Ed Poll discusses the effect that the new reality or the consumer market and the corporate market have on the legal profession.
Consumer Market
~The consumer market includes divorce law, personal injury law and debt collection.
~The consumer market is more commodity based; more standardized; therefore more cost sensitive than other practice areas.
Corporate Market
General Council have become more sensitive to total legal costs due to pressure from CFOs and CEOs.
~Corporations are cutting back on the number of firms handling their business in an effort to control costs.
~The conversions factor is pressuring outside firms to become more efficient
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With the Baby Boomers advancing to the ranks of retirees, those who don’t want to retire are striking back in larger numbers. Rutgers, the largest public university in New Jersey, was sued for age discrimination early in 2012. The suit was joined by 3 others who were fired. Such claims are on the rise. In 2012, 22,857 such claims were filed with the EEOC, Equal Employment Opportunity Commission, compared with 16,548 in 2006.
Lest you think the legal community is exempt from such claims, look back at the Sidley Austin settlement of $27 million not all that long ago. A number of “partners” were terminated by the firm, claiming they were partners. The EEOC claimed they were employees, irrespective of the title the firm gave them. If you look like a duck and act like a duck, you must be a duck, according to the EEOC. In the terms of the Internal Revenue Service, if the substance of the transaction is taxable, its form is irrelevant. The legal profession, and others, feared that Sidley would fight this in court, lose and thereby set precedent. Since they settled, no such precedent has been set. But, the bell has rung; the legal profession is being watched by the EEOC as are others.
Linda Popky, marketing consultant of Leverage2Market, writes her Top of Mind piece this week about a serious marketing blunder, as follows:
“…. (T)he local Orchard Supply Hardware (OSH) store featured a great buy on a tabletop propane heater….There was only one problem. A propane heater naturally requires propane to work. And even though OSH carries small portable propane tanks, they didn’t have the ones in the proper configuration to fit the heater. Whoops.
“So making this (purchase) work required an additional trip to … Home Depot (to get the correct propane tank) … Driving your customers to visit your competition to complete their product experience with you (is) not the best way to keep the flames of loyalty burning bright.”
As Linda suggests, make it easy to do business with you, not hard. Examples include answering phone calls quickly (as on the first ring) and messages returned promptly (no later than the next day. Being astute in The Business of Law® will create loyal clients.
A few weeks ago, Ed competed in the cycling events at the Senior Olympics. Today, Ed reflects on how that experience relates to his professional life and the Business of Law.
In this technology-driven age, a lot of lawyers’ work can be moved online. Today Ed discusses the virtualization of law offices to help you consider whether or not that move makes sense for you.
In the June issue of the ABA Journal, ABA President Laura Bellows talked about the gender pay inequity in the legal profession, comparing today with 50 years ago when President Kennedy signed the Equal Pay Act. The difference is 77 cents now vs. 59 cents then. And even today, Ms. Bellows says “(f)emale equity partners in the 200 largest firms … earn 89% of the compensation of their male peers. Not long ago, one of my clients experienced that very same bias, causing her to leave the large firm and open her own shop. Immediately, her income doubled.
But the President’s Message contained a new perspective for me. She said that unequal pay is a family issue, not just a gender issue, that affects families and retirement capabilities of husband/wife, father/mother and the well-being of everyone in the family. And the competition among colleagues is not of male and female, but of lawyer and lawyer. Gender is no longer a fair differentiation within the firm contest.
I’m becoming more sensitive to this issue as I plan for our LawBiz® Practice Management Institute scheduled for April 4th and 5th, 2014, in Santa Monica, CA. Join me and my co-anchor, Rebecca Torrey, an equity partner and member of the Executive Committee of Manatt, Phelps and Phillips, as we focus on management challenges faced by women lawyers in today’s profession.
While doom-sayers proclaim that the legal profession’s problem is too many lawyers, practical experience often tells a different story. A friend recently shared this story with me:
“When we needed an immigration attorney, only one returned our calls of enquiry from the several my husband called locally, (she got our business) and when we were looking for a lawyer for wills and other family matters recently, only one was interested in the bread and butter stuff we’re looking for help with. Couple this with the ‘non-lawyer’ who dealt with our house sale (very efficiently) in the UK, as consumers we see the ‘lawyer’ crisis differently!”
There may be an oversupply of lawyers for jobs at Biglaw (the high paying positions too many law school graduates still want), but the demand (the bread-and-butter business with the Main Street folks who can’t pay $1,000 an hour legal fees) is still there.
My friend’s experience suggests this simple solution for any lawyer worried about having enough business: pick up the phone! The teachings of my father many years ago come to mind. When the phone rings, and you respond, you will be hired. But,if you don’t respond, you won’t be hired. This is similar to the adage that if you don’t swing the bat, you can’t hit the ball.
Marketing efforts are designed to make people aware of you and to encourage them to call. But all the effective marketing in the world won’t make up for calls missed or not promptly returned. Service is fundamental. If clients want you, it’s because of the quality service you can and should provide. If you’re there right from the start it shows what you will do going forward.
I wrote recently about the great chasm between lawyer supply and demand for legal services. I suggested that this is an age-old problem only because many lawyers are courting a very small market segment, the large companies of the world. The bulk of the consuming public has less ability to pay but still great need. And the Bar hasn’t yet figured out how to incentivize lawyers to serve this need.
But perhaps the real issue is not so much the supply, but rather the lack of service provided by lawyers. The following several instances were reported to me from one who had repeated unpleasant interactions with lawyers. It’s a shame that she had more than one such experience, but most people can identify with what happened to her.
"When we needed an immigration attorney," she says, "only one returned our calls of inquiry from the several my husband called locally. When we were looking for a lawyer for wills and other family matters recently, only one was interested in the bread and butter stuff we needed addressed." She continues by making the further observation, "Instead of using a lawyer, we used a ‘non-lawyer’ for our house sale; she was very efficient." She concludes that "… as consumers, we see the ‘lawyer’ crisis differently!."
Lawyers get a bad rap deservedly in too many instances!
Today Ed revisits a topic he discussed a few months ago. This week’s clip will have you consider answer 2 important questions: What can you gain by hiring a new person, and how much will it cost?
