Law firms today and in the future must deal with a shifting legal services market that makes succession a more formidable task.  Succession is not simply finding a way to deliver the gold watch with dignity and promoting firm-wide acclamation for the new leader.  No, it is a lot more as recent reports and analyses affirm.

The Altman Weil 2015 Law Firm in Transition Survey noted that while revenue is up for 2015, demand growth for legal services generally is down.  Citi Private Bank Law Firm Group’s 2015 third quarter report had a similar take on law firm demand growth, observing a downturn in demand as compared to the same period of 2014.  Although the AW and Citi surveys present just a snapshot of the industries’ year-to-year performance, they address trends the industry is seeing.  The AW and Citi studies should make law firm leadership think about the future.

One law firm leader that has done just that is Seyfarth Shaw LLP’s Stephen Poor.  As he writes in his Amid Mounting Pressure, Law Firms Must Change; Mr. Poor thinks the AW and Citi reports indicate that Big Law is in the throes of structural change.  This change, Mr. Poor suggests, is fundamental.  While he does not expressly say so, it is reasonable to conclude that any fundamental change experienced today won’t end in 2015-it is destined to continue and evolve long into the future.

If Big Law and the relevant market forces are in a state of change, how is succession at law firms impacted?  For one, simply having a system or culture that transitions leadership smoothly to the next generation will not be enough.  If the coming changes alter the fundamentals on which law firms will operate, future leadership will face new challenges they must be prepared to confront.  But how?

Understanding how to manage through change is a start.  And while it can be a fool’s errand to try to predict the future, enough is known to offer five management principles that can help future leaders tackle the change they may see:

Leadership Must Be More Strategic.  For the health of the firm today and for the benefit of future leadership, the firm’s strategic thinking needs to recognize that past tactics, as trusted as they may have been, may be outdated.  Because service, value and judgment never lose their luster, strategic thinking must be unyielding in finding new tactics that will deliver those three indicia of success.

Growth and Sound Strategy May Not Be the Same.  Mr. Poor provocatively asks whether growth by merger and acquisition is the panacea some firms seem to think it is.  Growth makes firms bigger, but not always better.  In the future, growth as a strategic solution should be questioned if is viewed as an initiative and not an outcome.

A Need for Lawyers May Decline.  If demand growth is falling as AW and Citi reported, it could be that demand itself will go down in the future.  Couple that possibility with how technology could reduce the role lawyers play in the delivery of legal services, and the number of lawyers a law firm needs may drop.  Accept that as a possibility and be prepared to respond.

Success Will Depend on Innovation.  Just as the firm’s strategic plan should not assume that the “old way” is the “best way,” today’s leadership and that which follows must be innovative.  More and more general counsel approach legal services in new ways and will be looking for outside counsel to do likewise.  If your client is asking you to do something innovative that was its idea, you are simply a follower.  For tomorrow’s client, that is not impressive.

Demographics Will Change.  Over the last 40 years demographics at law firms have changed.  For most law firms, the “triangle” is gone.  Today’s geometric shape depicting the make-up of the firm’s workforce will change yet again.  Doing things like incurring long-term obligations when demographics could change even more may create burdens that in later years you’d much rather not have.

While much of the coming changes will be addressed by a law firm’s next generation, preparing future leadership to handle fundamental change is the responsibility of current leadership.  Teaching the management principles needed to address the coming change are key elements to a good succession plan.  As your firm addresses succession, are you engaged in that kind of forward thinking and teaching?

Every single business, if it is around long enough, will face a time of crisis. Law firms are no exception.

Whether a series or a single event, crisis comes with a handful of pivotal moments. Mishandled, these moments can threaten the very existence of any organization.

If you’re managing a law firm you know that crisis moments are no respecter of size, history, or even the almighty Profits Per Partner metric.

Law firm crisis often sneaks up on you, emanating from any one or a combination of developments, including:

  • Loss of key client(s)
  • Loss of key lawyers(s)
  • Loss of the ability to borrow
  • Litigation against the firm (which mismanaged can precipitate the previous three)

The historical landscape of the legal profession is littered with firms that, facing crisis, were unable to navigate the unfamiliar waters . . . and are no longer with us. You know the names; and if you’re like me, the list still sounds surreal. Heenan Blaikie, Bingham McCutchen and the infamous Dewey Leboeuf.

