Ed shares some thoughts on electronic marketing and offers ideas on how traditional marketing can help you stand out in the crowd.

You are more likely to be remembered, thus contacted, if you reach people on a personal level.

Differentiating yourself will lead to increased:

• calls by clients and prospects
• meetings
• calls from the media
• meetings

And most importantly:
More money in the bank.

 

Factors to Consider When Marketing You Firm:

-Have a Marketing Plan
-Consider the commonality between you and prospective clients.
-Play the Numbers Game
-The more people you can get in front of; the better the chance of someone engaging you.
-Build a quality referral sources
-Understand that people learn differently
-Connect with other professions who share your market

 In a December issue of the Wall Street Journal, the headline implies that lawyers are making far too much money in a Delaware case. This, despite the unheralded reduction in their fee request. But, it's easy too trash lawyers, and good headline writers (a special art in writing) are brilliant in getting readers to pick up the paper and keep reading ...

 But, let's look at the facts:

 First, the judge in the case said that the plaintiffs lawyers did an outstanding job, not just good, and such work should be rewarded. This is the same judge who historically penalizes lawyers when they fail to get results.

 Second, the agreement between plaintiffs' lawyers and plaintiffs permitted counsel to ask the court for 30% and they applied for less, only 15%, not a normally outrageous percentage.

 Third, the risk reward element of contingency cases should be evaluated as of the beginning of a matter. And in this case, the risk of no recovery was substantial. Victory was, by no means, assured. Monday morning quarter-backing is always performed by those who have a corporate bias, have no interest in the matter and just want to carp, are jealous or, worse, feel  that lawyers should be heard, not seen. Reminds me of the criticism against lawyers who sued Ronald Reagan, as governor of California. Despite the fact that the lawyers won most, if not all, the lawsuits brought against the abuse by the State, neither the facts nor the victories was much discussed by those with a political agenda.

 Last, these arguments that the lawyers' hourly billing rates were too high fly in the face of value billing, the new wave for corporate America. In other words, the results in this case were based on the value to the clients resulting from the effort and skill of the lawyers. In most cases, hourly billing results in higher legal fees ... fees unrelated to the value received by the client ... and fees that created certainty in the cost of the legal proceeding, an important factor to clients in most matters.   It's important to know what the legal cost will be before embarking on a matter. Value billing provides this.

 Thus, the criticism offered by the writer in the WSJ is off target, to say the least.  Most criticisms against legal billings involve the hourly billings ... here, value billing was requested by the lawyers and their clients and approved by the court. Hoorays should have been the proffered by the writer, not whining.

Rules against lawyers sharing fees with non-lawyers might need to be loosened to allow U.S. firms to compete globally. The proposal says that any firm with non-lawyer owners must have “as its sole purpose providing legal services to clients.”

This is the foot in the door.The next thing you'll see is Latham & Watkins, or other billion dollar law firm opening offices in Wal-Mart or Target stores for curbside service. This is not necessarily a bad thing. It will certainly bring the law to the people ... And it will certainly change the perception of the law.

I've always maintained that the rules of professional conduct are controlled by the large firms, AmLaw 100 and 250.  When their economic needs change, the rules get changed and the sole and small firm practitioners have to adapt accordingly.  In other words, the rules are not made in a vacuum, not made because of their inherent righteousness or goodness. They change and are made to serve the economic interests of the few ... oh, if the public is served, so much the better.

But if you're a solo, watch out ... your interests may not matter. Such has been the case in recent times when solos' interests were not protected, in fact hurt, by changes in the rules .. But, here, to allow the larger firms to complete on a global scale, we see the rules begin to change and allow allied professions to join in the ownership of law firms, not merely as allied professionals independently serving the same client.

Economics control .. as always ... even here in the rules of professional conduct.

Some folks are asking whether your new lateral partner have any unwanted baggage? In some instances, the new firm accepted partners from the old firm with the understanding that the lawyer would bring over clients from the old firm as well as his "unfinished business." This provides for immediate billing .. and therefore an opportunity to acquire great talent at a very low or zero cost.

