a revolution in legal services · 2015-03-12 · of service to increase. a&o’s survey also...

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March 2015 | Volume 16, Number 2 Ten years ago, clients with a legal matter had essentially two options. Send it to a traditional law firm or handle it in-house. Today, clients have many more choices. Different providers are mushrooming—a trend only likely to grow— offering a huge range of legal related services. In-house departments have grown and become more sophisticated. How should traditional law firms respond to these shifting tectonic plates in the legal landscape? The forces driving change No one can seriously doubt that profound changes have been taking place in the global market for legal services over the last 10 years. Nor is there much doubt about the causes: globalization, technology, liberalization of markets, the rise of General Counsels (GCs), and economic pressures resulting from the post-Lehman recession have combined to create a more complex and more competitive legal market place. Even if you doubt the permanency of these changes, it’s hard to ignore the facts. One measure of how things have changed is the rate of turnover growth for traditional law firms. In the ten years up to 2008 my firm, like many other firms, experienced double digit turnover growth every single year. Sometimes turnover grew 15 percent per annum or more. It was a seller’s market. Since 2008, squeezing out any turnover growth at all has been a challenge. The same is true for most law firms. This is a buyer’s market. In this new environment, I often sense deep frustration with the traditional law firm model when I speak to GCs around the world. Yes, of course, they recognize there will always be a place for firms that can deliver on “bet the farm” matters, offer exceptional client service, project manage huge transactions or have the deep specialism they might need. However, GCs have a lot on their desks that doesn’t fit neatly into those categories. They themselves are typically under tremendous internal pressure to find more effective, quicker, cheaper ways to process legal tasks, manage risk, and demonstrate they are adding value to the business. Many find it irritating that traditional law firms want only the cream of business. They find it frustrating A Revolution in Legal Services By David Morley, Senior Partner, Allen & Overy LLP, London, England

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Page 1: A Revolution in Legal Services · 2015-03-12 · of service to increase. A&O’s survey also showed that, on average, usage of the new services is fairly evenly distributed across

March 2015 | Volume 16, Number 2

Continued on page 3

Ten years ago, clients with a legal matter had essentially two options. Send it to a traditional law firm or handle it in-house. Today, clients have many more choices. Different providers are mushrooming—a trend only likely to grow—offering a huge range of legal related services. In-house departments have grown and become more sophisticated. How should traditional law firms respond to these shifting tectonic plates in the legal landscape?

The forces driving changeNo one can seriously doubt that profound changes have been taking place in the global market for legal services over the last 10 years.

Nor is there much doubt about the causes: globalization, technology, liberalization of markets, the

rise of General Counsels (GCs), and economic pressures resulting from the post-Lehman recession have combined to create a more complex and more competitive legal market place.

Even if you doubt the permanency of these changes, it’s hard to ignore the facts. One measure of how things have changed is the rate of turnover growth for traditional law firms.

In the ten years up to 2008 my firm, like many other firms, experienced double digit turnover

growth every single year. Sometimes turnover grew 15 percent per annum or more. It was a seller’s market. Since 2008, squeezing out any turnover growth at all has been a challenge. The same is true for most law firms. This is a buyer’s market.

In this new environment, I often sense deep frustration with the traditional law firm model when I speak to GCs around the world.

Yes, of course, they recognize there will always be a place for firms that can deliver on “bet the farm” matters, offer exceptional client service, project manage huge transactions or have the deep specialism they might need.

However, GCs have a lot on their desks that doesn’t fit neatly into those categories. They themselves are typically under tremendous internal pressure to find more effective, quicker, cheaper ways to process legal tasks, manage risk, and demonstrate they are adding value to the business.

Many find it irritating that traditional law firms want only the cream of business. They find it frustrating

A Revolution in Legal Services

By David Morley, Senior Partner, Allen & Overy LLP, London, England

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Please direct any comments or questions to either of the editors in chief:

PracticeInnovations

In This Issue EDITORS IN CHIEF

2

EDITORIAL BOARD

Empowering Professional Staff in a Changing Legal Environment

By Sharon Meit Abrahams

Sharing the financial realities of a downturn market for legal services with professional staff can empower them and bring value to the firm. Rather than shielding them, ask for their help.

What Got Them Here Won’t Get Them There: Your PD Toolkit For Helping Junior Partners Become Successful Contributors

By Ann Collier

The article describes a multifaceted approach to helping a junior partner become recognized as a leader and become the go-to person in the lawyer’s field.

Using Big Data to Develop Client-Centric Understanding

By Evan Parker and Christopher Zorn

By analyzing industry data, and synchronizing it with the firm’s existing practice strengths and geographic footprint, a firm can obtain new insights into strategic business development.

A Revolution in Legal Services

By David Morley

Ten years ago, clients with a legal matter had essentially two options. Send it to a traditional law firm or handle it in-house. Today, clients have many more choices. How should traditional law firms respond to these shifting tectonic plates in the legal landscape?

Experience Management: Build, Buy, or Abandon?

By Lisa Gianakos

If you have not been involved in an experience management project yet, you might wonder what is so difficult about it. It’s just a database, right? Wrong. These are very complicated systems.

William ScarbroughChief Operating OfficerBodman PLC6th Floor at Ford Field1901 St. Antoine StreetDetroit, MI 48226office: 313-393-7558fax: 313-393-7579email: [email protected]

Janet AccardoDirector of Library Services Skadden, Arps, Slate, Meagher & Flom LLPFour Times SquareNew York, NY 10036-6522212.735.2345email: [email protected]

Sharon Meit Abrahams, Ed.D.National Director of Professional DevelopmentFoley & Lardner LLP Miami, FL

Toby BrownChief Practice OfficerAkin Gump Strauss Hauer & Feld LLPHouston, TX

Silvia CoulterPrincipalLawVision GroupBoston, MA

Elaine EganManager, Information Center Shearman & Sterling LLP New York, NY

Ronda FischDirector of Research and Library SystemsReed Smith LLP Pittsburgh, PA

Lisa Kellar GianakosDirector of Knowledge Management Pillsbury Winthrop Shaw Pittman LLP Washington, DC

Jean O’GradyDirector of Research Services DLA Piper, US, LLP Washington, DC

Don PhilmleeLegal Technology ConsultantWashington, DC

Kathleen SkinnerDirector of Research ServicesMorrison & Foerster LLPSan Francisco, CA

William ScarbroughChief Operating OfficerBodman PLCDetroit, MI

Janet AccardoDirector of Library Services Skadden, Arps, Slate, Meagher & Flom LLP New York, NY

Pipeline to Success—Law Firms Finally Embracing CRM for Business Development Tracking

By Chris Fritsch

The main problem with CRM technology is that it’s just technology. It’s not a magic bullet. The software has to be implemented strategically, which means that firms have to focus not only on the technology itself, but also on the people that can make it or break it.

