Larry Bodine Law Marketing Blog : Law firm marketing, legal editor, legal marketing, attorney marketing, business development, marketing consultant, legal consultant, business development

For the third consecutive year, the ABA Journal has identified the 100 best legal blogs -- including the LawMarketing Blog. 

Voting will end at 5 p.m. CT on Dec. 31. Vote counts are now hidden. Final results will be posted by Jan. 5.

“We wanted to make this Blawg 100 more participatory to reflect the social media movement,” said Ed Adams, editor and publisher of the ABA Journal.  “ABAJournal.com is always looking for new ways to involve our audience in our stories and storytelling."

But here's where I need your support: please vote for this blog.

Readers are encouraged to go online to www.ABAJournal.com/blawg100 to vote for their favorites in each of the categories.  Votes will be tallied in December and winners will be announced in the February 2010 edition of the Journal.

Simply go to http://www.abajournal.com/blawg100/2009/business, scroll down and check the "vote" box next to the LawMarketing Blog.  I genuinely appreciate your support.

We all know about Chambers, Best Lawyers, Leading Lawyers and other directories sold by commercial publishers.  But there's a near-secret online directory that corporations and in-house counsel actually use to find a law firm, and chances are you've never heard of it. 

It's the "Find a Law Firm" feature of Serengeti Tracker, a project management and billing software program used by 100,000 individuals at 300 corporations in 180 countries.  So far about 20,000 law firms -- including all of the AmLaw 100 and 200 -- are in the client-created database.  But if none of your clients are using Serengeti, then you're not in the system and cannot be found by the vast majority of corporations.

For example, a quick search (with no filters) for law firms in Chicago turned up 550 results.  Corporate counsel can look up a law firm by name, expertise, location and practice area. The feature is built into the system, which is primarily designed for e-billing, tracking expenses, creating reports, storing documents and measuring the progress of an assignment against budget.

Serengeti also has a separate evaluation form to grade a law firm's performance on a particular matter.  It was considered so good that the Association of Corporate Counsel based their members only ACC Value Index on it.

So how do you get into the "Find a Lawyer" listing? Be the first law firm to advise your clients to use the Serengeti system, which will put you into the database. Right now, most corporations are using home-made excel spreadsheets to manage outside legal expenses, and you'll be doing your clients a big favor by advising them to use Serengeti.

Click on the graphic to see it full-size.

Wolf Greenfield, a 60-lawyer intellectual property law in Boston, has once again created a clever holiday greeting -- a sheet of flexible holiday magnets that combines marketing with fun.

Drawing on the talents of Sally (only the cops call her Sara) Crocker, Director of Client Services, and Jay Wager, Senior Manager of Business Development, the firm sent out a 7" by 9" sheet with 110 individual words that can be pulled apart and rearranged.

The sheet's arrangement already spells out their uniform selling proposition, including synonyms: "We are IP counsel in Boston and protect defend enforce your valuable new technology and innovation." Sally said the firm added the word "pony" as one of the words, to counterbalance the word "wolf," illustrating the firm's offbeat sense of humor.

It includes several industries the firm serves: "biotech chemical cleantech electrical mechanical pharmaceutical."  And there are blank rectangles where you can write in your own word. 

Adroitly, the late line of words spells out "but what a magnetic winter present you have from ... Wolf Greenfield."

Click on the picture to see it full size.

David Schmahmann, a former partner with Nutter, McClennen in Boston, has just released his second novel, Nibble & Kuhn.

The title is actually the name of a fictitious Boston law firm that serves as the background for a story about an unraveling firm, a young associate's struggle for success, and a complex workplace relationship.

Here's a summary:

An unraveling law firm. An unwinnable court case. An unworkable love. Derek Dover has it all.

Derek’s up for partner at Nibble & Kuhn just as that most proper of Boston law firms comically tries to 'rebrand' itself for the Google era. Pompous and arbitrary, the ruling junta of partners saddles him with a high visibility lawsuit just weeks before trial. The diligent young attorney arranges things so that Maria Parma, a new associate in the firm for whom he’s fallen hard, also gets named to the case. Maria, in turn, can't keep her hands off Derek, but it's complicated because she's engaged to someone else.

As Derek prepares his case on behalf of seven young victims of an industrial polluter, his anxieties about his career and his torments over Maria's mixed messages only increase. Have his eccentric WASP superiors handed him a 'toxic' case to ruin his chances of becoming a partner? How can he get his opponents to settle – an outcome the presiding judge all but demands - unless his unorthodox 'expert witnesses' perform with enough gravitas to match that of the other side with its Harvard Medical School scientist? Will Nibble & Kuhn survive the partners’ spectacularly bad business judgment? Does it even matter to Derek, given that his looming fiasco of a trial and indiscretions with Maria seem set to sink any chance he may have had at partnership?

