Training for Big Law Management
This is tounge in cheek, of course, but if your goal is to run a MegaFirm, then I humbly present to you The Evil Overlord List. There you’ll find 100 tips, tricks, and bits of advice for the Dr. Evil wanna be. Here are a few of the more serious ones:
When I’m an Evil Overlord …
12. One of my advisors will be an average five-year-old child. Any flaws in my plan that he is able to spot will be corrected before implementation.
24. I will maintain a realistic assessment of my strengths and weaknesses. Even though this takes some of the fun out of the job, at least I will never utter the line "No, this cannot be! I AM INVINCIBLE!!!" (After that, death is usually instantaneous.)
27. I will never build only one of anything important. All important systems will have redundant control panels and power supplies. For the same reason I will always carry at least two fully loaded weapons at all times.
40. I will be neither chivalrous nor sporting. If I have an unstoppable superweapon, I will use it as early and as often as possible instead of keeping it in reserve.
45. I will make sure I have a clear understanding of who is responsible for what in my organization. For example, if my general screws up I will not draw my weapon, point it at him, say "And here is the price for failure," then suddenly turn and kill some random underling.
46. If an advisor says to me "My liege, he is but one man. What can one man possibly do?", I will reply "This." and kill the advisor.
48. I will treat any beast which I control through magic or technology with respect and kindness. Thus if the control is ever broken, it will not immediately come after me for revenge.
50. My main computers will have their own special operating system that will be completely incompatible with standard IBM and Macintosh powerbooks.
52. I will hire a team of board-certified architects and surveyors to examine my castle and inform me of any secret passages and abandoned tunnels that I might not know about.
60. My five-year-old child advisor will also be asked to decipher any code I am thinking of using. If he breaks the code in under 30 seconds, it will not be used. Note: this also applies to passwords.
61. If my advisors ask "Why are you risking everything on such a mad scheme?", I will not proceed until I have a response that satisfies them.
74. When I create a multimedia presentation of my plan designed so that my five-year-old advisor can easily understand the details, I will not label the disk "Project Overlord" and leave it lying on top of my desk.
85. I will not use any plan in which the final step is horribly complicated, e.g. "Align the 12 Stones of Power on the sacred altar then activate the medallion at the moment of total eclipse." Instead it will be more along the lines of "Push the button."
90. I will not design my Main Control Room so that every workstation is facing away from the door.
There are a lot of good lessons here. Of course, there are just as many like these:
63. Bulk trash will be disposed of in incinerators, not compactors. And they will be kept hot, with none of that nonsense about flames going through accessible tunnels at predictable intervals.
72. When my guards split up to search for intruders, they will always travel in groups of at least two. They will be trained so that if one of them disappears mysteriously while on patrol, the other will immediately initiate an alert and call for backup, instead of quizzically peering around a corner.
89. After I captures the hero's superweapon, I will not immediately disband my legions and relax my guard because I believe whoever holds the weapon is unstoppable. After all, the hero held the weapon and I took it from him.
Are Your Best Clients Those Who Pay Fastest?
Wells Fargo’s Small Business Roundup Newsletter features an Albuquerque printer APC, recent winner of a SBA award. One of the best pieces of advice I’ve seen in a while comes from APC’s owner, Pedro “Tony” Fernandez. Mr. Fernandez explains how his business focused on cash flow to stay in business after 9/11:
To regain momentum, Fernandez turned to his customer base. “Rather than concentrating our marketing on high-revenue or high-volume clients, we went after our best payers,” he notes. “We looked at those who paid their bills consistently and quickly. Revenue dropped, but the method helped us strengthen our cash flow, which brought us back to pre-9/11 profit levels by 2004.”
Your biggest clients aren’t always your best. If you are looking to focus certain marketing efforts on your existing clients, think about trying APC’s approach. Focus on your best payers, not your biggest accounts.
More Smart Moves for Business
Here’s a list of Ten Smart Moves to Improve your Business that had a few gems:
On writing:
… take a topic that everyone has already written about but add a new twist to it. Children and Accessibility: It Matters was one such piece for me. It was well received and got some attention, which has ultimately led to people contacting me for other work because they saw something different.
On expanding:
Stay as small as you logically can: Small is flexible. Small can change direction in an instant if needed. I’m sure at some point my company will get bigger, but it won’t happen without good reason. Small is where it is at, baby (at least that is what all the other small companies are saying)
On pricing:
Raise prices every year: Just do it. Tell people about it beforehand so that they are expecting it. I’ve heard before that if you have never had push back from your clients telling you “that’s too much” then you aren’t charging enough. I’m not sure how true that is, but I look at it this way: I get better every year, and with more experience I can provide more value. Higher value = higher rates. Just do it.
