Straight Talk from General Counsels on How to Win Their Business

Far too much of corporate law practice marketing is predicated on what the firm wants potential clients to know, rather than what general counsels are actually looking for and how they conduct their searches. I came across a gem of a video on the Corporate Counsel section of Law.com that provides a glimpse of what general counsels actually care about when identifying and vetting outside firms.

  • Strong word-of-mouth is a great equalizer; gets you on the short list.

“Be good at what you do. We tend to interview the people we’ve heard about a lot, and we’ve heard about them a lot because they’ve had success in the past. And it doesn’t mean that we’re the kind of company that defers to the absolutely “blue chip” [or] “name brand” in a certain area because that’s an attorney the board will be comfortable with…If you are good at what you’re doing, whether you’re small, new emerging, well-known, we tend to be able to find you.”

Eric Whitaker, General Counsel, Tesla Motors

 

  • It doesn’t matter how good you are if you’re also an ass.

“Can I get along with this person, will they get along with my [internal] clients? Getting along with me is important, but it’s much more important to get along with the clients, because the clients are going to see you in the long term, every day basis. If the people who have to work with you on a daily basis in that transaction can’t stand you, that’s not going to reflect well on me nor is it going to get you repeat business.”

Robert Shives, Senior Director & Associate General Counsel, Fujitsu

 

  • Forget quirky videos and personal narratives; make website attorney bios more search-friendly.

“I absolutely check out bios, because we are frequently vetting new counsel. I look at representative clients, I look at representative matters. One of the things that makes me crazy is when the sites aren’t easy to maneuver. So how you’ve coded your website to be able to sort. Try and do it yourself, as if you’re an outside counsel trying to get to a person with this expertise in this location.”

Renee Lawson, Associate General Counsel, Zynga

 

  • Think rifle, not shotgun.

“One of the things that’s sort of interesting is that a lot of firms describe [themselves] as the everything to everyone. I’m usually looking for something very specific, so if you are an IP/anti-trust/transactional/product liability/labor and employment/estates and trust lawyer – which I have seen – you’re probably not the attorney I’m going to hire. So think about how you’re portraying yourself to the outside world.”

Renee Lawson, Associate General Counsel, Zynga

 

“It’s a credibility issue as well. When one sees that long list of “you’re an expert in every field,” you just pass. You take a pass on that person.”

Megan Pierson, Senior University Counsel, Stanford University

 

  • You’re competing against in-sourcing.

“I hire a lawyer and expect that they’re going to give me 2,000 hours a year for a $200,000 salary — I’m paying them $100 an hour. In reality, if you’re working with me at a high growth company you’re working 3,000 hours a year, so it’s even less [per hour]. My blended rate from law firms for the most part — big law firms — is still $400-$500 an hour.

“It’s simply a situation where, for the most part, law firms have priced themselves out of a whole bunch of work I used to have them do. It’s that simple. When I started in ’99 I would send contracts to law firms, I’d send license agreements to law firms, I’d send some employment issues to law firms. I just don’t do it anymore.”

“If work is going to repeat at all, I’ll bring the expertise  in-house. My in-house teams have simply gotten much bigger, and my outside counsel use has gone down, and it’s a direct result of the economics of it.”

Eric Whitaker, General Counsel, Tesla Motors

  • Billing reviews can be moments of truth.

“I don’t bring everything up with my outside counsel, but I do bring certain things up because we are early in a relationship and I want to set expectations. If I ask you to look at something on a bill, I expect you to look at it, and I expect you to get back to me promptly. And frankly if it even has the slightest appearance of being inflated, wrong, I expect you to say, “I’ve taken care of it,” and I expect you to do it right away.

“If I have to battle for a write-off with you, after I’ve given you the courtesy to bring it to your attention and reviewed your bills that you should have reviewed, you’re not on my list anymore.”

Renee Lawson, Associate General Counsel, Zynga

 

Law Practice Management: Fortune Favors the Bold

If you believe Vivia Chen’s recent post on Careerist, neither chief legal officers at corporations nor their outside counsel firms are seriously interested in alternative fee arrangements. Chen bolstered her thesis with an opinion from Corporate Counsel writer Nigel Holloway: “True, more than three-quarters of legal departments surveyed are initiating talks with their law firms over alternative fee arrangements, but these rarely bear fruit.”

