Tom's Rage Against the Medical Profession

Tom Peters is taking on the medical profession/industry in this post.  The money quote:

 The "system"—training, docs, insurance incentives, "culture," "patients" themselves—is hopelessly-mindlessly-insanely (as I see it) skewed toward fixing things (e.g. Me) that are broken—not preventing the problem in the first place and providing the Maintenance Tools necessary for a healthy lifestyle. Sure, bio-medicine will soon allow us to understand and deal with individual genetic pre-dispositions. (And hooray!) But take it from this 61-year old, decades of physical and psychological self-abuse can literally be reversed in relatively short order by an encompassing approach to life that can only be described as a "Passion for Wellness (and Well-being)." Patients—like me—are catching on in record numbers; but "the system" is highly resistant. (Again, the doctors are among the biggest sinners—no surprise, following years of acculturation as the "man-with-the-white-coat-who-will-now-miraculously-dispense-fix it-pills-for-you-the-unwashed." Come to think of it, maybe I'll start wearing a White Coat to my doctor's office—after all, I am the Professional-in-Charge when it comes to my Body & Soul. Right?)

Decker on Growth

Sam Decker has just written 7 Keys to Company Growth.  Really great stuff and worth the complete read.  Here are the basics to his P.A.S.S.I.O.N:

 Push the organization with big vision.

 Account for big goals.

 Seek out new ideas.

 Show wins along the way.

 Ignore distractions.

 Ownership must be clear.

 Neutralize negativity.

Why has ketchup stayed the same?

Malcolm Gladwell, author of The Tipping Point and the upcoming Blink (which I can't wait to read), wrote an article titled The Ketchup Conundrum for the September issue of The New Yorker.  In the piece, he discusses how Grey Poupon paved the way for the hundreds of varieties of mustard we see in our supermarkets today, and suggests that ketchup may be next. 

However, my favorite part of the article is Gladwell's explanation of how Prego (the spaghetti sauce) developed their extra-chunky sauce:

Standard practice in the food industry would have been to convene a focus group and ask spaghetti eaters what they wanted. But Moskowitz does not believe that consumers--even spaghetti lovers--know what they desire if what they desire does not yet exist. "The mind," as Moskowitz is fond of saying, "knows not what the tongue wants." Instead, working with the Campbell’s kitchens, he came up with forty-five varieties of spaghetti sauce. These were designed to differ in every conceivable way: spiciness, sweetness, tartness, saltiness, thickness, aroma, mouth feel, cost of ingredients, and so forth. He had a trained panel of food tasters analyze each of those varieties in depth. Then he took the prototypes on the road--to New York, Chicago, Los Angeles, and Jacksonville--and asked people in groups of twenty-five to eat between eight and ten small bowls of different spaghetti sauces over two hours and rate them on a scale of one to a hundred. When Moskowitz charted the results, he saw that everyone had a slightly different definition of what a perfect spaghetti sauce tasted like. If you sifted carefully through the data, though, you could find patterns, and Moskowitz learned that most people’s preferences fell into one of three broad groups: plain, spicy, and extra-chunky, and of those three the last was the most important. Why? Because at the time there was no extra-chunky spaghetti sauce in the supermarket. Over the next decade, that new category proved to be worth hundreds of millions of dollars to Prego. "We all said, ‘Wow!’ " Monica Wood, who was then the head of market research for Campbell’s, recalls. "Here there was this third segment--people who liked their spaghetti sauce with lots of stuff in it--and it was completely untapped. So in about 1989-90 we launched Prego extra-chunky. It was extraordinarily successful."

What untapped market is there for your services?  Can you find the unserved segment and be its "extra-chunky" Prego?

Life Laundry for Law Offices

I don't get BBC America at home, but have heard about the show Life Laundry, and thought it had an interesting premise:

In Life Laundry, storage expert Dawna Walter helps people streamline their internal and external lives by cleaning out their clutter and offering advice, insight and top tips – while antique dealer Mark Franks help turn junk into hard cash – all in 48 hours.