These firms, and others, have gone into bankruptcy to collect funds to pay the firms' creditors. In a law firm, the major assets "walk out the door every evening. Computers, furniture  and real estate are of minimum value, if any, in a law firm. Accounts receivable are a major asset, though often difficult to collect from clients when they know there will be little serious effort to collect.

But, when the partners from the old, now defunct, law firm went, they generally took "their" book of business with them ... and the "unfinished business" of the clients that went with them. One argument is that clients have a right to seek their own choice of lawyer. And the other argument is that the partner and new law firm benefited, resulting in a profit to the new firm that truly belongs to the old firm.

This battle will be fought for years, I suspect. But, the reality of our world is that anyone can sue anyone else, even if wrong. In the meantime, the largest pool of cash available to the trustee in bankruptcy for the defunct firms is the new firm and, perhaps, the lawyers, individually, from the old firm. Whether legitimate or not, new firms have been economically compelled to settle many of such claims in order to go on with the new firm business.

The new firms thought they were getting a steal! Maybe. But, I'm reminded of the old say that "...if it looks too good to be true, it probably is too good to be true." There is a cost to everything, even a very attractive, new lateral partner with great talent and a great book of business.

This week, Erik M. Pelton with Erik M. Pelton & Associates, PLLC is our guest blogger.

One of the keys to a successful law practice of any size is communication. Not only communication with staff and colleagues but communication with clients.

Smaller law firms have the advantage of being more transparent and having less bureaucracy. Clients of smaller firms expect to receive more personal service, and rightly so. Here are some simple tips for maximizing the benefits of client communications:

• Communicate in a variety of formats. Use email, telephone, and more to provide the client with options. Some clients now use Facebook as a primary platform and may wish to message you via its services. Some prefer to talk on the phone. Yet others – particularly those far away – prefer video conferences. Provide clients with several means to reach you, so that they can use what works best for them.
• Be prompt. If you receive a client email or phone message, get back to them the same day if possible, at most within 24 hours. Even if you cannot provide an answer at first, respond and acknowledge the message and provide an estimate for giving a fuller response. This provides quality customer service and prevents you from fielding additional nagging messages that follow up with the original one.
• Answer all brief inquiries immediately. If you can provide an answer in 3 minutes or less, provide the answer right away. Then the communication is removed from your to-do list, making your life workflow more efficient, and the client is glad that he or she did not need to wait for a response.
• Communicate proactively. Advise clients of status changes in their files, payment confirmations, and more. Advise the client of the next steps and the likely time frame. Set up template letters or emails for doing so. These proactive communications take little time and avoid and a large volume of status inquiries.
• Ask for feedback. Do not be afraid to ask clients for feedback about your services, not necessarily the substantive part of your services, but the procedural. How could I have provided you with better service? Do you have any suggestions to make my clients even happier in the future? When you receive a glowing testimonial from a client, ask for permission to use it with attribution in your marketing materials.
• Stay in touch with former clients. Provide former clients with opportunities to subscribe to your electronic newsletter, blog, or podcast. Keeping your name in front of former clients is the best way to continue to receive referrals and repeat business.
• Delegate. If you are too busy to handle some of the above communications, delegate them to staff or outsource them. But remember that clients are paying for you and for partner level services. I have my staff draft email templates and forward them to me, so I can be the one sending the message to the client. Clients understand that they may not always be able to speak with me by phone, but they know that I am generally accessible and that I will always take part in important discussions.
• Get communications from clients. Check out your clients’ websites. If they have social media pages, blogs, or newsletters, subscribe. This is a great way to stay on top of their business and their industry, and to make your advice more informed and stronger. When a client hears “I saw in your last newsletter that your company recently …” they are always impressed. I have often leveraged such knowledge into new business for counsel that the client may not have realized it needed.

Effective communications both to and from clients is critical to successful management of a small firm and to exceeding the client’s expectations. Strategic communications policies will also reduce redundant or confused messages that cause many headaches and waste unnecessary time. Clients left in the dark will be overly stressed, negative, and distrustful about their attorney’s efforts and value. Clients whose expectations are exceeded are likely to become large reservoirs of repeat business and referrals.

