Being There for Clients – How Available Are You?

Does providing excellent client service mean you have to be tied to clients 24/7?

Dan Hull, who writes the respected What About Clients blog thinks lawyers should be there for clients — 24/7. I agree with Dan when he says,

In the next decade, and even for high-end clients, more and more “cookie cutter” and fungible services will be outsourced and done by very smart and far more cost-effective workers and professionals in Bangalore, Taipei or Mexico City. Just wait. What’s left over will be specialty items and things clients need professionals and specialists to do at their highest levels of thinking and problem-solving.

This may very well be the ‘wave of the future’ for legal practices. That’s why lawyers need to differentiate themselves from the competition, whether that competition is down the street or across the world. It’s why lawyers have to focus more on what their clients really want, and on finding innovative ways to meet not just the needs and wants that clients openly express, but needs and wants that are below the surface.

Where I disagree with Dan is in the premise that providing your clients with the best service always means being available 24/7. For certain types of law practices, being available for your clients at all hours of the day and night, seven days a week might be necessary – a criminal practice comes to mind. If a client is arrested, they need legal counsel fast. And in that situation, if you’re not available, you might lose that client. And if your practice is international in nature and you’re dealing with clients in different time zones, chances are that you’re going to be available on a different schedule than someone with a purely local practice. 

Attorneys are not royalty, as Dan says. But it doesn’t necessarily follow that today’s marketplace or the marketplace ten years from now requires that attorneys be available to their clients around the clock. I’m sure that many will disagree with me, but being available around the clock may not be the best strategy for you or your clients, even if clients say that’s what they want.

It may seem like a radical point of view, but consider the possibility that being always available can diminish the value of your services. Although clients may say they want the cheapest lawyer, they really want the best representation they can get – they want the best value. Being the most available can undervalue your services in the same way that being the ‘cheapest’ can. As Dan Kennedy suggests in some of his teachings about marketing and running a business, nobody lines up to seek the advice of the old man at the bottom of the mountain. It’s the wise man at the top of the mountain that people line up to see – and that people make sacrifices to see.

I’m not suggesting that attorneys should make themselves unavailable merely for the sake of making themselves unavailable. But remember that your best clients are the ones that seek out your advice and that trust and respect you and your judgment. If you’ve built the right relationships with your clients and if you’ve positioned yourself in a way that takes advantage of your own unique talents and skills and you serve clients in a way that no other lawyer does, existing clients, and even potential clients, won’t be too eager to throw that away to take a chance on someone else merely because they claim to be available 24/7.

I’ve said before that sometimes being too available hurts both the lawyer and the client. Again, a lot depends on your individual practice, your practice area, and the client. But being too available can make the client too dependent on the attorney, and can unnecessarily inflate legal fees. It can be the cause of poor performance, distracting the attorney from the task at hand and from the client who’s looking for assistance. I’ve worked with and have personal relationships with attorneys that are available 24/7. Many times, their clients are unnecessarily demanding because they know the attorney is ‘available’ 24/7. Often, they’ve got high stress and high blood pressure, and they never really re-charge. That isn’t good for them, their families, or their clients. They may be ‘successful’ in that they make a lot of money, but is that the only definition of success?

By contrast, I know attorneys that restrict their availability, albeit for good reason. They explain to clients that when they’re involved in a trial (for example), they don’t take other client calls. The client can call the office and get assistance from someone else. If it’s a real emergency, the lawyer’s office is instructed when and how to contact the attorney, but the client isn’t given direct access. The clients respect this, knowing that when their case is being tried, they’ll get the attorney’s full attention.

All of that being said, depending upon your practice area, it’s a good idea to set up systems to ensure that there is a mechanism in place for clients to get to you if they have a true emergency. Dan says that, “no client worth keeping will abuse the privilege.” This may very well be true, but sometimes it’s tough to discern which clients are worth keeping from the outset. Giving all clients unfettered access to you at all times is, in my humble opinion, a mistake. Instead, if you’ve got a client with whom you’ve established a trusting relationship that goes both ways, feel free to give them access that you deem appropriate, and make sure they understand the uses of that access. 

If you’re working in a firm and can establish a system whereby a client gets immediate help from someone, and that you can be reached if necessary, that makes more sense than providing everyone with your personal contact information. Often, if a client trusts you, they’ll trust your staff and they’ll also trust your discretion about how a particular matter or problem should be handled, and by whom. Much of this is a matter of setting expectations with clients at the outset and establishing a good relationship.

Dan Hull contends that in order to be competitive, we have to ‘be there’ for our clients 24/7. I’m not sure that’s true, and particularly not in all practices. A lot of discussion about availability comes from a scarcity mentality – it’s based on the assumption that there aren’t enough clients to go around and that lawyers are all fighting over the same small pool of clients. But if you’ve positioned yourself in such a way that you’re providing service that others aren’t providing, being always ‘on call’ may not be necessary. 

I also disagree with Dan’s contention that not being available 24/7 is arrogant, spoiled and stupid – in fact, I think it can be good business, and that it can benefit both the lawyer and the client. 

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Is Poor Communication Undermining the Culture at Your Firm?

Michelle Golden’s Golden Practices blog contains a great post entitled, “If Internal Communication is Poor, Can You Still Have A “Great Culture?” She warns that firms that take their ‘great culture’ for granted are playing with fire. She lists seven ways in which firms undermine their ‘great culture’ by failing to communicate personally with people about important things:

  1. Notifying people by memo or e-mail about their colleague, even manager, having been “let go”
  1. Relying on the informal gossip chain to replace formal presentations of “state of the firm” or goals, visions, and other important news or changes
  1. “Leakage” of preliminary information (often by owners to select team members) about pending policies, pending raises or bonuses, or other critical economic information, such that a mention or two to friends means pretty soon the whole firm “knows” — often it isn’t even final so the info may be wrong(!)
  1. Rolling out new programs or policies by memo or e-mail with no formal presentation to personally introduce it, frame it with appropriate background information, answer questions, and create enthusiasm
  1. Not telling people (hopefully publicly!) that they have done a great job
  1. Not telling people privately AND constructively how they could do something better
  1. Telling people anything personal, corrective, or negative by e-mail (and cc’ing others is a very, very bad idea)

I have a few more failures of communication that undermine what would otherwise be a great place to work:

  1. Not communicating with the firm about new hires (and not being prepared for their arrival)
  1. Not telling people that a program, initiative or policy has been abandoned (possibly due to lack of enthusiasm or appropriate communication in the first place — see #4)
  1. Promoting someone or changing their job description and failing to clearly communicate the change to others on the team – particularly where the change involves a change in authority or chain of command
  1. Not communicating the ‘big picture’ to the whole team – failing to let people know how their role contributes to the whole, not informing the team of the results of an engagement or not reporting feedback from clients

and to make it an even dozen:

  1. Not listening (this could be a list in itself!) – actively discouraging input or acting in a way that sends a message that the other person isn’t valued (not being ‘present’ for the communication – answering emails, doing paperwork or taking calls during the conversation or meeting, having side conversations, or focusing on the intended response rather than being open to another point of view)

Take a good look at the way your firm communicates, and make sure you aren’t ruining what would otherwise be a ‘great culture’ by making these mistakes.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

How to Attract and Keep Superstars in Your Firm

Worried about great lawyers or staff being lured away by the competition? Read on to find out the best ways to keep your best employees loyal to your firm.

