Post #911 – January 10, 2022

6 GOALS We All Need to Obsess Over.

May I invite you to join me, in giving some thought to -- What am I going to do to . . . 

- Raise my visibility?

And I guess that prompts some related questions: What am I doing to ensure that I get asked to appear at conferences and gatherings of the top people in my chosen field or industry? And, what am I doing to stand out from the common herd?

- Create new intellectual property that will be of value to clients?

One needs to always do a critical assessment of how much of your fee revenue emanates from services that you did not provide five years ago. In other words, are you building your marketable skills or simply doing the same old shtick for your clients and expecting them to pay higher fees for the privilege. 

- Be regarded as THE thought leader in my field? 

When times were hectic the busyness of business trumped everything, but this may be the perfect time to invest in some long delayed, self-development. Is there some CLE that you’ve been putting off registering for or some article that you haven’t had the chance to write?

- Provide new ways for clients to retain and apply my expertise?

Turn your rough notes into a speech, your speech into a booklet, your booklet into a workshop. Offer to facilitate one of your client’s meetings. Make yourself so indispensable that you’re irresistible.

YOU need to become a magnet of YOUR expertise.

- Expand my client base?

Find three ways to do something that will contribute to your client’s business – help them improve their revenue, perform more efficiently or reduce their risks. That changes the question from “Should we do business?” to “How can I best add value?”

- Contribute time to helping others?

The more you help others, the more you’re helped. This is a great time to offer pro bono services, contribute to charities, and provide others with counsel and support.  

NOW is the right moment to block out some time to look forward to jump-start your 2022. You can certainly do this alone, but I’d love for you to do this with your team. As we head into our third year of Covid, perhaps it’s time to get the team together and embrace a new way of thinking: We don’t know what will happen next, or how long this will last, and it does NOT matter. We will get through it, step by step, day by day, by coming together and dealing with what’s in front of us.

The best predictor of future success is action. Let’s do one thing every week. It doesn’t matter how small those actions are. Doing something—doing ANYTHING—is always so much more important than just talking about it. Together, we just might discover a better way – and a more innovative way – a BOLDER way FORWARD. 

Post #910 – January 6, 2022

Let’s Kick Ass in 2022

I have always found that those firm leaders least surprised by the future are continually exploring today’s issues and the various factors that could shape and disrupt how their firms are currently operating. To do this effectively, your cherished assumptions, those long-held ideas and beliefs that have served you well, may need to be retired.  Here are some things to think about:

QUESTIONS FIRM LEADERS NEED TO ASK THEIR COLLEAGUES:

- What emerging unmet clients needs could provide the foundation for entirely new service offerings?

- What is a game-changing opportunity that could create much more value than we have delivered in the past?

- How could we partner with the resources of some complimentary third party to address a broader range of client needs?

- How can we transition from providing commoditized to cutting-edge services to differentiate our offerings?

- How could we harness technology and leverage data to deliver more value and deepen relationships and trust with clients?

WHAT EFFECTIVE FIRM LEADERS SHOULD DO:

- Always exhibit a desire (and track record) for investing in the future.

- Drive INDUSTRY specialization, the undisputed method to provide client distinctiveness and value.

- Transition from a the conventional ‘solving legal problems’ model to a providing ‘total business solutions’ model.

- Address underperforming partners on a timely basis.

- Ensure that some portion of non-billable time is spent by each partner in building their marketable skills.

- Grow for strategic purposes (getting better business) not simply for volume (getting more business).

- Create a firm-first (our clients vs. my clients) culture.

- Help partners and staff realize that quality work doesn’t necessarily mean quality service.

WHAT FIRM LEADERS SHOULD DEFINITELY NOT DO:

- Do not declare that intrapreneurial growth is important unless you put resources, metrics and objectives in place to support it.

- Do not encourage people to contribute ideas, engage in brainstorming and other activities unless there is a concrete effort to implement the best ideas, otherwise you demotivate people.

- Do not complain that partners are risk averse only to then blame someone for trying something that did not work.

- Do not appoint a Chief Strategy Officer and think that you have solved your firm’s growth challenges. 

- Do not waste time on flashy gimmicks to encourage innovation but rather focus on eliminating the barriers which are impeding your firm’s innovation efforts.

