Good morning, everybody. Take a look at this glass of water and tell me how much would you pay me for it? What’s its value to you? This glass of water reminds me about a commercial I saw. I saw it sometime in the last five or six years—and I only saw it once, but it stuck with me. Picture this. You have two guys in their twenties. This is taking place in the seventies. They are dressed a la Sonny Bono with moustaches, the long moustache, the drooping moustache and the hair and they’re talking to each other. One has a glass of water in his hand and he’s extending his hand. Clearly the glass of water is the subject of conversation and the other guy says to him, “Man, nobody’s going to pay you for water. Water’s free.” Well, I don’t know about you, but I think there’s been a tremendous revolution in revenue when it comes to bottled water, a revolution in terms of what Sparkletts has and in terms of the kind of money Sparkletts has made, the kind of money that we’ve paid—I know I’ve paid for bottled water in the past decade or two. That’s a revolution in revenue and that’s what we’re talking about today in terms of what’s happening with law firm marketing and law firm revenue and which really impacts how we have to market our professional fees and that’s the subject of this morning’s webinar.
My name is Sharon Berman. My company is Berbay Corporation Marketing and Public Relations. We specialize in working with law firms and we create the visibility and credibility that fuel revenue growth.
So just a couple of housekeeping details here. You’re going to be on mute during the presentation. You can submit questions during the presentation. I will try and address any questions at the end or e-mail you responses or give you a phone call. I also have a list of resources at the end because I’ll mention some of these things during the presentation and I’ll just give you a list at the end and you’ll also be getting the slides later on.
Now, this revolution has started a few years ago in terms of law firm revenue. It started about the time of the financial downturn and has created a sea change that really doesn’t look it’s going to change any time soon. If you look at the results of a recent survey by Altman Wile. This is done with law firms of fifty attorneys or more, but I don’t think you’re going to get different results if you’re a smaller firm. I think it could be generalized, but 96% of respondents said that they expect increased pricing competition to continue and 80% said that they expect a shift to non-hourly billing practices to continue. Merely 30% have made changes to their pricing practices which is fairly healthy, but when you think about the fact that 70% have not made changes to their pricing practices, it leaves a lot of opportunity for those who are already making those changes ahead of the game and gives you the advantage. Two, same survey, 96% of respondents said that the focus on improved practice efficiency is entrenched. That’s not going to go away and which, I think, is good. It’s not going to change, that we’re not going to go back to the way things were. 80% believe they’re going to continue to see increased competition from non-traditional forces such as legal zoom or outsource marketing—outsource the overseas marketing—and 45% have made significant changes to improve their efficiency. That’s a fairly impressive figure. It still leaves a lot of room for others to make those changes and for everybody to continue to focus on improved efficiency.
Now, these results here in this next slide are really to me almost the essence of this while presentation. The top four challenges that respondents saw was the challenge of how to increase revenue, how to increase new business, how to increase growth and how to increase profitability. Those were their top four challenges, but what was down at the bottom of the list? Delivering value. That challenge they saw below all these four and increased efficiency was toward the bottom of the list. Now, I don’t know about you, but there is a real paradox here because to me delivering value drives increased revenue, increased business, increased growth and increased profitability and being more efficient drives those four variables. So I think the results are topsy-turvy and I think those who grasp the fact that this is topsy-turvy are ahead of the game and if they act on this, they are going to be the one with the competitive advantages and we’ll be talking more about this as we go through, but I want you to keep these results in mind because they just tell the whole tale.
When we talk about to market your professional fees, I want to go back to some of the fundamentals of marketing first before we proceed. Now, when you take a marketing class, the first thing you learn is about the four P’s of marketing. This has been proved for decades. It hasn’t changed. It’s what they still teach and it’s the essence of marketing when you want to think about how you’re marketing your law firm and professional fees. You have your product. Your product is you if you’re a legal service. It has been the inventory of billable hours that you’ve had. That’s the way law firms have thought about their product for a long time, but really your product is your service and I also want to point out that it’s you. It’s how you merchandise yourself and your attorneys, how they present themselves, how they relate to other people, their grooming. All of that is part of the product. Then you have the place. The place is how you distribute your product. For a lot of marketers, it’s shipping and it’s retail outlets. May it’s e-commerce and maybe that’s something that you’re involved in, but for the place, it’s really your offices. It’s where you are, if you’re at your client’s offices. So that’s one of the essential P’s.
