Pricing and Profits
Today's Wall Street Journal has news about 3 major companies' profits being higher than anticipated. Coincidentally, they all raised the prices of their products.
Despite "high" hourly pricing in the legal community, one wonders whether there isn't room to raise prices further. If this is something you may want to consider for your strategic plan, see my article that suggests how and when to adjust fees.
Social networking for lawyers
LawBiz® facilitated a webinar about social networking and the benefits of this new technology for lawyers. David Nour, an expert on Relationship Economics, joined me in what the audience described as an outstanding learning experience. As the saying goes, it was like "drinking from a fire hose."
Substantially more than 100 people signed up and others contacted me with calendar conflicts. By popular demand, we will do our program again; we also will produce a DVD of this week's program; and my teleseminar with West LegalEdcenter on December 9th at 11 a.m. PT will bring David and me together again for another edition of social networking.
Stay tuned. Subcribe to LawBiz® Tips for current information as it is posted.
Will 2008 be a brief dip for law firms?
Aric Press, editor in chief of The American Lawyer, wrote in this month’s edition that “Next year’s Global 100 is apt to be a less pleasant experience (than this year’s law firm’s financial results). The best that law firms can hope for is that 2008 will mark the bottom, a dip in the otherwise inexorable rise of firm revenues and profits. A brief pause: Those are the optimists talking.... the work is down, collections are slower, hiring is off, and law firm leaders spend less of their time plotting global conquests and more trying to decide if anyone will notice that the quality of the paper in the Xerox machine has been taken down a grade...”
Alan Greenspan said recently that this crisis will not go away in the near future; it’s a longer term challenge. I’m old enough to have experienced a prior economic crisis (no John, not the Great Depression!), and it took a full generation to overcome. My fear is that it will take a full generation, or more, to overcome today’s crisis. Although the participants of the recently concluded ALM Law Firm Leaders conference seem to be more optimistic. I’m hoping they’re going to be proven correct.
Law is a Business
The Business of Law® is not a generic term. In 1995, lawyers did not think they were in a business, let alone a service business. And I was successful in my application to register this as my mark. It has been my mark for more than 10 years.
Today, lawyers in the large law firms understand that law is an honorable profession, but is also a business.
Peter Zeughauser in the ALM Law Firm Leaders conference said that the AmLaw 100 revenues are $64.5 B. That’s BILLION dollars. And 3 firms account for 10% of that number; that “profits” (why are we talking about profits if we’re not in business?) increased 8.7% in 2008, ranging from a low of $410,000 to $4.95 million.
Maister's Plan for the Future
David Maister started out his ALM session for the Law Firm Leaders Forum by saying that all law firm strategic plans are the same! They're all correct, but not unique. The bottom line problem is that, like a drunk, there is no will power on the part of law firm leaders to hold partners accountable for their failure to reach the goals of the strategic plan.
Continue Reading...Rick Borstein talks with Ed about new products from Adobe
Rick Borstein is the Business Development Manager of the Legal Market for Adobe Systems, Inc. He talks with Ed about all the differnt versions Adobe Acrobat 9 and their associated features. He also discusses Acrobat.com for file sharing and collaboration.
For those who want to learn more about Adobe's products after listening to this interview, you go to Rick's blog, at www.adobe.com/go/acrolaw.
29 minutes, 28 seconds
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Law Firm Leaders Gather to Commiserate
CNN just released a poll that suggests that most Americans are angry, worried, and stressed out about current conditions in our country. The legal profession is not immune to these forces. Law firm leaders from small, mid and large sized firms gather for a two day program designed to provide guidance on what the law firm of today needs to do in order to stay competitive in a changing economy. The sponsor of the program is ALM (now IncisiveMedia).
Continue Reading...Social media
LMA LA presented a program today on social networking. It was well attended and the speakers were all outstanding. Those in attendance, like me I'm sure, felt like someone had just turned on the firehose and spewed forth a whole lot of knowledge. Now our trick is to implement the ideas expressed.
What does "social media" mean? How does it differ from "social networking"? I'm not sure I understand the difference, but Sally Falkow, president and senior strategist of Expansioin InternetmarketingPR, had as broad a definition as any. If I am paraphrasing her correctly, it's using the internet to communicate with clients and prospective clients. It's not relevant which technique or application you use, just that you use the internet. I like this broad definition. It goes along with my definition of "marketing." Marketing is every technique you use to communicate your ideas to another. Looked at it from this perspective, lawyers even market in their presentations before a judge and a jury, though I know few would agree with me.
Jonathan L. Handel, an attorney with Troy Gould, told how he used social networking to expand his base, starting from just 14 months ago. There is just too much to say about Jonathan in this short space. So, I will suggest, instead, that you go to Google and search on his name. You will be surprised at how many times his name will appear. Suffice to say, Jonathan is a regular contributor to many of the major newspapers in the nation as well as blog sites pertinent to his field. Congratulations must be given to Jonathan.