These names captured our attention in large part because of their size and notoriety; but there are hundreds of other examples — less known, smaller firms that have suffered the same fate.

The truth is that some level of crisis is virtually inevitable — either as a result of management missteps or external influences. Doesn’t it make business sense for law firm leadership to proactively identify what can be done to maximize the probability of survival?

Like so many other things, preparation is the key to success. And though preparing for an unknown and unseen crisis may not be on the priority list for most law firm leaders, it should be on the list of all.

What Preparation Looks Like

The first step to proactive management of those moments that turn into a crisis is to have thought through who will be responsible for critical tasks — at least in general terms.

Here is an outline of key considerations as you consider taking steps today that will help you manage crisis in a way that minimizes the possibility of firm closure.

  1. Recognize that you have multiple audiences. Whether a crisis plan is in place or not, the law firm leader must recognize that there are three key audiences for any action taken.
  • Internal (all lawyers and staff personnel), the audience closest to and most impacted by the crisis;
  • Clients, who want to know first hand the status of their advisor; and,
  • The public, which is always interested in a potential disaster.
  1. Engage key players – Whether you directly solicit their participation as members of the crisis swat team, key members of the firm (you know who they are) must feel like they are “in the know” and have direct and frequent access to leadership.
  2. Develop a plan – Response to the crisis deserves a prompt and carefully thought out plan. As addressed below, plan development almost always benefits from seasoned outside perspective.
  3. Communicate – A crisis needs a spokesperson — often the head of the firm — but the key is there should be one and only one voice. The rest of the firm should be aware that all inquiries are to be directed to that person for response. The spokesperson should communicate frequently with a confident, calm demeanor. Above all, communication should be honest. Don’t paint a negative picture. But don’t overstate expected outcomes. Unrealistic expectations are deadly.
  4. Seek outside help. Very few organizations are staffed with all the expertise necessary to plan for and execute a response to a crisis. This is not the time for learning on the job. When in doubt, reach out to external expertise that can help craft and guide the firm.

Has your firm thought through how it will respond to a crisis?

 

 

Law firm succession, whether leadership or client focused, has been an issue for law firms for a long time.  Recent articles written about the legal industry suggest that succession will be different if not more difficult in the future.

At the risk of waxing about the “good old days,” it is arguable that operating a law firm successfully today is not as easy as it once was.  And it is not likely to get easier in the future.  William Henderson, noted law school professor that writes extensively about law firms and their industry, recently commented about the traditional law firm business model and stated “[i]t’s getting harder to generate new business and to grow your top line revenue.  The historic, bill-by-the-hour matter, that business is on the decline, so there is really no risk-free strategy right now—the clients are building capacity in-house for the lower-level work, and litigation is …too expensive.”

Add to that a recent study conducted by Citi Private Bank which noted that a number of law firm leaders have expressed concerns about the state of the industry and economy.  Young people entering the legal field seems to be on the decline and the recent Bar exam results are at the lowest since 1988.  On top of that, the idea of replacing law firm associates, at least to some degree, with artificial intelligence is being discussed more and more.

The point is not to take Chicken Little’s place and declare the sky to be falling.  Rather, these developments-whether long term or not-suggest that succession planning will be different in the coming years.  It will be different, if not harder, because:

Advances in Technology Will Have a Greater Impact.  Technology advances will fashion a double-edged sword. Technology advances tend to make a law firm’s practice more efficient.  Savings from efficiency can be passed onto clients, result in higher profits and improve lawyers’ quality of life-all good things.  But technology also may allow clients to satisfy their legal needs in house or stimulate more competition.  For some law firms their business may become more short-term in nature and not something that demands extensive succession plans.

The Pool Will Be Smaller.  If fewer people are going to law school and fewer that go pass the Bar exam, the pool of qualified candidates to whom the baton is to be passed will be more shallow.  Planning for succession by drawing from a smaller and less qualified pool will make succession more challenging.

