Twelve Truths About Time
In early August, I'm headed to Duluth, Minnesota to speak at the Strategic Solutions for Solo and Small Firms conference. One of the presentations I'm giving is called the Twelve Truths About Time. In it, I share twelve reasons why attorneys should abandon the billable hour. Here's the slide deck for that presentation.
It is still in "draft" form, and I expect to tweak it a bit before I use it live, so please let me know what you think. My friend and artist/designer, M. Jason Robards, drew the clocks. We're working next on a "Real Innovation for Real Lawyers" slide deck. I'll share that as soon as it is done. Thanks!
Let Your Clients Pick Your Next Associates
Seth Godin shares how he narrowed down 27 finalists for his "Alternative MBA" program to just ten participants: he let the applicants decide. Here's how he describes the process:
More than 48,000 people visited the page that described the program and 350 really cool, talented people applied. I picked 27 finalists and all of them flew out to New York to meet each other. This was the most fun I’ve ever had at a cocktail party (it helped that it was at eight o’clock in the morning).The conversations that day were stunning. Motivated people, all with something to teach, something to learn and something to prove. I asked each person to interview as many other people as they could. After three hours, I asked everyone to privately rank their favorite choices... “who would you like to be in the program with you?”
After they left, I tallied up the results. It was just as you might predict: nine or ten people kept coming up over and over in the top picks. I had crowdsourced the selection, and the crowd agreed. (It turns out that the people they picked were also the people I would have picked).
On January 20th, the most selective (one in 40 got in) MBA program in the world got started. Since then, they’ve never failed to live up to my hopes.
What if your firm choose its associates this way, by letting the applicants choose the others they'd like to work with? Or be even bolder, and bring your applicants in to spend a day with a mixture of your best clients -- and let the clients decide!
100 Tweets: Thinking About Law Practice in 140 Characters or Less.
I really like Twitter. For those who follow me, you know that I try to share lots of legal-themed tips, thoughts and ideas. In fact, most of my Ten Rules posts started out on Twitter -- where I'll test 15-25 "rules" to see which ones work best before picking the ten favorites.
However, there's lots of stuff that lives on Twitter now that used to live here on the blog. And since I don't expect everyone reading this to follow me there (or go back and read through my 2000+ Twitter messages), I decided to compile a "Best Of" list of my favorite tweets.
So, here (in .pdf form) is a little e-book I've titled: 100 Tweets: Thinking about Law Practice in 140 Characters or Less. It contains my favorite 100 tweets, in no particular order, and should give you a sense of what I share on Twitter that you don't always see here.
If you enjoy it, and would like to follow me on Twitter, I'll see you there.
Selling Through a Slump E-Book
I had the privilege of contributing the legal chapter in the new Selling Through a Slump: An Industry by Industry Playbook.
Oracle and The Customer Collective co-sponsored the guide, which contains great advice for selling in multiple verticals, including accounting and consulting, retail, the public sector, health care, insurance, telecommunications, services, technology, media and manufacturing. The author list reads like a who's who of industry experts, and I'm honored to be in such great company.
Check it out here. Registration is required, but the download is free.
Get a Life -- In Only Two Days
I've been spending some time talking to the organizers of the Get a Life Conference, after connecting at Techshow and on Twitter. It looks like a great event, and I'm really working hard to figure out a way to make it -- and perhaps do some cool LexThink-like unconference stuff with them if I do.
Lots of great speakers, including the incomparable Gerry Riskin, are on tap. Expect lots of talk about practical ways to make your law practice a more profitable business. From their site:
In this two-day workshop, you’ll learn how manage all the moving parts of a successful law practice and still have a life. But there’s one very important thing missing – you! One of the greatest challenges you have is making time for what’s personally important to you – your hobbies, friends and family.
It happens May 27th and 28th in Chicago. Check it out, and if you'd like to go, here's a link to a 25% discount (Enter INSIDER upon check-out). I hope to see you there!
Let Your Clients Decide Your Price
One of the biggest barriers lawyers must overcome when contemplating alternative pricing models is understanding just how customers perceive the value lawyers provide.
One of the ways I've combated this in my consulting practice (and at LexThink Innovate) is I let customers set the price of the work I do -- after it is done.
