Last night, during a break at the ABA Law Practice Management Section’s Fall conference, I watched an MSNBC commentator talk about the presidential campaign and the candidates’ strategic plans, or lack thereof. Then, I went to dinner with Allison Shields and Aviva Cuyler. We talked about the strategic planning process of law firms. We agreed that very few law firms we’ve seen have such a plan in place. During our conversation, I recalled a managing partner telling my large law firm Managing Partners Roundtable meeting just this week that his firm created a strategic plan about a year ago and had projected several scenarios, one of which was an economic downturn … and what his firm would do if such an event occurred. He said his firm is doing fine today, still staying close to their strategic plan.
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I was talking to Patrick Lamb today, asking his opinion about the impact of today’s financial crisis on law firm fees. His response brought me up short, though it shouldn’t have. He said that restricted credit lines have impacted everyone. After all, even banks won’t loan to other banks overnight funds as was normal before the crisis for fear of the 2nd bank’s failure. If banks won’t loan to one another, how can we expect banks to loan funds to law firms? Thus, collection policies of law firms must be carefully monitored and honored. Collection of billings, high realization rates, is essential to the survival of law firms in today’s environment.
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Extend the Reach of Your Rain Making Using Web 2.0
VENICE, CALIF. October 14, 2008—Law management guru, Ed Poll, JD, MBA, CMC, and social networking guru, David Nour, will present a free webinar for managing partners and law firm administrators on October 28, 2008 at 12:00PM (PST). The webinar will show listeners how they can extend the reach of their business development activities using social media strategies such as LinkedIn, Twitter, Second Life, and Plaxo.
Webinar host, Ed Poll, is a nationally recognized management consultant who has helped to transform many law practices into profitable and successful businesses. Featured guest, David Nour, is a social networking strategist and author of Relationship Economics (Wiley, 2008). In this webinar, the hosts will show listeners how to develop a meaningful online presence on social networking sites that enhance online visibility and search engine ranking, modernize business development by bringing it into the 21st century and increase profitability.
This one-hour presentation will provide an overview of LinkedIn: the ultimate business-to-business social networking platform, and discuss how to create a content-rich profile that will position a law firm or an individual practitioner on one of the networking platforms to enhance prospective client outreach and provide quality information about the services offered.
Additionally, the webinar will discuss the best practices used by social networkers on how to handle stagnated relationships, unanswered requests, unsolicited invitations and how not to abuse the system. Content covered in the webinar will also include the more advanced strategies of social networking, including advanced search techniques for a more targeted effort, turning answers into alliances, knowledge management, and the value of premium memberships.
For more information on how to register for the webinar, held on October 28, 2008 at 12:00 PM (PST), please visit www.lawbiz.com.
About Ed Poll
Ed Poll, JD, MBA, CMC, is a nationally recognized expert in law practice management. He helps attorneys and law firms increase their profitability, consulting with them on issues of internal operations, business development, and financial matters. Ed brings his clients a solid background in both law and business. He has 25 years experience as a practicing attorney and has also served as CEO and COO for several manufacturing businesses. In 1990 he founded LawBiz® Management Company and is now focused on coaching, speaking, and training law firms.
Ed is the author of numerous publications that have become the definitive works in the field and has just released his newest book Law Firm Fees & Compensation: Value & Growth Dynamics (LawBiz® Management Co., 2008). He is also a columnist for the Association of Legal Administrators and contributes the “LawBiz® Coach’s Corner” to Lawyers Weekly.
About David Nour
David Nour is a social networking strategist and one of the foremost thought leaders on the quantifiable value of business relationships. In a global economy that is becoming increasingly disconnected, BeOne Now is solving global client challenges with intracompany, as well as externally focused, Strategic Relationship Planning™.
David is the author of Relationship Economics (Wiley, 2008) and What Every Entrepreneur Needs To Know About Raising Capital (Praeger, 2009), a senior management advisor, and a featured speaker for corporate, association and academic forums, where he shares his knowledge and experience as a leading change agent and catalyst for Relationship Economics® – the art and science of business relationships.
