Savvy Bloggers Panel

My friend Bruce MacEwen (Adam Smith, Esq.) asked me to join some amazing bloggers on his Savvy Bloggers Panel.  He asked us, “Looking out five to ten years, what will the single most significant change be in terms of how sophisticated law firms (think AmLaw 200) are managed, on the ‘business side’?”  All of the responses are here.  This is what I wrote:

A: I have spent all but two years of my legal career as a solo practitioner or as a member of a two-lawyer firm. Because I’ve never worked for a “sophisticated” AmLaw 200 (or even AmLaw 20,000) firm, I’m afraid I can’t give a meaningful answer to Bruce’s question. Instead, I’ll answer a different question: What is the single most significant change small firm lawyers hope AmLaw 200 firms don’t implement in the next ten years?

The single greatest competitive advantage small firm lawyers have over their big firm counterparts is the ability to quickly adopt and implement innovative practice methods. Though many small firm lawyers have fallen into the billing-by-the-hour business model practiced by most large firms, I would suggest that a significant amount of the alternative pricing of — and value billing for — legal services comes from the small firm lawyers in this country. In my firm, for example, we have completely abandoned the billable hour and have moved to a service-pricing model that gives our business and transactional clients a range of services (including “free” telephone calls) for a monthly fee or a flat per-project cost. In doing so, we’ve managed to make our clients happier, increased our margins, and decreased the time we spend in the office. My greatest fear is that AmLaw 200 firms will adopt and embrace a similar business model.

In contrast to small firms, large firms have an unbelievable amount of institutional knowledge. For any given legal project, large firms have likely completed a similar (or the exact same) task hundreds of times. Their “inventory” of documents, memos, briefs, complaints, and opinion letters dwarfs the resources available to small firm lawyers. My fear is that if a large firm decides to couple that “huge selection” with “everyday low prices,” the WalMartization of the legal business will begin.

In short, if large firms were to apply the “Big Box” retail concept to the delivery of professional services, small firm lawyers would disappear like Main Street retailers when Wal Mart comes to town. Just think, the complex, expensive legal work most big firms seek is only a very small tip of a very large iceberg. Most business and transactional work is of the garden variety. There is no reason a large firm couldn’t set aside a team of associates and partners to do that kind of work for hundreds or thousands of small businesses for a low monthly or annual fee.

Doing quality work is just a small part of the equation. The big firms would have to deliver an improved customer-service experience as well. Instead of locking young associates away in the library for years, have them be the first point of contact for small business customers (even better, hire retired lawyers as “greeters” for new clients). Train these lawyers to answer the basic legal questions on the fly, perhaps by consulting a firm-developed knowledge base, and promise an answer to more complicated questions within a day or so. Guarantee telephone calls returned within 60 minutes – or that month’s service is free. Designate a chief client-service officer, and make that executive’s compensation dependent upon customer satisfaction levels. In short, take a look at what non-legal companies that excel at customer service are doing, and improve upon it.

Finally, to make this model a sustainable one, firms must hire the best and brightest students. Instead of focusing on the top five percent, recruit and hire law students based upon their capacity for creative and innovative thinking, people skills and business acumen. If law firms concentrated on hiring the best lawyers (instead of the best law students) schools may be forced to actually prepare students to practice law, instead of giving them the esoteric theory-based education most law students get now.

Do I think that most big firms will take these suggestions to heart? Not really. And for that I am thankful.

3 Responses to Savvy Bloggers Panel
  1. Traverse City Lawyer
    December 22, 2004 | 8:39 am

    Unfortunately for clients, the true innovators will be in the minority. Fortunately for those lawyers who innovate, the competition bar will be pretty low.

    I once worked for a large auto products defense firm run by Dick Bowman (Bowman & Brooke). Even back in the early 1990s, he was a true innovator. He would go to clients (like General Motors) with new ways for them to save money. He embraced client requests for innovation. Unlike He was true innovator of the business side of law. For all those who said such innovations such as flat fees could not work, he defied them and embraced the change.

    I agree that small firms will lead the way in terms of billing and quality innovations. I intend to be part of that change. I hope other lawyers read these posts and are inspired to challenge the business models which have driven this profession out of favor for so long.

  2. The Greatest American Lawyer
    December 23, 2004 | 7:47 am

    Don’t call me a solo.

    I will not be a solo-practitioner when my shingle [make that a banner] finally gets tacked above my door. I am striking out to be a ‘Non_Solo Lawyer.’

    I am after all already a node in the IP world filled with resources, information and other non-solos. The shared resources among practice groups in a 1000 person mega firm separated by walls, floors and cities are not much different (albeit smaller) than the world of non-solos connected together over IP. Technology is the answer we have been waiting for. Efficiency,communication, outsourcing and vertical specialization are the promise of correctly used technology.

    A pundit asked recently how big firms will evolve over the next decade. Pundits answered in all sorts of ways. But none mentioned that solos tied together offering more options and talent than the largest firms with niche areas of specialization will become new competitors to the largest firms. Non-solo practitioners with controlled overhead, nimble business models based on common principles but each built on the ‘no-boss’ principle. Why would any client want the best lawyer within the practice group in a firm, when they kind have the best in the state, country or world? …..

  3. Evelyn Mitchell
    December 28, 2004 | 10:48 am

    My small professional services company is moving from an hourly to a service-pricing model. Have you written about the process you used in coming up with the list of services you would include (and not include) in the base retainer? How did you come up with the price?

    I’d love to make the transition as easy as possible, but I don’t know anyone who’s successfully done it (or tried to do it at all).

    Thanks!

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