What About Billable Hours?
John Moore passed on the Jack Welch Quote:
The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse—the key vital sign of a company.
If Jack Welch ran a law firm, do you think he'd abandon one, two or all three to focus on measuring billable hours instead?
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Define Your Firm's Rules of Engagement
Guy Kawasaki shares some "Rules of Engagement" from a company called SuccessFactors. Here they are:
Rules of Engagement
I will be passionate—about SuccessFactors’ mission, about mywork. I will love what we do for companies and employees everywhere.
I will demonstrate respect for the individual; I will benice and listen to others, and respect myself. I will act withintegrity and professionalism.
I will do what it takes to get the job done, no matter what it takes, but within legal and ethical boundaries.
I know that this is a company, not a charity. I will not waste money—I will question every cost.
I will present an exhaustive list of solutions to problems—and suggest actionable recommendations.
I will help my colleagues and recognize the team when we win. I will never leave them behind when we lose.
I will constantly improve Kaizen! I will approach every dayas an opportunity to do a better job, admitting to and learning from mymistakes.
I will selflessly pursue customer success.
I will support the culture of meritocracy and pay for performance.
I will focus on results and winning—scoring points, not just gaining yardage.
I will be transparent. I will communicate clearly and bebrutally honest, even when it’s difficult, because I trust mycolleagues.
I will always be in sales and drive customer satisfaction.
I will have fun at work and approach my work with enthusiasm.
I will be a good person to work with—I will not be an asshole.
I agree to live these values. If my colleagues fail to live up toany of these rules, I will speak up and will help them correct; inturn, I will be open to constructive criticism from my colleaguesshould I fail to live by these values. I understand that my performancewill be judged in part by how well I demonstrate these values in mydaily work.
Any professional service firms out there with similar "Rules" for their employees?
Don't Be Later, Aligator
Joyce Wycoff shares an interesting strategy to keep employees from being late to work:
On Monday morning, my CEO and I stood at the company’s entrance lobby at 8:30 am sharp, the time employees were supposed to report for work. There was a constant stream of latecomers. As people strolled in, my CEO and I gave a warm smile and shook their hands, greeting them with a hearty ‘Good morning!’ ... then we handed each a slip of paper ... still smiling.
It read, "Thank you for coming to work today. I was here at 8:30 am to welcome you. Would I have the pleasure of greeting you tomorrow morning at the same time? Signed, CEO"
After a few days, there were no more latecomers. And we saved a big chunk in production costs.
This would be a lot harder in those law firms where 2000 billable hours is the norm. In those firms, the managing partner may need to stay in the firm’s lobby and keep people from going home. ;-)
Some Times You Just Have to Bucket.
Michael McDerment writes about the benefits of pricing services in “three buckets” (tiers) compared to a totally customized pricing strategy:
[W]hat is better: buckets or custom pricing? Buckets. How do I know we learned this? Since changing the pricing page on our site, our sign-ups/trails have increased 30%. We had VERY good conversion rates prior to that. This bump is great. What’s amazing is our actual prices are identical, but just by presenting our pricing in three easy to understand buckets, conversions of first time visitors to trials have increased about 30%….that will affect our bottom line from here on in…Amazing the power of a single web page, no? You know what I find weird? The exact same number of people exit our website on the Pricing page as they did before. Had the redesigned page not been the only site change, we never would have been able to be certain about the BUCKET FACTOR. That is why we try to make on design change at a time and track the results. (See the pricing page he is talking about here)
I have long believed lawyers and other professionals can implement a tiered pricing plan that would make it easier for clients to buy our services – in fact, I’m working with a firm right now to do just that. What “buckets” could you offer?
Put The Higest Price Items First On Your Menu
Found this link via The Church Relevance Blog: A-Z Retail Tricks to Make You Shop. If you can get past the annoying graphics on the page, there are some interesting tips that may make you rethink your office’s design. Here’s something I didn’t know that has multiple practical applications:
Order Of Price- Shops will often be laid out in order of price with the most expensive items being encountered at the beginning of your visit and the cheapest at the end. This is done to play on our sense of comparion, we are much more likely to spend money on accessories etc if we have just agreed to buy an expensive item, as in comparison they will seem cheaper than had we encountered them first.
