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.)

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I want to end the year on a lighter note, and will offer up tomorrow one phrase I would like to ban in 2010.

Of Lawyer Ratings and Value (Wine) Pricing

December 11, 2009 | Filed Under Legal Ratings, Pricing 

Sometimes you get tired of hearing about legal change, alternative billing, and those emerging lawyer ratings. So let’s talk something fun and tasty. Like wine.

One of the emerging social media superstars who is making wine more popular is Gary Vaynerchuk of WineLibrary TV. A recent video episode covered Robert Parker’s Master Wine Tasting at Wine Future in Rioja, Spain. It sounds slightly more fun than LegalTech.

Here’s the link to the episode. And darned if Mr. Parker (an attorney and former in-house counsel), talking to international wine buyers and distributors, doesn’t inform us about legal change in the process.

Here’s a few tasty samples to swish around a bit:

@ the 6:00 min mark:

– the wines that will do well will be the wines that offer the best value.

– one of the good things in this world recession is that consumers are searching out value.

– and they are discovering how many wonderful wines there are at lower price points.

– the age of speculation is not completely dead, but you must over-deliver in terms of value for what the price is.

– what will do well is good wines at reasonable prices.

@ 7:20 min mark:

- we look at wine from a global perspective.

- I am optimistic about the future of wine, making it accessible and friendly.

- value wines, education and interacting with your client base is everything.

Oh, and what does Mr. Parker offer his readers? Ratings.

Mr. Vaynerchuk also took this a bit further recently in a private briefing (for customers of this membership plugin for WordPress users). He is going multimedia and is the author of the current New York Times business books bestseller Crush It. He concluded with his thoughts on customers and reputation:

Word of mouth is what builds businesses. Word of mouth is now on steroids. And if you don’t give customers service, they will tell their friends. Period.

Oh, and what does Mr. Vaynerchuk offer his viewers? Ratings.

So feel free to sit back this weekend, turn off your computer, set your BlackBerry to quiet mode and pour yourself a glass (or two):

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Both Messrs. Parker and Vaynerchuk rate it highly.

Alternative Billing Hits the Road

September 17, 2009 | Filed Under Pricing 

Some enterprising lawyers in the Motor City are taking alternative billing directly to the consumer:

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If you click on the picture, you’ll hear that these attorneys guarantee a specific outcome or they waive their fee.

Perhaps one way to approach alternative billing discussions with clients is to make your proposal fit on a small sign that’s visible at 200 feet when driving 60 mph (in a 45 mph zone).