Monthly Archives: July 2007

Jul 25

The Role of Managing Partner

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If you haven’t seen it already, here is another gem from the presentations given by Managing Partners at the CLT conferences on “Planning for the Future” a little earlier in the year, where the skills and attributes of managing partners, practice directors, senior partners came under scrutiny. 

Key characteristics of firms that had been successful in developing their practice in the past few years to keep up with changes in the market were considered to be:

Sound leadership – which comes in a variety of styles, depending on the personalities involved; Innovation – willingness to explore and implement new options;  A vision of where the firm is trying to get to, with some kind of plan on a timescale that can be shared with others in the firm;  Recognition of the need to change to generate enough commitment to change;  Tenacity, to be prepared to persevere with initiatives even when it gets tough – because it will;  Investment in development of people and technology;  Investment in marketing – particularly better use of information and research;  Effective financial management – generally moving towards use of profit centres and Key Performance Indicators …. and more. 

But to make this all happen?  Not easy and everyone recognised the analogy in this video clip from EDS.  Initially produced by EDS in a different context, but I think you and your colleagues (please share it) will get the message.

 Click here – Herding Cats

However, the reality of legal business today is that difficult decisions have to be made.  Investment in people comes first wherever possible, but a successful practice often has to part company with some who don’t fit with the new vision for a variety of reasons – ranging from changes in the types of work being handled or the structure of the practice (operational / management / financial) to attitudes and behaviour that just cannot be made to work.

Jul 11

CRM – the New Risk Management?

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“Client Relationship Management (CRM) is the strategic process of selecting the clients a firm can most profitably serve and of shaping the interactions between the firm and these clients with the goal of optimising the current and future value of the clients to the firm.”

“Risk Management” is now regarded as so important that partners have to be designated the responsibility to deal with it - involving, for example, quality standards, money laundering, business continuity plans, complaints, professional indemnity and compliance with professional standards.  This follows from having recognised the increasing potential impact of this wide variety of risk-related areas of business (and more).  Yet the term “risk management” was rarely heard in the legal profession just 5 years ago.

Like “Risk Management” five years ago, “CRM” or customer relationship management is not a term widely used in law firms, although a lot of it is already going on.   Client satisfaction surveys, the client partner role, client reviews, performance and reward measures that include client satisfaction, online reporting, client profitability analysis, culling of clients, testing of new services, seminars and promotional events are all part of it. 

A CRM Strategy (like a Risk Management Strategy) helps to pull all these client and customer related areas together; to introduce a more structured, comprehensive and consistent approach to making the most of relationships with clients, referrers and introducers of business. 

Aspiring to introduce effective CRM will become as familiar a challenge to solicitors over the next few years as introducing risk management has been just recently - and not only for the largest firms.  Client focus has to become a top priority if solicitors want to build loyalty and make themselves more attractive to prospects by providing better value.  Then, today’s clients will be less easily tempted to try the new legal services of the AA, HBOS and the rest.  

If you are considering where to invest time and effort in the next 12 months, CRM should be up there.  Unlike other areas that you might have to deal with, managing your relationships and day-to-day interactions with clients and customers cannot be outsourced to someone else with more expertise and resource.  Some components like research, data storage, analysis, reporting and technology integration can perhaps be be outsourced.  Otherwise it’s down to your people to deal with if they interface with the client or deliver the service.  

The client-focused approach your people could adopt as a part of your CRM strategy has the potential to become a way of life at work; a differentiator from other providers of legal services that your competitors can not copy.  It defines how you deliver your services and is inseparable from your people, however automated (or not) your processes may be.

Although you can produce some big successes quickly by focusing on client relationships, the biggest wins come when attitudes change and become engrained in the way people work – which takes time.  To get there, lawyers need to learn to walk before they can run.  There is a learning process that most people within firms have to go through (as with use of technology) so that they can choose to do some things differently and better to improve the value of service for clients and the firm’s profitability.

