Make More Rain : hr, policies/ procedures

Law Firms Pass On Arbitration In Employment Disputes

Admin — Fri, 04 Apr 2008 07:00:36 GMT

In an article for the upcoming issue of the National Law Journal (NLJ) posted yesterday on their site, law firms are not taking their own advice when it comes to arbitration clauses in employment disputes.

Is this a case of what's good for the goose isn't good for the gander? Why would arbitration be a good idea for other businesses but not good for law firms? The answer brings into question the utility of arbitration.

The arguments for arbitration come from those who have been burned in litigation. Litigation can have you sitting in front of a jury that likely has no experience in the subject matter at hand and may in fact have motives other than the subject matter at hand to deliver a large award to a plaintiff. Arbitrators, on the other hand, are picked from within the industry from which the dispute arises and ostensibly provide a more fair, though equally binding, resolution at less cost than litigation. Where litigation can hinge on perception, arbitration decisions are meant to be grounded in experience-laden fact.

According to the NLJ story, however, only 10% of 200 law firm respondents to a 2003 survey had "mandatory arbitration in place". I assume this means that equity partners were bound by it through the partner agreement and that other employees were bound by it as a condition of employment, though it isn't specified in the article. One reason cited is that arbitration clauses may have a detrimental effect on the workplace. Said a partner with DLA Piper, "Your attorneys can perceive that you are materially changing their position vis-a-vis the firm and attempting to circumscribe the rights they might otherwise have."

I believe that statement holds true to any situation where arbitration exists, not just when applicable to law firms. Any other reason to not have them? The article paraphrased a partner in the New York office of Greenberg Traurig, writing "Arbitration [] no longer offers the benefits of a speedier, cheaper resolution, as proceedings have become bogged down in discovery and quasi-motion work that mirrors litigation."

If that is truly the case, then arbitration has a gloomy future indeed, and not just with law firms. I brought up the article to an attorney I know who defends clients in arbitration and he told me some of his concerns with it:

Arbitration has become very inefficient, with no control over evidence admission (ie, evidence can come in at any time);
The arbitrators do not have the same fear of appeal that judges do and thus are unafraid to ignore precedent;
The quality of arbitrators has declined.

This indicates some serious problems with the arbitation system for dispute resolution. As the attorney I spoke with said, "Our clients used arbitration to get away from runaway juries. Now they are going back to the courts to get away from runaway arbitrators".

We have begun taking submissions for the 2008 Law Firm Economic Survey. If your firm is interested in participating, please contact Brian by clicking here.

9 "Sure Bets For The Future" Attorneys Should Watch

Admin — Thu, 03 Apr 2008 07:00:20 GMT

Nothing in the future is certain, except taxes, death, and that the world will implode from global warming or some other threat that replaces it. That notwithstanding, Harvard Business Online is boldly proclaiming 9 "sure bets for the future":

1. The Almighty Dollar will share its throne with an Omnipotent Euro.
2. Some currently unregulated financial markets won’t stay that way.
3. Energy will cost a lot. All businesses will have to operate under some form of carbon constraint.
4. China’s and India’s share of world markets will grow. A group of 100-million-population countries, like Turkey and Mexico, will grow faster.
5. Spanish and Arabic will become more important business languages
6. Multiculturalism and multiracialism will reshape cultural identity in both the U.S. and Europe. The Plato-to-Nato story will no longer define America’s manifest destiny, if any.
7. Even as intellectual property becomes more valuable, IP rights will erode.
8. Creative business people will invent new frauds.
9. The aftershocks of the Internet Big Bang will continue. Media will converge. Prices will fall. Devices will proliferate. Profits will be redistributed more often than cards on boys’ night out.

Particularly important, if they come to fruition, are those "bets" dealing with regulation, energy costs, business languages, IP rights, and the deflation of the internet economy.

Regulations (typically poorly drafted whether intentionally or not) are treasure troves for litigation and thus opportunity;
Rising energy costs will impact profits, but again, will be opportunity for those who specialize in related areas of law;
Business languages will impact costs of doing business and what markets you target;
IP rights erosion will impact that area of law;
Technology deflation will benefit firms who invest in it.

