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…

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?

It’s Not About Returning Calls: Satisfying Clients Through Online Information Access

In his Ignite Law 2011 presentation “A Failure to Communicate,” Jim Calloway addressed the issue of how to manage client expectations for returning phone calls [around the 3:25 mark on the YouTube version].

  • Discuss with each new client the challenges of returning calls — “Tell them it’s hard.”
  • Set an office policy
  • Empower staff to help you follow it
  • Discuss the client’s preferred methods of communication (e.g. e-mail, paper systems)
  • Provide regular status reports
  • “Make sure they understand how this is going to work.”

The problem with that approach is that it can’t work, and it won’t work as long as lawyers stand between clients and information. Chronic client frustration with the prompt return of phone calls isn’t really about courtesy or responsiveness; it’s about the clients’ sense that they lack personal agency and control.

A better solution to alleviate the need for and urgency around calls (and emails, for that matter) is to give clients direct access to some of their case information through online collaboration tools.

By necessity, lawyers are strict information gatekeepers, and until recently there were no practical or secure options for providing clients direct access to their own case information. But offering clients online content sharing and project management platforms like Dropbox and Basecamp has the psychological and practical benefit of offering clients an alternative to calls and e-mails.

Some clients will want to take advantage of these platforms; others will not. Either way, both you and your clients win. Instead of asking clients for forbearance, you’re offering them peace of mind.

An upcoming post will detail how a solo practitioner in Arizona is using a mobile online collaboration application to satisfy and empower his clients, and to differentiate his practice.

Law Practice Management: Legal Work vs. Work Lawyers Do

Last Friday Rachel Zahorsky at the ABA Journal filed a story from the ABA Annual Meeting headlined “As Nonlawyer Vendors, Would-Be Clients Take on More Legal Tasks, How Can Practitioners Get Ahead?”

Wait a minute…since the unauthorized practice of law is illegal, how can these brazen scofflaws get away with it? Because the work that is shifting is not intrinsically legal work, but rather non-legal work historically performed by lawyers. Granted, lawyers might be better at those tasks than non-lawyers, but economic, sociopolitical and technological factors are successfully breaking up those unofficial franchises nonetheless.

“It’s getting to be so hard to define what the practice of law is,” said Thomas C. Grella, chair of the management committee at the Asheville, N.C., firm McGuire, Wood & Bissette. “So it’s going to be even harder for state bars to regulate in the future.”

Grella was a participant on a panel entitled “The Once and Future Firm: Fact v. Fiction,” sponsored by the ABA Law Practice Management Section. According to Zahorsky’s post, the panel concluded that:

“For firms to succeed and flourish in the future, there needs to be strong leadership among law firm management, a willingness to innovate with regard to technology and billing methods, and concise plans of succession that address the compensation squabbles that plague many firms when it comes time for senior partners near retirement to transition high-revenue generating clients to junior lawyers.”

Mind-blowing, provocative stuff, right?

It might not have made it into the panel wrap-up, but at least one panelist clearly gets it:

“Lawyers need to ask: ‘Why are [clients] hiring me?’ said Mark Robertson of Robertson & Williams in Oklahoma City. ‘Can they hire someone else and not have a law firm do it? What is involved in putting together the paperwork of an M&A transaction that requires a lawyer, other than an opinion?'”

Ask not what the guild can do for you, but what you can do for your client.

Bar Associations: Most Trusted Brands for Lawyer Searches?

I’m a HUGE fan of Lifehacker, probably the most followed blog on tips and downloads for getting things done. A post this week on “How to Find a Reputable Lawyer” got my attention both for what it said and what it didn’t say.

Consulting with ABA and state/local bar associations and using their lawyer referral services was clearly the main recommendation:

“Both the American Bar Association and various state and local Bar Associations offer search and referral tools to help you find legal representation based on the type of lawyer you’re looking for. Bar Associations aren’t able to help you directly, but they can give you wholesale listings of practicing and certified lawyers who specialize in your subject area. They won’t help you make the subjective decision of whether or not a lawyer has a track record of successful litigation or charges fairly, but they’re a great place to start narrowing down your search if you don’t have anywhere else to start.

“Additionally, look for lawyer’s groups and legal aid groups that specialize in the type of issue you’re facing. Some of this involves web searching, but you can find a lot of this information by calling your state Bar Association. Even if they can’t make specific recommendations, they can direct you to professional groups of lawyers who specialize in different areas, like health care law, employment law, and more….

“Don’t hesitate to check your local bar for more information on the specific lawyers you plan to speak with, and don’t hesitate to ask for and then check on those lawyers’ references before making a decision.”

The only other online resources suggested had a distinct access to justice/legal aid bent– LawHelp.org, ProBono.net and Nolo.

