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Volume 3, No. 1 - January/Janvier 2006
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A Plea for Clarity in Our Vocabulary for Marketing Legal ServicesRichard Potter, Q.C.* It is an understatement that lawyers are comfortable with rules. And when they set out to analyze a fact situation, lawyers are able to start the process using a widely accepted legal vocabulary. But in many aspects of law practice management, lawyers quickly become confused by the lack of a generally accepted vocabulary – the terms commonly used are ubiquitous (marketing, business development, communications, public relations, for example), yet their meanings seem to have the permanence of shifting sand. By clarifying our vocabulary, we can greatly improve our analysis of legal services marketing and increase our chances of making better choices. Although “marketing” is an imprecise term, I like to turn this quality into an asset by adopting it as the best umbrella word for the whole spectrum of business initiatives open to a law firm. Anything that involves the process of matching a client’s needs with a lawyer’s expertise and experience can be encompassed by this elastic term. But when we dig below the all-purpose term of “marketing”, we achieve more clarity by shifting to the visual and graphic medium. Here is a chart that I have found very useful in making marketing choices:
The left hand side (LHS) of the chart represents the communications end of the spectrum – that is, broadcast messages not individually tailored, having a relatively low unit cost of delivery and a relatively low incidence of success per message delivered. These are impersonal messages delivered at a distance and requiring repetition. The right hand side (RHS) of the chart is the business development end of the spectrum – that is, tailored messages with a relatively high unit cost of delivery that bring a much higher incidence of success. These represent individualized communication, delivered to the target more or less face-to-face. In and of itself, one end of the spectrum is not more desirable than the other. However, what is often missed is that one end of the spectrum is not the exact equivalent of the other. Ten thousand dollars spent at the LHS is not the equivalent of $10,000 spent at the RHS. For the busy lawyer or Managing Partner, however, it is all too easy to approve expenditures at the LHS end of marketing initiatives for one reason only: it takes almost no lawyer time and gives the appearance of taking positive action. At the RHS end, however, significant outlays of lawyer time are required and supervising these initiatives takes real management skills. It is easy to see which end of the spectrum is usually preferred. But preferring the LHS over the RHS comes with a hidden cost. Not only are LHS initiatives relatively wasteful, in that much of the communication never reaches the relevant readers/viewers/targets of the initiative (and therefore requires more costly repetition), but the chance of new business flowing directly from one LHS contact is extremely remote. It is not that LHS initiatives have no place in an overall program; rather, when constructing a marketing program, you should ensure that your initiatives are chosen to achieve a balance on the spectrum that makes the most sense for the firm or practice area involved. You should continue to weigh the costs of your program in money and lawyer time and re-evaluate the mix of LHS and RHS initiatives. A word about the content labels in the boxes in the chart is warranted. The positioning of the content labels (advertising, web site, CRM, etc) is not an absolute statement of the position towards the RHS or LHS, but rather a relative statement. The real question to be asked about any initiative is not where on the chart a label “ought” to be in the abstract, but where it will be positioned on the chart when you use it the way you plan to use it. For example, the most extreme LHS initiative, such as printing a static hard-copy brochure, can become an RHS activity if a lawyer takes a copy of the brochure and uses it as a starting point for an in-person pitch to a target. Similarly, a seminar for clients that involves little personal contact or follow-up becomes an impersonal and institutional exercise – that is, more of an LHS activity. In terms of the broad spectrum of marketing activities open to you, your primary goal should be to turn your communications initiatives (LHS) into business development activities (RHS). When your communications become highly targeted and personal, your rate of success will increase dramatically. More importantly, closer contact with your targets and clients will bring even better insight into what motivates and interests them. You may even attain a virtuous circle in which your next business development move seems to present itself almost automatically from the last one. In effect, your clients will be telling you how best to market to them. In itself, a changed vocabulary does not develop new business. But it can serve to remind us of the real goal of marketing: to match clients’ needs with our services and develop new business. * Richard Potter, Q.C. is