Read more here: Nine Sure Bets For The Future

We have begun taking submissions for the 2008 Law Firm Economic Survey. If your firm is interested in participating, please contact Brian by clicking here.

Pirates within the Law Firm

Admin — Thu, 16 Mar 2006 17:53:49 GMT

A couple of weeks ago I was meeting with a young professional. When I prepared to leave, he offered me a CD—a copy of a new release by an artist we both like. He explained that his firm had a CD burner and when he or some of the other associates purchased a new CD, they made copies and shared them.

I had just finished reading a short piece in the March 2006 Harvard Business Review titled Pirates Inside by Leigh Buchannan, a former senior editor at HBR. The above incident was anecdotal evidence that Buchannan’s comments were right on target. His warning was “…while organizations turn a fierce antipiracy face to the world, many of their employees are blithely downloading or swapping files illegally—and doing it at work.”

My livelihood came from intellectual property—software. Being a Nashville resident with friends in the music business, I understand the personal impact of piracy on the artist.

Consider for a moment the likely reaction of the law firm’s clients if they look to your firm as a partner in their fight against violations of proprietary intellectual property rights, but later they discover that that the law firm is manufacturing pirated works. If software is involved, the law firm could be opening itself up to fines of $150,000 for each unlawful use. By now, everyone is aware of the aggressive suits filed by the music industry targeted at the owners of computers downloading or swapping files illegally.

This problem faced by law firms and other organizations reflects erosion in respect for intellectual property rights. This is especially true among members of “Generation Y” who grew up with a no-holds-barred internet. The Business Software Alliance reports that two-thirds of college students think it is okay to copy, download, and swap copyrighted works.

As managing partner, this is an issue that you dare not ignore. To protect the firm and its partners from liability and damaging publicity, the firm needs to establish and publish a policy against use of any firm equipment or facilities in violation of the intellectual property rights of others. Specifically, the policy should state that except for “fair use”, copyrighted materials should not be copied and distributed to others. Downloading and swapping of copyright files is prohibited. Duplicating copyrighted software, except for vendor-allowed purposes, is unlawful. Using unlicensed copyrighted software is likewise prohibited. The policy should state that considering the ethical and professional expectations regarding the conduct of an attorney, violation of intellectual property rights by employees and member of the law firm (even if occurring away from the office and without use of firm equipment) could lead to termination.

The issue doesn’t stop with the law firm’s internal policies. Bringing this issue to the attention of clients and prospects is an opportunity for the law firm to add value to it relationship with both. Assisting a client in the development of an antipiracy policy and providing services in connection with compliance is a business opportunity for the law firm.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Lateral Movement Due to Work Environment and Work/Life Balance Issues

Admin — Wed, 15 Mar 2006 18:53:21 GMT

While work/life issues were last on the list of the top five reasons for lateral moves among law professionals, these issues are closely related to work environment issues which also ranked in the top five reasons. Work environment was the third highest reason for lateral moves among women.

Work environment issues include the physical aspects of the office. Does the firm maintain a professional environment and provide legal professionals and staff with the appropriate tools, resources and technology? This category also includes the physical location of the firm. Is it in a high crime area? Is the location an accessible one easily reached by the firm's team members? It also involves the culture of the firm, including its core beliefs and how partners and associates relate to one another. Confrontational, political, and competitive environments score low, while cooperative, encouraging, and friendly environments are the attractive work places.

The biggest operating cost and most valuable asset of a law firm is its people. Everything else is chump change. Do not pinch pennies when it comes to the firm’s facilities and tools. Protect the firm’s investment by being concerned for the care and well-being of its team. Make common courtesy a job requirement for all, including partners. Be intolerant of anyone and anything that creates a hostile or less than welcoming environment.

