11/22/04 11/22/04

To work at home -- or not?

From Arnie Herz’s Legal Sanity comes this link to an ABA Journal article titled, “Home Alone. Using Available Resources, Working at Home Can Pay Off,” that suggests that working at home is a viable alternative for some small firm practitioners. However, this BBC News Article seems to point to an opposite conclusion. According to a study quoted in the article:

Less than 50% of people who work from home are satisfied with their home office space, with a quarter of them forced to work in the kitchen, 37% in the spare room and 10% "hotdesking" it to anywhere they can find. [In fact over] three-quarters of home workers have found themselves working in a cramped and cluttered space, and over 50% of those surveyed said they did not have enough room to work effectively.

What does this all mean? Make sure the productivity gains you experience by losing your commute or gaining convenience are not offset by a bad work environment. Just because something feels like it is more productive, does not make it so.

11/22/04 11/22/04

More on Pricing Legal Services

I recently signed up for the free MarketingExperiements.com newsletter. According to the site:

MarketingExperiments.Com is a member of the MEC Labs Group and a division of Digital Trust Inc. MEC is an online laboratory with a simple (but not easy) five-word mission statement: To discover what really works. The Lab tests every conceivable marketing method on the Internet.Our experiments range from three to eighteen months, and they involve budgets ranging from $4500 to $50,000+. We are often surprised, and sometimes embarrassed to discover just how much we DON'T know about marketing.

In a recent experiment, they worked with a leading psychiatrist and author to determine how to maximize online sales of a new book. They tested three price points ($7.95, $14.00, and $24.95) and measured the effectiveness and total revenue produced by each. Their results are a bit surprising. The lowest price point generated the second-lowest number of orders and the lowest amount of total revenue. The middle price point generated the highest number of orders. The interesting nugget (for me at least) was that when the book was priced at $24.95, the smallest number or orders still generated the highest amount of revenue. In fact, both the $14.00 and $24.95 prices generated more than twice the revenue of the lowest price.

While the lesson for lawyers might not be to change your billable rate to $1,000.00 per hour (and only work one hour per day), it is interesting to note that lower prices (rates) don’t necessarily translate into more sales (clients). We’ve been playing with some pricing strategies here at my firm for our value-based billing mode and I’ll share some year-end results with you soon. Until then, the MarketingExperiments.com newsletter is a worthy read. I highly recommend checking it out yourself.

11/22/04 11/22/04

Baseball's Lessons for Lawyers

Great post by Jeff Angus over at Management by Baseball about how the Minnesota Twins have incorporated a new innovative way to price their season tickets by using flexible vouchers. In short, Twins fans can buy vouchers for game tickets (each priced $2.00 less than normal ticket price). If a fan buys the minimum of 40 vouchers, they can go alone to 40 games, take a friend to 20, three others to 10, etc. Each time the vouchers can be used for different seats, on an “as available” basis.

When I first read about the Twins’ plan, I started to think about how lawyers could use a similar voucher plan in their offices. We are talking to a few of our clients about offering estate-planning vouchers they can pass on as gifts to adult children, friends, parents, employees, etc. Each voucher is good for two wills, and powers of attorney for health care and property. We’ll offer the vouchers at a slightly lower cost than our normal flat rate for the services. In the event a person needs more significant estate planning, we’ll apply the value of the voucher towards our normal fee for that service. If this year’s trial run goes well, we will offer all of our clients the vouchers beginning next year.

At the end of his post, Jeff sounds like he is speaking directly to lawyers, when he shares some of his own experience with “out of the box” thinking:

It's amazing sometimes how rigidly a seller will adhere to a delivery scheme through inertia, even when the model has always been broken.

I worked for a swell software company where one of the highest-margin products it had was a product that could not be used by a single user. The fewest people this networked program could use was two. The buying of a single unit would only be for an upgrade (where an existing set of users needed to add another user). Dozens of times every week, technical support received phone calls from people who had just bought one unit and couldn't do anything with it (imagine instant messaging where you're the only person who has it).

