Law Firm 4.0 Blog

The Secret of CRM Success in a Law Firm - Guest Post by William A. Smith

Marketing technology implementations are challenging in a law firm for a variety of reasons.  The demand for trusted data for use by lawyers exactly when they need it is increasing, and the pressure on marketers to deliver just-in-time, relevant information and intelligence is greater than ever before. 

I recently spoke at the Lex Mundi 2012 Americas Regional Marketing Roundtable about Experience Management, which I believe is one of the hottest areas on a chief marketer's hot-plate.  Like CRM, which William Smith discusses below, experience database implementations are among the most challenging of all marketing technology initiatives - not because the technology is hard, but because gathering such data in a law firm culture is.  But the challenges and obstacles are far from insurmountable - I'll dedicate my next blog post to this.

The Secret of CRM Success in a Law Firm

Guest Post by William A. Smith

Fifteen years ago, if you asked someone at a law firm  what  is “CRM”  the responses could have been anything from a blank stare to  “isn’t that what our eyes do when you’re in a really deep sleep?” Today, client relationship management has become an integral and vital part of business organizations. Whether a law firm, technology company, or retail conglomerate, the ability to understand the value of your client/customer relationships-- who your clients are, how  the clients view you, benchmarking and monetizing the  value of those relationships-- has become a
core part of business management.

When I was child, my father would always say “It’s not what you know, it’s who you know.”  That axiom is true in life, politics and business. It is the very heart of social networking. Businesses have recognized the value of this “who knows whom” paradigm, going as far to seek out and develop technology solutions to help define:

• what makes a suspect
• what turns it into a  prospect
• how to develop it into a customer/client, and most importantly,
• how to retain the customer/client.

There are numerous success stories out there where companies have experienced market share and revenue growth by utilizing this “business intelligence.”  Client relationship management(CRM) technology has enabled organizations to develop the key performance indicators and marketing strategies that speak to their sweet spots  and answers the question “how does our marketing investment  translate into revenue?”

So why do law firms have such a hard time with CRM technology?  You would think that it would be a perfect fit –a business model that leverages relationships, and a technology solution that helps to sort it all. Regardless of the brand of CRM, most firms have a love- hate relationship with their CRM platform. Love the concept, hate the execution. 

On one hand, today’s firms are much more techno-savvy than just a few years ago-- better  equipped to handle new technologies that seem to spring up daily. They are also better at understanding the concept of integrating systems and knowledge management—leveraging the information in proposal systems, experience databases, time and billing systems and personal information systems.

But on the other hand, the cleanliness of concept crashes head-on into the chaos of implementation. In general, a CRM platform’s greatest strength is also one of its greatest challenges. These systems can be quite flexible, integrating with other enterprise systems to the point where  implementation and maintenance can be quite a handful. Typically CRM systems do not act like a “normal” database. The data is constantly changing and updating (minute by minute) due to user interaction, and if it integrates with other systems (HR and experience databases, time and billing, proposal centers, etc.), it is not only communicating with those other systems but, in a perfect world, it might even update or be updated by those other systems.  

Ok, so if these platforms can do everything except make frozen margaritas, why aren’t they being used to their full potential?    CRM platforms tend to much more flexible than the environments in which they are placed. Face it --- you have one platform that can talk to time and billing, HR, email, Internet, intranet, and with the right tools can even send and manage its own e-communications.  All of these individual systems have their own individual experts.  If a firm is lucky enough to have someone with CRM system background, that person often does not have expertise in those other aforementioned areas.

Technical teams are not “marketing-y” enough and marketing staffs are not sufficiently “techie.”  In other words,  an IT department may have the expertise to keep all of the firm systems up running as well as application/reports development, but they are not going to have the resources available to focus solely on the needs and nuances of a CRM system —reports, KPI, user acceptance,  workflow, etc.  Marketing may have unique expertise in the “use cases” and managing the CRM system, but often they will have no knowledge of the platform’s impact on the firm’s other resources and bandwidth, let alone any challenges with system integration and data management/analysis.

And let’s not forget about the attorneys. They want client information, market intelligence and any other data that will translate into billable hours or bring in the next big client and matter.

Each group is concerned about doing what they need to do—attorneys are about attorneying, marketers are about marketing and  IT is about IT-ing. However, working in these separate silos illustrates a weakness in the business intelligence game plan.  If these groups cannot share information, find redundancies and provide common solutions that move the entire enterprise forward, you wind up with bad intelligence, wasted efforts and more problems than solutions.

But there is an untapped resource available to firms—if developed and utilized it can give an organization quite an advantage. Firms that have a person who understands CRM from the technical, marketing, legal and business analyst perspective have the upper hand here. The ideal person (or persons) is someone that understands how CRM works in our legal environment—that has experience benchmarking, managing the project and implementing the CRM solution efficiently and effectively from start to finish.  This is someone who is capable on the technical side; who can walk the IT walk, as well as speak to the end user experience.

In addition this person can provide key business analysis and intelligence rather than just throwing reports over the wall.  Want to know the return on investment of lawyers’ travel and business development meetings, or what practice groups’-client relationships generate the most revenue? Curious about whether your e-communications  are reaching your desired audience? Do those communications strengthen or weaken your bottom line? This person can find those answers.