What this perfunctory analysis elides is that even if clients are not aggressively pushing for AFAs, that doesn’t mean they are unquestioningly paying whatever bills they get. There are other reliable, time-tested ways to lower costs. As long as outside firms are willing to write off billable hours, clients can achieve their cost and productivity objectives without the trouble of negotiating complicated new service agreements.

While the profession dithers with what to do about the billable hours pricing model, a few firms are pioneering a wide range of technology-enabled efficiency and cost saving applications. As Hamlet observed, “There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.”

 

Hal M. Stewart, Chief Operating Officer of Chadbourne & Parke, recently offered a more action-oriented take on  how innovative law firms are lowering operating expenses. His excellent post outlines nine innovative technology applications already in use by some law firms that offer significant opportunities for cost reduction and organizational effectiveness:

  • Full digitization of incoming mail
  • “Hoteling” office space arrangements
  • E-billing for law firm vendors
  • Workflow automation for billing adjustments and A/R write-offs
  • Automated notification for AFA threshold reporting
  • Unified VOIP communication, collaboration and messaging infrastructure
  • Social media for recruitment and associate communications
  • Workflow-enabled transaction experience systems
  • Data mining for alternative fee arrangement pricing

The pressure on both in-house legal departments and outside counsel to deliver exceptional legal services at competitive rates is real and growing. AFAs are only one piece of the puzzle.

Do you think there’s a tipping point coming for bold moves into cost control and reduction, or will it continue to be  more talked about than acted on?

Reconceiving Client Surveys, Part 4: Shorter, More Frequent and In Person

As discussed in the first post of this series, conducting client satisfaction surveys is as much marketing as it is client service. The frequency of surveys, their method of delivery, the breadth and depth of topics covered, and even the way the questions are structured all tell clients a story about your firm.

Frequency – In a professional services environment predicated on deep personal connections with clients, fielding a client satisfaction survey only once a year  seems perfunctory. Even if you have informal channels and tools for gathering  client feedback throughout the year, an official outreach on a quarterly or semi-annual basis telegraphs active interest and engagement — that you don’t take them for granted.

Method of Delivery – If someone can make a persuasive argument as to why mailing/e-mailing law firm client satisfaction survey forms constitutes better client service, please do so in the comment section below. A printed form should be hand-delivered to the intended recipient, accompanied by 1) a statement of appreciation for the client’s business and 2) a spoken, personal invitation to complete the survey candidly. In the case of an e-mail survey, make sure the message doesn’t end up in your client’s inbox without a personal heads-up — by phone or in person — to expect it. Steps 1 & 2 above obtain in this scenario as well.

Breadth and Depth of Topics Covered – Typical surveys take a “kitchen sink” approach, with questions ranging from the make-or-break (“How likely are you to recommend our firm to a friend or colleague?”) to the mundane (“Returns phone calls as promptly as I wish”). This approach inevitably results in questionnaires that are too long, which causes respondents to race through later questions. This is a particularly serious shortcoming when you have open-ended questions at the end of a long survey, because respondents are much less likely to provide thoughtful, detailed comments.

Instead of one long annual survey, consider fielding several smaller ones focused on a single client service category (e.g. core capabilities, responsiveness and collaboration, cost management/value, technology utilization, privacy/data security).  In addition to operationalizing client service conversations, you’ll obtain higher quality feedback.

Question Structure – Open-ended questions yield more useful feedback. If, however, you choose a closed-ended format, take special care in how you structure and word the questions and pre-populated response options (if you’re not using some sort of number or letter rating scale). The worst thing you can do is frame responses in such a way that it appears you’re trying to put words in the respondent’s mouth. Like this actual Big Law firm example [firm’s name is redacted]:

Rating Scale:

A – Exceptional Performance, rarely equaled by other law firms.  XYZ LLC  is the firm I hire for my legal needs.

B – Above Average.  Exceeds my expectations frequently.  I usually call XYZ LLC first.

C – Average.  Satisfactorily meets my standards.  XYZ LLC isn’t my first choice.

D – Below Average.  Failed to meet my standards in a material way.  I am seeking other counsel.

F – Unacceptable.  Without a significant and sustained effort by XYZ LLC to improve, I will discontinue using the firm.