Kevin O'Keefe of LexBlog was the moderator who, as usual, did an outstanding job of explaining the technology and asking the right questions of the panelists. Kevin has taken his business from the beginning stages of entrepreneurship to a spiked growth rate. I've know Kevin since the time he was practicing law in Wisconsin. In fact, he was one of the first subcribers to our audio series, Law Practice Management Review: The Audio Magazine for Busy Attorneys. That series has now morphed into our podcasting that can be heard both here and at our web site.
An outstanding program and its coordinator, Cheryl Bame, is to be congratulated. "This baby has legs" and just may go on the road to other LMA chapters.
This topic is now so exciting that LawBiz will be hosting David Nour, an expert in the field who just had his new book, Relationship Economics, published by John Wiley & Sons. Go to our site and sign up for your FREE registration!
Continue Reading...
Law firm economics during crisis
During times of economic crisis, law firms need to be even more careful with the economics of their practice, according to writer Shannon Nelson of Law360.
Continue Reading...Challenges facing law firm leaders
Law Firm Leaders Forum takes place Wednesday and Thursday, October 22 - 23, 2008 at the Westin Hotel, New York.Dan DiPietro from Citi Private Bank and David Maister will, among others, head the cast for Wednesday.
Peter Zeughauser and Greg Nitzkowski, of Paul Hastings, will, among others, present on Thursday. I have the pleasure of participating in a segment on Thursday as well.
If you're in New York then and reading this post, let me know. Perhaps we can get together.
Partnership: Be careful what you ask for ...
Partnership: Be careful what you ask for. As my mother used to say, "... you just might get it."
Myles Lynk, Professor at Arizona State University, spoke at the ABA's Law Practice Management Section's conference in Tucson. His topic was "Choice and Opportunity--Race, Politics and the Practice of Law.
Continue Reading...Lawyers: Can you refuse ex parte notice?
I was having a conversation with Marc W. Matheny, a sole practitioner in Indiana, today. And the conversation turned to voice mail messages.
The message I've heard a number of lawyers leave on their machines says that they do not accept ex parte notices on this line. I had never thought about this before, but I pose the following question for your consideration: How is it that you can refuse to be served? If you were personally served with a summons and complaint, can you refuse to accept service? During my 25 years as a practicing lawyer, I can't remember an instance when refusal was permitted. I admit that it's been awhile since I practiced, perhaps the rules have changed.
If your phone number is your normal business contact point, and if phone service for ex parte matters is acceptable in your jurisdiction, how can you tell the other party that you refuse to accept service just because youir answering machine is on?
This poses an interesting question for me ... and one I suggest lawyers address with their local court rules before relying on the sufficiency of the voice mail statement concerning service. At the very best, you will be fighting a battle about the sufficiency of the service rather than the merits of the matter ... and this is usually not productive either for the lawyer or the client.
Law firm strategic planning & the Flying Wallendas
Allison Shields asks a fascinating question, "What do the Flying Wallendas have to do with strategic planning?" This was in response to my blog post reflecting an earlier conversion among Allison, Aviva Cuyler and me.
And I agree wholeheartedly with Allison's conclusion: "If your firm hasn't started the strategic planning process, now is as good a time as any to begin. Your strategic plan can begin by focusing on where your firm is now, what challenges it faces and what resources are available to meet those challenges and anticipate what might happen in the future and begin scripting a response so that you can act instead of panicking."
Law firm strategic planning or just a bunch of tactics?
Last night, during a break at the ABA Law Practice Management Section's Fall conference, I watched an MSNBC commentator talk about the presidential campaign and the candidates' strategic plans, or lack thereof. Then, I went to dinner with Allison Shields and Aviva Cuyler. We talked about the strategic planning process of law firms. We agreed that very few law firms we've seen have such a plan in place. During our conversation, I recalled a managing partner telling my large law firm Managing Partners Roundtable meeting just this week that his firm created a strategic plan about a year ago and had projected several scenarios, one of which was an economic downturn ... and what his firm would do if such an event occurred. He said his firm is doing fine today, still staying close to their strategic plan.
Continue Reading...Collections in time of financial crisis
I was talking to Patrick Lamb today, asking his opinion about the impact of today's financial crisis on law firm fees. His response brought me up short, though it shouldn't have. He said that restricted credit lines have impacted everyone. After all, even banks won't loan to other banks overnight funds as was normal before the crisis for fear of the 2nd bank's failure. If banks won't loan to one another, how can we expect banks to loan funds to law firms? Thus, collection policies of law firms must be carefully monitored and honored. Collection of billings, high realization rates, is essential to the survival of law firms in today's environment.
