Blogging Continues to be Hot for Lawyers . . . and Consultants?

I have been inspired to try my hand again at blogging after taking about 3 months off. First of all, take note of these statistics. According to The New York Times, 6.1% of all bloggers are lawyers. According to the ABA Litigation Section, 57% of members read at least one blog on a regular basis; 19% of these same members publish their own blog. As a consultant wanting lawyer business, these statistics are quite inspiring.

Why all the lawyer blogging?

• Bloggers often feel strongly about a topic and just must get it out to the interested public
• To influence public discourse about a particular topic
• To develop new business. Recent articles about blogging cite lawyer stories about how blogging has boosted their practice.
  

Joshua Fruchter's article in the Marketing the Law Firm Newsletter provides "best practices" tips for us reluctant bloggers:

1. Make sure your blog projects a professional image.
2. To my objection to feeling I have to write an article for every post, Mr. Fruchter suggests that as long as a post is well written and offers a couple of helpful insights about the subject, a few paragraphs are adequate.
3. Frequent posting is the key to high search-engine rankings; but who has time to post original content every day? If you notice, the content of most blogs is commentary on content created by someone else . . . which is what I'm doing now, thanks to Mr. Fruchter.
4. Mr. Fruchter provides sources for content for us novice bloggers to comment on; i.e., Google Alerts, Westlaw/Lexis, other blogs and government sites.
5. "Search engines will rank a blog higher the more "inbound links" there are to your blog from other Web sites with related content". In lay language that means we need to link to the posts of other (lawyers, consultants, etc.) publishing blogs on related topics to improve our search engine ranking. Adding others' blogs to your "blogroll" is another way to improve your search-engine ranking.
6. Finally, give your audience as many ways to access your blog as possible; i.e., subscriptions by e-mail or RSS and linking from your e-newsletter and Web site, if you have one.

Keep on blogging!

Revenue Growth Must Cover the Lawyer's Compensation Package Cost

There is a flip-side to the age-old question of how solos and small firms can compete with larger firms on associate compensation; and that is, what's the on-going cost to the firm going to be of hiring an additional lawyer and will projected revenue growth cover the growth of the new lawyer's compensation package?

In a New York Journal article featured at law.com today, Florence M. Fass reminds small firms to consider the "exponential growth" of an associate's initial base salary (plus employer FICA, Medicare tax contributions, workers compensation and state disability costs) as "time passes and tenure increases" and the cost of benefits such as health insurance and retirement contributions (generally tied to compensation) when determining if the projected growth in firm revenues will cover the growth of the compensation package.

Money is not the only type of compensation that can be used to attract associates to the small firm environment. Ms. Fass points out that firms who can offer flexibility in the types of benefits associates and non-legal staff, for that matter, can select can be very attractive.

I will take issue with one point Ms. Fass makes with respect to paying lawyers to not take vacation time in order to reduce the firm's cost of not having revenue produced during their paid vacation time. In my experience, lawyers typically do not take the vacation time they need to take to rejuvinate, reflect and rest in order to be more effective lawyers and maintain the life/work balance that is needed. And, finally, she mentions bonuses paid for client origination. This practice is becoming suspect in larger firms because it can be so divisive.

The important point in this article which didn't get too much "play" was being sure that revenues produced by the firm or the new revenue producer not only cover their compensation package; but cover their overhead (fixed costs) and add to the firm's profitability. If a new hire does not do the latter, there's no point in hiring him.

A Promise Kept

How many of you would be willing to spend $25,000 in legal fees to collect a $77.55 judgment for a client?

How many of you would be willing to spend $25,000 in legal fees to collect a $77.55 judgment for a client because one of your firm’s retired founding partners made a promise to a client that the firm would stand behind their representation of the client - a promise that was made 20 years earlier?

How many of you would even make such a promise to your clients, in the first place?

Rex Houston of Wellborn Houston did just that in 1987. The firm kept that very promise to his client 20 years later. Crazy, huh? Or, is it?

When young lawyers join the Young Lawyers Division of the ABA, they take a pledge . . . a pledge of professionalism. The first promise in this pledge is this:

“I will remember that the practice of law is first and foremost a profession, and I will subordinate business concerns to professionalism concerns.”