Promotion. Promotion is where 99.9% of the conversation about marketing has been for the past decade. When we talk about law firm marketing, a lot of the time, that’s what we’re talking about, increasing your visibility, your sponsorships, your media presence, your online marketing. We’re talking about promotion which is critical.
What I haven’t been talking about until recently is the fourth P which is price. Are you selling the right service at the right price—and that’s always the key question and a lot of times until recently, law firm professional fees were really separate from marketing and now we’re back to integrating them. Now, you can’t talk about price without talking about value and that’s what a lot of the conversation is going to be about today.
The other thing I want to talk about and mention is a fundamental of marketing is about your brand. I mean there’s been so much talk about branding. What’s your brand and law firm branding, but really why are we branding and why do it basically? What’s the essence of it? A brand is made of three aspects. The first is your graphic identity. That’s the logo, but your logo is really communicating something; it’s a symbol and it’s symbolic, but it’s not just, for example, a nice looking oh—it’s what that is communicating. So in terms of the brand, one of the elements is the graphic identity. Another element—and this is the core of your brand—is your promise. What is your client buying? What are you promising them and what promise are they buying and that has to be supportable, meaning you can’t promise something you can’t deliver and it has to be repeatable. That is also the essence of a brand. You have to be able to deliver that over and over because that’s the essence of why somebody is buying Del Monte peas versus the generic brand because they know that every time they buy those peas, they’re getting what they’re promised and that’s the essence of a brand, whether it’s a lawyer or whether it’s the Del Monte product. The aspect of a brand that we are really concerned about and focusing on is the brand equity. I mean brand equity is why you brand. It’s the difference between what somebody is going to pay for something they know versus the generic brand or the no name brand or the law firm down the street that nobody knows. It’s that difference between the call it non-branded or generic product or just not as well branded product versus a well-known brand. It’s that brand equity and that’s what we’re trying to achieve and that’s part of your professional fees.
And that is why public relations and marketing—that’s where visibility and credibility come into play. I was talking to a lawyer about this recently. We were talking about how do you get somebody to pay you $2,500 for a project versus $3,000 for a project. Well, there’s less price resistance when somebody knows who you are, when they have heard you speak, when they’ve seen you quoted, when they receive your e-newsletters versus somebody that has just said, “I can do it for less.” And that’s part of why we brand and why you’re focusing on your visibility and credibility and once again, that gets to value. Do they see that value in paying the extra $500 because at least there’s a trust there; they know who you are or know of you as opposed to just taking that risk and is it worth $500 more to them.
So this is some of the fundamentals.
When we’re talking about value, this is just one definition they all seem to say basically the same thing, an amount as of goods, service or money considered to be a fair and suitable equivalent for something else, a fair price or return. That’s what we’re talking about when we talk about value and really a lot of you when we asked, “What is it that you want hear about or learn about today,” it’s how to market your professional fees. How to market your professional fees is how to communicate the value that you bring and some essential points about value: it’s subjective; it really depends on who you are talking to. There is no black and white box that encompasses value. It just varies from person to person. Value is in context. Take a look at this glass of water. This glass of water, if you’re in your kitchen, are you going to give me 5¢ for it if you can turn the tap on? If you’re at the gym and you want bottled water, you might pay me a couple of dollars for it. What if you’re in the desert and you’re dying of thirst and I have this glass of water, how much is this glass of water worth to you. So you want to be thinking about that. That has to do with the context. How quickly does somebody need something? How important is it to them? Value is not constant. Today what I value is not what I might value tomorrow. Just because your clients value something today doesn’t mean they’re going to value it tomorrow and it’s customized and it just goes back to all of these points is that you need to tailor the communication of value. What you’re communicating about your value needs to be tailored per perspective client or current client or whoever you’re talking to. It’s not a fixed point. Very important.