Well-run Firms Will Have the Best Chance at Succession.  In the future, law firms seeking success from a business point will have less room for error.  A well-run firm will not only enjoy its present, but will be better able to continue its legacy.  It will have more clients, be more profitable and have better talent-all things important in succession.  Preservation of firms that have uneven business practices will be far less common.  Succession for these firms may not be possible.

More Mergers Can Be Expected.  More and more law firms are dealing with succession by combining with another firm.  As the demographics evolve, “succession through merger” will continue to become more commonplace.

Because succession planning will not get easier, preparations must be initiated as soon as possible.  David Goener of Beaton Capital recommended in his Generational Change is Slow inLaw Firms that dialogue about succession begin 10 years before the transition is likely to occur.  He also recommends that detailed work on the succession process begin 5 years prior to the anticipated succession.  Are you ready for succession today?  With the industry changing all the time, will you be ready in the future?

When the subject is your internet service, bandwidth refers to how much information your provider will push to you in a specified period of time. Need more information faster? More bandwidth is as close as a bigger check.

But when we’re talking about a person’s total work capacity — how much information you can take in, how many issues you can juggle, how many meetings you can chair, the size of the checkbook rarely matters much.

For all of us, personal bandwidth is limited. We can’t buy more. It is not a renewable resource.

And as a law firm leader, how you choose to use yours is of critical importance.

If you’re leading a law firm today, this is inevitable: the almost infinite number of issues confronting an individual or leadership team on a daily basis will continually test the natural limits of bandwidth.

The choices made in allocating decision making resources will define how successful your leadership will be.

Here’s The Key

Bandwidth for the law firm leader is about prioritization and allocation. Effective leaders are those who are able to determine what is most important, allocate time to the most critical issues, and spend time on other matters only if there is time (or bandwidth) left over.

Every firm’s needs are different; but here is a list of a few areas that almost always belong on a list of priorities:

  • Stability and morale. A leader has to be in touch with the firm, addressing concerns, providing direction and encouragement. An allocation of time significant enough to provide genuine connection to the human capital of a firm is essential.
  • Client trust and confidence. Clients are obviously the lifeblood of any law firm. The prudent leader will monitor the firm’s critical client relationships, track retention rates, intercede when issues arise. Strategic client interview programs should be high on any priority list.
  • Fiscal condition. Regular (and realistic) assessment of the firm’s position is a must. The earlier financial challenges are identified the easier they are to address.
  • Performance. A system of regular performance monitoring is in the “tool kit” of all effective leaders. They are constantly aware of what the intended performance is, how performance is tracking to the intention and taking appropriate action to correct any issues.
  • Change initiatives. It is interesting that at first blush you would think one of the challenges is to find enough opportunities for change to respond to the market and its demands. Actually, in my experience, the opposite is true. There is never a shortage of good ideas regarding “what we should do.” The challenge presented to the effective law firm leader is to winnow down the multitude to the few ideas that provide the best opportunity to strengthen the firm. Biting off more than you can chew is a dead giveaway of a lack of focus. Attack what you can execute and monitor.

How does your leadership team manage its bandwidth?

Aric Press’ recent piece on lawyer retirement is excellent in identifying some of the subtle challenges for law firms dealing with Boomer departure.  Press’ Is it Time for You to Go, Joe? describes the difficult conversation faced by law firm leadership seeking to transition senior lawyers and their practices. Press goes on to observe five best practices among law firms facing the difficult conversation with the long-time contributor who needs to give way.  For any law firm facing that challenge, Press’ piece is required reading.

Preparing or planning for the difficult conversation is as important as having the conversation.  In today’s world of a large Boomer population recovering from the collapse of 2008, navigating succession dynamics with jumpy lawyers controlling business is no easy task.  Given that landscape, preparing for the conversation requires firms to consider some basics before approaching the Boomer about succession.

Timing is Everything.  Planning for succession should occur early.   But planning does not mean the conversation should be scheduled prior to careful thought on how the Boomer should be approached.  There is nothing worse than a non-strategic succession conversation spooking the Boomer into bolting to a perceived more welcome place.  For that reason, Press’ admonition to have the conversation early does not mean a spontaneous conversation just as the issue first gets on leadership’s radar.