As they say on TV lawyer shows, “Objection. Leading the witness.” Also, doesn’t “D” sound worse than “F”? And would clients experiencing “D”- or “F”-level service even bother filling out a survey form?

 

Reconceiving Client Surveys, Part 2: Open-Ended Questions Yield More Useful Feedback

Your client satisfaction survey is comprised of closed-ended questions with a limited number of response options. Respondents are asked to rate various performance factors on a 1-5 numerical scale. Your most important client rated you a “4” in overall satisfaction. In fact, all of the responses were 3s or 4s. They’re not unhappy, but they’re not thrilled. Not ready to leave, but not necessarily willing to give you additional matters or provide recommendation and referrals.

What actionable information has that survey given you? As discussed in the previous post, the law firm client satisfaction survey should be a research and marketing exercise, not a popularity poll. In a relationship-driven profession, the most effective survey instrument for collecting meaningful, actionable information is a survey form or script that relies primarily on open-ended questions.

Metagora makes the case succinctly:

  • Open-ended questions allow respondents to include more information, including feelings, attitudes and understanding of the subject. This allows researchers to better access the respondents’ true feelings on an issue. Closed-ended questions, because of the simplicity and limit of the answers, may not offer the respondents choices that actually reflect their real feelings. Closed-ended questions also do not allow the respondents to explain that they do not understand the question or do not have an opinion on the issue.
  • Open-ended questions cut down on two types of response error: respondents are not likely to forget the answers they have to choose from if they are given the chance to respond freely; and open-ended questions simply do not allow respondentsto disregard reading the questions and just “fill in” the survey with all the same answers (such as filling in the “no” box on every question).
  • Research has shown that open-ended questions are better for eliciting sensitive information than closed-ended questions.

Granted, the narratives generated by open-ended surveys require more work (read: time and expense) to compile and clearly present, but the depth and breadth of insight you gain will more than compensate. Most importantly, your clients will notice — and think of you more positively.

Reconceiving Client Surveys, Part 1: Remind Them Why They Like You

Why do so many client satisfaction survey introductions begin with some variation of “In order to better serve you and improve our overall relationship….”? At best it’s an expression of low self esteem, and at worst it’s an invitation to find fault. Despite their empirical trappings, surveys are as much marketing as they are client service. Wouldn’t the surveys be more valuable to both you and your clients if you used them as the beginning of a discussion about what’s going right in your relationships, and how to leverage those strengths into other areas?

How You and Your Clients Can Get the Most Out of Your Satisfaction Survey

  • Structure your survey as an inverted pyramid — The level of thoughtfulness and detail in responses falls off rapidly in surveys, so pose questions in descending order of importance. For example, don’t start off by asking the respondent to rate you on whether their phone calls are answered as promptly as they’d like. (That comes from an actual Big Law survey form.)
  • Don’t dither. Start with THE question — In a profession where firms live or die by the quantity and quality of referrals they receive, there is only one survey question that matters in determining client satisfaction: “How likely are you to recommend our firm to a friend or colleague?”
  • Use the main body of the survey to elicit context and tease out details behind your “net promoter” score —  Regardless of whether they are fans, neutrals or detractors, there are reasons why the respondents are still clients. Ask them to identify what they value most about working with you. Detractors will have an opportunity to vent later on in the survey. Causing them to consider and identify positive attributes in addition to criticisms will give you more to work with when you start developing your remediation plans.
  • End the survey with a promise — Assure respondents that you will develop and share with them an action plan based on their feedback — then do it.
Part 2: Open-Ended Questions Yield More Useful Feedback

Legal Marketing: You Are What You Bill (Hourly)

The relationship between lawyers and hourly billing rates might best be characterized with that over-used quote from the movie “Brokeback Mountain”: “I wish I knew how to quit you.”

For all the client-centric talk about alternative fee arrangements and value billing, hourly rates retain a firm grip on law firms and lawyers for both practical and psychological reasons. As a practical matter, it’s hard to beat elapsed time as the basic unit of measurement for professional services work, and hourly rates are the easiest — if not necessarily the best — ways to charge for service. But lawyers also cleave to the belief that hourly billing rate is the primary expression of  ability and status.

In the discussion thread of a recent post by Carolyn Elefant on high-end legal temp agency Axiom, one commenter noted: “Why would a good lawyer work for Axiom? Clients must understand that they’re getting junk for $150 per hour.” Really? What if a lawyer previously had been a successful solo charging $250 per hour? Is she less competent now that she’s billing at a lower rate?

