Please join the LMA New England Chapter next week at their 2015 Regional Conference, taking place on November 12 -13 at the Hyatt Regency in Boston. This year’s theme is “What’s Your WOW Factor?” Join attendees as they learn about the best tools and approaches to stand out among the competition, succeed at winning new business and become industry trendsetters. Don’t miss out on the chapter’s most important and popular event, one that saw record attendance last year!
One of the most interesting elements of my job as a business development coach for attorneys is interviewing top rainmakers to better understand “How they did it.” While every attorney knows a rainmaker or high-level business developer, you might never get the chance to hear how they actually accomplished their goals, what it really took to do so and how to avoid the pitfalls they’ve encountered. One of my first interviews occurred with the Managing Partner and co-founder of Stahl Cowen, Jeff Stahl. He put everything on the line when he went out on his own. As he stated in our interview, it was “a combination of need and fear,” to begin developing his book of business. Here are Jeff’s top three tips for success in building his legal practice, followed by some of my own thoughts on the subject. Jump to the end for the full interview. Enjoy!
Jeff’s Tip #1: Helping versus Selling
Jeff’s first and most important revelation as a business developer was to really want to help people, not to sell them legal services. He says quite empathetically that it’s imperative to, “Recognize when someone is in need of service and then be there, and be creative to help them. Then it isn’t perceived as a sale, but as assistance that usually has greater receptivity than somebody who is hard selling.”
From my point of view, he is touching on one of the critical turning points for attorneys as it relates to sales and being viewed as a “salesman.” I don’t know too many lawyers who like or want to be seen as a salesman. What Jeff explains so clearly in his interview is that you need to switch off that mindset and turn on the idea that you are in the unique position to help people with real problems. The key here is to try not pitching and selling, but rather try asking and listening.
One of my favorite mantras is, “Prescription before diagnosis is malpractice.” Think about that. If you walked into a doctor’s office with a migraine and he suggested amputating your head, I’m sure you’d move pretty quickly to the nearest exit. The same rule should apply to prescribing legal services in the form of a pitch meeting. Just don’t do it! At least not until you’ve fully diagnosed the issues, needs and pains the prospective client is dealing with.
Jeff’s Tip #2: Market Yourself When You’re Busiest
If I’ve heard it once, I’ve heard it 1000 times, “I’m too busy to market myself.” One of the best take-aways from Jeff’s interview was his statement, “Too many people go out and market when they’re slow. You need to market when you are busy, because when you market when you’re slow, you often appear desperate. That comes across and people realize that.” Even when you’re working 60 hours a week, it’s imperative to find ways to market. If nothing comes in right away from the effort, at least you’re building your pipeline which will pay off when things do slow down.
In my experience, the key to success here is to find the time to market by getting organized with your day and opening up gaps of time for business development. A few suggestions I typically offer include:
Time blocking- Get into the office at 6:30 am once a week and spend an uninterrupted hour emailing clients, strategic partners and new people you’ve met to schedule a coffee or lunch sometime in the next few weeks. This one hour block of time each week will help ensure that you get meetings set every week without fail.
Delegating more- Do everything in your power to delegate administrative tasks to others at a lower billable rate. If you are billing $300-600 an hour, why are you making copies or doing filing? Try making a list of every administrative task that you do and add up the hours in a week. You might be shocked at how much time you’re wasting on activities that can be done for under $50 an hour by someone else. This “found time” can be better used for business development activities or even going home for supper with your family once in a while.
Never eat lunch alone- It’s the title of a great networking book for a reason. Schedule lunch at your office and invite someone to join you. Utilize a conference room so that it’s quiet and you can focus the conversation on your guest. If you did this with two of your existing clients or strategic partners every week, you will be delighted to the results you might see. Working during lunch might be helpful to get things done, however it doesn’t have to be your routine every day.
Jeff’s Tip #3: Be Impressive!
“When a client tells you what their issue is, it isn’t always their issue. Through effective listening you may recognize things that they may not even realize themselves.” Effective questioning and listening is not only important as a way to best service the client, but also as a way of differentiating yourself from other attorneys who aren’t focused on the clients story, needs and issues. From Jeff’s perspective it’s more important to be perceived as impressive and knowledgeable, than to beat your chest regarding your prowess as a successful attorney.
