Productivity Test
Need to get more done? Try this tip from Scott Berkun:
Here’s a test to help sort how your attention is working for you. Make a list of all the things you read, check, skim, or browse every day (Include every gadget or device you use once a day). Make a second list of why you’re spending your attention on them. What are you trying to achieve or feel? Rank the first list based on the second. Then cut the first list in half or by one-third and see what happens.
Do Your Trial Exhibits Pass This Test?
Dave Gray has been doing some terrific blogging at Communication Nation. In this post, he shares the results of a study about how people create visual diagrams.
A 1997 study found that when people create visual diagrams, they use about 6 to 12 visual elements, or "nodes" to describe a system.
What's interesting to me is that this is true no matter what tools they used and regardless of the complexity of the system.
Dave suggests that the ways people create diagrams is related to the ways people understand diagrams from others. His thoughts:
1. People construct "mental models" when trying to understand how things work
2. Most mental models seem to be made up of 6-12 components
3. A diagram with more then 13 components will probably not become integrated into people's consciousness as a mental model
To me, that means that if you want your system to be understood and integrated into people's thinking as a mental model, you had better boil it down to a simple picture.
If you are a lawyer that uses diagrams to communicate with clients (or juries), you should take another look at your materials and see if you can simplify them. Maybe Bill Gates should take the same advice:
In this slide alone, I count almost 40 components — and I’ve seen a lot of trial graphics that are a whole lot worse.
Sketch a Solution with Clients
Ever have a client that’s has a problem you are struggling to solve? Here’s a tip from Noise Between Stations that could help:
When you’re trying to solve a problem and you’re stuck it’s because you’re trying to solve it in your head. Just as you can do simple calculations in your head but need a calculator for everything else, you can’t solve tough business problems in your head.
When you draw, build, write, or use something that is physical, your physical senses help you understand more about the situation. You more fully understand the problem than if you only thought about it. Financial analysts do this by writing calculations on the back of a napkin or playing with numbers in a spreadsheet. Designers do this by sketching on paper or carving foam in the shape of a product. Engineers do it by combining parts they have on hand to make something new.
…
It’s important to ignore how well you’re doing what you’re doing, because that will distract you from accomplishing the goal. This may go against our usual inclinations to do things “right.” We’re taught to think things through and carefully design a solution. But when you’re stuck we need to overcome this tendency. Free your mind from all the rules you normally follow. Pick up the pencil and just sketch.
You might even use techniques you know to be incorrect because they help you move more quickly. This is good. The are only two guidelines here:
1. Do it quickly
2. Create something tangible
I can’t recommend this tactic enough. When I was mediating custody disputes, I used huge easel-sized 3M Post-It notes to sketch out custody scenarios with my clients. I’d draw a month’s worth of days in a grid, and would give each client their own big Post-it to diagram their ideal custody situation. Often times, once the parents got up and put marker to paper, they broke out of their mindset that a reasonable custody arrangement couldn’t be negotiated.
If you have an office or meeting room, take down some of your diplomas and expensive art work and instead throw up some big Post-it notes (or a whiteboard) on the wall and see how many more client problems you’ll solve.
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."
Client Experience Matters
Found this article (via Digg) titled Why Features Don’t Matter Anymore: The New Laws of Digital Technology. In the author’s words, “user experience (along with a strong brand, and clever marketing) is much more important for the success of a device then technical specifications.” There is much to be learned here for all service providers as well, so I encourage you to read the entire article with that in mind. Here are the author’s 10 fundamental rules (read the article for his explanation):
1) More features isn't better, it's worse.
2) You can't make things easier by adding to them.
3) Confusion is the ultimate deal-breaker.
4) Style matters
5) Only features that provide a good user experience will be used.
6) Any feature that requires learning will only be adopted by a small fraction of users.
7) Unused features are not only useless, they can slow you down and diminish ease of use.
8) Users do not want to think about technology: what really counts is what it does for them.
9) Forget about the killer feature. Welcome to the age of the killer user-experience.