I was reading one of my daily newsletters, Early to Rise, and came across an article by Michael Masterson which addressed exceeding your potential by surrounding yourself with superior people. Masterson relayed the story of a young woman who was succeeding brilliantly at her company, but wanted to leave. When he asked her why, she said that although her boss was a wonderful person and an excellent businessman, she had ideas to expand the business and make it more interesting, but her boss rejected all of her ideas because he had a particular way of doing business. Frustrated and sure that she could make a difference elsewhere, she decided to leave. I can understand that, having experienced it myself. And so can a lot of people who are dynamic, committed, and innovative.

As Masterson says in his article, the ‘superstars’ don’t often leave because of money. Sure, money is often a factor, and law firms, like businesses, need to ensure that their top performers are paid well. But, for most high performers, interesting work, personal and professional development, and a chance to contribute to the firm in a meaningful way often mean far more than the paycheck alone. 

Masterson’s advice on keeping superstars:

  • Invest in your top performers.
  • Continually weed out the weak performers and replace them with stronger ones.
  • Treat your people well by giving them what they need – which sometimes means being tough, but always means being fair.
  • Give your best people lots of good work to do.

Finally, Masterson suggests asking yourself these questions, and re-evaluating your priorities if you answer ‘no’ to any of them:

  • Have I hired anyone in the past few years who is as good as or better than I am?
  • Am I willing to have someone who is smarter than I am work for me?
  • Would I give a superstar employee the chance to demonstrate his superiority?

Sometimes it’s a leap of faith to allow a superstar to shine, particularly if that superstar might outshine some of those that are already at the top. And law firms often fear that allowing a superstar more responsibility, more ways to shine, more access to clients, more free rein will give them the tools they need to leave and perhaps to take some of the firm’s clients with them. But the greater risk is in preventing these top performers from doing challenging and complex work, and from putting their ideas into action. That virtually assures that they will leave. Not only are you likely to lose a superstar, but by consistently treating your superstars that way, you’re likely to attract less of them in the future

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

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    <p><strong>P.S.  Found a mistake or a bug?</strong> If there's anything that bothers you about this site,  I want to know! Send me an email at <a href=

Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Why Lawyers Are Bad at Client Service

I received an email from a reader in response to something I’d written about  excellent client service that said, in part,

Customer Service, whether in a diner, the grandest salon purveying the finest food and beverage in this or any land, or in the conference room filled with the greatest collection of legal minds … is a lot MORE than even what Meyer calls Hospitality, and whether one argues that it can be taught, it CAN be felt.

It’s more than just being on the client’s side. It’s empathy, it’s caring, but it’s also genuinely liking people. The best food servers like serving food to people. The best retail clerks like shopping with their customers. The best salespeople like selling. And the best lawyers like lawyering for their clients.  They think it’s important. It’s what they DO. It’s what they’re MEANT to do. They mean it when they do it, and they love all of it. If they thought they could get away with it and not be called weird, they’d hum while they did research. . .they might even sing while they wrote (just to themselves, of course, I’m just sayin’).

You said something interesting in your blog: “They should always be made to feel that everyone in the firm, regardless of position and familiarity with that particular client, is there to serve the client – as indeed they are. For a truly spectacular client experience, everyone within the firm must be willing to ‘go the extra mile’ for a client, and to do the unexpected.”

I’d be a little more strident: It should be clear that the first, and frankly only job is to serve the client. Period. Until you get to that point, you don’t understand client service, and if you never get to that point, you will NEVER understand it. If I were ignored, or made to wait, I’d take my business elsewhere, especially at the rates law firms charge. And when it comes to legal services, I can guarantee you, there IS another law firm down the street. There may only be one Chef Fancy at Le Chateau Extreme, but, until a lawyer proves herself to be indispensable, she’s pretty much fungible in the eyes of most clients (sad, but true). And even if lawyers are not, law firms ARE.

It’s a LOT more than just being “hospitable” even if you take the “Southern hospitality” meaning into account. I would agree that not everyone can do it, and I’ll say what some won’t: If you can’t bring it out in your people, get rid of them, and find people who have it. They’re out there, and clients deserve it. I know I do.

I agree with a lot of what this reader had to say. Here are some of my thoughts about why some of this may be occurring:

The unfortunate state of things is that many, many lawyers think of themselves as technicians – what they feel they’re MEANT to do has more to do with understanding the law or analyzing a problem than with serving a client. Some of that is the result of the way lawyers are trained.

Lawyers are trained to research precedent and analyze issues in the context of previous decisions. Clients are rarely discussed in law school. There is little, if any, discussion about all of the myriad aspects of serving clients that don’t involve analyzing issues or making arguments. It isn’t surprising that the client service aspect of the profession is often overlooked or ignored, or just not valued by the time lawyers begin practicing. 

Lawyers that practice in large firms after law school have little to no client contact for years, and often see only the small issue they’re working on – they’re rarely informed about the ‘big picture’ or the overall strategy involved in the engagement, let alone the client’s business strategy or needs outside of that particular matter. To a large extent, lawyers are trained to be backward looking. New ideas and innovative thinking are often scoffed at or viewed as too risky or too costly to undertake.

Lawyers often see the legal issue, not the person behind it. They don’t always see that ‘liking people’ is an important aspect of their jobs – and historically, it may not have been as important for lawyers, because clients put up with a lot to get the lawyer’s technical expertise and training.

Many lawyers just don’t see how client service (or lack of it) affects their bottom line – either the nature of their practice doesn’t lend itself to repeat clients or they don’t realize that clients aren’t coming back (and aren’t referring others) because they didn’t receive excellent client service. Many clients won’t leave during the course of an engagement because it’s just too expensive to change lawyers in the middle, and there’s an element of the ‘devil you know vs. the devil you don’t know.’ In those cases, the lawyer doesn’t realize she has ‘lost’ a client because the engagement gets completed despite the client’s dissatisfaction.

Some clients that leave because of poor client service may give a different reason for leaving – it may sound like they’re complaining about fees, but their real complaint may be that they didn’t feel they got value for their money because the service wasn’t up to par.

