Tag Archives: Law Firm Management

Keep Your New Customers Close and Your Best Customers with Empty Pockets

I have never understood why corporations punish their most loyal/best customers. I was reminded of my confusion on this issue by this post on Patrick Lamb’s blog. While Patrick is talking about credit cards and how law firms charge their ‘best’ customers, the exact same statements can be applied to customers of legal publishers, online and print.

Unfortunately, this statement from the post sums it up:

Give your new customers better rates and keep milking your loyal customers for all you can get.

This has been the legal publishing model for quite some time, and resetting the dial on pricing is very difficult (as so many of you already know). Why don’t these companies cultivate and reward their best customers? I’ve got some ideas, how about lower increases or no increases after x-number of years or a no-cost add on of new content or free print (I could go on and on here).

Why are firms essentially punished for being long-term customers? This is really simple math, firms cannot sustain yearly increases on a base price  for 10 to 15 to 20 years. Flash forward to current day and their pricing is completely out-of -whack with current models.

However, there is ZERO incentive for the ‘robber barons’ of legal publishing  to make any changes and they know it…they just keep on chugging. This reminds me of the Little Engine that Could, except in this example there is no top to the mountain of money.

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Learn from the Best

As I’ve said many times, the buzzword right now (for law firms and librarians) is ‘value’; we are all trying to provide value to our clients. Since we are all in the same boat, I figure why not learn from the best…Google. For a some insight, check out  this post on WiredGC. Here are the pertinent quotes:

  • It’s not good enough to apply normal management disciplines – we think that scarcity breeds clarity. If, for example, we have enough resources invested in something, we halve it and eliminate overheads.
  • When we build something we strive for ubiquity in usage and adoption. That helps us understand how customers react and then we build a revenue model.
  • We measure people every 90 days. We get 360-degree feedback on people every 180 days and that feedback is published to the whole company. People want reality. Ninety per cent of the rewards end up going to 10pc of the people.
  • Customers today have more choices and are more aware of our competitors’ offerings. Unless we can serve them 24/7, 365 days a year, competitors will eat our lunch. […] At the end of the day it’s the customer who owns the cash. That’s why we construct our organisation to deliver value. The underlying framework is to make it easier for people to do business, solve problems and move on.

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LexisNexis Survey: State of the Legal Industry

Earlier this month, LexisNexis released a new survey designed “to generate insights and identify trends about the future of the legal business model.” Incorporating views and opinions from lawyers, corporate counsel and law students, the survey demonstrates that perceptions about the economy are very different depending on your perspective.

Overall the study sought to:

•Gather lawyers’  and students’ perceptions of the current state of the U.S. legal industry

•Understand lawyers’ beliefs about what the future holds for American law firms and legal professionals

•Gauge law students’ attitudes toward entering the legal profession in today’s economy

The Executive Summary:

The national survey, commissioned by LexisNexis, is the first of its depth and breadth to be conducted on the legal industry since the start of the economic crisis. Of the 550 respondents polled, 300 were private practice attorneys,150 were in-house corporate counsel and 100 were law school students.

Corporate counsel say law firms are not doing enough to respond to the economic downturn

•71% of corporate counsel responded that law firms today are not doing enough to respond to the current financial pressures on their business model

•Almost half the in-house counsel polled (46%) say they have requested rate cuts, yet less than one in five (18%) private practice attorneys say their law firms have reduced bill rates

•Only 38% of corporate counsel believe that law firms are being responsive on changing fees and costs given the current economic recession

•69% of corporate counsel have shifted work in-house since the start of the economic downturn; 56% have reduced spend on outside counsel

Private practice attorneys say clients are too focused on costs, at the expense of quality and results

•Over half of corporate counsel surveyed (58%) say they believe law firms are too profitable; however, most private practice attorneys (77%) believe their clients are too focused on reducing costs, at the expense of quality and long-term results

•According to the survey, private practice attorneys say their firms have taken a number of steps in 2009 to respond to the changed economic climate: 43% have conducted layoffs; 41% say their firms have offered alternative fee arrangements; 33% have implemented hiring freezes; 29% have deferred start dates; and 26% have reduced salaries since the start of the economic downturn

Opinions are split on the future of the legal industry

•53% of corporate counsel and 52% of private practice attorneys believe the recession will permanently change the way business is done in the legal industry

•57% of corporate counsel believe the billable hour will give way to alternative billing arrangements

•More than half of corporate counsel responded that they will shift work in-house (57%) and reduce the amount of their total spend on outside counsel (55%) in 2010

•When asked what actions their law firm is most likely to take in 2010, the top two responses among private practice attorneys were: conduct layoffs (18%) and defer start dates for new hires (18%)

The next generation of lawyers feel ill-equipped for the business of the law; many areconsidering alternatives to a career in law

•According to the survey, 65% of law school students (and 90% of lawyers) said that law school does not teach the practical business skills needed to practice law in today‟s economy •35% of law school students responded that they do not feel adequately prepared to succeed in the changing legal marketplace

•One fifth (21%) of students say they regret attending law school

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Let’s Celebrate International Professional Legal Management Week (Oct. 5 – 9)

For the third year in a row, law librarians are an active part of IPLMW festivities. This year, check out a great article from Monice Kaczorowski and Holly Pinto published in the IPLMW magazine. Additionally, librarian Sarah Mauldin will take part in a free webinar tomorrow on inter-generational issues in the legal workplace.

