The Client Revolution

"Don't take this the wrong way …"

We just finished up a case for some clients: guys wrongly accused of taking trade secrets from their employer in a bid to set up a new competing business. We ended up with a terrific result, getting the lawsuit dismissed and allowing them to continue their careers with no money changing hands. We did it effectively for what turned out to be a very reasonable fixed price.

After it was over, the clients were very appreciative. They thanked us for our work and our results. In an email, one of them expressed more gratitude, and then added this:

Don't take this the wrong way, but I hope I never have to speak to you again professionally.

Huh. Now I know what he meant, and I know that he meant it half tongue-in-cheek. But just half. As good a job as we'd done for him and his colleagues, as much value and caring and support as we had given him, it was — overall — a negative experience for him.

And this wasn't the first time I'd had this expressed to me over my 16-year career. A long-time client would call after a months-long hiatus, and I'd go, "Hey, it's been a long time" and he'd go, "I know. It's been nice." Ouch. Now I know that my client isn't saying that he dislikes talking with me. It's just that he'd rather not have to talk to me.

And this bothers me.

Maybe it's the nature of the work we do: people usually aren't very happy when they need employment-law or business-litigation help.

And yet.

And yet I can't help wondering if there's something we can do — if there's something lawyers can do — to make clients want to deal with them. In the same way that they want to deal with other great businesses.

People love to buy the latest gadgets from Apple. People love to fly Southwest. People love to visit Disney parks, or buy shoes from Zappos.com, or buy groceries from Whole Foods. Is there something we can do to make people love dealing with their lawyers, or is our field fundamentally different from other businesses?

This is an important question, and one that I'm spending a lot of time thinking about. I'll let you know if I find the answer.

What do you think? Can a law firm be like Apple, or are lawyers doomed to being necessary evils? Share your thoughts in the comments below.

Fixing prices Down Under

The Client Revolution isn't just limited to the United States. Lawyers in Canada and the UK are also bridling at the Woodrow Wilson–era business model of timesheets and billable hours. In Australia, there's been a flurry of antitimesheet talk and activity. See Ron Baker's post "Timesheets on the defense Down Under" over at VeraSage Institute for a nice summary, highlighting colleague John Chisholm's great work in the area.

Australia's national legal newspaper, Lawyers Weekly, had a fine special report on the topic, "Once upon a billable hour," by the paper's editor, Angela Priestley.

I spoke with Angela last week. She was interviewing me in advance of my visit next month to Sydney, where I will be presenting at the Australian Law Practice Management Association's annual conference. Angela did a nice job framing the issues and summing up the message that I plan to bring to Oz next month. She paid particular attention to the problem of timesheets, and rightly so. She writes:

Shepherd believes that all areas of law can function without timesheets — even litigation, which he says takes up 75 per cent of his work — and he's adamant that if a firm moves to fixed-price billing it must also remove timesheets to ensure the removal of the billable hour is truly engrained, even if such a firm only uses timesheets for internal purposes.

"Many firms say, 'we'll try fixed prices, but we're going to keep timesheets.' That's a cop out, they are missing the point there," says Shepherd.

That point is that lawyers operate differently when not tied to billable hours. Shepherd believes that by removing timesheets, lawyers can truly concentrate on delivering the best outcome for clients and that in his firm, the moves has contributed to a direct increase in revenue.

"I really don't want my lawyers to be thinking about time," he says. "It's not just an invoicing method, it's a way of thinking about the work that we do. You don't practice the same way when you're not worried about hours. You do things differently, you make different choices."

It's an idea that's fast making its way around the world. Read the rest of Angela's piece here.

Thoughts? Have you heard of lawyers ditching timesheets in other parts of the world? Share in the comments below.

Cooling my heels: $600?

I spent part of Thursday morning at the Suffolk County Courthouse in Boston. Like all courthouses, it's a place where important work is done, but where a staggering amount of time is spent waiting. And that's what I did, for the most part: waited.

You see, I had to go to the courthouse to file an emergency motion to compel, something I rarely do. My task was mainly to get my papers in the hands of the courtroom clerk and get a hearing scheduled on the docket. I didn't want to send someone else — a messenger, a paralegal, even another lawyer — because there was a minute chance that the judge would offer to hear from me on the spot. In the end, she didn't, and the clerk scheduled my hearing for Monday. I accomplished what I needed to do, so it wasn't at all a waste of time.