Since there’s often no easy way for a lawyer to know that a former client had another legal matter and didn’t return to the firm, or that a current or former client didn’t recommend the firm to a friend with a legal problem, this is, to some degree, an ‘invisible’ problem. This can be overcome at least in part if lawyers put better client service/client experience initiatives into place, have frequent conversations with clients about their experience with the firm, have more in depth conversations with clients about expectations, learn to listen more carefully to clients, and regularly survey or review these issues with clients at all stages of the engagement.

A lot of lawyers make the mistake of putting themselves, rather than their clients, in the center of the equation, and that attitude trickles down to the staff. In lots of law firms, the thinking is that the staff exists to help the lawyers, not to help the clients. Although of course, the ‘ support staff’ in a law firm is there to make the firm work more effectively and to support the legal work the firm is doing, many lawyers seem to forget that the legal work is being performed for clients. Without clients, there would be no firm.

I did not ever mean to imply that client service was limited to Meyer’s definition of hospitality as set forth in the Inc. magazine piece, and I agree that as competition increases, lawyers will need to be more and more focused on clients. It’s a lesson they’re still learning, and part of what I’m trying to impart to lawyers. Clients DO deserve more. And lawyers that don’t get it are going to eventually learn the hard way.

I’m not trying to make excuses for lawyers, but to those ‘on the outside’ who may not have experienced legal education or the (sometimes unfortunate) realities of legal practice may not realize that all of that education and experience shapes the thoughts, beliefs and actions of lawyers.

The best way to increase the level of client service that is being provided is to continue the discussion, and to make that discussion practical and productive – to show lawyers how client service (or lack of it) affects their practice on a profound level, and what they can do to change that and increase the quality of representation they provide to their clients.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

What To Do With Client Feedback

In a previous article I wrote about the importance of seeking feedback from clients, and the ways in which to go about obtaining it. But don’t forget what may be the most important part of the equation – what to do with the feedback once it is received. Obtaining feedback from clients and never looking at it or taking action on it can be worse than failing to ask for the feedback in the first place.

The response to the feedback you receive doesn’t necessarily have to be a direct response to the client, although in many cases, a direct response is appropriate. A client who takes the time to provide constructive suggestions for improvement of a firm’s performance is going to expect action from the firm – either a change in the way the firm provides its services, or some explanation or further discussion from the firm about how to deal with the client’s matters in the future. But whatever feedback the firm receives should be acted upon in some way. And the feedback should always be shared in some manner with those that worked on that client’s matter, including support staff and associates. Although it may not be appropriate in all cases to share the exact response received, the nature of the response should be communicated if the firm expects to improve on weak performances and to encourage strong performances.

Many lawyers make the mistake of taking action only on negative client feedback, but results of a client survey or study indicating that the firm’s performance is ‘ok,’ may warrant more of a response from the firm, whether internally or directly to the client, than purely negative feedback. It is the merely ‘ok’ response that may signal danger for the firm for the simple reason that those results are easy to overlook. It is the indifferent client that the firm has the best chance of turning into a satisfied and enthusiastic future client if the client’s concerns are acknowledged, particularly if there are areas in which the firm can improve its performance in the future for that client. Although negative responses do warrant attention, there are some clients who just won’t be satisfied, and these may be the clients that the firm does not want to encourage to return. By contrast, the indifferent client can often be won over.

Rather than ignoring the ‘ok’ response, the firm should seek to identify the areas in which the client was less than thrilled with the firm’s performance. Often, the areas of disappointment or indifference relate not to the firm’s technical expertise, but to the level of service provided to the client – the ‘experience’ that client had with the firm. 

If the firm has received the client’s feedback in written format, sometimes a follow up meeting between the client and senior members of the firm can go a long way toward repairing or strengthening the client relationship. Remembering that the law is all about relationships, it is the service, rather than the techinical expertise, that often ‘makes or breaks’ the attorney-client relationship. 

Most client complaints are experience or service-oriented, rather than results or expertise-oriented – the lawyer failed to return telephone calls, the lawyer didn’t listen, the lawyer was condescending to the client, the lawyer failed to keep the client informed of progress on the matter, the lawyer failed to provide the client with a reasonable overview of the matter in terms of time, procedures, and billing expectations, the lawyer failed to live up to promises about deadlines or timeframe, the lawyer failed to alert the client to major changes or complications with the engagement, the staff at the attorneys’ office failed to make the client feel welcome or understood, etc. The good news is that these issues are often easily dealt with, once the firm is aware of them. But failing to follow up with a client that provides an ‘ok’ report robs the firm of the ability to learn of these issues, which many clients will not raise on their own unless and until the problem is beyond the point of repair.

Finally, don’t ignore positive feedback from a client. If you or your firm receives a glowing review from a client, ALWAYS, at the very least, say thank you. You can thank the client in a letter, via email or with a follow up telephone call. Let the client know you appreciate their taking the time to complete your survey and thank them for their positive comments. You may also want to ask the client’s permission to use them as a reference, or to use their comments as a testimonial for your firm. Some clients may be uncomfortable with this idea, so this conversation needs to be extremely respectful of the client’s wishes. (See my earlier post about client testimonials here). However, there are many clients who are more than happy to be a ‘raving fan’ for an attorney that has provided outstanding service. 

 

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Tips For Obtaining Client Feedback

Seeking feedback from clients is important. But what is the most effective way to obtain this information? The answer may depend on the kind of practice you have and the nature of the particular client – whether it’s an ongoing relationship or a ‘one time’ client.

So many lawyers boast in their marketing materials, on their websites, in firm brochures, etc., that they provide ‘excellent client service.’ Ultimately, in order to back up those claims, law firms need to connect with their clients in meaningful ways – by staying in touch, by showing interest, by learning about the client’s business, by anticipating clients’ needs, by providing solutions that make sense from the client’s point of view, and by checking back with clients to see whether they feel that we’re doing enough. Sometimes the best way to serve our clients is to admit what we don’t know and set about learning it – whether directly from them, or from other sources.

Client feedback can be sought through completion of client surveys or feedback forms sent to a client upon completion of each matter. The advantage to this type of system is that many clients will be more forthcoming on paper than they would be when speaking directly to a lawyer from the firm, particularly if the lawyer is one with whom the client works on a regular basis. The disadvantages of using forms is that many clients will not bother to complete the forms, particularly where the concluded matter is a ‘one time only’ engagement.

One possible solution to this dilemma is to provide the client with an opportunity to provide feedback to the firm earlier in the process, thus allowing the firm an opportunity to learn whether the client is happy with their experience of the firm and to correct any misunderstandings while the matter is ongoing.

Written feedback forms should not be too long or too cumbersome to complete, lest they discourage the client from responding. A few ‘narrative’ questions may be helpful, however, for written format feedback, ratings-type questions (for example 1-5) may be easier and faster for a client to complete. 