Think About and Understand the Person.  Before having the difficult conversation, think about the person you are getting ready to speak to.  What is his or her personality?  What are his or her financial circumstances?  What kind of relationships does he or she have with clients?  What kind of relationships does he or she have with colleagues?  How profitable are his or her client relationships?  What is the track record with regards to lateral movement?

Be Flexible in Scheduling the Conversation.  If there has been adequate planning, the firm may have flexibility in scheduling the conversation for a time when the senior lawyer is likely to be most receptive.  If so, pick the right time.  Having the conversation when the attorney is on edge, feeling vulnerable or after the firm has received bad news is not preferable.

Pick the Right Messenger.  People trusted by the senior lawyer should lead the conversation.   Having the Boomer’s archenemy open the dialogue makes no sense.  Nor should the messenger be someone the Boomer does not know well.  A person respected by the Boomer and with whom he or she has a rapport is best.

The Tone of the Message Should Be One of Collaboration, not “Take It or Leave It.”   The most successful succession plans are ones that are jointly negotiated in which the needs and desires of the firm and Boomer are respectfully addressed.  Having a plan that is the product of negotiation is more likely to provide the motivators that spur the future conduct desired by both sides.  It takes time to collaborate over a succession plan, so a non-rushed “give and take” is a recipe for success and worth it for all concerned.

As Aric Press recounted in his Is it Time for You to Go, Joe?, few people relish initiating discussions about retirement with a respected colleague.  Typically it can be hard, a little emotional, and unsatisfying.  For that reason, great care is needed in planning the conversation long before it is had.  In our experience, the five basics discussed above serve firms well.  Are there others that you think are equally important?

Somewhere along the line the idea of being held accountable began to be viewed as punitive. Paying the price.

Certainly this is part of the equation; but accountability is a much greater concept than merely calling one (or a group) to account for decisions and deeds.

Today’s most effective leaders know this, and successfully incorporate accountability to check progress against guides and benchmarks.

Effective law firm leaders are no exception.

Not An Outside-In Proposition

Extraordinary leaders are, before contemplating any other measure, accountable to themselves.

It is unfortunately common for would-be leaders — those who hold-down positions of authority — to shy away from accepting responsibility for less-than-winning results. Many are skilled at deflecting or redirecting blame to others or even to circumstances. This approach can work in the short run; but the eventual cost comes in the form of lost credibility and trust. When the tab in these columns reaches a tipping point, any ability to lead is gone — position on the org chart or title notwithstanding.

I am not a Buffalo Bills or Rex Ryan fan but his conduct following a recent loss to the New England Patriots is reflective of a leader owning his team’s performance. In a post game interview, Ryan said “This loss is squarely on one man’s shoulders . . . It’s on my shoulders.”

This brand of accountability builds confidence, and inspires a sense that we’re in this together.

We’ve all witnessed the would-be leader. Accomplished in the art of deflecting responsibility when the news is bad and taking full credit when times are good. This individual’s calls for solidarity and partnership will eventually ring hollow. Few will follow.

Accountability For The Organization

The accountable executive has a clear vision of the steps necessary to ensure that the organization remains true to its purpose, mission, values and goals. When / if these components have not been articulated, the accountable leader has both the institutional equity and the tools necessary to instigate the necessary dialogue.

Accountability For Firm Members

 The effective leader builds and hones an entire organization that is accountable. Expectations for performance, culture and professional growth for every member of the organization are clear. With those expectations established and communicated, the accountable leader (or a team of accountable leaders) routinely monitors actual performance to those expectations, taking appropriate actions in response.

Inside the accountable firm, when expectations have been met or exceeded the performance is rewarded in a visible manner. If expectations are not met corrective action is taken in a humane and respectful manner.

Having a culture in which there is a recognized expectation that is routinely measured against is more important than what those expectations actually are. An organization whose leader ensures that goals are regularly set and measured against is on its way to improvement.

Accountable firms are the byproduct of teams and individual leaders who first hold themselves accountable.

Does your law firm and its leadership project a culture of accountability?