Jeff’s hit on something really critical here. Perception is reality and belief stronger than fact. The concept is simple if you think about it. By asking relevant, probing and open ended questions, the prospective client will perceive that you are an expert based on the way you are managing the conversation and your bedside manner. A great example here would be observing two psychologists. The first spouts off about why she is so good at what she does and her advanced degrees. The other, warmly welcomes her patient onto the couch and begins building rapport. Then the second psychologist begins asking questions about the patients reason for being here today. The patient’s response is followed up with additional questions which open up the dialogue to reveal the actual issues being faced.
If you are working diligently to find new business opportunities, and a prospective client finally agrees to meet with you, try to act like the second therapist by asking questions and being an expert listener. You will not only build greater credibility as a lawyer, but also uncover issues that your new client didn’t even know he had. A win-win outcome is inevitable.
I’d like to thank Jeff Stahl for his rainmaking insights. The reality is that there is always a way to find balance in work and in life. For many of you, it’s a matter of having the proper mindset. For others it’s obtaining new strategies and tactics to accomplish the goals you’ve set. Check in monthly for a new installment of Rainmaker 101 for more tips from the business development superstars I’ve interviewed.
Please join us for the 2015 Regional Conference, taking place on November 12 -13 at the Hyatt Regency in Boston. This year’s theme is “What’s Your WOW Factor?” Join attendees as they learn about the best tools and approaches to stand out among the competition, succeed at winning new business and become industry trendsetters. Don’t miss out on the chapter’s most important and popular event, one that saw record attendance last year!
Please join us for the 2015 Regional Conference, taking place on November 12 -13 at the Hyatt Regency in Boston. This year’s theme is “What’s Your WOW Factor?” Join attendees as they learn about the best tools and approaches to stand out among the competition, succeed at winning new business and become industry trendsetters. Don’t miss out on the chapter’s most important and popular event, one that saw record attendance last year!
The results of Citigroup’s 2015 Law Firm Leader’s Peer Monitor Report were examined by a highly informative panel[i] at Thomson Reuters’ recent 20th Annual Law Firm Leaders Conference in New York. The detailed discussion outlined overall marketplace trends and reviewed the strategies of law firms who are profitably navigating today’s turbulent legal market.
State of the U.S. Business Law Marketplace
Market conditions for law firms are stabilizing in 2015 but a fragile global economy / geopolitical climate, and changing legal department purchasing behavior are leading to continuing flat demand for purchasing legal services. Current marketplace conditions include: more work being done in-house or by non-law firm outsourced providers and law firms coming in from other markets who are competing aggressively on price and / or who are buying business growth by lateral attorney hires.
Lower demand for law firms’ services is also being driven by a decreased appetite for costly litigation and developing technology which performs more cost effectively commodity type legal work.[ii]. The most common reasons for moving work in house is more control over costs and increased efficiency.[iii] In a 2015 survey of over 300 in-house counsel from 22 industries over 47% of the companies surveyed reported an increase in the number of law department lawyers employed.[iv]
Larger Business Trends Lead to a Less of an Appetite for Litigation and a Push for More Cost Effective Service Delivery
General Counsel manage their departments in tandem with the overall goals of the business. Unresolved legal issues can have a negative impact on a company’s stock price and reserves set aside for lengthy litigation could be deployed for other business activities. Accordingly, there is an ongoing trend of companies settling earlier than before, and being more open to pursue alternatives to expensive and drawn out courtroom trials.[v] Also, the increased cost of conducting complex litigation due to e-discovery, is also causing companies to think twice about how hard and how long they want to fight.