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3Practice Innovations | March 2015 | Volume 16, Number 2

Deconstructing the Myth of Low Technology Adoption in Law Firms — Continued from page 1

that law firms seem unable or unwilling to adapt to meet the changing needs of their clients, in the same way that clients’ own organizations have been forced to adapt to rapidly changing markets.

We ignore what our clients say at our peril.

And they know what they are talking about. One of the most significant changes over the last 10 years has been the rise of the GC in terms of status and power. Many are recruited from traditional law firms. They know what we are good at, and not so good.

These are sophisticated clients capable of assessing value and quality in legal services. Even if some might deep down prefer to stick with the traditional hallmarks of quality they know—top law firm brands—they have little choice but to experiment with alternatives.

New models, new servicesThe result of these developments is a legal market, which is more diverse, dynamic, and multifaceted than ever before.

New types of service and service providers are now available to clients, including the following:

• Contract lawyers: Self-employed, independent lawyers engaged for short periods or a fixed term to provide flexible project support or fill an absentee position.

• Document review services: Outsourced organizations that review high volumes of legal documents at a lower cost, sometimes by nonlegally trained individuals (often used in litigation or due diligence).

• Managed legal services: Contracting out all or part of the function of an in-house legal team to an independent legal provider.

• Online legal services: Standardized legal advice available only online; often accessed through a subscription service.

• Legal consultancy: Independent consultants who advise on the management and operation of a legal department or the structuring of a large piece of work.

• Hybrid legal solutions: Collaboration between two or more of the above providers often combined with process and technology innovations.

Increasingly, clients are turning to some or all of these “nontraditional” delivery models to help solve their most complex legal challenges. They are determined to get

the right advice for the right transaction at the right price. They expect, rightly, their partner law firms to be alive to the new possibilities and to be open to offering their services in different and innovative ways.

A global revolutionThere is no doubt that appetite for the new types of service is already high.

In 2014, Allen & Overy carried out a survey* of 200 senior clients—mainly at GC level—spread across five regions of the world and covering corporate and financial institutions.

Use of different legal services by clients surveyed

Two-thirds of those interviewed were already using contract lawyers, one-third said they had used document review services, and around a quarter were using legal consulting or online services.

When asked about future preferences, most organizations expected their usage of the new types of service to increase. A&O’s survey also showed that, on average, usage of the new services is fairly evenly distributed across the world’s main economic regions: North America, Europe, and Asia Pacific. Organizations in the Middle East and Africa have been slower to adopt the new services, but said they expected to catch up quickly over the next five years.

The size of the prizeWhat do these changes mean for established law firms and their clients?

The opportunity for clients is clear: to combine the different resourcing options now available with new technology and improved business processes to create more value for less cost.

 

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4

Deconstructing the Myth of Low Technology Adoption in Law Firms

In practice, this means looking afresh at the way legal tasks are approached and managed. By disaggregating larger pieces of work—for example an M&A deal, a complex dispute or a regulatory investigation—into their constituent parts, it is possible for clients to allocate work to multiple providers to drive down cost without, if done properly, compromising on overall quality.

For example, a project may require the high-level advice of a traditional law firm, combined with document review conducted offshore at lower cost, some specialist consulting input, and four or five contract lawyers on the ground in the client’s premises. These resourcing options are then enhanced with smart technology and project management to produce an entirely new, hybrid solution to the client’s specific legal challenge—faster and more cheaply than was previously possible.

For established law firms like A&O, the opportunities are no less exciting. Whether by diversifying into some of these new areas, or partnering with third-party providers, or a judicious combination of the two, it is possible for the traditional law firm to offer highly integrated, cost-efficient services, which can be combined in a thousand different ways to meet the needs of clients, ultimately enhancing the relationship.

Allen & Overy’s approachA&O has been investing in the new services for some time, to provide clients with more flexible, tailored solutions to their legal challenges.

Of the six new types of legal service described above, A&O has invested in five (see diagram).

I don’t suggest our way is the only way but I do believe law firms will increasingly have to place some bets on what is right for them.

We have adopted a seed-corn approach to investment—invest relatively modest amounts of money into different projects. See which ones work and back them some more. Pull the ones that struggle to gain traction with partners or clients. Proven success in one area gives us credibility and “permission” from the partnership to try the next.

We see it as critical that any new services are deeply integrated with our traditional, high-end law firm model. While we operate them in separate businesses, they have to be aligned with, and supportive of, our core business. For example, compensation of those running them is aligned to partner compensation rather than the results of that new business alone.

Our partners have to see they will ultimately benefit from these new services rather than be cannibalized by them. They have to help us win more work for our core business, albeit perhaps executed in different ways, rather than less. We need our partners to be enthusiastic salesmen and advocates for these new services if they are to stand any chance of succeeding with clients.

In 2012, A&O created a Legal Services Centre (LSC) in Belfast, which specializes in large-scale document reviews—contentious and noncontentious—supporting A&O offices around the world. We recently added our 65th lawyer to that team. Typical matters can involve many hundreds of thousands of documents, email chains, chatroom messages, and audio files. The pressure to manage costs is enormous. Speed and accuracy are therefore essential.

Despite initial warnings that departing from our traditional model would diminish quality, our experience is the opposite. The quality of the work has improved. Our team have become highly skilled specialists in process and use of workflow IT that has become a competitive advantage.