But this is more than just a home makeover show. For some it's an incredibly emotional experience as they struggle to come to terms with the past.

Faced with rooms too full of junk for their owners to use, to broken computers and washing machines that have sat idle for years, Dawna and Mark take drastic action, emptying the offending rooms on to the closest outside space.

Step-by-step they take the homeowners through their belongings sifting, sorting, and slinging out the clutter that has taken over their homes – and in some cases their lives.

From people who have allowed their possessions to take over as a result of trauma, to sentimental hoarders, over-zealous collectors and people and families whose relationships are under strain from the amount of junk cluttering their homes – the Life Laundry experts are on hand to help.

What would the Life Laundry experts find in your office?  Old computers, printers that don't work, dozens (hundreds, thousands) of books that you don't use anymore?  Piles of trade publications and legal magazines that you've set aside to read someday? Get rid of all of that stuff and be amazed at how little you really needed any of it.

Ergonomics for Everyone

I'm pretty happy with my actual working environment.  I alternate between my Aeron and Leap chairs, have a cord-less keyboard and mouse, and use two monitors.  Though the ergonomics of my situation could be improved slightly (maybe by throwing in some feng shui ), I feel comfortable when I work. 

It seems that work comfort was on the mind of New Zealand's Occupation Safety and Health Service when they passed these ergonomic guidelines for the workers in the nation's now-legal sex trade:  

• Beds and workstations should support the worker’s back and allow for services to be performed without strain or discomfort.
• Beds and massage tables should be adjustable to allow employees to use them without strain.
• Employees should be trained for safe use of equipment and techniques.
• Workers’ clothing should be comfortable and should not affect the employee’s posture.
• Workers should take breaks between shifts and clients to avoid stress and fatigue.
• Workers should alternate between repetitive and non-repetitive activities.

Certainly some good tips here for all us workers in the "service" business.

Warmer Workers = Better Workers

Via FastCompany Now comes a link to this study that shows that warmer workers are better workers.  According to the article:

When the office temperature in a month-long study increased from 68 to 77 degrees Fahrenheit, typing errors fell by 44 percent and typing output jumped 150 percent. Hedge's study was exploring the link between changes in the physical environment and work performance.

"The results of our study also suggest raising the temperature to a more comfortable thermal zone saves employers about $2 per worker, per hour," says Hedge, who presented his findings this summer at the 2004 Eastern Ergonomics Conference and Exposition in New York City.

Now excuse me while I crank up the thermostat.

Tips for Better Invoices

From A List Apart comes these tips for creating better invoices. The article contains advice on invoice contents, terms, delivery, timing, and aesthetics. Some really good advice for any business person who sends out invoices on a regular basis (Lawyers, are you listening?). My favorite part is the section on invoice content:

1. The word “invoice.” Obvious enough, but don’t let the client mistake it for anything other than a bill that needs to be paid. Make it big and bold and put it at the top of the page.
2. Your Employer Identification Number (EIN) or Tax ID Number. This will be important come tax time, when the client starts putting together W-2s.
3. Similar to the EIN, some clients may assign outside contractors a unique Vendor ID. This practice is usually found in larger companies. If you have been given one, be sure it appears conspicuously.
4. Names and addresses of both client and contractor. Make a clear distinction between the “to” party and the “from” party.
5. Date everything. Date the invoice (the day it goes out, not the day you write it) and list the dates of when items on the invoice were completed. In the terms, list the due date and penalty dates. If something ever goes to small claims court, the judge will look favorably on your scrupulous attention to detail.
6. A clear, itemized list of services rendered. Descriptions should be short and to the point, and all delivery dates indicated. Next to each item, list the hourly rate, hours worked and subtotal amount.
7. The total amount owed. On the bottom, labeled explicitly, bolded if needed.
8. The terms of the invoice. At the very least, this should include when the invoice is due; for instance, if you expect payment within thirty days (fairly standard), simply put “30 Days.” (You could also put “15 Days” or even “Immediate” if you don’t particularly like the client.)