Reading for Managing Partners
This Harvard Business School Working Knowledge article, titled Why Your Employees are Losing Motivation, is a must read for anyone who manages employees. According to the article, most employees are enthusiastic when they start a new job, but in most companies, employees morale declines dramatically after their first six months — and continues to decline. Sound like any business you know? Check out the great tips. The article is definitely worth a read.
Only Make Smart Mistakes
Steve Pavlina sets out 10 Stupid Mistakes Made by the Newly Self-Employed. They are a worthwhile read (go to the post for his explanation of each), even if you’ve been self-employed for a long time. I know I still make a few of these stupid mistakes. How about you?
1. Selling to the wrong people.
2. Spending too much money.
3. Spending too little money.
4. Putting on a fake front.
5. Assuming a signed contract will be honored.
6. Going against your intuition.
7. Being too formal.
8. Sacrificing your personality quirks.
9. Failing to focus on value creation.
10. Failing to optimize.
Does More Time Equal More Money?
Here’s How to Have a 36 Hour Day. Now, for you lawyers out there, leave in the comments section your suggestions on How to Bill a 36 Hour Day.
Price like a Professional
Sean D’Souza gives some advice on raising prices in The Price is Never Wrong. A comment to the post caught my eye:
Adam Kayce writes: Darn good point. Every time I’ve raised my prices, not only do I make more money (which is nice), and not only do I seem to get more business (also very nice), but two other things rise, too: what you call “respect”, and “business self-esteem”.
People see me as more of a professional, the more my rates increase. It’s all perceived value.
But also, as I charge more, I give more - and I see my work as more valuable. That’s the business self-esteem rising. I believe it, so I embody it, and the value of the work increases. Great cycle.
I’d never thought about how pricing relates to business self-esteem before. What do you think?
Risk Aversion and the Glass Ceiling
I pass on this interesting survey (pointed out by Rob May at BusinessPundit) that suggests that one reason women earn less may be because they prefer the “sure thing” of a fixed salary instead of a riskier (but potentially higher paying) performance-related pay package. What does this say about the partner compensation model in law firms?
Technology does not equal productivity.
Here’s a must-read article from Wired, that shows how technology has made us less productive. Some quotes from the story:
Workers completed two-thirds of their work in an average day last year, down from about three-quarters in a 1994 study, according to research conducted for Day-Timers, an East Texas, Pennsylvania-based maker of organizational products.
The biggest culprit is the technology that was supposed to make work quicker and easier, experts say.
"Technology has sped everything up and, by speeding everything up, it's slowed everything down, paradoxically," said John Challenger, chief executive of Chicago-based outplacement consultants Challenger, Gray & Christmas.
"We never concentrate on one task anymore," Challenger said. "You take a little chip out of it, and then you're on to the next thing. It's harder to feel like you're accomplishing something."
Is the Bottom Line the Bottom Line?
Russell Beattie reminds us to focus on the bottom line:
But say you do have something cool, and your new innovation has that 10x improvement that a new service needs to really take off. Not that there’s a lot of this out there, but still. You can create a new website, fill it with all the goodness in the world, be good to your users, and be a good netizen and use every open standard there is while you’re at it, if at the end of the day your users didn’t put money into your bank account, it’s a useless waste of time for everyone involved. I mean, hey, if you want to create the next non-profit service like Wikipedia, all the more power too you. But if you want to get VC cash, an office in downtown Palo Alto, do a bunch of development, attract lots of users and pretend you’re a business? Then act like one, create something of real value and make some real money from it.
Twenty Questions to Build Your Business
Sam Decker shares Twenty Questions to Develop Your Business that every small business should be able to answer. Really worth a read.
Technorati Tags: small+business,
KM for Law Firms
Jack Vinson summarizes the two days of a legal KM (knowledge management) conference he attended. Check out his posts about Day One and Day Two.
Technorati Tags: km, knowledge+management, law
Billable Hour Resources
Here’s a great list of billable hour resources from my friend Lisa Solomon at The Billable Hour.
If you must bill by the hour ...
Here’s a cool utility that could help you recapture some of that lost time. From the TimeSnapper website:
With TimeSnapper you can play back your week just like a movie. You can play it at any speed you like, and jump in at any time you like.
When it's time to fill out that dreaded timesheet, TimeSnapper is a savior. No need to tear your hair out trying to remember where all the time went.
Via Lifehacker.
Best Management Ideas
Lisa Haneberg posts the winning entries in her Best Management Ideas contest. All are worth a read.