10) Less is difficult, that's why less is more
Technorati Tags: client+service, experience, marketing
Build a Strategy Network in Your Firm
Andrew Razeghi has a great article titled Create Success: Stop Thinking Like a Lawyer he wrote a few years ago, but that I just found. Among other things, he takes on the topic of law firm retreats:
No firm can create strategy in a half day, or even a full day. Not only is the time insufficient, the contributors are isolated. There are typically no clients at such retreats, or any investment bankers, accountants, and other professional advisers that law firms work with. Therefore, the retreat often devolves into a feel-good exercise.
Wouldn't it be better to have 20 attorneys thinking about strategy for four hours a month for 10 months? Who are those who make things happen? Who are the thought leaders in your firm? What if you gave them the chance to think strategically as a part of their job? Create a "strategy network" within your firm - a web of business thinkers with a structured forum in which to think about the business of law, not the practice of law. This network should not just include senior partners and rainmakers, but new partners and senior associates too.
I really like this idea and think it could be a good fit for a practice group or small law firm. Anyone want to try this in their firm? I’d be happy to help you get it off the ground.
Do your calendar and priorities match?
Mark at Manager Tools writes about an exercise he has all of his executive coaching clients do before he begins working with them: He asks them to list their priorities and then looks at their calendars. The result?
90% of the time they don’t match.
When I review with my clients what they said their priorities were, versus what their calendars proved they actually were, the primary emotion, once we fight through disbelief and dissembling, is embarrassment. The smart ones get something powerful from this: the disparity between what they know their jobs to be and what they spend their time doing is the primary source of their dissatisfaction in their role.
Such a simple, yet profound exercise. Try it yourself and see if your calendar and priorites match?
Thanks to Lisa for the tip.
Choosing the wrong profession?
According to the article [here], many mechanics charge between 100 and 140 pounds ($174 -$244) an hour just in labor costs. Junior barristers charge 30 - 100 pounds ($52- $174) as their typical hourly fee; physicians charge from 44 to 63 ($77-$110) pounds per hour.
So, that's why you are suing me.
Management By Baseball breaks down a silly law suit by Major League Baseball against the owners of fantasy baseball leagues. What’s so interesting about the post is the explanation of the three common reasons big companies sue small ones. The third one doesn’t sound familiar, does it?
COMMON REASON #1 -- The attacking organization is on a decline it cannot stem with the creative energy & growth in its market & is just trying to squeeze a little more juice out of the old beetle before it folds.
COMMON REASON #2 -- The attacking organization is struggling to survive because even though it has creative energy, its markets are blocked & the chump change it stands to claim is more than it currently has.
COMMON REASON #3 -- The attacking organization just brought counsel in house or hired new outside counsel and the newcomer is trying to make an impression or the hiring executives want to show off their new toy.
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.
Don't Just Pitch, Pitch In!
Patrick Lamb passes on a great tip from an article by Charles Green about how a law firm, given 90 minutes to “pitch” themselves to the General Counsel of a Fortune 50 company threw the pitch away — and hit the ball out of the park. From the GC:
Then came firm three. They said, 'We have 90 minutes with you . We can either do a standard capabilities presentation--which we're very happy to do--or we can try something different. We suggest that we get started on the job, right now--as if you had already given us the contract--and begin the job, right here, right now. After 85 minutes, we'll stop and you'll have firsthand experience of exactly how it feels to work with us.'
Consider this approach for your next pitch — and let me know how it goes.
Things I wish I'd have known in law school.
Buffalo Wings and Vodka sets out a great list of classroom participation strategies. My favorites:
The Admiral Stockdale: Most professors will simply move on to the next student if faced with an answer like "POTATOES! I LIKE POTATOES! WHERE'S MY PONY? MOM? ARE YOU THERE? POTATOES!" Also known locally as "The Shawn Rutherford?"
The Paige Pipkin: Really just a stalling tactic, forces the professor to clarify as many parts of the question as possible while you frantically flip pages in your case book: "Could you repeat the question?" "Could you say that one word again?" "Could you give me the language of origin?" "Could you use it in a sentence?" "Could you use it in a sentence other than the original question?"