Resistance to change was overwhelming. They had always sold 1-packs. It didn't matter that a 2-pack required only another registration key (a slip of paper with another number on it), and would therefore cost about 15 cents more to make while nearly doubling the asking price, never mind it would cut down on angry or confused (or both) customers and those customers' wrath directed at clueless resellers and our own technical support. And this was software, not something hard to package like a power-drill or a workbench or a piece of furniture -- it was a book, a pamphlet, a card with a number on it and a disc. No-one needed to design new packaging.

It took over a year to even get the idea discussed. Ugly, but not unusual.

Decisions as to what to put in the box usually stem from earlier wisdom that was actually wise. The wisdom then loses some of its value over time, but systems and the people who run them fall into patterns they don't want to change.

The Twins woke up and tried something different from what teams have been doing since their executives started working in baseball.

Shouldn't you?

Indeed.

11/19/04 11/19/04

Drum Roll Please!

I've done it -- I've found someone silly enough to pay me for doing what I was previously doing for free. As of today, I have become an "affiliate" of the Law.com Blog Network. The [non]billable hour is joined by The Volokh Conspiracy, May It Please The Court, I/P Updates, MyShingle.com, Jottings by an Employer's Lawyer, and Crime and Federalism (click here for a link to all of our bios). I'm honored to be in such fine company and hope that my affiliation with the folks at Law.com profits everyone.

I have a lot more going on here too. In the next week, I'll be putting up a "user's guide" to this blog, and will rerun some of my favorite posts in a new "Best of the Blog" category.

On the Five by Five front, I've been getting the submissions for my Law Student Edition and can't wait to share the five ways each contributor would change legal education.

I also hope to have an announcement soon on the innovation conference conference for lawyers.

Finally, I'm rolling out a new project here called "Building the Perfect Firm," where I'll draw upon the hundreds of ideas I've compiled in this blog, along with substantive suggestions from non-lawyer experts in marketing, architecture, client service, psychology, business and innovation to put together a blueprint for how law could be practiced in a fulfilling (and hopefully profitable) way.

Well, that should keep me busy for the next few months. If you are new to reading this blog, welcome. If you are a long time patron of t[n]bh, thank you. And if you are reading this post in your aggregator, click through to my site from time to time to look at the pretty ad. Grace needs a new pair of shoes.

11/18/04 11/18/04

The Psychology of Pricing

I ran across this interesting article in the November 2003 edition of Design:Business newsletter. Though written for design professionals, there were some really good insights into the pricing of all professional services. Just some snippets:

Although there is no question about the overall importance of pricing to the success of a design business, overemphasizing it is a common mistake. Many designers assume that pricing is a very important factor in success, which it is not. Surveys of buyers of professional services consistently show that cost is never even among the top reasons clients give for choosing a supplier. Typically, the surveys show that cost ranks around tenth in importance. It is always lower than quality, service, dependability, flexibility, convenience, etc. Creative Business knows of no similar surveys specific to the buyers of design services, but our experience among better clients with good projects is that cost ranks fifth in order of importance. Ahead of it are “chemistry,” or how much the client likes the individual(s) he or she will be working with; degree of relevant experience; portfolio quality and creativity; and service. Also relevant is that the more creatively challenging the job and more sophisticated the client, the less importance cost takes on. And vice versa. Additionally, our experience is that skill in pricing ranks fourth in importance among the reasons some studios and freelances are more successful than others. Again, not number one. Higher in importance are the desire and motivation to succeed, the everyday working procedures that have been established, and marketing programs and efforts.

Understanding the psychology of design pricing is important because most clients accept that quality, results, and price go hand in hand. The higher the quality, the better the results, the more something is thought to cost. This belief is especially relevant to the design market because clients place orders without seeing what they’ll be getting. They make purchasing decisions on the anticipation of quality and results based on little more than samples of similar projects and their confidence in a firm or individual. Similarly, once the work is produced it will usually be subjectively evaluated before any market feedback is received. Here, too, client satisfaction depends mostly on perceptions of how well they believe their needs have been met. Aggressive (low) pricing in such situations sends the wrong signal. It can lead clients to expect a reduction in quality and results. It can also lead to a destructive pricing cycle: the more price-competitive a design firm is seen to be, the less their work will be valued; and the less their work is valued, the more competitive they will need to be in the future.

