Lies, Damn Lies, and (Legal) Statistics

Here’s my follow-up post dissecting the very interesting survey by Altman Weil on how corporate legal counsel make decisions on hiring lawyers. So here it is.

In my first comment, I gleefully dissed social media, which ranked a non-existent zero on a 1-10 scale. Now I want to take my comment back – sort of. Let me step back a couple of steps and explain why.

Much of the survey was related to a legal counsel’s perceptions of a lawyer or firm. In that venue, social media is definitely off their radar. Don’t expect corporate legal counsel to want to be friends on Facebook, or on your Twitter feed. That said, social media  does play an important part in their perceptions – but second-hand. Someone they trust – who IS on your twitter feed and is a friend (virtual or otherwise) referred them to you. In other words, wisely executed social media, which builds and maintains your referral network, can be very valuable indeed. So, social media ranks a “0” for corporate counsel. But quite possibly it DID get you the client – because of social media one step removed from that counsel.

“Demonstrated understanding of your business/industry” was the top-ranked issue with 9.6 out of 10 points. Again, I don’t imagine too many legal counsel do raw research on the web to find the right attorney. Rather, they first go to others in their industry, other lawyers, or other related professionals for recommendations. Only then, when they’ve gotten a couple of recommendations, they may do some research into the background of those lawyers. But the recommendation comes first, then the check of history & track record.

Same goes for the issue of “directory listings, traditional or online,” which ranked a paltry 3 out of 10. These fall into the same category as websites. The primary purpose of a website – at least for higher-level attorneys in more complex areas – isn’t so the attorney can be found in a Google search for “securities lawyers.” In fact, you really don’t want that type of call. Rather, it’s for VALIDATION – for a more valid prospect to check out a lawyer who has already been recommended. So, directory listings and websites both aren’t big factors – unless you don’t have one.

Why didn’t “personal contact: visits / phone calls / personal notes” rank higher than a 6? Because of a dichotomy. Those things, done too early in a relationship, are usually off-putting. Done judiciously after a reasonable level of relationship has been established are valuable. So essentially “cold” calls would probably rank in the minuses. And calls, cards and visits from “friends” would rank maybe an 8 or 9.

One item I didn’t mention in my last post was “Direct mail / email communications about a firm” which ranked a dismal 2. Why – or better said, why do you really need to ask? Because we are all so overwhelmed by e- and regular-mail that anything that is not strongly and directly relevant to our needs at the moment is viewed as simply annoying. The lesson here is to handle such communications with utmost care. Does it pass the urgency test – “you really need to know this” or just the our-gency test – “we really want you to know this.” If it’s the latter, ditch it.

Enough for now, a bit more later. In the meantime, I highly recommend you peruse the Altman survey and chew it well.

Tips From an Old Friend In the Field

Long-time friend and client Jason Studinski, one of Wisconsin’s leading trial lawyers, has not only survived but thrived after the Wisconsin “off the cliff” experience when Governor Scott Walker managed to pass tort reform within 90 days of his election. A few years ago, BW (before Walker) I advised Jason in very successfully re-inventing his PI practice. He took that experience into the battle, re-inventing himself once again after the personal injury “cliff.” I recently asked Jason to share his insights on how he did it.

Jason: “There have been seven points that I have identified in the last three years concerning my approach to marketing.”

1. Relationships are everything.  We have worked hard to find new referral sources and shore up existing sources. (Cole: Jason fully understands and wields the power of relationship marketing.)

2. Get free press instead of paying for it.  We are going to be doing more press releases. (Cole: Jason harnesses the daily thirst of the press for copy.)

3. Recycle my marketing materials.  If I do a talk on a subject, I try to find additional venues for that same talk.  I try to turn the talk into articles.  I try to find talk radio for the subject too.  I will be posting all of this on our website as well. (Cole: Jason regularly uses the “three cushion shot,” re-purposing his work to leverage  the power of his marketing.)

4. Make use of part-time folks for purposes of marketing. (Cole: leverage your marketing with systems and people – lots of talent available cheap – if you know how to harness and direct them.)

5. Take advantage of the new visibility opportunities of social media. (Cole: Yup.)

6. Hyper-niche.  General practice no longer exists – even if you say I generally practice personal injury.  Niche. (Cole: two new keys to building a successful practice: NICHE, which allows you to identify and reach a specific TARGET MARKET(key two) efficiently, rather than trying to reach everyone.)

7. Say no. Now more than ever it is critical to say no to bad work or work that simply doesn’t fit.  We have to leave behind a scarcity mentality and adopt more of an abundance mentality.  This means that instead of taking work on that we don’t want or can’t do efficiently, we should say no – and spend that time on marketing and building the business. (Cole: SELECTIVITY means you don’t get overwhelmed with lots of work on low-value matters, so you can spend more of your time in high-value areas. “Busy” doesn’t always equate to “successful.”)