ROI through the client's eyes
I’m completing my “Beyond ROI” presentation for ABA’s Techshow and have come up with a theme I like a lot. Let me know if you like it too:
The only “Return on Investment” that matters is the return your customers receive on their investment in you.
Be a Master
Hugh MacLeod on the billable hour:
The thing about consulting I hate is, you just get paid by the billable hour. So the minute you stop tapdancing, you're dead.
A Journeyman gets paid while he works. A Master gets paid while he sleeps.
Attorneys Aren't Knowledge Workers - Ron Baker
Attorneys Aren't Knowledge Workers by guest blogger Ron Baker
In light of my last post titled Your Employees are Volunteers, this one is sure to cause some cognitive dissonance. My VeraSage Institute colleague Dan Morris thinks I'm wrong about professional firms being filled with knowledge workers; he believes the majority of them are more akin to factory workers.
Now I know this is a heretical view, but Dan assembles a very powerful argument to support his assertion. He doesn't deny professionals have the potential to be knowledge workers. His argument is they are not largely because of the incentives and structures of the firms in which they operate, which function like sweatshops of yore.
Now this is a powerful argument, and it made me pause to reexamine my core assumptions about automatically asserting that just because someone is a credentialed professional they are automatically a knowledge worker.
There's no doubt they can contribute a certain amount of creativity and innovation to the jobs they perform and the customers they serve, but being a knowledge worker also requires that the leaders of your organization recognize and treat you like one.
Stephen Covey writes about exactly this in his latest book, The 8th Habit: From Effectiveness to Greatness: "It's the leadership beliefs and style of the manager, not the nature of the job or economic era, that defines whether a person is a knowledge worker or not."
When you consider the metrics used by most firms to measure their team members, they all come from the Industrial Revolution's command-and-control hierarchies (realization, utilization, billable hours, etc). Yet as I discussed in my posts on The Firm of the Past and The Firm of the Future, the metrics we use to measure a knowledge worker's effectiveness are woefully inadequate.
Dan further supports his argument by stating that true knowledge workers:
- Don't have billable hour quotas.
- Spend at least 15% of their time innovating and creating better ways to add value to customers (this destroys efficiency under the old metrics!).
- Understand that judgments and discernment are far more important than measurements in assessing performance.
- Are focused on outputs, results and value, not inputs, efforts and costs.
- Don't fill out timesheets accounting for every 6 minutes of their day.
- Are trusted by their leaders to the right thing for the firm and its customers.
- Are passionate and self-motivated, and don't need constant supervision.
If the above describes your firm, congratulations — you are a true knowledge organization. Perhaps nothing illustrates the value knowledge workers can add to a business than last week's purchase of Pixar by Disney for $7.4 billion in Disney stock.
Disney will have to respect Pixar's culture and continue to let it make quality movies at its own pace, in its own way. Otherwise, if Pixar's creative talent leaves, "Disney just purchased the most expensive computers ever sold," according to Lawrence Haverty, a fund manager at Gabelli Asset Management.
Unfortunately, most professional firms we've come into contact with around the world do not fit Dan's criteria, which is why he makes such a strong case they function more like manual laborers than knowledge workers.
UPS founder Jim Casey remarked in 1947: "A man's worth to an organization can be measured by the amount of supervision he requires."
The moment you feel the need to hover over your knowledge workers, either physically or metaphorically with the Sword of Damocles — the timesheet — you've made a hiring mistake.
Until professional service firm leaders begin to grant their team members autonomy — Greek for self-governance — and treat them like self-respecting knowledge workers, I think Dan's argument trumps mine.
What do you think?
Technorati Tags: ron+baker, knowledge+workers, law, firm
Thirty-Nine Cents per Happy Client
Are you including self-addressed stamped envelopes when you send your bills to your clients? You should be.
Your Employees are Volunteers - Ron Baker
Human Capital (not Cattle) by guest blogger Ron Baker.
In the knowledge society, the most probable assumption for organizations--and certainly the assumption on which they have to conduct their affairs--is that they need knowledge workers far more than knowledge workers need them.
-Peter Drucker
The term human capital was first used by Nobel Price-winning economist Theodore W. Schultz in a 1961 article in American Economic Review. His basic thesis was that investments in human capital should be accounted for in the same manner as investments in plant and machinery.
The obvious challenge is that investments in tangible, physical assets can be counted and comprehended, but those in people cannot. It is as if accountants would value the average human being at $50 since that is the approximate worth of our various chemical components. Human capital is like the dark matter of the cosmos, we know it's out there but we can't measure it.