As Elefant replied, “I’m not so sure they are getting junk. I mean, the lawyers have large firm and in house GC experience – but my impression is that they are not rainmakers and prefer the certainty of ongoing work and steady pay to a higher rate.”

Toby Brown opens his recent post 3 Geeks and a Law Blog on billing rate increases with a zero-sum rhetorical question:  “As a lawyer are you highly valuable (justifying a higher rate) or are you low value?”  Again,  hourly billing rates are erroneously linked directly to the quality of professional skills. Lawyers who bill at a higher rate are intrinsically better than those who bill at a lower rate.

Brown then goes on to inadvertently demonstrate how billing rates unnecessarily complicate fee discussions with clients. On one hand, Brown notes that “Rate increases are a relationship building opportunity,” yet he goes on to counsel that “Rates are merely the starting point for rate and fee conversations” and  “Have conversations with clients about pricing, versus rates. At the end of the year, or end of a case, what really matters to a client is the fee.”

Then why dwell on hourly rates at all? If the client ultimate cares most about the total fee and you make a compelling argument based on that, how you get to the final nut rate-wise becomes less relevant and less contentious. You could put rates into an appendix without reference to whether they’re going up or down, and only discuss them if the client asks.

One of the clearest examples of the pernicious hold hourly billing rates have on the lawyer psyche is a presentation by Victor Medina at the 2011 Ignite Law event. Though you’d be hard pressed to find a client to agree with his thesis, Medina posits that “Legal services are expensive, and they ought to be…Clients are really not in a position to judge your legal competence.” His solution: “Be better tea.”

“There’s $9 tea and there’s 40 cents [sic] tea, and the only way we know whether or not one’s better is by the packaging and the price.”

Gosh, if we only had a superfluity of ratings and reviews content on some sort of global interconnected web of computer networks…

Social Media for Lawyers: Contemplating the Nuclear Option

You’ve tried training, guilting, pleading, appealing to professionalism, more training — and still, getting your associates to blog, tweet or even share one of their presentations is like pulling teeth.

Have you considered linking social media content creation to performance metrics and merit increases? OK, forget social media. What about carrots and/or sticks for traditional business development and networking activities?

For all the hand-wringing about the difficulty of getting lawyers to create content for social media and participate in networking activities, there seems to be a deep-rooted resistance to even considering the use of performance evaluations and compensation as a management tool for driving those behaviors.

Having tried a voluntary approach to participation in the firm’s marketing and business development activities, one of my clients  recently instituted some mandatory measures. In addition to weekly one-hour professional development meetings, firm management requires associates to log at least 72 hours of business development activities per year, which is tracked through a billing code in its ProLaw system. Research and writing time for blogs and articles count, as do networking coffees and lunches. However, passive activities like event attendance do not. Results will be discussed in annual reviews and factor into merit increases and bonuses.

Money Motivates

  • Spiffs – Practically everyone who’s held a sales job is familiar with “spiffs” — spot awards for selling particular items. If you’re having trouble getting people to submit blog posts or newsletter articles, try periodically offering $5 Starbucks or iTunes gift cards for the next submission. You’ll be surprised at how motivating a free spiced pumpkin latte or smartphone game download can be.
  • Pay per submission – I worked with one firm that gave away $50 spot bonuses for every accepted staff blog post submission. Even the partners were eligible, and the managing partner took pride in his second income. So for only $7,800 per year — 3 posts a week, 52 weeks a year — the firm had a strong pipeline and frequency of posts.
  • Executive face time – Lunch with the managing partner is a pearl of great price. See how many JD Supra submissions you can generate by offering associates that incentive (and they’ll have something to talk about during the meal).
  • Time off – Offering extra personal days as an incentive for extraordinary contributions to your content marketing could be the most motivating compensation of all.

Six Sigma for Law Firms: Move Over Client Surveys, Make Way for Net Promoter Scores

As I’ve written about previously, I am proud of my GE pedigree, particularly the invaluable Six Sigma and “Lean” training in operational rigor, analysis, continuous improvement, measurement and repeatable processes. So I was interested and encouraged to see Lisa Damon of Seyfarth Shaw honored as one of the ABA’s 2011 Legal Rebels for her work championing SeyfarthLean, the firm’s Six Sigma-inflected initiative to drive strategy and operational effectiveness that delivers both cost reduction for clients and revenue growth for the firm.