But if I had been like 99.99% of other American litigators representing companies, I would have billed my client for that hour spent (mostly) waiting. And my client would be lucky that it hadn't been more time, since my office is less than a hundred yards from the courthouse. If I billed hourly, my client would have spent — based on my firm's size, my location, and my personal level of experience — at least $600. That's six hundred dollars for the two minutes it took to have a piece of paper filed in court, plus 58 minutes of leaning against a wall in the corridor.

Someone explain to me how my time — anyone's time — would have been worth $600 to stand around and do nothing for 58 minutes. And don't tell me about the opportunity cost — that my time cooling my heels for one client kept me from doing other work. No client cares about that.

Yes, I delivered value to my client by going to the courthouse, but not $600 worth. Fortunately, my client is paying a fixed price, and doesn't need to worry about how I spend my time.

What do you think? Should clients pay for waiting? How does that benefit them? Where is the value in that? Share your thoughts in the comments below.

Why Verizon FiOS is smarter than I

Or is it "smarter than me?" (Verizon FiOS would know, because it's so smart.) (Actually, according to Grammar Girl, it's both, but "I" is probably better.)

Anywho, here's why Verizon FiOS is so smart. It's currently locked in a grudge match with archrival Comcast over whose TV-and-internet package is better. Most of the commercials by both companies are nasty and forgettable. But the following commercial, which has been in heavy rotation on NESN (the network of the Red Sox), is inspired. Go ahead, it's only 32 seconds. I'll just stand here awkwardly:

... and we're back. Pretty good, huh? What I really like about the ad is that, unlike all the other commercials, it doesn't make subjective claims about being "better." Nor does it get into technobabble about how many more "Mbps" it can deliver. Instead, it focuses on a single, indisputable idea:

That cable was invented in 1948.

Implicit in that fact is that cable is somehow inferior to the modern technology of Verizon's "100 percent fiber optics." And that's a powerful message. (Full disclosure: I'm watching the Red Sox game and transmitting this post on my Verizon FiOS network, on which I'm getting a bitchin' 17 Mbps in download speed. But fear not, FTC: they ain't paying me to write this; I'm paying them.)

So how does that make Verizon smarter than I? Because I should have made this commercial years ago. But I would have changed some of the words. Like:

So why are you still using an antique law firm with an hourly billing model created in 1919 to for your 2010 business?

Then maybe something about hooking your business up to 100% fixed-price lawyering. I gotta work on the tagline.

Big shout out to VeraSage's Ron Baker, whose research uncovered the 1919 origin of law-firm timesheets. See my recent exchange with him on this example of antiquity.

This isn't the first post I've mined from a sporting-event commercial. See "What lawyers can learn from an Office Depot commercial" from this year's Super Bowl.

What do you think? Is this an effective message? Do I watch too much TV? Is it really "than I"? Sound off in the comments below.

Tell me how to do what I want to do

After my recent post decrying lawyers' inability to innovate along with their clients (see "Why I hate 'practicing law'," my friend Ed Wiest (@erwiest) correctly pointed out that this notion was not exactly new. In a comment to the post, Ed included a quote from the legendary J.P. Morgan:

I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do.

That was over a hundred years ago. Yet I'm sure the problem is even worse today. Lawyers, acting out of fear (of being wrong) spend their time issue-spotting and telling clients about the varying risks of a client's course of action. What clients want is what Morgan wanted: help in achieving their goals. Today, many lawyers have no idea of their clients' goals and dreams, and would never consider offering something as unlawyerly as "business advice."

Some even advocate for this. Former lawyer and Inc. Magazine columnist Norm Brodsky is dead-set against lawyers giving business advice:

The attorney's role should be to advise clients of the potential legal consequences of whatever decisions they make. Period. End. I have been known to fire lawyers who insist on arguing with me about business issues.

Read more of Brodsky's misguided comments in his ironically named piece "Norm Brodsky on Finding a Good Lawyer." In his defense, he's probably right that lawyers give bad business advice, but only because they're not trained to do it.

One more thing on the Morgan quote: Ed cites to BrainyQuote for the quote, and wonders whether the lawyer Morgan was referring to was Elihu Root. In fact, it was Elbert Gary — lawyer, judge, and founder of U.S. Steel — whom Morgan admonished when he told the famous banker that he couldn't do something. See this 1927 interview with Time Magazine, which gives the context of the quote. Also see this Yale Book of Quotations entry, which has the quote in a Gary biography.