Some firms are catering to those who place work/life issues high on their priority list. When a firm can do so, it benefits from the services of talented professionals who, because of lifestyle or choice, place personal and family requirements ahead of the job demands for frontline legal professionals. Not all firms have the mix of business and depth of staff to accommodate work/life concerns. Those that can’t, or won’t, will lose talent to those who can.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

An Environment that Attracts and Retains Legal Professionals

Admin — Tue, 14 Mar 2006 18:33:07 GMT

Without the right environment, the attorneys currently in your law firm can become the lateral hires of the firm next door.

The same working environment that fosters retention of a firm’s legal professionals is also the one that attracts lateral candidates. The main reason laterals move among law firms is because they are disappointed with their own self-development. That bit of knowledge can make your firm an effective competitor for top legal talent.

The working attorney’s role is not enough to retain talented legal professionals. The attorney needs to feel that the firm is investing in his/her preparation to become a well-rounded member of the firm’s leadership. It is more than professional development; it should not be limited to their expanding legal knowledge and experience. It should include learning the business side of the law firm—it is the assimilation process taking an individual from newcomer status to that of an insider/part of the team. It is the conversion process from “just being on the bus” to driving the bus.

How does a firm create such an environment? You start by making professional development a main event for the firm with a holistic approach. Like anything worth doing, it takes planning, organization, delegation, goal setting, measurement and personal accountability if it is to work.

Start by developing a model development track, a checklist or plan for associates based on yearly benchmarks. Those tracks become an extraordinary recruiting tool for the firm.

The standard development tracks should, however, be individualized as needed for each member of the team. Assign responsibility to make sure that each member of the team has the time and opportunity to complete each year’s development track. Put systems in place to measure progress and identify deviations in time to take corrective action.

In addition to continuing legal education, development tracks should include training in leadership skills, relationship development, communications and presentation skills, sales and marketing, and technology. Over the first five years, development tracks should involve the legal professional in all aspects of law firm operations—dealing face to face with clients, taking responsibility as the primary contact for selected clients, participating in business development activities, building their own book of business, functioning as the supervising attorney, handling billing and collection responsibilities, performing new client intakes, participating in decision-making committees, reviewing financial reports (including productivity, work in process and fees receivables), performing management functions related to those reports, gaining an understanding of the financial aspects of a law firm, etc.

A small but increasing number of firms are hiring external coaches to work with their developing associates. Other firms pair associates with partner coaches and mentors. Where the internal approach is used, the compensation and evaluation of responsible partners should include an element related to the completed development activity and progress of their assigned associates.

Legal professionals who are actively growing from year to year both professionally and as law firm businessmen and women are far more likely to become the new generation of leaders in your law firm rather than someone else’s new lateral hire. Development means operating a “finishing school” that will enable a relatively young associate to become a well-rounded professional member of the firm’s leadership.

Moving Beyond Eat-What-You-Kill Compensation Plans

Admin — Mon, 13 Mar 2006 18:32:00 GMT

I received the following e-mail from one of the morepartnerincome.com readers:

“I find many of your comments informative and thought-provoking. In your recent discourse on ways to Increase Partner Income you made two suggestions which involved a firm's compensation plan: ‘Change the firm's compensation plan to favor supervision over working credit,’ and ’Modify compensation plans to increase rainmaking and handing off work.’ Both of these suggestions seem excellent, but I am not aware of any compensation plans which foster these goals, and I would greatly appreciate some examples.”

Some mature law firms have shifted away from purely objective compensation plans to subjective models. The advantage is increased flexibility and a compensation plan that can focus on individual performance in relation to the current goals and objectives of the firm. More weight, for example, can be given to rainmaking if a firm is in a growth mode or recovering from client losses. The following table illustrates a subjective plan based on a compensation committee’s judgment. In the example illustrated, partners are evaluated in a number of areas other than their own personal production. The example firm believes that partners should achieve a hygienic production level but not exhaust their available capacity as working attorneys. Partners need to reserve some time for business and talent development. After all the scores are tallied, points are adjusted for personal production. In this example, a partner gives up 20 percent of their “share” of income distribution if they fall below 1500 hours. Partners who go above 1700 hours only increase their share of income by 10 percent. This is just one of many possible flexible scoring approaches that can be adopted when a firm moves away from a purely number-driven compensation approach.