Scorched Earth Policy: If the professor is going to take you down, then you're going to take him down with you. Pull in an unrelated law review article. Cite Blackstone. Bring up the war in Iraq. Or abortion. Calling your professor a racist is also good for this, though it often takes a little bit of creativity in some of the drier classes. Trust your instincts.
To that, I’d add the Mutharika Mambo: When the professor dislikes your answer and asks you the question again, repeat your first answer verbatim. The professor will likely be so confused he’ll move on to another student. Or, in my case in first year contracts, reward the second answer (that, remember, was identical to the first) with a “very good, Mr. Homann.”
Baker's Law: Bad Customers Drive Out Good Customers - Ron Baker
Baker's Law: Bad Customers Drive Out Good Customers by guest blogger Ron Baker
We hold these truths to be self-evident, that all men are created equal,…
-Thomas Jefferson, The Declaration of Independence, July 4, 1776
Whenever anyone quoted those immortal words from the Declaration of Independence — all men are created equal — Federalist Fisher Ames, an ardent opponent of Thomas Jefferson and a superb congressional orator, would retort: "And differ greatly in the sequel."
While Fisher's admonishment might not be the best way to administer a country's laws — where all should be treated equally — it is profound when it comes to understanding no two customers are equal. A German Proverb teaches, "He who seeks equality should go to a cemetery."
Maximum vs. Optimal Capacity
All firms have a theoretical maximum capacity and a theoretical optimal capacity. From a strategy perspective, it is essential to see how that capacity is being allocated to each customer segment. Your maximum capacity is the total number of customers you firm can adequately service, while the optimal capacity is the point at which customers can be served adequately while maintaining your competitive advantage and pricing integrity.
Insuring a proper amount of capacity is allocated to various customer segments, while offering a differentiating value proposition within each segment, is an essential element of implementing value pricing strategies. It also prevents bad customers--those who are not willing to pay for the value you deliver--from crowding out good customers.
The Adaptive Capacity Model
Think of your firm as a Boeing 777 airplane, similar to the one below:
When United Airlines places a Boeing 777 in service, it adds a certain capacity to its fleet. However, it goes one step further, by dividing up that marginal capacity into five segments:
A. First class
B. Business class
C. Full fare coach
D. Coach
F. Leisure, Priceline.com, and Bereavement fares
The airlines — and hotels, cruise lines, golf courses, car rental agencies, and other industries with fixed capacity — are adept at managing and predicting their adaptive capacity to maximize profitability.
Lessons from Yield Management
The airlines understand it is the last-minute customer who values the seat the most and hence they reserve a portion of each plane's capacity for their best customers. They do this even at the risk the plane will take off with some of those high price seats empty — and that revenue can never be recaptured since they cannot inventory seats.
Why do they take that risk? Because the rewards of reserving capacity for price insensitive customers comprise the majority of their profits.
Airlines allocate only so many seats to coach, leisure, Priceline.com (or bereavement) seats, which they offer well in advance of the flight. However, no airline adds capacity in order to accommodate these customers.
This point is noteworthy, as too many firms will, in fact, add capacity — or reallocate capacity from higher-valued customers — in order to serve low-valued customers. This is the equivalent of the airlines putting the upper deck in the back of the plane rather than the front.
Furthermore, many companies will turn away high-value, last minute work from its best customers because it is operating near maximum capacity, usually at the low-end of the value curve for price sensitive customers. This is common during peak seasons; the lost profit opportunities are incalculable.
Many worry about running below optimal capacity and cut their prices in order to attract work, especially in downturns or slow cycles. This strategy is fine, but you must understand the tradeoff you're making. Usually, that capacity could be better utilized selling more valued services to your first-class and business-class customers, who are less price sensitive than new customers.
This way, the firm does not cut its price and degrade its pricing integrity in order to attract price sensitive customers, sending a signal into the marketplace it is willing to engage in this strategy and affecting the perception of its value proposition.
The conventional wisdom is you have to be at maximum capacity — where demand exceeds supply — to raise prices. But since when do you have to wait to be fully booked to demand a premium price? Do not confuse working harder (supply-side capacity) with working smarter (demand-side pricing).