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Legal Professionals and Web 2.0

The legal profession has been slow to adopt many Web 2.0 technologies, but we are getting there. A recent survey by CCH found that:

  • 59% use Web 2.0 technology at least once per week – most use it for professional purposes
  • 54% of social media usage is for professional research
  • 72% of professionals value information from peers as much as something published in a book

In 2008, the ABA Legal Technology Report wasn’t so promising (see Web 2.0 Still a No-go), but the complete 2009 Survey was recently released, and there have been some big changes:

  • When asked whether their firms maintain a presence in an online community/social network such as Facebook, LinkedIn, LawLink, or Legal OnRamp, overall twelve percent (12%) of respondents report affirmatively, up from 4% in the 2008 survey
  • When asked whether they personally maintain a presence in an online community/social network such as Facebook, LinkedIn, LawLink, or Legal OnRamp, overall, 43% of respondents answered affirmatively, almost three times the percentage (15%) in the 2008 survey

We still have a long way to go, but I think that most in the profession are open to learning more about new technologies that will improve their practice and service to clients. I recently showed my Google Reader to an attorney who confessed that he did not know what I meant when I asked him about receiving information via an RSS feed. Once I showed it to him and explained how it would help cut down on email, he was hooked.

Hat tip to explodedlibrary bunker.

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2009 AmLaw Librarian Survey: It’s Been on My Mind

It’s been a couple of weeks since the 2009 survey was released, and the results have been on my mind. Here are some of my thoughts:

  • Budgets for resources have shrunk 46%. This is no surprise to any of us, but, the survey also mentions that 43% of respondents report that their budgets are larger. I wonder what those librarians are doing to secure increases in this economy?
  • 62% of respondents said that the library is their firm’s main source for marketing research, which is a good thing in my opinion. The more the library can support internal “customers” the better. However, tracking the results of these efforts and making sure that the library is recognized can be difficult. As a library director mentions in the article “90% of my own work is public relations.” I couldn’t agree more, and believe that library director is the “head cheerleader” and nothing else is as important.
  • Lexis or Westlaw? This year, 31% of firms said that they intended to move to a single-vendor strategy versus just 12% last year. Is this surprising? No, not really, as these two services usually combine for more than half of the library budget. Additionally, the commoditization of primary law and the growth of small specialty providers has significantly changed the market.
  • Average yearly librarian billable hours are up from 300 to 350, however, it doesn’t seem like this was a factor in saving jobs, as staff counts are down for 57% of respondents. Should librarians seek to increase their billable hours? I’m not sure. While there are direct benefits to billing out librarian time, the question really is: How can the value of the library staff be communicated outside of the “billable hour”?
  • Firms are starting to use technology to organize and deliver content in new ways. I wonder why this is occurring now? I have a feeling that the concept of  “information overload” has finally caught up with many firms, and there is a realization that investment in information infrastructures is not just “nice to have,” but necessary.

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A Softer Side: The End?

Work/life balance. It used to be a topic that filled this blog, but I’ve barely written about in the past few months. Of course we all know the reason why, however, the question now becomes: what will happen to the debate. Jordan Furlong has written a great post on his blog, Law21, concerning the legacy of work/life balance and his concerns over the current status.

One paragraph that really caught my eye:

There are two institutional flaws in our system that hurt our newest colleagues. First, there’s the unspoken symbiosis between law schools and law firms — the former charge students huge amounts of money and provide little practical lawyer training, allowing the latter to hire low-skilled and heavily indebted graduates to fill virtually the only positions lucrative enough to pay off their loans. And secondly, billable-hour targets for associates at more than a few firms simply can’t be achieved without damage to one’s health or ethics, or both. These problems are neither natural nor inevitable — they result from our neglect of the system, and they annually damage our profession’s standards and morale. (my emphasis)

As Mr. Furlong so succinctly states, the problems of work/life balance are institutionalized and are damaging to the profession as a whole, not a few. Therefore, it is the responsibility of the profession as a whole to continue to work to make positive changes.

Maybe we have seen the death of the work/life balance debate…maybe it will continue when the economy recovers, who can really say.

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