Below is a copy of my "You Decide Invoice" that I use for all my consulting work. The relevant provisions read:
YOU DECIDE: Your absolute satisfaction with LexThink isn’t just our goal, it’s the measure of our worth -- and the determination of our fee. The rules are simple: you pay us what you feel we were worth to you. You decide, no questions asked. The only rule? We want to know why you paid what you did, and how we could have done better.
and
WHEN TO PAY: While we leave our fee in your hands, we can’t leave it there forever. Please send us your payment and feedback within 21 days after you get this invoice. Please send a copy of this along with your feedback and your payment. Thank you for your business.
On the second page (not shown), I ask for feedback from the customer:
Tell us, in as many words as you want, how we did. Think about your expectations, the result, and how it felt to work with us. Also, let us know if we can share your feedback with others -- and if we can give you credit. Attach more sheets if you need to.
That's it. I explain to the customer before they engage me that they'll set my price, and then give them the invoice as soon as the engagement's done. So far, I've always received at least as much as I've expected -- and most importantly, usually more than I would have charged if I'd set my price before beginning.
I also know that when I will ultimately receive less than I expect (or not get paid at all), it will tell me I need to learn lessons from the engagement, and improve my services (or be more selective with my clients) so it doesn't happen again.
What's keeping you from experimenting, and letting a few (trusted) customers name your price?
Ten Rules for the New Economy
This economic downturn provides a tremendous opportunity for lawyers to look at their practices in a new (and different) way. Here are ten "rules" for lawyers facing an uncertain economic future. I hope you find them helpful.
1. Your best response to bad economic times is to become indispensable to your clients. What can you provide to them that they can’t do without? If you can’t answer that question, it is unlikely your clients can either.2. Never assume your current clients know all you can do for them. Never believe your former clients remember all you did for them. Reach out to both and remind them. New business will follow.
3. “Advertise more” is the advice you’ll get from the yellow pages salesperson. “Blog and Twitter more” is the advice you’ll get from social media consultants. “Serve more” is the advice you’ll get from your clients.
4. In a bad economy, you can be proactive, reactive or inactive. Chose the first, knowing most of your competitors will pick the other two.
5. Don’t lower your rates, increase your terms. The easier you make it for people to pay you, the more likely they will.
6. There’s a fine line between compassion and pity. Your clients aren’t paying you to feel sorry for them, they are paying you so they’ll no longer feel sorry for themselves. Instead of saying “I’m sorry,” tell them the six words all clients long to hear: “I’ll help you get through this.”
7. When your worst clients use the economy as yet another excuse to not pay you, use it as an excuse not to keep them.
8. Though you might earn less of your clients’ money, never deserve less of their trust.
9. Your clients never hired you because they wanted a lawyer, they hired you because they needed one. When they leave you, it isn’t because they suddenly need you less, they just need other things more. Don’t take it personally, you’d choose food and heat over advice, too.
10. Remember all those rainy day, practice-improvement projects you’ve put off ‘til “someday” because you’ve never had the time to do them? Guess what, today is someday. Now is the time for you to make big changes in your business. What are you waiting for?
If you enjoyed these, check out my other posts in the series: Ten Rules for New Solos, Ten Rules of Legal Innovation, Ten Rules of Legal Technology, Ten Rules of Hourly Billing and Ten New Rules of Legal Marketing.
Also, if you'd like to get more ideas like these in real time, follow me on Twitter.
Ten Rules for New Solos
As our economy sours and the legal job market dries up, there are lots of lawyers looking at solo practice for the first time. As a former solo myself, I’m sharing these ten “rules” for new solos. There are more to follow, and please share yours in the comments.
1. The good news: As a solo, you are your own boss, can do whatever you want and answer only to yourself. That’s also the bad news.2. Your solo practice is far more likely to fail because you’re a bad business person than because you’re a bad lawyer.
3. If you are a bad procrastinator, you’ll be a terrible solo. Nothingwill impact your ability to succeed as much as your inability to manageyour time. It is unimportant how great you are at lawyering when youdon’t send your bills out on time.
4. Never underestimate the value of the water cooler. You can find many "co-workers" online in Solosez, Blogs, Twitter, etc. Just don’t spend all your time there.
5. Would you let your plumber appear in court for you? Remember your answer next time you’re fiddling with your phone system, computer network, etc... You can’t expect someone to appreciate your expertise if you fail to appreciate theirs.6. If you’re looking for a guru, you can have Foonberg. I’ll take Elefant.
7. If you’re thinking of opening a “general” practice, remember this: Your clients don’t have “general” legal problems, they have specific ones. They’ll hire you because you’re able to help them, not everyone else.
