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Catching the Wave: Fifteen Trends That Will Make a Difference

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Catching the Wave: Fifteen Trends That Will Make a Difference Catching the Wave: Fifteen trends that will make a difference Charles A. Maddock Altman Weil Inc. Buyers’ market • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Strategic Market Shift Market Sellers Buyers Value proposition Sellers define Buyers define Message Extrinsic Intrinsic “What do we need to “What do clients want to sell?” buy? Focus New business Current clients Marketing Relationships/time Strategy communication/ $ (Rifle shot) (Shotgun) Cross-selling, Tactic Building share targeting Expectation Immediate Long-term Differentiation Low Potentially high M&A • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. © Copyright Altman Weil, Inc. Consolidation Mergers Failures • D’Ancona & Pflaum/Seyfarth Shaw • Brobeck, Phleger & Harrison • Reboul MacMurray/Ropes & Gray • Altheimer & Gray • Ross & Hardies/McGuire Woods • Arter & Hadden • Venture Law Group/Heller Ehrman • Peterson & Ross • Riordan McKinzie/Bingham • Pennie & Edmonds McCutchen • Hill & Barlow • Gouldens/Jones Day • Crosby Heafey/Reed Smith • Dyer Ellis/Blank Rome © Copyright Altman Weil, Inc. Globalization Baker & McKenzie 3,241 Clifford Chance 2,922 Freshfields 2,644 Linklaters 2,250 Allen & Overy 2,025 Eversheds 1,844 DLA 1,753 Skadden Arps 1,727 Jones Day 1,722 Lovells 1,658 © Copyright Altman Weil, Inc. Convergence • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Convergence • Clients employ 34 firms • 16% will increase on average. outside services in 2004 (86% in 2001). • Convergence continuing. • 17% plan to decrease outside counsel. • Increased metrics • 59% plan to fire outside and accountability. law firm in 2004. • Selection factors • 60% think their lawyer is changing. “too busy.” Source: Altman Weil/ACC Chief Legal Officer Survey, 2003 © Copyright Altman Weil, Inc. Business intelligence • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Applications RFPs Firm and departmental plans Personal development plans Specific opportunities Client meetings Merger candidate or lateral search Competitive analysis © Copyright Altman Weil, Inc. eBilling • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. eBilling: Value Proposition eBill Processing eBilling product Cost savings, improved efficiencies Data Management Matter Management product Integrated data, management reporting Data Analysis Consulting services Better budgeting, strategic decision making, outcomes © Copyright Altman Weil, Inc. Leadership training • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Unique Aspects of Management and Leadership in Law Firms • Flat organizational structures creates need for leaders to also be managers • Traditional command and control does not work well • Lack of training • Lack of feedback © Copyright Altman Weil, Inc. Inhibitors to Effective Leadership • Poor linkage with • No group plan or senior management goals (vision) • Lack of delegation • Lack of execution skills • Fuzzy or no job • Lack of or poor description communications skills • Voluntary • Task/time Management management conflicts Syndrome © Copyright Altman Weil, Inc. Level 5 Level 5 Executive Builds enduring greatness through a paradoxical blend of personal humility and professional will. Level 4 Effective Leader Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards. Level 3 Competent Manager Organizes people and resources toward the effective and efficient pursuit of predetermined objectives. Level 2 Contributing Team Member Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting. Level 1 Highly Capable Individual Makes productive contributions through talent, knowledge, skills, and good work habits. Level 5 Hierarchy Good to Great: Why Some Companies Make the Leap and Others Don’t by James C. Collins © Copyright Altman Weil, Inc. Managing your time/tasks Urgent Not Urgent III • Planning • Crisis/problems • Communications • Deadline driven tasks • Preventative actions • Learning Important • Relaxing/thinking Unnecessary meetings, Trivia reports Phone calls Other’s minor issues Irrelevant communications Interruptions Not Important III IV © Copyright