David Maister, in his book Managing the Professional Services Firm, contends that client surveys with 25 or so ratings-type questions are simple for clients to complete and have historically been shown to communicate the firm’s desire to improve while allowing the client to provide both positive and negative feedback. Maister contends that response rates to questionnaires of this kind are high where the client is aware that the questionnaire is coming, and where the questionnaire is returned to the firm, rather than to the specific partner with whom the client deals on a regular basis.

Another way to obtain client feedback is to schedule an interview with the client at the completion of the matter. If possible, this interview should be conducted by a senior lawyer in the firm, although not necessarily the lawyer that regularly handles this client’s matters – once again encouraging candor. 

The following are some general areas to cover when requesting comments from clients on their experience with your firm:

  • The client’s overall experience with the firm
  • Experience with lawyers
  • Experience with non-lawyer staff
  • Responsiveness
  • Communications with the client
  • Technical ability

Some narrative questions can be included as well. Ask what suggestions the client has to make the client’s experience more enjoyable or improve the firm’s service, what would encourage the client to hire your firm in the future (or recommend the firm to a friend or colleague), what areas the client thinks the firm could improve and in what areas the client thinks the firm excels. 

Many clients appreciate the opportunity to praise particular individuals within the firm (including the non-lawyer staff) with whom the client has dealt, particularly on long-term engagements. Some firms may want to include an opportunity for the client to identify the individuals with whom the client interacted by name and to provide specific comments about the service they received from those individuals.

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Already a subscriber? Want to learn how I can help you? Learn more about the products and services I offer by clicking here.

Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

How Many Clients Should You Have?

A friend recently asked me, “How many cases should I take in a year?” Unfortunately, there’s no magic number to answer that question, perhaps that’s because it isn’t the right question to ask – it’s looking at the problem from the wrong end.

A better way of getting to the information that I think my friend really wants to know is by starting from the outcome that you want to achieve. This will be different for every practice. What matters really isn’t the number of clients, per se, but whether you’re accomplishing what you want and need to with your practice. “Too many” clients may just mean that it’s time to expand your practice and bring on some help, or start taking on higher value, but lower volume work. “Too few” clients may mean that you aren’t charging appropriately for your services or you aren’t effectively marketing yourself.

Instead of looking at the problem from the angle of “how many clients should I take on this year,” which, translated, really means, “how many clients do I need to take to get where I want to be financially and to satisfy my other needs related to the practice, i.e. professional fulfillment, etc.,” try looking at it from the opposite perspective and define what those needs are, and then you can work backwards to determine the best way to get there.

Looking at your practice from this angle is similar to looking at the vision you have for your practice (you can read more about that here.) Once you have the vision, you can determine the steps you need to take to get there. Once you know what you’re looking for from your practice in the next year, you can determine what kinds of cases you need to take, how many to take, and how much you need to charge to reach your goals.

Some things you might want to consider (and this is by no means an exhaustive list) are:

  • What kind of practice do you have?
  • How many current cases are you handling?
  • How much time, on average, does it take for you to handle each case?
  • Are the kinds of cases you’re handling now the kinds of cases you want to handle, or are you looking for something different?
  • Are your cases ‘high value/low volume’ cases, or ‘high volume/low value’ cases?
  • Can you delegate some of the ‘lower value’ or administrative work you do to another person, whether it’s another lawyer or an assistant?
  • Do you practice in multiple areas of the law, or just one?
  • What are your expenses, including retirement, medical and dental expenses, among others?
  • How do you charge your clients – flat fee, hourly, contingency?
  • What fees do you currently charge?
  • How much do you want or expect to make this year?
  • Do you plan to take some cases on a ‘pro bono’ or ‘low fee’ basis?
  • How many hours of your day can you reasonably expect to bill?
  • What is the going rate for legal services in your practice and geographical area?

The bottom line for me is to figure out what you want your year to look like, and then determine how many, and what kinds of cases you want or need to take.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

Exceeding Clients’ Expectations

By under-promising and over-delivering, law firms can increase their bottom line and improve the reputation of lawyers in general, and that makes exceeding clients’ expectations just good business. 

Of course, there is an opposing viewpoint. Exceeding clients’ expectations is considered by some to be a “stupid strategy.” However, often, those that think exceeding expectations is the wrong path to take often base their opinion on the premise that exceeding clients’ expectations offers more value to a customer than the customer wants, and cuts down on profitability. 

But under-promising and over-delivering doesn’t mean providing additional value to the client in such a way that it hurts the firm’s profits. On the contrary, it creates increased profits by increasing client loyalty. 

Often, exceeding clients’ expectations does not require additional expenditures of money or time, and can be accomplished simply and effectively. Seemingly small changes can make a big impact. Some good examples include communicating with clients on a timely basis, ensuring that each contact the client has with the firm is pleasant and courteous, and making clients feel as if the firm cares about the client and her business.

Some define good client service as determining the client’s wants, and then delivering exactly that and nothing more. In my opinion, this is not only short-sighted, but is a disservice to clients. Clients hire lawyers for their expertise, advice and experience. Sometimes what the client ‘thinks’ they want is, upon further reflection or exploration, not in the client’s best interests. Often, the lawyer is able to suggest different alternatives that would better meet the client’s needs, or more effectively accomplish the client’s goals. 

Creativity and innovation in the approach to a client’s problems may be the best value a firm delivers. A mindset that places a premium on the client’s stated wants and disregards the firm’s ability to assess the situation and suggest alternatives, is a huge loss for clients and de-values the importance of hiring an attorney. It’s this kind of thinking that leads people to the conclusion that legal services are a mere commodity.

In short, exceeding clients’ expectations is an excellent strategy. It is the essence of good service.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Can Excellent Client Service Be Taught?

A brief article in the July 2006 Inc. magazine caught my eye. The piece was about customer service in restaurants, but the lesson applies to law firms, too. A reader asked whether great customer service can be taught. The answer, by Danny Meyer, CEO of the Union Square Hospitality Group, a company which includes the Gramercy Tavern among its holdings, makes a distinction between customer service and hospitality, and claims that the latter cannot be taught.

Meyer says that in the restaurant business, customer service is, “getting the right food to the right person at the right time.” In the legal world, that translates to performing the work competently and on time for the client. In short, it’s what I call technical skill.

Hospitality, on the other hand, is defined by Meyer as, “the degree to which your customers feel that your staff is on their side.” To Meyer, this includes such intangibles as remembering repeat customers, listening, making eye contact, and handling mistakes well.

When I talk about providing excellent client service, I’m talking about what Meyer calls hospitality. That’s the real essence of client experience. It’s what will make the difference between a good law firm and a great law firm. In the legal world, there’s nothing the client wants more than to feel that his lawyer, and indeed the entire firm, is on his side.