Social networking for lawyers - webinar announcement
Extend the Reach of Your Rain Making Using Web 2.0
VENICE, CALIF. October 14, 2008—Law management guru, Ed Poll, JD, MBA, CMC, and social networking guru, David Nour, will present a free webinar for managing partners and law firm administrators on October 28, 2008 at 12:00PM (PST). The webinar will show listeners how they can extend the reach of their business development activities using social media strategies such as LinkedIn, Twitter, Second Life, and Plaxo.
Webinar host, Ed Poll, is a nationally recognized management consultant who has helped to transform many law practices into profitable and successful businesses. Featured guest, David Nour, is a social networking strategist and author of Relationship Economics (Wiley, 2008). In this webinar, the hosts will show listeners how to develop a meaningful online presence on social networking sites that enhance online visibility and search engine ranking, modernize business development by bringing it into the 21st century and increase profitability.
This one-hour presentation will provide an overview of LinkedIn: the ultimate business-to-business social networking platform, and discuss how to create a content-rich profile that will position a law firm or an individual practitioner on one of the networking platforms to enhance prospective client outreach and provide quality information about the services offered.
Additionally, the webinar will discuss the best practices used by social networkers on how to handle stagnated relationships, unanswered requests, unsolicited invitations and how not to abuse the system. Content covered in the webinar will also include the more advanced strategies of social networking, including advanced search techniques for a more targeted effort, turning answers into alliances, knowledge management, and the value of premium memberships.
For more information on how to register for the webinar, held on October 28, 2008 at 12:00 PM (PST), please visit www.lawbiz.com.
About Ed Poll
Ed Poll, JD, MBA, CMC, is a nationally recognized expert in law practice management. He helps attorneys and law firms increase their profitability, consulting with them on issues of internal operations, business development, and financial matters. Ed brings his clients a solid background in both law and business. He has 25 years experience as a practicing attorney and has also served as CEO and COO for several manufacturing businesses. In 1990 he founded LawBiz® Management Company and is now focused on coaching, speaking, and training law firms.
Ed is the author of numerous publications that have become the definitive works in the field and has just released his newest book Law Firm Fees & Compensation: Value & Growth Dynamics (LawBiz® Management Co., 2008). He is also a columnist for the Association of Legal Administrators and contributes the “LawBiz® Coach’s Corner” to Lawyers Weekly.
About David Nour
David Nour is a social networking strategist and one of the foremost thought leaders on the quantifiable value of business relationships. In a global economy that is becoming increasingly disconnected, BeOne Now is solving global client challenges with intracompany, as well as externally focused, Strategic Relationship Planning™.
David is the author of Relationship Economics (Wiley, 2008) and What Every Entrepreneur Needs To Know About Raising Capital (Praeger, 2009), a senior management advisor, and a featured speaker for corporate, association and academic forums, where he shares his knowledge and experience as a leading change agent and catalyst for Relationship Economics® - the art and science of business relationships.
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Law firm lays off more lawyers and staff
Another law firm laid off a large number of folks. This is depressing. I think there is a better way.
Coincidentally, I read yesterday about Toyota in the Wall Street Journal. Toyota's sales are decreasing; they've closed a plant. They did not lay off workers. Rather than giving them paid leave, as GM and Ford have done on occasion, the workers come into the plant and take education courses to improve their skills and to do deferred maintenance. When it is time to reopen the plant, their workers will be even better skilled and the plant will be even more efficient. This is part of the Japanese philosophy of continuous improvement. Most importantly, Toyota employees feel a greater loyalty to the company.
Large law firms hire new lawyers, then terminate senior lawyers. One managing partner termed this technique as "culling." But, each lawyer laid off cost the law firm between $250,000 and $500,000, according to every managing partner I've talked to. This goes right to the "bottom line." Firms looking to cut expense in order to improve profits should look no further than their hiring and firing practices!
Rather than fire experienced lawyers, why doesn't the law firm offer new education opportunities for its lawyers and its staff? New lawyers don't know how to "find the courthouse." Experienced lawyers know not only where the courthouse is, but they also know the culture of the law firm. There is much they already know, and for which the law firm has already paid. It's a lot less expensive to educate experienced lawyers in a new practice area than it is to train a brand new lawyer.
And, they would improve the morale of those in the firm, increasing the loyalty to the firm. This would result in better service to clients as well as increased profits.
What is wrong with the current picture? Why is it that law firm management has yet to understand what American industry already knows? I have heard a number of explanations, but none of them make sense to me. Perhaps you can help me on this.
Lawyer Retirement May Be Only a Dream
Will lawyers actually see their “second season,” their “red zone” of life? Will the 400,000 lawyers projected to retire within the next 10 years have to work or will they be able to retire? Will lawyers be just like others in our country today who are seeing their “nest eggs” dwindle by at least 50% in just the last few weeks?
