Legal Marketing Blog

If you don’t know, you are failing at marketing!

As is the case when I get “blogger's block” I’ll look at some trusty book or two for ideas, as I did today since my RSS feeds aren’t inspiring me. Well, one of my trusty-ist is Richard Levick’s and Larry Smith’s 365 Marketing Meditations: Daily Lessons For Marketing & Communications Professionals, which is available on Amazon. Their meditation for today is:

“What keeps your clients up at night? This is the bullseye of marketing. If you don’t know the answer, you are not marketing. You’re just busy.”

There really isn’t much to add to that succinct statement, except it means that you are not talking or listening to your clients. And that is bad marketing!

I know that many lawyers are turned off, if not terrified by the concept of networking. The idea of walking into a room full of strangers and striking up a conversation is truly worse than a root canal. I can’t say that I’m overly comfortable with networking myself.

However, I found an article entitled “Bad Networking Ain’t Networking” by John Snyder on Attorney at Work to be quite helpful. When Synder left BigLaw for a solo practice, he was told “you’ve got to network.” His response to that in the article raises two excellent points:

• Don’t go to networking events to get business. Rather look at it as opportunities to make new friends; and
• Think of ways to help those you meet.

He sums it up beautifully: “So here is how I would amend that ‘you gotta network’ edict. It’s not about networking – it’s about being a friendly, generous and helpful person…(and those are) the qualities that clients or potential referral sources seek in a lawyer.”

So, attend networking events with the idea of making friends, not networking.  The results may surprise you.

Obviously, pricing is an important part of marketing your legal services. There is no question that price sensitivity is real; and that clients, particularly in these economic times, are feeling the pressure to minimize legal costs.

Some argue that the cost of legal services should be driven solely by what the client is willing to pay. That unfortunately is only part of the pricing equation. On Attorney at Work last week, there is an article that provides excellent insight into value pricing by Toby Brown, the Director of Pricing for Vinson & Elkins. His proposition is that there are three critical bits of information that a law firm should determine prior to pricing a particular piece of legal work.

1. Understand the clients price sensitivities. Clearly one size (or fee) does not fit all situations. As Brown points out, a given piece of legal work may have a high value for one client, and lower value for another. I would agree with him that "the only effective way to understand the client's value priorities is to have a direct conversation with them." The client is the only one that will know what the particular legal issue(s) means to them, or about the internal pressure they are under to reduce legal costs;
2. Know what your costs (better still, your desired profit margins) are. Some would contend that it doesn't matter what your costs are. The only thing that matters is what a client is willing to pay. That is total baloney. If law firms price their services under that reasoning, without knowing what their costs are, they won't be in business very long. It may be correct that a client simply will not hire you for the fee you quote, but if you don't know what your costs and profit margins are, you won't how much you will gain or lose by taking the work. There may be good reasons for taking some work at a loss, and there are firms that do that to get their foot in the door for future work. But, without knowledge of your costs, you cannot make an intelligent decision as to whether to take the work or walk away; and
3. Do some risk and reward analysis utilizing project management techniques. After you understand what a client's price point is, what your costs are, and what your margin needs to be, the firm should then do some "risk and reward" analysis using project management tools that include risk assessment, understanding the scope of the work (what’s included, what’s not), the client’s goals, and a client communication plan for starters. As Brown says, “[T]he main point here is that the decision to take the risk and make the investment should be made with knowledge and awareness…”

The bottom line is that pricing should not only match the client’s value proposition, but the firm’s value proposition as well. A firm can’t “just accept the clients’ definitions of price and value absent your own costs and risks,” according to Brown. Concur in spades!

One of the key issues involved with Legal Project Management (LPM) is “assigning tasks and managing the team.” An integral part of that involves pulling your team together as early in the process to explain the goals and objectives, and plan the tasks involved in an assignment. [For more on the 8 key issues in LPM visit my colleague Jim Hassett’s web site LegalBizDev.com and blog at LegalBusinessDevelopment.com].

What is the point?, you may ask. One of the benefits of LPM is that it can do wonders in avoiding the “vague assignment” problem in law firms. Bill Melater, who is the resident Dis-Associate on Attorney at Work had an entertaining piece last month about his vague assignment experience.

He was summoned to a partner’s office and told to “breakdown” a file. Without further explanation, he really didn’t understand what he was suppose to do with this task that was thrown at him with a three-hour deadline. Worse, the partner promptly went into the “Do Not Disturb” mode by closing the door and turning off his phone. That behavior may not be a problem for the partner billing by the hour (although clients’ attitudes are rapidly changing on that topic), but I can assure you that it is a BIG problem for a firm on a fixed fee. That behavior is a money loser!