Evaluation Scores for Income Distribution
		Evaluation Score for each Partner
Performance Area	Maximum Score	AAA	BBB	CCC	DDD	EEE	TOTAL
Rainmaking	20	20	18	5	8	15	66
Cross-selling	20	18	18	0	8	15	59
Client Satisfaction	20	18	15	18	15	18	84
Community visibility	10	8	10	0	3	8	29
Billing and Collection-WIP and AR Performance	20	12	10	10	10	15	57
Work Hand-off: Delegation and Utilization	20	18	20	5	5	18	66
Self-development	15	10	5	10	10	10	45
Staff Development	20	10	5	0	10	15	40
Policy Adherence	10	1	5	10	8	5	29
Technical Skills	10	10	3	10	6	5	34
Knowledge Sharing	10	8	5	8	6	5	32
Total	175	133	114	76	89	129	541
Productivity Adjustment		100%	80%	110%	110%	100%
Adjusted Points		133.0	91.2	83.6	97.9	129.0	534.7
Percent of Distribution		24.9%	17.1%	15.6%	18.3%	24.1%	100.0%

Productivity Adjustment:
Less than 1500 hours	80%
1500 hours to 1700 hours	100%
Above 1700 hours	110%

For the firm that prefers a number-driven objective system, some of the weight can still be shifted away from personal production to rainmaking, cross-selling, work hand-off and mentoring, if desired. Another method is to combine the objective and subjective approach by introducing a bonus mechanism tied to individually assigned goals, including business development and work hand-off. For example, consider the following approach:

Sample Compensation Formula

Under the compensation formula, each partner earns points and 80 percent of profits of the firm after all expenses other than partner composition are distributed pro-rata based on each partner’s percentage of the aggregate points. The remaining 20 percent is distributed based on the compensation committee’s evaluation of partner performance against goals and objectives assigned to each partner. There is no guarantee that a particular partner will receive a distribution under the bonus portion of the plan, and to keep distributions meaningful, distributions are to be made in amounts of $5,000 or more. In order to fund the required distributions, additional capital contributions may be required from the partners as determined by a vote of the partners. Points would be accumulated as follows:

· Origination points equal 20 percent of the dollars collected where the partner is the originating attorney.

· Billing Attorney points equal to 30 percent of the dollars collected where the partner is the billing attorney.

· Working Attorney points equal 50 percent of the fees collected for the personal production of the partner as working attorney on any client/matter, regardless of who is the originating or billing attorney.

o The partners may vote to provide certain partners with a firm account which they can charge for work spent on firm management responsibilities (subject to a maximum number of hours) for which the partner receives working attorney credit.

· The remaining 20 percent of firm income shall be distributed as a bonus based on subjective evaluation of individual performance against assigned personal goals as determined by the compensation committee. Goals may include such factors as:

o Rainmaking and Cross-selling

o Client Satisfaction

o Community and professional visibility

o WIP and AR management

o Delegation, utilization, work hand-off and knowledge sharing

o Staff Development and mentoring

o Self-development

o Use of technology

o Policy and procedure support and adherence

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Selection Process for Laterals

Admin — Fri, 10 Mar 2006 19:56:47 GMT

There are a number of studies that address issues surrounding lateral movement among law firms. Two important sources includeNALP, the National Association for Law Placement, and IOMA, the Institute of Management & Administration.

A NALP foundation survey looked into the issue of why laterals leave and what makes them stay. For managing partners, the important finding is that laterals don’t leave or stay for compensation reasons. At least compensation is not at the top of their list. This finding agrees with IOMA’s report that as far back as 1997, surveys indicated that higher compensation was one of the least important factors in getting lawyers to switch firms. What is number one on their list? It is something that midsized firms are equipped to deliver. It is professional development.

Midsized firms are in an excellent position to give lawyers exiting the mega firms what they are looking. The problem is two out of three lateral additions are turning out badly. Laterals represent a significant source of work-experienced lawyers and, unfortunately, most of the time midsized law firms are not successfully taking advantage of the resource. What is going wrong?

