Lawslot

More posts in the world of blawgs, particularly Never mind the billables by  Jordan Furlong in Law 21, following the article Killable hour in the latest Economist. Regular readers of this blog will know that selling time is one of my pet hates.

Furlong puts it very well in his post,

Your client doesn’t care how much profit you make for yourself; the client only cares that you delivered excellent value in a cost-effective (to the client) manner. How you bill your services is between you and your client; how much it costs you to deliver those services has to be your number-one business priority.

Selling time is the antithesis of selling value. Read Stefan Stern’s article Focus on value or pay the price in the FT (now some three months old). I liked his closing paragraph,

But for most businesses protecting margins in the next few months is going to prove extremely difficult. Cynics, Oscar Wilde once said, know “the price of everything but the value of nothing”. You know things are tough when the cynics don’t know the price either.

If Nick Jarrett-Kerr is right that the current downturn in work has removed the last excuse for partners avoiding to engage in valuable non-chargeable work (see his article in Kerma Partners Quarterly 2/08 and my earlier post Spending time wisely), then high on our list of things to look at is how to resolve the problem of a business model based primarily on selling time.

Although his post The new brand landscape for law firms in Law 21 is primarily aimed at law firm rebranding rights and wrongs, and is very well worth reading for that, Jordan Furlong also touches on billing and branding,

Today, brand opportunities are opening up everywhere — not primarily in new industries or practice areas, although there are a few of those, but in how a firm delivers value to its clients. Service delivery, billing parameters, value definition, client communications, risk sharing — these and many other key elements of customer relationships, which have lain dormant and ignored for years, are coming to sudden life.

Take the oldest complaint in the book — the billable hour system — as an example. Clients have moaned for decades about how the billable hour removes the burdens of accountability and risk from the lawyer (though clients share some of the blame for not pushing harder), and conventional wisdom called the billable hour unkillable.

But now there are firms that have successfully staked out this ground and branded themselves as having abandoned the billable hour altogether.

An interesting report by Economics Editor Chris Giles in this morning’s FT, that ‘data show that confidence is down but consumer and business behavious tells another story’. He suggests that ‘the gap between action and sentiment puts the economy at a tipping point’.

We are certainly seeing this day to day: work continues, but ask anyone about what happens next and the outlook is decidedly gloomy. At a lavish corporate event last week, to which I took one of my daughters, she was most surprised not by the artwork on display but by, to her, the incongruity of unlimited champagne and the chorus of doom-sayers quaffing it.

There are various steps that we can take in our practices to see us through the slowdown, whether it be long or short. In an email circular last month, Nick Jarrett-Kerr of Kerma Partners, identified “where partners should be spending their time during a market turndown” as

• skills building
• steam-lining and re-engineering work
• getting even closer to clients
• getting involved in internal projects
• motivating and developing their precious assets [their teams]

Most partners see fee-earning as their key task, and in most practices this is the case, but, as Jarrett-Kerr notes, ‘the silver lining in the recessional cloud may be that at last the excuses have been removed for partners avoiding to engage in valuable non chargeable work’.

At a dinner last month, the host (Chairman of a Business Angels Network) and I realised that we were probably the oldest two in a room of 50. It is not that we are that old (mid-50s), but that in the work we do clients and colleagues are getting younger. Law 21, one of my law blog feeds, had a series of interesting posts some weeks ago on the issues both of employing Generation Y and having Generation Y as clients.

Law 21 is Canadian law blog, but the problems either side of the Atlantic are the same, and there is little difference in the way we approach the issues (or, as is often the case, don’t), and it is certainly not just technology but culture as well.

I thought of this again the day before yesterday. The day started at Twofour Communications in Plymouth, at an event both celebrating their 20 years in business and targeted at the South West professional community, to whom they would like to sell more services. What was most noticeable was that almost without exception the guests were a generation older than the hosts (which led me to ask whether they had in fact asked the right people). At the end of the day Caroline and I were at The Northcott Theatre in Exeter, for a concert by Tasmin Little and John Lenehan, as part of the Exeter Summer Festival. Here we were among the younger members of the audience. The contrast between my day’s start and finish could not have been clearer, or more illustrative of the the different worlds in which we now live and work.

Generational issues are much in my mind as a lawyer, and not just the prospect of employing Graduate Divas. Nicholas Carr’s closing to his latest book, The Big Switch, is relevant both to lawyers, and also to Twofour,

All technical change is generational change. The full power and consequence of a new technology are unleashed only when those who have grown up with it become adults and begin to push their parents to the margins. As the older generations die, they take with them their knowledge of what was lost when the new technology arrived, and only the sense of what was gained remains. It is in this way that progress covers its tracks, perpetually refreshing the illusion that where we are is where we were meant to be.

Life was ever thus.

Somewhat late in posting, but see this post (it links back to my Selling time post earlier in the month).

Fees to rise despite client pressure, say lawyers

Wishful thinking? Speaking with clients this morning at one of our regular Breakfast Clubs, it is clear that we cannot take anything for granted. What this period of economic uncertainty now offers us is an opportunity to revisit the relationship between lawyers and clients as regards fees and value: and to move the agenda to value.

An excellent article in yesterday’s FT by Stefan Stern on today’s workplace, Success at work is a drug that becomes an addiction. His final comment is one that will resonate with many corporate lawyers, as we work ever longer hours,

The best and most subversive question to be asked about the “long hours culture” is this: why don’t you want to go home?

When I was an articled clerk, and just writing that dates me, my principal, one of the best corporate lawyers I have met, made it clear that office hours (9.00 to 5.15 in those days) meant for me just that. He didn’t expect to see me in the office much after 5.30, and he himself was gone not much later. How things change, and not always for the better.

Deepak Malhotra’s post From narrative to value in Legal Village early in the month caught my eye. This sums up the dilemma for law firms:

“Law firms sell time and legal skills. From the perspective of in-house counsel, we buy legal outcomes. There is a huge difference between process and end result. Until we start talking the same language, I see that this debate about fees is going to remain and its intensity will only increase. This is where the hourly rate is limited, because the hourly rate is process and it implies that it operates independent of outcome.”

Selling time is not what we should be doing, and things are changing. How quickly is another matter. The problem is that it is considerably easier to sell time than value, and when I have argued the matter with my partners (most of whom are wedded to the chargeable hour), their usual reply is that if it works, why change it. The point they are missing is that either we will have to change, or clients will change us.

Succession and Strategy: two words that most lawyers do their best to avoid. Succession because it implies mortality and loss of control; and strategy because it asks us to consider a horizon somewhat more distant than the end of the partnership year. We ignore them, however, at our peril. One of my favourite blogs is Jordan Furlong’s Law 21- Despatches from a legal profession on the brink. It may be Canadian but what applies that side of the water does this side as well. See Jordan’s post Surving a succession crisis.