First, Melater wasted time trying to figure out what to do and most likely didn’t get it right through no fault of his. Time wasted is a guaranteed profit killer, especially with fixed fee work. But, even with hourly billing the invoice may need be reduced (written down) or a portion written off due to the client’s refusal to pay for the excessive time spent on a file review – which BTW is the client’s way of imposing their own version of an alternative fee. See my post “Has the Hourly Billing Model Become An AFA?”

Project management is not only real in the world of industry and thus to many clients, but in the law world’s “new normal” it can and will drive law firms to be more efficient eventually. If your firm is not ready for legal project management, partners at least ought to understand the need to reduce write-downs and write-offs by being more thorough, and efficiently assigning work to younger lawyers. With clients demanding more efficiency, the more efficient a law firm becomes, the more successful they will be at getting more business.

With the crush of year-end and the busyness of the holidays, I decided to post an encore of a holiday post I did in 2007 on reaching out and touching clients and referral sources by telephone during the holidays.  Personal attention is better than (but not to the exclusion of) holiday cards. Here it is:

December 18, 2007  
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Work Your Network During the Holidays

It’s a good idea to touch base with contacts within your network during the holidays. It’s even better than sending holiday cards. Pick up the phone and reach out to everyone you know (okay, if you are THAT popular, not everyone) and wish them a happy holiday season. It especially makes sense to at least speak to every referral source and client, including those you haven’t done work for lately or received a recent referral.

And talking about networking, I thought I would call your attention to a post I did in December 2005 entitled “Ignore Your Friends At the ‘Business’ Holiday Party.”  The premise of that post was that you can get together with your friends anytime, so use business-related holiday parties as productive networking and business development opportunities that you can cultivate further in 2008. If interested in reading more of my thoughts on that subject, give that post a look.

Again, Happy Holiday(ing) Everyone!

It's not too late to select and ship gifts to clients, referral sources, friends and family. In past years, i.e., in 2005, 2006,  2007, and 2008, I posted suggestions on gifts for the holidays. Okay, so I procrastinated the last couple of years. Bad me, but I’ve decided to mend my ways for 2011.

Many suggestions made in earlier years are still good ones, and some of the same ideas are suggested this year, such as thebillablehour.com (which has added items to their original watch collection). Some of my favorites this year include:

• Gas power blender from tailgatorzone.com;
• Whiskey Stones from teroforma.com that replace ice cubes and won’t dilute your cocktail (not so crazy, huh);
• Solar powered bikini (you may not want to go in the water in this one) from (I don’t have a clue); 
• USB Desktop Aquarium, with calendar, time, date and low powered air pump (I wonder what happens when your PC goes into sleep mode) by X-Treme Geek; and
• LawTunes.com album "Yule Hear From Our Lawyers," with catchy tunes like "Legal Holiday," Bluebook Christmas," and "Second Seat Santa."

For more, see A Lawyer’s Gift Guide by Dan Pinnington and Reid Trautz, and Tech Toys for the Holidays 2011 by Jim Calloway and Sharon Nelson.

Happy Shopping!!

In a couple of posts back in 2009, I talked about the importance of a personal brand, as well as its relation to the firm’s brand. Both are important, but the personal brand is more critical since clients hire lawyers in most cases, not the law firm.

In this month’s issue of Law Practice Today, personal branding was the theme, and one article by Jonathan Fitzgarrald caught my attention because it also addressed the interrelationship between the two. Specifically, how a bad personal brand can impact the firm’s. And, if taken a step further, could have an affect on one’s employment longevity. As someone wrote recently in a somewhat different context, but apropos, “you might want to buy a new pair of shoes, because there’s pavement in your future.”

Fitzgarrald suggested some “brand builders” that might help with yours:

• Take your appearance seriously. You may think you can dazzle potential clients with your brain power alone, but not so if the prospect is hung up on how you look;
• Keep your message “simple and concise,” (starting with a fine-tuned elevator speech) that conveys how you will “add value to the prospect’s business;”
• Relate to your listener in a personal way by bringing your personality to the table (not just a dry “lifeless” recitation of your background) and listen more;
• Focus on providing great client service. Remember that maintaining existing client relationships (or defensive marketing) is just as important as developing new business (with some practice area exceptions, of course). So, spend non-billable time adding value to your client service; and
• Monitor your brand by seeking feedback from clients and referral sources (e.g., how would they describe you to a stranger), and yes, even from your support staff and peers.

Obviously, your personal brand is very important to your success. It can also impact your relationship with your firm, particularly if they are out of sync.