Once again, Peter Drucker was at the forefront of thought when he coined both the terms knowledge society and knowledge worker in 1961 and positing it was the G.I. Bill of Rights--which made available higher education to some 2,332,000 veterans and was certainly the largest single investment in human capital up to that time--which caused the shift to a knowledge society.
Presently, less than one-fifth of the labor force is employed in blue collar occupations, and approximately two-fifths are "knowledge workers"--those who work with their heads, not their hands.
Knowledge Workers Have Nothing to Lose but Their Chains
Knowledge workers are not like workers from the Industrial Revolution who were dependent on the employing organization providing the means of production (factories and machines). Today, knowledge workers themselves own the firm's means of production in their heads. This has been a tectonic shift in our economy, the ramifications of which we are still trying to comprehend.
For example, how does one measure the productivity of knowledge workers when what goes on inside their heads cannot be observed, let alone objectively measured?
In a factory, the worker serves the system; in a knowledge environment, the system should serve the worker. Knowledge work can only be designed by the knowledge worker, not for them. Unlike work on an assembly line, knowledge work is not defined by quantity but by quality. It is also not defined by its costs, but by its results.
It may be possible in a widget factory to work harder, but in a knowledge factory working smarter is the only option. The traditional metrics of productivity need to be replaced by judgment, and there is an enormous difference between a measurement and a judgment: a measurement requires only a stick; a judgment requires knowledge, insight, wisdom and discernment.
Knowledge Workers are Volunteers
There is a Chinese Proverb that teaches the beginning of wisdom is to call things by their right names. Your people are not assets, resources, or inventory, but human capital investors seeking a decent return on their investment.
In fact, your people are actually volunteers, since whether or not they return to work on any given day is completely based on their own volition. Consider for a moment how people decide which volunteer organizations to contribute some of their talent. It's usually based on a desire to contribute to something larger than themselves. They work hard--some would say harder than at their jobs--for these organizations because they are dedicated to the cause, they have the passion, the desire and the dream to make a difference in the lives of others. All for zero pay. Why?
This is not just an economic decision, it is a psychological and emotional decision. With all this evidence of human behavior, many firms still treat their people as if they will slack off if they're not held accountable for every six minutes of every day. Is this any way to inspire people to be their best? Is this any way to instill a spirit of service, creativity and innovation?
Or is this nothing but antiquated thinking about the nature of man being lazy and slothful unless forced to work, redolent of Frederick Taylor's time-and-motion studies? Your people may hang their hat at your firm, but where is their heart?
Becoming A Lightning Rod for Talent
It doesn't make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do. – Steve Jobs, Founder, Apple Computer
Attracting, hiring, developing and retaining talent are the most important jobs to which everyone in the firm can contribute input and ideas. Partners spend more of their time--or at least they should--making people decisions than any other. No other decisions have as many repercussions throughout the firm, or have lasting significant effects than who to hire.
Typically, a firm is batting 0.333 on its hiring decisions--that is, one-third turn out to be good decisions, one-third are minimally effective, and one-third are abject failures. It is rare in any other area that firm leaders would accept this level of performance.
The issue of attracting Human Capital investors is a marketing issue. As in all marketing, it does not look inward and ask, "What do we want and need?" On the contrary, it looks outward and asks, "What do you want and need?" There is an enormous difference between these two approaches.
In effect, firms have to do the same to win over people as they do to gain new customers--show them why the firm is their best competitive alternative.
Because knowledge workers are investing their Intellectual Capital with firms that will pay a fair return, the question should not be, "How much is this person worth to the firm?" The real questions are: "How much is the firm worth to this knowledge worker? How can the firm add to this person's Intellectual Capital, and develop it even further?"
A New Order of the Ages
Characteristics like passion, desire, obsession, motivation, innovation, creativity and knowledge may not show up anywhere on a firm's financial statements or timesheets, but they are the traits that will ultimately determine the fate of your firm. Knowledge work is non-linear and not subject to the cadences and rhythms of an assembly line; rather it moves by iteration and reiteration, a process of the mind.
My favorite one dimensional test for creating a culture worthy of the respect and dignity of the people you are trying to attract is simply this: Would you want your son or daughter to work in your firm?
My colleague Dan Morris flies a flag over his firm's office building with its name and logo in three colors. It is interesting to me because when I first saw it, I recalled those who first called themselves liberals--in the classical definition of the word--had in mind three liberations (which explains why the appropriate liberal flag is always tricolore).
They intended, first, to liberate humans from tyranny and torture; second, to liberate humans from poverty; and, third, to liberate humans from censorship and other oppressions of conscience, intellect, and art.
It is time we hoist a new flag over The Firm of the Future and usher in a new order of the ages, one that respects the dignity, and earns the rewards, of its Human Capital investors.