More on the future of law

Another thought provoking post by Jordan Furlong in Law 21 on How to solve the legal employment problem. It makes for uneasy reading,

We’ve been bingeing on reports of law firm layoffs for a few months now, and there’s every reason to think those reports will continue through 2009. But we haven’t spent as much time looking at the big picture: there is a growing population of lawyers whose jobs are gone for good, and a larger group of lawyers whose underlying business models are fast becoming obsolete. . .

During the recession, we’re all going to learn to do more with less. Cost-saving efficiency and “good-enough” quality will be the twin standards by which purchases of all kinds will be made, including legal services. Lawyers have never needed to be efficient and they’ve always preferred an exhaustive answer to an adequate one; they’re not going to adjust easily, and some won’t adjust at all. Clients also will need their lawyers to focus more on high-value services that demand advisory skills and judgment, and less on than repetitive tasks that require boxes to be ticked off and i’s to be dotted. That’s going to be more than a business model challenge; that’s a new way for many legal professionals to view themselves and their functions, and again, some simply won’t have the wherewithal to meet the new expectations.

In particular read the take on the problem for legal education: “churning out lawyers suited for 20th century practice”.

The long view

I posted some weeks ago about cultivating a habit of optimism: something which is increasingly difficult as the news gets worse, but stick at it. Keeping the morale of the team up should be one of a law firm leader’s main responsibilities.

Another responsibility, and this has to be linked in to that optimism, is to hold onto the long view. Short term solutions often seem to offer immediate relief to problems, but there is the very real risk of missing the wood completely as you concentrate on the trees.

Business planning in uncertain times is an article by David Hunt in Smith & Williamson’s Summer 2008 Professional Practices News was spot on. In it he identified two principal tasks: to reign in costs, and to seek opportunities.

Although the first of these is, in large part, obvious, Hunt adds a number of key riders

service delivery (i.e. people) cost, so one way of cutting costs is to get rid of them. This is being done across the profession as law firm after law firm puts in place redundancy programmes. But, as Hunt notes, “change (redundancy programmes) may be and are expensive and can have a long term impact on a firm’s culture”. I would add that you need to know what you want to be as you come out of the downturn is also important.
cutting discretionary spending offers an immediate opportunity to limit costs, but (again Hunt) “marketing, training, recruitment and capex become ever more critical in a downturn as they aid recovery and future expansion.”

And as for seeking opportunities, take the long view: “thought should be given to future as well as current revenues”. So consider

lowering prices to win work (although I would add the caveat that there is a risk that teaching your client to buy on price makes only one party, the client, happy, and may have a long term impact on the relationship
re-evaluate business development activity: build new contacts or markets and strengthen relationships with existing clients (back to Nick Jarret-Kerr’s admonition, which I linked to in my post Spending time wisely, back in early July, to get even closer to clients.

Thought for the week ahead

From a March 2008 Stefan Stern FT column Desperate measures for latter-day Willy Lomans, in which he quotes Neil Rackham, (in his words, ‘the author of the seminal Spin Selling and reliable deliverer of common sense’)

In hard times, people make the mistake of trying to sell to more people at less intensity,” Mr Rackham says. “But what actually works is selling to fewer people in more depth. The same approach that works in good times works in bad times.

Vanity publishing sucks

All too often law firms’ websites (invariably still brochure-ware, however fancy) and their updates and bulletins are more about the law firm and its lawyers, and less about the target audience. At best this is an irritation, and at worse a definite turn off. I know, as I regularly receive unsolicited updates from accountants and property advisers: most of them, if soft copy, are now routed seamlessly into Junk Mail (I have only recently discovered this very useful application in Outlook); if hard copy, they find their way unread into the recycling bin in very short order.

I follow these rules

Think about who your target audience is
Think about what they have told you they want (and not just what you think they want)
Think about how what you are going to tell them will help them (as well as helping you)
Think about what you want to say
Think about the best delivery channel

and then make sure that it only goes to those people to whom it should go (see earlier my post Mailing list hell).

Spending time wisely

An interesting report by Economics Editor Chris Giles in this morning’s FT, that ‘data show that confidence is down but consumer and business behavious tells another story’. He suggests that ‘the gap between action and sentiment puts the economy at a tipping point’.

We are certainly seeing this day to day: work continues, but ask anyone about what happens next and the outlook is decidedly gloomy. At a lavish corporate event last week, to which I took one of my daughters, she was most surprised not by the artwork on display but by, to her, the incongruity of unlimited champagne and the chorus of doom-sayers quaffing it.

There are various steps that we can take in our practices to see us through the slowdown, whether it be long or short. In an email circular last month, Nick Jarrett-Kerr of Kerma Partners, identified “where partners should be spending their time during a market turndown” as

skills building
steam-lining and re-engineering work
getting even closer to clients
getting involved in internal projects
motivating and developing their precious assets [their teams]

Most partners see fee-earning as their key task, and in most practices this is the case, but, as Jarrett-Kerr notes, ‘the silver lining in the recessional cloud may be that at last the excuses have been removed for partners avoiding to engage in valuable non chargeable work’.