Being interviewed by a prospective client is not that different than a young lawyer interviewing for a job in this awful market. This idea came to mind when I saw an article by William Melater, a young associate and contributor to Attorney at Work. He wrote about three basic rules for young graduates interviewing for a law job. I thought how helpful the same rules would be in making a pitch to a prospective client.

The basic rules are:

1. Look like an attorney. Melater suggests that young attorneys forgo the "stupid hip hairstyle", earrings, and be clean-shaven. Since "you are borderline unemployable", avoid expressing your individual style until you are employed. Do the same when it comes to prospects. The days of casual dress are no longer in vogue IMHO. Even though your potential clients may dress less formally, they still want their lawyer to look like a lawyer IM(further)HO;
2. Stop talking and listen. Don’t spend your time trying to prove how smart you are.  It is better to listen more than you talk. Let the interviewer ask questions and then respond accordingly. That is true for a job applicant, because the interviewer really only wants to know that you will fit in, work hard, and “learn how to be a lawyer.” A prospect also wants to know that his/her wants and needs are understood and that the lawyer has the background and experience to solve their problem. The core credentials of both has gotten you in the door, so don’t kill your chances of being hired by talking more than you listen; and
3. Do your homework beforehand. Do as much research on the firm or client as you can before meeting with them. What you learned in law school or done for other clients doesn’t mean anything if your capabilities don’t meet the needs of the employer or this specific client. So, learn as much as possible about the law firm and client in advance.

Since we are in the personal services business, how we present ourselves to a prospect – whether a prospective employer or prospective client – can rest on how you prepare, present and listen during the selection process.

How appropriate this week as the nation (if not the world) honors the memory of a great curmudgeon in CBS’s Andy Rooney, that Attorney at Work has a post by its own killjoy Otto Sorts. It deals with an old codger’s advice to the younger members of the legal profession, particularly relating to the business side of the practice.

His pearls of wisdom for young attorneys include:

• Clients want solutions. So, make sure you understand the problem before running off to do “your legal stuff,” as the resolution may rest with a dose of common sense;
• Do a good job at a reasonable price. And don’t charge for your time, if you can’t help. The client “won’t be happy, you won’t feel good, and the karma will be very bad indeed;”
• Remember that the practice of law is both a business and a profession. The business side is (or will become) your responsibility, and on occasion, you will need to spend (sometimes) as much time on the business side as on practicing law. Otherwise, Sorts suggests buying “some good walking shoes, because I see a pavement in your future;”
• Clients hire lawyers, not law firms. Your firm’s “spiffy….website” ain’t gonna make up for a “crappy personality, poor communication skills, failure to respond to calls or any of the other reasons people fire their lawyers;” and
• Listen more than you talk. The real world of practice is not like law school where you got credit for being quick to answer a question. If you first don’t listen well to clients, you may just blurt out the wrong answer before understanding the client’s needs.

Although many younger lawyers, especially in larger firms, do not see themselves as needing to contribute to the business side (and some are even discouraged from doing so), in the long term that is a huge mistake. More and more in our mature industry, the business end of the practice will determine one’s survival and satisfaction with their choice of vocation.

In a telephone conference earlier today with a client talking about legal project management and alternative fee arrangements, I was struck by a statement by one of the partners on the call. Although he recognized clearly that AFAs, especially fixed fee matters, makes project management more urgent in today's legal world. He went on to say that that even if the firm was billing on an hourly basis, the client was treating the fee as an AFA. WHAT? I was thinking, and then he explained: “With write-offs and write-downs, the client is imposing a fixed fee.” The client simply will not pay more than the figure she or he thinks is right. That fact shows up in the realization rate.

Today I also ran across a post on In Search of Perfect Client Service by Patrick Lamb that raised the question about how the realization rate according to Hildebrandt's Peer Monitor Index (PMI) continues to decline. It seems that law firms merrily go about raising rates, while clients summarily go about paying less.

In part, here is what Lamb gleaned from the PMI:

“But that increase (in billing rates by 3.5 percent from a year ago) is marginalized by the fact that firms' ‘realized rate’ -- the rate they are actually paid by the client -- reached an all-time low this quarter. Net collected realizations fell slightly, to 85.4 percent, which also represents an all-time low.”

He suggests that it would be better for a firm to have a sit down with clients and talk about NOT raising rates or even lowering them, if the client will help the firm with their realization.

Another option is for the law firm to become more efficient – whether on hourly billing or a fixed fee. That’s where legal project management comes into play. It can increase value for the client, and improve the firm’s bottom line.

As Lamb concludes: “But whatever firms do, simply doing what they used to do (increasing rates) is a fool's errand.” Not to mention poor marketing.