Continue Reading...Law Firm Revenue Projections
A recent study by a major bank suggests that the revenue of large law firms have been flat or decreased 10%; the next tier of law firms experienced 5 to 15% declines.
But, 2009 should see better results according to this study. Firms have absorbed the increased compensaton for associates. Firms have moderated the growth in their head count, both of new associates and lateral movement that doesn't return immediate results.
There will be more segmentation of work by corporate law departments. This will provide work for smaller law firms from General Counsel who will be more cost conscious. This will especially be true if the current "value" emphasis by members of ACC (Association of Corporate Counsel) comes to pass. There will still be work that will not be price-sensitive.
Retirement may be merely a vision now
One pundit commented today that our 401 K's have now become 101 K's!
With close to 400,000 lawyers (Baby Boomers) slated to retire in the next 10 years, the legal profession will be rocked! How, however, no one is yet commenting.
With the current financial collapse, and investment values plummeting by 50% in many cases, we may not see so many retirees, after all. Even lawyers may have to work longer years than they anticipated. We may have one more generation than contemplated in the work place. Will we see even more challenges in an effort to understand why each generation reacts differently to the same stimuli? How will we reconcile the differing values between, and now among, generations? As Rodney King once said, "Can we all get along?"
Heller Ehrman - Business as usual or a disaster waiting to happen
Wall Street isn’t the only institution falling down around us. A law firm, not the first, that was first opened 118 years ago in 1890, collapsed in a heap of depressed lawyers, staff and clients, not to mention vendors. Many people were significantly impacted by the dissolution of this 600+ lawyer firm.
How could a banking institution, built over decades, collapse in hours? How could a law firm of such magnitude collapse in a matter of weeks? For the law firm, there are a number of reasons provided in the public airwaves, each of which carries a significant lesson about The Business of Law®.
Here are a few of the lessons that popped out for me:
An oxymoron
With the recent financial crises still in the news, it is helpful to find a little levity. While coaching a client of mine today, we were talking about Bank of America buying all the other banks at bargain rates.
His comment: Bank of America is an oxymoron, it should just be called The Bank!
Client trust accounts and bank stability
The State Bar of California recent answered several questions about the FDIC and clients' trust accounts. While their comments relate to California lawyers, their comments are instructive for all lawyers with clients' trust accounts. Caveat: Check your jurisdiction's rules and regulations, including those of both the bar and the banking associations.
Continue Reading...Honest Lawyers
Confidence makes the world go 'round. In our current financial crises and credit restrictions, one lesson becomes very clear: Our financial markets require the confidence of banks and the public that loans will be repaid and that the extension of credit is safe. Until our public regains that confidence, the markets will have difficulties and the NASDAQ will continue to slide downward.
So, too, people must have confidence in their lawyer and the honesty and trustworthiness of their lawyer. What has our profession come to when a lawyer must promote his honesty?
ScanSnap drawing winner
As noted in an earlier post, we offered a brand new Fujitsu portable scanner, model ScanSnap S300. Our drawing has now closed. I'm pleased to say we had a large number of participants ... Shows the interest in Fujitsu, and well it should. I use the scanner myself. I'm impressed not only with the speed of its operation, but its very small footprint. It sits inconspicuously on my desk, ready for immediate use.
Our lucky winner is Jon Lewis of the law firm of Lewis, Feldman, Lehane & McAtee, LLC, of Birmingham, AL ... Congratulations, Jon!
Rules of Professional and Beautiful Lawyers
The September 15th edition of Massachusetts Lawyers Weekly has two articles, one on top of the other, each with the photograph of a rather attractive woman. No sexism intended here, but this is the oldest tactic in the business to sell newspapers!
The first article discusses a proposed change in a Massachusetts rule of professional conduct that would require a successor contingency fee lawyer to be responsible for the predecessor counsel’s fee, unless there is an agreement to the contrary in effect. Obviously, this rule has prompted controversy. Lawyers in Massachusetts should be quite wary of this proposed rule and make their voices heard.
The second article features a well-endowed lawyer who will be the cover photograph for the 2009 Beautiful Lawyers Calendar, featuring 12 lawyers “who reportedly embody ‘the style and spirit’ of the Massachusetts bar.” If other states do not follow suit, there may be a heavy influx of male lawyers to Massachusetts. And if other states do follow suit, we may see the beginning of the demise of either Sports Illustrated bathing suit issue or Playboy!
Note to my readers: After my previous post about our economic and political systems collapsing around us, I had to attempt some levity, even if not PC ... In advance, I ask for forgiveness, hoping you will see the humor in this as I do. Perhaps, though, you need to read the newspaper to get the full impact of my reaction. <g>