- Do not tell your partners to be more intrapreneurial but then keep them so busy doing commoditized billable work that they have no time for experimentation.

- Do not miss the opportunity to celebrate success and praise the intrapreneurs within your firm.

Post #909 – January 3, 2022

The Most Lucrative Growth Is Industry Focused: 

But ONLY If You Get Granular

(this is an excerpt from my forthcoming book – Industry Specialization: Making Competitors Irrelevant)

We all know intuitively that we need to have our firm grow but the subject of growth can be a tricky topic such that it becomes important to have an informed perspective on how to think about it.  Growth creates healthy practices, strong firms, opens up opportunities, excites and attracts good lateral talent, and rewards partners.  But do we really know how to achieve it?

One approach is to pay attention to which clients you pursue and particularly when you look at clients through an industry lens.  I would argue that in order to truly identify growth opportunities you need to drill well below the traditional industry level.  And I would suggest that those few firms that have focused at all on developing Industry Practices invariably miss-the-boat when they position themselves at too high a level to establish themselves in a manner that really attracts the better potential clients.  

And why does this happen?  Because, and I am not going to blow smoke at you here – law firms and lawyers do NOT understand the intricacies of Industries.

As but one example. even some of the Legal Media that I would expect to know better, have me shaking my head.  The Legal 500 is seeking submissions for its US Ranking of law firm practice and industry groups.  The purpose of these rankings is “to help in-house lawyers and legal teams find the right advisors.”  Amongst the list of Industries in which you can enter your firm to be considered include “Environmental” and “Native American Law.”  Important areas of practice to be sure, but are these really industries and especially when you cannot help but add “Law” to the title?  Then their categorizations go on to include “Media, Technology and Telecoms” . . . all lumped together as one industry?  Digging deeper you can find “Cyber Law” (there is that “Law” term creeping in again) and “Fintech” included under this heading.  

Little wonder when it comes to understanding industries, that some of our law firms seem confused!

You are welcome to read the remainder of this article in the latest issue of Legal Business World page 38: 

PDF: https://lnkd.in/dYuXrMeQ

Post #909 – December 16, 2021

REVISITING: Making A Shockingly Unimpressive Impact

Further to last Thursday’s post, I’ve now been in touch with the Editor of the magazine in question and done some sleuthing. You will remember I posted about 4 elite firm leaders, who in individual published interviews were asked about how they differentiated their firm and their answers lacked much real substance. I did not identify the firms because it was not my intent to embarrass.

What surprised me with that post, was some marketing professionals trying to either rationalize that this was probably some obscure publication or suggest that a law firm leader should not be interested in being profiled in any CEO publication.

So, I’ve now discovered that these leaders interfaced directly with the Magazine Editor who informed me in writing that when working with any firm leader . . . "we would send the proposed questions to you and work with you on the areas of focus for your profile. The questions may be answered in writing and we will send a final PDF back for review and approval prior to publication."  
From what I could discern these firm leaders are definitely authoring, reviewing and approving their own material with the intent of getting it in front of Corporate CEOs.

Nevertheless, from one reader I was told “Given all that is on the agendas of the leaders of elite law firms I find it hard to believe that they would do anything with this request, but forward it to one of their able CMOs who would supervise the drafting of the response.” 
Are we talking about one of those $1m salaried CMOs?

I also heard, “As to whether CEOs read these interviews, I have NO reason to believe they do.”  
Maybe not.  But I’ve now been informed by the Editor that “we distribute 10,000 copies in addition to the digital version and we have an exclusive distribution platform reaching C-suite executives and private jet travelers."

Still can’t believe a firm leader would be interested in having their interview published to connect with CEOs? 
REALITY TIME: I've now discerned that this is really a PAY-To-PLAY exercise!
We have elite firm leaders each investing $10K+ to have a two-page glossy interview published . . . that no one is going to read? 

Meanwhile, the distinguished, former Editor of a major legal publication asked if I might disclose the names of these firms.  
My response: “Now if someone who has covered our industry for over 15 years, resides in NYC, and knows these firms better than most anyone I can think of, cannot decipher one firm leader's answer from another - I guess that says it all, doesn't it?”

