Big Time Competition Just Arrived

The legal marketplace has become extremely competitive.  You know that.  But it just became a lot worse, and you may not yet be aware of the new threat.

A 700 lawyer private law firm in China — Zhong Lun Law Firm — has opened an office in New York.  The firm announced in a press release that the purpose of the office is to help American clients investing or doing business in China, and also to help Chinese clients conduct business and make investments in America.

Two attorneys with degrees from top American law schools — Philip Zhang and T.K. Chang – will head the firm’s NYC office. They will be supported by  over 40 partners in the firm’s worldwide offices who have American law degrees.  Thanks to varying time zones, they will be able to support clients 24 hours a day.

So many of you are reading this and thinking that this is not a threat to your firm, but rather to the huge firms which handle international law.  True enough.  But contemplate for a minute what happens when this foreign law firm starts trolling the waters and catching clients formerly netted by these large firms.  Those firms will in turn need to find a new fishing spot.  Maybe your fishing spot.  And it will take a whole lot more fish of the size you catch to replace the ones they will be losing.

Where will you fish next?

Law Firm Layoffs Continue — Quietly — to the Detriment of Service Partners

At a recent presentation to students at a local law school, I emphasized that law firms are still downsizing, in order to deal with continuing underutilization.  The layoffs are not as spectacular as they were in the past few years, and therefore rarely make headlines like this recent one anymore.  But they continue nonetheless.

I was making this point in order to emphasize the perils of becoming a service partner.  In “olden days” this was often called a “worker bee” partner.  In the Finders, Minders, Grinders scenario, this would be a Minder as a partner, or perhaps Grinder as a partner or associate.  In short, if you are not familiar with these terms, we are referring to an attorney whose career involves servicing clients of some other partner(s).

How does one become a service partner?  Early in one’s career, one is convinced by one or more partners with heavy books of business, that they do not have to do any rainmaking on their own in order to do well, and even to become a partner; just service the partner(s) clients and that will be sufficient.

Many a capable attorney has been drawn by the siren’s call of no marketing necessity, and the ability to do nothing but practice law to their greatest capacity.  Many have made the ranks of partner, although for the majority who worked at firms with non-equity partners, that is the level of partner they achieved.  Still, even without a share of profits, and perhaps no say in management, having the title and a nice compensation package was more than adequate when coupled with the ability to ignore rainmaking responsibilities.

Here’s the problem.  It’s a lie.  Maybe a good-intentioned lie, but a self-serving lie nonetheless.  Because when a lawyer depends on someone else to fill his or her plate with work, in all likelihood that lawyer will eventually have an empty plate, and no justification for continued employment.  In some small percentage of such cases, the service partner may eventually “inherit” the desirable clients when the rainmaking attorney dies or retires.  But that assumes that the rainmaking attorney makes it a point to actively work on succession such that the relationships that matter are passed on to the service partner.  In my experience, that’s not going to happen often.  So eventually, at the point in one’s career when the attorney expects to start working less hard, he or she becomes a liability due to a lack of work, and has to start all over again somewhere else, or as a solo with no business and lots of experience.

Some firms have called me in to deliver the bad news, because no one within the firm had the ability to look the 70+ year old attorney in the face and tell him/her that the firm could no longer economically justify their existence at the firm.  The feelings of betrayal are incalculable.  The attorney feels that the “deal” with the firm required them to continue to fill his/her plate.  Why aren’t other partners, younger partners, feeding them work to make up for the partner who retired or died?  Simple:  they are going to push the work downward, so as to maximize their profit, as well as their control.  They are not comfortable pushing the work up.  They can not critique performance comfortably, and many times, the older partner doesn’t treat their clients with the same significance as clients from the more senior partner(s) who used to feed them work.

Law firms today can’t afford to elevate attorneys to true equity partnership positions unless they are also rainmakers.  So don’t be drawn by the siren’s call of alleviation of rainmaking necessity, to rocky waters where your ship will eventually crash and sink.  Stay the course.  Even if it means asserting your rights to keep some time to work on your own meager clients, as you build your book of business.  Your very existence will some day depend on it.

Something to Brag About – Linked In

I just received a note of congratulations from LinkedIn letting me know I have one of the top 1% most viewed LinkedIn profiles for 2012.  Considering that they just announced passing the 200 million member milestone, I think that’s quite an achievement.  I attribute it to the relentless pursuit of creating and reposting content, which I hope is meaningful and helpful to attorneys and law firm administrators.  In this medium, content is King!  If it gets me an occasional visitor to my profile or web site, so much the better

Teaching an 89 y.o. about Social Media

I’m amused when someone thinks they’re too old to learn to use a computer, social media, or whatever.  One is never too old to learn if willing.  The reality is that they don’t care to learn.  Ok, I get it.  We all have varying interests.  But there are some skills that should be required.  And in fact a lawyer is required to keep abreast of the proper usage of technology in the practice of law, both in service of clients, as well as in the efficient management of their practice.