So what do clients value? I mean that’s one of the essential questions. They value results, right? That is what really they’re after, the results of whatever, whether you’re putting some documents together for them or whether you’re reviewing an employment agreement, they value the results. Today there’s a lot of talk about budget predictability and that is something that’s highly valued, especially if you’re talking about corporate counsel. Budget predictability is very high. Efficiency—they want to minimize risk. Most clients—and these are the kinds everybody likes—value fairness. They want to be fair to you. I mean they want value for fees, but they want to be fair to you. They’re not for the most part—I know they’re exceptions—but they’re not trying to gouge you. They want to be fair to you and they want to be fair to them. Sometimes minimizing administrative burden is very important. They to make sure that what you are doing, your firm objectives and goals align with theirs, what you are producing aligns with theirs. They want an alignment of goals. What they do not care about is time. They do not care for the most part how long this took. They don’t care if you estimated it at five hours and it took fifteen hours. They don’t care how long it takes. They care about the results. Now, when you’re asking about what clients value, the way you ask them questions about what they value is going to be what differentiates you. Asking what they value and going through the questioning process can really first of all demonstrate that you understand and are trying to discern what they value and can separate you from the competition. So the process of identifying that value is one of the ways that you can differentiate yourself. The other thing is in terms of value, many of the things they value have to do with you personally or your firm or its culture. These are harder things, let’s call them the hard aspects of value that we have here, but they value how you manage relationships, whether you’re responsive, whether you’re nice to deal with. There are a lot of soft things that clients value also and that’s what differentiates one law firm from another and one lawyer from another.
So how do you drive value? In terms of driving value, there’s an internal aspect and there’s an external aspect. The external has to do with the marketing and promotion and communications. What do your clients want? This is specific to your client and the client or prospective client that you’re talking to at the time and this has to do with communicating via marketing that you understand what they want and that you are delivering what they want—and we’ll more about that in a minute. It also has to do with sales. When I say sales–call it business development—I am talking about what you and your attorneys—they are your sales force—what they are communicating and it’s important that not just you, but they all know what value you bring. So what your clients want, how are you communicating that across all your marketing vehicles and how are you also delivering that in your selling process and internal is how can you build your capacity to drive value. You’re talking about how do you drive it from an internal perspective. That has to do with the culture change; it has to do with buy-in. Your attorneys have to believe in the change in the things and how the market’s changing and what firms need to do to respond to it and it has to do with the infrastructure you have because you can’t change a lot of these things without taking a look at your infrastructure and we’ll be talking more about that.
Value proposition. What is your value proposition? What is a value proposition? One definition is a value proposition is a promise of value to be delivered and a belief from the client that the value will be experienced. That’s one definition. Your value proposition is what is the value you provide versus the law firm down the street or the law firm in Kentucky or whatever it is? What’s the value that your firm provides? You need a value proposition because this needs to be succinctly presented. It needs to be presented in a way that is clear, coherent and immediately comprehensible and I say that because a lot of firms, a lot of professionals, do not know that their value proposition. They know they provide value, but if we have lunch and I ask, “So what value do you provide?” and they’re trying to talk off the cuff, they’re going to ramble and it’s going to be five minutes later where I’m still going, “O.K., I’m not sure I understand exactly what value you provide and I’m not sure you know what value you provide.” So this is all about packaging and I say that because the other part of this is that a lot of you do know what value you provide. You talk about it, let’s say, on your website. So you talk about it in your material, but it’s not packaged in a way that’s comprehensive and coherent that if you took the same material—and I always envision this is as a packaging—tying this red bow around it—and put it together and said, “Here is our value proposition,” it would be so much stronger and it would be right out there and it would be something that would do a better job of marketing what you have to sell and also create less price resistance from your prospective clients. So I’ll be showing you some examples of that.
Let’s take a look at some examples here. My disclaimer is I have no relationship to any of these firms. It’s just I thought they were doing a very job. Number one, Kaynel(?) Gates. They have a whole brochure on their value proposition. They’re an international law firm. They are the not the only international law firm, right? We can probably name a dozen international law firms, but they are saying that is their value proposition. Their global presence and their global resources mean that they can respond any time to any concern, any crisis, anything that needs to be done and that gives you peace of mind and if you want to go on their website, you can see this. Now, they have taken the fact that they are an international law firm and they have packaged it as their value proposition and then everything else in this brochure supports it, but this is material they have; it’s material you have. They didn’t generate something new, but they took it and they said, “Hey, folks, here is our value proposition.”
This is a firm in the mid west. I looked it up last night and I want to say Minnesota perhaps. I’m sorry, but they do corporate restructuring and bankruptcy work. They specialize in automotive, Harrington Draygich. I thought what they did was brilliant. They addressed the Association of Corporate Counsel Value Challenge which we’ll be talking about in a minute and they said, “We have taken on this value challenge.” And this is what they said—they have a paragraph supporting each of these lines, “We’ve developed a number of capped fee arrangements for particular engagements, developed a new approach for billing our clients and we work with our clients to prepare a budget based on parameters and expectations.” This is their value proposition. You could see in the corner that they call it the Value Proposition; they address it; it’s clearly communicated; it differentiates them. This is a very strong piece of marketing and differentiation.