If you are offering a “menu” of prices for multiple levels of service (estate planning, for example) try placing the more expensive services at the beginning of the menu, instead of the end.
And continuing down my trail of links, from the Retail Tricks site, I found ConsumerPsychologist.com that has some great articles on consumer behavior.
Don't Worry, Hire Crappy
Bob Sutton has written a thought-provoking article called Crappy People versus Crappy Systems that discusses the importance of good systems and the misguided emphasis on hiring great people as the panacea for all of a company’s woes. In other words too many businesses:
focus excessive energy on hiring stars and weeding-out mediocre and poor performers, and insufficient energy on building a great system that enables most competent people to succeed.
The system, not the people, matter most. As he explains:
some systems are so badly designed that when smart people with a great track record join them, it seems as if a “brain vacuum” is applied, and they turn incompetent. Jeff often jokes that this is what happens to many business school deans, and indeed, these jobs have so many competing and conflicting demands that they are often impossible to do well.
The entire post is worth a read.
The Thirty Day Rule for Technology Purchases (and Irrational Client Demands)
I liked this idea from Get Rich Slowly:
The 30-day rule is a simple method to control impulse spending. Here’s how it works:
- Whenever you feel the urge to splurge — whether it’s for new shoes, a new videogame, or a new car — force yourself to stop. If you’re already holding the item, put it back. Leave the store.
- When you get home, take a piece of paper and write down the name of the item, the store where you found it, and the price. Also write down the date.
- Now post this note someplace obvious: a calendar, the fridge, a bulletin board. (I use a text file on my computer.)
- For the next thirty days, think whether you really want the item, but do not buy it.
- If, at the end of a month, the urge is still there, then consider purchasing it. (But do not use credit to do so.)
I can think of so many places this would work. First, for those firm technology and gadget purchases or upgrades, sit on the impulse for a month. If you still think you need it, make the purchase.
Second, if you have an irrational client demand you do something that you don’t think is particularly prudent (like filing that motion to compel to get the lawnmower back from their neighbor in the middle of winter), suggest that you wait 30 days, and if they feel it is still important then, you’ll do it.
Office Design for Employees
Designing your firm’s new space? Take a look at this post about a printing company in Montana. Some of the unique office features:
Day Care and 'family' is built in; there are no other options! The first thing you see when you come walk the parking lot to the front door are little kiddos playing under the Montana sky. All employees pay a pitance to have their young kids on site with them. It's a fundamental. Andrew made it a key design driver. And the # of Baby Bjorns in the office was an indicator that for many of the employees, a family 'quality of life' decision was made without compromising their careers. And its a spectacular daycare. Small adult/kid ratio. Healthy environment. Kids loved. And obviously very happy teachers and parents on site. It wins all visitors over the second they come into the building. The main floor is designed for humans, not executives or administrators. Andrew had been told by the design team at first that a 'traditional' executive/client floor was needed. Sends the right message. Fits the design. Tradition. Andrew felt that didn't match the company's feel. Instead, the upper floor does have all of those elements -- like a typical 'entry' to a school -- but for any visitor, the real sense is that it's an open series of collaborative spaces that are designed for all team members (regardless of rank) to relax, create, rest, and connect. Every space is a learning space. Man, there just weren't any spaces in the building that didn't suggest learning, collaboration, experiment, and team. Sure, business had to be done and things were divided up by tasks and teams, but the real take-away had to do with energy and collaboration. I'd have given anything for teachers/administrators and school designers alike to have spent time on the bottom floor (ground level, due to the slope that building sits on) where the teams were moving at full speed, serving clients around the nation, and providing rigorous real-time design/printing solutions. Spaces were vibrant. Team members were free to work in a variety of settings. And the place had a learning buzz about it. All workers are humans, learners and team members first. I was struck by one programmer/service expert that had forgone the chair entirely. He used a yoga/exercise ball as his chair -- not only did it help create a different dynamic, but it also had a huge impact on his back problems. I also liked that it allowed him to move. To bounce. To fidget. To shift. Mmmm....imagine if kids were given the same option. Imagine. We talked about this a bit, but what really struck me was that the 'trappings' of professionalism were tossed out the window with a grand investment being made instead to support 'how' people worked, created, succeeded, and collaborated. Every team member looked happy/healthy. And the spaces reflected that -- not choosing expensive design but instead being creative and letting the teams be able to gravitate towards what worked best for them. Solo. Small groups. Large groups. Formal. Informal. Inside. Outside. In other words, every space a learning space. Even hallways. Very little wasted...and a far more vibrant learning organization because of it!