As I read the tips, I remembered the hours and hours I've spent on my office's legal accounting programs trying to get good-looking, informative invoices to print with the information I needed. PCLaw's prepackaged invoices were absolutly awful (I've not tried versions 6 or 7), and the template "editor" was an exercise in futility. We've moved to Quickbooks and are rolling out a new invoice design, which incorporates most of the tips from the article. I'll try to post a sample soon.

Keep your employees happy.

Thanks to The Small Business Blog for pointing me to this My Business article profiling ways Service Net Solutions keeps its employees happy. Some of the fringe benefits:

Fun Money. $100 per year to spend on any fun family-oriented activity. Employees get reimbursed if they bring in a photo documenting the event, says Callahan.

Health Care for the Home. Home warranties, covering everything from kitchen appliances to plumbing.

Community Outreach. Eight hours of paid time annually to volunteer in the community.

Computer Purchase Plan. Up to $400 every three years toward the cost of a new PC.

A Five-week Paid Sabbatical. Available every seven years.

None of these things can cost much to implement, but go a long way towards keeping employees happy. I'd love to hear from some the readers of this blog about the kinds of things their businesses/firms do to reward employees. Alternatively, I'd be just as interested in horror stories.

It's the Cash Flow, Stupid

I've been following Will Keller's The Accounting Blog for a while and found this post today with Will's Advice for Managing Cash Flow. From the post:

Now please listen up because we're getting to the important part. For most companies, the key cash flow drivers are as follows: pricing, sales volume, credit terms, inventory management, supplier terms, and expenses. In other words, the specific things that your company does in these six areas- from your pricing strategy to your payment terms to the amount of inventory you carry- will directly impact cash flow. That may not sound very glamorous, but the results can be exciting.

The advice in the article is (or should be) obvious to all lawyers, but it bears repeating from time to time.

Ain't Big Firm Life Grand

Anonymous Lawyer, (whom I once thought was faking it, but may be the real deal) writes about the big firm rat race and answers the question posed by one of his partners, "Why do my kids hate me?"

They hate us because we're never home. They hate us because we're pulling out our Blackberries all weekend while we pretend (and they can tell when we're pretending) to enjoy being around them. They hate us because work is #1, and they're #2 -- or #3, or #4. It's sad. Because it's not like years from now we're going to regret not checking the Blackberry more often. It's sad because time passes really quickly and it starts to feel like "too late" very quickly. That's what keeps people here. By the time, maybe eight months into your first year, maybe a year a half -- but not much longer than that in most cases -- by the time you realize what this job is doing to you it feels like you're stuck. "It's too late." And so you hope it gets better. And you hope, and you hope, and you work, and you work -- and then it's no better, and even more so, "it's too late." And then you may as well stick around and try and make partner, and then if you're lucky enough and skilled enough and effective enough at what you do, and the right people know it, you make partner, and you think it's all going to change. And a lot does change. But the hours are still long, and there's still a hierarchy so you're never really at the top of the totem pole, and the money jumps but the pressure doesn't really slow down, and the people you compare yourself to change, and you aren't really relaxed about it... and it really is "too late" now, because this has gone from a job to a career, and you're stuck. And you never see your kids. And they hate you. And then you don't even want to go home, and so you stay at the office, and the spiral continues...

Read the full post and the comments too.

Longer Hours = More Malpractice?

An article in Ergonomics Today references a study claiming Error Rates for Nurses Increase With Length of Shifts. According to the study conducted by researchers at the University of Pennsylvania, nurses who work for more than 12 hours straight could face error rates as much as three times higher than their counterparts working shorter shifts. Makes you wonder if the same goes for lawyers trying to meet that 2400 billable hour requirement.

So That's How Big Firms Get All The Top Students...

There is a fascinating conversation going on right now at Anonymous Lawyer's Blog over this post where Anonymous Lawyer writes about how his large firm recruits and retains top students. Read the full post, and then go to the comments for a great give-and-take between an attorney at a "Lifestyle" firm (lower billable hours, time for a real life, lower pay) and a bunch of law students and associates who'd like to work there.