Conspicuously absent from this how-to guide were references to lawyer search stalwarts like Martindale-Hubbell, Avvo, Super Lawyers and Lawyers.com. They’re free, too, and certainly would be likelier than LawHelp.org to show up in a Google search when researching such an article. So it looks like an intentional omission.

Why?

My sense is that the cost of legal representation — real and perceived — has transformed access to justice into a mainstream consumer issue, and bloggers/journalists writing for a mass audience sense that. In that dynamic, the traditional role of bar associations as impartial brokers comes into higher relief — and creates a great marketing opportunity to promote member services and increase participation in bar programs.

My State Bar of Texas Annual Meeting Wrap-Up

Last week I had the great good fortune to participate in the State Bar of Texas Annual Meeting, and live blogged on Twitter — hashtag #sbot11 — a goodly amount of interesting comments and insights from the sessions I attended . It was topically diverse, engaging, well-curated and well-run, with a lot of strong, actionable content.

Since my interest is marketing and business development, I spent my day Thursday in a series of sessions called “The Adaptable Lawyer Legal Innovation/Computer and Technology Track,” and Friday in the Law Practice Management track. While it wasn’t billed or consciously framed as such, the content of those sessions aligned with one or more of four basic subject areas:

  • Mobile computing
  • Social media platforms
  • Content marketing
  • Niche marketing

Mobile Computing

The standing-room-only crowd for the “60 Apps in 60 Minutes” session made it clear. From iPads and productivity apps to cloud-based research tools and practice management systems, mobile computing is transforming the way that lawyers work. While the iPad was still something of a novelty for “geeks” at last year’s annual meeting, it has quickly evolved into an essential operational hub. As Tom Mighell pointed out in his fast-paced and useful presentation, the depth and breadth of applications specifically for lawyers has made the iPad the de facto mobile computing platform for lawyers.

Social Media Platforms

Facebook was clearly the shiny object this year, with Twitter and LinkedIn tied for a distant second. Last year’s belle of the ball — blogging — was hardly discussed. That probably sounds snarky, but it derives from disappointment about missed opportunities. The presenters who discussed the various social platforms could have framed them in an integrated context, drilling down further into one or more and offering actionable guidance and specific counsel about how use cases can differ by social platform, firm size and practice area. Instead, the overall impression was “here are all the social media sites you need to join.”

Content Marketing

As mentioned above, legal marketing tends to focus on the channel rather than the product. In other words, the social media platforms themselves rather than a merchandising strategy for content. While no one discussed content marketing directly, several presenters showed an inchoate sense of the “create once, publish everywhere” axiom of social media marketing. A simple example of this would be to write a blog post, tease it on you Twitter and LinkedIn feeds, cross-post it on LinkedIn groups and link to it on Facebook.

I was excited to hear several speakers mention JD Supra, an online content distribution service for legal topics (articles, white papers, presentations) that is woefully underutilized and deserves serious consideration as an organic search/social signal amplifier.

As a practical matter, law firms are likelier to see quicker, more direct results from JD Supra as a content marketing platform than from Facebook — and with  a lot less effort.

Niche Marketing

At the risk of sounding like a broken record, there were several good niche marketing case studies, but you had to really dig for them under generic social media palaver. For example, instead of discussing how focusing on a niche expertise — the Foreign and Corrupt Practices Act — led to a thriving international business practice, one panelist spent his time extolling his narrow and idiosyncratic understanding and use of social media.

Since the number of solo and small firms chasing after a declining pool of general business and family law opportunities is increasing, next year’s program would benefit from a session with practical instruction on how to leverage specific interests and expertise into unique value propositions that attract clients.

Summary

I’ll give the last word to Kevin O’Keefe, who tweeted, “Is there a better State Bar Annual Meeting than Texas? Great people, presenters, and connections.”

Who’s Afraid of LegalZoom? And Why?

Mentioning LegalZoom in a group of lawyers elicits a similar reaction to uttering “Voldemort” to magical folk in a Harry Potter book/movie — fear and contempt for “He Who Must Not Be Named.” He Who Must Not Be NamedLegalZoom is the most reviled recent innovation in the legal industry, the bete noire of small business and family law.

But like family lawyer Lee Rosen, I’m puzzled why lawyers seem focused on destroying the business through legal challenges and rhetorical attacks instead of besting it in the marketplace.

 “…The flaws in LegalZoom…are fixable. LegalZoom has resources and they’ve got time. They’re going to fix every issue they identify and, eventually, they’re going to have an excellent product. They’ll build greater and greater intelligence into the service and they’ll, one day, get it right for every client.

“Once they get it right, you’re still going to need to make a living. It’s time to start telling the stories of how you add value and give people a reason to come to you.”

With some innovative marketing — like adapting your service delivery model and sharpening your value proposition — you can actually benefit from LegalZoom’s outsized presence in the market.