In 2013, A&O added to its portfolio of services by launching a flexible resourcing business, Peerpoint. This business offers clients access to a panel of experienced, high-calibre lawyers available to work flexibly on a contract basis for either temporary placements or specific projects. Now numbering 50, the consultant lawyers are mainly alumni of A&O, thus carrying the A&O stamp of quality.

This last point is crucial. A&O stands for premium-quality legal services. People are open to using the firm for nontraditional services and are attracted to a one-stop shop solution, but only if the A&O “quality guarantee” is maintained.

 

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5Practice Innovations | March 2015 | Volume 16, Number 2

Deconstructing the Myth of Low Technology Adoption in Law Firms

Does it work?Taking just one example, we recently won a competitive pitch for one of the largest projects the firm has ever handled. In a letter detailing why we won the job, the client identified what our Belfast operation offered as one of four main reasons for our success.

ConclusionIt is clear that clients and their law firms both have much to gain from these new ways of working. We may not yet have all the answers but many clients appreciate the fact that we are trying. When they use these new services, clients are typically delighted with the flexibility and cost benefits offered by the new models. For the law firms who get it right, there is the prospect of achieving significant and sustainable competitive advantage over their rivals.

* Research conducted with 198 general counsel and other business contacts at corporate and financial institutions in 27 different countries. The views of 185 individuals were captured through 20-minute structured telephone conversations. A further 13 individuals participated in a longer in-depth interview.

Collectively, these organizations spend nearly GBP3.5bn on external legal services. Almost half (48 percent) of the interviewees are responsible for making legal decisions across their entire company or group globally. Meridian West, an independent consultancy, conducted research and analysis.

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6

Using Big Data to Develop Client-Centric Understanding

By analyzing industry data, and synchronizing it with the firm’s existing practice strengths and geographic footprint, a firm can obtain new insights into strategic business development.

IntroductionClients have always been the heart of the modern law firm. Today, with external legal spending on the decline and heightened competition over market share, firms have redoubled their focus on client service. At the same time, clients’ expectations about what law firms

should know and do continue to grow. Among other things, and in addition to practicing law and managing relationships, corporate clients now expect outside counsel to understand their business, and their industry.

Acquiring this “client-centric” understanding is valuable because it allows for a distinctive brand of client service. It also presents a challenge, because lawyers are accustomed to viewing their client relationships through the lens of practice areas, while clients themselves rarely do so. Put differently, clients focus on what they are doing vis-à-vis their industry competition. Their outside counsel, in contrast, tend to focus on the particulars of current client matters.

In this article, we describe how “big data” on corporate organizations can be used to generate a client-centric understanding of a firm’s client base. We also explain why the upside of leveraging such data goes beyond the ability to provide distinctive service offerings. In brief, a firm that understands its clients’ industries can use this same information to assess internal performance, and can link this information with external client data to inform business development and set strategic priorities.

It is worth noting at the outset that data on corporate clients are plentiful. Thus, what is possible with related data far exceeds what we can describe in a short article. To maintain focus, in what follows, we consider two broad dimensions. The following analysis facilitates client-centric understanding by disaggregating data on corporate clients by industry and geography.

Client Industry and GeographyThe first step in building a data-driven approach to client service is to assemble and organize the relevant data. On the industry front, this requires at a minimum assigning each corporate organization to a specific industry category; assignment to a second, more specific subindustry category is also recommended. For example, in our work with law firms, we have developed a classification scheme that draws on federal NAICS codes to assign each organization into one of 12 broad industry categories and one of 204 subindustry groups.

Several examples are immediately apparent. Calculating conventional firm-level metrics (revenues, leverage,

By Evan Parker, Director of Analytics at Lawyer Metrics, LLC and Christopher Zorn, Cofounder and Managing Partner of Lawyer Metrics, LLC, and the Liberal Arts Research Professor of Political Science at Pennsylvania State University

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7Practice Innovations | March 2015 | Volume 16, Number 2

Using Big Data to Develop Client-Centric Understanding

profitability, etc.) by industry can reveal unanticipated insights about the firm’s performance. Cross-categorizing matters by industry and practice group provides a picture of which practice areas are most highly concentrated among clients in particular industries, and conversely which industries have more or less diverse “practice area profiles” at the firm. Such information is valuable as firms move from a practice area focus to one organized around client industries.

The second dimension that is an essential part of building a client-centric understanding pertains to geography. Although many law firms’ corporate clients have global reach, their legal departments tend to be located at or near the company headquarters. By geocoding the corporate headquarters location, firms can visualize their “client footprint” and begin to survey the corporate client landscape in a targeted fashion.

By integrating facts about these organizations with geographic data and our proprietary industry classification system, our results provide insights about legal markets across various regions and industries. To demonstrate the value, we provide a stylized example.

ExampleThe client analytics we describe are derived from data on thousands of publicly- and privately-held corporate organizations. For simplicity, we focus here on revenue-based metrics; other relevant measures might include company counts, employee headcounts, or other financial indicators. It is also important to present results using easy-to-understand visual displays. One technique that we have found useful is to summarize the data using combinations of location- and sector-specific visual summaries and maps.

Consider a hypothetical Chicago-based firm interested in better understanding the industry conditions of its local clients. Examining data on all large (> $50 million revenue or sales) public and privately-held companies in the Chicago metro area allows us to understand the “economic DNA” of the region. In particular, the top panel of the figure below shows the proportion of industry activity in each of our 12 sectors, relative to the entire U.S. Industries at “par” are those for which the proportion of economic activity in the Chicago area are the same as for the U.S. as a whole; sectors above or below “par” are relatively over- or underrepresented, respectively. So, for example, revenues of Chicago-area manufacturing companies are roughly twice as large as they are in the country as a whole. Similar analyses (not shown) can be conducted for subindustries within each broader industry category. Summaries of total annual revenues and company

counts in each area provide information about the absolute significance of each industry for the region.

The relative importance of manufacturing, transportation, utilities, and health care for the Chicago-area economy suggest that a focus on those sectors is of particular value. The second panel locates each of the 333 companies in those four sectors on a map of the Chicago area, along with the location of each firm’s headquarters. Orange symbols denote companies that are clients of our hypothetical firm, while blue symbols are companies, which are not (yet) clients.

