There is so much happening in our profession that it’s hard to keep track …
I read an interesting article in a recent issue of the New Yorker Magazine that employed workers are actually seeing an increase in purchasing power because of declining prices all around. Yet wages are not going down because, historically, companies have chosen not to change wages for reasons relating to employee morale.I’m not sure whether that historical fact holds true in this environment. I just read that a couple of the large law firms are telling their new hires that the starting compensation will be $145,000, NOT $160,000. Obviously, change is in the air.
The purchasing power for employees is an interesting thought. The key, of course, is to keep your job and even lawyers are facing challenges here.
And “readjustments” in the work force are taking place more quickly because of our recent adherence to “just in time” management. Interesting concepts. How is your firm handling the changed economic conditions?
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"History should be a guide post not a hitching post and when marketplace adjustments increase in both strength and frequency I think falling back on historical prose that we are different than all other industries / marketplaces is a great way to ensure a repeat of history."
Despite the pain, I’m not sure how many of us can alter our course of conduct. But, clearly, the successful ones will have to make some mid-career alterations.
Larry Bodine suggests that law firms that survive today’s economic crisis will:
Have “customers” not “clients.”
Offer flat fees per project or per procedure.
Have rates that are markedly lower than in 2008.
Will routinely produce budgets for all legal work.
Be run like real businesses, which know their costs, can calculate a profit margin, and offer customers “just in time” services at the best price possible.
Realize that customers are fickle and expect personalized service.
Have lawyers that fly coach and stay at cheap hotels near the client’s offices, instead of the Four Seasons 5 miles away.
Have lawyers that know their clients business, their goals, strategies and objectives, and work to help the client make more money or cut their costs.
I have been talking about the difference between clients and customers and patients and customers for a long time. I’m glad that Larry’s first point on his list is the same. Why should this be so important? Because not all of us are clients; we all are customers. Therefore, we can relate. There was a hit movie years ago where a mean doctor was a patient. Only after his experience did he have more compassion for patients and changed his ways. Today, medical schools are required to teach doctor-patient relations. When will law schools do the same?
I was coaching a client today. She pulled at my heart strings by telling me the problems she is having with several of her clients who owe her money, big sums of money.
One of the clients paid her $37,000 two weeks ago and already owes her another $27,000. After complaining about some of the services and getting a $5,000 reduction in billing, he has not yet committed to a date certain for payment of this amount. Oh, yes, you guessed part of it. "The check went out last week."
Should she continue working for this client? My advice was to review your file to make sure it’s clean and not susceptible of negligence claims, make one last effort to collect by telling the client he has to pay what is owed within 7 days or you will file a motion to withdraw because the client has not honored his agreement commitments, and then be sure you are far enough away from trial to have sucha motion granted.
Bottom line, however, while you are taking care of your client, you must take care of yourself! If, while focusing attention on the client’s issues, you ignore your own billings and accounts receivable, you will lose the respect of the client, you will not get paid the full amount owed to you, and you will not get more referrals from this client. Lawyer Beware!
I respectfully disagree with his assertions. This is what I said in response to Susan’s comments:
It’s hard for me not to disagree more. Leverage always has been, and will continue to be, a motor for profit. Whether that leverage comes from associates or from non-equity partners (another form of associate) is not clear, nor important, for this discussion. Time will tell. And Susskind’s conversation merely discusses another form of leverage, technology, just not the human form.
In China, years ago (I can’t speak for today because it’s been many years since I was there), the leverage the economy used was people. They couldn’t use machinery because they had so many people who needed work.
Yes, experience is important. But, it is also teachable. Perhaps the more progressive law firms will wake up to how important continuing education is for their lawyers (partners and others) as well as their staff.
Morale is low. Agreed. But, that in part is because of failed expectations. Expectations in BigLaw must be brought in line with economic reality; the business model needs to be adjusted a bit … then morale (with good leadership) will rise.
Richard Susskind has written a book suggesting that lawyers may become obsolete unless we make some dramatic changes.
I see nothing unusual about his conclusion … that legal work will be unbundled and that the work that is more mundane and routine will be systematized and perhaps even automated. Technology advances provide us with opportunities that didn’t exist before. We can, today, create better product for less money. Technology is only one aspect. Globalization is another. And this isn’t just for the large law firms. A client of mine, in Texas, opened an office in India for the specific purpose of document review and document production – it’s done for less money more quickly … And he can get a faster turnaround because of the time difference.
Law is slow coming to this process. My background is in manufacturing. I’ve owned and operated several companies. In order to retain prices, not to increase prices, we would do everything we could to automate. When automation, reducing the amount of labor costs, would go no further, we reduced the size of the container. For example, we would go from 32 oz to a 22 oz jar or a 10 gal. container to a 5 gal. container.
When we have time of challenge as we do now or changes in our economy and culture, we have the opportunity to innovate for improvements in products and services. We have the opportunity to create new demand. I see this beginning to happen in our parts of our economy. It will have to happen in the legal profession, nay the legal business (The Business of Law®), if we are to continue to serve our public as we know.
Yes, we "sell" all the time. My definition of "marketing" is the process by which we persuade another of the merits of our idea. This comes in the context of persuading a judge or jury of our client’s position; of persuading our supervising partner that we’re the right person to work on a matter (in a large firm); of convincing a prospective client that we can get the result they seek. This is all marketing/selling. And we do it all the time. I even do it in my sleep when I seek to persuade my wife that I’m entitled to a portion of the bed when we move around. Marketing/selling is both conscious and unconscious. When we make it conscious, we have a better chance of succeeding.