Check out the entire post for more.
The Key(s) to Attorney Motivation
Here’s an idea to motivate law firm employees: Give the “Employee of the Month” the keys to the company car. From Autoblog:
[At Infusion Software], if you're deemed the month's top performer, you get the keys to the "Infusion Z," the company's silver Nissan 350Z. The car sports the Infusion logo on the door, so they get some free advertising wherever the Employee of the Month drives. That's a fair trade if you ask us. When you're cruising in the Z, it's not like you can see that from the cockpit, anyway. Oh, and should an employee get into an accident with the car, he or she has to pick up the insurance deductible.
What kind of car should law firms use? A Mercedes, a BMW, or perhaps a Bentley? What kind of car would motivate you to bill those 220 hours this month?
Tick is Slick: Time Keeping the Web Way
All right, we all know the name of this blog is The [Non]Billable Hour, but you’ve got to check out Tick, a really cool Web 2.0 application for tracking time (and measuring it against budgets). Very slick, and free (for now). Are any of the legal technology vendors making anything this cool, intuitive, and pretty?
Tick is Slick: Time Keeping the Web Way
All right, we all know the name of this blog is The [Non]Billable Hour, but you’ve got to check out Tick, a really cool Web 2.0 application for tracking time (and measuring it against budgets). Very slick, and free (for now). Are any of the legal technology vendors making anything this cool, intuitive, and pretty?
What Start-Ups Want in a Lawyer
OK, so Andy Lark is talking about hiring a PR agency, but I think he could just as easily be talking about hiring a lawyer:
But I don't want $15,000 dollars worth of service. I don't even know what that is!
I want results. I don't care what it costs or whether an agency has to under or over service to deliver it. I just want results against the agreed budget. You commit, I commit, we all commit together.
What is more troubling to me as a Valley CMO is:
1) finding a great agency is bloody hard work. They are few and far between. At any billing rate. Few CMOs I know get the value of PR or AR, let alone the value of a good agency... I accept we are part of the problem, but...
2) finding an agency that gets your business and has a real enthusiasm for contributing to the growth of the business - harder still
3) finding an agency that understands that great ideas get funded - near impossible. They are caught in the conundrum or belief that ideas require budget prior to being generated. Bullshit. (and I am talking about real ideas, not those regurgitated from the last pitch)
4) finding a team that can explain why they should get paid more and then associate some kind of outcome with the result - well, if you find them, let me know. The most common justification - "we've been over servicing your business for six months now, you need to pay us more" - is nuts. Nuts!
5) finding an agency - the word is a bit of an oxymoron. It implies some kind of powerhouse of ideas and execution - the strength of a team. What you generally end-up funding is one very dedicated individual surrounded by some other folks - generally you aren't quite sure what they are doing but they all arrive for meetings and scribble madly into notebooks.
What is needed is a new kind of agency. One not built on billable hours and 10k budgets. Maybe one built on the power of ideas to drive a startup's growth curve? One with the courage and conviction to articulate a value proposition that resonates with the CMO of a start-up and ability to explain what the budget should be.