A figure such as the one here integrates data on companies (both clients and nonclients), industry sectors, and geography to provide an easy-to-grasp, compelling overview of the local market conditions in four key sectors. Moreover, the flexibility of this general approach allows for analysis at the local, state, or national level, and for a focus on any or all industries or subindustries of interest to the firm.

295,488

46,521

38,883

154,089

5,035

149,358

24,779

55,420

104,285

14,204

332

208

23

7

95

25

145

90

44

135

18

3

Revenue Count

Energy

Telecommunications and Media

Finance, Insurance, and Real Estate

Technology

Education

Wholesale, Retail, and Service Industries

Miscellaneous

Health Care and Life Sciences

Utilities

Transportation

Manufacturing and Production

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Firm HQ

Industry● Health Care and Life Sciences

Manufacturing and ProductionTransportationUtilities

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8

Using Big Data to Develop Client-Centric Understanding

SummaryAn analysis of large corporate organizations can help relationship partners and firm leaders understand basic facts about their corporate clients. An emphasis on metro area geography and industry sectors together yields a client-centric view of the corporate legal market. The results of such an analysis not only highlight the market conditions that current clients are experiencing, but also point to strategic opportunities for client development. For these reasons, the results can be used by firm leaders for more than educating partners about client service—and might actually serve as part of a data-driven approach to business development. By analyzing industry data, and synchronizing it with the firm’s existing practice strengths and geographic footprint, a firm can obtain new insights into strategic business development. The results can also serve as a persuasive tool, bringing empirical evidence to bear on the arguments that sustain law firm business strategy. In the largest sense, the client results allow firms to understand their clients using data, and in turn make strategic business decisions.

ExtensionsThere are a host of extensions to the analysis we have outlined above. For example, a firm with a strong focus on labor and employment matters may find that analyses based on employee headcounts are more informative than one based on revenue. Alternatively, a firm might want to categorize organizations by capitalization size (small, mid, large); among other things, such a categorization allows the firm to develop distinctive approaches to large cap industry giants and small cap “up-and-comers.”

Finally, note that while industry classifications are likely to be important for the range of a firm’s clients and practice groups, the relevance of geography is more variable. Some clients’ business models are more geographically dependent than others; similarly, some matters are likely to have a strong geographic component (e.g., labor and employment, tax) while others are not.

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9Practice Innovations | March 2015 | Volume 16, Number 2

The article describes a multifaceted approach to helping a junior partner become recognized as a leader and become the go-to person in the lawyer’s field. Tools include coaching, communications training, presentation skill enhancement, using assessment tools, personal branding, and support in developing business.

What Got Them Here Won’t Get Them There: Your PD Toolkit For Helping Junior Partners Become Successful Contributors

How do junior partners make the transition to becoming successful contributors to the firm? They need to graduate from being primarily a worker bee into someone both clients and partners identify as a go-to person to solve specific problems. This kind of credibility is not bestowed upon a lawyer

the day he or she becomes partner. And, as they say, “what got you here won’t get you there.”

As a trainer or professional development person, you are charged with helping newly minted partners make this transition. You’ve learned that while some lawyers only need a little guidance, others need a lot of support in developing new skills. You also know that not all lawyers need the same support, and consequently you have quite a few tools in your professional-development toolbox. Most importantly, you have learned that being a successful partner requires different skills than the lawyer demonstrated as an associate.

While you customize your approach to meet each lawyer’s needs, you’ve learned that the following process yields the best results.

1. Gather third-party information. Speak to the practice group chair and several more senior

colleagues to get a picture of appropriate goals as well as the lawyer’s strengths, blind spots, and opportunities. Tools: interviewing, listening for vision, opportunity, and gaps in skills or knowledge.

2. Gather information from the lawyer. The lawyer completes a brief questionnaire to identify strengths, blind spots, and opportunities. Knowing that not everyone wants to complete the questionnaire, you sometimes have a brief conversation with the lawyer instead. The lawyer also takes a personality and problem-solving assessment (i) to help you understand how to best support the lawyer, (ii) to create a framework for the lawyer to understand his or her own strengths and blind spots, (iii) to understand colleagues and clients, and, importantly, (iv) to devise strategies that will meet the lawyer’s particular needs and challenges. Tools: interviewing, listening, MBTI, and Kirton Adaption-Innovation Inventory (KAI).

3. Identify gaps/set goals. Debrief the lawyer, identifying opportunities for improvement in areas such as communication, presentations and public speaking, leadership, personal branding, business development process, and networking. Set specific goals in each area. Tools: coaching and issue spotting.

By Ann Collier, Founder, Arudia, Chevy Chase, MD

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What Got Them Here Won’t Get Them There: Your PD Toolkit For Helping Junior Partners Become Successful Contributors

4. Create the plan. Create a tactical professional and business development plan, complete with weekly, monthly, and quarterly tasks. If necessary, create the lawyer’s brand; give a primer on how to deliver it. Lay out the business-development and reputation-building processes so the lawyer understands how to strike the balance between moving forward and pushing too hard. Provide guidance on where and how to network. Tools: insight, personal branding, business-development process, networking.

5. Ongoing coaching. Regularly follow up to keep the lawyer focused and making progress. Tools: coaching, persistence.

It’s the beginning of a new year, and you’ve been asked to work with Pat, a new junior partner.

Meet Pat. Pat became a partner in January and knows it’s time to develop business. Pat’s practice area is employment law, with a focus on structuring executive compensation, dealing with whistle blowers, and litigation. Pat is diligent, thoughtful, and reserved.

You begin the process by talking with Pat, the practice group chair, and several more senior colleagues to get a clearer picture of Pat’s strengths, blind spots, and opportunities. Pat inspires great confidence in some, and not in others. Another theme that emerges is that Pat’s serious manner can be perceived negatively as “aloof.” You are determined to get to the bottom of this and are confident that the assessment tools will yield insight that will help Pat relate better to others.