My 89 y.o. mother was forced to stop working a few years ago when her health took a dip.  She is doing well now, but her retirement remained permanent.  However, her mind is sharp as a tack, and she continues to love to learn.  Her computer skills are decent, and she cruises the internet daily in search of knowledge, and the occasional game of bridge.  She wanted to know about social media, or, as she worded it, “whatever’s taking up so much of your time on that darn computer and phone!”

This past Saturday was lesson one.  We went to her favorite deli for early-bird dinner.  As soon as we sat down I pulled my iPad out of my pocketbook.  (Yes, my pocketbook is that large and heavy!)  I took a lovely smiling picture of her perusing the menu.  I showed her the picture so that she could be satisfied she looked young and vibrant.  A few pictures later and I was ready to post.

After we ordered dinner, I opened Facebook.  I have a personal page, and a business page for Freedman Consulting.  I took her to my personal page.  There she got to read what some of my friends and our family are up to.  She found it fascinating.  Then I created a short post which said “Saturday nite early-bird special at Ben & Irv’s fabulous Jewish deli makes my 89 y.o. Mom very happy.”  I added the picture of her smiling face to the post.  I allowed the locator to capture the location.  And I hit POST.  Mom was astounded by how easy what I did was, and how fast I did it.   At this point our soup arrived.

Before soup was done, we had 2 LIKES and 3 comments.  All of which I shared with Mom.  Two of the comments were from people who worked for me decades ago at the law firm I managed.  Mom worked there in accounts payable.  Another was from someone I went to junior high and high school with, who was just happy to hear I was lucky enough to still have my mother in my life.  (AGREED!)

The instantaneous nature of the communications astounded her.  “Wow, this is way better than email.  I don’t have to think about who to say anything to.  If they’re my friends and relatives, and we’re connected, I can just say what’s going on, and they’ll respond if they want.”  Yes, exactly.  She got it.

Then we want onto my business page.  I wrote, simply “Words of wisdom from my 89 y.o. mother:  at this age buying green bananas is a risk!”  It’s one of her favorite old-people jokes, and she says it every chance she gets.  She was greatly amused.

Within just seconds of hitting POST we picked up the first LIKE.  Again, mom was amazed.  Her quote is getting a fair bit of attention, which I share with her.  She is delighted with each additional LIKE.  So for her sake, I hope it goes viral.  (For her, viral would equate to about 12 people!)

This isn’t really very scary stuff, folks.  Setting up your social media presence takes some skill, mostly in the writing area.  It’s not and shouldn’t be legalese.  There are tons of people out there who you can hire to assist.  Some are expensive, some are not, and price is not necessarily an indicator of quality or skill.   So check references and check their work product.

It takes time for sure, because ultimately it’s all about content. Just having connections means nothing unless you have something to say, which is of value elsewhere. (In this case I’m only speaking in a business context. Personal pages serve an entirely different purpose.) But with the right tools (smartphone and tablet) you can keep the time under control.  I have increasingly translated down-time into productive social media time by using my Smartphone and tablet, and downloading the mobile components of each social media app.  That means that less and less time is taken away from work production. Yet I am creating a larger presence. And that’s a very good thing from both  earning and marketing perspectives.

Bottom line?  No matter what your age, these are tools you should understand.  And they’re not that difficult.  Really.  You might consider them a burden, a distraction, a continual noise droning on in the background.  And you would not be incorrect.  At least while you’re getting used to them.  But they are also incredibly important methods of communications, and sources of information which may be relevant to your clients’ matters.   Ignore them at your own risk.

Newsletters are Only Valuable When They Deliver Timely Information That’s Useful

We’re all tired of getting newsletters containing information which we’ve already gotten from several sources.  If it isn’t timely, don’t bother.  And usually it’s written in unintelligible legalese.  That makes it useless for most prospects and clients.  Unbelievably, most firms still don’t “get” who their audience really is.  They write in a style which only another attorney might understand.  And by the time the editing cycle is done — each attorney in line who reviews, makes stylistic changes to the wording of the person beforehand, requiring the document to loop back for another round – the news is stale by the time it arrives in the inbox.  Yawn.  Yet another viewpoint about a topic that was fleetingly important.  When will firms stop over editing? 