It all comes back to the selection process. It is easy to determine if a candidate has the needed qualifications. When you hire, you have confidence that they “can do the job.” The unknown is “will they” in “this environment” with “these people.”

IOMA points to these mistakes in the selection process:

The firm relies on the word of a partner that a prospect is a “good catch” and skip normal due diligence. It usually takes 18 to 24 months to move a bad addition out of the firm. Hiring is too important to skip the basics. Partners need to agree on a regimen of steps that must be taken prior to offering a candidate a position with the firm.
Making room for a good catch. No matter how good a candidate appears to be, adding a new lateral places stresses on the organization. Hire only for pre-defined economic and/or strategic reasons.
Not doing adequate due diligence regarding the lateral’s expectation of bringing clients with him/her. The mobility of clients is almost always overstated leading to disappointment among firm partners and a drop in expected compensation for the lateral.

Successful addition of laterals is all about the screening process. The former President Reagan’s mantra, “Trust but verify,” fits the selection process well:

Verify whether the candidate really has the credentials reported
Confirm the experience listed on his/her resume.
Understand his/her reasons for leaving the existing firm
Check with his/her clients and personal references.
Check with people that haven’t been listed as references that you think should have been listed on their resume
Do a thorough conflicts check
Check for complaints, insurance claims, and past investigations of the candidate or former partners.
Determine the candidate’s financial status and perform a credit history check.
Identify all of the clients the candidate has worked on, the type of work done, the billing arrangement, the primary client contact, and who at the former firm was the attorney in charge
Review a multi-year history of billed hours, collected fees, billing rate, write offs and adjustments.
Is the lateral bringing in additional staff? You must consider each as you would if hiring any new professional employee or staff

You must thoroughly understand the candidate’s current compensation arrangement and level of compensation for a multiple year period. Also, the candidate must clearly understand and agree with the compensation arrangement that will apply following their addition to the firm.

A lateral with a book of business is a small acquisition; treat it as such. Laterals bring their baggage as well as their book of business with them.

The step most often omitted by midsized law firms is testing the candidate in an effort to determine if the individual possesses the characteristics and personality traits that are likely to make them a success in the interviewing law firm. You should test all candidates using a professional testing service or using tools like the Meyer-Briggs typology test (available on the web) in an effort to determine if the individual “will do the job in your environment with your people”. If, like most firms, success in business development is a requisite skill, your test should also be targeted to determine the presence of personality traits conducive to relationship building and business development.

IOMA published the “Complete Guide to Lateral Hiring & Integration Best Practices for Law Firm Leaders” in 2005 containing case studies of actual practices in place at selected firms. It also includes an appendix containing the Lateral Recruitment and Due Diligence Checklist used by Sullivan & Worcester, LLP when pursuing a lateral addition at the partner level. Page 44 of the guide includes a test used by some firms for evaluating whether a candidate will make a good fit for their firm. Pages 48 and 49 include critical interview questions as well as a reminder of the questions you should never ask. For the firm without a track record for successfully recruiting and assimilating laterals, the publication is well worth its $299 cost. Another source that warrants your interest is the numerous articles written by Joel A. Rose of Joel A. Rose & Associate, http://www.joelarose.com and particularly his article titled A Primer on Due Diligence for Acquiring / Merging with Lateral Hires.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Recruiting: Can They, Will They, Do the Job in Our Environment with Our People

Admin — Thu, 09 Mar 2006 19:13:00 GMT

I previously posted concepts that involved individual achievement, and the post was received with its share of critics. Some were looking for motivational concepts and didn’t find what they were hoping for. Concepts like “Pros Play Hurt” convey expectations for excellence rather than provide inspiration. It takes both inspiration from the top and individual accountability among team members to forge a truly great organization. Great leaders understand what best ignites the passions of its people but they start with the best materials, outstanding team members.

