This page is to serve as a conduit for the most updated information on the business side of the legal industry. We will provide interesting articles, case studies and white papers for marketing, sales, business development and leadership of law firms. Check back frequently. If you want to receive automatic updates, follow Bill on LinkedIn
March 17, 2014
As a result of this NY Times article - http://www.nytimes.com/2014/03/15/business/an-underling-among-the-officials-accused-of-fraud-at-dewey.html?ref=business&_r=0
The recent indictment of a major NYC law firm caused me to write this blog. Simply stated: Law firm leadership, in the future, will have to make the financial health of the firm transparent. The NY Times and WSJ article made it clear to me that employees, consultants, equity partners, non-equity partners, of counsel and all the other free agency members of law firms should ask the leadership to share the financial health of the firm.
The CMOs, BDOs, client relations professionals whose mission it is to bring in paying clients have a significant risk. They are being held accountable for results either directly or indirectly, which means “show me the money”. It is clear from this indictment that if you have knowledge that the firm is not meeting their financial obligations to the various stake holders, then you have a fiduciary and legal duty to report that information to the appropriate members of the firm and perhaps the others in law enforcement and the various organizations that have financial relationships with the firm.
This blog may have proven to be one of the most incendiary in the aftermath of the news reports. I have met with lawyers and non-lawyers in firms that have had and currently have similar financial problems. Having been the victim of a subpoena in a lawsuit stemming from a failed firm that cost me more than $10,000 in legal fees to avoid a deposition on information that I never saw, I speak from personal experience. The $10,000 would have been better used to provide my grandchildren a contribution to their education. I never received a thank you or a “sorry you got trapped in our internal, bitter war”. No good deed goes unpunished.
So to be clear, my role was to provide the failed firm, which will remain unnamed, services to help them avoid dissolution. The warring factions wanted me to support their position and had the firm’s leadership listened to me and my assessment, they would still be around. I was never shown the financials so I was an innocent uninformed victim.
I will not work with a law firm unless they agree to share with me the truth of their financial well being. If the ultimate mission as an outside consultant in business development is to help them grow profits, then I need to have a benchmark to prove our value.
January 20, 2014
I have visited over 100 firms here in North America and overseas in the last 24 months. There are over 40 CMO and BizDev jobs open. Some have been open for over two years. The firms have told me that they made a judgment that marketing, branding, brochures, newsletters…etc have failed to bring in business compared to what they spent. A Very low ROI in their judgment and the CMOs are taking the heat. I have a spreadsheet of all the open positions for CMOs or BDOs. It is growing longer every week. Some recently placed CMOs have lasted one week, others made it to seven months. Some firms have had 4 or 5 in the last several years.
The partners thought they were getting sales when they hired these CMOs and CMOs did the “marketing thing” as they do not have the authority or clout to drive sales. As you can see from the LMA listserve discussions and various national conferences sales, client teams and account management has not been discussed, hardly at all. The great promise from marketing and branding was that the business would come in without the lawyers having to do much at all. In other words, marketing was going to make sales unnecessary! “I went to law school so I would not have to do sales”. In my case I went to law school to learn how to sell to lawyers.
The big buzz amongst MPs and marketing partners is business development, i.e. sales and client teams. The firms that get it have gone to very structured client teams using firm-wide account planning similar to what IBM and HP have done for the last 40 years. LSSO have a Harvard professor speak on this very subject at the Chicago meeting. His conclusions support the conversations that I have been having with firms. The firms that self-medicated trying to develop client teams on their own have mostly universally failed. Client teams now have a bad rap in those firms and chances or revisiting teams are remote. I am wondering how the clients of these firms might react knowing the lack of collaboration of client future and latent needs are missing in their outside lawyers.
Hence many of the CMO jobs are going unfilled. What the search consultants have told me (I get 4 to 5 calls a week looking for BDOs) is the pool of people to fill the position of Chief Business Development Officer is VERY small. That explains why partners are now filling those slots. At the very large firms the compensation can be as high as $500k plus. I can appreciate a partner jumping on that opportunity given the market for legal services.
In all fairness to the CMOs few have sales, client team and account management backgrounds or experience.
We have stats (14,000 partners surveyed worldwide) that indicate the average partner spends less than one hour a week meeting with clients and prospects face-to-face in a business development/sales situation. No surprise there! The real problems are 99% of the lawyers do not want or are not skilled to do business development (the lawyer code words for sales). Some lawyers spend less than 10 hours a year. There are recent HBR studies that indicate buyers will not buy from people they have not met and have trusted relations. There are not proxies to build trust. Also internal lack of partner trust resulting in client hoarding has become rampant in this economy. “I need to have a portable book of business”.
Lateral movement and having your own book of business rules like never before. The fabric of these firms is being stretched to the limits. No one seems to be teaching how to drive firm loyalty. Free agency has caused many firms to fail. Firms are beginning to look like NBA teams where a very few number of stars are running the show for their own personal wealth. Daniel Pink’s new book, “DRIVE” gives those of us who value mastery, purpose and self actualization hope. Hope unfortunately has limits as a strategy.
The demise of most firms is typically driven by a tiny minority of partners. Practice group marketing has facilitated the demise in almost all of the most recent firm breakups. Some practice groups in large firms had their own CMOs and became firms within the firm. The potential departure of significant practice groups remains the single biggest exposure law firms have today.
The other approach of self-medication has been to use former MPs to do BD and client opinion surveys. I like the commitment however I remain skeptical that the lawyers will fix the client concerns. Some firms have fired their entire mktg/bd departments. When in doubt about ROI clean house. Others have outsourced marketing and use coaches. The trend I am seeing now emerge is that these outside consultants/coaches are being hired as contract CMOs/BDOs (see the LMA job bank) for this description. Some of the coaches are in the attorney placement business. They help partners build a book of business then the lawyer shops the book to other firms…very clever.
Because there are no true comparable models on how the grow the business in a recession I would suggest that CMOs, MP, COO and other stakeholders look outside the legal profession for solutions to the account management and sales challenges. Forget the standard reply “we cut the budget for legal services so we want a discount”. Most of the business issues that become legal work did not exist as budget items in 2008 and 2009. Also the budgets are being set at executive levels ABOVE the legal department. Raise you and your firm’s contact level to those who approve the budgets.
These are my thoughts from listening to firms and businesses.