In a newly posted piece, Casey Sullivan‘s Law Firm Mergers Reach Highest Point in Nearly a Decade reports that 2016 is to be yet another record year for law firm mergers.   As the cascade of announcements show (as well as the Altman Weil research compiled in its Mergerline), merger as a law firm strategy has gained in popularity since the legal industry shakeout of a few years ago. Among many of the mergers are a number of smaller ones in which the size of the firms involved are less than 35 lawyers. The fact that merger is not just reserved for the bigger firms is evidence that firms across the size spectrum find the idea of combination compelling.  With merger being an idea that is not abating, is it time for your firm to merge? Before you answer “yes,” there are certain things to consider.

Deciding whether to combine law firms requires intense analysis. Besides the usual metrics of revenues, expenses, headcount, practice expansion and the like, law firm leaders face intangible issues, such as whether disparate practices can coexist, whether some clients’ incompatibility precludes their being served under one banner, or whether strong personalities can get along. These issues can be tough to resolve and it takes a great deal of work to sort through them successfully.

Other issues should not be so tough to assess. In fact, there are certain issues, danger signs if you will, that augur against any combination if they cannot be resolved with adequate certainty and confidence. If these danger signs surround the potential merger target, it may be time back away from merger or look for another candidate.

No Integration Plan Exists. One of the most difficult tasks in trying to make two law firms or practices come together successfully is how they will live together. Different systems, philosophies, core values and strategies can’t wait to be resolved later. If you don’t know how you will work out these issues, you should not combine. Even worse, if you have not taken the time to identify the issues, you are not close to being ready to combine.

The Firm Cultures Clash. Law firms often describe their culture in reverential tones that connote a gratefulness that it is not like other firms. The “other firm” likely feels the same way. No one firm culture is the best any more than one expensive golf putter is better than another. But understanding the cultures of the two firms walking down the isle is vitally important, and if you don’t know how the two cultures will mesh, turn around and walk back out of the church.

Prior Lateral Growth of Your Target Has Been Significant. If your target has grown recently through significant lateral acquisitions, be wary. Most laterals arrive with a book of business that is easily re-packaged and moved to another firm. If you are counting on a lot of that laterally acquired business staying, you may be disappointed.

Your Merger Target “Needs” to do the Deal. We all like a good deal-that is our nature. But if a potential combination candidate seems desperate to do a deal with you, there likely are fundamental problems under the surface that have put it in such straits. It is a little like buying a used car from the salesman that won’t let you leave the lot without making a deal. At the time of sale he knows something you don’t. Weeks later, when your clunker won’t start, you know.

Rate Structures and Practice Sophistication Are Dissimilar.  “Once we started talking, we were surprised at how similar our firms were.”  If the press release is not “merger-speak” and management of the two potential merger candidates truly believe such a statement because it is true, a merger may be beneficial.  But if the gulf between the two firms’ rate structures and practice sophistication is substantial, compatibility is suspect and integration issues will be significant.

There is too much at stake to combine law firms when danger signs about the combination are obvious. Common sense should steer you away from many combinations. For those possibilities that remain, in-depth analysis should provide the kind of guidance needed to avoid mistakes and make a successful combination possible.

What other reasons should cause you to walk away?

 

 

To merge, or not to merge? That is the question. More and more law firms face that issue these days. We often advise law firms facing that watershed possibility and take them from considering merger in the abstract to addressing its reality. But because roughly 50% of mergers reportedly fail, properly evaluating a potential merger is extremely important. A flawed analysis, a few undeserved assumptions or allowing momentum to overtake critical examination can doom a merger to failure. Conversely, a lack of confidence in a proposed merger because a systematic and thorough analysis was not performed can be a lost opportunity for both firms.

Numerous reasons propel firms towards merger but for many firms the business-altering step of merger is worth considering because (i) a new generation of leaders is not rising to the top, (ii) client needs dictate a broader platform, and/or (iii) financial or market dynamics augur for change. Getting from the step of being “receptive to merger ” to the step of “closing a merger” is a long process that requires careful and in-depth analysis. While due diligence, merger term negotiations, who is included and internal selling can occupy firm management for weeks if not months, in our experience, the analytics ultimately come down to five areas of compatibility. If compatibility exists, or reasonable measures can be taken over a finite period of time to reach compatibility, the merger has a much greater chance of success.