You see, we live less in the conceptual world of brand and reputation and more in the real world of qualified opportunities, pipeline growth and time to sale.
Until then, 10k sounds like a nice round number to start with. Agencies shouldn't let it end there. We will pay more. And I am willing to put my money where my mouth is.
If you want to serve this market, listen closely to Andy’s complaints. Make it your number-one priority to contribute to the growth of your clients’ businesses, not to extract the maximum amount of money from their coffers. Build client-centered teams — and make sure your client meets everyone on the team BEFORE their time shows up on a bill. Finally, start your representation by focusing on the goals of the client and the results they desire. Then agree upon a budget (or, gasp, a fixed price) to meet those goals and achieve those results.
Get Your Lawyers to Use Technology
Here’s an interesting tip to spur firm-wide adoption of new technology: Cut Off Non-Adopter’s E-Mail.
Make Someone Else's 'Employee of the Month' Yours
Gerry Riskin and Michelle Golden have been talking about the importance of having a great receptionist. Having had two amazing secretary/receptionists (Janelle and Sandy, thank you!) in my last two jobs, I second (third?) this sentiment.
Now, how do you find that perfect receptionist? Here are some tips on recruiting great retail employees, from a blog I’ve just moved from “probation” to my regular reads called Just Looking, that may give you some ideas:
Find the Employee of the Month wall in the retailer. Normally this is back near the offices in a hallway that is accessible by the public. Write down the names of the last 6 people who won, and then go find them in the store. Walk up and congratulate them on winning and ask why they got the award. You might have a great conversation that could end with "Here is my card, if your interested in examining other opportunities give me a call"
Look at stores that are not in your industry. Too often, sales managers will only recruit from of retailers like themselves. I found great luck recruiting in retailers outside of my industry. Blockbuster Video was a great place to recruit entry level sales and customer service reps. Anyone who walked out from around the counter to ask me if they could help me find something, got my attention and my card.
Always Be Recruiting. Don't ever stop, because you never know when you might run across someone that would be a great member of your team. I can remember two instances of this happening. One was when I was out to dinner with some friends. The waitress was amazing and during our chatter I found out she was looking for a part time job. I ended up hiring her for for the holiday season and we both were very satisfied with her 4 month stay. The other instance was when I answered the phone and a telemarketer began his pitch on the other end. It was one of those telemarketers that didn't give up at the first no, but kept the tone very light hearted. He came in and interviewed for a full time position.
Recruit for the right traits not just sales skills. There is no way you will ever be able to evaluate a potential recruits selling skills effectively but you can get a good feel for their passion and enthusiasm. My goal when recruiting is to find someone who is outgoing, passionate and enthusiastic about what they are selling. I can't teach passion but I can teach someone with passion how to channel it into selling better.
Set a Recruiting Goal when you go out. If you head out to go recruiting without a goal, all you will get is 2 to 4 hours of walking around. Set a goal of coming back with 4 to 5 names to call and at least 2 business card drops. A business card drop is when you introduce yourself and give them your card with a suggestion they call you. The list of names are of people who you will call later that day and invite them to come in for an interview.
Keep a People Pool. Don't toss out information from old interviews. Make a file and keep it around for later job opportunities. You never know when a position will open that might be perfect for someone you didn't consider before.
Network with other Sales Managers. Find sales manager in other stores that do not compete with you directly. They might be interviewing a candidate that needs more hours or income then they can afford, that might be perfect for your job. A lunch, once a month with a few of these other sales managers could help you locate the people you need. Who knows, maybe they might have a current employee who is looking for a change that is the perfect recruit.
Charge Late Fees for Missed Appointments?
What do you do when clients don’t show up for scheduled appointment? Rob May’s new doctor has a pretty good idea:
A few weeks ago I started going to a new doctor, and was made to sign a document explaining their late fee policy. It was unique. If you miss a scheduled visit, you are charged a $20 fee. If you are late by more than 10 minutes, that qualifies as a missed session. But the doctor's office doesn't keep the money. All money from late fees is donated to the local children's hospital.