The next one is also very interesting because it doesn’t mean that you have only be talking about alternative fees. You can be marketing your hourly professional fees even though the world is changing, you’ll still be marketing those. This is Keller, Brown, Hill and Ritter. They are firm in Columbus, Ohio. They come full service. They do real estate; they do litigation; they do IP. It seems that there is very little they didn’t do, “Our location in Columbus, Ohio, means we pay less than most of the same everyday expenses. It also means that our clients locally, nationally and internationally pay less for their legal services.” O.K. A lot of firms say something similar, but they show this graphically. They are not afraid to show this in a very clear, striking way and this is on their website. So this was another way that they are saying, “Hey, folks, our value proposition, highly quality service at mid western prices, but look, let us show you exactly what we mean.’
So these, I think, are really great examples of some value propositions. Sometimes you may be saying, “Well, I’m not sure I have those points of differentiation,” but if we dig deep, we all have points of differentiation and a lot of it is that your points of differentiation may not be so different, but it’s how they’re presented, That is the main point. It’s how you’re presenting them that’s going to help you differentiate.
The other thing that I did not find is a value statement and actually I found very few firms with these value statements. A value statement is succinctly expressing your value proposition and it’s very important. They are very challenging to create, but I think they can really help brand you, help focus your marketing and I think they are worth really focusing on. A value statement is succinct. It’s not a tagline. We’ll go through these in a minute a little bit more. It’s not a tagline. Tagline is promotional. You want to have a tagline and you can also have a value statement. As I said, they’re very challenging to create, but they are worth the effort.
So just to give you an example for us. Our tagline is that “we turn how into wow,” but that’s promotional. That’s doesn’t talk about the value. We do turn how into wow, O.K., is that value we bring? Our value statement is that we create the visibility and credibility that fuel revenue growth because what our clients care about, professional service firms, law firms, is revenue growth and the value we bring is the input, the visibility and credibility that fuel revenue growth. So that’s a value statement.
Here’s another value statement. This is for Merck. Merck’s value statement is they preserve and improve human life. There’s a lot of value in that.
This is a CPA firm I came across. I’ve know them for a while, but I just came across a piece of their literature and thought, “What a great value statement.” “Bringing clients to pursue their passions since 1981.” That’s more than a tagline and this is the CPA firm of Sobel, Primes and Schenkel over in West L.A. They’re not saying we do your tax returns faster or cheaper or whatever. We free you to pursue your passions. Talk about value. There’s a lot of value in that. So you can see that when you take the time and effort to come up with this value statement, it can really be a differentiator; it can be striking. You don’t have to say a lot more. So it’s definitely a worthwhile exercise.
Let’s recap for a minute. Price and value are integral to your marketing and branding. Value is subjective; it’s fluid and it’s inconstant. So you have to keep on your toes because what your client valued six months ago may not be what they’re valuing today. Clients value results and in driving value, there’s an internal aspect and an external aspect. We’ve been talking about the external. We’re going to be talking about the internal and you want to consider putting together your value proposition and your value statement.
Moving on. Internal in terms of driving value. A lot of you may be familiar with the Association of Corporate Counsel Value Challenge which they started a few years ago. The value challenge is an initiative to reconnect the value and the cost of legal services. Law departments can use management practices that enhance the value of legal service spending and law firms can reduce their cost to corporate clients while still maintaining strong profitability. When you go to their website, there is tons of material about value and how different firms are doing it than some of the things that you can do and it’s definitely worthwhile and they talk a lot about value-based fees or alternative fee arrangements. What are those exactly? Those are billing arrangements that are partly or entirely non-hourly. They’re flat fee; they’re fixed fee; they’re per phase. They tend to be operational versus strategic. Per phase can be everything up through the trial is going a certain price or the routine document review is going to be a certain price and then if somebody has to go stand before the City Council, that’s going to be another price. So there are different ways to think about these things. What they are not is it’s not a contingency fee; it’s not a discount—and I know that a lot of your clients, that a lot of firms approach, “Hey, we’d like to have an alternative fee.” And really what somebody means is we want a discount. They’re not a discount and when it comes to law firm pricing, they’re not for the most part value-based in terms of when you hear consultants or other people talk about value-based fees. I mean there’s a place for value-based fees, but value-based fees are really based on the value and the impact that you’re creating for the firm. So if I’m going to make $350,000 more because of this consulting project that you’re doing, on an hourly basis, a consultant might have said, “O.K., that’s going to be $25,000,” but then on a value-based basis, they may say, “You know what, that’s going to cost you $100 grand, let’s say.” For the most part, that doesn’t work in legal pricing. There are not very many firms that have been able to do—the legal market doesn’t support that in general. The value-based fees we’re talking about here are not let’s say what the rest of the world is considering a value-based fee.