Pat thoroughly completes the questionnaire and takes the Myers-Briggs Type Indicator and the problem-solving assessment—the KAI. Not surprisingly, Pat is an Introverted, Sensing, Thinking, Judger (ISTJ) with a more Adaptive problem-solving style, which means Pat solves problems by digging into details and following a rigidly structured analysis and process. Since people who are more Adaptive prefer to problem solve within a defined structure, you now know that Pat will be more confident and successful with a very thorough and detailed plan.

Next, you focus on Pat’s ability to inspire confidence, which is part of a larger communication issue. Pat hates small talk, and just about everything is small talk. That said, clients and partners appreciate and even enjoy working with Pat, whom they experience as clever, tenacious, creative, and having a dry sense of humor. You hire an external coach who specializes in using these assessments to improve communication, networking, and building relationships. You’re confident that Pat, who’s already shown an interest

in the assessments, will leverage the frameworks for understanding others’ behavior and communication. In particular, you hope that Pat will understand how others could perceive Pat’s very serious and detailed approach to everything as nitpicking and hypercritical.

At the same time, you and Pat work on a reputation and business development plan. Like many new partners, you notice that Pat is nervous about meeting expectations to develop business. You know that Pat won’t be able to focus until you and the practice group chair set reasonable expectations. You remind Pat that this is a multiyear process and, in these early years, what’s very important is building a reputation as a highly-skilled expert.

Expectations managed, you begin with creating an authentic personal brand and then move onto the plan. You’ve found that working with lawyers at a large whiteboard with an assistant taking notes is the most effective, time efficient way of collecting information and pulling together a cohesive plan. You also know that you’ll have to help Pat prepare for networking events, including making small talk, talking about employment law (brand delivery), and developing a couple of personal “news stories” to answer the inevitable “what have you been up to?” questions. Brand delivery is particularly important because every lawyer needs to be able to articulate what the lawyer does in an interesting manner that invites follow-up questions and lays the foundation for building a relationship.

In addition to more general networking events, a cornerstone of Pat’s business development plan is presenting on executive compensation, whistle-blower problems, and employment issues, generally to partners in the firm’s other offices as well as the community at large. After practicing internally, Pat will take the presentation on the road, delivering it to bars, industry meetings, and general counsels and human resource executives at clients and prospective clients. The firm’s director of marketing is an excellent presentation coach and has agreed to help.

Just about every lawyer you’ve worked with has benefited from regular follow up. It’s no surprise—they are busy with client work and business development doesn’t feel as urgent. Every two weeks you meet with Pat to give guidance, anticipate challenges, help take advantage of opportunities, and generally keep on track. On the weeks that Pat says, “I’m too busy,” or “I’m not prepared,” you check in for five minutes, knowing that skipping one meeting turns into missing two, three, and then completely losing momentum.

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A year later Pat is more confident—even remembers to smile at networking events and when presenting and knows how to engage others in the most interesting aspects of employment law. Pat’s partners have made introductions to clients, to whom Pat has made presentations and by whom Pat has been asked to work on a few small projects. Pat’s also on the short list for a number of prospective clients and will likely be hired by one in the next few weeks. You still follow up regularly, but it’s more to hear about Pat’s accomplishments than to prod. The coaching process has been a success.

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If you have not been involved in an experience management project yet, you might wonder what is so difficult about it. It’s just a database, right? Wrong. These are very complicated systems.

Experience Management: Build, Buy, or Abandon?

Having worked on a few incredibly frustrating experience management projects, I began to wonder if there are any great success stories out there. Are there better solutions available? Personal experience as well as research suggests that even the best-in-class products still require so much tweaking that it might make more sense to build something custom to begin with. Even when that appears to be the best path forward, building

an experience management system can be a long, expensive, and complicated project. Maybe it’s simply not worth doing at all.

First, let’s distinguish between experience and expertise management. These two labels may be used interchangeably, but most often expertise refers to people and the knowledge and skills they possess. However, law firms tend to shy away from the expert label and use the softer-sounding experienced label instead. (Note: In ILTA’s 2014 Technology Survey these two labels were mixed together but, even so, 77 percent of firms responding said they had no system for tracking experience/expertise. The larger firm size categories were more likely to have something in place and 72 percent of 700+ attorney firms did have a system.)

Tracking individual attorney expertise isn’t easy either, but enough firms have tackled this problem by mining the work attorneys do and inferring experience rather than attempting manual capture in a database or similar vehicle. While that could yield more accurate results, it is rare that attorneys have the time or inclination to continually report and update their skills. Close enough results are often acceptable because expertise searching is often limited in exposure.

Experience, on the other hand, usually refers to a group’s knowledge and skills, or more specifically the matter experience a firm has, and is used in pitches and proposals or for more general marketing purposes, such as in a firm’s public website, Chambers, Thomson League Tables and other rankings or listings. Accuracy is more important here. Experience is the firm’s positioning to the external world, clients, prospects, and competitors.

If you have not been involved in an experience management project yet, you might wonder what is so difficult about it. It’s just a database, right? All you need is client, matter description, and a handful of other key pieces of information, right? Wrong. These are very complicated systems. The most common problems from a high level are listed below. Some of these will be discussed in greater detail.

1. Product Selection—There just aren’t that many to choose from. There are some newer market entrants, but they are not yet proven. Yet if

By Lisa Gianakos, Director of Knowledge Management, Pillsbury Winthrop Shaw Pittman LLP, Washington, DC

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you’re not with a large firm, you may not have the resources to build a custom system.

2. Vendor Support—Commercial systems are rarely used “out of the box,” but customizations can make vendor support challenging because institutional project knowledge is lost over time, due to changes in personnel on either the vendor or firm side. Also, because there are no clear market leaders, the number of support personnel available may be minimal.

3. Complexity—There are common fields needed for all matters, but these are often overlaid with unique and large numbers of fields that are practice or matter specific, resulting in very complex systems.

4. Flexibility—Avoiding silos of spreadsheets or other “noncompliant” experience lists that practices used prior to implementing a firm-wide solution may not be possible if you aren’t flexible enough to meet their needs with a central system. At the same time, you need to balance their needs with what the marketing department needs and the desire to “keep it simple.”

5. User Interface—Tend to be complicated due to the large number of fields and complex logic to only present relevant information (for example, if yes, then ask this additional question, if no, ask these two other questions).