Unfortunately most firms do not have such a person – they are hard to come by. Typically, there are several people who can provide different bits of information—but rarely do any of them have a single, holistic approach or share the same perspective.  The fact that this person is unique shouldn’t deter firms from having a goal of finding or developing someone with this combination of skills, experience and viewpoint—a valuable resource that could pay dividends for years to come.

William Allen Smith is the former VP-Marketing Information Systems, Walkers Global LLP, and can be reached at [email protected] or 877-696-3480.

 

How law firms can grow revenue in a more client-friendly way

In a catch up conversation with Ed Schecter this morning, we discussed a subject about which we are both passionate:  how law firms can strategically grow revenue.  This isn’t a new conversation at all.  In fact, it’s a tired one that we’ve both had countless times in our careers.  The economy is slowing and mid-sized and global law firms in the U.S. and abroad are feeling it.  Double-digit revenue increases and profit margin upswings are unlikely over the next unpredictable number of months.

But firm leaders are still buoyed by the possibility of revenue generation above and beyond what they reported last year.  Here is a quick rundown of the most popular options you have available:

1. Work harder
2. Raise hourly rates
3. Improve client relationship management so you are mining all the opportunities at existing clients (a/k/a/ form client teams)
4. Hire laterals with large, portable books of business
5. Conduct business development training
6. Shed practices that are producing lower margin work
7. Shed lawyers and staff
8. Reduce overhead with wholesale cost-cutting
9. Merge and/or acquire

But for #3 above, there is no mention of clients – the very people that partners are hoping will write bigger checks to their firms.  And, other than mergers and acquisitions, there is nothing very strategic about most of these approaches, even though most mid-sized and global firms have all of them in their quivers – and at any given time, have embraced every one of these tactics as the solution to declining or flat firm revenues.

Here is one initiative that is not on the list. It is strategic, has significant revenue generation potential and can effectively influence all of the nine opportunities above.  It’s an initiative that marries people, process and technology and focuses all the attention and effort around two things:  saving lawyers time and making them more money.

(For several years, I have described what I do in that very nutshell.)

It’s a fact that the requests for proposals (RFPs), RFIs, pitches and other materials have skyrocketed in the last four years.   Marketing and business development professionals estimate the increase as four to five times higher today than in 2008.   As a result, AmLaw 100 and 200 firms are taking a fresh look at how they respond to the volume, the demand for different types of information, and practically, how it gets out the door to the prospect or client.

Proposal center and experience management projects are typically initiated by the marketing/BD/proposal team, yet often controlled (management and budget) by the IT department who are, arguably, the most removed from the buyers of legal services and the lawyers who hope to serve them.)  Consequently, these project planning sessions are too often focused on the tactical features and functionality that a particular proposal writer or business development manager wants, rather than a strategic discussion about how the firm can compete better, improve its service delivery, get closer to clients and win more often.

How does knowing what buyers of legal services want from their lawyers influence the proposal center and experience management planning process?  Consider this:

1.  Content is the most critical aspect of any proposal.  How compelling and relevant is your content around legal project management in the M&A industry, for example?  And how does it differ from your LPM content for patent litigation?  Clients say they want LPM because it has the potential of streamlining workflow, creating efficiencies and saving them money.  How are you responding to this requirement, and anticipating their next one?

2.  Experience is the most vital subset of content, but most firms struggle with how to find it, parse and sort it, and package it.  Given that buyers of legal services want to know what you’ve done, for whom you’ve done it and what you can ultimately do for them, having ready and easy access to the most germane experience should be your top priority.  In an earlier blog post, I noted that the ownership of experience management has moved from the IT department up through the firm and is now on the desks of your executive committee members.  Effectively gathering, managing, manipulating, leveraging, overseeing and packaging lawyers’ experience is one of the most strategic and client-friendly things you can do, and it will increase revenue over time. 

3.  The proposal template has significantly evolved over the last five years from a simple firm-logo-in-the-header Word document to a complex, magazine-style PowerPoint or Word document that presents the firm’s material in a graphically pleasing, visually striking way. The firm’s branding is assured, and the firm is differentiated simply because many of its competitors are way behind this design curve.  The template is created to best showcase what clients want to know about you. 

4.  Of your X-number of proposals that you’ve submitted since the first of the year, how many have you won?  How many times was your patent litigation team for the pharmaceutical industry featured in proposals that had a China component in the last 12 months?  How many proposals resulted in a formal beauty contest or in-person meeting?  Of those, how many did you win?  When you lost the litigation work to a competitor firm, how many times in the last year did you lose to that firm and that lawyer?  (Don’t you think that lawyer would be an ideal lateral candidate?  You can calculate with some certainty the dollar-amount of the business you’ve lost to him.)  Why did you lose?  When you won, why did your competitors lose – what was it they did that you should know?  (If you conduct a formal win debrief, your clients will tell you.)

If you can’t answer these questions within seconds (yes, seconds), take a step back and view your proposal center/experience management people, processes and technologies more strategically.  Every answer to every question is business intelligence that you can use to craft smarter responses that can drive future revenue.

These are just four aspects of a comprehensive proposal and experience management solution that are designed around your revenue and growth goals, and making your firm more client-friendly; but, there are many others.  Such are the planning conversations (among others) that should dictate features and functionality, and guide the design of your tools and processes. 