Altman Weil, Inc. Networks • What are they? • What impact will they have? • How should we respond? © Copyright Altman Weil, Inc. Networks: Name Recognition 12 Meritas 8 19 AM LF Assoc 15 7 Interlaw 10 7 Interlex 10 49 Lex Mundi 61 0 10 20 30 40 50 60 70 Percent © Copyright Altman Weil, Inc. Networks: Name recognition 4 State Capital 6 3 Pac. Rim Advisory 7 Multilaw 4 4 Terralex 1 1 TAGLaw 4 6 US LF Group 4 4 World Law Group 1 0 1 2 3 4 5 6 7 Percent © Copyright Altman Weil, Inc. Relationship management • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Focus on relationships OPPORTUNITIES ADVOCATES SUSPECTS SERVICE MARKETING SATISFIED PROSPECTS CLIENTS SELLING CLIENTS QUALIFIED PROSPECTS © Copyright Altman Weil, Inc. Key client management program • Client teams and plans • Technology integration • Corporate Counsel Conferences • Annual legal plan • Reverse seminars • Annual client audit © Copyright Altman Weil, Inc. True branding • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Building a brand: what matters? High ‘Antes’ ‘Drivers’ Features that are Features that are both important e c important to buyers but to buyers and highly n a are provided by all differentiated from those of v e l competitors at similar competitors e R level ‘Neutrals’ ‘Fool’s gold’ Features that are Features that are distinctive but irrelevant to buyers do not drive buyers’ loyalty to Low brand LowDifferentiation High © Copyright Altman Weil, Inc. Client input • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Industry teams • What are they? • What impact will they have? • How should we respond? © Copyright Altman Weil, Inc. Applying the Customizing the Body of Body of Grey Hair Rocket Science Knowledge Knowledge Client Efficient Making informed Complex issue; “Bet your Problem solutions to choice; guidance client has no company” issue common through process experience problems Key Efficient, low User-friendly Real time diagnosis Innovative and Skill cost delivery; advice; relieves and judgment novel solutions established anxiety methodology CSF Established Established Experience in Highest level methodology; methodology and similar problems; diagnostic skills; efficient, low low cost delivery technical, functional state of the art cost delivery plus relationship knowledge knowledge Profit High volume, Above average High fees; low Premium fees; Driver high leverage fees, good leverage leverage very low leverage; may refer work Selling Better, faster, We’ll help you with We’ve seen similar Smartest brains Prop cheaper choice and give problems; trust us, around ongoing support we’ll help you Pay for play • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Fundamentals — NIPP David Maister in 1984 first wrote on the derivation of this formula: (1 + L) x BH x BR x R x M July/August 1984 issue of American Lawyer © Copyright Altman Weil, Inc. Firms increase profits fastest by • Increasing price. • Reducing cost of services sold. • Shedding unprofitable people, clients, services. • Increasing volume. • Reducing OH. • In this order! © Copyright Altman Weil, Inc. The special horrors of client DISCOUNTS ! • Kills profits. • Seldom is a good differentiator. • Is like cocaine to clients. • Partners hide behind them. • Destroys the value relationship/perception. © Copyright Altman Weil, Inc. Two ways to earn $1m in fees • Partner hours: 1,800 • Partner hours: 2,000 • Partner rate: $327 • Partner rate: $294.30 • Assoc. hours: 2,000 • Assoc. hours: 2225 • Assoc. rate: $218 • Assoc. rate: $196.20 • Revenues $1,024,600 • Revenues $1,025,145 © Copyright Altman Weil, Inc. Outsourcing • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Outsourcing • Controlling costs: – 5.7% of CLOs agree – 83.7% of managing partners agree • Legal market – 15,000 legal jobs offshore 2005 – 500,000 legal jobs offshore 2015 • Cost savings: – 53% less than IHC – 69% less than OSC © Copyright Altman Weil, Inc. Professional sales • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Marketer/lawyer personality • What is it? • What impact will it have? • How should we respond? © Copyright Altman Weil, Inc. Contact: Charles A. Maddock Principal Altman Weil, Inc. (610) 886-2000 [email protected] © Copyright Altman Weil, Inc..
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