6. Classification Schemes—Getting agreement on classification schemes (e.g., matter types, industry, area of law) can be very challenging.

7. Data Conversion and Normalization—Moving from one system to another (even when the system is a bunch of Excel spreadsheets) may require complex logic and scripting for data conversion. In some cases it may outweigh the effort, meaning rekeying all of the historical information into the new system.

8. Integration—Pulling data from accounting and other systems in an attempt to automate but still requiring “exceptions” to this data, or pushing experience information back into other systems like a firm’s website. Straight integration is not very difficult but if you need to include complex business rules, handle exceptions, or transform data, it can get complicated very quickly.

9. Time—Getting attorney information on matters to be profiled, made far worse if buy-in is not obtained in advance.

10. Laterals—Incorporating incoming laterals’ experience into the system as well as worrying about departed attorneys.

11. Setting Thresholds—Determining what constitutes a matter worthy of capturing, which may vary from practice to practice, and building workflows/alerts to let people know it’s time to “profile a matter.”

Complexity vs. Flexibility vs. Keeping It SimpleI’ve yet to see an experience system that doesn’t have 100 or more fields, at least 30 or more fields for each type of matter above the common core fields. Even if you’ve seen the output of these systems (typically in pitches, proposals, and ranking tables) most people have no idea how difficult it is to make that possible. Aside from the difficulty imposed by fields pertaining to unique types of work, more complexity is introduced by the practice area/group classifications that firms use on their public websites, which do not match how things are viewed and organized internally. This means the experience database has to have a way to map the values between one schema and another. And what happens when any one of these schemas changes? Suddenly you have records that indicate a practice area that has now been split into two (even worse than when two groups are merged). What do you do? Sometimes there is a need to keep these historical classifications too.

Classification Schemes Speaking of classification, I once spent two years on an area of law reclassification project related to an experience database, two fun-filled years of meetings and huge, gnarly spreadsheets just to get agreement and buy-in from every practice that the new schema was correct. It amounted to a single field in the database. This story is not unique. If you find anyone who worked on an experience management implementation who still has hair, you probably missed some important stuff!

User InterfaceEven when all of that classification and agreement has been achieved, you encounter the next issue, the User Interface (UI). With so many fields to fill in, particularly for work that spans more than one practice or matter type, it commonly requires several screens’ worth of fields, or perhaps worse, one page that scrolls on and on and on. Trying to get matter details from an attorney is a daunting task. Present them with an ugly, complicated UI, and you’re even less likely to gain their buy-in. Many firms don’t even give attorneys access to the system, partly due to this issue.

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Experience Management: Build, Buy, or Abandon?

Are There Any Happy Stories?I spoke with numerous firms and my suspicions were confirmed: there are very few case-study-worthy stories around experience management. In asking people what the hardest part about their EM project is/was, one commented:

“The technology is the easy part. I’m really rethinking how much information we should capture. Do we really need 100 fields per record? Since every field is searchable, do we really need to separate everything? We are trying to strike a balance between fewer fields and ensuring data consistency and quality. For instance, we use the concept of tagging by using a keyword pick-list, which users can add to on the fly. This allows them to use their own lingo, be flexible to support any kind of information, but by tag sharing we ensure some amount of data consistency and reduce the proliferation of fields. That also helps keep the UI cleaner.”

This sounds like a good approach to me—flexible yet comparatively simple. It seems like we haven’t applied the best technology to experience management. If we can infer the expertise of an attorney by analyzing his or her work product documents, time entries, and bios, why can’t we do something similar for matters to infer firm experience? There are definitely some core fields you will always need, but beyond that, it just gets too complicated. I would love for a vendor to develop and/or apply auto-classification technology, or e-discovery techniques, to pull out the core concepts around sets of documents and time entries, applying thesauri and/or legal taxonomies, to alleviate the need for so much manual profiling. There is a golden opportunity here to make many firms happy! In fact, it might be possible to abandon traditional experience management system approaches entirely to an almost completely automated data mining-type solution.

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Sharing the financial realities of a downturn market for legal services with professional staff can empower them and bring value to the firm. Rather than shielding them, ask for their help.

Empowering Professional Staff in a Changing Legal Environment

Nobody wants to be the one to share bad news with the family, but sometimes it has to be done. In this case, the bad news I’m talking about is telling your staff the truth about the health of the legal industry and its impact on their own well being. Unfortunately, there have already been losses and many staff are not paying attention. More telling is that staff have not changed their ways in preparation for the worse, which may be yet to come. It is time to be open about what is

happening and how it may affect them. The goal is to share with them the realities so they can develop new skills and behaviors to carry themselves and the firm forward.

Legal spending is down across the industry, and though we have seen some uptick, the futurists claim it will never go back to prerecession levels. There are fewer big deals and even less “bet the company” cases. The American Lawyer website says “in the past ten years beginning in 2004, business legal service revenues fell from $159.4 billion to $118.3 billion.” This is a 25.8 percent drop resulting in less work to go around.

What does this mean firms should be doing about staff? First, firm management needs to be honest and share the reality of a different legal industry. Supervisors can be proactive by encouraging staff to be more conscientious about business costs. Help them understand that they too can make a valuable contribution. Teach them the economics of your particular firm by explaining how the billing and collections process impacts the revenue and cash flow cycle. Show them ways to reduce waste and become more efficient. Encourage them through “suggestion boxes” and other means to improve internal processes and to do more with less. In her article Legal Practice: The Suggestion Box, Julian Summerhayes writes suggestion boxes are for “… any forward-thinking, innovative professional practice—anonymous or otherwise.” Make your staff aware that they work for the firm and not just the specific lawyers or departments they support. They should be focused on the firm’s economic success.