11/18/04 11/18/04

Five by Five - Law Student Edition

By Monday, I'll have up the next Five by Five. This time, I've asked five law student bloggers to answer this question: What five things would you change about legal education? On the roster:

Ambivalent Imbroglio

Three Years of Hell to Become the Devil

Sugar, Mr. Poon?

Jeremy's Weblog

Buffalo Wings and Vodka

I've also asked my pretrial students at Washington University Law School for their responses. If you've got some good ideas, let me know.

11/17/04 11/17/04

Testing New Design

This is just a test. The new design will be complete tomorrow, along with a bunch of new posts and some really cool news. Thanks for your patience.

11/17/04 11/17/04

The Dream Firm

Jessamyn West at librarian.net has this post about her dream library. Two of her suggestions:

We'd be open when people wanted to use the library, not just when librarians wanted to work. How would we know? We'd ask them. [some surveys: here, here, here and here]
In my library, we'd fix your computer for you. We'd work the information booth at your event. We'd answer your questions any time and any place, not just when you come to us and wait at the reference desk for us to be free. We'd save your time, even if it sometimes meant sacrificing our own.

I've been thinking about how the dream law office (or any professional services firm) would look and operate -- if it were designed by clients. Any ideas?

11/15/04 11/15/04

My Tablet's Back!

I wrote here about my Tablet PC being stolen. It turns out that I had left it at a client's office right before I ran to St. Louis (where I thought it was taken from my car). I had asked that client if he had seen my computer and he said no. Last Thursday, he brings it by my office. Apparently, his wife had picked it up and -- assuming it was his -- brought it home from his office. After about a week, he asked her whose laptop bag was in their foyer. When she said she thought it was his, he remembered my inquiry. Problem solved.

11/13/04 11/13/04

Under Construction II

New redesign is coming next week.

11/13/04 11/13/04

Help Wanted

The Anonymous Lawyer has one spot left in next year's summer associate class. As with all of AL's posts, make sure you read the comments. Hurry up and apply!

11/10/04 11/10/04

Under Construction

I'll be making some big changes here at t[n]bh and ask that you cut me some slack with the design experiments. If you are reading this blog via RSS, continue to go about your business.

11/9/04 11/9/04

Clutter is Never Free

Knowledge@Wharton has this great article with a conversation with one of the authors of Conquering Complexity in Your Business. Some excerpts:

Complexity is a systemic effect that accumulates over time. So while you may have a perfect portfolio today, your customers' tastes are changing—what's good today is probably not good tomorrow. Many businesses respond by expanding their portfolio and placing more goods or services on the market. Each innovation may represent a source of customer value and profits at the time that it is introduced, but unless you have some mechanism for rebalancing that portfolio, complexity will creep into your processes, tax internal systems, and drive up costs. Even worse, you might strangle growth in the name of pursuing customer value.

Also, it consumes resources and can impede growth. If you have a portfolio of 4,000 products, you're spreading your marketing resources across all those products, when you should be concentrating on core brands. We also find in our work that companies with a complex product or service line have a significant gap in their understanding of what truly drives their profitability. What's important is that companies understand the relationships between complexity, cost, efficiency and growth, which we captured in a concept called the Complexity Equation. Management can then make rational decisions with these relationships being explicit, instead of implicit or unknown.

As a general practitioner, this article hits a bit close to home.

11/9/04 11/9/04

Worthwhile's Thought for the Day

This great quote from Richard Koch (author of The 80/20 Principle) comes courtesy of Worthwhile:

People put average effort into too many things, rather than superior thought and effort into a few important things. Pursue those few things where you are amazingly better than most others and that you enjoy the most.