Ultimately, Derek sets in motion a line of inquiry that spins events entirely out of the control of the judge, the jury, and any and all attorneys.

You can buy the book for $16.50 on Amazon.com.

The Illinois Attorney Registration and Disciplinary Commission (ARDC) has closed its investigation of a wacky complaint filed against Total Attorneys, Inc. and its president Kevin Chern, with no finding of wrongdoing.  The complaint, filed by a publicity-seeking Connecticut attorney, was part of a sweeping effort by the complainant to shut down pay-per-performance marketing in the legal profession.  

The same attorney filed complaints against more than 500 attorneys in 47 states, alleging that those attorneys were in violation of their various states' ethical canons simply because they were advertising with Total Attorneys.

Total Attorneys General Counsel Pam Gracyalny called the complainant's actions unprecedented, saying "there has never before been an ethical complaint filed nationwide on the basis of a single model."

The complaints and ensuing investigations have caused a buzz in the legal community and general business press because the issue highlighted the gray zones surrounding Internet marketing issues in the legal industry.  Because most states have not amended or interpreted their rules to account for the new opportunities and business norms made possible by current technology, attorneys making use of new media have been traveling uncharted waters for several years.

Chern called the decision a victory for both small firm attorneys and consumers.  "The Total Attorneys model," he said, "makes Internet marketing affordable and time-efficient for small law firms and solo practitioners and improves consumer access to legal information and services."  The company has an A+ rating with the Better Business Bureau (BBB).

Illinois is the fourth state to reach a favorable conclusion with no finding of wrongdoing.  Hawaii and Alaska have already determined that there was no basis for action on the complaints, while a North Carolina panel dismissed a complaint against Chern for the alleged unauthorized practice of law.  The Hawaii Office of Disciplinary Counsel also noted that the complaint raised serious commercial free speech issues. No state has determined that either Chern or any of the company's attorney clients has violated the law or applicable rules of professional conduct.

Total Attorneys founder and CEO Ed Scanlan says, "We always expected our advertising model to be vindicated, and are encouraged by the fact that every state that has made a determination with regard to the complaints has decided in our favor.  When the dust settles, we expect that these rulings will play an important role in establishing that attorneys can use new technology and new media to promote their practices in a manner that is entirely consistent with their ethical obligations and the rules that govern their profession."

A giant nutrition label grabs your eye at the Minnesota airport. It's not for an energy drink or pack of lunch meat, its an advertisement for a "100% Lean Law Firm.  Newbreedlaw.com."

As a general counsel or client executive, I'd like what I see: 0g fat. Equally divided among six key practice areas. Putting clients first: 100%.  And my favorite: Obnoxious lawyer schtick: 0%.

It's the innovative new ad campaign by Halleland Lewis Niland & Johnson. The airport ads are so clever it makes people stop in their tracks and pull out their cell phone cameras.

Marketing genius Dustin Sanick, of the ad agency Kohnstamm Communications Inc. in St. Paul, explained: "The campaign highlights the specific practice groups and how their client-focused approach along with their applied business practicality maximize their clients' business results.  The ad doesn't bloat the groups, but keeps them 'lean" for their clients."

It's  smart marketing approach, because most law firms promote all their dozens of practice groups, and as a result doesn't promote any of them at all.  By targeting six practices, the firm has created a comprehensible idea for clients to wrap their minds around.

It helps that the firm was founded as recently as 1996, and thus is not burdened with hundreds of years of stultifying tradition.

The firm's unconventional website states, "A look around our firm will tell you a great deal about the way our people work. All attorneys have offices of equal size. We’ve invested heavily in the quality and efficiency of our common and meeting spaces. We focus not on hierarchy, but teamwork — because you get better results that way."

Partner Keith Halleland sums it up, "What could be harder than creating a brand around a law firm?  But Kohnstamm's relentless PR efforts have truly helped take us to a whole level of business."

"We are painfully familiar with client complaints that large law firms charge too much for new associates who know too little about the practice of law to be worth it," said Prof. Silvia Hodges, who is a full-time faculty member at Emerson College in Boston, where she teaches professional/legal services marketing. She is also an adjunct associate professor of law at Fordham University in New York.

"The clients may have a broader complaint. For all their glittering academic records, these young lawyers not only don't know much about the realities of the practice, they know even less about the business world.

The new LexisNexis survey reveals that law school students are feeling the impact of the current turmoil within the legal industry. More than half of law school students surveyed (54%) say that the current state of the legal industry has made them consider career alternatives, while almost two-thirds (65%) believe law school does not teach the practical business skills needed to practice law.