The American Lawyer reports that 60 percent of the Am Law 200 acknowledge offering discounted rates to their top clients. Alternative fee arrangements (AFA) are slowly becoming the norm, as clients want to have more predictability in their legal budgets. It is time to explain to the staff that an AFA can consist of any fee that is flat, capped, fixed, contingent, or value based. They need to understand that the hourly rate model is shifting and why clients are demanding this new model more often. Part of this explanation needs to cover the type of work that is profitable and the type of clients the firm needs. Often

By Sharon Meit Abrahams, Ed.D., National Director of Professional Development, Foley & Lardner LLP, Miami, FL

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Empowering Professional Staff in a Changing Legal Environment

it is the assistant or paralegal who contracts with third party vendors for everything from court reporters to translation services. Teach staff how to negotiate and ask for better terms because under an AFA clients are no longer directly paying for these ancillary services.

Law is a reactive industry waiting for clients to call and for things to happen. Typically lawyers do not create needs or products. To succeed in the future, this must change. This is where the business development and marketing staff and even the technology department can step up to add value. Has your firm created any internal tools that could be packaged and offered to clients? Tap the resources of the professional side of the firm to look for business solutions that can assist your clients. For example, if you have created a project management system for monitoring legal work, could it be tweaked for clients to use to manage their legal spending? Often lawyers overlook the skills and abilities of the employees on the professional side. The time is ripe to tap into these assets and look for alternative revenue streams.

Technology continues to change the practice. Everything from e-discovery to client management systems (CRM) has an impact on the speed at which lawyers practice law. Secretaries and assistants need to keep current to remain competitive. Staff to attorney ratios are moving toward a 1-to-1 or < 1-to-1 ratio. This means some tasks will disappear or be outsourced and some staff will lose their jobs. Now is the opportune time to instill in the staff the need to heighten their skills. Firms can offer internal training or external programs in all the software platforms that efficient firms are currently using. Proficiency in Interaction, Relativity, Microsoft Office, and a myriad of other legal tools will become the norm and low performance will no longer be tolerated. High-quality employees will embrace the need to learn new skills so that they can remain employed or have skills valued by other firms.

Alternative law firms like Axiom and Elevate Services take work away from traditional firms. Along with these less conventional companies, consulting and accounting firms are also poaching work traditionally given to law firms. PwC has stated its goal to become a Top 20 legal services provider over the next five years. How can traditional law firms compete? By using their professionals to do more billable work at lower rates. One of the reasons these businesses impact the legal industry is that they use a more profitable model, which spreads the work around to be more efficient. Your staff have skills and abilities that can be more fully utilized especially among paralegals, technical specialists, and project managers. Engage your firm’s

nonattorney professionals by brainstorming with them ways to create more efficiency at the work product level. For example, many paralegals have the skills and knowledge to do work that first- and second-year lawyers currently do, at a much lower rate. Consider the options at your firm, and then create pilot programs to see what alternative working models are profitable.

As times change in the legal services environment, one thing remains even more critical: client service. We need to work harder to stay connected to the client as we use new and additional technology. Entire deals can be completed without the client and partner ever meeting face-to-face. Firms must continue to differentiate themselves through their client relationships. The 2014 BTI Consulting Group’s annual report on client service says, “Only clients can define and measure client service—and as it turns out, not everyone measures up.” It is the law firm’s responsibility to teach staff, from the receptionist to the tech people running AV equipment, what exemplary client service is and how to deliver it. This includes being responsive, using and sticking to budgets, and communicating regularly with clients. The legal industry could take a lesson from highly successful hotel chains on how to train everyone from top to bottom in quality service. In Beyond Biglaw: Disney Lessons for Lawyers (Part 1) — Customer Service Gaston Kroub, a Biglaw partner writes, “Whether you are in Biglaw or a boutique, learning how to deliver superior client service is of paramount importance, especially in the free-for-all competitive environment we have been dealing with over the past few years.”

Law firms have significant sources of data, which could be used to increase efficiency. Data sources are everything from timekeeping software and electronic bills to document management systems storing thousands of documents. All of this and more can be used to create efficiencies provided the firm has the technology and people to process and analyze the data. Lawyers do not have the time or interest to search through piles of data unless it proves their client is not responsible or that the deal documents are faulty in some way. However, if finance or tech staff were properly trained and charged with analyzing the data, there might be some clues on how to improve efficiencies or effectiveness. For example, if a firm charted attorneys who put in time daily against those who did it weekly or less often, they could prove that daily time keeping captures more time ultimately leading to more billable hours. Sharing this data analysis with your assistants can help them influence lawyers to change their behaviors regarding billing practices. In Frederick J. Esposito’s piece, Making the

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Timekeeping Honor Roll, he says, “Wise lawyers know that contemporaneous timekeeping is essential to success ...” Now, who wouldn’t want to bill more time?

So what is the point in all this? The lesson is to get firms to realize they need to include their staff in financial discussions, AFA implementation plans, and cost containment initiatives. Law firm leaders need to instill the necessity of becoming more skilled and efficient to benefit both the firm and individuals’ careers. When firms acknowledge that the entire other half, the professional side, can and will have an impact on the future of their practice, then firms will be more successful. By embracing the above, leaders can change from the bearers of bad news to solution gatherers.

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The main problem with CRM technology is that it’s just technology. It’s not a magic bullet. Lawyers shouldn’t expect that purchasing a “shiny” new piece of software is going to solve all of a law firm’s business development challenges. The software has to be implemented strategically, which means that firms have to focus not only on the technology itself, but also on the people that can make it or break it.

Pipeline to Success—Law Firms Finally Embracing CRM for Business Development Tracking

What gets measured gets done. This can certainly be said about “nonbillable” activities in law firms. For anyone familiar with attorneys, this is not surprising. Busy lawyers are tasked with competing demands for their very valuable—and very limited—time. And for lawyers, time is money—literally. So when there is client work to be

done, anything that takes away from billing often ends up being put off until they have time—which sometimes means indefinitely.

But as competition for work has increased recently, law firms finally are being forced to focus on the one nonbillable activity that makes all the other billable activities possible: business development. As a result, attorneys have learned that successful business development takes time. So, not surprisingly, they are now searching for technology to make this process less time-consuming and more effective. One type of technology that can help enhance law firm business development efforts has actually been ubiquitous in other industries for years: the business development pipeline (of course, most other industries call it a sales pipeline, but let’s not split hairs).

