LawMarketing Blog
by Larry Bodine

Online Panel of GC reveals how law firms get hired

Mon, 28 Jul 2003 13:23:04 GMT

There a great Web seminar coming up next week that I highly recommend marketers register for:

Law Firm Business Development:
From the General Counsel's Perspective

August 6, 2003
11-1pm (PDT) | 1-3pm (CDT) | 2-4pm (EDT)
To Register Call Toll Free: 800.775.7654 (International Calls: +1 715.833.5426) and mention Seminar LMP7934-0.
Click here to register online.

Go to http://www.lawmarketing.com/gc/ to get more information.

To get the early bird registration you must register on or before Wednesday, so time is running out!

Sun, 27 Jul 2003 00:35:11 GMT

Multidisciplinary Practices in the UK

Sat, 26 Jul 2003 16:09:48 GMT

The UK government has announced plans to deregulate the legal industry, allowing mergers between accountants, investment banks and lawyers in England and Wales. David Clementi, former deputy governor of the Bank of England and chairman of Prudential, will head an independent review panel in charge of recommending legislation for a more open legal market, as well as a new agency to oversee the legal profession. The Law Society, which represents 90,000 solicitors, may lose its self-regulating powers.

FRONT PAGE - FIRST SECTION
Falconer aims for 'Tesco law'
By Bob Sherwood, Legal Correspondent
Financial Times; Jul 25, 2003

A radical shake-up of the legal profession paving the way for law firms to float on the stock exchange and supermarkets to offer "Tesco law" was announced yesterday by the government.

In a move likely to lead to the legal world's own version of "big bang" deregulation, the government signalled it planned to allow companies to provide legal services to clients.

Lord Falconer, the constitutional affairs secretary, said: "There will need to be quality control, but if we can get to the point where there is 'Tesco law', we think that's probably something of interest to the consumer."

At the moment, solicitors are forbidden from entering partnerships or incorporating with anyone other than fellow lawyers. The government also supports the ending of restrictions under which solicitors employed by companies can offer legal advice only to that company and not its customers.

The deregulation would open the door to mergers and diversification where accountants and lawyers in England and Wales could combine to form complete business services practices. Investment banks could also set up, or take over, legal teams to provide a full transaction facility.

David Clementi, former deputy governor of the Bank of England and chairman of the insurer Prudential, will head an independent review charged with drawing up new principles that will sweep away restrictions that stop companies such as banks and insurers offering legal advice to their clients, so such services would be available on the high street, including at supermarkets.

Mr Clementi will also consider the creation of a new super-watchdog - an equivalent to the Financial Services Authority for the legal profession - that could regulate all solicitors and barristers as well as companies that break into the market.

Mr Clementi has been given until the end of next year to work out the details of how to regulate a more open legal market and safeguard the independence of the profession. His recommendations could lead to legislation. Announcing the review, Lord Falconer said there was a "significant chance" the Law Society, which represents 90,000 solicitors in England and Wales, would lose its self-regulation powers. He stressed that Mr Clementi would be asked to work out how - rather than whether - such changes should take effect. The current maze of 22 bodies regulating legal services was "outdated, inflexible, over-complex, insufficiently accountable or transparent", he said.

Before the review, banks, building societies and insurance companies will be allowed to help bereaved families administer wills. Lord Falconer said the will market would be opened up straight away to allow greater competition.

The review was prompted by a 2001 report by the Office of Fair Trading, which challenged competitive restrictions in the sector. It also called for the scrapping of the Queen's Counsel system of senior barristers.

Clifford Chance, a large law firm, welcomed the proposals, but many high street solicitors are worried.

The Law Society warned that new entrants to the market could "cherry-pick" the most profitable legal services and drive traditional lawyers out of business. It also insisted self-regulation was the only way to guarantee lawyers' independence.

Find this article at:

http://search.ft.com/s03/search/article.html?id=030725000176

What clients pay for senior partners

Fri, 25 Jul 2003 01:17:01 GMT

I was looking through the slides from yesterday's audio seminar on Law Firm Pricing, sponsored by IOMA, the Institute of Management & Administration, an found a slide on what clients pay senior partners by practice area.

