It's over, for a while: The wild demand for legal services and the willingness to eat the 6.5% increase in hourly rates. Call it BigLaw's 9/11.
In THE AMERICAN LAWYER today, Paul Lippe put his finger on six of the factors which are ushering a new era in the legal business. They are:
- C-level compensation is taking a hit. That always correlates with compensation patterns in BigLaw.
- Fewer deals.
- Fewer M&As.
- The Recession, global and national.
- BigFinancial Services are cutting 20 to 25% of everything. That will include money for legal expenses.
- Reduced risk tolerance. That means clients's getting into less trouble.
So, what's a law firm to do? Plenty.
To begin with, be willing to change - more than you ever anticipated.
To do that, observe vs. judge. For instance, observe what successful models such as Marler Clark Law firm does instead of being critical of its Marketing-Communications Hustle Gene. [Disclosure: Now and then I do digital editing for Marler Clark.]. In 2006, which seems light years ago, Manfred Bruhn observed in "Leitfaden Integrierte Kommunikation," that competition between companies has become less a matter of the nature of the services or products and more about competition between marketing communications pushing and pulling for prospects's attention.
The trick is to hit upon the right formula for those marketing communications. And it can't be just digital or non-digital [e.g. networking]. Still a prophet in the wilderness, Akin Arikan is preaching the need for online and offline marketing to reinforce each other. The way to do that doesn't come off the shelf. It requires trial and error. BigLaw is not used to that. How to start? Ask yourselves how you would be putting your firm out there if you had no investments in tradition? A useful read might be Arikan's "Multichannel Marketing."
Obviously, search for niches or your firm's possible long tail. While many consulting firms are starving, Kenexa is growing. Its niche is not just employee relations but a unique way into the minds and hearts of Joe Worker. In the November 2008 edition of FAST COMPANY, Kate Rockwood reports that 60% of the Fortune 100 contract with Kenexa.
The challenge is, again, trial and error. For just that reason Steve Jobs's speech "Stay Hungry, Stay Foolish" keeps having such traction in these tough times. Of course, the media will be watching. Good. Great publicity for blowing up the old model and creating new kinds of value for clients.
Third, be nice. I don't know Dechert Law Firm except through a disappointing encounter with one partner. But from what I read in the media, those folks don't seem nice, at least not to their own people.
Maybe it's coincidence but since last March the firm has taken it on the chin three times in the media. The latest hit is the rumor that it laid off 80 more associates since it laid off or didn't lay off [that's still not clear] 13 in March. The Chairman Barton Winokur is all over the legal news today denying that rumor.
Here is my e-book on the ethos of nice in a digital age Download savingsoulsonparkavenuekstreet.pdf. For those needing more fundamental grounding in emotional intelligence, here's my e-book on that topic Download CUsersjasneDocumentsjg.pdf. It's useful also to read anything by executive coach Marshall Goldsmith and "The Wealth of Networks" by Yale Law Professor Yochai Benkler.
Fourth, think freebies, such as free high-powered seminars, e-books, and legal advice to the desperate such as the Chinese parents whose children were sickened by melamine. This will be a symbiotic situation of mutual benefit. You will learn from putting this together. The recipients will get a lot. And new business development will likely happen.
Even before the current 9/11 for not only law but all professional services, I and my contract team of employees re-visited every aspect of our operations every six month. Yeah, change it before it's broken.
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