Costco Has Some Wisdom for Lawyers

Costco is one of the nation’s smartest companies. Even their Costco Connection magazine, which began as advertising flack, has evolved into a publication whose every issue provides value and insight to its members (along with a lot of advertising flack).

Last month’s edition has an article entitled “Top Five Mistakes Small-Business Owners Make” that hits attorneys dead center, and re-states some of the key points I have been teaching my clients and firms for twenty years:

1. Not knowing why customers buy
2. Offering a transaction rather than an experience
3. Being the answer (wo)man
4. Allegiance to how it’s done
5. One-dimensional thinking

I encourage everyone to read the Costco Connection article first, and over the next few days I’ll provide my own legal spin on each.

The Legal Balloon Goes Pop

Another story in the ABA Journal predicting the already  in-progress turmoil and diminishment of the legal profession.

One thought that always rattles around in my head: the profit margin of the average business is, in a good year, 20%. Grocery stores operate on a margin of 2-3%. Law firms operate on an average profit margin of 45-55%, yes, even the pretty good local and solos. Let’s not talk about the margins for some PI firms.

The legal profession has never had  a focus on efficiency and process because of its immense “slop” factor. Even poorly-run, inefficient firms could make barrels of money because they were keepers of the secrets, gods of the law. But technology and the web is stealing the bottom layer, at the same time as hordes of young lawyers are wandering homeless, willing to do whatever work they can find for whatever the client will pay.  And you’ve read, I’m sure, about how technology is now being used to do the kind of complex discovery that associates used to do – and better than they did, because computers don’t get tired or distracted – and also the massive analysis of contracts and agreements to identify key issues. Like all technology, such is now being brought down to the retail level and being made available to smaller firms.

Frankly, all of this is why today I am working with more attorneys and firms than ever – not simply on “marketing” or “operations,” but on transformations – rethinking firm directions, structures, target markets and niches.

The profession is in the process of deflating — until 80% or more are operating like businesses, with similar margins. Law firms in general have no idea how to do that, and senior lawyers will be horrified to see their share of that 45-55 percent profit disappearing.

Law is becoming an business, an industry – at least 80% of it is. And yes, one with high standards. But no longer a high priesthood. And only a few sharply focused superstar lawyers and firms will be left making those amazing profit margins, while thousands of others will be joining the middle income brackets, or less.

 

The Walnut That Rules Us All

What’s stopping you from moving forward? Changing firms, hiring an associate, launching a new practice area, firing that assistant, moving to better offices? It’s likely a legacy from our ancient ancestors.

Sitting atop our spinal column beneath our cerebrum is a walnut-sized organ known as the limbic brain. It was there before our ancestors became thinking beings, long before we came down from the trees, and while it has numerous functions, one of its most important purposes was – and is – to keep us from being eaten in the jungle – to keep us alive. You could call it the “watcher,” or even better, the “watch out” organ. It’s hard-wired to be constantly on the watch for whatever could harm us, and in that respect we owe if a debt of gratitude. Because it was, most probably, responsible for the survival of homo sapiens.

But once we developed a brain – let’s say “consciousness” – it went underground. It didn’t disappear – no, still today it’s constantly scanning our jungle looking for potential disaster. But it doesn’t “talk” – it’s not a part of the conscious mind. Instead it communicates emotionally. So when, for instance, we confront anything new or consider anything out of our familiar order, that reptilian brain telegraphs us a message – “watch out or you’ll die!” And we get a lump in the pit of our stomach, a feeling of discomfort, or a vague sense of un-ease, urging us to avoid that new step, return to the fold, step back to the familiar, because the familiar is safer than the unfamiliar – even when we may be unhappy with it.

Why the ramble into phsyiology and psychology? Because, if we remain unaware of that constant “watch out” message being sent to us by our little walnut, we will forever be trapped by its message.

Heaven knows, our offices of today are noticeably devoid of lions and tigers and bears – creatures that could eat us. Very few of our decisions, short of stepping in front of a bus, are today likely to kill us. Make us unhappy, put us in financial distress, disrupt our lives yes, but kill us? Not likely.

The fact is that moving forward – growing, changing, experimenting, taking new paths – is the only road to success in any aspect of our lives. So, that walnut is not always your friend.

But it can’t be silenced, even in the safely OSHA-padded civilization we live in today. It’s hard-wired to do its job. It will continue to shout – at that emotional, unconscious level – those “watch out!” “step back or you’ll die” messages. And if we remain unaware of them, we are at their mercy. They will keep us trudging down the least-risk, most familiar – and often least rewarding – path forever.

If you truly want something better, something different, you need to start learning to recognize the telltale signs of its message – those non-verbal, emotional messages – and move them into the consciousness, your intellectual brain, so you can decide – will this decision truly endanger me? Or is the risk worth the potential reward?