The ‘hospitality mentality’ needs to be present throughout your firm in order to provide your clients with a good client experience. Your receptionist should take care to remember long-standing and repeat clients. Professional staff must be mindful of listening to the client’s needs and concerns, rather than merely barging in with the lawyer’s solution to what the lawyer perceives the client’s problem to be. Clients must be treated courteously and professionally at all times. They should always be made to feel that everyone in the firm, regardless of position and familiarity with that particular client, is there to serve the client – as indeed they are. For a truly spectacular client experience, everyone within the firm must be willing to ‘go the extra mile’ for a client, and to do the unexpected.

Sound easy? It may be, but time and time again I’ve observed law firm personnel, whether staff or attorneys, ignore clients sitting in the waiting room, brush off a client’ s call without attempting to help because they aren’t familiar with the client’s problem or because the person whose ‘job’ it is isn’t currently available. Client service is the job of every individual employed by the law firm.

For employees who aren’t providing the proper level of hospitality, Meyer recommends telling the employee precisely where he’s going wrong and giving him a fixed amount of time to make specified improvements. For law firms, that means feedback of a less than traditional nature. And that feedback can’t wait until an annual performance review – your relationships with your clients are too important for that. Feedback needn’t be formal, but it must be provided at all levels on an ongoing basis. This feedback should be made in conjunction with client review sessions or client satisfaction programs.

Hospitality, or an outstanding client experience, is often a product of the firm’s culture and environment as a whole. As Meyer cautions, “hospitality starts with employees treating one another with respect and trust. If that’s missing with your staff, it will be missing with guests.” Wondering whether your clients are being treated the way you want them to be? Look first at how your partners, associates and staff treat one another – if your internal culture, atmosphere and communication are poor, chances are the client experience with your firm may not be as positive as you’d like it to be.

Meyer contends that the key to hospitality is hiring the right people, because hospitality cannot be taught. Although I don’t necessarily agree completely, I do agree that a firm can’t provide its clients with a truly great client experience without the right people. Meyer says he looks for five key traits when interviewing prospective candidates to work in his business: friendliness, curiosity, a good work ethic, empathy and self awareness. What do you think are the key traits a legal employer seeking to increase the quality of client experience with her firm should look for?

This article originally appeared on my blog, and prompted a number of comments. To see the post and the comments, go to: http://legalease.blogs.com/legal_ease_blog/2006/07/can_excellent_c.html

For more about how your firm can incorporate client service into its cultures, see these articles and blog posts: Considering Client Service as Part of Employment Reviews, Exceeding Clients’ Expectations, How Client Dissatisfaction Can Hurt You, Do You Know What Your Clients Really Want? and Rules for Client Service.

If you’d like to read more about client feedback programs, you can check out these articles and blog posts: Do You Know if Your Clients are Satisfied?, Tips For Obtaining Client Feedback, What to do With Client Feedback and More on Client Surveys and Client Satisfaction.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Do You Know If Your Clients Are Satisfied?

In ongoing surveys of lawyers that I’ve conducted, most agree that client service is an important part of marketing, and yet many don’t have methods in place to measure client satisfaction. Among those that do have such procedures in place, even fewer follow up with clients after each individual engagement to determine their satisfaction. 

Many lawyers tell me they don’t need formal procedures to gauge client satisfaction – they just ‘know’ whether or not their clients are satisfied. But do they really know? Don’t make the mistake of assuming that clients who don’t complain are satisfied clients. Once a client starts making objections, it may be too late to salvage the relationship. Many clients don’t complain until they’re already fed up and ready to walk out the door – or at the very least, not recommend you to others.

Some lawyers are afraid to ask clients for feedback because they fear it will invite clients to think of negative things to say. But the point of seeking information from clients is to find out how to improve your service. Sometimes even ‘over the top’ clients have legitimate complaints or concerns that can be addressed in a more global way. And often even the most unreasonable client complaints have a nugget of truth at heart that is worth exploring.

Another objection I’ve heard to seeking client feedback is that once a lawyer asks a client for their feedback, the expectation is that their complaints or concerns will automatically be addressed or resolved. Many lawyers fear that clients will suggest changes that the lawyer cannot make for ethical, financial or other reasons, and that failing to make those changes paints the lawyer in a worse light than failing to ask for feedback in the first place. In rare cases, that may be true, but turning that objection on its head may lead to a valuable learning experience. 

If the client making the objection is a repeat client, or one from whom you are likely to get business in the future, the issue might be worth exploring in a more in-depth conversation or face to face interview to determine whether there is some middle ground that can be reached. Keeping an open mind during these conversations may lead to solutions the lawyer never considered – solutions that could be beneficial to both sides.

Alternatively, speaking with the client about the issue and addressing their concerns while explaining the reasons why changes can’t be made in the way they anticipate can strengthen your relationship and may provide the client with a better understanding of the way in which you work, while at the same time providing the attorney with valuable insights into the client’s priorities and goals.

Even for ‘one time’ clients, addressing these kinds of concerns can be valuable. Perhaps the issue is one that needs to be explained in more detail at the time you are retained to avoid misunderstandings with future clients. And chances are that taking the time to talk with a client, even one for whom you’ve already concluded your business, will generate goodwill that may lead to referrals in the future.

Seeking out feedback from clients can help you determine what kinds of clients to take on in the future; perhaps hearing the same complaints from the same kinds of clients is a signal that this type of work, or clients that fall into this particular category, are no longer the type of clients with whom you enjoy working, or with whom you can profitably run your practice.

Following up with clients after an engagement is concluded can also lead to valuable positive feedback about individual lawyers in the firm or about specific areas in which the firm excels. Sometimes the firm may not even be aware that they have particular strengths (or may not be aware that clients take note of them). In these cases, client feedback can provide valuable insight into the firm’s competitive advantages that can be used to differentiate the firm from the competition and strengthen its marketing.

Clients that see that their attorneys show a genuine interest in the client’s experience are often that much more willing to help the lawyer by referring the firm to friends and colleagues. And great comments on a client feedback form or in a follow up interview with a client after the successful conclusion of a case can sometimes lead to references or testimonials.

 

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Do You Know What Your Clients Really Want?

Seth Godin claims that consumers say they want everything “perfect, now and cheap,” but what he thinks they really want is “interaction, expectations exceeded and respect.”

Whether we agree with Godin or not, it behooves us to realize that consumers, which includes consumers of legal services, often don’t articulate what it is that they really want. Sometimes they don’t know what they really want – at least initially. It takes a little digging, a little conversation, a little interaction with them to get to the heart of what they really do want. And sometimes it takes a little testing. Clients often act very differently than they think they will or say they will at the outset if some basics are not explored.