The notion that what we are is determined through the eyes of those who judge us isn’t always a welcome concept, nor is the opportunity wedge. While people can always make decisions to expand the opportunities available to them, the failure to make such decisions has the opposite effect of denying to the individual those would-be opportunities. These are basic notions of personal accountability. Some people believe in life’s great lottery rather than the concept that we are accountable for and the product of our own decisions and actions. Does luck play a role in life? Are some of us born with superior abilities or advantages? Sure, but never forget that “chance favors the prepared mind.” You can possess a great talent and have enjoyed great advantages without benefiting from them in the end. There are inspiring stories of those who have overcome adversities to achieve great things in the eyes of others.

Morepartnerincome.com takes the perspective of law firm owners, not that of associates or non-owner employees in the law firm. Those associates and employees are the key to the firm’s success. As Jim Collins says, “first get the right people on the bus.” Mentoring of associates is an important asset-building function, and it should include an approach that encourages motivation aligned with the organization’s objectives. Mentoring is team building. It is cultivating the future partners or leaders of the firm. But law firms are only a finishing school. The finishing process starts by hiring people who have the training and knowledge to do the job. They have to have within themselves the motivational drive to do the job. Business recruiting is about playing the odds that new additions will be a success. You want to hire people who “can and will do the job in your environment with your people.” The difficult part of this hiring process is determining the “will they” part.

Everyone is motivated. They are not, however, all motivated the same way or for the same thing. There are seven life choices among which a law firm’s team member can allocate their energy and time: job, family, religion, civic activities, health, recreation and self-development. Each of those choices competes against all others. How an individual chooses to allocate their time depends on their individual values. Firms that make the “best place to work” list tend to be those that are most accommodating to individual goals. But even among the most accommodating there are limits. It is usually the failure of law firm management (or the inability of the firm in pursuit of its own objectives) to accept an individual’s unique priority of values that results in demotivation and eventual separation from the firm. Harmony has to exist between the superior “goals” of the firm and the secondary “goals” of the individual.

Every individual has their own pattern of strengths and weaknesses, and each allocates his/her interest differently among the seven life choices. No sound law firm is looking for a team of stepford people. Strength comes from diversity of personalities. But when you net it all out, the individual’s pattern of strengths and weaknesses and their individual goals must come together in such a way as to make them a positive contributor to the organizational goals of the law firm. Individuals with behaviors that send them off in a different direction from the firm, that endanger the firm, or that obstruct the success of others should go elsewhere.

This brings us to the issue of hiring professionals--recruiting at both association and lateral level. What separates a sound addition from a bad one is the individual—the candidate. The facts are that 60% of lateral additions usually turn out badly. Truth be told, most law firms do not have any better batting average in the selection of new graduates. It usually takes 18 to 24 months to move a mistake out of the organization. Hiring failures are costly and they are distractions to other members of the professional team and to the pursuit of the organization’s goals.

Many commercial organizations hiring at compensation levels equivalent to that of a new associate or an experience lateral use professional testing services. They use testing to identify the personality traits of candidates in an effort to determine if they have the motivational drive to meet the “will they” test. Likewise, testing before hiring can increase the odds that your selection will meet the “with our people in our environment” test. Professional skills are the easiest to determine, and they will not assure that a candidate will be a successful addition to your law firm team. You start by considering only those candidates with the requisite training and experience and then narrow your selection to those who “will do the job with your people in your environment.”

I contend that successful candidates will be the candidates who understood and accepted that they are always judged by others. They will be the candidates motivated to achieve excellence in the eyes of those who judge them, including the law firm’s clients.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com

Managing Partner Advocate

Admin — Wed, 08 Mar 2006 18:44:59 GMT

If you find www.morepartnerincome.com valuable, be sure you take advantage of the complimentary subscription to the companion publication Managing Partner Advocate. The hard copy Advocate is published four to six times annually and includes information tailored exclusively for Managing Partners.

The most recent issue includes a check list of best practices for increasing per partner income, a sample marketing plan for the individual attorney as well as articles dealing with leadership, law firm continuity and other law firm management topics.

To make sure that you receive every issue of this informative publication for managing partners, e-mail morepartnerincome@juris.com and include the following:

Firm Name:

Your Name and Title:

Mailing address:

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Laterals, Are They A Quick Fix?