Cultural Compatibility. Culture is more than being comfortable with your new partners. Culture involves many things that you may take for granted, including employment arrangements and practices with legal and non-legal personnel. How one firm hires or fires an employee matters. Promotion practices, performance evaluations and decision-making processes say a lot. These everyday interactive things define a law firm’s DNA and its personality. Understanding the two personalities avoids a schizophrenic result.

Financial Compatibility. Seldom do two law firms display the exact same financial metrics. Firms with a wide gulf in metrics like profits per partner, revenue per lawyer, productivity per lawyer, capital, and realization are not likely to mesh. Metrics that are more closely aligned nonetheless need to be scrutinized to avoid a false positive based on apples being compared to oranges. Disparity in billing rates, firm debt, unfunded pension obligations and space utilization undermine financial compatibility.

Client Compatibility. Clients make a firm. Besides the all-important question of legal conflicts, a firm needs to know the philosophical and strategic approach of its betrothed to business conflicts, client profiles and the proposed billing rates. While it is easy to see the incompatibility of a law firm with a huge union clientele trying to merge with a firm that represents management, other more subtle problems can lurk beneath the surface and need to be studied. Clients that are “competing to the death’ may not see the benefit of being represented by the same firm.

Compensation Compatibility. The setting and paying of compensation is tough in any circumstance, but trying to blend two systems in which lawyer behavior is different at the respective firms due to motivations from the compensation systems is even tougher. Moreover, if one firm’s lawyers are used to being paid a larger draw every month than the other firm’s lawyers, something will have to give. An otherwise compelling merger may be saved with phasing in the two systems, or better yet, a new system that utilizes compatible best practices.

Operational Compatibility. No firm can succeed if it does not operate smoothly. Technology or other operational concerns need to be understood and dealt with up front lest they create undue frustration post merger. Not all these issues can be resolved as of the merger’s effective date, but understanding the issues, developing a plan for dealing with them and communicating about them and their planned resolution helps greatly.

Mergers can be risky, but they also can propel a firm to places not realistically possible if left to organic change. Digging deeply into the data and understanding compatibility in these five areas is critical to a successful merger.  What other compatibility metrics should be considered when contemplating merger?

Sara Randazzo’s recent How Can Law Firms Increase Revenue? Charge More reported about some law firms dealing with revenue demands by increasing the rates that they charge. Increasing rates, especially at a time when demand for legal services is tepid at best, seems counter-intuitive. But for some law firm leaders, the need to increase revenue overwhelms contrary logic and rates get raised.

Given today’s legal market, raising rates should raise eyebrows. Productivity at law firms is challenged, clients are pushing back on increased legal fees, more clients are bringing legal work in-house and alternative service providers are taking more market share.

Of course, to many law firm leaders the idea of raising rates is both tidy and familiar. In an industry where law firm success and confidence may turn on the most recent compensation round, making sure attorney compensation continues to rise is a paramount concern. Facing this pressure, the increasing of revenue almost always becomes a necessity. The reliable raising rate tool comes out of the toolbox, gets used and the short-term challenge is met.

Unfortunately, law firm health is not a short-term matter and the raising of rates offers few guarantees in the long-term. Besides being a crutch, it can be a lazy man’s misguided attempt at maintaining a law firm’s health. And as some clients evolve into being more like competitors than consumers, the need for clients to pay rates of any level, let alone rising ones, is reduced.

Planning for the long-term health of a law firm requires that leadership temper its reliance on the raising of rates and consider some new ideas. Admittedly, in implementing the new ideas rates may need to be raised as a bridge towards the implementation of long-term initiatives. But if leadership is looking for long-term health, it should think beyond raising rates and pursue other initiatives, including possibly:

Having Technology Play a Central Role in the Future. You can’t open a legal publication these days without reading about the critical role that technology will play in the future. Artificial intelligence, algorithm based communications, data analytics-all will supplant to some degree the labor-intensive activities on which today’s law firm model is based.

Moving Away from the Hourly Rate. The need to consider a different fee model is not simply based on a growing client discomfort with paying higher rates (especially for the junior to mid-level lawyers-a firm’s bread and butter as Martha Neil reports), but also because client demand for efficiency will make hours harder to come by.   Stout rates times a smaller number of hours does little to grow a revenue stream. Other means of charging for legal services responsive to clients will need to become the norm.