The Pipeline At its most basic, a pipeline is simply a way to track and report on business development efforts. Initially, when law firms began tracking business development opportunities, the original tool of choice was Excel. Even at some of the largest firms, lawyers often tended to gravitate to spreadsheets to track just about everything. There are several reasons: they are easy to use, they’re on the desktop, they allow you to enter almost unlimited information, and they can even be used to print detailed lists and colorful charts and graphs. As a result, for many firms, Excel was a good place to start building basic business development pipelines.

The problem with spreadsheets, however, is that they have limitations. First off, they’re “flat.” Spreadsheets were designed for quick and easy entry of large amounts of basic, linear data such as the contact names and information for people or companies as well as other key details, which are the basic building blocks of a pipeline. But because spreadsheets are flat, they don’t allow for ongoing tracking of important activities related to an opportunity or for capturing historical information such as last steps and next steps. This type of information can be incredibly important when trying to move opportunities forward or determine the best process for bringing in business.

By Chris Fritsch, Founder, ClientsFirst Consulting, Atlanta, GA

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Pipeline to Success—Law Firms Finally Embracing CRM for Business Development Tracking

This is where real pipeline software can help to take a law firm’s business development to the next level. A true sales pipeline allows opportunities to be entered and linked to related people and companies. Pipelines also allow for entry of additional information such as activities related to an opportunity, which can then be assigned to the individuals who need to complete them. Once all the data is entered, a pipeline can also provide a perpetual history of the activities that took place during the business development cycle and reminders for activities to keep advancing the opportunities forward.

Sophisticated pipelines also can help to predict deal outcomes and project expected revenue. They can even be used to create dashboards and generate reports. By utilizing these types of analytics, lawyers can identify which opportunities may have become stalled or inactive and which ones may be “low hanging fruit,” the opportunities that are most likely to yield the best results with the least effort.

Most importantly, pipelines provide a good way to hold attorneys accountable for developing business. Many firms have found that pipeline activity and progress reports can be effective tools to improve results and foster a bit of healthy competition in practice group meetings.

The Past When some larger firms with sophisticated marketing departments began to realize the limitations of spreadsheets years ago, they started looking for alternatives. But because the profession had not been focused on sophisticated business development tracking in the past, there were not many choices of pipeline software available that could meet the specific needs of law firms.

So as an interim solution, some firms started testing CRM software such as Salesforce to help overcome the limitations of spreadsheets. While these CRM systems included advanced pipeline functionality, unfortunately they didn’t make sense for a firm-wide deployment. Even though they had been commonly used for contact management in most other industries, because they were Web-based, could be extremely expensive, and were hosted in the cloud rather than inside a firm’s firewall, the lawyers wouldn’t embrace them.

To compensate for a lack of attorney utilization, a few firms did have some successes with deploying a limited number of licenses to BD or Marketing managers who would work with key lawyers or practices and were tasked with entering the data and generating the reports. But because the systems were not readily

accessible to all the lawyers, many of the key business development contacts remained where they had always been—in the attorneys’ Outlook, which made these early law firm pipelines into just more “silos” of disconnected data.

The ProductsAll this is changing however. Recently, some CRM developers have begun building pipeline tools to meet the changing needs of law firms. A few years ago, Microsoft began offering a version of its Dynamics CRM through industry vertical resellers who configured the software specifically for law firms. Aderant has since acquired this product, CRM4Legal. Two other companies have also released new offerings built on the Dynamics platform: Business Development Premier from Thomson Reuters and ProfessionalCRM from Consulting4CRM.

More recently, LexisNexis InterAction, the industry leading CRM for large law firms, began beta testing their new Business Development Module that should be released this year and has easy data entry, automated alerts and advanced analytics and dashboards. Additionally, ContactEase from Cole Valley, the most popular CRM used by midsized firms, has also implemented a new Tracking Module for Opportunity and Pipeline Management. The advantage of these pipelines is that they and are tied to existing CRM systems that work completely within Outlook and are typically deployed firm-wide, allowing attorneys’ contacts to flow in with very little effort, time, or training required. This allows a firm to better leverage relationships into opportunities and, ultimately, new matters.

Even Salesforce has finally officially entered the law firm pipeline picture through several partners including one vertical reseller whose product, OnePlace, is configured specifically for professional services. Their cloud-based system is being looked at by a few U.S. law firms and has been adopted by one firm in Canada.

While it’s great that firms are finally focusing on business development tracking and new pipeline software for law firms is being developed, it’s also important to make sure that we don’t forget the fundamentals of successful business development as we move forward so that we don’t repeat past failures.

The ProblemOver the years, we have all heard way too many stories of CRM systems failing to meet expectations. What we don’t typically hear is that the reason why these systems didn’t meet expectations was often that the expectations were unrealistic. Indeed, people have

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20Practice Innovations | March 2015 | Volume 16, Number 2

Pipeline to Success—Law Firms Finally Embracing CRM for Business Development Tracking

time, since up to 30 percent of a firm’s contact data can become outdated each year. Finally, there has to be a focus on system adoption. Lawyers not only have to understand the value of the software for the firm, they must also believe that there is something in it for them. Only then will firms be able to get the widespread utilization and value that will allow them to realize return on their pipeline investment.

One final note: While there is little doubt that pipeline software can be beneficial, it also important to remember that if the lawyers don’t continuously work on “filling up” the pipeline by regularly getting out of the office to go see clients and prospects, the software isn’t really going to help. But that’s an article for another day.

been complaining about CRM systems for as long as … well, as long as there have been CRM systems—and these complaints are not limited to law firms.

The main problem with CRM technology is that it’s just technology. It’s not a magic bullet. Lawyers shouldn’t expect that purchasing a “shiny” new piece of software is going to solve all of a law firm’s business development challenges. The software has to be implemented strategically, which means that firms have to focus not only on the technology itself, but also on the people that can make it or break it.

The PeopleTo ensure success, first the pipeline technology must be supported at the highest leadership levels in the law firm. Next, there have to be knowledgeable, well-trained people dedicated to inputting the data. Information has to be entered correctly, consistently, and completely because bad data will not inspire attorney trust. Additionally, resources have to be dedicated to ongoing data quality to ensure the data remains current over