Admin — Tue, 07 Mar 2006 18:38:51 GMT

Recently we were asked to provide advice to a young firm that was the product of a break off. The group had been a part of a law firm acquired by one of the mega firms. After a short time the group decided to separate and form their own partnership.

After a couple of years, per partner income was still well below the earnings level the partners had been used to prior to break off. Some of the partners felt that the solution was for the firm to add one or two laterals for a quick fix.

A review of the numbers quickly disclosed that the firm’s production or utilization was well below norms. The firm just didn’t have enough business for the resources on board including partners, associates and paralegals. Our advice to this particular firm was to stick it out a little longer without adding laterals.

The partners are engaged in the great American dream. They are investing “sweat equity”—sacrificing current income to build something of value. They are almost there. Given their capacity each new source of revenue drops to the per partner income line. The best solution is to continue to concentrate on building their book of business one client at a time. Yes, they need to kick business development up another notch but what they need most at this time in the life of the firm is a little more patience. They should forego “quick and easy fix” solutions, which are never that “easy” and seldom “fix” anything.

Based on the experience of others, it is unlikely that the lateral’s book of business will move in mass to the lateral’s new professional home. Overestimating client portability appears to be the standard rather than the exception. The very fact that this previously highly compensated group of partners now finds itself with inadequate income is one more confirmation of the tendency is to overestimate the amount of business that will follow an attorney. Second, lateral additions are small acquisitions. The addition of new personalities and the stresses of assimilation and integration are distracting to day to day business operations and can render a fatal blow to the firm especially one in the early fragile phases of its life.

Another “quick fix” alternative proposed by one of the existing partners is to reduce the firm’s professional staff including the number of partners. Doing so is a law firm’s equivalent of factory closings. It is a bad choice unless it becomes essential as a survival move.

Most of the time there is no such thing as an easy or quick fix. Success takes time and investment. In the case of a professional service business that investment often involves sacrificing immediate personal income for future benefit.

When are laterals the right thing to do? How do you find them? What are the risks involved? How do you make them a success? We will explore those questions and report on related best practices in some of my post over the next two weeks.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Client Feedback Programs for Law Firms

Admin — Mon, 06 Mar 2006 18:56:11 GMT

Guest author: John Remsen, Jr., jremsen@theremsengroup.com.

Many firms mistakenly assume that clients will automatically speak up when they have a complaint. Not so. All too often, the client just goes away without saying a word.

Asking clients for their feedback and responding to what they say will increase retention and be one of the firm’s most productive rainmaking endeavors. You will create a rapport with clients that makes them feel comfortable to raise valid concerns and constructive criticism. It gives the firm the opportunity to improve client satisfaction and build stronger and more loyal client relationships in the long term.

One size doesn’t fit all. The key to introducing a sustainable client feedback program is to find the right approach or combination of approaches that will work for your firm – given its practice, its goals, and its unique firm culture. Firms I have worked with successfully used different combinations of the following:

In-person Client Surveys: A series of formal, face-to-face meetings with selected clients conducted by an experienced, independent third party (or at minimum conducted by an alternative partner). The information gathered is rich in content and it’s astounding how candid clients can be when talking to an outsider.

Client Satisfaction Surveys: A mass-mailed questionnaire to a representative sample of clients. Good to gather information on a discrete topic, but might be perceived as impersonal to your most important clients. For higher response rates, use a short questionnaire and include a self-addressed stamped envelope. For an example of a successful questionnaire see the attachment to the earlier post on morepartnerincome.com, Client Satisfaction Questionnaire.

Post Engagement Questionnaires: A post engagement questionnaire at the conclusion of a matter. Post engagement questionnaires are particularly good for consumer-oriented law firms. Here again, keep the questionnaire short, with a mix of open-ended and “rate us on a 1-10 scale”-type questions like those in the attachment referenced above. Keep in mind that four out of every five consumer clients select their law firm based on recommendations from others.

