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April 2007

Lawyers as Business Advisors

Lawyers have become so myopic that they often forget how much knowledge, information and expertise they really have. We get to see the inside guts of so many companies. We see were companies succeed and fail. Too often, we focus only on the legal problems without expanding our efforts to understand the business process that allowed those problems to happen. We have been talking a lot recently about value billing. Really, we have been talking a lot about value. The word "billing" gets tagged on in order to describe one aspect of what value-based law firms provide.

Many lawyers are well equipped to add value on the legal and business side of company problems. Those lawyers should remember to sell problem solving on the back-end and front-end as part of their overall solution.

For instance, a client refers to you a number of large receivables on corporate accounts. The receivables are over 180 days past due. Sure, the lawyer can send a threat letter and file litigation in order to collect that debt. A better lawyer would also dig into the process which allowed that debt to exist in the first place.

We offer legal and business solutions to our clients. Because of our technology background, we are able to show clients how to use technology to improve and document their internal process. I can tell you from experience that clients see a lot more value in the preventative services we offer, then the corrective services. Improving a client's /customer’s internal process provides real tangible results in which preclude problems from arising in the first place.

Sure, lawyers are good problem solvers. But a great lawyer will help his/her client from experiencing the problem in the first place.

Is your firm acting as a business advisor to your customers?

Do Hours Equal Profits?

Because counting hours is such an easy exercise for a firm, it is easy to presume that maximizing billable hours will maximize profits. What is lost on many firms is that a business model which is tied to hourly billing actually "caps" the profits that any firm can make.

Think about it. How many cases have you handled at which you provided hundreds of thousands of dollars in value in very little time? In those cases, was it your brilliance, strategic efforts and experience which delivered the results to the client? Do you think that the hours that you put in to delivering those results is an adequate measure of the value you provided?

The goal of a law firm is not to bill the client the minimum amount possible the goal of a law firm is to provide value and be paid for value received. While counting hours is simple, it hardly measures value. If you are a great attorney in a great law firm that focuses on providing value to clients, then the hourly billing system is leaving you short.

Over the next few weeks, we will be talking about the intricacies of value billing, why clients have no problem paying more than your hourly rate if you deliver results and how to incorporate innovative billing models into your law firm business model.

Wake Up! And Add Value

What did we learn from the fall of communism? One lesson that should have been obvious is that capitalism works because it provides the right incentives to workers. Ask yourself, "What are the incentives for the lawyers in my firm?"

With traditional hourly billing model, the incentives are merely to bill your hourly quota each day. The incentive to ensure that you meet your hourly quota permeates your thoughts and dictates your actions.

The value billing approach is different. Because you have defined and documented value to the client, and your singular mission is to obtain that value for the client, you wake up in the morning thinking about adding value. Instead of thinking about hours, your mind focuses on accomplishing the defined goals you have already laid out for your client.

It sounds like a subtle difference but it is not. It is dramatic. I am just winding up a multi-million dollar minority oppression case. Over a year ago, we set out with four major goals. Only one of those goals were financial. The other goals were strategic and provided the leverage we needed in order to obtain the financial goal. The goals were defined and documented from the beginning and monitored throughout the entire project. The discussions with the clients all centered around the four predefined goals. The to-do items in the extranet were all directed at the four goals.

Is it any wonder that we were able to achieve all four major difficult goals on behalf of the client? It shouldn’t be. The entire focus of the entire case was defined, documented, redocumented, discussed, assessed, reassessed, refined...

It is extremely hard to achieve the kind of focus described above in the traditional hourly billing setting. Good lawyers can do it pretty well on some occasions. But at some point, firm culture catches up with you. No one is impervious to the environment in which they live.

How can you create a firm culture which prioritizes providing value to the client from the time your workers wake up in the morning until they go to bed at night.

Microsoft < Google

As has been posted before, exciting things are happening within the "walls" of Google, but according to's Elinor Mills, Google is still surpassing expectations in the outer market. "For the first time, Google has surpassed Microsoft in worldwide visits to its web sites" says Mills, whose information comes from comScore, a company that "provide[s] a continuous, real-time measurement of the myriad ways in which the Internet is used".

Mills' article also cites a 13% increase in unique visitors to Google web sites when compared to a year ago, which is higher than all competitors within the search engine market.

With Google reaching this new height, it is a further reminder of the identity of the "big man on campus" and how Google is the one that high-tech firms like ours have to deal with if they want to successfully reach consumers. While it is a sobering realization of the market power that is in the hands of Google CEO Eric Schmidt, there isn't all bad news.

That reported 13% increase in unique visitors is only a representation of the huge numbers of people who are making their first overtures with the internet. With Google finding these new consumers, we can safely assume that a fraction of them are now receptive to your web-marketing campaigns and high-tech message. This growth means the consumer base to which you are constantly trying to coerce, is greatly increasing in number every year - which is good news in my book.

Reputation: Easier to Build Now than in Elementary School

The legal market is one that is highly dependent on many things, but high on that list "reputation" can be found. It is reputation that precedes your face in the mind of the client, can often shape your interactions with opposing counsel, and even affect the way in which you deal with judges. However, the problem is that oftentimes for the single-attorney firms (especially high-tech ones) basic reputations don't exist.

How can a client have any idea of what to expect when the very thing that marks your firm has no precedent in his experience? And when dealing with legal troubles and everything that goes along with that, how ready are they going to be to go for something unprecedented and unique? The answer is not very.