8. Your friends, family and business contacts may hire you eventually, but they’ll rarely do so right away. They have to need to hire you, not just want to.
9. Never tell prospective clients that being a solo makes you cheaperto them. Show them that being a solo makes you better for them. Ifyour clients hire you because your rates are low, they will fire you assoon as your rates are no longer low enough.
10. There is no shame in going solo. Your clients don’t care thatthe legal market tanked, that you got laid off from BIGLAW or that you“wanted more time to spend with your family.” They have their ownproblems, and are looking to you solve them. When you do, you’ll bothprofit.
If you enjoyed these, check out my other posts in the series: Ten Rules of Legal Innovation, Ten Rules of Legal Technology, Ten Rules of Hourly Billing and Ten New Rules of Legal Marketing.
Also, if you'd like to get more ideas like these in real time, follow me on Twitter.
Ten Rules About Hourly Billing
After the great response I got to yesterday's Ten New Rules of Legal Marketing post, I've decided to share a few more "Rules" of Hourly Billing I've culled from my blog and my speeches. Enjoy!
1. Ask your clients what they buy from you. If it isn’t time, stop selling it!
2. Imagine a world where your clients know each month how much your bill will be so they could plan for it. They do.
3. If you don’t agree on fees at the beginning of a case, you’ll be begging for them at the end of it.
4. Sophisticated clients who insist on hourly billing do so because they’re smarter than you are, not because they want you to be paid fairly.
5. When you bill by the hour, your once-in-a-lifetime flash of brilliant insight that saves your client millions of dollars has the same contribution to your bottom line as the six minutes you just spent opening the mail.
6. Businesses succeed when their people work better. Law firms succeed when their people work longer. Your clients understand this -- and resent you for it.
7. Every time your clients jokingly ask you, “Are you going to charge me for this?” they aren’t joking -- and they’ll check next month’s bill to be sure.
8. The hardest thing to measure is talent. The easiest thing to measure is time. The two have absolutely no relationship to one another. Your law firm measures talent, right?
9. Would you shop at a store where the cost of your purchase isn’t set until after you’ve agreed to buy it? You ask your clients to.
10. There are 1440 minutes each day. How many did you make matter? How many did you bill for? Were they the same minutes? Didn't think so.
If you'd like to get more ideas like these in real time, follow me on Twitter.
If Lawyers Didn't Exist
I know, the title of this post sounds like the beginning of another lawyer joke, but it comes from a very thought-provoking article from Indi Young on A List Apart titled Look at it Another Way.
Indi suggests several ways we can "step out of our problem-solving role." This is important because:
Whether we’re improving what we make, how we make it, or how we shareit, we normally take the perspective of the creator by default. Wecan’t help it. We’re drawn into decisions about all sorts of details.We love the minutia—solving problems, finding a way around alimitation. We don’t try to see past our own role in the process.
Instead of trying to improve our businesses (or our processes/outputs/etc.) from the inside, she suggests we drop our problem-solving role completely, forget about our business' existing limitations and become the person we serve.
Pretend you and your organization do not exist, and study what this person doeswith all the resources available in her life. For example, what does acitizen need from her town government? She needs a way to get from herhouse to the grocery store, the library, the post office, herworkplace, etc. These could be roads, bike paths, public transit, andsidewalks. She needs utilities like water and electricity to bedelivered to her property. She needs assurance that her property willbe defended from fire, protected from floods, and accessible during adisaster. She wants to feel safe from assault, whether by a human, ananimal, pollution, noise, or disease. This list goes on.
Like governments, lawyers (though some might argue) exist to fulfill a need. Here's a way to identify those needs: Think about your clients for a moment. But, as the article suggests, don't think of them as a “user” of the thing you provide.Instead, "think about how and why they accomplish what they want to get done."
So, who are your clients? What do they look like? Where do they live? What do they need? What do they want to get done?
Most importantly, what wakes them up at 2:00 am the morning before they call your office? Would they say it is because they wanted "estate planning" or because they want to make sure they can "take care of their family" when they die?
Put another way, if lawyers didn't exist, what unmet need would your clients have? And if you were the only one to recognize that unmet need (in a world without lawyers, remember), would you invent your firm as it exists today?
Would your client?
Would Steve Jobs?
Free Fee-Setting Advice
From my friend Gerry Riskin comes a link to this Report on Fee Setting for Professionals. In it, an all-star cast of legal innovators and business gurus answer the question: What one piece of advice do you need to know to get the fees you deserve?