Thanks for the great quote, Ed!

What do you think? Should lawyers spend more time giving advice on how to achieve clients' business goals, or should they stick with the naysaying? Be like Ed and sound off in the comments below. (Maybe I'll get another post out of it.)

How to increase revenue 43%

Short answer: offer an additional pricing choice. Even a stupid one.

Longer answer: Check out this video. It's almost perfect. It shows how adding a single pricing choice can add 43% to total sales revenue. It's presented by Professor Dan Ariely, a delightful MIT economist. And it's only 114 seconds long.

Why don't you take the 114 seconds to watch it? I'll wait ...

Here's the math on the different options:

With two choices:

68 x $59 = $4,012

32 x $125 = $4,000

Total: $8,012

With three choices, one of which is stupid:

16 x $59 = $ 944

84 x $125 = $10,500

Total: $11,444 (an increase of 43%)

OK. Interesting, huh? Ariely's main point is that customers often aren't very good at knowing their own preferences, and they take cues from outside indicators of value, such as pricing options. By offering a third choice, even a ridiculous one, customers end up perceiving more value in the more-expensive choice. That's why Wendy's sells a triple cheeseburger — not to sell lots of triple cheeseburgers (they don't), but to sell more double cheeseburgers.

The moral of the story is not to offer ridiculous choices; it's to offer choices that lead your customers to find differing amounts of value in the various options — something you can't do if you bill by the hour.

The rest of Ariely's TEDtalk lecture is here. It's great, and it's only 17 minutes long. His book, Predictably Irrational, is here. I confess that I haven't read it yet, but it's definitely on my list.

Big thanks to Ed Kless who highlighted the video last December.

[Update 9/11/10: Ed points out in the comments below the effect this has on profits, given that The Economist's costs don't change. Very cool, Ed.]

What do you think? What kind of options can you offer to help your clients discover their preferences? Share your ideas in the comments below.

Can Inception plant ideas in the minds of lawyers?

Maybe. There are certainly some important lessons for members of the Client Revolution.

First of all, if you haven't seen the movie, do. It's the best movie of the year. It's also the smartest movie of the year — in fact, it's the smartest movie in a long time. You don't walk out of there thinking that you've seen the same thing before; it's a legitimate original.

If you've been in seclusion this summer, here's the general idea: Leonardo DiCaprio plays Dom Cobb, an expert in extracting information from people's dreams. But he's put to the test by a new client who wants him to do something much more difficult: plant an idea in a business rival's dreaming mind. That's "inception." They want their target, Robert Fischer, to break up his late father's business empire.

As Cobb and his team map out their heist, one of them raises a question central to the movie:

COBB

"I will split up my father's empire." Now this is obviously an idea that Robert Fischer will choose to reject — which is why we need to plant it deep in his subconscious. Subconscious is fueled by emotion, right? Not reason. We need a find a way to translate this into an emotional concept.

ARTHUR

How do you translate a business strategy into an emotion?

That's a question that all lawyers should ponder. As lawyers, we're trained to figure out a business strategy — in our case, a legal strategy. But we often forget that clients don't respond to business or legal strategies. Instead, clients — like all human beings — are led by emotion.

You want to become a rainmaker and bring new clients into your firm? Then figure out how to translate a business strategy into an emotion.

---

The second lesson for lawyers comes from behind the scenes. Turns out that as successful as the movie has turned out to be — making about $700 million worldwide to date, the most successful heist movie ever — they had trouble getting financing beforehand. According to E! Online, DiCaprio agreed to take less money up front in exchange for receiving "first-dollar gross" pay at the back end. In other words, according to E!, Leo is getting a cut of every ticket sold, and is already looking at a massive payday of more than $50 million.

Most lawyers fear so-called "alternative billing arrangements" (as they call them) — more accurately known as "value pricing" — because they're afraid that they'll end up making less money than they would if they billed hourly. Imagine if Leo had shared this fear and turned down the first-dollar gross arrangement in favor of his usual "billable hours." The actor obviously believed in the movie and in writer-director Christopher Nolan. His faith was richly rewarded.

Lawyers, let me plant this idea into your dreams: If you have faith in your clients and your cases, you might end up doing far better than if you just filled out your timesheet.