To those Firm Leaders or CMOs reading this: 
It could be highly productive to formulate a MEANINGFUL answer to this Editor’s initial question (which was really all this posting was meant to highlight): 
“How do you define your difference and what sets your firm apart in the industry?”

Post #908 – December 13, 2021

The Truth is Starting To Come Out – Beware a 2022 Inflation Tsunami

While firms may experience a prosperous 2021 and looking for more of the same going forward (it's been forecast that in 2022, law firms will push hard for double-digit rack rate increase), inflation is roaring at a pace not experienced in most people’s lifetimes. Saturday’s WSJ front page screamed that inflation is NOW the highest in 39 years. Last week’s Corporate Board Survey shows deteriorating C-Suite sentiment, expecting lower growth and higher interest rates. And, the definition and method for calculating inflation has deceptively changed over time in ways that obscure this issue. 

What do I mean? Well, the former definition focused on the amount of currency being created, the source of inflation; whereas the latest definition focuses on rising prices, which is more a symptom of inflation. Meanwhile the FED has quietly increased the money supply for over 70 years without it showing up too much in increasing prices . . . until NOW.  Since inflation is measured by changes in the Consumer Price Index, an index that tracks the average price of a basket of goods and services we purchase, the precise method of doing so has also changed. I’m told that if inflation were calculated the same way today as it was in the 1970s, our inflation rate would currently be CLOSER TO 15%!

Keep in mind, Governments have an incentive to understate inflation. Since pension entitlements and welfare payments are often indexed to inflation, understating the true rate of inflation can help government reduce its financial liabilities. 

For the US economy, run-away inflation could eventually be devastating, producing a deep economic recession. America is awash in debt, and higher rates will place many borrowers in financial distress. US government debt currently stands at around $29 trillion; while US corporate debt stands at over $11 trillion; and the combined debt of households and non-profits is currently in excess of $17 trillion (as if any of us really understood what a trillion dollars represents). And since the US dollar is the global reserve currency, most attention has been focused on the American situation. However, we need to understand that high inflation is a global trend and therefore could cause a severe economic contraction as interest payments rise and spending falls.

Contemplating action sooner rather than later, before everybody wakes up to the real threat posed by inflation, may allow you to position yourself.  You need to ask: 
- How will we manage rapidly rising costs across most elements of our practices from travel to in-office expenses?
- How do we ensure that we retain our best talent without incurring more double-digit compensation cost increases?
- Is our strategy (which client industries we serve, what specific services we provide and why they choose us) still sound for 2022 and beyond?

Post #907 – December 9, 2021

Making A Shockingly Unimpressive Impact

I was reading how salaries had now reached $1 million for global CMOs, and then happened upon a magazine published exclusively for CEOs where I came across 2-page interviews with four firm leaders of NY-based BigLaw firms. Here was the first question posed to each:
Question: “How do you define your difference and what sets your firm apart in the industry?”

FIRM 1: “Our people, expertise and the cross border global nature of the firm are what set us apart. We are a global elite law firm, advising on some of the most significant marquee disputes and transactions that shape our clients’ businesses and the industries in which they operate. Our successes point towards excellence and our robust global platform. Our lawyers and staff operate with a mindset of distinction and dedication throughout everything they do.”

FIRM 2:  “Our difference starts with our attorneys and their commitment to our clients. Our priority is understanding the businesses of our clients and letting that dictate our legal strategy. We also value retention and relationship-service as a key to success – we have some clients who have been with the firm since its inception, and many who have worked with us for decades over hundreds of matters. These institutional relationships continue to grow not just because we provide clients with excellent legal advice, but because we care about their growth and success.”

FIRM 3:  “Our core strength is our consistent, intense focus on teamwork. It sets us apart in the industry. We delivered exceptional client outcomes last year against the backdrop of a tremendously uncertain environment and a scary time for us all personally, and this is a testament to our guiding values. This level of teamwork is only possible because we have exceptional people. The spirit of our people, who are skilled, creative and innovative, and our dedication to our clients, no matter the circumstance, is what made the year we just had happen. We operate in a way that makes our institution unique.”

FIRM 4:  “We are a purpose-driven firm with an unparalleled reputation for excellence and professionalism. Our commitment to improving our communities and to fighting for social and racial justice dates back to our earliest days, long before such efforts were popular. We don’t try to be all things to all clients; we focus on five areas where we lead the market.  Our firm’s entrepreneurial spirit and adaptability enable us to not just survive challenges and uncertainty, but to thrive.”

