Cultivating an Opening Day Mindset
April 5, 2010 | Filed Under Change, In the News
Today is officially Opening Day for Major League Baseball. (Last night’s Yankees/Red Sox game was exciting, but all true fans know that Opening Day means day).
Among the great things about Opening Day is the fact that all teams and players start even, all have at least a chance to appear in the World Series. (Well, maybe not the Nationals…)
So here are three ways I think Opening Day can serve as time for reflection (and perhaps even optimism) for lawyers facing unrelenting change and the attendant uncertainty:
1. Strive for precision, not perfection. (The best lawyers have setbacks, too).
“Baseball’s best teams lose about sixty-five times a season. It is not a game you can play with your teeth clenched.” — George F. Will.
2. It is possible to do good work if you’re not overly focused on the meter. (Results, not effort, are what matters).
Baseball is infinite. It has no limits of time or space. There is no clock. The foul lines extend indefinitely beyond the field of play. Even the outfield wall is only there for convenience. — Bruce Hoffman
3. It’s not about brute strength, but also perseverance and agility. (Law is the great equalizer, and a source of fairness in an unfair world).
“There is no sports event like Opening Day of baseball, the sense of beating back the forces of darkness and the National Football League.” — George Vecsey
Most current discussions about the law and the legal industry are understandably serious. Baseball reminds us that sometimes you can see things as more of a game (play outside and have fun) and still be OK. So here’s a bonus thought from one of baseball’s best announcers, who wasn’t talking about the law, but could have been:
“I love the game because it’s so simple, yet it can be so complex. There’s a lot of layers to it, but they aren’t hard to peel back.” — Ernie Harwell
Law Firms: Beware the Middle Market
March 23, 2010 | Filed Under Pricing, Change
Trying to be all things to every client may result in being few things to none.
Last week, I wrote in Why Value is not a Virus that I thought corporate legal work would diverge into lower-end, more commodity-like work and higher-end, larger risk/reward work. Both would be priced accordingly. There were some great responses, that I note in an update at the end.
Three observations follow for me:
1. Any size firm can work profitably in either market.
2. Since costs are crucial (particularly at the low end), few firms will be able to properly bundle lower- and higher-value work.
3. All firms will have to be experts in managing projects, collaboration and using technology and newer service providers.
So when I try to step away from the legal reading, something seems to pull me back in. This time, it’s an article by James Surowiecki in the New Yorker. He focuses on companies like Apple and Acer that price products either at the premium end or the low end:
These two strategies may look completely different, but they have one crucial thing in common: they don’t target the amorphous blob of consumers who make up the middle of the market. Paradoxically, ignoring these people has turned out to be a great way of getting lots of customers, because, in many businesses, high- and low-end producers are taking more and more of the market.
For my argument, “middle market” doesn’t mean the size of the client. It means the approach toward the market. Then Mr. Surowiecki brings up what is really different now:
The boom in information for consumers has also severely weakened middle-market firms. In the past, these companies were able to charge a premium price because their brands were taken as signals of reasonable quality and reliability.
For some law firms without a focused strategy, the middle market may become the muddle market.
This is why things like the ACC Value Challenge and other legal rating or cost/service information is so important. It is why the state of the economy is not what is driving change. As researchers like to say, it is a correlation but not the cause. The cause is the global competition that clients are facing. This cause was there before the downturn, it is here now, and it will accelerate change even faster when economic activity rebounds.
Since so much is happening right now, and much of it doesn’t fit in this space, I set up lawriver late last year. It’s just a simple site that’s easy to check from your desktop or mobile.
How Google Meets its Value Challenge
March 4, 2010 | Filed Under Value, Change
Many law firms are finding it hard to come up with a clear value proposition and delivery model for clients.
So step back from the law for a moment and take a rare glimpse inside Google. You may be familiar with their work.
This is courtesy of an interview in the Silicon Republic with Google’s European sales chief, John Herlihy.
(First, there’s a mini-bombshell that Google sees the future in mobile, not on the desktop. That’s one reason for the development of lawriver. –Ed).
Mr. Herlihy describes what Google does to promote innovation and implementation at Internet speed:
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.
That last sentence is not a bad mission for most companies, law firms included.
Clearly the Google model is not for the faint-hearted, or for partners wanting to slow down a bit after years of 2,000+ billable hours.
Scarcity, excellence, and value before revenue. Now that’s an alternative arrangement.
Wired GC Big 3 - #1: Value is a Starting Point
December 29, 2009 | Filed Under Pricing, Change
Rather than follow the popular Top 10 format, I thought I’d streamline. Face it, in any Top 10 list, numbers 7-9 tend to flag a bit.
So I’ve done the Wired GC Big 3 for 2010. Here is #1, the other two will be rolled out in the first full week of 2010.
You know value is everywhere: in today’s Chicago Tribune, and a key point from ACC’s Fred Krebs throughout his look at in-house trends for 2010.
A vital premise I operate under: the focus on value has very little to do with the current economic downturn. It just happened to coincide and it made things move faster. But it was not the cause, and so an uptick in GNP will not solve the issue for law firms or make clients less demanding. (If you don’t agree with this, you can probably stop reading now).
The problem with looking at value as a standalone concept is that it makes it sound like a communication problem, not a cost issue. If only law firms show clients more clearly how much service X is worth, they can keep charging those historical effective rates with associated profit margins. The marching orders to key client partners and legal marketers become: sell better!
That would work in a time when (a) general counsel weren’t under ongoing cost pressure, (b) they really didn’t know what firms Y and Z would charge for X, and (c) there wasn’t new service providers beyond large corporate law firms for many legal matters.
Once GCs show progress in reducing legal costs, it isn’t the end. CEOs, boards and CFOs say something like “great, how about another 10-20% next year.”
The focus on value has been essential to reframe the debate and get clients and law firms talking. I think where GCs were at the end of 2008, most managing partners have arrived as we close out 2009.
My History of the Billable Hour 101 becomes: what was the cost-plus model is now moving through value-minus on the way to something else (I covered phases I and II in February 2009 at the 1:30 min point of the video).
While value is a starting point, I am about done fleshing out a more robust way of looking at legal costs. I’ll save that for the second week of 2010, as this is (hopefully) a week of some reflection, resetting, and renewal. (And college football.)
I want to end the year on a lighter note, and will offer up tomorrow one phrase I would like to ban in 2010.
Five Years Gone: Time for Change at Wired GC
December 21, 2009 | Filed Under law river, Change
Five years ago I started this weblog.
Here was the first sentence:
CNN reports that firms are expanding to meet demand for outsourced attorney and legal support services:…
And I ended with a question:
The start of the long-expected disintermediation of legal services?
So now I’ll answer after five years:
I think we are at least at the start of the start.
It the spirit of creative destruction, we’ve reached a fork in the road at the Wired GC, or perhaps a bend in the river.
Law river, that is…
Some of the news and views detailing change in the legal industry really doesn’t fit the format here. So rather than let some timely links languish, we give you lawriver.
It’s about as simple as we could make it. Less to distract and an easier fit when you are working off a small screen.
And five years hence…who knows?
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