The Client Revolution

The spirit of giving … and marketing

I just finished rereading Hugh MacLeod's terrific short book, Evil Plans: Having Fun on the Road to World Domination. If you need some inspiration on following your dreams, this book is a great starting point.

Toward the end of the book, Hugh talks about his approach to marketing. If you're not familiar with his work, I can tell you that he is the worldwide leader in cartoons drawn on the backs of business cards. (It's entirely possible that he's also the only cartoonist who works in that medium, but whatever.) From this fairly obscure position, Hugh has published two bestselling books, has a very successful blog (gapingvoid.com), and sells his artwork all over the world.

Yet he gives much of his work away for free. In fact, every weekday morning, he sends out an original cartoon — his "gift to the world," as he calls it:

If enough peo­ple like the gift, it’ll build up good­will, they’ll tell their friends, and the list will grow. The more the list grows, the more peo­ple dis­co­ver the trail of breadc­rumbs that leads back to the work I actually get paid for.

He does this in a way that doesn't seem like marketing, and it has proven very successful for him. Some of his followers simply enjoy his gift and do nothing more. But enough of them enjoy these gifts so much that they eventually return the favor by buying his artwork, books, or services.

You can read more about his giftlike approach to marketing in a blog post — "The three keys to social media marketing" — that tracks what he wrote in his book.

Since tonight is Christmas Eve and the fifth night of Hanukkah, many of us are thinking about gift giving. What gifts can you give to the people who might become interested in what you have to offer? Start looking at your marketing as gift giving instead of "selling."

Happy holidays!

Timekeeping and fearmongering

Most lawyers agree that timesheets and billable hours are terrible ways to measure value, but they don't know how to do it any other way. But amazingly, even as 2012 approaches, there are still some who actually believe that timesheets are necessary.

Jerry Kowalski, a former big-firm lawyer who now runs a merger-and-acquisition consulting firm, has been beating this drum for quite some time. His latest post of gloom and doom, called "I Know You Hate Keeping Time Sheets, but Even in the New Era You Must Still Do So and Here’s Why," is filled with canards like this:

The simple point is not simply that keeping accurate, detailed and timely time records is not simply the gold standard, it remains the only standard.  Yes, virtually every lawyer abhors the notion of justifying his or her daily existence in twelve minute increments, and, yes, we all now know we sell valuable services not hours, time accurate, detailed and timely record keeping still remains with us.

Nonsense. Keeping "accurate, detailed and timely time records" isn't the only standard for measuring the value that the client places on your services. In fact, it doesn't measure client value at all. All it measures is a tiny portion of the time spent by lawyers solving their clients' problems. I say tiny because it only accounts for the hours spent applying the lawyers' knowledge; it completely ignores the years of study and experience that the lawyers accumulated to garner that knowledge.

For example, according to Kowalski's bio, he practiced law full-time from the late seventies until 1992. I'm sure that near the end of his career, his clients benefited much more from his 15 years of knowledge and experience than from a few hours of casework. But none of his knowledge and experience was reflected on his timesheets. (And don't tell me it was reflected in his billing rate. That's not how BigLaw rates work. They're based on geography, firm size, and years since graduation — not knowledge or experience or skill. Jerry's value to his clients was probably underrepresented.)

The notion that timesheets are the gold standard of value is also belied by the fact that all timekeeping firms frequently write down their lawyers' time. At the end of each month, the billing partner reviews the other lawyers' timesheets in the context of the total job performed for the client. If the result seems high — especially if a junior lawyer spent "too long" on a research issue, or if the outcome was unfavorable for the client — the billing partner writes down the total to some arbitrary amount that feels "fair." But how can this be? Jerry says that the timesheet is the only standard of value for a lawyer's work? If that was true, law firms should never write down hours.

Finally, there's the tired, fearmongering refrain that legal pricing (what Jerry calls "alternative fee arrangements" or "value billing") is somehow illegal. As if. I challenge anyone to find me binding legal authority that mandates hourly billing or prohibits pricing. Kowalski and other critics of pricing often point to the rare case where a court has ruled unfavorably on fixed fees. But in the cases where courts have disallowed or reduced fees, the lawyers acted with questionable ethics and tried to defend unreasonable fees. The New York case Jerry cites actually involved made-up time records.

As for the massive fee award in the Southern Copper case, that fee wasn't based on the attorneys' hours; it was based on the result. The lawyers won a $1.9 billion award. They sought a fee of 22.5%; the court granted them 15%, or $285 million. Doing the math and calling it $35,000 an hour is silly. The plaintiffs didn't hire the lawyers for their time; they hired them for the $1.9 billion.