I had a very interesting conversation with an attorney last week after one of my presentations. We were discussing how he talks to clients about fees and expectations. Although clients often tell him that they only want him to do work on the file, when he probes a little deeper with them, he often finds that what they really want is for him to use his discretion to determine what would be best for the client, both economically and in handling the file. For example, when he points out to the client that they’ll be paying his fee to appear for non-substantive conferences that require an appearance but have already been adjourned ‘on consent’ of the parties, the client agrees that perhaps he doesn’t want the partner to do everything on the file, and that the partner should use his discretion to determine when to send an associate.

This lawyer is very smart. He’s created a win-win situation. He wins and the client wins. The client is getting great representation in the most economical manner it can be delivered. The attorney is still accountable to the client, but he’s leveraging properly so that he can focus on the tasks that need to be handled by a higher level attorney, while giving his younger associates experience and keeping the client happy. If done properly, not only does it keep the client’s costs down, but ultimately, it maximizes the return for the firm as well. And his conversation with the client enhances the relationship of trust. The client knows that, rather than trying to ‘milk’ the client by getting his partner rate for everything from photocopying to filing papers and doing routine tasks on the file, the attorney is making informed, professional decisions about the appropriate staffing for the project.

It may sound simple, but there are lots of firms out there that wouldn’t challenge the client when the client says they only want the partner handling the file; they’d just charge the client for everything at the partner’s rate, thinking they’re getting a windfall. But ultimately, that doesn’t enhance the relationship with the client if that wasn’t what the client really wanted – regardless of what the client said in the beginning. And it’s poor use of the partner’s time as well.

It’s our responsibility as lawyers to educate clients about what they can and should expect from the process. If your clients are insisting on an immediate, ‘perfect’ result at very little cost, consider exploring whether that’s what they really want, and whether that’s a reasonable expectation. Others may disagree, but I think that it’s the attorney’s responsibility to turn away clients with whom he or she cannot agree on reasonable expectations. Allowing a client to proceed under false expectations spells disaster, usually for both the attorney and the client. 

Taking the time to talk to clients about realistic expectations and interacting with them, addressing their real concerns, digging deeper to determine what result they really want and what you can realistically provide is critical to establishing the trust and confidence that are essential to a good attorney-client connection. This probing and process of education creates value and shows the client that you respect them, your work, and the others that work with you.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Value Billing: Too Nebulous to be Effective?

This is the second in a series of articles about fees, prompted by two posts authored by Carolyn Elefant on two different blogs. The post I want to discuss today was a post from the law.com legal blog network entitled, How Can Lawyers See The Value in Value Billing If No One Will Tell Us What It Is?

Elefant says she can understand contingency fee billing, because it aligns the interests of lawyers and their clients, but she doesn’t understand ‘value billing.’  She laments the fact that although there seems to be a lot of talk about value billing, no one has been able to provide her with a tangible example of value billing.
Part of the problem may be that the term ‘value billing’ is being used by lots of people to describe lots of different billing arrangements. Some seem to be using the term to describe any billing arrangement that isn’t hourly billing.

As I understand it, value billing (as discussed by proponents like Ron Baker) is a system of determining the fee for a particular matter based not on the inputs involved (i.e. time, expenses, etc.), but rather based upon the outcome and/or the type of service the client prefers, and the significance of that outcome to the client. Sometimes the outcome or value isn’t a financial result, but is some other intangible result, such as peace of mind, etc. (or a combination of factors). The fee is then set based upon what the client wants or thinks is significant.

Elefant’s frustration with the lack of concrete examples of value billing is understandable. Unlike an hourly billing system, which charges clients a particular rate across the board, value billing by its very nature, makes explanation in a vacuum impossible. That’s because the fee will be different for every client and every matter.It is only after ascertaining the client’s desires and priorities that the fee can be determined. And the lawyer’s job in determining that fee will not necessarily be an easy one. Then again, neither is setting an hourly rate.

Under the hourly system, if a lawyer charges $300 an hour for their services, is there ever a concrete explanation of the reason for the lawyer’s fee? Some lawyers charge $150 an hour. Some charge $600 an hour. Why? Is there any ‘real’ correlation between the lawyer’s expertise and experience and the dollar amount charged per hour? What is a year of experience worth per hour? What are 100 verdicts worth per hour?  Why is the focus on the effort that is put into the project, rather than the outcome? Is a work of art valuable only if it took the artist years to create? Is one work of art more valuable than another because it took longer to create?

In order for value billing to work, the key is to have a detailed conversation with the client about expectations and the manner in which success and fees are measured. That may include advising the client that representation can be had for a lesser price elsewhere – if that can be determined. (Although the service would not necessarily be ‘the same’ elsewhere, as every firm has its own strengths, weaknesses, personalities and style.) Clients are still free to seek a second opinion or to compare prices. But lawyers who have done their homework and established the client’s priorities shouldn’t fear the lower priced options. In fact, telling clients that you charge differently and your prices may be higher than others’ and telling them exactly why may be what closes the deal for you.

Some important aspects of value billing seem to be frequently overlooked, especially by those that are skeptical (or downright hostile) about whether value billing can work for the legal profession. One of the main components of the value based fee system is that the fee is set forth for the client at the beginning of the arrangement. Unlike an hourly fee arrangement, the client knows in advance, based on the specific criteria outlined with the lawyer, what the total fee will be for the entire matter. Should the client’s objectives or the scope of the matter change or deviate from what was originally agreed, the value fee system contemplates a system of ‘change orders’ which would adjust the fee accordingly.

Of course, the lawyer must also determine whether this client or matter is worth undertaking. The client’s desired outcome, budget, system of measurement, expectations, etc. may be unrealistic. The value of the representation to the client may be low, and may not be able to support the fee. But these situations arise under all billing arrangements. If the lawyer believes that she cannot represent the client for a fee that would be acceptable to both lawyer and client, or the client believes the fee is unacceptable, or if there are other areas of conflict, either can decline to enter into the relationship.

Detractors, such as David Giacalone (mentioned in Elefant’s post, and author of the blog formerly known as f/k/a), are concerned that value billing is just a way for lawyers to drive up fees, or that value billing cannot be done ethically. Giacalone posits that asking a client to discuss the value of the legal services to the client  puts the client in a position of ‘bidding’ for the lawyer’s services. He further speculates that the client would then question whether they ‘bid’ too high. But it appears that Giacalone confuses the process of determining the value to the client with the setting of the actual fee. The value to the client determines the fee but it is not the fee itself. As in any other billing arrangement, the lawyer quotes the fee to the client.

Another objection Giacalone makes is that clients won’t understand what ‘value billing’ means, and therefore it’s just another way of confusing the client in an attempt to ‘trick’ them into paying a higher fee. Although the term ‘value billing’ may be ambiguous, lawyers don’t need to use that term when discussing fees with their clients. And ‘tricking’ the client under a value based system is impossible, since the essence of the system is the up-front, in-depth conversation with the client  that establishes the client’s perspective of outcome, definition of success, and criteria to measure success.