Partnership for Profits?

Todd talks about the book The Partnership Charter on the 800CEOREAD blog. Todd really liked the book, and I'm going to pick it up based upon his recommendation (it will be my first order from the 800 CEO Read site -- how's that for the power of blogging evangelism). In his post, Todd quotes the following passage from the book:

"Researchers from the Center for Study of Entrepreneurship at Marquette University investigated a sample of nearly two thousand companies and categorized the top performers as 'hypergrowth' companies and those at the bottom as low growth companies. Solo entreprenuers founded only 6% of the 'hypergrowth' companies. Partner founded a whopping 94%, and many of those had three or more founders."

I'm still digesting what this might mean for solo lawyers, but now that I have a partner, I can see how a good partner can make a business hum.

Pricing New Services

My partner and I have been struggling with pricing our new services. We are offering a monthly price to clients for a set range of services, including unlimited phone calls and weekly meetings (if requested by the client). I'll post more on our full business plan later, but this article on pricing really resonated with me. From the article:

How much should you charge for a new product? Charge too much and it won't sell — a problem that can be fixed relatively easily by reducing the price. Charging too little is far more dangerous: a company not only forgoes significant revenues and profits but also fixes the product's market value position at a low level. And as companies have found time and again, once prices hit the market it is difficult, even impossible, to raise them. In our experience, 80 to 90 percent of all poorly chosen prices are too low.

Companies consistently undercharge for products despite spending millions or even billions of dollars to develop or acquire them. It is true that businesses and private consumers alike are demanding more for less; the prices of personal computers, for example, have been pushed downward despite their higher processor speeds and additional memory. Global competition, increased pricing transparency, and lower barriers to entry in many of the most attractive industries have contributed to the trend. But these are not the only problems. Many companies want to make a quick grab for market share or return on investment, and with high prices both objectives can be harder to achieve.

These concerns encourage companies to take an incremental approach to pricing: they use existing products as their reference point. If a new offering costs 15 percent more to build than the older version does, for instance, they charge about 15 percent more for it. Particularly in consumer markets, they might set the price slightly higher or lower than that of their main competitor.

The incremental approach often underestimates the value of new products for customers. One of the first makers of portable bar code readers, for example, calculated how much more quickly its customers would be able to assemble their own products if they used portable readers. The company then took the price of the older, stationary readers and raised it proportionally, solely to account for the time savings. This strategy also fit in with the company's desire to penetrate the market quickly.

But by using an existing product as the reference point, the company undervalued a revolutionary product. The portable reader not only improved existing processes but also enabled companies to redesign their supply chains. Portability and instant access to information prepared the way for real-time inventory control, vastly improved logistics planning, and just-in-time deliveries, thus eliminating the need for large inventories. Buyers quickly recognized a bargain and flocked to the low-priced product. The company, which couldn't keep up with demand, not only failed to capture the full value of its reader but also set the market's price expectations at a very low level. A single bad decision easily erased $1 billion or more in potential profits for the industry.

There is some really great stuff here. I'm not suggesting raising prices is always the right course, but if you offer a revolutionary service or product, don't sell yourself (or your service) short.

From CFO.com via this post from Rob at BusinessPundit.

Will there be a Wal Mart Law Firm?

Jeremy Wright at Ensight writes about how Wal-Mart is trying to commoditize the web design and web hosting industry. His advice to web designers includes these nuggets:

You can't service everyone. If this is your client base, and Wal-Mart serves them better than you, you can either change your client base or differentiate. If it isn't your client base, it hardly affects you. . . . This move may expand the segment more than crowd it. . . . Whether you want the clients who are willing to go after 5$ websites is up to you.