Most people know, or at least have some inkling of, what path they should be taking to better their businesses, their careers, their lives. But the reptilian brain is a coward. After all, “fight or flight” is a true survival trait in a dangerous world. But the path to success almost always conveys some level of risk. Some level of fear. And therefore, some level of courage. And courage flies in the face of instinct.

So, for your consideration I share my best definition of courage: “positive action in the face of fear.”

“Ethics and Managing Business Risk In the Law Firm”

On July 26-27 I’m conducting a very important seminar in Greenville & Columbia, South Carolina. “Ethics and Managing Business Risk In the Law Firm” is a risk reduction program with a major marketing training component, because I believe a high percentage of malpractice and grievance problems occur due to insufficient income, which compromises the attorney’s ability to deliver the highest quality work and can tempt good attorneys to misuse client funds.

A catastrophe or a serious error can completely destroy a legal career. Too many good attorneys have gone down in flames because of lack of preparedness for a disaster(and they come in a wide variety, from natural to employees or even partners), or lack of income. Because of its importance, it qualifies for 3.0 South Carolina MCLE credit hours, including up to 3.0 LEPR credit hours.

If you’re anywhere close, I encourage you to attend. You can register at http://bit.ly/IZRt6n. If you would like a copy of the handout, e-mail me at dustin@attorneysmasterclass.com

Are You Building a Legal Business – Or a Job?

Every successful non-lawyer business transforms itself every few years in its continuing quest for growth. Small firms seldom do.

Law school stunted the thinking of most lawyers by telling them “you’re not a business person – you’re a professional,” inferring that a “business” was somehow slightly dirty and inferior to the professional firm. So most solo/small firm attorneys spend their careers working in “non-businesses.” They treat it like a job – come in, work hard, go home. They don’t plan for growth and change. They don’t plan for attracting new business – another legacy from law school – the “better mousetrap” theory of marketing – just do good work and clients will come. Even growth – hiring staff or associates – is resisted, and usually done only with reluctance, and resentment of the expense.

What’s the distinction?

It’s a job when the owner does all the work and is the center of everything, and when they’re gone, no business gets done.

The “legal business” has a”life” outside the lawyer. First, it has a clearly identifiable operating structure –

    • “Externalized knowledge” – forms, checklists, procedures for all phases of firm operations, from office management to basic legal processes and functions
    • An organized resource base of standardized “boilerplate” documents, letters, etc.
    • At least one well-trained, quality staff member who facilitates and supports firm operations
    • Technology adequate and fully functioning — a true network with server and backup, current (and legal) software and functional contact & client management and/or case management software
    • Effective case, file and client management procedures and systems

Second, it has an active and clearly definable marketing program, consisting of:

      • A complete and maintained client, former client and prospect database
      • A basic marketing plan and list of targeted organizations and activities
      • A documented base of active referral sources
      • An effective website and web presence
      • A documented list of firm marketing activities and organizational involvement
      • Professionally managed finances – financial & billing software, accrual accounting, and a fully functioning collections management system

Every week I talk to skilled, experienced attorneys who are somewhere in the middle or late phase of their careers and are still at the “job” level, who want to transition, sell – or just keep the practice from killing them. I have only two solutions to offer: quit the job, or evolve it into a legal business. A job has little sales value; the legal business has much.

If you’re one of those attorneys, maybe it’s time that you explored going over to the “dark side” – building yourself a business that works for you, instead of just continuing to work hard. The payoff is considerable – now, and in the future, when you’re thinking about transitioning.

Lessons from the Northwest Woods

Every time I travel to teach, I end up learning something. Just returned from conducting “Managing Disasters and Risk in the Law Firm” in Missoula, Montana, and was powerfully reminded of what the REAL legal profession looks like.

The press – including most of the ABA press – is about the high-flyers – the big firms, the big money, the big cases. But 62% of the profession isn’t any of that. they’re one-ers and two-ers, guys and gals just out to make a living doing the unglamorous stuff that makes the country work. Wills, closings, divorces, traffic and DUI defense, property disputes, bankruptcies and business disputes.

The Missoula audiences, and the discussions afterwards were filled with them. But what shined through is something we often don’t notice in the day-to-day scuffle. Commitment. Idealism. Principle. The attorneys I met, young and old, radiated it, almost to a person. Out there where most are in jeans and boots, it’s a little more visible than in the big cities, where most wear the obligatory lawyer garb. In Missoula the realness shows through. The caring about our world and its people. How the next generations will live in the cities and in the environment.

Admittedly, living in that moment-to-moment breathtaking land, much more of daily life -and the practice of law –  is about protecting the environment and a livable future. But what swirled to the top of every conversation was an almost universal commitment to protect – something.

And isn’t that, at the end of a hard day, pretty much what the legal profession is about?