And earlier this week I came across a post by Darryl Mountain on the SLAW blog that discussed how to apply a standard Six Sigma DMAIC tool — the fishbone diagram — to analyze legal problems.

It seems like the time might be right for innovative firms to consider importing another quality and customer engagement tool from the business sector into law practice management: the Net Promoter Score, a customer/client loyalty metric and a operational discipline for using customer feedback to fuel profitable growth. Adopted by companies like GE, P&G, Intuit and American Express, the NPS is derived from a single question posed to customers/clients: “How likely are you to recommend [Company X] to a friend or colleague?”

Survey participants respond on a 0-to-10 point rating scale divided into three groupings:

  • Promoters (score 9-10) are loyal enthusiasts who will continue buying and
    will refer others, fueling growth.
  • Passives (score 7-8) are satisfied but unenthusiastic customers who
    might be receptive to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your
    brand and impede growth through negative word-of-mouth.

To calculate the Net Promoter Score (NPS), subtract the percentage of Detractors from the percentage of Promoters. In concert with the survey, NPS companies develop an operational model to drive improvements in customer loyalty and enable profitable growth. Key elements of the model include leadership commitment, effective business processes, and systems to deliver real-time information to employees so they can respond to customer feedback.

Studies examining the NPS “loyalty effect” have shown that companies with the highest customer loyalty typically increase revenues at more than twice the rate of competitors.

Know of any law firms that have tried NPS or a similar methodology with clients?

How Yelp Is Upending Lawyer Ratings and Reviews

If it gives you peace of mind to continue investing time and money in “pay-to-play” and “claim your profile”  lawyer ratings and reviews websites, then god bless and best wishes. But the mind share these vestigial marketing tools– “basic boxes” to check — continues to command could be distracting lawyers — particularly small and solo general practice firms — from leveraging local word-of-mouth communities, Yelp in particular.

[youtube http://www.youtube.com/watch?v=O_yohVlVbEA&w=420&h=315]

Consider this quick-and-dirty case study.

As of this writing, a general search for “lawyers” on Yelp’s San Francisco community site turned up 5,557 profiles.  General litigation and estate planning attorney Michael Blacksburg showed up near the top of the results page. His 63 reviews yielded a 5-out-of-5 stars rating. In a “Michael Blacksburg San Francisco lawyer” Google search, his Yelp profile was the first listing after links to his own website. A Super Lawyers link turned up down the page, but notably absent from the first page of results were links to “basic boxes”Avvo and Martindale-Hubbell.

Interestingly, a basic Google search for San Francisco immigration law firm Van Der Hout Brigagliano & Nightingale LLP — which had a 5-star overall rating based on two Yelp reviews — produced similar results. The top search result was the firm’s own website, followed by the firm’s Yelp profile.

Why Yelp Deserves More Attention from Lawyers

  • Yelp is the online ratings and reviews destination of first resort for service businesses – While it’s not necessarily a household name, Yelp has higher top of mind awareness with the general public than lawyer review sites. Ask an average person on the street whether they’ve heard of Avvo, Martindale-Hubbell or Super Lawyers and you’ll get blank stares. Heck, ask the average lawyer and you’ll likely get the same response.
  • Yelp has monster SEO clout – As discussed above, even a modest Yelp profile is easily found through a basic name search on Google. As of June 2011, more than 53 million people had visited Yelp in the previous  30 days. That compares with Avvo’s claim of 2 million unique visitors per month. Because Yelp is a multi-category site and Avvo is limited to lawyers and physicians, the sheer volume of visitors and the resulting flow of fresh content makes Yelp’s search benefits for members practically insurmountable.
  • Positive experiences in one service category means higher propensity among Yelpers to consult the site for other, unrelated service providers – In other words, finding a plumber or HVAC guy they like increases the probabilty that a Yelper will look for a dentist or lawyer there, too.
  • Yelpers trust other Yelpers – Every Yelp reviewer has his/her own ratings — even followers and fans — which factors into the perceived authority of their opinions. It’s also important to note that Yelp’s filtering and page rank algorithms favor the contributions of established users.

Have you established a Yelp business profile? What’s your experience been so far? Any advice?