the principal of i-lawmarketing.ca (www.i-lawmarketing.ca) and advises law firms on strategy and on the spectrum of marketing from communications to business development. Actions Speak Louder Than WordsRichard G. Stock* Stanford University’s Robert Sutton co-wrote a book with Jeffrey Pfeffer called The Knowledge – Doing Gap, based on case studies of companies he and his students prepared. Sutton’s overall findings were clear: the problem is not analysis; it is how to implement. He observed that some companies had a propensity for research and analysis rather than action, and that they needed to re-do their values and vision. In highly competitive markets, new operating philosophies were needed which could be used to guide a wide range of actions in different situations. The Straight-Talk Trap Sutton identified five basic causes of the gap to implementation. Some apply to some firms and law departments more than to others. Consensus-building values in legal professionals make the first cause pretty common. “The Straight-Talk Trap” finds firms waiting and planning in lieu of taking action. For this one, Sutton suggests that “people get ahead by sounding smart, not by doing smart things right; the more critical people are, the more they may appear smart.” There are always one or two people in every group of 10 who fit this behaviour and who anchor 80 % of the conversation. Their colleagues incorrectly let them forge ahead. The countermeasures include career and compensation systems that place greater value on action and results than on talk. Even plans and reports that must be reduced to writing should rely on simpler, action-oriented language with systems that monitor follow-up. When Memory Substitutes for Thinking The second cause is “When Memory Substitutes for Thinking”. The commitment to the past re-affirms the firm’s social identity and culture. The danger of precedent is ever present, especially if the firm has been successful over the years. The usual phrases are trotted out: “If it’s not broken, don’t fix it!”; “No growth for the sake of growth”; and “We’ve always done it this way.” John Kotter’s Leading Change can help firm leaders and their teams focus on the future. Sutton and Kotter both suggest that one should give people things to do that they have never done before and that the management team be “moved around”. When Fear Prevents Acting on Knowledge The third cause is “When Fear Prevents Acting on Knowledge”. Sutton’s research suggested that only 38 % of workers trust their companies to keep their promises. There is a well-established fear of blame in most people. Many lawyers have the additional reflex and training for risk aversion. Few law firm compensation systems reward partners and associates for valiant effort but no success for business origination and non-billable work. Two basic design imperatives for compensation systems are that a firm gets what it measures and what it pays for. The better-balanced compensation systems for professionals provide a meaningful share of total compensation for leading groups and producing results that are developmental, higher risk and of strategic value to the firm. When Measurement Obstructs Good Judgment The fourth cause is “When Measurement Obstructs Good Judgment”. The cause takes on a different form in a law firm than it does in a corporate or government law department. Law firms still measure worth based on billable hours and total billings per fee earner. Yes, compensation systems level out peaks and valleys and factor in other contributions. But, while 75 % to 85 % of what an individual receives in total compensation is directly proportional to their personal economic contribution to the firm, not enough is set aside for developmental and management contributions. Ensuring the linkages are in place is critical. When Internal Competition Turns Friends into Enemies The fifth and final gap is “When Internal Competition Turns Friends into Enemies”. This is not an easy challenge to meet when the private practice of law tends to attract large numbers of independent-minded high achievers. The situation is not as dire in corporate and government law department settings because of values that are more corporate and reward systems that rely less on individual contribution. Law firms and large law departments must favour team players only and minimize the visibility of and rewards to individuals who do not work co-operatively. Knowing what the five causes of the knowledge-doing gap are does not eliminate them. Law firm and law department leadership must act to prevent and close the gaps that stand in the way of delivering effective legal services and building a sustainable business. This is an abridged version of a more complete article to be published in the February issue of Lexpert magazine. * Richard G. Stock, M.A., FCIS, C.Adm., CMC is a partner with Catalyst Consulting, the firm designated as the Preferred Supplier for Legal Services Consulting by the Canadian Corporate Counsel Association. Richard can be reached at rstock@catalystlegal.com or at (416) 367-4447. Effective Client TeamsLori Brazier* This article was previously published in Lexpert, June 2004. “We hire lawyers, not firms” is still a