11/9/04 11/9/04

Budgeting for High Risk Ideas

I've written before about how much I like the Report 103 Newsletter from the JPB Group. Today's issue (check here in few days for the archived version) suggested implementing a High Risk Idea Budget:

Some radical new ideas are so obviously brilliant that you can implement them and watch the money roll in. But these ideas are few and far between. Most radical ideas are highly risky. If they work, they might put your company way ahead of the competition and establish your firm as a market leader; or they might slash 25% off your operational costs; or they might cost your company an arm and a leg. Unfortunately, a lot of companies do not implement their hottest ideas precisely for this risk factor. Although everyone in the company loves the idea, the CFO reviews the numbers and says it is just too risky to contemplate.

Clearly, of course, no company should put the entire enterprise at risk. However, every company can and should establish a high risk budget for implementing radical ideas. This might represent five percent of the operational budget or 25%. It depends on the company and the market.

By defining a part of the budget for risky projects, you give your company an opportunity to implement the most exciting ideas. Many will fail. But a few will work. And a small number will be real winners that will repay your high risk ideas budget many times over.

Moreover, granting an employee – or a team of employees - a portion of your high risk idea budget can be a powerful reward (see previous story on rewarding innovation).

The primary point of resistance many firms seem to have to dumping the billable hour is that it may turn out to be unprofitable. Why not set aside a certain number of clients (or an attorney or two) to implement some alternative billing strategies?

11/9/04 11/9/04

Dumping the Billable Hour (Again)

Jay Conrad Levinson and Michael W. McLaughlin, authors of Guerilla Marketing for Consultants write about one of my favorite topics: abandoning the billable hour. Some excerpts:

It’s time to dump the hourly rate once and for all.

To begin with, the hourly rate is a totally bogus number. It’s computed using very broad (and sometimes flawed) assumptions about a firm’s costs, volume and profit. And, many consultants toss those assumptions out the window and discount their hourly rates when they believe doing so will improve their chances of winning a project.

By charging a client for time alone, you completely undermine the expertise you’ve spent years building, and you limit the profit you can justifiably earn. Dozens of pricing alternatives exist that don’t rely on the hourly rate. Look for alternatives that lead to discussions with clients about the outcomes they want to achieve.

When pricing your next project, think results, not effort.

Thanks to Dana VanDen Huevel for the link.

11/4/04 11/4/04

The History of Ideas

I talk a lot about ideas here, and even sold quite a few at my garage sale a few weeks back. I wonder what I would have gotten for this, the Dictionary of the History of Ideas. Set aside a few hours and peruse this unbelievable digital version of Philip P. Wiener's book from the early 70's, "The Dictionary of the History of Ideas: Studies of Selected Pivotal Ideas." Really great reading.

11/3/04 11/3/04

My Tablet's Gone

My Tablet PC is gone. I think it was taken from my car in St. Louis last week, but I didn't notice until the next day. Insurance company won't replace without a police report -- the problem is, though I believe it happened when I was getting gas (and all of my windows were down), I can't say for sure. I've written here and there about how crucial the tablet has become to my practice and now it is gone. Anyone out there have an extra Tablet they'd like to give me? I'm really bummed.

11/3/04 11/3/04

Five by Five - Stephen M. Nipper

Our final contributor is Stephen M. Nipper, a registered patent attorney working in Boise, Idaho with the firm Dykas, Shaver & Nipper, LLP and author of the Invent Blog. His contributions:

What five things would you change about IP law and/or practice?

[What started as "five things" has quickly digressed into a rant to my fellow practitioners about how they need to change THEIR IP practice. Hope you all don't mind.]

1. Embrace the future. Lets face it, the Internet is changing the practice of intellectual property law. Many of the businesses we used to rely on for patent copies, copies of file wrappers, etc., have had to evolve or die as more and more of the USPTO's data and knowledge is made available on the Internet for free. Do you really think that is the end of it? Do you think that it is not going to affect IP attorneys too? I'm afraid that you've got a big surprise coming. It is time to start thinking outside the box about how we provide our services, how we bill for them and how clients find us.