The third promise is this:

“I will remember my responsibilities to serve as an officer of the court and protector of individual rights.”

Rex Houston, the retired partner who made a promise to a client 20 years earlier and whose firm honored it, not only fulfilled his professional responsibility by making such a promise; he served the profession well by teaching, through his example, his younger partners the importance of keeping theirs.

The article reported in the Texas Lawyer, March 20, 2006, quotes James Homes, one of seven partners in Wellborn Houston:

“’You can’t just select your cases based on money. You’ve got to take care of people,’ Holmes says. ‘And we’ve always believed if you take care of people, fees will take care of themselves. . . .’”

How refreshing it is to see in the current news coverage of the legal community; where law firm profitability, internal eruptions and lawyer movement is too frequently the subject of the news, a story as this reported. It is a reminder of what the practice of law is intended to be.

It seems to me that there needs to be a significant course correction, where practicing law is once again a profession and less of a business. Such a course correction, if undertaken, will not take place by implementing strategic plans or "differentiating" your firm from another; it can only take place with a change of heart, of purpose and of vision.

Imagine if lawyers took back the profession of law; practiced law with the heart and purpose they promised to do as young lawyers and stopped practicing for the sole purpose of the almighty $$; or to "dominate"; or to be listed in AMLAW 200; and stopped tap-dancing for their clients . . . wouldn't firms and their clients be happier and better served? It’s a risky proposition and flies in the face of every legal management consultant out there.

It takes courage to take the “road less traveled.” I hope there are other firms, like Wellborn Houston, who have the courage to remember that the practice of law is first and foremost a profession and that they have a responsibility to subordinate business concerns to professionalism concerns.

Increasing Firm Revenue

If the burning issue in your firm is how to increase the firm's 2006 revenues, look no further than your timekeepers. No, I'm not talking about ratcheting up their billable hours . .

Working Smarter not Harder

Let's look at an example: Lawyer A spends 9.6 hours per day in the office: 4.8 billable hours and 4.8 non-billable hours. Lawyer B spends 8.5 hours per day in the office: 7.0 on daily billable hours and 1.5 on non-billable hours. The ratios of billable hours to worked hours (billing realization) of the two lawyers are 50% and 82%, respectively, even though they are spending similar amounts of time in the office. Annualized, Lawyer A will have recorded 1600 billable hours while Lawyer B will have recorded just under 1100 hours. Assuming a $200 per hour billable rate, the difference in revenue production between the two is about $100,000. As you can see in this example, the problem is not Lawyer A's work ethic (otherwise known as her commitment to the firm); it is most likely a problem of poor time management and poor timekeeping skills.

Realization is the Key

While this example may illustrate an extreme case, most timekeepers will readily admit that they know they are not capturing all of their billable time on any given day. This loss of billable time could be costing your firm hundreds of thousands of dollars every year. Demanding that timekeepers work more hours without first ensuring that they are accurately capturing all of their time is a disservice to the timekeepers and the firm. Mistakes and errors in judgment are more likely to occur when lawyers grow tired and grumpy from routine 12-hour+ days.

Timekeeper Training

EDGE International, a management consulting firm, has developed a one-hour Timekeeper Training program for law firms. EDGE offers this training to law firms to be conducted in-house for their lawyers, paralegals and staff. I am working in collaboration with EDGE to provide this critical training.

It works like this: We obtain information from the client-firm about its current timekeeping policies, procedures and standards. After reviewing this information, a telephone conference takes place with management to discuss recommended policy and procedural changes that we feel will improve the firm's: 1) amount of billable time captured, 2) the accurate recording of the time worked, 3) the timely entry of recorded time, and 4) firm-wide consistency in time descriptions. We then prepare and submit to the client-firm a draft of the policy language which includes our agreed-upon changes. When the policy language has been given final approval, we customize our presentation in accordance with the firm's new policy and the training sessions with the firm are scheduled. We prefer that the sessions contain a manageable number of attendees and so are prepared to conduct 3 to 4 sessions in a day to achieve that goal and provide everyone the opportunity to receive the training.