Although detractors complain that clients will have no way to ascertain whether a value-based fee is reasonable, the opposite is true. Using a value based system puts the legal fee in the proper context – what is important to the client. By contrast, the hourly fees charged by lawyers are in no way standardized, and there’s no way for clients to tell whether a particular hourly fee is reasonable or not, other than in comparison to other lawyers. The value based fee system lets clients compare the legal fee to what the client thinks is significant. The client can then determine whether the fee is reasonable. And they can still compare the fee to fees charged by other lawyers.

Finally, Ron Baker’s version of value billing includes a guarantee of satisfaction – a written part of the fee agreement that gives the client the right to ask for their money back. Although other billing arrangements certainly leave room for negotiation of fees and lawyers often have conversations with clients about adjustments to those fees, I don’t know of too many lawyers that provide a written money back guarantee as part of their fee agreement.

Lawyers regularly complain that clients don’t understand the value of the services they provide. Asking the client what the service is worth to them – in both tangible and intangible terms – helps clients see that value, and is a logical starting place for discussing fees. It is certainly more logical than ‘how much work’ went into it. That mentality returns to a model which rewards inefficiency and ineffectiveness.
If the client chooses the lawyer because of a level of trust that has been established, and the client is happy with the fees, why can’t the lawyers make a substantial profit? If the client is willing to pay a premium for a certain outcome or service (like turning the contract around in days rather than weeks), where’s the problem?

Among other problems, the hourly system encourages inefficiency, gives lawyers an incentive to overcharge and causes frustration for clients who are concerned about the clock ticking for every task the lawyer performs, regardless of how meaningful it is. The hourly billing system also discourages clients from spending time talking to their lawyers. In short, the hourly billing system puts clients and their lawyers in conflict.

Since the most widely used system for setting fees is flawed, exploring new ways of working makes sense. Will it work? I don’t know. Maybe it will work well for some practice areas and not for others. Maybe it will work across the board, once lawyers get used to having these kinds of conversations with clients and basing their fees on a new standard. Maybe it will be a flop. But it seems to me that it’s definitely worth discussing.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

The Dilemma Over Legal Fees

Carolyn Elefant’s My Shingle blog recently discussed competing on price. Carolyn contends that solos, and particularly new solos, need to compete on price in order to get their foot in the door. She says, “…what incentive does a client have to hire a new attorney unless he or she is charging a lower rate?”

There are lots of reasons clients change law firms, or choose lawyers, other than price. In fact, studies have shown that price is a relatively insignificant factor when it comes to choosing one firm over another. The lowest price doesn’t always win. Many clients leave law firms because they feel the firms are not responsive enough, because the lawyer doesn’t listen to what the client really wants, because the rapport just isn’t there, because the lawyer wasn’t forthcoming about problems with the case, because the lawyer failed to adequately explain the steps to the client and manage the client’s expectations at the outset, and for a host of other reasons.

The lawyer/law firm-client relationship is just that – a relationship. If a solo can establish a rapport with a certain type of client or within a certain type of industry, build or demonstrate knowledge and, more important, trust, price shouldn’t be a major factor in the decision.

A solo that can show that she is capable, listens to the client, focuses on the client’s needs, and is responsive to client calls, requests, etc. can often outshine a larger law firm. Although clients often express dissatisfaction with their representation in terms of the fees that they’re being charged, the real reason for their defection isn’t the rate or fees themselves- it’s that they don’t feel they’re getting value for their money, and they don’t feel that their lawyer cares about them. Solos often are attractive to clients because clients feel they get more personal attention, and they’re willing to pay for it.

Many dissatisfied clients stay with their current counsel because it’s just to difficult or too time consuming to search for another lawyer, who may be just as bad or worse than their current counsel. But a solo (or any lawyer) who can get that client’s attention and demonstrate the qualities the client is looking for in a lawyer is likely to earn some of that client’s business. Then it’s up to the lawyer to show how they can deliver.

The My Shingle post was prompted by an article in the Connecticut Tribune directed toward solos and advising that they shouldn’t undercut their fees because discounting them devalues their services. Although I disagree with Elefant’s position that solos need to compete on price, I don’t necessarily agree with the Tribune article that the determining factor in setting fees should be the ‘prevailing rate’ in the area. Perhaps ‘what the market will bear’ is a better yardstick for determining fees (although Elefant disagrees here, too). But the definition of ‘the market’ is really the key. The market isn’t defined by your competitors – it’s defined by your target clients.

Every firm has a personality and has strengths that may be a ‘fit’ for a particular client or group of clients, regardless of the size of the firm. A particular solo may have expertise that no one else in the area – whether solo, small or large firm, can boast. A solo might have connections, experience or knowledge about a particular industry, business, or particular type of client. If a solo is able to position themselves in such a way that their offering is different than anyone else’s, there is no ‘prevailing rate’ because there is no comparison between the services the solo is providing as against the services provided by another firm. They can be alone in the market.

One way a solo can stand alone might be in showing clients how to cut legal or other costs, without discounting the lawyer’s fee. Solos are often able to keep up with technology and other innovations faster than larger firms, because larger firms have bureaucracy and layers of approval to be negotiated before changes in technology can be made. The costs of these changes are higher for larger firms due to sheer volume. A solo that can demonstrate advantages and savings to their clients can do so without lowering their fees. Ed Poll gets it right in his post, Don’t Lower Your Fee – Fee Is Not The Issue when he says “the total cost of legal services is the relevant factor, not the per hour fee.”

What’s really important, as Poll says, is that you focus on what is really important to the client – and that you find out what that is in each case. Even with the same client, the values and expectations may differ with different matters.

All of this leads, for me, back to the problem of determining the appropriate method of setting fees, which is discussed in a separate article.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Value Based Billing For Lawyers – Will it Work?

Nobody likes change, and perhaps lawyers are even more resistant to change because they’re so used to relying on ‘precedent’ to determine what they can or should do in the practice of law. But it may be time for some more creativity when it comes to billing clients. Many assume that the market wants and supports the billable hour because that’s what everyone is used to. Lawyers fear that going to a different fee model automatically means they’ll be making less money, and, at least according to the lawyers, clients aren’t willing to pay more for legal services. I don’t know that either of those assumptions are true. I do know that there are problems, on both sides of the fence, with using a billable hour model. 

One of the main complaints from clients about hourly billing is that they are unable to budget or to anticipate legal fees. One of the possibilities is to establish ‘flat fee’ billing. But most lawyers assume that flat fee billing still means billing based on a particular activity, and they base the fee on the time it takes to perform that task. The same activity may have a different value for different clients, which may justify a different fee. ‘Flat’ fees don’t necessarily mean that the fee is the same for every client, or that the fee is always the same. It means that the lawyer needs to discuss the client’s expectations and intended outcome, as well as the value of those particular services to the client, and establish a fee based on the value. It is the value which will determine what the client is willing to pay – not the activity itself. 