Clutching the Prohibition Era (1919, to be exact) talisman of the timesheet shows the world that you don't have any idea what your clients are buying. Clients don't buy hours; they buy your knowledge. Try measuring that instead.

And sowing fear about the risks of a timeless pricing model is reminiscent of the opposition to horseless carriages at the turn of the last century — not long before the birth of the billable hour.

(Image from "Vintage hate for automobiles" at 22 Words.)

Update Jerry responds in the comments below, which I greatly appreciate.

Modest billing-rate increases? As if

If you see lawyers with their arms in slings, it's probably from too much patting themselves on their backs. According to a recent survey in the National Law Journal (subscription required), law firms raised their rates in 2011 by "only" 4.4 percent. The story now is that this is the third year of "modest" increases.

From the National Law Journal:

For the third year in a row, law firms showed restraint with hourly rate increases, inching up at a rate only slightly higher than inflation in many cases. The average firmwide billing rate, which combines partner and associate rates, increased by 4.4 percent during 2011, according to The National Law Journal's annual Billing survey. That followed on the heels of a 2.7 percent increase in 2010 and a 2.5 percent increase in 2009 — all of which paled in comparison to the go-go, pre­recession days when firms could charge between 6 and 8 percent more each year.

via www.law.com

But if you get out the trusty slide rule, you'll see that rates have gone up fully 10 percent since the start of 2009. That's 10 percent during a massive recession. How many clients out there feel like their legal services are worth 10 percent more than they were three years ago?

Many firms had record revenues this year, all the while paying lip service to clients' "being in the driver's seat now." Let's not get ahead of ourselves. Just because firms aren't raising rates by 8 percent doesn't mean that clients are now thrilled.

Not thinking of you this holiday season

So it's that time of year again, where lawyers and law firms fall over themselves to remind people that they exist. It used to be that every firm paid for expensive, customized holiday cards. (My firm used to.) But it's very time-consuming to print out contact lists, stick labels on envelopes, and run them through the postage meter. It's also not very environmentally friendly. And although it can look nice when you have dozens of cards taped to your conference room's glass walls or arrayed around lobby, they're up for a couple of weeks and then they get tossed in the trash.

Increasingly, law firms — especially larger firms — are turning to email-based holiday cards. There's this industry of e-card vendors who have convinced lawyers that Flash-based cards are exactly what clients, prospects, and other contacts love to receive. Unlike the paper-based analog greetings, these digital wonders afford the opportunity to use motion graphics (essentially, animated words and pictures) and public-domain holiday music to send a stronger message.

So I should have been happy when I received an email from a big-firm lawyer I know, taking the time to wish me season's greetings. I know that she took the time because she told me: "I just wanted to take this time ...." The only problem is that she didn't actually take any time. I know this because the email didn't come from her.

It came from her secretary.

There it was in the email header: from [her secretary's name], to "undisclosed recipients." I guess I should be honored to be one of the undisclosed recipients, but for some reason I'm not.

The email itself had two generic lines about wishing me holiday greetings, followed by the lawyer's name. Then a big "Click Here" icon. I'm not generally interested in clicking anywhere on these things, but I decided to click there this one time. Solely for research purposes, you understand.

This took me to a browser window with a cartoon of a weirdly deciduous tree. Some generic, unidentifiable piano music starts in — not too Christmas-y, mind you — and then the cartoon tree starts to grow leaves, then lose them in a strong breeze, then grow some more, then lose them again, then grow some fruit, then again with the wind, and so on. While this is happening, words appear wishing me more season's greetings (I guess the tree thing has to do with seasons in general), an expression of gratitude (not sure for what; I'm not a client), and then a pronouncement that the firm has donated funds to unspecified charities. Which is nice, I guess.

The music then continues endlessly. Literally. I turned off the sound on my Mac after a couple of minutes. It's on a Flash loop, with no way to stop it short of closing the page or driving your shoe through your computer. I actually ended up forgetting about it, came back hour later, turned my sound back on, and the piano was still going.

And that's not even my favorite part.

My favorite part is that the law firm's name appears on the page (not including the URL) ten times. (And seven more times in the covering email, not including the return address.) Really, guys? Did you think I'd forget whom to thank for this display of genericness? It's always about you, isn't it?

Lawyers, law firms, other professionals: don't do foolish holiday things like this. No one nowhere wants your motion-graphics holiday card. No one thinks for a second that the purported sender did anything more than tell her secretary to hit "send" to the undisclosed recipients. I certainly didn't think that the lawyer whose secretary sent mine spent a millisecond thinking about me.

If you want to tell people that you were thinking about them, do it in a way that shows that you actually were. A handwritten card or note. A small thank-you gift. Even just a phone call or a personalized email (it's better than nothing). But please don't spam people.

Or have your secretary spam people.