Jeremy cautions that focusing in areas where big businesses like Wal-Mart shine (doing it better, faster, cheaper) will lead to failure. Instead, he tells his readers they should:

1. Provide more value.
2. Have more skills.
3. Have a better relationship.

Reading his post, I wonder if legal services are capable of being commoditized. The large firms in the best position to work better, faster, and cheaper have squandered the opportunity to cut their costs because of their ties to the billable hour. A firm that bills by the hour has no incentive to decrease the amount of time it takes to do a given task or provide a given service. Until large law firms begin to approach their practice with the single-minded focus on efficiency that the "big box" stores like Best Buy, Wal-Mart, and the Home Depot do, perhaps us in small firms can be both "better, faster, and cheaper" and be more valuable, more skilled, and more likely to have a better relationship with our clients than the big firms can.

Entrepreneurial Development for Lawyers

From Kirsten Osilind's re:invention blog comes this post about the Women's Venture Fund (and Martha Stewart's proposal to work for them in exchange for reduced jail time). The Fund has a 6 Stage Entrepreneurial Development Model that Kirsten summarizes thusly:

stage 1: Desire - a woman entrepreneur has an emerging idea, with no clear sense of what needs to be done.
stage 2: Friends and Family - the entrepreneur has developed a product or service, but they only serve a limited market (friends and family members).
stage 3: Indigenous Neighborhood Market - the entrepreneur continues to evaluate the market opportunity through personal preferences and shopping experiences but begins to extend their product and services sales to strangers.
stage 4: Local Market - the entrepreneur begins to encounter an objective market that has no affiliation to her.
stage 5: Trade Show and Conventions - the true beginning of a stabilized small business coupled with critical evaluation of the entrepreneur's marketing concept, the larger competitive industry, and larger scale opportunities.
stage 6: Mass Market - the last and final developmental step when an entrepreneur recognizes a mass market and chooses the final form product or service she will supply based upon market demands.

The stages mirror what most lawyers go through when deciding to hang out their own shingle. Take a look at the WVF site. There is some great stuff there.

Can Lawyers Innovate?

Quick, in the last decade, what has been the most significant positive change in the way lawyers do business? How about over the last twenty years?

Seriously, apart from technology making us available 24-7, I can't think of one way the legal business model has changed in a positive way for lawyers, their staff, or clients. Do lawyers work fewer hours? Are working conditions better now than in 1995? Or 1985? Is the average second year law firm associate encouraging everyone they know to become a lawyer? How about the clients? Are they happier with their attorney now than fifteen years ago? Have legal services become cheaper? More widely available? As a profession, are lawyers more respected now than a dedade ago?

How can an industry populated with as many intelligent and clever people not implement positive change? Profitability has risen, but is that a positive change when so many lawyers hate what they do and how long they have to spend doing it?

Lawyers can innovate. Look at how amazingly brilliant and imaginative lawyers who do estate planning, M&A work, intellectual property, and criminal defense can be on a daily basis. Why don't those same lawyers apply their vast talents and creativity towards changing the fundamental way we lawyers practice? Is it because time spent on the practice -- as opposed to time spent on clients -- does not have an immediate, tangible financial return?

Since I've started my new firm, I've fallen victim to the same pressures that keeps all of us from innovating. I've been so overwhelmed by the time I need to serve my clients and get my new firm off the ground that I've failed to move forward on the innovation front. I know I need to get back on track and thinking about my firm's future, so here is my weekend agenda for renewing my creativity and recommitting myself to making my practice better:

Friday:

Buy a magazine I've never read before (courtesy of Eric Heels).
Use the Sentence Completion exercise from The Nub to answer the following questions:

If I were a client I'd want my lawyer to...
My business would be more fun if only I could ...
My office would run more smoothly if we ...

Cook something for dinner I've never made before.
Write down twenty five ideas.

Saturday:

Get up early, and spend the first hour brainstorming with my KnowBrainer cards.
Take a walk with my daughter.
Go pick strawberies.
Write down my ideal scenes.
Take a nap.
Finish The Seven Day Weekend by Ricardo Semler

Sunday:

Help my dad barbeque. My father has a commercial smoker and he bbq's for the entire neighborhood at least twice a year. We'll be smoking ribs, chickens, and hams for nearly 30 people. We'll start around 5:00 a.m., because the hams take nearly 11 hours to cook. Mmmm good. As far as I'm concerned, you can't innovate on an empty stomach.