  • LegalZoom can only say it’s cheaper; not better, or even as good.
  • If you’re honest with yourself, you don’t even want clients who think online forms are good enough. They would never be happy, you would end up over-servicing the client, and you would likely not get future business.
  • Is anyone actually losing clients to LegalZoom, or is the service model just attracting individuals and small businesses who otherwise wouldn’t consult with an attorney?
  • LegalZoom’s Achilles’ heel is that it cannot provide peace of mind. Leverage that. Create a higher-margin niche in reviewing draft DIY documents.
  • Productize and market your own forms. 
  • Give templates away. It’s a mitzvah to other small and solo firms (and potential referral sources), and a good marketing hook for your higher-value client services.

Do you think LegalZoom is an actual threat to small and solo firms, or are you embracing the challenge?

The Say:Do Ratio in Legal Marketing

[youtube http://www.youtube.com/watch?v=aLEhh_XpJ-0&w=425&h=349]
During my tenure with GE I had the great good fortune to work with the legendary Lloyd Trotter, the former corporate vice chairman, president and chief executive officer of GE Industrial Systems, and driving force behind GE’s operational prowess. One of the most enduring lessons I learned from Lloyd and his executive team was a simple performance metric: the “say:do” ratio, a measurement of commitments met.

Attorneys cannot guarantee a specific outcome, but they can commit to attaining high levels of client service.  Particularly for small and solo practices, a reputation for a strong say:do ratio in client engagement can be a powerful differentiator, helping firms win new clients, retain existing ones and support higher billing rates.

A few simple “starter” actions:

  • Make reasonable commitments on the timing of deliverables so you can always meet them.
  • Return messages promptly, even if you don’t have an answer. Respond, if for no other reason, to acknowledge receipt of the original message and communicate when you’ll have the requested information.
  • Don’t be late for meetings. Clients are paying for your time, be respectful of theirs.

What’s your “secret sauce” for maintaining a strong “say:do” ratio?

The Firm Is Dead! Long Live the Firm!

[youtube http://www.youtube.com/watch?v=j1VoopyFVTg&w=480&h=390]

I read an interesting business section “obit” today: Clark, Thomas & Winters, Austin’s oldest continuously operating law firm, has closed. No official cause of death was given, but it couldn’t have helped that former partner Walter Demond was indicted in 2009 and in May will be tried on charges of felony theft, misapplication of fiduciary property and money laundering involving client Pedernales Electric Cooperative.

What’s interesting to me as a branding and marketing case study is that the “new” firm that occupies Clark Thomas’ old offices, Duggins Wren Mann & Romero, is comprised of 29 former Clark Thomas attorneys. Notwithstanding, in an Austin American-Statesman article reporting the firm’s formation last month, spokesmen insisted it’s entirely new — but did not explain how:

“Senior partners David C. Duggins, Casey Wren, James Mann and Celina Romero  all worked for Clark Thomas, along with managing partner David Gilliland and 24 other attorneys, officials said.

“Chuck McDonald, a spokesman for Clark Thomas [and now for Duggins Wren], said the new entity ‘represents the significant core’ of the older firm. Its offices will remain for the time being on the 15th floor at the 300 West Sixth Street building, where Clark Thomas is located.

“Gilliland emphasized Monday that the new firm of Duggins Wren Mann & Romero is exactly that — a new firm, not Clark Thomas under a different name.

“‘This is a completely new venture,’ Gilliland said. ‘We have good practices and stable clients. It’s just the best for everyone involved.'”

And that means….?

Well, according to Duggins Wren Mann & Romero’s generic, barebones current website, “The attorneys of Duggins Wren Mann & Romero, LLP pride themselves on supplying successful solutions for the legal and business needs of clients throughout Texas and the nation.” Compelling stuff.

Further,

“Until recently, the attorneys of Duggins Wren Mann & Romero, LLP practiced with one of Austin’s oldest, largest and most prestigious law firms.  These attorneys have continued their commitment to each other, their clients, and to the level of service and values they bring with them.”

Apparently the Clark Thomas legacy is valuable enough to use as leverage in establishing the new firm’s pedigree, but notorious enough not to be mentioned by name.

Doubtless, it’s a very difficult maneuver they’re trying to execute here, but they’ll have little hope of quickly moving off the “Used to be Clark Thomas” default brand if they approach branding/rebranding obliquely and timidly.

My advice to Duggins Wren Mann & Romero (not that they asked for it):  Awkwardly and unconvincingly dancing around the Clark Thomas legacy only brings more attention to it. Take ownership of the best parts of the Clark Thomas heritage, incorporate it forthrightly into your own foundation story, then move on to define and articulate the new firm’s unique vision, values and capabilities. Get some customer testimonials to build third-party credibility. And the sooner the better.

If you were tasked with such a daunting branding/rebranding challenge, how would you approach it?