 
© 2011 Erik M. Pelton. All rights reserved.

This week, Erik M. Pelton with Erik M. Pelton & Associates, PLLC is our guest blogger.

A steady stream of new clients and new business is critical to the success of any small law firm. Key marketing decisions such as to whom, about what, and in what manner will marketing be done should be well planned to be targeted, measured, and efficient. When developing a marketing plan, it is key to consider and include the following factors:

Once you have considered these sources of new clients and your firm’s “brand” there is no shortage of opportunities! Print ads, online ads, responses posted on websites where users ask questions, speaking engagements, attending and/or exhibiting at conferences, local or industry networking events, social media, writing for magazines or newsletters, developing a mobile application, firm newsletters, and blogs represent just some of the potential channels for you to reach new clients. In doing so, don’t forget to also include a plan to connect with current and former clients to market yourself or your firm. 

© 2011 Erik M. Pelton

Musicians and singers, he points out, think of their coaches as “outside eyes and ears”. They hear and see things that even the best performers can’t detect about their own performances. In endurance coaching, anyone can design hard workouts. Anyone can make you tired and push you into the darkness. In coaching lawyers, anyone can tell you what to do even if it is beyond your comfort zone.

But a good coach will help you understand where you want to go, devise a plan that is within your comfort zone and that will get you there, and then be your mentor and accountability partner to assure your success.

Who is your coach? Is it your colleague, your spouse or significant other or a professional whose career is devoted to helping others like you to succeed? Whomever it may be, we all succeed sooner and stay on top longer when we have a coach, our "outside eyes and ears."

Despite the diversity of our geography and of our people, I have found that lawyers are facing the same issues irrespective of whether they are in small communities or larger cities, in solo practice or in major law firms, in general practice or in a specialty boutique. Are there differences? Yes, but I like to view it in terms of nuances rather than differences. In other words, the "differences" are smaller in nature than many contend.

Oh, I know, we all think we're different. We all think we're special and face special circumstances. My experiences in both industry and in law tells me different, that all commercial enterprises, whether professional or trade, have the same basic characteristics. In other words, we all have to get the business (marketing), do the work (production) and get paid (finance). Each of us excel in certain areas and need guidance and support in others.

My travels has renewed my energy to coach and to produce more material (audio and electronic) that will guide lawyers to improve their connection with their clients. Though our trip has not yet concluded, it's never to early to thank those many lawyers who've attended our programs and been generous with their comments of support. I look forward to continuing our work together.

Television advertising is an important marketing tool for many lawyers. It has become more important for some, despite the increasing importance of the internet. 

One way to address these competitors is to focus on existing clients.  Bond with existing clients, serve them in ways that creates loyalty, and have these very same clients be your advocates with others.

In such a case, you don't need television. You won't have competitors! You will be in your own bubble, growing your revenue and growing your profitability with clients who continue to return and who refer others to you.

In order of priority, one needs to get the work … marketing. Then, one must do the work. Production. Next, one needs to get paid. Finance.  These are the three legs of the stool. The successful lawyer/law firm must focus on collections. Less than a 90% realization/collection rate is a symbol of future trouble.

In this lawyer’s situation, she is successful in the collection phase. In fact, it’s difficult to imagine a higher success rate when you have little to no accounts receivable.

The focus, then, needs to be on marketing, getting more work to fill the pipeline. These are separate and distinct issues. Relish in your success  collecting your billings and address the marketing  to attract more clients.

Increased revenue and decreased stress, two outstanding reasons why we should care ... I think the members of this audience hit it on the nail!

Next stop is Seattle ... come join us if you're in the area..

Ed Poll talks about the factors to Consider When Marketing You Firm.

AdAge says: "...Return on advertising investment has always been a priority for marketers, but in the recession it flew to the top of the list. As chief marketing officers fought to justify spending within their organizations -- often via spirited discussions with procurement departments about where the dollars are going... " The Days, the subject matter of this article, I'm pleased to say are friends ... and outstanding marketers who focus on providing a profit on marketing dollars spent.