I'd highly recommend reading Gerry's post to get a peek at what's in the report, and then downloading it (sign up required).
What's your practice plan?
Michael Hyatt shares the importance of having a "Life Plan." He talks about why it is important, and openly shares quite a bit of his own. Under the "My Colleagues" category of his plan, Michael writes:
I want my colleagues to remember my servant-leadership, myintegrity, my humility, and my commitment to having fun. I want them toremember how much they learned and grew as a result of knowing me. Mostof all, I want them to remember how I empowered them to accomplish farmore than they ever thought possible.
When you read his post, think about the things you'd include in a Life Plan for your practice. The quote above would be a great start for the "My Clients" section. Give it a try.
Using Instant Messaging in your firm? You should.
Here's an article from Science Daily that suggests that Instant Messaging (IM) reduces workplace interruptions. If you've been avoiding IM in your workplace because you believe it saps productivity, think again:
The study challenges the widespread belief that instant messagingleads to an increase in disruption. Some researchers have speculatedthat workers would use instant messaging in addition to the phone ande-mail, leading to increased interruption and reduced productivity.
Instead, research showed that instant messaging was often used as asubstitute for other, more disruptive forms of communication such asthe telephone, e-mail, and face-to-face conversations. Using instantmessaging led to more conversations on the computer, but theconversations were briefer, said R. Kelly Garrett, co-author of thestudy and assistant professor of communication at Ohio State.
Worth a read.
Managing Partners, Report to the LAB
My friend Patrick McKenna has been working hard on a Leadership Advisory Board (LAB) for Managing Partner magazine. Though populated with large firm lawyers, the LAB is shaping up as a pretty amazing resource for managing partners for all sized law firms. Here's a description:
The LAB was formed as a resource to provide pragmatic advice to assist new managing partners with their critical burning issues and help them succeed. The LAB is comprised of the following distinguished current and former law firm leaders: Angelo Arcadipane (Dickstein Shapiro LLP); John Bouma (Snell & Wilmer LLP); Brian K. Burke (Baker & Daniels LLP); Ben F. Johnson, III (Alston & Bird LLP); John R. Sapp (Michael Best & Friedrich LLP); Keith B. Simmons (Bass Berry & Sims PLC); William J. Strickland (McGuire Woods LLP); Harry P. Trueheart, III (Nixon Peabody LLP); together with Patrick J. McKenna (Edge International).
Check it out, and keep on eye on Managing Partner Magazine for more.
Charge $297 per hour and not $300.
Here's a fascinating article in Scientific American titled Why Things Cost $19.95 that discusses the psychological impact certain prices have over others. If you've always wondered why we see odd prices so often ($19.95 vs. $20.00), the article gives the answer. Two University of Florida marketing professors studied how consumers relate a ticketed price to the perceived wholesale "cost" of a good or service:
There were three scenarios involving different retail prices: onegroup of buyers was given a price of $5,000, another was given a priceof $4,988, and the third was told $5,012. When all the buyers wereasked to estimate the wholesale price, those with the $5,000 price tagin their head guessed much lower than those contemplating the moreprecise retail prices. That is, they moved farther away from the mentalanchor. What is more, those who started with the round number as theirmental anchor were much more likely to guess a wholesale price that wasalso in round numbers. The scientists ran this experiment again andagain with different scenarios and always got the same result.
Why would this happen? As Janiszewski and Uy explain in the Februaryissue of Psychological Science, people appear to create mentalmeasuring sticks that run in increments away from any opening bid, andthe size of the increments depends on the opening bid. That is, if wesee a $20 toaster, we might wonder whether it is worth $19 or $18 or$21; we are thinking in round numbers. But if the starting point is$19.95, the mental measuring stick would look different. We might stillthink it is wrongly priced, but in our minds we are thinking aboutnickels and dimes instead of dollars, so a fair comeback might be$19.75 or $19.50.
I'd really recommend you read the entire article, but the initial takeaway for me is this: If you want clients to believe your rate (or set price for a given service) is close to your actual cost, price in odd numbers.
Bill before the 'moneymoon' is over.
The Urban Dictionary's Word of the Day today is Moneymoon, defined as:
The time after your purchase of a good or service and before 'buyer's remorse' happens. "The moneymoon is over, I realzie now that buying that boat was a waste of money."
Made me think of the number one rule of small business cash flow: Bill your clients before the moneymoon is over.