Antitrust attorneys top the charts at an average of $437 per hour (topping out at $850 per hour). Clients pay these senior parners rates up to 16.5% higher than those paid to attorneys in other practice areas.

Who's on the bottom of the chart? Environmental and Employment senior partners. They are paid an average of $375 per hour (topping out at $750 per hour). Clients pay them 5.9% less than senior partners in other practice areas.

From lowest to highest-paid senior partners, the practice areas were employment (at the bottom), environmental, civil litigation, intellectual property, IP litigation, privacy, corporate and at the top, antitrust. The charts are based on research by The BTI Consulting Group of Boston, MA.

Law Firm Sales Directors

Thu, 24 Jul 2003 14:51:03 GMT

An interesting thing I picked up at the Northstar Conference this week in Chicago on "The Latest in Law Firm Business Development" is that law firms are indeed hiring sales directors. The speakers predicted that most law firms will eventually have a Director of Sales. To wit:

José E. V. Cunningham, Chief Sales & Marketing Officer, Shaw Pittman LLP, Washington, D.C. He is paid a straight commission on new business he brings in. In most states this fee-splitting is verboten by the ethics rules, but it's OK in Washington, D.C. This gives Shaw Pittman a huge advantage in the market. He is responsible for the firm's global business development initiatives, including client-focused and industry-based solutions, and all marketing activities. Jose is a sales veteran from Cap Gemini Group, Channel International, Ltd, Unisys Corporation and AT&T.

Gary Booth, Chief Client Development Officer, Pillsbury Winthrop, San Francisco. Gary was well known in his prior job as Managing Partner for Global Business Development for Arthur Andersen. His current responsibilities include management of the firm's client team program that includes "opportunity management," client selection, client satisfaction and relationship sales training.

Mark Cowan is the Partner with Patton Boggs in Washington, D.C. As Head of Business Development and Marketing, he does not practice law and devotes himself full-time to new business generation. I did a Webinar with Mark on sales, and there's an article mentioning him on the LawMarketing Portal at http://www.lawmarketing.com/publications/news/pub449.cfm.

Rob Randolph, Marketing Manager for Business Development, Duane Morris, Chicago. Rob was also on the Webinar with Mark Cowan and me, and Rob wrote an article about law firm sales, which is online at http://www.lawmarketing.com/publications/news/pub388.cfm.

Barbara Sessions, Marketing Partner and Director of Business Development, Winston & Strawn, Chicago, IL. Barb is an ex-LMA president and has been with her firm for 9 years. She's one of the few marketers who went from staff to partner. She's in charge of communications, marketing strategy, practice development (industry strategies and cross-selling), business development (RPF responses, market share analysis, research, contact management), strategic initiatives (anniversaries, events, sponsorships, charitable efforts, partner retreats), public relations and training.

Will marketers move into sales? Only if the marketers have the right genetic makeup. Cunningham said that "marketing DNA is different from sales DNA."

Six Reasons Why lawyers lose clients

Wed, 23 Jul 2003 18:22:12 GMT

I picked up an interesting statistic from Daniel D. Morris of the VeraSage Institute, who spoke during today's IOMA audio seminar on Law Firm Pricing. He identified why lawyers lose clients:

1% The client dies
3% The client moves away
5% The client has a friend he prefers
9% The client is lost to a competitor
14% The client is dissatisfied with the service
68% The client believes you don't care about them.

This shows that a good marketing strategy for law firms is to improve client relationships and service.

Top Ten "What Not To Do's" When Conducting Client Interviews

Wed, 23 Jul 2003 02:51:22 GMT

Bob Boehm, an in-house lawyer, presented a rollicking and lively talk on the “Top Ten ‘What Not To Do’s’ at When Conducting Client Interviews,” at the NorthStar Conference on Conducting Client Interviews in Chicago.