Prices are determined by value created for the customer, not the internal capacity constraints of your firm.
How much fixed capacity are you allocating to each customer class? What will be the criteria you use to ascertain where in your airplane each customer sits?
By viewing your firm as an airplane with a fixed amount of seats, you will begin to adapt your capacity to those customers who appreciate-and are willing to pay for-your value proposition.
Technorati Tags: ron+baker, pricing, law+firm, economics, value
Why Customer, Not Client? - Ron Baker
Why Customer, Not Client? by guest blogger Ron Baker
Customers are people; consumers are statistics.
--Stanley Marcus [1905-2002], Quest for the Best
Stanley Marcus was the son of one of the founders of Neiman-Marcus. I believe he understood customer service better than almost anyone, and I have learned many things from his books.
One of his favorite sayings was: "No 'market'--or 'consumer'--ever purchased anything in one of my stores, but a lot of customers came in and bought things and made me a rich man."
Words mean things. The words we use and the language we adopt, as a firm and as a profession, take on certain meanings over time. They become part of our culture, the way we do things.
When I began researching the Total Quality Service (TQS) and customer loyalty movements in the late 1980s, it struck me how many organizations have tried to call their customers something other than a customer.
The word client, when you look at its etymology, is an inappropriate word to describe the relationship between a professional and the person he or she serves in today's marketplace. Client is derived from the Latin word cliens, which is a follower, retainer, one who follows his patron. In other words, a person dependent on another, as for protection or patronage.
According to my Dictionary, "among the ancient Romans a client was a citizen who placed himself under the protection of a patrician, who was called his patron; a master who had freed his slave, and retained some rights over him after his emancipation; a dependent; one under the protection or patronage of another." Are these the type of images you want to project?
The Problem with the Contemporary Meaning
I realize words change in meaning, and they adopt contemporary usage and generally accepted definitions, and client is no exception. The Dictionary also describes client as "a person or company for whom a lawyer, accountant, advertising agency, etc. is acting; loosely, a customer; a person served by a social agency."
But visit any governmental agency that dispenses aid to individuals, and you will soon discover they too use the word client. A social worker may have clients but I do not believe this describes the relationship we have (or want) with our customers.
What has happened to the word customer, and why do so many businesses attempt to describe the people they serve as something else? After all, customer is derived from the word custom, which is something done regularly. Therefore, a customer is a person who buys, especially one who buys regularly.
Why is it when you see the doctor, you're a "patient," when you board an airplane, a "passenger;" when you get into a taxi, a "fare;" to your utility company, a "ratepayer;" to your insurance company, a "policyholder;" and to a newsletter, a "subscriber."
What's going on here? Why not call customers what they are? Why do businesses develop a special terminology to describe what is, in essence, a commercial transaction? It is as if professionals believe we are not subject to the laws of supply and demand along with everyone else.
Partially, it's arrogance, a way for us to feel superior about ourselves relative to our customers. After all, one doesn't "sell" to a client; one doesn't pander in the marketplace with non-professional advertising to attract clients; rather they rush to seek us out for our expertise, experience, guidance, etc. Does this sound like the current environment in which we operate?
The customer is sovereign, period. We may not like it, we may wax nostalgic for the good old days when customers lined up like passive sheep to be fleeced, but those days are gone, forever. Professionals can no longer place themselves above the "crass marketplace." We must participate in it, and we must differentiate ourselves from the competition if we are to succeed.
Walt Disney insisted his customers be called "guests." His attitude, which still permeates the entire culture of all Disney theme parks, is that the role of employees ("Cast Members") is to entertain the guests and show them a good time. The words used to describe the people served by a business are a good indication of the attitude of the firm.
I'm not suggesting if you change your vernacular you will automatically instill a culture committed to the customer. Far from it. But the words you use to describe the people you serve says an enormous amount about the attitude of your firm--and it is the attitude and actions of your people that ultimately determine your firm's culture.
I don't expect many professionals to adopt the word customer. And that's a good thing, for you. After all, you're reading this Blog for the purpose of differentiating yourself from the competition, because competition really is conformity. Start referring to your clients as customers, and you will discover it has a salutary effect on your attitude, firm culture, customer loyalty and respect, and ultimately, your bottom line.