Are your customers, or your employees, always right?
For another worthwhile read this morning, check out the Top 5 Reasons Why "The Customer is Always Right" is Wrong from the Chief Happiness Officer Blog. Reason Number 4, it results in worse customer service:
[W]hen you put the employees first, they putthe customers first. Put employees first, and they will be happy atwork. Employees who are happy at work give better customer servicebecause:
- They care more about other people, including customers
- They have more energy
- They are happy, meaning they are more fun to talk to and interact with
- They are more motivated
On the other hand, when the company and management consistently sidewith customers instead of with employees, it sends a clear message that:
- Employees are not valued
- That treating employees fairly is not important
- That employees have no right to respect from customers
- That employees have to put up with everything from customers
When this attitude prevails, employees stop caring about service. Atthat point, real good service is almost impossible - the best customerscan hope for is fake good service. You know the kind I mean: courteouson the surface only.
Do you put your customers first, or your employees?
How to Run Your Law Firm Like a Startup ... or Not.
Jason Calcanis heads up Mahalo, a human-powered search engine. In this post, widely circulating around the tech/startup blogosphere, Jason gives 17 tips on saving money while running a startup that will (I didn't say should) surely resonate with some BigLaw managing partners. Some of his "really good" ideas (since toned down a bit in an update to the post):
- Buy everyone lunch four days a week and establish a no-meetingspolicy. Going out for food or ordering in takes at least 20-60 minutesmore than walking up to the buffet and eating. If you do meetings overlunch you also save that time. So, 30 minutes a day across say fourdays a week is two hours a week... which is 100 hours a year. You getthe idea.
- Don'tbuy a phone system. No one will use it. No one at Mahalo has a deskphone except the admin folks. Everyone else is on IRC, chat, and theircell phone. Everyone has a cell phone, folks would rather get calls onit, and 99% of communication is NOT on the phone. Savings? At least$500 a year per person... 50 people over three years? $75-100k
- Buyyour hardest working folks computers for home. If you have folks whoare willing to work an extra hour a day a week you should get them acomputer for home. Once you get to three hours of work a week from homeyou're at 150 hours a year and that's a no brainer. Invest in equipment*if* the person is a workaholic.
- Fire people who are not workaholics
... come on folks, this is startup life, it's not a game. Don't work at a startup if you're not into it. Go work at the post office or stabucks if you're want balance in your life for realz. - Getan expensive, automatic espresso machine at the office. Going tostarbucks twice a day cost $4 each time, but more importantly it costs20 minutes. Buy a $3-5,000 Jura industrial,get the good beans, and supply the coffee room with soy, low fat, etc.50 people making one trip a day is 20 hours of wasted time for thecompany, and $150 in coffee costs for the employees. Makes no sense.
- Stock the fridge with sodas---same drill as above.
Sound like BigLaw to you? Well, except for the awesome coffee machine. That's not a cost like copies that you can pass on to clients.
New Research Explains Billable Hour's Staying Power!
Well, not exactly, but this article in the Telegraph discusses an experiment exploring humans' preference for a familiar (though less efficient) path, and found:
most of us are happy to play follow-my-leader, even if we aretrailing after someone who does not know where they are going andtaking the most meandering route. Even more striking, even when we are shown a faster route, we prefer tostick with the old one and tell others to take the long road too, afinding that could have lethal implications when it comes to evacuatinga building or ship in an emergency.
In the study, participants were led from one room to another. When asked to return to the first room, almost all took the familiar path back, even when they were aware of a shorter path:
All but one person took the route they had beenled. What we were surprised by was how strong this effect was, evenwhen the alternative route was much shorter .... They preferred the long route even when the experimenter had drawnattention to the alternative route, or when the experimenter took thelong route solely to pick up a fallen poster, eliminating thepossibility that participants thought the experimenter had a good, butunknown, reason to take the long route. By askingparticipants to collect the next guinea pig in the experiment, thescientists observed that each person in the chain copied the route ofthe participant before them: a simple tradition that meant thealternative route was never discovered.
Interesting food for thought, don't you think?
Don't Forget the List
My friend (and XPLANE co-worker) Bill Keaggy put together The Ultimatest Grocery List that you should check out and modify for your office. Create a list of all the things you regularly buy -- even once a year -- for your practice and add each item to the list. Check off the boxes when things are getting low, and you'll save at least one or two trips to Office Depot or Best Buy each year.