Content Pilot’s “CP Proposal Pilot” and Branding Services Wins Big in the National Law Journal “Best Of” Awards Competition

May 30, 2012 --DALLAS, TEXAS - Content Pilot LLC announced today that CP Proposal Pilot and CP Deals and Cases won the top award, “2012 Best Proposal Automation and Experience Management Solution,” in NLJ’s first nationwide survey of lawyers and other legal industry personnel.  The National Law Journal created the “Best Of” awards to spotlight the industry’s leading technology solutions, consulting services in various areas, such as branding and design, public relations and crisis communications, as well as other categories, including education and banking services.  Content Pilot also placed in the “Marketing and Branding Services” category.

“We are so thankful to our clients and other industry leaders who voted.  It is a great honor to be recognized as a leader in these competitive peer categories – categories that are strategically important to law firms.” said Deborah McMurray, founder, and CEO and Strategy Architect of Content Pilot. 

CP Proposal Pilot and CP Deals and Cases have been in demand by AmLaw 100 and 200 firms since 2008, and especially post-recession as firms are streamlining processes, improving infrastructure and having a rifle-shot focus on business development success.  McMurray states, “In the last 18 months, Proposal Pilot has been the first choice among AmLaw 30 firms for pitches, proposals, RFPs and experience management.  We help these firms save lawyer time, leverage firm intelligence and ultimately make more money.”

About CP Proposal Pilot and CP Deals and Cases:

CP Proposal Pilot is a web-based system that is fully customized to how each client manages pitches, proposals and RFPs. Unlike Content Pilot competitors, the methodology and process comes from an intimate understanding of what buyers of legal services want from their lawyers and what lawyers want from their marketing/business development team. The tools integrate with time and billing, CRM, a firm’s document management system, and other databases and systems.

About Content Pilot:

Content Pilot LLC (www.contentpilot.net) is a Dallas-headquartered marketing strategy and technology company founded in 2006 that serves leading law firms and other professional services firms across the U.S.  For more information about Content Pilot technologies that drive business:  Contact Deborah McMurray at 214.351.9690 or 972.897.4921 by phone or email at [email protected].

Experience Management - It's been elevated to mission critical.

I have had more than a dozen conversations with AmLaw 100 and 200 firm leaders starting in Q4 2011 and continuing through January 2012.  They identified cross-selling and revenue growth as their top priorities for 2012.

As resolved as they are about that, they also admitted that they aren’t entirely sure how to increase cross-selling success.  After all, lawyers have tried cross-selling since my first in-house legal marketing position in 1987 (and likely before then) – and at its most successful, it has had tepid results.

We all understand the obstacles to cross-selling.  A well-conceived experience database can’t fix all of them, but done right, it can fix these two age-old complaints:  “I can’t cross-sell, because I don’t know what my partners do.”  Or, they say, “I don’t trust the data.”

One more thing on the minds of managing partners that causes them to lose sleep at night: How can they fully integrate the lateral partners they’ve hired over the last year (read: so they can be profitable as quickly as possible)?  In 2011, we saw 60 law firm mergers, up 54% over 2010.  Every one of the partners who changed firms brought Excel spreadsheets and other documents filled with matters they’ve done, hoping their deals and cases would quickly be incorporated into the new law firm’s experience coffers.  This past January, in less than a two-week period of time, five U.S. mergers were announced.  If we keep up this pace, we’ll have more than 130 mergers this year (source: Altman Weil).

In the short lifetime of these experience management tools, they have gone from being an IT-only project, then they moved to the knowledge management team, then on to the marketing/business development department – and now, to the law firm’s executive office. We hope this means that the project teams will get the resources (people, time, technology) to do them right.

Results from the ILTA Experience Management Survey

To prepare for a January 31, 2012 International Legal Technology Association (ILTA) webinar on experience databases (It’s worth listening to the recording of the entire webinar on the ILTA website - with Lisa Simon and Kathrine Cain, it was excellent. ), we conducted a short survey.  We wanted to know:

• Where are firms in their experience database life cycle? Of 48 respondents, 29% were in the implementation stage, 23% were in each of the planning or maintenance phases, 17% were upgrading/replacing their systems, and 8% were still at the very beginning – thinking about it.
• Will they build it or buy one from an outside vendor? 53% said “Buy” and 45% said, “Build.”  The “Buy” group noted primarily two companies as their vendor, Hubbard One and Content Pilot each received seven votes, two other companies were mentioned once or twice, and several said they were still investigating options or “unsure.”
• With what systems will they integrate?  “Financial” had 70% of the responses, with conflicts and records receiving 23% and 30% respectively. “Other” received a high percentage of responses, and included systems such as CRM, website, ERM, proposal tools, document management systems and HR databases.
• Who is the content owner of your experience database?  Marketing and business development were the two largest groups, scoring 77% and 40% respectively. The IT department only received 4% of the votes and knowledge management (KM) received 6%.

Is this a big firm only initiative?  It doesn’t have to be, but 63% of the respondents were in firms 350 lawyers and larger.  37% were in firms 50 to 349 lawyers.

