seems like a little IP is better than none, mentioning it makes you a less attractive candidate than if you’d said nothing at all.

The challenge here is to recognize that more is actually not better, IF what you are adding is of lesser quality than the rest of your offerings. So if you are an employment lawyer practicing in the firm with the accomplishments I just mentioned, but your particular group has little to mention by way of first tier achievements, you are better off presenting the firm’s big picture accomplishments then trying to finesse something of lesser status. In other words, your highly favorable or positive attributes are diminished and diluted in the eye of the beholder (the prospective client) when they are presented amongst only moderately favorable achievements.

If this bias in how we present ourselves is so pervasive, how can we stop ourselves from making this kind of mistake? According to Dr. Halvorson, we need to constantly remind ourselves when making any kind of presentation to think holistically.

How distinctive is the package I’m presenting, taken as a whole, and are there any elements that take away from or dilute the impressiveness and overall value?

Three 10’s and a 2 is not better than three 10’s.

Rant #658 – Tuesday, March 19, 2013

How Confident Are You That We’re Seeing An Improved Picture?

According to the latest Law Watch Managing Partner Confidence Index survey, released this week by Citi Private Bank's Law Firm Group those surveyed (only 77 firm leaders) are feeling more confident. In a subsequent discussion with my fellow co-author and favorite law firm finances analyst, Ed Reeser, I obtained this insightful analysis:

As we recall, the first quarter of 2012 started off with some vigor, and then things went into the tank in the second quarter and continued rather poorly into the third. Only an unexpected and marvelously active fourth quarter, both in terms of work and collections, appears to have saved the 2012 calendar year. Specifics on how, when and from where this rebound came are to this point anecdotal and a bit vague, as the information has come from preliminary reports. Greater details are eagerly awaited, as through the end of November the impressions were not positive for the fourth quarter of 2012.

There are some seriously inconsistent responses within this survey. Heavy discounting (100%) and expectations of increased costs (72%) are in the same report as increased profits expectations (75%). How can one reconcile those contrasting forces?

First, there is revenue growth . . . and indeed 85% of the respondents have expectations of revenue growth. How are they going to get it in a market that Citibank says is characterized by "not enough legal work to go around"?

There is organic growth from within, which has been lacking for most firms, but perhaps with a recovering economy that could go up and help much larger numbers of firms. Obviously that would be great, and indeed 93% are looking to conditions that are the same or better than last year. That is pretty optimistic considering that Q4 was perhaps the biggest unexpected miracle result since the US defeated the Russians in hockey at the 1980 Olympic Games, and without it the year was pointing towards a serious disappointment.

There is buying growth through lateral hires . . . a strategy that recent reports from Professor Henderson and Chris Zorn at Lawyer Metrics on the US side of the Atlantic, and Mark Brandon on the UK side of the Atlantic . . . have shown to be a failing one most of the time.

Second, there is removal of participants in the profits pool and increase leverage, This approach is evident in the FTE chart on non-equity partner growth expectations. Of the three tactics, only this last one of self-consumption is absolutely available and consistent with proven past behaviors and results. Not for all firms. But for a very large number it has characterized their performance in 2012, and more of the same should be expected.

This report is like a finger, pointing to the moon. The finger has strongly optimistic expectations of greater demand, overall confidence, stronger economy, stronger business conditions for the law, rock and roll profits, and increased revenues.

But the focus should not be upon the finger – it is about where the finger is pointing. Strip away the aspirational and 'hoped for' expectations, and lift the gaze to where the substantiated components of the report based on past performance lead your vision . . . stagnant demand, heavy discounting, increased costs, reduced partner head-counts.

What do you see?