Client Site Visits: A non-billable visit with the client. Best for ongoing business clients, this program involves lawyers visiting clients at their places of business. The lawyer should be clear on the purpose of his/her visit. Objectives might include learning more about the client’s business, thanking the client for previous work and showing that you genuinely care. Such visits are extremely effective and very natural for the profession’s best rainmakers. There is no better way to build rapport and better understand your clients’ goals and objectives.

Informal Attorney/Client Interactions: A relationship building event. These can happen almost anywhere…. over lunch, at the conclusion of a business meeting or on the golf course. The point is for the lawyer to ask, “How are we doing?” Or, better yet, “Is there anything we can do to make your life easier?” And then, respond as appropriate.

To implement a successful program there are two essential considerations. First you must respond to what clients are telling you. If the firm and its lawyers ask for client feedback and are not willing or prepared to act on what they learn, it’s better not to ask at all. Second, if it isn’t measured, it isn’t important. No program will succeed without measurement and accountability—set targets, measure performance and hold people accountable!

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About the author: John Remsen is the principal of The Remsen Group, a marketing consulting firm that works exclusively with law firms.

Dashboards: Flying the Law Firm by Instruments

Admin — Fri, 03 Mar 2006 19:47:29 GMT

Forget reports. Today’s pace is too fast for yesterday’s news. Business Week Online let out the secret being used by major corporate CEOs to guide their business. The February 13th article reported that major corporate leaders are relying on “Dashboard” technology. The Business Week article said “dashboards pull up everything the CEO needs to run the show.” Corporate executives have learned to focus on key performance indicators that measure the direction of movement and speed of movement for their organization. Dashboards quickly point out areas that need the executive’s attention.

Dashboards provide situational awareness and couple that with drill-down capability for actionable information. The technology has given these executives the tools to change the outcome rather than just analyze, after the fact, what has happened.

Dashboards are starting to show up in Law Office Business Software suites like the Juris® system. They fit the “part-time management” style of law firms perfectly. Law firm managing partners split their attention between lawyering and managing. They don’t have time to dig through last month’s reports. They need information current as to the moment in a form that is instantly digestible. That information needs to be actionable—it should imply the corrective action needed and clearly point to the cause of the deviation from target or norms.

Successful executives understand and focus on the key performance indicators that drive their business. Dashboards are the new instruments for keeping the law firm on track. Dashboard views can be customized to provide an individualized field-of-view over the legal professional’s area of responsibility.

To ditch out-of-date reports and start flying by instruments contact your business software vendor for an update on dashboard plans or availability. Juris law firms can call 877/377-3740 or e-mail sales@juris.com for more information about MyJuris, the dashboard portion of the Juris software suite.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Competitive Advantage in the How Zone

Admin — Thu, 02 Mar 2006 19:31:53 GMT

In a previous post I discussed the importance of narrowly defining a law firm’s market in order to achieve a dominant market position and the resulting competitive advantage.

But what about the existing mid-sized law firm that does not have a nitch market but has survived over time, often growing with their community, to achieve a substantial stable of clients? The firm may owe its early success to an extroverted founder well entrenched in the community—with business leaders, political power makers and the social in-crowd. The firm’s mission statement is typically the closest thing to mother and apple pie:

To be the best,
With the best people, and
Provide unmatched client service

Does this existing firm have to change the generalist nature of its business and narrow its focus to secure a competitive advantage? It certainly would help secure their future to concentrate growth efforts on just a few areas where they have already developed a particular strength or reputation. However, they already have a community leadership position. They have the opportunity to secure a competitive advantage in the “How” zone.

By deciding that they will differentiate the firm by “how” it carries out the business of providing services to customers, the firm can establish its unique character. To pursue a “how” strategy, the firm mission would become:

To follow the “best” practices
To have the “best” environment and workplace culture for attracting and retaining outstanding talent
To implement and observe the “best” client services standards

The emphasis shifts from “what” to “how”. “How” a firm operates can provide a powerful competitive advantage. Unfortunately, securing and maintaining a “how” advantage appears to be harder that securing an advantage through what you do, since so few firms have actually done it.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.