Monday:

Install MindJet's MindManager on my Tablet PC and learn how to use it.
Write down twenty-five more ideas.
Complete my firm's guarantee and give it to my seven year old neighbor to see if he understands it.
Relax, have fun, and get psyched for Tuesday morning.

If you have ways you innovate, let me know and I'll post some more ideas on Tuesday.

Great Stuff from The Nub

The guys over at The Nub picked up my post the other day about Value Billing, and added their thoughts:

One can take the question further and ask: How much have we helped our clients succeed? And get the client to determine this. Then build in some sort of payment that is dependent on how much the solution helps the client achieve success. For example, I've been paid the final 25% of my fee upon hitting performance targets. Other times I've received an extra % upon my client's satisfaction.

The Nub also has a pointer to a great excerpt from the John C. Maxwell book Today Matters.

Are you doing too much busy work?

Duct Tape Marketing is one of my daily reads. In this post, author John Jantsch argues that marketing is your highest payoff activity. John writes:

I don't know about you but most small business owners are do-it-yourself types and get sucked into doing the littlest silly work faster than you can say "Oh look, the copier is jammed again." If you want to achieve any of your goals and finally start making what you are worth then you’ve got to stop doing $5/hr work. Period.

John suggests that you calculate what your time is actually worth per hour (your Personal Average Yield, or PAY) and delegate everything that doesn't contribute to your business' growth. John continues:

So I ask you. Is fiddling with the copier, chatting with the mailman, running to the office supply store, making deliveries, or returning meaningless email paying you $72/hr? For that matter, doesn’t mowing your own grass, washing your own car, cleaning your own windows take you away from marketing your business? I know, now I’m asking you to give up most of the fun things you like to do everyday but hey, if you can get the neighbor kid to mow your grass for anything less than $100/hr, therefore giving you 3 hours to write a killer sales letter - it’s probably a steal

Figure out your PAY number, paint it on the wall in your office, and then go about setting up your business in a way that allows you to focus on the only things that can really pay that kind of money: marketing, innovation, and customer service. – cause everything else is just a cost.

Ron Baker is in the House

I have written about Ron Baker before, the author of several books on value pricing. This morning, Ron left the following (edited) response to some of the give-and-take in the comments to a recent post. To get a flavor of the debate, and to whom Ron is responding, read all the comments. Here are some choice excerpts:

Hourly billing is not the cheapest way for a client to buy legal services, since the lawyer always has an incentive to bill more hours. There is no correlation between inputs and activities, and output and results. To think otherwise is to fall prey to Karl Marx's Labor Theory of Value. Many large companies now insist on fixed prices up front, and when "scope creep" occurs change orders are used. Houlry billing is not here to stay, it's only being kept in place by the apathy of the professions.

How do actuaries price earthquake or flood insurance? The answer, of course, is they are pricing risk, so are lawyers. Clients don't buy time, and to think they do is the problem with the professions. Do you care how long it took Porsche to build your car? Do you fly on an airline that charges you $4 per minute? They operate under uncertainty and risk, too, but so what? Who better to scope the project than the lawyer. If you think you are being paid for your time, you have put an automatic ceiling over your earnings. Do you think Tiger Woods has this attitude? You are being paid for your Intellectual Capital, not your time. Time is useless, and you certainly can't leverage it. It's the results you create customers are buying. All living beings, and all businesses, are subject to the constraints of time, so what?

Value Pricing doesn't mean price gouging, it means charging a price agreed upon up-front, BEFORE you do the work, JUST LIKE EVERY OTHER BUSINESS ON THIS PLANET. To deny this, and claim professional's aren't subject to the laws of economics, boggles my mind. How many things do you purchase as a consumer that you don't know the price up front? Why do you think clients of lawyers are any different? Humans tend to avoid risk and uncertainty, and yet when you price by the hour that's all they get.

I think highly of Ron's theories and his books. He has kindly agreed to answer a Q & A here at the [non]billable hour. If you have questions, submit them to me and I'll edit them and get them to Ron.