What shocked me was these leaders each wasting valuable space, in a preeminent CEO publication to deliver such a trivial, unimpressive message. 
So, where are those million-dollar CMOs helping their firm leaders get proper media interview training?

Post #906 – December 6, 2021

Can Business Schools Really Help You Develop Leaders?

As the war for talent is in a “crisis mode,” I was intrigued to see one international firm launching a “new MBA level program with a group of business schools to give Associates executive leadership training.”  My first reaction was . . . Not Again!  

Now business, as an academic subject, is all about things that are logical, rational and analytical - it is fundamentally about knowledge. It can be learned by reading books, analyzing business cases, studying relevant theories and discussing the applicable principles involved. Thus, we sit in classes and intellectualize, but never have to deal with those messy, idiosyncratic humans.

Leadership is really a behavioral skill, that is about whether or not you can actually influence individuals and teams to accomplish anything. So, it requires putting people through a set of processes or simulations where they have to experience and react to a real-life scenario, try out different approaches to the situation at hand – thereby developing their emotional self-control, interactive style and determining what might actually work best when dealing with different people.

I’ve watched a number of firms link up with prominent business schools in an effort to train their people. These lawyers may be learning about business, but when it comes to leading, it is a case of the blind leading the blind! And esteemed academic, Henry Mintzberg, professor at McGill made this same point in his excellent book, “Managers not MBAs”. He also was “totally against this notion that you can separate managers from leaders, which implies that leaders don't have to manage, and means that leaders don't have to know what is going on intimately in their organization - which is wrong.”

This had me wondering what might happen if we got back to basics and started really managing our people. Let’s start to hold accountable those with managerial responsibilities to deliberately and intentionally engage in one-on-one coaching with those on their teams. Ever hear the old adage that “people don’t quit jobs, they quit managers?” 

For example, let’s ask each lawyer to divide their client work into three categories: LOVE this stuff; Guess that’s why they call it WORK; and If I could only get this CRAP off my plate.  Now, exercise effective coaching to help your lawyers identify which matters turn them on, then help them get more of that kind of client work.

Imagine a concerted effort to start HELPING people grow their skills, get the kinds of work they desire, and succeed in building their expertise . . . NOW how many would want to leave that kind of environment?

Post #905 – November 29, 2021

Leadership Horse Races Rarely End Well

We’ve all been reading about talent wars, unprecedented levels of turnover and how various firms have reacted. Meanwhile, I’m intrigued to read in this week’s legal media that the “Clifford Chance Managing Partner RACE is Down to Three.”

From having worked with numerous large firms on their leadership succession issues, I know first-hand that having a contested election isn’t necessarily a negative, it only becomes highly problematic when it becomes public and political. In this case, partners are set to go head-to-head to succeed Matthew Layton, the firm’s current firm leader.  The media are loving it and this is when it all begins to go off the rails!

First, it can become quite distracting to everyone in the firm as it is politicized through continuous speculative discussions amongst partners.  This is when things begin to heat up as our various candidates move from subtle campaigning to having their friends become more overt in canvassing for their support. Factions develop, emotional discord creeps in and rivalries become intense.  It is not uncommon for partners to take sides for or against particular candidates which can result in overt behavior that deters teamwork and knowledge sharing. 

And what do the clients think . . . or does anybody care? In one instance because I was involved in overseeing the process, I had all of the candidates quietly confer with their largest clients.  One partner upon asking his important GC client “What would you think if I were to let my name stand as a candidate to become the firm’s next Chair?” came back to the nominating committee to report that his client’s response was “Think again!” This GC was making it very clear that if this partner were to proceed, the legal work would be moving to some other firm.

Finally, in looking at who might best assume the leadership mantle, firms will tend to gravitate to those who are legally talented and gifted rainmakers. In these kinds of contested situations a highly valued partner who loses may ultimately take it very personally (who likes to be publicly humiliated?) and decide to leave your firm. It should be no secret that headhunters usually swarm whenever firms go through highly contested elections because they know that there will inevitably be fallout. 

So, Clifford Chance may have just painted a bulls-eye on two of its Star Partners.