Technorati Tags: ron+baker, client+service, customer+service
The Firm of the Future - Ron Baker
The Firm of the Future by guest blogger Ron Baker
In my last post, I exposed the predominant practice equation for The Firm of the Past, and dissected the problems with it, how it does not explain the success of professionals (because it is far too focused on hours, efficiency, and inputs, rather than results, output and value), and why it no longer comports to the intellectual capital economy professionals inhabit today.
The New Practice Equation offers a viable and proven alternative to leveraging the real critical success factors of The Firm of the Future:
Profitability = Intellectual Capital x Effectiveness x Price
The Market Share Myth
This theory has many advantages over the old one. First, rather than focusing on top line revenue, the firm is forced to think about the profitability of each customer. Business is a game of margins, not market share, and growth for the sake of growth is the ideology of the cancer cell, not a profitable business.
Further, not all customers are equal, and many firms could stand to lose up to 40-60% of their customers, and they’d be more profitable if they did so. Marginal customers may contribute revenue, but they also absorb precious, fixed capacity that is better allocated to more valuable customers.
Mind Over Matter
Second, professional firms don’t sell hours. They create and sell — and their customers buy –– Intellectual Capital (IC). This is a far broader view than thinking about leveraging people and hours. Microsoft didn’t create the wealth it has by pricing by the hour, and I doubt Bill Gates keeps a timesheet.
A firm’s IC consists of three components: Human Capital (its people); Structural Capital (its systems, proprietary software, checklists, resources, etc., that enable it to perform its work); and Social Capital (customers, vendors, suppliers, referral sources, alumni, and alliances). These components are the real levers of profitability in any professional service firm, not people hours. You can’t leverage an hour; time is simply time, and all businesses –– indeed, all living beings –– are constrained by it. So what?
There are so many more ways to leverage the three components of IC, but it requires a radical change of mindset to get away from the notion that “billable hours” drive a firm’s profitability. As Archimedes said, “Give me a lever long enough, and I shall move the earth.” The real lever in a professional service firm is its IC.
Doing the Right Things
Third, the Firm of the Future will focus on effectiveness, not efficiency. There’s not much the average firm can do to squeeze another 15-20% efficiency from its Human Capital, which are only fallible human beings. The focus on billable hours has hindered professional firms from focusing on being effective with their customers.
If you study surveys of how customers select –– or fire –– their attorneys, efficiency is never mentioned. It is always because of outstanding service, or lack of service –– issues such as they don’t ignore me, they are proactive in looking after my interests, they are aggressive in helping me pursue opportunities, etc. You can’t do all of these things if you are focused on nothing but billable hour quotas.
Therefore, the Firm of the Future will measure and judge team member effectiveness by utilizing Key Predictive Indicators (KPIs), which are leading indicators of performance. Timesheets are lagging indicators, and don’t offer firm leaders a relevant, or timely, measurement of the right things (effectiveness); instead, they attempt to focus on doing things right (efficiency). And they do a lousy job of it, since one can look great on a timesheet while having a lousy service attitude, or upsetting colleagues, or performing sub-quality work.
I will take effectiveness over efficiency any day in a knowledge environment. Let me be clear: The Firm of the Future does not have timesheets.
Pricing on Purpose
Last, Firms of the Future recognize they are a business just like the airlines, hotels, rental car companies, etc. Businesses have prices, not hourly rates. You’d never fly an airline that tried to charge you $4 per minute. The idea is simply ludicrous. In fact, professional firms need to start pricing up-front for everything they do, period. No more excuses.
To retort a firm can’t do that because it doesn’t know exactly how long it is going to take is specious. The customer doesn’t care how long it takes, they only care about the price relative to the value, and they want to make that comparison before they buy, not after. Do you care how long it took Toyota to build your car?
Besides, from the firm’s perspective, it is much better to know the customer doesn’t agree with the price before you do the work, which helps you prevent committing precious firm capacity to customers who don’t value the work.