Your Tool is only as Good as the Content

Given the promotion of experience management from back-office-tactical to strategic, what’s the best way to ensure the trusted nature of your content?  One over-arching answer is to start your planning in the right place.  (That sounds like an over-simplification, but we regularly see firms with messes on their hands because of no strategic understanding of the project and its objectives, and ultimately poor planning, start to launch.) Whether a brand new system, a refresh or upgrade, or just adding new practices – start with these questions:

1. What data gathering processes and workflow already exist? 
2. What data are already accessible in documents or other databases? How clean is it?
3. Who will input new matters and how often?
4. How many fields per matter are too many – and therefore a barrier to entry and use?
5. Post-launch, how much lawyer time will be required for each new matter?
6. Who is the ultimate owner of the database and who will ensure the ongoing efficacy of the data?

Knowing the answers to these questions before you start building the tools is imperative to your successful launch and the ongoing vibrancy of your system.  The answers will dictate your strategy and the choices you make.  After launch, it’s often too late.

I can't stress enough that successful technology implementations are equally about people, process and technologies.  Often in experience database projects, strategy is missing entirely, and people and process get short shrift. 

What’s Next?

Given that it’s taken us a good 10-20 years to get where we are today, what’s next?  All the lawyers and marketers to whom I’ve spoken about this agree that for cross-selling success to improve, lawyers must learn to strike while the iron is hot.  Meaning, when lawyers are with clients and prospects at a conference, at lunch or having a drink, or riding together in a cab and the prospect asks, “Do you have anyone who does XYZ in the software industry?” – the lawyer must be able to facilitate a relevant conversation around that topic.  Right then and there. 

Waiting 24-48 hours for responses to the in-office email, “Does anyone handle XYZ in the software industry?” is not going to grow firm revenue.  The opportunity is long-gone.

Therefore, trusted mobility is next.  Look for a mobile app that integrates with your experience database and that is instantly accessible on your Smart Phone or tablet.  Clients and prospects think this is cool; consequently lawyers will think it’s cool, too.  Learn more about Content Pilot’s mobile app, Velocity™.

I also predict greater investment in these tools by law firms (in people, processes and technologies), and that there will be increased pressure from the top rung of leadership for lawyers to use them.  Hopefully daily.

The best description of "strategy" I've read in years

I am having lunch today with the "3 Geeks and a Law Blog" trio - Lisa Salazar, Toby Brown and Greg Lambert.  To prep, I am climbing into their award-winning blog of the same name and came across this description in a post by Greg.

He's talking about another blogger at his firm, King & Spalding, Richard C. Hsu, who writes his own blog, "The One Page Blog."

As the set up to this great strategy description by Hsu, Lambert writes this:

Richard discusses his thoughts behind why he is blogging in the section of his blog titled "Lawyer's Confessions" where he admits that, although he is a super techie (CalTech grad and experienced programmer), he has found himself somehow "out of touch" with the new generation's mode of communications. He reminds us that, despite our experiences, there seems to always come a day when someone younger comes in and makes us understand that in order to "get with it" we'll need to climb outside our own comfort zones. For Hsu, that meant playing to the strengths that comes with age/experience, and that is understanding strategy.  He says it best in his explanation of technology and technology strategy:

And here is what Hsu writes:

On the other hand, technology strategy is not technology.  It is strategy.  And strategy’s half-life is more like plutonium:  what worked a thousand years ago works today, and will work in a thousand years....  Invest in understanding strategy now, and you will understand it just as well — probably even better [in the future.]

It's true!  Law firms too often assume strategy discussions (and strategic planning) are a necessary evil, led by expensive consultants who leave you with nothing more than a weighty document that isn't actionable. 

And strategy is almost non-existent in most major tech project implementations in law firms - from websites to proposal centers, experience databases, mobile apps, client extranets, intranets, CRM, KM and more.  Every technology initiative in your law firm should have a clear strategy component.  It's the strategy that will drive goals, objectives and measurements of success.

True, some consultants do leave you with fat stacks of paper. But if firms viewed strategy as a combination of vision, ideas and business transparency - and then took fear out of it, these planning sessions would be infused with hope and life. And your tech project implementation would be successful, and your internal and external teams accountable for meeting your stated goals.

And, like Hsu says, strategy has a shelf-life like plutonium - or the last Twinkie you ingested.

 

 

 

 

 

A Toast to Differentiation: What law firms can learn from Blue Hill at Stone Barns

(Guest post by Lise Anne Schwartz)

Regular visitors to this blog know that Deborah is a connoisseur of fine food, wine and restaurants. So when she visited New York last week, the pressure was on to find a unique dining experience for us to share. I took her to Blue Hill at Stone Barns, a restaurant on a working farm 30 miles from New York City.

Blue Hill gets virtually all its produce, meat and poultry from its own four-season farm and other local organic farms. It is among the pioneers of the locavore movement in the Northeast, where food is sold and served as close as possible to its source.

Like top law firms, fine dining establishments sell a pricey product in a crowded and largely undifferentiated market. But some manage to stand out and earn a reputation for adding value to the dining experience. We think Blue Hill’s success in this regard holds a few valuable lessons for law firms.

1. Looks count.  Our first steps into the dining room at Blue Hill told us what to expect. The room is large, with dark beams and trim against a high-peaked ceiling, heavy cream draperies, and a huge wooden farm table showcasing grown-on-the-grounds ingredients. Thick white linens, small votives and white plates dress the tables. Against this clean, elegant backdrop, creative vegetable presentations shine (smoked kale, roasted baby carrots and tiny, jewel-like radishes “growing” on a miniature twig tree, anyone?). The restaurant’s promise is immediately clear—unpretentious, rustic elegance, creativity and appreciation of simple, fresh ingredients.

