How would your firm be different if EVERY lawyer were taught to think like a rainmaker?
Many law firms are behind the ball in a legal landscape that has been rapidly redrawn (and will continue to be redrawn) by external forces. While law firms were once largely immune to competition, that is no longer the case. Most of the larger firms in the USA have huge pools of partners whose skills are not keeping up with the times. Why do I believe this? Each merger increases the pool of lawyers whose skills are not relevant to what the corporate world needs nor are they responsive to corporate demand for alternatives to traditional law firm relationships. This coincides with a very unusual period in history in which the advances in technology have put a shortened the shelf life of many lawyering skills. Clients need lawyers who know the law AND, just as critically, understand their clients’ business.
Many lawyers are so out of touch with the market that they do not know how Legal Outsourcing is impacting their practice and client mindset. Nor are they responding to the impact of many do-it-yourself (DIY) legal startups that have emerged since 2008 to make the cost of lawyering (such as writing contracts and wills) radically less expensive. This has allowed clients to have many more options for dealing with legal issues that didn’t exist a decade ago. Traditional firms have not developed new business models that place high value on delivering client satisfaction. As a result, there is a disconnect between client expectation and service provided by traditional firms which is eating into firm revenue. Firms that know how to close this gap, like Bartlit Beck, will earn premium fees. In addition, the number of new lawsuits filed in the USA is down by 50% or more. When you add up all the structural forces at play it’s not a pretty picture. The market is experiencing a great deal of change in a very short time. While lawyers are not known for their adaptability or flexibility, there is huge premium paid to those who can create value and adapt.
Your problem may be the pool of partners in your firm that simply aren’t keeping pace. Why not? Most firms are too focused on working with partners to increase billable hours without paying any attention to those adept at creating value.
One of my former clients, Fred Headon, served as president of the Canadian Bar Association last year. Fred was the first in-house lawyer in the history of the Canadian Bar Association to be elected to lead this group (similar to our ABA) so he understands the client’s perspective better than CBA or ABA presidents past. That’s because Fred works in house for Air Canada. He could have chosen any number of worthy issues to highlight during his tenure as CBA President. What Fred urged his colleagues throughout all 10 provinces to focus on is relevance. His candid message to his members is “lawyers are in danger of becoming irrelevant.” All kinds of new services and competition are popping up almost daily lessening the need for lawyers. Making this worse is the profession’s rather obsessive attachment to the billable hour.
What’s a leader to do?
First, they must lead. Most Managing Partners aren’t leading in business development in spite of the desperate need for it. Very few understand the level of value achieved from setting forth clear expectations around relationship building. Every firm needs to take what may seem like draconian steps to ensure the firm’s long term sustainability. Has your firm’s leader set forth the number of hours she expects equity partners to invest in relationship building each week? In those rare firms which have set forth this expectation, very few hold their colleagues accountable for reaching that number. If you set forth an expectation but aren’t willing to hold partners accountable to that expectation it’s the same as not setting the expectation.
Second, leadership needs to make it clear that culture change is needed. How else do you get the message across to your colleagues that they MUST learn more about how business works and how rainmakers think? Develop a Rainmakers Scorecard that properly gauges talent in your firm. The lawyers most in demand these days have business savvy as well as great legal minds. My work with rainmakers around the globe has taught me that the best are obsessive about HELPING THEIR CLIENTS SUCCEED. These lawyers are constantly inventing new ways to create value for their clients that keeps them in demand and makes them more sustainable. This kind of talent is rare in most firms. I’d estimate that no more than 5-10% of your lawyers think like your client’s C Suite residents and also think like rainmakers.
So how does this type of culture change happen?
Slowly… Our recent experience is instructive. We entered into a long-term agreement with a firm to deliver culture-changing training and coaching. Our plan for launching this culture change effort started with a Call to Action workshop on rainmaking, immediate tracking of activity on a “Success Wall” and selecting the top 12 motivated lawyers for coaching. Those being coached began an intensive 3-month primer on the art of networking and relationship building in order to embed the rainmaking tools into their practice. Some of our fee was based on clear outcomes. The three core milestones were creating a system, daily metrics and individual and group business development plans.
The initial group formed 3 new practice groups each of which submitted first ever Group 2015 Business Development plans. The combined projected income of all three would represent a 62% increase in gross revenues over the entire firm’s 2013 revenues!! We selected those new groups that we felt had the best chance of gaining entry to the C Suite and had something unique or innovative about their service offering. We also wanted to see groups that felt they could “productize” their innovative service. The first new practice group had been delivering an innovative type of complex collection work to a Fortune 100 Company for 15 years. This service offered predictive analytics. It generated revenues of $2 million annually, but the lead lawyer had never figured out how to leverage this experience into more revenue from other Fortune 1000 companies. In fact, he had not even created a single lead for this service. Yet, within 3 months of launching this collaborative practice group, they had jointly produced a credible 2015 group business development (BD) plan creating new revenues from this innovative service offering. The early market response to our productizing this service was strong, generating 4 strong leads within the Fortune 1000. One of those leads was a client for over 28 years that had been steadily reducing its work sent to this firm.
The second practice group was called the Impact Practice Group. Its plan had the potential to double firm revenues within ten years and operate with almost no competition because large law firms were so out of touch with market needs. This kind of entirely new revenue stream would provide the firm with a healthy operating capital increase. It would also become the “Think Like a Rainmaker” training platform for the entire firm. This service was also tied so strongly to sustainability that it gave every lawyer in the firm an entry point to the C Suite and large endowments.
The third practice group produced a Private Equity Practice Group Plan that was equally innovative and designed to gain enthusiastic access to the C Suite rather than the legal department. Why don’t more law firms aim their plans at the C Suite? I’m not sure. One reason may hark back to Fred Headon’s message about relevance. Law firms are more comfortable talking to in-house lawyers than senior executives and most firms have ZERO incentive for learning or are disincentived from learning how to communicate comfortably with the C Suite. It’s my view that firm leaders must make learning HOW to approach the C Suite a top strategic priority by 2020 or the disconnect will grow even larger.
All three new group plans were asked to include these “radical” elements in their BD plan:
- Group originations that encouraged collaborative selling rather than individual effort alone.
- Each plan had to spell out projected revenue numbers for 2015, 2016 and 2017
- Each group was required to develop an innovative product that was based on fixed fees or “productized” for C Suite needs.
- Each group keeps its own P&L so the group members can begin to think like the C Suite and get monthly reports
- Each group was expected to further embed the Rainmaking Toolbox into firm culture
- Each group was expected to create a group sales pipeline that the entire firm could follow along.
So how did this new blueprint turn out?
Several factors got in our way. The appropriate people may not have been selected to champion and succeed in this new rainmaking mindset. The billable hour mindset was still firmly entrenched within this firm’s culture. Any time you change culture the entrenched interests cause a rubber band effect, stretching and then pulling back into the old shape. We started out with top leadership support but it waned as the long arc of culture change didn’t produce enough short term results for them to want to continue. Long term investment mindsets don’t mix well in law firm cultures (one nasty byproduct of “billable hour disease”). Incremental changes were made but this firm, like many others, has a long way to go in creating wholesale culture change. Is your firm ready for a new blueprint for culture change?