Maximizing Billable Hours

The goal of your firm should be to maximize billable hours in a manner that is consistent with your firm's culture. So, before you ask your timekeepers for more hours, take steps to improve their timekeeping skills. Doing so will increase the firm's revenues, maintain the quality of the firm's work product and support the work/life balance your lawyers are trying to maintain.

For more information regarding the Timekeeper Training program, contact Ed Wesemann, Edge International, at Wesemann@edge.ai or 1-912-598-2040, 1-877-922-2040 (toll free from U.S. and Canada). EDGE INTERNATIONAL is a management consulting firm with partners resident in the United States, United Kingdom, South Africa, Germany, Canada and the British West Indies; and an acknowledged leader in providing sophisticated strategic advice to law firms worldwide.

Statistics: What Story Do They Tell?

I just received my Law Practice magazine and strongly recommend you read every article in it over the Christmas break. Not only does it give great information about how to take charge of your practice, it provides some interesting statistics from a number of recent law firm surveys. I'm not sure what they all mean when put together. I'll have to think about that more. But here are some that may help you think a bit about how your practice is performing in some of these areas.

Revenue & PPP

• Over 74% of the law firms recently surveyed believe their 2005 gross revenue on a cash basis will be higher than the past fiscal year (Law Practice Management Reference Guide 2006, IOMA and LOMA).
• 64% of law firms surveyed anticipate higher distributions to partners for 2005 than in 2004; with 5% expecting to see an improvement of 20% or more!
• 54% of law firms' gross revenue is now derived from hourly billing, compared to 86% in 2004.

Trends

• 76% of large companies have negotiated preferred rates with their law firms, with few guaranteeing a specific number of hours or future work. (BTI Consulting Group).

Marketing

• 93% of respondents to a survey conducted by The LawMarketing Portal and Sage Business Development Institute believe that associates must be able to develop business to be successful as a lawyer. (The full report may be viewed here.)
• 65% of respondents said their firm's partners consider business development capability an important factor.
• 87% of respondents said associates see business development essential for their success.
• 57% of firms fail to give associates any training on how to develop new business.

Associates

• According to the American Lawyer 2005 Midlevel Associates Survey, the average associate's billable hours in 2004 were 2,072 compared to approximately 1850 hours for associates in 1986.
• Sally Schmidt's article, The New Generation of Lawyers: Planting the Marketing Seed, provides additional insights from the survey:
• Associates feel they have less opportunity to become partner, and many feel they're viewed as "fungible."
• Partner mentoring continues to be neglected by law firms.
• Many have dual-career families in which domestic and child rearing duties are shared by both spouses; a different dynamic from years past.
• 9/11 and the dot.com debacle left associates feeling they wanted to pursue a more balanced life of work, family and giving.
• It also found that associates prefer teaming efforts as opposed to the eat-what-you kill cutlture still in many law firms.

Be Intentional: Begin with the End in Mind

A question lawyers seem to be asking more and more frequently is, "How can I sustain the success I've had in my law practice?" Law firms inevitably reach a point in their "life" when "the way we've always done it" isn't working. And, in some cases, it may just be pure, (I hesitate to say) dumb luck that the firm has stumbled into the success it has had. One day you look up and ask, "how did that happen?" The next question then inevitably is, 'how can I do it again?" There is never a better time than at the end of a year to step back and take a look at what you're doing as a person, lawyer and firm. Where are you? Are you in a different place than you were this time last year? If so, is it a better place - a place you intended to be at the beginning of last year? Were you actively deliberate in your decisions and actions or did you spend another year reacting? Did you envision what the end of this year would look like and use that vision to guide your decision-making throughout the year? If not, I challenge you to plan strategically for where you want to be at the end of 2006 and to act "intentionally" to be sure you get there. As a firm, look at these things:

1. Who are your best clients? Identify the characteristics that your "best" clients share and incorporate those as guides into accepting and firing clients next year.

2. What are your best practice areas? Where is your core expertise; which practice areas have been most profitable for the firm over the past five years; how can you strengthen and market your core expertise in the coming year?

3. Ask your clients what you're doing right and what needs improvement. Find out if there are other services the firm can provide to them. Don't do it by paper or telephone. Go to their office, take them to lunch or dinner and really listen to them. Then implement their suggestions.