Pricing earthquake and other disaster insurance is far more complicated than legal services, yet my insurance company gives me a fixed price, before I buy (and before they know what their costs are going to be). It’s called risk, and it is where all profits come from. The professions are going to have develop pricing competency if they are serious about capturing the value they create, and if that means they have to hire pricing professionals, including actuaries, then so be it.
Pricing is the number one driver of profitability in any business, and is far too important to leave to people who lack the creativity, imagination and self-esteem to price based upon value. You know who the mediocre and wimpy pricers are in your firm. They are severely handicapping your profitability by leaving money on the table, since they are far too focused on costs, hours, and efforts to think clearly about results, outputs and value to the customer.
Lawyers are subject to the same laws of economics, and consumer psychology as every other business. It is time they learned to Price on Purpose, and stop hiding behind the veil of billable hour.
Do Professionals Hate Change?
Other consultants will tell you professionals won’t take this journey to become a Firm of the Future because they hate change. In fact, the physicist Max Planck once said “Science progresses funeral by funeral.”
I reject this line of reasoning. I don’t think a profession progresses by shooting its elder members. It is not change, per se, lawyers fear, it is the uncertainty of the effects of the change they fear. That is a much different issue to deal with.
If I was Lloyds of London, and I could insure a firm’s losses for a given period of time if they were to try my theory and it failed, I think many more would change. Unfortunately, I’m not Lloyds and can’t do that.
I have to convert my colleagues based upon the logic of my arguments and ideas, through the use of words. I am optimistic I can do that –– I have a fairly good track record so far –– which is why I will continue to write, lecture, educate, and disseminate my ideas into the national conversation, through our think tank, VeraSage Institute.
In fact, the Fellows at VeraSage are so committed to this process –– a group of 14 dedicated professionals world-wide assembled in order to better the professions and quality of life –– we offer any firm assistance, in the form of e-mail and telephone consulting, if they are truly serious about making the transition. They can learn from our collective experience –and from other firms –– and this will help them avoid the mistakes others have made, thereby lowering their risk.
A Paradigm Worthy of a Proud Profession
Professional firms are Intellectual Capital organizations, and it is time for them to begin acting as if they understood this fact, rather than trying to constantly enhance efficiency by treating their Human Capital as if they had no mind of their own, redolent of the days of Frederik Taylor’s time-and-motion studies.
Humans are not simply machines that exist to bill hours, yet the old practice equation keeps us mired in this mentality. No one entered this profession to bill the most hours; it is simply not a relevant metric to judge the success of an attorney. I believe we can –– indeed, must –– do better than the one-dimensional opportunities presented by an antiquated model.
When I first publicly presented and contrasted The Firm of the Future with The Firm of the Past, a CPA explained to me at the break why she thought the new equation was so superior to the old. She said, and I’m paraphrasing here, “Your equation presents so many more factors that enable a firm to achieve its objectives than the old one did. It is like being freed from a cage that has restricted our firm for decades.”
I have offered you a testable hypothesis, one that is subject to the falsification principle of the scientific method. I hope someday this theory will be replaced with an even better one, as that is how all knowledge creeps. I only hope to live long enough to see it.
Clare Boothe Luce used to say, “The only difference between an optimist and a pessimist is the pessimist is usually better informed.” When it comes to the professions, I certainly hope she was wrong. But the road not yet traveled is long, and it seems the professions, to paraphrase Winston Churchill’s exhortation of America, will do the right thing –– once they have exhausted the alternatives.
Despite this, I remain optimistic. Milton Friedman tells a wonderful story that may illustrate what we need:
A young nun was out driving a car down a superhighway and ran out of gas. She remembered that a mile back there had been a gas station. She got out of her car, hiked up her habit, and walked back. When she got to the station she found that there was only one young man in attendance there. He said he’d love to help her but couldn’t leave the gas station because he was the only one there. He said he would try to find a container in which he could give her some gas. He hunted around the gas station and couldn’t find a decent container. The only thing he could find was a little baby’s potty that had been left there. So he filled the baby potty with gasoline and gave it to the nun. She took the baby potty and walked the mile down the road to her car. She got to her car and opened the gas tank and started to pour it in. Just at that moment, a great big Cadillac came barreling down the road at 80 miles an hour. The driver was looking out and couldn’t believe what he was seeing. So he jammed on his brakes, stopped, backed up, opened the window, and looked out and said, “Sister, I only wish I had your faith!”