A law firm often makes its first visual impression through its website. What kind of experience does your firm’s website promise? Does it effectively preview what it’s like to do business with you?  Is the voice consistent – do you sound like “one firm?” Can visitors easily navigate where they want to go? Does your design showcase important content or overwhelm it?

2. Get personal.  Blue Hill has no set menu; rather, the chef writes an individual menu for each table (and sometimes each diner) based on your food preferences and what’s fresh on the farm. All you have to do is answer a few questions and then decide whether to order five, eight or 12 (yes, 12!) courses. We diners feel like we are eating food thoughtfully prepared by a personal chef, not generic dishes the kitchen puts out on autopilot – day after day, week after week.

Good legal service is the same way. Sophisticated law firm clients, like sophisticated diners, come in with an idea of what they do and don’t want.  If I tell you I don’t want sweetbreads, I won’t be happy if you serve them to me, no matter how well-prepared they are.

On the other hand, if you give me a meal I could have created at home, I’ll feel like I didn’t get my money’s worth. Successful lawyers really hear what the client wants—and then use it as a jumping off point to provide better service and results than expected. That’s the kind of value-add that makes clients line up to pay premium prices.

Deborah adds:  Speaking of getting personal, let’s talk about written proposals and pitches.  The volume of requests in 2011 as reported by marketing and business development professionals was up two to four times over 2009.  This upward trajectory is expected to continue.

Creating a “one-size-fits-most” pitch packet is not getting personal.  You can bet that it will not make your prospect feel special, important or well served by your firm.  Marketers know this, of course; the key is convincing your lawyers to step back and design a presentation effective and tailored enough for the prospect to say, “You understand me.  I’d like to hear/see more.”  There are technology tools that automate the process so you can focus your time and attention on being the right strategic fit for your prospect.

3. Give a little bit.  Before we began our parade of courses (we chose five), the chef treated us to three separate amuse bouches—small appetizers meant to welcome diners and awaken palates. A particular favorite was tiny beet and goat cheese sliders served on top of a tall crystal stem filled with sesame seeds. The presentation was wonderfully simple and elegant.  We felt like valued guests, not people the restaurant was trying to milk for money.

What can you give away, either through your website or face-to-face? A training course? A quarterly status meeting? A set of form documents?  Everything you give away should preview what it’s like to do business with you.  Set the stage for what’s to come—awaken the palates of your prospects and clients.

4. Educated cross-selling.  Cross-selling is the oat bran of today—the magic bullet, the cure-all for hard-to-grow law firm business.  Everyone struggles with it, and sadly, it is frequently ineffective.

Blue Hill had something to cross-sell us, too: a series of wines perfectly paired to each of our five courses. But unlike most law-firm cross-selling, the server who artfully pitched us the pairings knew a lot about what she was selling. She had visited the vineyards (from France and Germany to Italy and California), seen the growing methods, tasted the products and talked with chefs and sommeliers about how the wines would enhance the sum of all the flavors. (Are you familiar with biodynamic wine growing methods?) 

We know a good bit about wines, but because of her soft-handed style, she enhanced what we knew.  She didn't make us feel like neophytes, yet we felt smarter at the meal's conclusion than when we arrived.

Imagine if lawyers knew this much about their partners’ practices before trying to cross-sell them. You’d have a trusted source actively participating in the sale instead of just saying, “You should meet my partner so-and-so; she really knows real estate.” Building—and using—an experience database for your firm can make this kind of cross-selling raw material a lot easier to come by.

As you can tell by the photo above, the educated cross-selling worked. We ordered, and loved, the wine pairings.

Differentiation works, whether at Blue Hill at Stone Barns or in your law firm.  It just takes care and diligence to make it pay off.

Lise Anne Schwartz is a New York-based copywriter and the President of Bold Language.  She is a former SEC lawyer and pastry chef.

"2012 CFO Outlook" - A survey by Merrill Lynch and Bank of America - What does this mean for law firms?

Now that the holidays are behind us, let's get down to some serious business - and some prognosticating about what law firms' business and financial lives might be like this year.  The bottom line is that the CFO respondents (600 of them from corporate America) are concerned and have low confidence in the economy - in spite of their prediction that corporate revenues and hiring will increase.

A post on the BofA website says: 

In its 14th year, the survey finds that despite lower economic confidence and an expanding range of concerns heading into 2012, U.S. CFOs are largely holding firm on employment and hiring projections, research and development spending, new borrowing, and other activities that drive both day-to-day operations and future growth.

So, the news for law firms who serve these corporations is largely good.  But, communication around fees and project management and scope will need to be clearer and more transparent than ever. 

The Summary Report includes the following key findings (the full report and a webcast won't be available until February 1, 2012):

1. More than half of the 600 executives expect revenues to grow in 2012.
2. 46% expect to hire new employees and 48% expect employment levels to remain the same.
3. More than 75% surveyed said their R&D levels are the same or higher than their pre-recession spending.
4. More CFOs say that more credit is available now and fewer expect the cost of capital to increase.