One of the objections to a fixed price model which was raised in the comments to the aforementioned posts was that lawyers can’t possibly influence the fees that are charged for legal services. Legal services aren’t coffee or water, but years ago, I’m sure that if you asked Americans what they would be willing to pay for a cup of coffee, their answer would be significantly less than what many spend on Starbucks without blinking an eye(even considering inflation). Starbucks definitely influenced what Americans are willing to pay for coffee. And what about bottled water? Before bottled water, water was consumed from the tap – for free. But someone found a way to get people to not only pay for bottled water, but to pay relatively high prices for it.

Both of these examples demonstrate that value is different for different customers, and that the business (or law practice) that can do a good job of establishing that they provide a value over and above what the customer is used to, can certainly sell at a different price point. These examples may also knock out the assumption that the only way to succeed with a ‘flat fee’ model is by cutting expenses or services; in fact, they demonstrate that the opposite may very well be true.

Although value may be based on results, it isn’t always based on what the lawyer would typically consider ‘results,’ and this can create riction between lawyers and clients in any fee arrangement. Goals and value need to be established in advance: perhaps the client is more concerned with making a point than with a particular result, monetary or otherwise, or is willing to pay for ‘peace of mind’ or some other intangible result. These situations are prime for an alternative fee agreement. 

There could be many ways of determining a fixed fee established in advance with the client based on the client’s objectives and the value to the client, as opposed to a fee that is based on the time spent or on the specific activity to be performed. I don’t know what the “ideal” answer is, but I think the exploration needs to be done, and that lawyers need to start coming up with creative ways to devise fee arrangements that work better for themselves and their clients.

Michele Golden of Golden Practices in a post entitled, “Inside The Firm of The Future,” notes that, “this topic evokes more passion, on both sides of the discussion, than I’ve ever witnessed in the professions.” I happen to think that’s a good sign – to me, if there’s passion involved, it’s worth discussing, and likely that a breakthrough is on the way. 

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!

 

Take Care When Drafting Your Fee Agreements

The April 14, 2006 ABA Journal e-report contained an interesting article that is another reminder to make sure your fee agreement says what you think it says. The article was about a lawyer in Louisiana who took a will contest case on a contingency fee, but after negotiating a good settlement for his client, ended up with nothing when his client refused to settle. 

According to the article, the fee agreement indicated that the lawyer would be entitled to one third of ‘whatever additional property or money we can get for you.’ Although the lawyer was able to negotiate a settlement wherein his client would have received over $20,000 more than what he would have been entitled to under the will, the client refused to settle, fired the lawyer, and attempted to pursue recovery on his own, but lost the case.

Although the trial court and one appellate court agreed with the attorney that he was entitled to one third of the settlement amount, the Louisiana Court of Appeals reversed, noting that since the client obtained no additional recovery, the lawyer was not entitled to a contingent fee.

The Louisiana lawyer submitted a brief which, at least according to the article, seems to express outrage that the client didn’t seem to care about the money, but was more interested in forcing a trial and appeal on his adversaries. The lawyer’s brief indicates surprise that he would be expected to spend several days in court (a 180 mile round trip distance) just to lose the case, and wouldn’t even be able to recover his expenses. But it was the lawyer’s fee agreement that dictated the result.

This result is, in my experience, not all that uncommon in contingent fee arrangements. The client is always the one with the power to make the ultimate decision whether to settle or to move forward. Often, the client’s decision to move forward with a trial rather than accepting a settlement offer results in no recovery for the client, and no recovery for the lawyer.

What many lawyers seem to forget when taking on clients is that although the lawyer may see the case in terms of monetary value, the client doesn’t necessarily see it that way. Litigation, particularly litigation pitting family members against one another (such as divorce, or will contests like the one here) often has at its root more emotion than reason. Lawyers often express frustration that the client doesn’t want to accept what the lawyer considers to be a ‘good’ settlement or complain that their clients aren’t ‘making sense’ . But many times, the problem is with the lawyer, not the client. What makes sense emotionally to the client might not make sense financially. It’s the lawyer’s job to discuss these issues with the client not only during the representation, but before any fee agreement is signed.

It is the lawyer’s responsibility to explore with any potential client what the client seeks to accomplish by hiring the lawyer. Then, and only then, can the lawyer decide whether the case is one the lawyer can or should take on, and if so, how the lawyer’s fee should be structured. If the lawyer decides to take on the client, expectations must be specifically discussed and memorialized so that both the lawyer and the client are sure that they are working toward a common goal. The lawyer’s fee agreement should reflect that, and should be a ‘good deal’ for both the client and the lawyer.

The contingent fee agreement is one which is inherently risky for both lawyer and client. But often lawyers forget that they are shouldering some of the risk, and get angry or frustrated when their gamble loses. If the lawyer isn’t willing to take the risk then the contingent fee agreement isn’t the way to go. 

Perhaps the attorney in this story didn’t have had a frank discussion with his client before any fee agreement was signed to determine what his client’s stated objectives were. That conversation may have revealed that the client expected a certain specific monetary recovery that the lawyer didn’t think was possible. If that was the case, and the client indicated an unwillingness to settle for anything less than the stated amount, the lawyer would have at least been better informed about the risks he would be taking by agreeing to represent the client at all, particularly under a pure contingency arrangement.

If the lawyer had learned that the client’s motivation was not the monetary recovery at all, but that the client wanted to force the family through a trial (as the lawyer later claimed), the lawyer could have agreed to take the case under a different fee arrangement. But even without being sure of the client’s motivation, the lawyer’s fee agreement could have minimized some of the risk to the lawyer.

What alternatives were available? There are probably an unlimited number of possibilities. The lawyer could have written the fee agreement to require the client to pay expenses regardless of the outcome. He could have requested an additional fee for trial. He could have requested a flat fee up to trial with a bonus for settlement above a certain amount. He could have asked the client what the value of having the emotional ‘closure’ of a trial was to the client, and based his fee on that, rather than on a percentage of the recovery.

Just because the most traditional and most common methods of compensation for lawyers have been the one third contingency and the hourly rate doesn’t mean that lawyers should conform to those old practices, which may be some of the worst ways (for both lawyers and clients) to compensate lawyers for the work that they do. Lawyers draft their own fee agreements. It’s time to get more creative and do some serious thinking about how lawyers benefit their clients, and how to structure fee agreements to reflect those benefits.

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Already a subscriber? Want to learn how I can help you? Learn more about the products and services I offer by clicking here.

Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

P.S. Found a mistake or a bug? If there’s anything that bothers you about this site, I want to know! Send me an email at Allison@LegalEaseConsulting.com. I want this site to be not just a resource, but a refuge for lawyers. I want you to be comfortable here.  So if there’s something that bothers you, please tell me!