The Firms of the Future must lead the profession by following a model worthy of its proud heritage. If we reinvigorate and revitalize the professions, begin to understand and leverage the Intellectual Capital it creates, there is no limit to what we can achieve, as long as we do not lose faith in ourselves.
Technorati Tags: ron+baker, billable+hour, efficiency, timesheets, intellectual+capital
The Firm of the Past - Ron Baker
Nothing stops an organization faster than people who believe that the way they worked yesterday is the best way to work tomorrow. To succeed, not only do your people have to change the way they act, they’ve got to change the way they think about the past.
––John Madonna, former Chairman, KPMG International
<!--D(["mb"," Revenue \u003d People Power x Efficiency x Hourly RateIn Greek language, analyze means “unloosen, separate into parts,” which we will proceed to do with this theory to expose its many weaknesses.First, since most firms have a relatively high contribution margin (revenue less direct labor costs), it gives them a false sense that any revenue is good. This in turn leads them to accept customers who are not as valuable to the firm as others, since marginally valuable customers take up a firm’s precious capacity, and keep it from reserving capacity for its most valuable customers.Second, the way most firms were built in the last century was by leveraging people, literally building a pyramid structure. As technology came on the scene––and especially when the computer hit the desktop––the pyramids began to flatten and firms started to leverage technology. Most firms, however, will put revenue before capacity, always playing catch-up to the workflow and customer demand, and working their people at full tilt. Most other businesses––think of FedEx, Intel, etc.––will put capacity before revenue.This constant full capacity utilization seriously hinders a firm’s ability to attract top talent, valuable customers and cross-sell additional services to existing customers, not to mention innovate. It also makes the partners and firm leaders believe the way to prosperity is to leverage people, and worse, billable hours. What David Maister calls the donkey strategy––prosperity by carrying a heavier load.Third, most firms focus on efficiency by measuring such things as utilization rates and billable hours. Yet, if you study statistics going back at least fifty years, you’d find utilization rates and billable hours are within a very tight range.",1]);//-->Revenue = People Power x Efficiency x Hourly Rate
\n",0]);D(["ce"]);//-->mind, not matter. Where ideas and knowledge––what economists term human capital––comprise 75% of any nation’s, or law firm’s wealth-creating ability.
Technorati Tags: ron+baker, timesheets, billable+hour, efficiency
Goflockyourselfable Language Test
I’m glad to see Go Flock Yourself is back. It’s a blog about the absurdity of all things Web 2.0, and pretty funny to boot. In a somewhat mean-spirited post ripping the use of the term “Syndicatable” in the new book by Robert Scoble and Shel Israel, GFY’s anonymous author shared a pretty useful language tip:
The only people to whom the word “syndicatable” is going to mean anything are the ones who already know what syndication is. Think of it this way, in what I like to call the “Room-full-of-middle-aged-suburban-women-test.” In this test, you walk into a room full of middle-aged suburban women, and say “Blog content is SYNDICATABLE.” Take the number of purely blank stares, multiply it by the number of them that get up and head for the coffee table or the bathroom, and you have a direct index of that statement’s failure to convey even a lick of meaning in and of itself.
As lawyers, how often do we use terms in client conversations that wouldn’t pass this test?
Get on the Same Level as Your Clients
Jack Vinson shares a suggestion from Sylvie Noel for laypeople communicating with experts:
[I]f you want to understand your local expert, tell her how much you already know about the subject. That way, she can adjust her vocabulary to your needs.
Good advice for starting out a new relationship with a client. Have them tell you how much they know about the subject first.
Technorati Tags: client+service, attorney, client
No Gain Without Solving Pain
Are you a lawyer who’s thinking of going solo? Take this advice from Joel Spolsky:
Don’t start a business if you can’t explain what pain it solves, for whom, and why your product will eliminate this pain, and how the customer will pay to solve this pain.