So, why are the CFOs seeming gloomy?  Here is what the survey found:

Senior financial executives are more concerned about more factors that could affect the economy than in any previous point in the CFO Outlook survey’s history. Heading into a critical election year, it’s telling that 70% of CFOs cited concern about the effectiveness of U.S. government leaders and 63% cited the U.S. budget deficit. In addition, 60% listed healthcare costs, 58% listed unemployment levels and 55% listed consumer confidence as concerns. By contrast, last year’s top concern regarding the economy was healthcare reform, chosen by 54% of CFOs.

The 2012 survey captures views across five key categories:

1. Economies and Sectors
2. Performance and People
3. Financing
4. Mergers and Acquisitions
5. International Trade. 

The Executive Summary briefly summarizes the findings in each of these five areas.  Below is a chart of their greatest economic concerns:

The table below (also taken from the Executive Summary) compares how the CFOs felt in 2011 to the 2012 results:

 

The secret to becoming a rainmaker - Part 3 (Or, the "Triangle of Success")

In Part 1 of "The secret to becoming a rainmaker," I shared the one thing that I think makes the greatest difference in lawyers who are effective business developers.  Here is an excerpt of that post:

This post isn’t about telling you how to sell.  It’s about me finally articulating the one attribute that stands out among all others – the one attribute that enables lawyers, regardless of practice area, industry strength, personality type, communication style, law firm or law school credentials, to consistently and effectively develop client relationships that pay off.

Here it is:  Stop thinking about yourself.

The "Secret to Becoming a Rainmaker - Part 1" was that easy.  Now here is Part 3.

Remember the old product/service project triangle: "good - fast - cheap:  pick any two" -?  In another back-of-the-napkin, Pinot Noir-fueled discussion last Thursday with client and friend, Mark Shank, we discussed a "Triangle of Success" for lawyers (all professionals, really - anyone who sells their brain power and experience - including marketers and business development folks).  The traditional "pick any two" doesn't work for professionals who want to fast-forward their careers.

The "Triangle of Success" principle is nearly as simple as "Stop thinking about yourself."  For the highest level of success in the formative years of your career, professionals must equally embrace each side of the triangle.  The three legs of the triangle are:

• Relationship development
• Reputation management
• Service delivery

What we see here is an equilateral Triangle of Success.  When one's career takes off, it's natural to adjust the focus of the triangle - perhaps, as we learned in 10th grade geometry class, to an isosceles triangle, where you invest more heavily in two sides that are of equal length, with a third side that is shorter.  Another option is where all three sides are of unequal length, as illustrated in a scalene triangle.  But - for your success trajectory to continue throughout your career, you must invest something in all three areas.

Professionals who are especially technically proficient in their subject matter dismiss relationship development as too "touchy-feely."  They often don't respect those whose greatest proficiency is establishing rapport and trust among prospects and clients.  This group struggles to recognize that without clients, no law firm would exist. 

Certain lawyers build their reputations through credentialing activities, such as speaking, publishing, blogging or tweeting.  They are known for being experts in an area, but they are sometimes not regarded for their exceptional service delivery.  Other practicing professionals may regard this group as "self-promoters," spending too much time on credentialing and not enough on clocking billable hours.

And the final triangle-leg is made up of those who are strong legal practitioners, who are the happiest when they are closed in their offices tackling a client's issue.  This group often relies on others to bring in the work - and they would feel challenged by having to give a speech or develop lasting, meaningful relationships with people who could be clients.

The need for balance is obvious, but too many professionals are - (I'm going to say it) - slackers in the areas that sit just outside their comfort zone.  Investing in the Triangle of Success takes commitment early in your career, similar to the discipline we have when it comes to exercise or eating right.  Don't just invest in the areas that are easy for you - equally invest in all three. 

When you've attained a level of success, you can adjust your investment so that it is tailored to what you enjoy most.

How does the "last mile" relate to lawyers' website biographies?

The "last mile" is a supply chain management term (and a single released by hard rock/glam band, Cinderella, in 1989, and also a play and movie from the 1930s) that refers to a product's last mile before it gets to market and on store shelves. Apparently, it's the hardest and most expensive leg of the process.  According to Wikipedia, "This last leg of the supply chain is often less efficient, comprising up to 28% of the total cost to move goods. This has become known as the "last mile problem."

Tom Fishburne, a self described "Marketoonist," created this cartoon that reminded me of lawyer website biographies.  (You can subscribe for free to his weekly marketoon at www.marketoonist.com.)  His cartoons reach more than 100,000 marketers each week and have been featured in The New York Times, Fast Company and Wall Street Journal.

Law firm marketing and business development professionals struggle to inspire their lawyers to regularly update their website bios.  While this cartoon is applicable to a branding campaign or website as a whole, I want to narrow the focus and ask you to consider how buyers of legal services are evaluating their short list of professionals. 

Here is how the lawyer selection supply chain works: 

1. Buyers seek a referral from trusted colleagues or friends.
2. They make a short list of three to six lawyers to review.
3. They Google the lawyers' names to see what surfaces on page one or two of results.
4. Then, these buyers visit the lawyers' websites and biographies.
5. These buyers frequently print the bios and lay them side by side on a conference table and continue their evaluation, filtering out those lawyers who aren't meeting their criteria.
6. The buyers may call one, or perhaps two or three of the short list lawyers to interview.
7. They choose one lawyer over the others because the references were strong, the experience that the biography presented was current and relevant to the buyer's need, and the telephone or in person connection and communication between the lawyer and the client was warm, engaging and on-point.
8. The right lawyer gets hired.