A Look Inside: 2015 Thomson Reuters Legal Department In-sourcing and Efficiency Report
Since the great recession many law firms have become adept at trimming administrative overhead costs but seem to forget that corporate law departments are corporate overhead. In a 2013 survey of 238 managing partners and law firm chairs, over 44 percent indicated that their firms had taken steps to improve the cost effectiveness of legal service delivery, mostly in the form of changing project staffing models to include part-time and contract lawyers and outsourcing an increasing number of non-lawyer functions at their firms. [vi] Alternative service providers in the legal arena cover functions such as discovery management, document creation, dispute resolution alternatives to litigation, and talent management services. Legal process out sourcing (LPO) through alternative service providers has a predicted growth of 30% in 2015 and it is estimated that there is currently $20 billion of outsourceable legal work in the U.S. legal marketplace.[vii] It is estimated that the LPO market has only captured 5.5% or $1 billon of the estimated $437billion U.S. legal market.[viii]
A Look Inside: 2015 Thomson Reuters Legal Department In-sourcing and Efficiency Report
Practice Areas Where Demand Is Consistent or Growing for Law Firms
While businesses may have less of appetite for costly litigation, demand remains strong in certain areas due to more domestic regulatory investigations and U.S. lead examinations stemming from cross-border activities. [ix] In a survey released this month, 48% of law departments predicted an increase in regulatory work in the next year.[x] Other growth practice areas include: Intellectual Property/Patent; Cybersecurity/Data Privacy; Bankruptcy; Healthcare/Pharmaceutical, Financial Services and Mergers/Acquisitions. [xi]
Common Features of Underperforming Law Firms in Today’s Marketplace
To address the buying needs of corporate clients, firms which are surviving are becoming more efficient and predictable in their pricing and service delivery. Firms who are underperforming tend to have:
The lowest overall leverage rate (partner to associate) and less cost effective use of leverage;
A higher reliance on income partners, and a declining income partner contribution;
A high use of Other Lawyers but the use of these lawyers make a negative contribution to the firm’s bottom line;
A lower overall equity partner productivity and a decline of equity partner equity during 2009-14;
The lowest realized rates and lowest growth in those rates during 2009-14;
A heavier litigation reliance;
Less rocket science work and more commoditized work; and
Firm brands that are not as sharply differentiated or recognized.[xii]
What a Hyper-Competitive Legal Market Marketplace Means Operationally
General Counsel are generalists, who manage the legal needs of a company but are limited in the legal tasks they can and should do on behalf of their client, the company. Accordingly, there is always a set group of work that won’t be done in-house or for which third party specialized expertise is advisable. Outsourcing of ‘rocket science’ work and going to law firms who have established reputations for certain types of work are easier sells for in-house counsel who have to sell their outsourcing decisions to company management. Marketplace trends are resulting in more of a concentration of high end work in a smaller group of law firms. Notable legal market predications / observations made by the panel:
Clients will further segment the market (“financial and reputational tiering”);
Firms will further consolidate;
Lateral activity will remain high; and
Brand differentiation will help attract the right laterals and grow market share in a flat demand environment.
With continued cost pressures, the panel commented that profitable law firms will:
• Use systems and processes to improve:
Matter management;
Practice management;
Workforce management; and
Partner performance measurement.
In order to demonstrate a concern for efficiency, successful law firms need to facilitate better collaboration between the firm and client. In order to leverage internal resources and grow deeper, more stable and more profitable relationships with clients, law firms need to improve or better communicate their client service offerings and share information about legal developments. The panel identified the following ways to stay or become known for expertise and to demonstrate concern for law firm department budgets:
Knowledge sharing;
Client relationship teams, strategic and well thought-out cross selling; and
Developing associates and younger partners to ensure a sustainable business and cost effective service delivery structure.
Take-Aways
You have to have a brand – “We’re cheaper – but still really good and can do whatever you need, especially the easy stuff” isn’t working. Established brands make law firms an easier sell for in-house counsel to their management or management may even advocate for well know legal brands to their law departments. Company management does suggest particular law firms and attorneys and they pass on to the law department relevant thought leadership that they were sent by law firms or that they have come across. Executive management approves the law department’s budget. The general counsel should not be your only contact point. If you want to be considered for the less than 10% of litigation work that’s considered bet the company, shouldn’t management know you and feel comfortable that you know their needs?