Some of those improvements can be put into practice only if lawyers take the initiative to find easier ways to communicate and collaborate with clients as an integral part of the way they work.  Some firms are well on their way to doing this but others have not yet gone through the thinking process to head in this direction.

The results you would hope to achieve by consciously developing a CRM strategy – to be implemented over the next 5 years would probably include:

  1. Improved client satisfaction and / or associated Improvements in client retention and / or reduce complaints.
  2. Increasing the average “lifetime value” of customers to the practice; this incorporates the desire to cross-sell more.  
  3. Increased new business opportunities – existing clients / new prospects.
  4. Acceleration of initiatives to extend and customise services.
  5. More or faster conversion of opportunities to business.
  6. Reductions in the time involved and cost of key stages in dealing with clients – such as billing, accounting for referral fees, tracking and reporting back on cases or referred clients.
  7. Reduction in the resource cost of marketing and promotional campaigns through better access to the right information, use of campaign and document templates alongside continuous learning and improvement.
  8. Improved decision-making at various levels, where decisions made without adequate information available are generally less reliable and take longer to make.  Some such as giving estimates on fixed price matters and tenders have a direct financial impact. Others, such as “which clients to keep and which markets to expand?” may have time and resource implications as well as a direct impact.  Decisions here could be based on an evaluation of the current or potential “Customer Lifetime Value” (CLV) of clients.

If you haven’t started to talk about “CRM” in your firm yet, there is a white paper – CRM in Legal Practice – that you can download from our website at www.inpractice.co.uk

Jul 05

8,500 law firms set to become 5,500 … soon?

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Stephen Mayson’s prediction – read more below.  For better or worse, I agree with him and this is probably going to happen sooner than most lawyers expect.    I have just completed a round of conferences with Central Law Training aimed at smaller and medium-sized firms, where I was discussing what technologies lawyers should be investing in today.  Just one aspect of the challenges facing lawyers today, but one which will play a significant part in distinguishing successful practices from the rest.  My interest is not in the technical side of technology, but in how a firm should develop their strategy and their people to harness the potential of IT to support a successful, profitable business that can hold its own against potential competitors.     Our big message is to get lawyers using more technology “hands-on” themselves so they don’t have to ask someone else to do it for them.  However, from the show of hands on who has or hasn’t got what on these sessions, it appears that partners in most small and medium sized firms are failing to take the lead to help their lawyers (and other staff); to help them think differently about their work and their relationship with clients and others with whom they work.  They are not helping lawyers in the way they must - as business managers – to give them the understanding, tools and skills needed to focus more on giving clients what they know they want; what they can touch, feel and experience about the legal service they experience.    Lawyers are not alone in this.  At a discussion group I attended recently with a group of accountants, they were questioning why their clients were not using technology more.  We concluded that the accountants weren’t entitled to ask the question.  Virtually all of them were making very limited use of technology themselves.  As with lawyers, this is largely down to professionals feeling that, as “professionals” they shouldn’t be expected to deal with such things.   There is however a difference between UK lawyers and US lawyers.  I have never been convinced that technology available to lawyers in the UK is that far behind what has been available in the US.  We have certainly been well ahead in case management for a long time.  However, we have been miles behind on how willing lawyers have been to use it themselves.  This is so fundamental that we have in the past advised owners of a very successful legal software product in the US, not to bring it over here.  To produce the excellent results their software could produce, lawyers need to touch the keyboards and use the software themselves – in the US they did, in the UK, they wouldn’t.  So our client put their plans on hold.  All the evidence suggests that lawyers’ attitudes on this have not changed much in the UK during the past couple of years.    Instead young, IT-capable lawyers are getting sucked into the habits of their peers so the potential for working smarter often dissolves under the pressure of work.  Regrettably, lawyers with authority (not just the older partners in my experience) in most legal practices are not in a position to create peer pressure within their firm.    When it comes to typing, I am not suggesting that lawyers should ever type more than a line or two for themselves.  They need to be willing to “point and click” more to move documents around and get information.  Being able to exchange a few words in a “chat” online with the clients and contacts who are already comfortable with this way of keeping in contact would be good.  If you want it, you can do this for free.   Lawyers need to work with their IT people (with some input from whoever understands what clients want) to set up systems that allow them to do more, faster by just pointing and clicking.  And yes, more lawyers need to be able to type just a bit better to make this comfortable.  They can then fill in the odd piece of text between “points and clicks” to do it for themselves:

  • Get the information they need on their desktop;
  • Share knowledge and experience;
  • Produce whatever documentation they need;
  • Send it wherever they want it to go.

With non-legal organisations like HBOS, The AA and the Co-op all providing legal services now, the pressure is on to get closer to clients, streamline legal processes to both cut costs and improve the service, while paying more attention to communication and presentation as key parts of the legal service.     Although technology (and particularly new, cheaper, more user-friendly tools now available) is critical in all these areas, it is clear from the feedback on these sessions that very few firms have woken up to the reality of what can be done differently and better.  Very few are even exploring the new options becoming available to help lawyers work smarter - never mind putting them into practice.  Without some exploration of what is possible, it is unlikely that lawyers will develop a vision of what is really possible, so there is nothing to aspire to … so little will change.   Our research in early 2006 of nearly 300 law firms found that 22% spent nothing on IT training for their staff and another 22% less than £100 per head.  Little wonder then that lawyers find it easier to get someone else to use if for them.   Examples of these new tools and ways of working with IT include:

  • Online HR management programs,
  • Multi-purpose tools like Microsoft SharePoint that give you secure shared work areas (with documents, tasks, discussion groups, links to more info and much more) for you and your client (or you and your colleagues) on the Web, document management, web content management and much more
  • CRM4Legal – providing full client relationship management tools within Outlook, which most lawyers use every day.
  • Microsoft Live and Messenger which allows you to chat online to clients and colleagues (but not securely, so keep this informal for now)
  • Online newsletters – so you can view who reads what, let them choose if they want your communications, build up a loyal community of contacts
  • Outsourcing management of IT to expert IT management companies who have the skills and resource to keep up to date, letting you focus on helping your lawyers “point and click” more.
  • VoIP – using the Internet for telephone calls to cut costs.

Check out the “related links” section of this blog for more information on these.

Some initiative is needed in most firms to explore how these new options can be made to work for lawyers determined to improve the way they operate and collaborate with other lawyers, clients and introducers.

In summarising his address to these sessions, Stephen Mayson concluded that “the current legal services have been described by some as a ‘wake-up call’ for lawyers.  In fact, the alarm went off at least 4 years ago when David Clementi was appointed to carry out his review.   Some didn’t hear it and are still asleep.  Most, I think, hit the ‘snooze’ button and are still in the twilight zone between congnisance and action.  Not enough have leapt up and breathed in the new dawn’s fresh air.  It’s not difficult to imagine where we might find 3,000 law firms to lose!”   The most inspiring part of the sessions for me was the half hour case studies from firms that are wide awake; examples of firms that have at least begun to address the challenges and new opportunities that are being created.  I don’t think any of them found developing their business easy, but the key features that appear to be common in these firms appear to be:

  • None of them found it easy.
  • Someone was prepared to lead and put their neck on the line.
  • Tenacity.
  • Acceptance of a level of managed risk.
  • All have partners prepared to manage or are prepared to work with others able to manage.
  • Lawyers prepared to listen and learn.
  • Lawyers prepared / determined to change.

Candid case studies were presented by:   Warners, Bishop & Sewell, Bolt Burden, Fidler & Pepper, BPL, Pannone & Partners, Barnetts, Withy King, Raworths, Crombie & Wilkinson, Blackett Hart & Pratt, Follett & Stock, Kester Cunningham John, Woolley & Co.