Boehm has been a partner at a law firm, where he handled securities M&A, and is now General Counsel of Steiner Leisure Limited, a spa company based in Coral Gables, FL

Top Ten “What Not To Do’s” When Conducting Client Interviews

Don’t forget your goal: to help the client. You’ve got to be really careful whom you send to do the client interview. If you send the Chief Marketing Officer to do it and there’s no letter of introduction, it is a huge mistake. The message is “we’re here to help ourselves.” You’ve got to be really careful. During the course of the interview, every question shouldn’t suggest that you’re trying to generate new business. Think how the question will play in the client’s mind, otherwise the interview can turn 180 degrees and will kill you. Be smart, everything you do should be done to help the client.
Don’t force the issue. Let’s say you spend months calling your client about the interview, and finally you reach them, and they say they’re too busy. You say to yourself, “This client is an idiot. Why don’t they want to do this?” Don’t force it. As a GC, I’m really busy. I may not want to meet with your lawyer, because it may not be the best use of my time. Don’t tell the clients what he or she needs. What you could do is say, “I’m going to call you back in a few months.” But don’t force the issue. They’ll feel you’re shoving marketing down their throat.”
Don’t make it seem as if you are doing this to help your law firm attract clients. Don’t let the client think this is a fishing expedition to get more business. Sometimes really smart lawyers say really dumb things. It’s so transparent when they are only posturing themselves to attract other clients in the industry.
Don’t make it a burden. I think that a person-to-person interview is the best way to do it, but your client may not think so. Your client may not have time and may just want a questionnaire. Do whatever the client wants, or don’t do it at all. You are taking a client away from working on other things. Make it easy for them. Make sure it’s user-friendly and you’re not taking up too much of their time.
Don’t bill for it. You wouldn’t think a law firm would be that stupid as to bill for a client interview. But, for example, I recently got a bill from a law firm – it had a one hour charge for “transitioning work to other associates” because an associate was leaving the firm. The partner should have reviewed the bill. You can put one hour of stupidity on a $50,000 bill, and the client will remember the stupidity.
Don’t leave yourself cell phone on or do dumb things. If your cell phone rings during a client interview, you’ve wasted it. You want to convey to your client “I love you and I want you to love me.” An interruption from a ringing cell phone wrecks this message.
Don’t ask the wrong questions. There may be awkward questions that make the General Counsel uncomfortable. Think about whom you’re talking to. Don’t get into a sensitive area, like where the GC messed up on. You’re talking about people’s careers. Don’t ask a question that will cost the GC his job.
However, don’t be afraid to ask questions that will elicit a response like, “you have a person at your firm that does that?” You should ask those tough questions about your own firm.
Don’t use the wrong personnel. Whom do you use? It depends. You’ve got to think about the relationship you have with the client, and how they will react to whom you use. For example, I tell my outside law firms in a nice way when I’m upset. For example, I was upset with a bill I got recently and I told the relationship manager. But other people would rather tell a third party because they want to say “I hate those people I’m working with.” Lawyers sometimes don’t put themselves in the shoes of the other party. Think about the other person, that’s the key
Don’t bother doing it if you are not going to use what you learn. It is much better to suffer a mediocre relationship with a client than to have them feel “you wasted my time, picked my brain and did nothing about it.” It’s worse not to follow through than not to ask the questions.

Verbatim Comments from Clients

Tue, 22 Jul 2003 01:09:09 GMT

I recommend you point your partners to this blog. I'm attending the conference on Conducting Client Interviews by Northstar Conferences at the LeMeridien Hotel in Chicago. Allen Chichester, the CMO of Piper Rudnick in Chicago just played at 13-minute videotape that showed focus groups of clients the firm held in 8 cities in 2002. It was compelling.

The focus group participants were 80 purchaser of legal services -- clients and prospects in large organizations with $500+ million in revenue. Half were firm clients; half were prospects. The firm gave attendees lunch and $200 for their participation. They did not identify the firm as the sponsor of the focus group. The research was conducted by Mark Greene of The Brand Research Company.

Following are quotes from actual business executives speaking about the law firms they use:

* I want timely billing -- I routinely get invoices that are 6 to 9 months

old

* I want accurate billing -- I see things that are so obviously in the wrong bill. I shouldn't have to tell them who worked on what project.