common refrain among corporate counsel and business executives. But significant users of legal services are now requiring law firms to field stable teams of lawyers and paralegals to meet their needs in various practice areas. Certainly this was a key feature of the TD Bank Financial Group’s partnering arrangements (see Lexpert, March 2004, “The Cost of Choice”). Arguably they are still hiring lawyers – a team of them and not just certain individuals. Clients recognize that the partners whom they rely on cannot and should not do all of the work. Law firms have responded by aligning teams with clients, and also with the specific business units or departments who regularly retain their services. The focus of these teams goes beyond responding to requests for services – to anticipating future requirements and aiming to be as effective as possible for their clients. More than one business representative has remarked upon uncoordinated approaches on the part of individual lawyers to promote the services of their firm leading to risks of confusion. Effective client teams develop a client-specific business plan that addresses the requirements for legal services across a rolling 3-year period. The plan builds on the knowledge of business objectives and the anticipated challenges that will require legal insight and input. It is growth-oriented and identifies how the firm can increase its involvement with the client by responding to new issues or concerns or by doing a greater share of the work the firm has traditionally performed. Growth in new areas not presently serviced by the firm means consideration of how to cross-sell and showcase capabilities with which the client may not be familiar. An effective plan takes into account the firm’s position vis-à-vis the client relative to other law firms and looks at what those firms are doing for the client to determine how to compete for a greater share of the client’s work. The competitive advantage of a firm lies in its ability to meet (and surpass) service needs and add value. Associates can be helpful in this regard by assembling intelligence from their counterparts at competing firms. The team sets specific objectives for work volumes, market share and profitability – along with initiatives required to achieve these objectives. The best objectives are SMART goals (Specific, Measurable, Achievable, Realistic and Time-Focused). Specific initiatives include managing workflow (getting the work to the right level), service guarantees, quality assurance and training / mentoring to ensure top-notch service. Designing and implementing the plan is a challenging process. Law firms value individuals who are self-starters and capable of working independently. A group approach to business development, service and client relationship management can be a whole new way of thinking. Thus the role of the team leader is critical. He or she must be someone who is respected for his or her economic performance and status in the legal community so that others on the team are motivated to embrace the plan and the goals and initiatives flowing from it. Data is always important to be able to analyze activity levels, workflow and realization. Good team leaders recognize the importance of enlisting the help of administrative staff when such data is not already available. Team effort is also key. The first task of the team leader is to set the stage and define some key objectives, drawing on his or her knowledge of the client’s business goals. But a successful team plan is developed by all of the team members collectively – and assigns accountability for specific initiatives to specific members of the team, including associates and paralegals, so that everyone feels part of the plan. A big part of the team leader’s job is to encourage the independent thinking and creativity that come naturally to lawyers and help the group consolidate all of the various ideas into a workable plan. Effective teams invest considerable time and energy building the plan, and reviewing it regularly to follow up on progress. A compensation system that rewards both group effort and non-billable initiatives is a prerequisite. * Lori Brazier is a partner with Catalyst Consulting. The firm has been designated the Preferred Supplier for Legal Services Consulting by both the CBA and the Canadian Corporate Counsel Association. Lori can be contacted at (416) 367-4447 or lbrazier@catalystlegal.com. New Chair of Sections OBA is pleased to announce that Roderick Flynn of the law firm of Evenson
Bundgard Flynn and Past Chair of the Education Law Section has been appointed to
the position of Chair of Sections. His e-mail address is r.flynn@ebf-law.com. The OBA and the current Chair of Professional Development, Ben Hanuka, welcome Rod. Publications
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Section Executive 2005-2006Chair: Lori Brazier, LL. B., MBA Secretary (Sections): Robert A. Muir Newsletter Editor: Ginevra Saylor Technology Liaison: Richard B. Potter,
Q.C. Member-At-Large: David Chaiton Member-At-Large: David B. Debenham Member-At-Large: Charles E. Humphrey Member-At-Large: John M. Sotos Staff Liaison: Janet Green | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||