When a firm gets it “right” the difference is clear. A tip of the hat goes out to Conshohocken-PA based Heckscher, Teillon, Terrill & Sager for their timely January 2, 2013 “Death and Taxes” newsletter. Heckscher, Teillon, Terrill & Sager, founded in 1994, provides sophisticated estate and tax planning and fiduciary related services in a personalized setting for individuals, families and small businesses.  They know their stuff.  And their timely news is expertly written.  Plain english.  Understandable, and by that I mean crystal clear. 

My only criticism, and it’s minor, is that their newsletter mentions that all previous newsletters are available on their web site.  I’ve been all over their site, and can’t find them.  So I am hopeful that my link above will work, even though it was a customized link for me.

If you’ve been sending out a newsletter, or are thinking about it, look at this as an example of how to do it right!  Bravo and kudos to HTTS.  And thank you for enabling me to understand the estate implications of the new tax law.  And for getting this information into my hands so quickly.

A Nice “Soft Touch” for Clients and Prospects

It takes a whole lot of “touches” to turn a stranger into a prospect, and a prospect into a client.  And a whole lot more to hold onto precious clients.  Soft touches work well this time of year.  People are in the holiday spirit.  They are feeling sentimental.  So anything which touches the sweet spot of sentimentality gives an extra charge.  I find that the good old-fashioned holiday letter is especially appreciated.

First, let’s start by defining what a “touch” is.  The following are examples of touches.  The prospect / referral source / client:

1. Attends a seminar you present
2. Reads an article you wrote
3. Is given your name by a trusted colleague or service provider
4. Meets you at a social event
5. Meets you at a charitable event
6. Meets you at a political event
7. Meets you at a  sports event
8. Meets you at an industry conference
9. Is introduced to you through a connection on social media
10. Sees your seminar or reads something you wrote on social media
11. Finds your web site in response to a search
12. Sits on a Board with you
13. Serves on a committee or event you chair, or vice versa
14. Hears your name mentioned when a topic comes up
15. Is personally introduced to you by someone you both know
16. Receives a personal communication from you, such as an article which might be of interest with a personal note, or a holiday letter

It can take anywhere from 10 – 17 quality touches to turn a stranger into a prospect, and subsequently into a client.  And then retention strategies must be employed, in addition to doing a “good job” for the client.  Otherwise, your experience may be “one and done” instead of a long-term client who refers others as well. 

As I mentioned earlier, this time of year lends itself to holiday letters to “clients and friends.”  Many of you are thinking that your holiday card is enough.  Yes, a holiday card is nice.  It is more nice when it’s hand signed.  And it’s effective if it arrives early in December, rather than after the holiday.  Yes, I get tons of holiday cards from attorneys which don’t arrive until after the holiday.  Not only do they go right into the trash, but they leave an impression of the law firm as disorganized.  Not the message you want to spend your hard-earned money creating.  However, a card just isn’t the same personal touch as a letter.

I usually only receive two or three each year.  So they stand out.  This year I want to commend Montgomery County attorney David Feldheim for his letter.  Thank you, David, for including me on your mailing list.  While David’s letter acknowledged the reality of a difficult year with many challenges, it also expressed gratitude over professional and personal milestones achieved.  It was a perfect balance that left me feeling like I know David better than I knew him before the letter arrived.  I felt warmed by his upbeat outlook for the future, and appreciation for his sharing his best moments in 2012.  We all love good news this time of year!

Let me take this opportunity to thank all of you for your contribution to a wonderful year at Freedman Consulting, Inc.  I also experienced many challenges, professionally and personally.  But I have come through all in better condition than I was when the year started, and I have all of you to thank for that.  Happy holidays and best wishes for a prosperous new year!!

Most Popular Tweet of 2012

The year isn’t over yet, but it’s unlikely anything will top this one. 

Gaze Into the Crystal Ball at 2013

I would love your perspective on what you think are going to be the top issues law firms and individual lawyers will be wrestling with in 2013.  I’m researching for an article which will appear in The Pennsylvania Lawyer.  I would do it from my own perspective alone, but then again, I predicted the Beatles would never catch on, and since then I have been reluctant to trust my instincts alone to predict the future. 

Of course there will be obvious issues: profitability, marketing, increased competition for clients and even jobs.  And then I am hoping some of you will tackle the more subtle issues, such as what seems the decline of civility, reduction in face-to-face communications, and so forth.

I will gladly provide attribution if you indicate I can quote you, and I choose to do so.   So gaze into your crystal ball and predict what you see coming in 2013, and more importantly, share what keeps you up at night regarding 2013 and beyond.