4. Look at how you are staffing your most profitable matters and your least profitable matters and be intentional about how you staff your matters in 2006.

5. Review your firm's "model". Is it relationship-driven or "eat-what-you-kill"? How "partner-heavy" is the firm? Will it sustain the firm beyond your generation?

6. Look at your compensation system. What is the distance between the highest and lowest paid partner? Does it cultivate the characteristics of a true partnership or are you in essence sharing space with each other?

7. How well are you prepared for disaster? Would the death of a key partner deal a fatal blow to the firm? Could you survive a natural or man-made disaster that might put you "down" for a few days?

8. How effective is the management of your firm? Is its structure an impediment to effective decision-making and forward movement? Are partners spending too much time on administrative tasks? Is your administrator a "yes" person or does he or she add real value to the administration of the firm?

9. Look at areas of exposure to malpractice and ethics violations. What steps can be taken to reduce the possibility of malpractice?

10. Embrace technology that enables you to best serve your clients.

Have a good year.

Inability to Staff Support Functions is Slowing Recovery Process for N.O. and Gulfport Lawyers and Court Systems

One of the frustrations we heard from New Orleans and Gulfport lawyers weeks after Hurricanes Katrina and Rita hit was that lawyers outside the two ravaged areas were growing more and more impatient with the time it was taking for affected lawyers and court systems to recover. What’s taking so long? A reality that was not foreseen – staff members who have chosen to not return to the area and the inability to house employees who would like to return but have no house to come back to or school for their children to attend. While law firm and court facilities may be sound and lawyers and judges ready to resume work and preside, there is still little to no infrastructure to support the employees needed to re-open businesses. There was and still is, I’m sure, a disconnect between the day-to-day reality of New Orleans and Gulfport lawyers and the reality of the lawyers (on the other side) who are personally unaffected by these events. As recently as this week law.com reported on the condition of the federal and state court systems in those two areas and the staffing challenges they still face. Remember that just because you have been able to distance yourself from those devastating events, those affected are still much closer to them than they would like to be. Be patient and understanding with those members of “the bar” who continue to attempt to practice under unprecedented circumstances.

Do You "Do Marketing"?

I am frequently asked if I "do marketing" for law firms. Frankly, marketing is not an area of focus in my consulting practice. I typically refer my clients to my preferred legal marketing vendor when they are looking for help in marketing their firm. However, for those who may not feel they can afford a consultant to help them market, let me put you on to a free source I have recently discovered: Tom Kane's blog, legalmarketingblog.com. I highly recommend it to solo and small firm practitioners who want to market their practice but don't know where to start. Of particular interest are his recent posts which summarize a recent Martindale-Hubble small firm marketing survey. I would recommend you read the survey and then Tom's summary to understand the marketing activities other practitioners have found most effective and to do some benchmarking against your own marketing efforts.

You can download the file containing the survey.

Fundamental to a Successful Practice: Communication

I have a client who readily admits that she does not return phone calls from clients in a timely manner or have a procedure in place for responding to unhappy clients, of which she has many, according to her receptionist. Her reasoning is that most of the calls are initiated by pesky clients who are unnecessarily concerned about their case. This same lawyer does not review files or talk with clients on any regular basis; does not always copy the client with correspondence and documents relating to a client’s case; nor does she bother to educate her clients at the beginning of their representation about the legal process involved in representing them. It is my experience that lawyers who practice in this way will not be able to improve the quality of their client base – their reputation precedes them. They cannot hire or retain talent who are embarrassed and demoralized by their behavior. They are unprofitable, as a result, and unhappy.

Lawyers who do not acknowledge the importance of building strong client relationships as a key to building and sustaining their practice in this day and age are not ignorant – how many times must this subject be addressed – they are simply wrongly motivated. They have clearly chosen the wrong profession. Practicing law requires building healthy and effective relationships with clients, colleagues and staff. Relationships are either sustained or destroyed by the level and quality of communication between the parties to the relationship. Communication is a salve to many a wrong-doing in practice and in life and should never be underestimated in its importance to the management of both.