In terms of creating value, when you’re marketing your professional fees, one of the key ways that you can create value is to provide options to your client, not just “here it is,” but options. There are several ways we can approach this. One is additive. “Option A, if you want for us to just do this part of the project, it’s going to be so much money. If you want Option B, that includes Option A and that’s going to be a little bit more and if you want Option C which is everything we talked about, this is how much more it’s going to be.” The philosophy here is usually that your entry level is going to be fairly high so that the difference between Option A and Option B, somebody looks at it and says, “I’m already spending $5,000. Another $750 is not that much more. So let me do the $5,750.” So that’s part of the philosophy there or there can be options standalone. “You can do Option A, that’s this or you can do Option A and C or Option A, C and D or whatever” and they’re not additive; they’re totally independent. You could create value versus time in terms of “I can get it to you in two weeks. This is what it’s going to cost or if you don’t care when it comes, it’s going to cost less.” CPA’s do this. If you want your tax return by April 15, this is what it’s going to cost. If we can do it in offseason outside the busy season, then it’s going to cost less. Experience—“If you want me to do all the work, this is how much it’s going to cost and if you don’t care if most of the work is done by associates or done in India with me overseeing it, then this is how much it’s going to be.” You can also be thinking about what you can strip out so that it still provides value to the client, but basically allows you some freedom and more profitability. So these are just some options to consider. It’s not an exhaustive list, but it’s some of the options to consider in terms of how you can create value by providing options.
When it comes to implementing alternative fee arrangements, who do you want to approach about implementing alternative fees? I think there are different schools of thought on this. Some firms say, “Well, go to your best clients, your current clients who are your best clients and talk to them” and the reason is because a lot of times when you are converting from an hourly basis to an alternative fee or non-hourly basis, you need a lot of information and sometimes it means you need to open up your books to them—not every financial aspect, but I’m just saying giving them more information than you normally would and they need to open their books to you in terms of “this is how many wage and hour cases we’ve had last year” or “this is how many real estate deals we’ve done” or more information than you might normally get from them. So that’s why a lot of times, firms suggest doing it with your best clients. I happen to think that it might make—I’m not saying don’t do it with current clients—and, by the way, I know firms who’ve approached good clients and the clients have said, “No, we’re not interested in converting. We’re fine the way things are. “ So once again, it’s individual. I think it makes more sense to start with new clients and just in terms of when you’re making a change, it’s like you have a legacy, a way, a history with clients. It might make sense to be trying this with new clients and it’s not an either/or. So what does this mean? You need information from them in terms of what are you bidding on, what’s been their averages, what’s in the norm, what’s outside of the norm. There’s a lot of information you need as opposed to just being able to say, “Well, you know what, we’ve been doing it for $500. We’ll do it for $400 now” and just sort of saying, “I’ve got to back and figure how I’m going to make money on this.” So it’s a lot of information from both sides.
There’s infrastructure. We’ll talk more about this, but you’re going to need a certain infrastructure in order to be profitable working with alternative fees. For a lot of firms it means a lot more tracking—not to sound onerous, but you’re going to need to be able to track a lot more things in terms of the processes and the tasks as opposed to, “O.K., revenue and expenses or number of hours and how much did we make?” That sort of thing. And it takes a behavior and a culture change because this is a different way of doing things and we’ll be talking more about that.