Thinking About Investing in Innovation. Transform the firm’s culture into one that constantly looks for ways to deliver legal services so valuable that clients will gladly pay. Except for the bet your company cases, many clients that pay legal fees view them as a necessary evil. Innovation can change that outlook and build greater relationships.

Rethinking the Personnel Model. Technology may reduce your personnel needs and with it your personnel costs. The growing free-lance economy may make it possible to minimize the financial burden of the large workforce that is taken for granted today.

Rethinking Overhead. Few firms aren’t willing to cut costs. If a firm works hard at the four transformative steps above, it may find that its overhead is reduced. Even if less lease space and personnel costs are offset by increased investment in technology or other innovations, the value added may prove more tangible to clients than unproductive empty offices and employees currently covered by the rates they pay.

Some firms have no choice but to raise rates in order to meet revenue targets. That can be a bad place to be. With client expectations and innovation making inroads on the industry financial model, long-term thinking must not be forgotten as rates are raised. If your firm raised its rates this year, was it simultaneously working on long-term initiatives that would reduce future reliance on the raising of rates?

 

 

I am very pleased that Eric Fletcher has agreed to provide this insightful guest post. Eric is an extraordinary law firm marketing professional who leads marketing and BD at Liskow & Lewis, is the author of the Marketing Brain Fodder blog, and is the co-author of 8 Mandates for Social Media Marketing Success. Eric is a husband, father and a long-time advisor and friend of mine. If you haven’t seen it Eric’s TEDx talk is worth your time.

Enjoy Eric’s post.

There are exceptions; but the fact is that for many lawyers, marketing is an annoyance, if not anathema. And there is good reason.

Talk to either or both sides of the conversation, and at least two possibilities arise.

  • Lawyers, often by nature and certainly reinforced by education and training, are highly skilled at spotting problems, whereas marketing professional services is about the identification of opportunities; and,
  • Historically, the practice of law has been reactive, providing analysis and applying precedent, while business development is based on proactive pursuit.

Yet, notwithstanding the glass-half-empty vs. glass-half-full perspective, neither of these are the reason marketers and law firm leaders frequently seem at odds.

What About Changes In The Industry?

Granted, these are not the good ole days. For years the challenges of legal business development were camouflaged by remarkable growth. But for at least a decade an increasingly competitive marketplace has introduced the legal industry to the uncomfortable reality of disruption.

The once rock-solid cornerstones — the right law school, passing the Bar, hanging a shingle and delivering quality work — guarantee nothing in this new normal. Already wrestling with the practical applications of all things marketing, lawyers now face the challenges of finding new work.

But every industry changes. Even major shifts in the legal space are not the root cause of the lawyer / marketing dichotomy.

The Problem and the Opportunity

At its best, marketing is not about spin, or tag lines. Nor does success hinge on a splashy new website, the colors of a logo or an award-winning ad.

Whatever you might label it — marketing, client relations, business development, or sales — the law firm marketing function is about facilitating and supporting opportunities for lawyers to develop relationships with a strategic market.

The Best Marketing Is Born Of Aspirations

Roger’s most recent post discussed the fabric of successful and enduring partnerships — shared aspirations.

The suggestion is that there are a handful of goals so central to the reason a partnership was formed in the first place, that these aspirations become the backbone of strategic direction. Every critical decision — compensation, growth, practice diversity, where to invest — is measured against this set of aspirations.

And yes . . .shared aspirations — implying they are well known and discussed — provide rich context for a natural approach to marketing.

The pursuit of those universally held, jealously guarded goals becomes a cultural marker. In this environment — where objectives, priorities and the allocation of resources are clear, marketing becomes organic; and the partnership’s marketing professional can lead a calculated pursuit of a clearly defined target.

Organic marketing delivers unique leverage because everywhere the organization touches its market, the DNA of the firm is planted.

If marketing is mystery or anathema in your firm, progress may be as close as examining whether the critical aspirations shared by your partnership are at the heart of why and how you take your story to your market.