PA Lawyers Who Made the 6th Annual ABA Journal Blawg 100 List

Thousands of law-related blogs vie for attention from peers and prospects.  Only 100 make the coveted ABA  list each year.  Congratulations to those from PA.  To achieve this level of recognition  requires consistent effort and dedication.  The payoff is a decided elevation in name recognition.  Does it pay off in clients?  Let’s hear from those of you who’ve been nominated. 

How Appealing

howappealing.law.com

As Nicholas Wagoner from Circuit Splits points out, Howard Bashman not only continues to churn out links on this appellate news-watch blog but also points readers to high-quality reporting on the subject. Bashman, practicing out of Willow Grove, Pa., also sends readers directly to federal and state court opinions so they can brush up on the latest appellate news from original sources.

Litigation & Trial

litigationandtrial.com

It’s a close call, but this blog from Philadelphia plaintiffs-side tort lawyer Max Kennerly is more about civil litigation and being a trial lawyer than tort law per se. Lengthy posts dig deeper than the mainstream media into the cases of the day—usually tort cases. But other posts cover First Amendment topics, law practice topics and legal news of import in Pennsylvania.

Philly Law Blog

phillylawblog.wordpress.com

Simple Justice’s Scott Greenfield calls Jordan Rushie and Leo Mulvihill “two kid lawyers with moxie, a sense of humor and a serious focus on what it means to start out in the practice of law.” These relatively new lawyers joined forces early this year to blog and practice in their own small shop. In posts, they (mostly Rushie) log the unwritten rules they are gradually learning from experience and other practitioners about trial practice and finding clients.

Taxgirl

blogs.forbes.com/kellyphillipserb

You’ve got a few more months until taxes are due, but you can read Taxgirl year-round. Philadelphian Kelly Phillips Erb blogs about taxes for Forbes, and it’s not just a personal finance blog; she also reports on political wrangling over tax legislation and tax-related news from the media. If you want to know about the tax woes of Prince and Michael Vick, Taxgirl’s your girl.

Tort Talk

torttalk.com

Daniel E. Cummins, a frequent contributor to Pennsylvania Law Weekly, is an insurance defense attorney in Scranton, Pa. Tort Talk provides in-depth analysis of recent Pennsylvania tort cases and notes CLE events and national tort reform efforts.

You can view the list of all the nominated blogs here, and then click on the provided link to vote for ones  you like best.  Good luck to our PA bloggers.

Law Firms on the Edge

Loans to law firms used to be a “no brainer” until some spectacular failures created losses in the millions.  Now, law firms are watched and analyzed carefully by banks.  An article entitled “Consultant Has ‘Somewhat Robust’ Watch List of Law Firms in Possible Danger” which was appeared in ABA Journal Law News Now, included a video of an interview of Dan DiPietro, chairman of the Law Firm Group at Citi Private Bank.  I was impressed with the interview, and the fact that Dan uses “real” indicators of whether a law firm is in trouble, rather than just focus on the P&L.  He knows that underbidding jobs, partner defections, and excess capacity are all surer advance indicators that a law firm is heading for the fiscal cliff’s edge.  He rightly recognizes that only later do these trends reflect in the bottom line.

His view is that transactional work is strong in a few industries, but otherwise is mostly still flat, causing financial hardship at large law firms.  And that trend will continue for the foreseeable future.  Although his focus seems to be exclusively with “BigLaw” I can confirm that this trend is affecting mid-size firms as well.  Especially because of increased competitive pressure from larger firms now focusing marketing attention on smaller clients than normal, in an attempt to increase utilization of professional staff. 

I convey these increasing competition principles to attorneys by using a fishing analogy.  Think of the BigLaw firms as the deep sea fishermen.  They’re after the big scores.  But when their favorite locales are overfished, they look for new spots.  Next thing you know, they invade the waters formerly favored exclusively by the mid-size firms. Smaller fish, but still reasonable size and quantity.  They make up for the size difference in fishing for greater volume.  So what do the smaller firms have to do, faced with better-equipped increased competition that outclasses their operations?  They come and fish off the local pier of small-firm.   Firms that never expected competition; firms that always felt that larger firms were not interested in their clients.  They are now facing increased and daunting competition. 

When you know that you are or will shortly face steep competition where there was little or none before, it’s time to bring on your A-game.  Excellent service — defined from the perspective of the client, not the law firm — will be the number one determining factor of who gets or keeps the client.   Cost management and innovative pricing strategies will be another.  The days of clients rewarding inefficiencies are over.  If you haven’t taken quality-control measures to leverage your firm with knowledge management and workflow innovations, you will be unable to remain competitive.