The infrastructure and the efficiency all lead me to be talking about legal project management. What is legal project management? Sometimes it’s called legal process management. Legal project management adapts proven management techniques to the legal profession to increase client value while protecting law firm profitability. There’s online programs to become certified as a legal project management. There are consulting firms and I have some of those. One of them will sit at the end under our resources who teach legal project management. If you’re going to do legal project management, it’s great for some of your firms to get on line and become certified, some of your lawyers to get on line and become certified. I think that’s great. I don’t think that’s transformational. I think it makes more sense if you have a whole department or a cadre of your champions at least going through it so they can be leading and it takes culture change because if you come to some of your more seasoned lawyers, your most successful lawyers, your people who’ve been around who’ve been bringing the firm money and you go to them and talk about efficiency, they’re going to say, “Who, me, not efficient? I don’t know what you’re talking about.” You may get a lot of resistance, but if you go to your team, let’s say, that just completed a project financing for a client, some bridge or energy project and you say to them—and this could be a litigation; it could be a trial team or whatever—and you say—sit down debrief and say, “How could we have done this ten percent more efficiently,” you’ll come up with ideas. I mean I think we all know that if we sit down with our teams, we can figure out how to do something more efficiently and this is what legal project management is about. It also takes an infrastructure in terms of you can’t just be tracking time. You have to be tracking processes, tasks, looking at task codes so that you can analyze things, “O.K., how much time are we spending across the board on depositions or this part of a deposition or this part of reviewing documents for a financing or a real estate deal.” And you need to be able to look at those across the board so you can then look at how can we be more efficient. I don’t want to make it sound onerous. I don’t think it needs to be onerous, but I think it does take more detail than a lot of firms already have right now and it takes tracking. There’s no way—just like time tracking. If you’re not tracking it, if you’re not doing it as it happens, then you’re going to be losing a lot of valuable information.
To recap, we’ve talked about the role of pricing and value in marketing that’s an integral aspect of marketing. We’ve talked about how when you ask questions you can differentiate yourself in terms of the questions you ask. We’ve talked about packaging in terms of taking what a lot of you already have in terms of your value proposition and putting it together under that rubric so that it’s really presented clearly and breaks through the clutter. We talked about efficiency because you cannot be profitable with alternative fees—maybe for the first year you can—but you’re not going to become more profitable unless you can do things more efficiently because you can’t raise your fees basically. So I mean it’s really how efficiently can you do things and about the need for infrastructure that that is going to be critical in terms of if you’re profitable.
So now, when it comes to value and marketing, you have your communication points and you know what your value proposition is; you know what your value statement is. This is where the rubber hits the road. Are you clearly communicating these points through all of your marketing vehicles on your website and this is–for example, I talked to a mid west firm that is very successful with alternative fees. That’s most of the way their firm does business is through alternative fees and they’re very profitable and they’ve also all gone through legal project management and I was talking to them about, “Well, do you talk about legal project management on your website?” and the managing partner had to like pull up his website because “Gee, I don’t even know.” Well, they don’t talk about it on their website. To me, if you’re going to go to that trouble, at least in this market until every other firm on the block has done it, it’s a real differentiator and it shows what you’re willing to do. Now, I talked to another firm that’s become a real convert and believer in legal project management and they said, “Yeah, we sure do talk about it on our website.” And they said, “We tell our clients we are not going to waste your time. We have gone through this process. It’s important for us to be efficient. We will not waste your time.” So you could see the differences in philosophy. I mean I absolutely believe you want to be communicating you value points and if part of that’s legal project management, then you want to be communicating that. On your blogs, are you talking about it on your blogs? On Linkedin, do you talk about your value proposition and how you bring value on Linkedin. In your engagement letters, is it the same engagement letter it’s been for decades or are you mentioning the value that you’re going to be bringing in the engagement letter?
A point about shadow billing and whether or not to do it. Shadow billing is where you have made an alternative fee arrangement with the client and at the end of the year, you come to them and you’ve tracked how much time—if you had done it the old-fashioned way, let’s say—how much it would have cost them and then you say, “Look and we did alternative fees and we saved you X number of dollars.” I’ve heard both sides of this story, that some firms do “Yeah, we do do shadow billing. We want to show our clients how much we’ve saved.” I’ve heard other firms who don’t. I look at it and think, “It’s great for the first year and then what do you do? O.K., you’ve saved them money the first year. What are you going to do the second year?” I’m not sure that I’d want to open that can of worMs. I mean you made an agreement with them. If everybody’s happy, then I’m not sure that you have to go back and make that comparison or if you do it the first year, I’m not sure you want to do it the second year. It’s really open for debate.