What do you think? Like the movie? Think it applies to lawyers? Wish you had gone into acting instead? Share your thoughts in the comments.

[Update 9/11/10: Click here for a link to an amazing article by Sam Adams (no, not that one) on Salon.com: "Everything you wanted to know about 'Inception.'" But do not read it before you see the movie; big-time spoilers abound.]

Why I hate "practicing law"

No, not the career. The phrase.

Why do we say that we "practice" law? It has a connotation that we need to practice before we get any good. "Keep practicing, counselor. You'll get there." (As in "Carnegie Hall," as the old joke goes.)

But my problem with "practicing law" is more serious than that. I think the use of the term subtly affects what we as lawyers think we should be doing. Let's see what my dictionary (the New Oxford American Dictionary, the very best) says:

verb [ trans. ] ( Brit. practise)

1. perform (an activity) or exercise (a skill) repeatedly or regularly in order to improve or maintain one's proficiency : I need to practice my French | [ intrans. ] they were practicing for the Olympics.

2. carry out or perform (a particular activity, method, or custom) habitually or regularly : we still practice some of these rituals today.

Here's where my problem is. "Performing an activity repeatedly or regularly ..." "Carrying out an activity habitually ..." And how about that use of the word rituals?

The way we describe to the world what we do is with these words that connote that we keep doing the same old thing. And that fits in perfectly with the nature of most lawyers. Precedent. Tradition. These are the watchwords of our profession.

But no one else "practices" in the business world. They innovate. Or they go out of business. The same is true for lawyers; we just don't like to talk about it. So we cling to our 1919 business model based on timesheets, like we used to cling to powdered wigs. Like we still cling to fax machines and bike messengers.

We need to stop "practicing" and start innovating, or those rituals we perform will soon become unnecessary and extinct.

What do you think? Agree? Disagree? Think I'm picking nits, or am I on to something serious? Shout out in the comments below.

The Client Revolution Evolution

Hope you've enjoyed your Labor Day weekend. I've spent much of it completing a redesign of The Client Revolution and its sister blog Gruntled Employees. For those of you who read this blog through an RSS reader or email feed, you can take a look at it here.

Much of the changes are cosmetic. The basic blog design has been in place for nearly four years (later this month) at Gruntled, and coming up on two years here. Like many blog designs from 2006, these two became cluttered with too many sidebar elements, internal references, blogrolls, and widgets. Quite frankly, I'd gotten a little tired of looking at it all.

The redesign goes for a much more streamlined and clean look, similar to my firm's website (coincidentally last redesigned in 2006). This should allow the content to take on more prominence than before. Photos and other artwork will become more rare; I usually take too much time hunting down the "perfect" pic. Also, for the first time, the blogs now use real fonts, hosted by TypeKit. This one is called FF Dagny Web Pro, and it's a nice upgrade from Arial and Trebuchet.

Let me know what you think of the new look in the comments below, or give it a "Like" if you do. (Facebook doesn't seem to have a "Meh" button.)

Cosmetics aside, I'm also changing my approach to the posts themselves, trying to focus on more, shorter posts. My tendency is to post longish articles, which naturally take longer to write (and read). Shorter, targeted posts should also make it easier to write with greater frequency, something I've found difficult while running a law firm and raising two kids. Heck, even the ABA Journal gave me a hard time about infequent posts when it named this blog to its Top 100 list. Ouch.

I've started using the simple-but-brilliant Markdown language developed by my favorite Apple blogger, John Gruber of Daring Fireball. It allows me to write nearly everything on the iPad using SimpleNote.

I want to try to get more discussion going, too, so I've disabled the comment-moderation feature. I've heard that removing this barrier will let readers feel more free to share. Of course, I'll still be removing any spam or inappropriate comments, so it shouldn't become too much of a free-for-all.

Lastly, and most importantly, I'm aiming for a more-unified theme in my blogs, my firm's website, my law business, and my nascent consulting practice. They all share the same goal: to make clients' lives easier by reinventing the business of law. Ideally, making these minor social-media changes will help me do a better job of helping you.

OK, this has felt like a fairly self-indulgent post. If you've read to this point, thanks, and sorry. If you're one of the hardy souls who reads both blogs, please ignore the almost-identical post over at Gruntled.

But do tell me what you think of the redesign. I value your feedback, and I thank you for continuing to join this conversation.