Here is how the lawyer biography supply chain works on the law firm side:

1. The firm begins a website redesign or refresh.
2. Marketers contact the lawyers about updating their bios for the new website.  Perhaps there is a new bio format, so the old bio material must be (and it should be!) reorganized to better fit with today's scanning readers with short attention spans and viewing on mobile devices.  Lawyers are given a deadline of two months before launch.
3. One month before launch, only one-quarter of the bios have been updated, another quarter were sent back with "no changes" written at the top, and the final half of the lawyers have been radio silent.
4. Two weeks before launch, in the middle of beta testing, marketers continue to hound the firm's top professionals.
5. The site is launched with less than half of the bios updated.
6. And they stay that way for weeks, months or years.
7. The buyer of legal services views the bio of the lawyer referred to him and dismisses the candidate as "not the right fit."  The bio is dated, the photo is ten-years old and the lawyer insisted on being referred to as "Ms. So-and-so" throughout the bio instead of using the more accessible and familiar first name.

For the lawyers who refuse to update their bios, you aren't hurting your marketing team (although their frustration is mounting), you are hurting your chances of competing and getting hired.  If your bio is dated, bland or sounds like 1,000 other litigators, employment lawyers or corporate/securities/M&A lawyers, you will quickly be dismissed by buyers of legal services as irrelevant. 

For those lawyers who do update your bios, but don't focus on what truly differentiates and distinguishes you, you may or may not get the chance for an interview.  Why take that risk?

For the small  handful of you who write an overview that is compelling, up-to-the-minute with regard to the work you are doing today, and include representative experience that answers the questions:  what have you done, for whom have you done it, and what can you do for me -- you have the greatest chance of rising to the top of the thousands of lawyer website biographies. 

And, bonus, your Google search results will be more relevant, too.  Google typically pulls the first 150 characters in a lawyer's bio for the search results.  "Marty" Truss (James M. Truss) is a litigation partner at Cox Smith in San Antonio.  Here is the overview for his bio. 

And here is the top Google result when searching for "marty truss."  This is how Marty is known, and wants to be known.

Lawyers, please update your bios every quarter - refreshing them with new, more current keywords (think of the search terms your target buyers would use to search), recent publications, speeches, board appointments, and most importantly, experience.

More than 50% of your website visitors view the lawyer biographies.  And typically, these pages are viewed more frequently and longer than other pages on your website.  Website biographies are consistently the most important business development tools that lawyers have today.

 

Martindale's Counsel to Counsel Forum - Managing Investigations, Compliance and Audits in Today's Tough Markets

I have facilitated Martindale Counsel to Counsel forums all over the world since 2000. These discussions are "best practice" exchanges by corporate counsel and law firm lawyers about a particular topic.  Consistently, they are the best received CLE programs by buyers of legal services and senior law firm partners of any I've seen. 

Yesterday's program in New York was a popular one - it always is, given the regulatory climate in a post-Enron world.  All particpants (17 corporate counsel and 6 law firm partners - 2 each from co-hosts Andrews Kurth, LeClair Ryan and Morvillo, Abramowitz) were well prepared and shared a 5-minute best practice based on real-world experiences.  We heard war stories from the trenches of legal departments about compliance concerns, enforcement challenges and next steps in their thoughtful compliance planning and handling.

I thought I'd include my introductory remarks here - it's a good primer on what's on the minds of sophisticated buyers of high-end corporate legal services.

A special thanks to my co-chairs for the program:  Vanessa Vargas-Land, Vice President and Assistant Compliance Officer, Archer Daniels Midland, and Gregg Formella, Senior Attorney, American Airlines.

And thanks to our co-hosts and partners from Andrews Kurth:  Spencer Barasch and Roscoe Howard

Shareholders from LeClair Ryan:  Carlos Ortiz and Michael Ruggio

And Principals from Morvillo, Abramowitz:  Lisa Prager and Robert Anello

Here is my introduction:

Lexis Nexis/Martindale has sponsored Counsel to Counsel forums around the world since 2000, and I have facilitated many of them since the very beginning.  The purpose is to bring corporate counsel and law firm lawyers together in open and candid discussions around many of the hottest issues and concerns of the day.

How many of you are new participants to Counsel to Counsel?  As you see with our table set-up today, this forum is the antithesis of a “talking head CLE.”  The best Counsel to Counsel forums are those where participants are interactive, open and candid.  So, get comfortable, ask questions, share opinions—even when you disagree.  Don’t be shy about sharing your war stories and experiences.

Having said that, today’s forum is “off the record.”  Some of you will be contacted about sharing your best practice as an article.  And others will be posted in the legal articles database at martindale.com.  But nothing will be done or shared without your review and approval. 

Now, let me briefly set the stage for our discussion.  In my research for today, I found several conditions and developments that impact corporations and how they do business in the U.S. and abroad.

1.            Since 2007, regulators and commentators have touted each year as a new record-breaking year for FCPA enforcement.  2010 saw a record-breaking year in corporate fines and prison terms for individual defendants.