According to David Cruickshank of Edge International, 96% of firms say lateral hires are part of their growth strategy[xiii]. Great legal brands help recruit great associates and laterals, as well as clients. How do you keep the attention of attorneys at regulatory agencies, high potential law grads and star attorneys with established practices? Share your knowledge. Many legal recruiters scour publications as a starting point for finding lateral candidates in niche practices. Your knowledge and service are your brand. How do you build or maintain a brand? Share your knowledge, write, speak, repeat.
How do you convey to clients and potential clients that you mean what you say – that you have deep expertise, that you can manage things in a cost effective manner, that you collaborate, that you are committed to technology – you show them. Jay Hull, Chief Innovation Partner at Davis Wright Tremaine mentioned during the conference that you go for wins on small projects with name brand clients, for proof of concept. Per Jay if you want to show a commitment to technology and innovation, you bring a legal technologist to a pitch meeting. Don’t drag your client into inter partner quarrels if you want to build confidence in your ability to manage complex multi-jurisdiction litigation. Want show deep expertise, include multiple authors on articles, rainmakers should bring along associates or new partners to speaking engagements or networking events – be a team and grow and show your depth.
[iv] 2015 HBR Consulting Law Department Survey – the Center for the Study of the Legal Profession at the Georgetown University Law Center and Thomson Reuters Peer Monitor.
[viii] Revenues estimated using AmLaw 200 data, Peer Monitor, Hackett Group Report and New York Times; Expenses from Peer Monitor Corporate Legal Dept is based on internal spend on legal matters.
[ix] A Look Inside: 2015 Thomson Reuters Legal Department In-sourcing and Efficiency Report.
[x] 2015 HBR Consulting Law Department Survey.
[xi] Citi 2015 Law Firm Leaders Survey.
[xii]2015 HBR Consulting Law Department Survey – the Center for the Study of the Legal Profession at the Georgetown University Law Center and Thomson Reuters Peer Monitor.
Coming out of the 19th Century, practicing law was an almost unimaginably great way to live.
The work was knowledge work and, by and large, it was challenging.
The practice entailed a craft to be mastered – both in terms of knowledge and experience, and also in terms of analytical and persuasive skills. Lawyer skills enhanced life skills. They developed judgment.
The work was meaningful. It made a difference in the lives of clients who had personal connections with their lawyers.
The profession itself was set apart. Its members had attended the same or similar schools, and had read and studied the same literature and culture. There was a high level of trust among practitioners.
Many lawyers practiced by themselves, controlling their own comings and goings, while regularly associating fellow lawyers as needed. Others practiced in small, personal partnerships. Experienced lawyers helped new lawyers learn the practice, regardless of firm memberships.
Lawyers’ work contributed in a vital way to the system of justice, and also to a growing system of business and commerce.
Lawyers were compensated based on value delivered and the clients’ ability to pay. There was a grounded sense that lawyers had an obligation to render services for the public good without pay in appropriate cases.
There were no timesheets. There was no billing software. There were no hourly rates, and no billable-hours quotas.
Lawyers commonly earned a good living, often by investing alongside their clients in new ventures and being involved in the operations of those and other businesses; or, more simply, by farming while they also practiced law.
Commonly, lawyers played leading roles in the civic and cultural affairs of their communities, both as a matter of interest and perceived duty, and also because it promoted their law practices.
The technologies used in legal work imposed a slower pace on professional life.
Lawyers’ public and private roles were not separated. Few perceived a need to balance different aspects of their lives.
There was little need for lawyers to get up early in the morning.
For the most part, lawyers were not called upon to lift or carry heavy things.
Why would anybody screw that up?
Current developments in the legal profession and in the broader workplace offer the hope that a 21st Century version of what was lost can be recaptured.
Legal services technologies and artificial intelligence, alternative legal services providers, networking capabilities, and communications technologies – these are tools that relieve practitioners of the need to perform high-volume, routine tasks. They enable new forms of collaboration. They can support newly envisioned, smaller, more cohesive, and more creative professional associations.
This will require differently trained lawyers, and new kinds of legal services providers. For lawyers and the schools who prepare them, it will require rethinking legal education, and a new understanding of organizational development, talent management and professional development.
Those things will come, albeit not rapidly. Some heavy lifting may be required.
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State of the U.S. Business Law Marketplace