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Another law firm laid off a large number of folks. This is depressing. I think there is a better way.
Coincidentally, I read yesterday about Toyota in the Wall Street Journal. Toyota’s sales are decreasing; they’ve closed a plant. They did not lay off workers. Rather than giving them paid leave, as GM and Ford have done on occasion, the workers come into the plant and take education courses to improve their skills and to do deferred maintenance. When it is time to reopen the plant, their workers will be even better skilled and the plant will be even more efficient. This is part of the Japanese philosophy of continuous improvement. Most importantly, Toyota employees feel a greater loyalty to the company.
Large law firms hire new lawyers, then terminate senior lawyers. One managing partner termed this technique as "culling." But, each lawyer laid off cost the law firm between $250,000 and $500,000, according to every managing partner I’ve talked to. This goes right to the "bottom line." Firms looking to cut expense in order to improve profits should look no further than their hiring and firing practices!
Rather than fire experienced lawyers, why doesn’t the law firm offer new education opportunities for its lawyers and its staff? New lawyers don’t know how to "find the courthouse." Experienced lawyers know not only where the courthouse is, but they also know the culture of the law firm. There is much they already know, and for which the law firm has already paid. It’s a lot less expensive to educate experienced lawyers in a new practice area than it is to train a brand new lawyer.
And, they would improve the morale of those in the firm, increasing the loyalty to the firm. This would result in better service to clients as well as increased profits.
What is wrong with the current picture? Why is it that law firm management has yet to understand what American industry already knows? I have heard a number of explanations, but none of them make sense to me. Perhaps you can help me on this.
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Will lawyers actually see their “second season,” their “red zone” of life? Will the 400,000 lawyers projected to retire within the next 10 years have to work or will they be able to retire? Will lawyers be just like others in our country today who are seeing their “nest eggs” dwindle by at least 50% in just the last few weeks?
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A recent study by a major bank suggests that the revenue of large law firms have been flat or decreased 10%; the next tier of law firms experienced 5 to 15% declines.
But, 2009 should see better results according to this study. Firms have absorbed the increased compensaton for associates. Firms have moderated the growth in their head count, both of new associates and lateral movement that doesn’t return immediate results.
There will be more segmentation of work by corporate law departments. This will provide work for smaller law firms from General Counsel who will be more cost conscious. This will especially be true if the current "value" emphasis by members of ACC (Association of Corporate Counsel) comes to pass. There will still be work that will not be price-sensitive.
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One pundit commented today that our 401 K‘s have now become 101 K‘s!
With close to 400,000 lawyers (Baby Boomers) slated to retire in the next 10 years, the legal profession will be rocked! How, however, no one is yet commenting.
With the current financial collapse, and investment values plummeting by 50% in many cases, we may not see so many retirees, after all. Even lawyers may have to work longer years than they anticipated. We may have one more generation than contemplated in the work place. Will we see even more challenges in an effort to understand why each generation reacts differently to the same stimuli? How will we reconcile the differing values between, and now among, generations? As Rodney King once said, "Can we all get along?"
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Wall Street isn’t the only institution falling down around us. A law firm, not the first, that was first opened 118 years ago in 1890, collapsed in a heap of depressed lawyers, staff and clients, not to mention vendors. Many people were significantly impacted by the dissolution of this 600+ lawyer firm.
How could a banking institution, built over decades, collapse in hours? How could a law firm of such magnitude collapse in a matter of weeks? For the law firm, there are a number of reasons provided in the public airwaves, each of which carries a significant lesson about The Business of Law®.
Here are a few of the lessons that popped out for me:
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With the recent financial crises still in the news, it is helpful to find a little levity. While coaching a client of mine today, we were talking about Bank of America buying all the other banks at bargain rates.
His comment: Bank of America is an oxymoron, it should just be called The Bank!
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The State Bar of California recent answered several questions about the FDIC and clients’ trust accounts. While their comments relate to California lawyers, their comments are instructive for all lawyers with clients’ trust accounts. Caveat: Check your jurisdiction’s rules and regulations, including those of both the bar and the banking associations.
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