The number of FCPA enforcement actions increased by 85% from 2009 to 2010.

As of June 30 this year, 17 actions have been filed, and 2011 is poised to yield a record number of trials and defendants to challenge FCPA charges.  Even Corporate America is playing its part, with the first ever FCPA trial of a company.

2.            The monetary penalties assessed against corporations in 2010 were also astounding in their magnitude. In total, companies paid a record $1.8 billion in financial penalties to the DOJ and SEC in 2010.  Of the top 10 biggest FCPA settlements of all time, eight of them were reached in 2010.

3.            In just one 2011 case (and there are several  notable ones, including IBM and Tyson), in April of this year, Johnson & Johnson agreed to pay $77 million in combined penalties related to improper payments to government officials in Poland, Greece and Romania.  According to every report I read, Johnson & Johnson was very forthcoming, and admitted responsibility for its actions and subsidiary company actions in these countries, as well as in Iraq.

4.            In countries with socialized medicine, every doctor in the country may be considered a government official. Doctors’ research payments or even travel and entertainment payments to induce product or pharmaceutical purchases may violate the statute.

5.            As troubling as the government actions, financial penalties and reputation damage are to  a company, there are new civil threats from enterprising plaintiffs seeking to capitalize on FCPA misconduct:  derivative claims, securities fraud actions, tort and contract law claims, employment lawsuits, and private actions under RICO statutes.

6.            The FCPA Law blog regularly publishes the “corporate investigations list.” The last list I could find was published in January 2011 - it listed 71 companies (nearly all of them issuers) that are known to be the subject of an ongoing and unresolved FCPA related investigation.  With social media and blogs, it is nearly impossible to keep such investigations quiet, even in their earliest stages.

7.            Dodd-Frank introduced more than 2,000 pages of new regulations and provisions.  As a result of the new Whistleblower rules under Dodd-Frank, companies are fearful of more of whistleblowing occurring, more lawsuits, more fines and a much higher cost of compliance.  The new rule doesn’t require Whistleblowers to report violations internally to qualify for an award under the SEC’s program.  How do you establish a spirit in your company that encourages your employees to invest in your compliance protocols before they go to the SEC?

In most cases, the SEC will not consider information that was obtained through a communication that was subject to the attorney-client privilege.  This is one more reason  to ensure that privilege isn’t needlessly eroding in your companies.

A final note about Dodd Frank – it included an obscure provision called “Conflict Minerals” where U.S. companies have to report whether certain minerals, such as gold, are used in their products – even trace amounts – and whether those minerals came from the Congo and adjoining countries.  Even though it isn’t illegal to use them, companies will be required to audit and report on where the minerals they use come from.  The idea is that shareholders and consumer groups will put pressure on companies to stop using anything from the Congo because of its human rights violations.

It isn't finalized yet, but nearly 6,000 U.S. companies are expected to be affected by this provision as of Jan. 2012.

8.            With the blurring of one’s personal life and professional life – because of the ubiquitous nature of social media and proliferation of Smart Phones and other devices that we use in the workplace – corporate compliance and controls have the potential of eroding every day. 

Security experts say that employees are easy targets for security breaches because we readily and enthusiastically post volumes of information about ourselves and our jobs online.  Blogs and social media sites like LinkedIn are very useful sites for criminals – since many of us share details about our roles at work.

 In May, a Hewlett-Packard executive accidentally exposed the company’s cloud computing strategic plans on LinkedIn by updating his profile with details about what the company was building.  Bloggers and probably competitors quickly noticed it before the executive could take it down.  This was an executive!!

9.            How many of you use Gmail for your personal email?  In June of this year, Google shut down a phishing attack that targeted the personal Gmail accounts of what it described as senior U.S. Government officials, Chinese and South Korean political activists and others who were communicating through Gmail instead of through their official, secure email accounts of their organizations.

10.         The challenge for compliance officers and the legal department is that social media is inherently decentralized.  Social media amplifies and broadcasts our personal bad decisions and our bad judgment.

11.         Carrying and using SmartPhones and tablets carries the risk of introducing unknown security holes inside the corporate networks.  And senior executives in your companies are often the most guilty of leaping on the latest gadgets! 

12.         As we all know, when it comes to compliance, people are the weak link in every organization.  Another thing that well intentioned employees do is share their corporate login and password with employees inside the company – after receiving an email requesting them.  Hackers have figured out how to have such a request appear as though it’s coming from an internal, trusted account, such as the IT dept.  The answer from a compliance standpoint?  Have a policy where employees NEVER share their login credentials and passwords with anyone in your company.  Not even your CEO.  If you get such a request – notify the appropriate IT compliance person.

13.         Gregg and others of you will talk about the increasingly important role of IT in your compliance program.  I’m wondering if you have gone so far as to have IT security experts assigned to the compliance dept?

14.         In 2010, 662 organizations publicly disclosed data breaches – and the number is likely much higher because countless companies don’t disclose it.

A final thought before I turn it over to the co-chairs:  Challenging times in the world of business signal an opportunity to rethink things—from ethics and compliance guidelines to business models.  For the in-house/outside counsel relationship, there is an opportunity to get creative, focus on cementing the best relationships and locking in value, and look at how outside services are priced, handled and managed.