And then when it comes to value and your communication points, your lawyers know what they are. This is so important. This is not just something for a website or your brochure. Your lawyers know how to communicate your points of value. Do you talk about them in your internal firm meetings? Do you do any kind of role play? Do your lateral hires and recruits know what they are immediately? I was listening to a lateral hire who joined a big firm and he said for months he had no idea how to describe the firm or what they did or what value they brought. He was sort of thrown in. It was like he had no idea how to describe it. There are other firms now that are more ahead of the game and the first day somebody walks in, they have that information ready for them, but it’s the same thing if your attorneys go to a conference to either circulate or if they’re manning a booth. Most of the time, they’re thrown in there; they have no idea what they’re supposed to communicate what their value points are. So it’s not just a matter–yes, it’s important to put them together, to tie them up and put that ribbon around them, but you have to make sure that everybody, your sales force, knows how to disseminate them, what they are and how to disseminate them. That is how you market your professional fees.
This is all talking about a revolution, a revolution in revenue, right? A revolution—think about when there’s a revolution in art. You had abstract expressionism and you had impressionism which revolutionized art a century ago or a century and a half ago. That revolution in art also has to do with that all of this pricing and marketing of your professional fees is an art. That’s why I don’t have this list of this is what you have to do. This is an art. Value varies from firm to firm; it varies from client to client. It’s an art. It’s trial and error. It’s evolutionary. You are going to make mistakes. That doesn’t mean you turn around say, “Forget it.” You’ve got to keep honing it. It’s like all your marketing is like a website; it’s like everything you keep. It’s all evolutionary. It’s about changing the culture. This is a revolution. We’re changing a culture in terms of clients are forcing law firms to change their culture. It’s about changing the culture that is changing. It’s about changing your internal culture which is pushing the boulder uphill and you have to start small. You have to develop your champions. It’s not going to permeate the whole firm over night. It takes that chipping away, but it does all start with you. That’s where it starts. Revolutions start with you.
So thank you very much for listening. I have a list of resources. These will be in the slides that they send out later. If you want to read about the history of law firm billings, there’s a very interesting article. I don’t even know if this publication’s still around. I can’t remember what it was, but anyway it’s here. If you want to just hear how we got there and the changes and how legislation impacted things over the years, this was an interesting recap. ACC value challenges, I said there’s a ton of information there about value and down at the bottom of the list here, there’s something about—if you want food for thought, “51 Practical Ways for Law Firms to Add Value.” It’ll keep you busy for a while. Legal project management, LegalBizDev. Jim Hassett is one of the gurus of legal project management. There are a lot of other resources, but you might want to start there. Ron Baker, “Implementing Value Pricing, a Radical Model for Professional Firms.” Ron Baker is one of the gurus of value-based fees. He talks about value-based fees the way I talked about more globally, but it’s definitely good food for thought. Also—and I didn’t put this on here, but really it’s an oversight—is Alan Weiss is also the guru of value-based fees and a lot of you probably know him, but same rationale, same thought in terms of how you look at your pricing. We talked about questioning and how your questions can make a difference in you and in the value that clients see in you. This is a recent book worth taking a look at , “Power Questions” by Andrew Sobel. So those are some resources and if we have any questions, I’d be happy to take them.
One of the questions here is what kind of questions should we be asking in order to determine value? Just a couple of sample questions that come to mind, like what do you expect from us? How do you define a successful relationship? What are your company’s critical success factors and I don’t know if you know the term KPI’s, key predictive indicators? I mean how are they measuring their results basically. I always like to ask why now? I mean this has been, let’s say for example, an ongoing issue. Why is it now you’ve picked up the phone? To me, that’s always interesting and can give a lot of information. If price were not an issue, what role would you want us to play in your business? These are just a couple of questions. There are a lot more, but in terms of—please do not ask, “What keeps you awake a night?” To me, that’s just a by-the-book question. Let’s not ask that one.
How do you approach a longtime client about adapting to new fee arrangements? I think what you would want to do is to talk to them about the fact that the world is changing and that you are changing with the world, that you know professional fees and value for fees have become a big issue and that you have taken a look at how you might be able to do things differently. I wouldn’t walk in with a proposal. I’d walk in with some questions, maybe some thoughts about how you might do it differently. I wouldn’t want to let’s say give away the store right away until you get more information from them and you do it client by client. I think if it’s one or two clients, that’s a great way to start. It doesn’t mean everybody’s going to convert or get on line.
And somebody here asked me about e-mailing the handouts. We will be e-mailing the handouts, hopefully by the end of the day and earlier I hope.
O.K. It looks like we are out of time. Thank you very much for listening. Once again, I am Sharon Berman. This is the Berbay team and we welcome the opportunity to talk with you further. Thanks very much.