Post #904 – November 29, 2021

An Explosive Legal Micro-Niche: FinTech.

There is a dramatic changing of the guard taking place in the Financial Services Industry that will impact every law firm serving clients in that sector. From opening accounts to insurance underwriting and credit profiling, FinTech startups are flipping conventional business models.  With significant venture capital dollars flowing into the FinTech ecosystem, “challenger” banks are threatening to wipe out banking behemoths faster than Blackberry was taken out of the cellular telephone market. 1 out of every 5 Venture Capital dollars went into Fintech thus far in 2021 (2700+ deals in US, 1800+ in EU and 110 in Canada) with 206 Global Fintech Unicorns.

Here are a handful of over 20 Micro-niches:

• Asset Management. Ever heard of buying stocks or mutual funds without having to pay a commission fee?  FinTech companies like Robinhood are enabling investors to trade for free in exchange for their data. They forward this data to high frequency traders who can then influence the price of the asset. 

• Alternative Insurance Underwriting. Two people with the same height and weight, both non-smokers and who don’t drink alcohol will be given the same life insurance premium. However, one might be an exercise freak, while the other a couch potato and more likely to die of diabetes.  Now with intelligent and self-learning algorithms, InsureTech companies can determine whether or not to give insurance, provide different terms and conditions, and offer alternative payment options.

• Digital Banking. Imagine your traditional brick and mortar bank going completely online — no physical office, no bank tellers, no mail. Challenger banks are now offering no-frills individual and business bank accounts through a complete digital infrastructure. 

• Peer-to-Peer Lending. Peer-to-business (P2B) lending is when a business borrows money from one or multiple individuals.  FinTech companies create platforms to match borrowers with lenders and usually take a fee from the borrower’s repayment. 

• Small Ticket Loans. Banks and other lenders don’t want to underwrite smaller ticket loans because of the low margins and high costs in setting up and recovering them. FinTech companies are delivering impulse buy mechanisms (buy now & pay later, or BNPL) and one-click buy buttons on e-commerce websites to enable customers to buy quickly without having to enter any form of authentication or credit card details. 

Corporations are increasingly vulnerable to the acceleration of technology that’s eating every industry — and nobody is staying in their lanes.  With capital flowing like never before, the number of insurgents poised to eat an incumbent’s lunch are multiplying every day.

Post #903 – November 29, 2021

There is No Vaccine for a Lack of Leadership.

There are few people out there with bad intentions, but there are firm leaders with bad habits.  Last week I spent an hour on a call with the Managing Partner from a 200+ lawyer firm who was seeking my counsel on succession planning and specifically with replacing their practice and industry group leaders, many of whom were very senior and had been in their roles for well over a decade.  After being briefed, I began by asking five very basic questions:

First; do these group leaders have a formal, written job description?  Answer: “No.”

Second; do these leaders have a clear understanding of precisely how many non-billable hours they are expected to spend leading and managing the people on their teams?  Answer: “No.”

Third; have you provided these team leaders with any organized leadership training within the past three years, to help them enhance their individual performance?  Answer: “No.”

Fourth question; have these leaders be given any written expectations, (such as you must, as a group, meet at least once per month) of what your firm’s leadership is expecting of them as team leaders?  Answer: “No.”

Fifth question; do you, as the firm leader, meet with all of your team leaders to have them share and discuss their particular leadership challenges and successes with each other, at least once quarterly?  Answer: “No.”

Final and very serious question, why are you bothering to even have practice and industry teams?  Are these simply TINOs (teams in name only)?

Now, let me not leave anyone with the impression that this was, in any way, an isolated incident, or that the answers that I most often elicit from firm leaders, to these five questions, are wildly different in most other discussions that I’ve had.  

It is still the case in too many law firms that we form these teams and then we say to the team leader we want you to manage this group; and we are very good at demanding that our people perform, but are distressingly useless in helping our people succeed.  This is not a system designed to obtain measurable results.

So I guess the GOOD NEWS for those of you reading this is that your firm may continue to prosper in spite of itself, as most of your competitors perform just as pathetically.  Or as my good friend, David Maister used to say, “the savings grace for today's typical law firm is that they only have to compete against . . . other law firms.”

But SADLY, that is rapidly changing!  So, what are your plans for 2022?