Do you look at this issue? Can you determine whether the money you spend is producing a profit, is enabling you to expand in your practice area, is improving your skill as a lawyer, or otherwise contributing to the improvement of your law practice?  You should. If not, you're in the gardening, playing with the dirt rather than growing gorgeous roses for sale to others who can appreciate your skills.

Another way of saying this is what I've always preached:  Hire for work ethic; hire someone who is passionate about their work, about making a contribution to the organization. and about focusing on the client, not themselves. The rest can be taught. Skills can be taught, attitude cannot.

This group of law firms, the largest of which is Baker & McKenzie at 3,700+ lawyers, makes up less than 5% of the attorney population. Their growth, like all corporate growth, has its expansion and contraction phases. There are at least two questions that come to mind:

1.  Is this contraction permanent? Is this contraction a reflection of the entire industry?

2.  Does this contraction reflect a major shift in the way legal services will be delivered in the future?

My crystal ball does not give me the answers. But, I believe that

i) even sole and small firm practitioners felt the change;

ii) though the numbers in the survey reflect 2008 as the base year, there does seem to be a cautiously upbeat attitude among lawyers today. More lawyers are contacting me with the serious questions of how do we make our practice better, how do we grow our practice ... in other words, lawyers are starting to come out from their caves, a bit shell shocked, but ready to understand the needs of clients and focus on providing solutions to their clients;

iii) it's not the contraction that will cause the shift in the way services are delivered, it's the continuing evolution of technology that will impact the delivery of services. And this conclusion would have been the same with or without the contraction. It's just that, because of the contraction, we're more sensitive to the changes. But, these changes began before 2007-2008, and they will continue after 2011.

Lawyers have to be more sensitive to technological changes and how these changes can improve their efficiency and mode of delivery. Clients certainly are and they are looking for those lawyers who can reduce their legal costs (not necessarily hourly rate). Thus, even the decades-old billing and pricing models will be subject to pressures that mere conversation failed to impact until now.

As Oprah said yesterday while interviewing the President and First Lady, "... keep your eyes on the prize."  Know what you want in your practice. Know what your clients want from you ... what is the ultimate solution they are seeking by engaging your services? Stay focused and you will have happy clients ... happy clients pay their bills ... happy clients refer their colleagues and friends ... While doing good, you will be able to do well.

Only a short time ago, we believed that non-lawyers would be able to participate in the ownership of American law firms. The pressure, so we believed, would come from the British Empire. Australia already allows this and it will soon be permitted in England. But, not the U.S. ... until now.

The District of Columbia permits non-lawyer ownership to the extent of 25% interest in a law firm. And, now, North Carolina has a bill before its Senate that would allow 49% non-lawyer ownership.

One argument is that law firms have expanded and are now very large organizations. In order to grow, they need additional capital ... and capital is best raised in the capital markets, not from individual partners of law firms ... and that means non-lawyer ownership. While large law firms are looking more and more like their corporate clients, it is still a stretch to suggest that law firms should raise outside capital.

Do law firms need to grow? Why can't corporate clients' interests be served well by smaller regional law firms? Why does the corporate law firm have to be as large as the client? We saw unions grow in both size and power in response to corporate and management  growth and power. And we now see unions fighting to stay alive. Will that also happen to large law firms of the future? Will technology enable small groups of lawyers to be effective in large corporate representation? 

Some argue that the rules of professional conduct wouldn't bind non-lawyers in matters of confidentiality and charging reasonable fees. Further, the very independence of lawyer's judgment might come into question. But, the rules have been bent, if not changed or discarded entirely, when large firms' economic interests were at stake. So, it will be fascinating to see who argues on which side and how this issue develops.

Is it possible that this issue will finally cause the break up of the mandatory (integrated) bar association into State licensing agencies on the one hand and voluntary bar associations on the other hand ... with the latter being the home of sole and small firm practitioners banding together to serve their own economic interests?