I haven't missed a visit, but if I did, I can't imagine arguing with the penalty. I think it's brilliant. It turns the debate from a me vs. them fight for my money to a decision about whether to give money to a third party charity. In essence, it diffuses customer anger while still imposing a penalty. It reminds me that innovative solutions to business problems do exist, but they sometimes require you to step a little bit outside the lines of conventional wisdom.
Make Money by Specializing? Bank on it.
In an interview in the New York Times, the Chairman of ING Direct shares explains why his company specializes and avoids cross-selling:
Q. Does the question simply become one of pricing, of being able to offer the highest return?
A. In every country where we are, we have competitors offering higher rates than we offer. But you've got to be very careful, because, you know, consumers are smart. We have a product offering that has no commissions, no minimum, no tricks. Does the competition offer any tricks, like ties to something else that you have to do to be there, or a minimum balance, or a minimum usage? We have to be better than the next most comparable alternative.
For us, cross-sell is not what we want to do, because we want to keep it simple. We know that out there, the largest pool of earnings in the retail banking world comes from savings and mortgage — those are the only two things that we want to do. If you try to cross-sell too many products, you confuse the clients about what you are and your costs escalate exponentially.
Here are three questions every small business person should be able to answer:
1. What is your most pofitable service or product?
2. If you focused exclusively on selling that service or product, could you sell more?
3. What’s stopping you?
I’m not suggesting that small business owners abandon their passions to concentrate on making the most money possible, but I do believe that most business owners — and this goes double for lawyers — don’t even know what their most profitable service or product is. Answer the first question, then the second, and finally the third, and you may be on your way to a more profitable business. And if not, at least you’ll understand the trade-offs you are making in your business and your life.
Your Customers Don't Want to do Business With You
Mark Cuban said something Friday that really struck home for me. Writing about the struggles of promoting movies through traditional newspaper and magazine channels, he tells those industries:
Each of us is looking for the holy grail of promotion. A way to leave you as a customer.
How scary is that ? A huge customer of your industry would prefer not to do business with you.
I think the same can be said for most people who deal with lawyers. If there is a real alternative to using lawyers, how many of our clients would jump at the opportunity? What are we going to do about it?
Mark’s advice to the magazine and newspaper businesses:
So its time to buck up. You either squeeze what you can and cry when it happens, or you step up and create cost effective alternatives. The days of a movie review and the ad for the movie wont cut it for much longer.
So those of you in the entertainment sections and sales groups of newspapers and magazines have two choices, come up with new ideas, or a new version of your resume…
I have some more thoughts on this issue and will share them soon.
Do You Value What You Do?
Sean D’Souza gives some more advice on pricing. What stood out for me was this quote:
First you must value your own stuff.
Then they’ll value your stuff.
What's Your Premium Plan?
The folks at 37 Signals share a pricing lesson: Don’t forget the premium plan. Here’s what they have to say:
We launched DropSend (a service for sending large files you can’t email) last November and it’s been ticking along nicely, picking up about 3,500 users per month.
We always planned on offering a premium version for businesses that was brandable and multi-user, but we couldn’t get it done in time for launch, so we decided to launch that feature later.
Well, two weeks ago, we finally finished the new DropSend Business Plan. It’s $80 more than the Pro plan ($19 vs. $99), and we were worried that it might be a bit too expensive. Holy crap, were we wrong.
In two weeks, we’ve increased our total revenue by 30%! Two weeks. As I write this, I’m still finding it hard to believe. The Business Plan is now responsible for the lion’s share of our revenue from DropSend.
What we learned from this is that people will pay for quality. Offer them something really good, and they will go for it. Our premium plan is aimed at businesses who have the need for a high-end solution, and of course, they are the ones who can afford it.
If you are struggling with pricing, think about a “premium” plan that includes extras your “regular” plan does not. Give your clients a choice. You may be surprised at the plan they choose.