2. Due to the Internet, people now have unfettered access a litany of information about the practice of intellectual property law. Because of that, they are expecting more and more from us. Gone are the days when "the only thing my client needs to know about the law is my phone number." Instead, attorneys need to realize that that your new client likely knows more about IP law than the average general practitioner does. You should treat them with respect. Work with them on projects instead of for them, make yourself more available to them, visit their office/factory/shop. Quit biting the hand that feeds you.

3. You are your brother's keeper. One of the things IP practitioners tend to do is ignore our responsibility to spend time educating non-IP attorneys as to the basics of IP law. Lets face it, our colleagues (understandably) aren't typically very good at issue spotting when it comes to IP issues. The result is countless pain and suffering (and much gnashing of teeth). Solution? Go teach a CLE to general practitioners, blog, write articles for your local bar journal, start writing a newsletter, etc. You will be rewarded.

4. The Princess Principle. At my house we joke about "The Princess," often referring to my daughter being demanding (or when said jokingly to my wife, often followed by me sleeping on the couch...but I digress). Too often I see IP attorneys (especially the patent attorneys) strutting around like they are somehow better than other attorneys.like they are the Princess and everyone should worship them. I can especially see the Princess Principle when I look at how non-IP attorneys treat my staff (usually with respect) vs. how IP attorneys treat my staff (rudely, impatiently, etc.). Just because our IP attorney ancestors narrowly defined who could practice IP law doesn't make any of us The Princess. Get over it, you were a geek who happened to go to law school and has benefited from the "System." Realistically, we're all more like court jesters than princesses.

5. Billing. What would a post on Matt's blog be without talking about billing? Intellectual property practitioners need to work harder at providing alternative billing methods to their clients and need to be more responsive to billing issues in general. Why? Because the Internet is dramatically changing both the quantity and quality of competitors who are now only a few clicks away from your clients. Clients are becoming less and less inclined to merely get annoyed when they have issues with one of your invoices or your prices, and more inclined to start looking for your replacement. One thing you should remember about that replacement.it is just as likely to be a firm in a distant, smaller metropolitan area as it is to be a firm down the street. The Internet has really opened up the practice of IP law, making firms in smaller towns (with less overhead) able to provide competitive services to clients all across the nation. If you don't take care of your clients.they (we) will.

Now that I have totally annoyed all of my competitors. I'm out.

11/3/04 11/3/04

Five by Five - Doug Sorocco

Up next is Douglas Sorocco, partner in the Oklahoma law firm of Dunlap, Codding & Rogers and author of the PHOSITA blog. Doug's Five Ways he'd change the practice of IP law:

1. Everyone needs to take a deep breath regarding software patents. The end of the world is not near, the seas are not going to be flooding our coastal cities and software patents are not stifling development of new and useful tools and processes. Software developers are simply going to have to become better business people and accept that nothing is free and patent clearance searches must be made an integral part of the development process.

2. Continuation application practice must be reformed to require the update of the "best mode" of practicing the invention every time a new continuation application is filed. A loophole (according to my opinion) in continuation practice is the fact that anyone can file as many continuing applications as they want and never have to update the "best
mode" in the application. If a continuation application is filed several years after the parent application, it is likely that the best mode of practicing the invention is woefully out of date. U.S. patent policy of limited monopoly rights for full disclosure would be better served by updating this crucial piece of information every time a new continuing application is filed.

3. Clients and businesses see the patent lawyer as integral to the business model and growth strategy. Any patent attorney that doesn't request a business plan or meeting with management to discuss the implications of intellectual property filings should be disbarred. Do not pass go. Instantly disbarred and perhaps made to wear a chicken suit as future employment.

4. All law and graduate students should be required to take a general intellectual property overview class as part of their first year curriculum. Our society and economy is quickly becoming knowledge based. Every attorney (and business person) should have at least a fundamental understanding of the legal protections underpinning such fundamental aspects of day to day business and technology life.

5. Significant and substantive reform of the U.S. patent office procedure for patentees, lawyers and patent office employees. The current system is broke and the pressures put on patent employees are absurd. As applications become more complex, Examiners are not being given the appropriate amount of time, training and resources to complete
their jobs efficiently and expertly. Fee diversions must be stopped and quality made the "gold standard" rather than production and counts

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