* I want more detailed billings - particularly if more than one lawyer is working on the case. WE used to get bill that says "for services rendered: $35,000." I have stopped using several firms because they cannot give me the detail I wanted in their bills.

* I want flat fees, fixed fees, capped fees or other arrangements that do not reward inefficiency, which hourly billing does.

* I want them to train the lawyers before they send them to work on my files. What I have found at the big firms is that the associates weren't very good

* I talked to an associate who said, "I just spent 12 hours researching the issue." I asked, "Did you get an answer?" The associate said "no," but the firm sent the bill for 12 hours anyway. Until there's a complaint logged, the firm isn't going to do anything about it.

* I want someone to counsel us, not tell us what the case law is. I want an attorney wiling to make those risk judgments and tell us, "yes, you should do this deal." But most counsel just want to give legal advice.

* The income of lawyers has grown dramatically in recent years. At the same time the pressure has grown to bill a minimum monthly number of hours. It seems like the interest in the relationship has become 100% "what can I get from the client on this one." We see this all the time. The relationship is what we're looking for in a law firm, someone who values our business. I honestly think law firms are losing sight what the lawyer-client relationship is all about.

* Lawyers want to give you perfect legal advice for a perfect world. None of use is working in a perfect world. There has to be knowledge of our business and a sensitivity about how our company operates, so that the advice they're giving is something we can realistically achieve, and so they know what's important to you and what isn't.

* They need to understand our business a as well as we do, or otherwise we won't be interested in them.

* The relationship you value the most is the one that anticipates your needs. So if I have a law firm that's proactive not reactive - that is, they pick up the phone and tell me here's something that may be of value to you - it would knock me over with a feather.

* I never once had a partner call me up and ask me, "What did you think of my team's performance?"

* The lawyers I find valuable are those who share their business judgment

* We had several key class action lawsuits and I tried to find law firms to work on it. I called a senior employment lawyer at one of firms we used, and told him "I need somebody to explain the state industrial labor law, I don't' understand it." Two days later I got an 8- or 10-page long explanation of the law. We ended up hiring another firm that had a lawyer who explained the law to me over the phone.

* I want a law firm that will tell me up front "here's what I think it'll cost, here's what I think I can achieve." Managing expectations and being responsive is what I want.

* The law firm doesn't understand that you can get repeat business if you can get us in and out of a case more quickly.

* Law firms should have the long-term view. They won't make that much money in this particular matter, but I'll be appreciative if they get me out of a case quickly. They'll make it up many, many times over in the future.

* Lawyers lack business sense. They should look ahead 10 years, and not look ahead only 10 months. They should think, "If I do good work for Sara Lee, I'll still be working for them in 2008." Give me some pro bono work now and it'll pay off later.

* We're actually looking for something more profound - lawyers who don't sell us hours. Companies want to buy expertise, responsiveness and assurance. I don't care how long it takes the firm to do the work. At our company we're asking for something more profound.

Chichester played the 13-minute videotape at a partner retreat. "This tape gave us a way of helping our lawyers listen to what our clients were saying," Chichester said. "It isn't that hard to stand out if you can create a positive client culture -- the bar is set very low. The feedback was very consistent grout to group. It wasn't fancy, but they were issues that were important to clients."

Cooked books Sank Altheimer & Gray

Sun, 20 Jul 2003 16:33:39 GMT

A Chicago Tribune story reveals why Altheimer & Gray folded:

- The firm booked $6.3 million in uncollected fees as 2002 profits.

- Using this accounting maneuver, the firm borrowed $24 million, to pay big partners like Gery Chico $800K per year, to fund day-to-day operations and to open a San Francisco office.

- Meanwhile, revenues were down and the firm could not repay the debt or pay its rent.

- 40% of the firm's $31 million in receivables was over six months old, meaning it was likely uncollectible.

On July 1 when the firm voted to dissolve, it came as a shock to partners and staff. The staff was left out in the cold; they got no advance notice and were given their last paychecks on June 30, and no severance pay.

For the story, see:

Altheimer practices questioned

Partners now wonder about firm's management

http://www.chicagotribune.com/business/chi-0307200253jul20,1,1864607.story

LawMarketing Blogby Larry Bodine