To offset this inherent "uniqueness" that is found in firms like ours, it is extremely important to utilize the tools available to you to create that very reputation that will ease the worry of your clients, set a standard to which their future legal dealings will measured, and even create distinction for yourself in this competitive market.

The importance of creating a reputation cannot be underestimated, and while it seems like a simple concept, the fact of the matter is that a reputation is something "traditional" firms don't necessarily have to worry about. However, a reputation is extremely important for those who don't have it, and too often high-tech firms are the ones lacking.

Luckily, the internet is the great equalizer, and with the high-tech firm's inherent ability to take full advantage of the World Wide Web, creating a powerful reputation is not an impossible task.

When the Billable Hour Backfires

We are all aware of the troubles that plague the attorney-client relationship when it is confined to the billable hour. From the unanticipated bills that tear into the pockets of those we serve, to the sheer confusion of clients as their budgets are eaten by phone calls, meetings and motions - but what about the strain that accrues to the paralegals and assistants who actually work in the office?

Rather than focus solely on their work, paralegals must constantly keep track of their time according to the tasks and cases that they are working on. Further, in order to bill within the amounts acceptable to the client, staffers must cram or shortchange tasks in order to avoid breaching previously set maximums. Than, if you are going to achieve the quality that the client deserves, oftentimes staffers have to put in the extra time - which in turn overloads the client. The reality of the billable hour is that puts the entire law firm at odds with their clients - the same ones they are supposed to be working with.

To achieve real profits, and create a prosperous practice, one must reconcile the firm and client so as to create a unified team that will be much better at accomplishing the unified goals of both. To leave the firm and client at odds is to seriously hamper your practice because of the strain that is placed upon both those who work for you and those you work for - a strain which can be alleviated with a better billing system.

Viringia Tech Massacre - Cho Seung-Hui is Responsible. So Are We.

A lot has come out about Cho Seung Hui, the man police have named as the shooter in the Virginia Tech tragedy. There is little doubt at this point that Cho Seung Hui is responsible for his murderous rampage. 

But as I followed the technorati tags and internet trail of Cho Seung Hui, I came across some great reporting by the blog at Wired Magazine.  A Wired blog post by Kevin Poulsen looked for traces of Cho Seung Hui on the internet with updates about internet clues the killer left behind.  As I clicked a link to a young woman being reported as Cho Seung Hui’s ex-girlfriend and early victim of his gun, I was dumbfounded when I saw the Google MySpace advertisement inviting me to put 50 Cent in the sight of my gun and shoot him dead to win $5,000.  When I clicked on one of the victims MySpace friends, Google ads asked “Do You Want To know The Date of Your Death?

Here is a windows media file which gets big enough to see the entire screen.

Shocked? Horrified, Amazed?  Yes, all of these emotions struck me. Watch the video and you will wonder, like I did, “who else besides the shooter is responsible for the Virginia Tech Massacre?”

This video and the advertisement shown therein are no coincidence.  Violence is marketed to the 15-25 year olds who dominate MySpace and many other internet sites like candy.  These advertisements broadcast on Cho Seung Hui’s alleged deceased ex-girlfriend myspace page speaks volumes about all of us.

Our responsibility for violence such as occurred at Virginia Tech can be reduced to a Google ad.  We don’t tolerate violence.  We encourage it.  We market it.  We glorify it.

So when you are casting dispersions at Virginia Tech for not evacuating the campus, the gun shop for selling the murderer his gun, the gun laws for allowing firearms, the police for not acting sooner, Congress, Bush, etc, etc, etc, don’t forget to look in the mirror.  And if you need a pick-me-up, line up 50 Cent in your scope and shoot him dead.   You could win $5,000 from

Lessons From Finding Nemo

Here is a clip from our recent vacation in Florida. Notice the rustic and rugged places that we visited on our chartered 34' sailboat.  :-)

Here are some lessons from the Disney movie Finding Nemo which can benefit us all.

  1. Life is about risk.  You can stay in your anemone where it is safe, but you will have missed the journey that is life.
  2. If great white sharks can learn new ways to live without eating meat, then lawyers can certainly learn to bill without counting hours.
  3. Sometimes things get tough.  But successful people just keep swimming swimming swimming.

Duke Lacrosse Players Exonerated

It is being reported by CNN that not only have all charges been dropped in the sexual assault case against the three former Duke University lacrosse players by North Carolina’s Attorney General, but the AG has gone further. Attorney General Roy Cooper states:

"We believe that these cases were the result of a tragic rush to accuse and a failure to verify serious allegations. Based on the significant inconsistencies between the evidence and the various accounts given by the accusing witness, we believe these three individuals are innocent of these charges." [CNN report concerning the three former Duke Lacrosse Players]

It is no wonder that people mistrust the justice system. This is yet more evidence illustrating the imperfections of our justice system. Yes, innocent people go to jail. Yes, innocent people are charged with crimes they don’t commit. Yes, the justice system fails on a regular basis.

We all watched O.J. Simpson walk after a jury returned a verdict of "not innocent" in his favor. We watched the trial judge in the Anna Nicole Smith burial hearing cry from the stand. It was enough to make us all cry, not in empathy with Judge Seidlin, but at the justice system itself which was being once again embarrassed.

Unfortunately, only the most outrageous cases, which depict the justice system in the worse light, get the most press. Even worse, there are thousands of cases of regular individuals who suffer grave injustice at the hands of the legal system whose stories are never told…