As a former litigator, I remember that law school was several years of reading statutes and appellate court opinions. Absolutely nothing was taught about running a law firm and getting clients. It makes sense that the survey found that one fifth (21%) of students say that based on the changing legal marketplace, they regret attending law school.

"Law schools have also started down this road. Some have long offered joint J.D. and MBA programs but as a practical matter that effort is too long and too expensive to attract all but the most obsessed. Instead, by my count, at least 17 schools have created courses that purport to teach basic practice management concepts," Hodges says.

She makes sense when she says a model "law business" survey course should include:

• A taste of business concepts and strategy
• Finance and economic indicators
• Firm governance and organization to firm ownership
• Law firm economics
• Client relationship management
• Marketing and business development
• Human resources

"The financial collapse of 2008 has given this discussion new urgency, and a do-or-die burden on legal practitioners. The young generation is called to take a fresh look at their profession and how they approach client needs, because, to vary the cliché, it's the business model, stupid. And no one wants a stupid lawyer," she says.

More than half of corporate counsel surveyed (58%) say they believe law firms are too profitable, according to the LexisNexis State of the Legal Industry Survey.  This means clients feel they were ripped off, or overpaid for what they got from law firms.  And clients are sending law firms a message: change or die.

This eye-opening statistic sums up the why there is high tension between law firms and clients, why the ACC Value Challenge is being pursued, and why corporations want flat fees and an end to the hourly bill.  It also means that the way law firms conduct commerce with their clients will change forever, starting right now, and that the change will be permanent.

Pricing is the No. 1 issue facing the legal profession today.  Of course law firms respond that they have already cut salaries, laid off staff and lawyers, offered alternative fees, implemented hiring freezes, deferred start dates for new associates and use technology to be more efficient. But it's not good enough.

It's no good when corporate counsel read in the AmLaw 100 that 19 firms had annual profits per partner of $2 million or more, or that four law firms have lawyers charging $1000 per hour or more.

The tension between lawyers and clients is so bad that one-fifth (21%) of students say that based on the changing legal marketplace, they regret attending law school, according to the LexisNexis report.

Meanwhile law firms are making the huge mistake of not giving clients a price break when they ask for it. Almost half the in-house counsel polled (46%) say they have requested rate cuts, yet less than one in five (18%) private practice attorneys say their law firms have reduced billing rates. Just know that people always remember those who didn't help them when the economy was down.  There will be hell to pay for this, because loyalty is a two-way relationship.

Corporations are already punishing law firms. 69% of corporate counsel have shifted work in-house since the start of the economic downturn and 56% have reduced spending on outside counsel.  This means there is less legal work for law firms to do.  The corporations are trying to starve the law firms out.

Who will win this debacle?  That's easy: the customers have all the money, so they win. Remember the maxim, "the customer is always right" ?  It's true in retail and it's true in professional services. Whoever has the gold calls the tune.

This means law firms will have to change their business model, starting with dumping the billable hour. Will this change be permanent, or will things to back to the way they were before 2007?  Read the following words carefully: the change is permanent.  A sea change has taken place between law firms and clients.  Every piece of market research I've read in the last six months proves this to be true:

• In-House Counsel Now Bolder to Reduce Costs and Increase Value
• 2010 will be the year of the flat-fee arrangement
• You're Crazy to Raise Rates in this Market
• What Clients Want to Buy in 2010
• Get on the Winning Side of the Alternative Fee Transition

Law firms must obey the top rule of Marketing 101: Find out what the clients want and sell it to them.  In this case the clients have devoted an entire web site to what they want at http://www.acc.com/valuechallenge/ 

The message to law firms is simple: change or die.

The LMA national confererence is coming up on March 10-12 in Denver.  However, some marketers are having trouble getting approval to go because of the poor economy and cost-cutting at their firms.

It's not cheap.  Registration for a regular member is $995, and non-members pay $1445.  Rooms at the Hyatt Regency are going for $209 to $249.  This makes law firm CFOs choke, because they understand nothing about law firm marketing.

To the rescue, the LMA has created "A Customizable Letter To Your Manager" that marketers can customize and use in support of their attendance. See page 8 of the document at  http://bit.ly/7zeuWJ  Here's an excerpt:

I appreciate that my attendance will represent a considerable investment in terms of time and money so you’ll also find a breakdown of expected costs and my plan for keeping the expense to an absolute minimum. You’ll also read my plan for providing you and the team with a full post-conference report to ensure we get maximum value from the investment.

The LMA Annual Conference is a one-of-a-kind opportunity for the entire legal marketing community to learn from the leading practitioners in the sector. The event is in its 24th year and regularly attracts more than 1,000 attendees from firms just like ours.

 

This year’s event is especially important because in such changing economic times, we need to learn how to best respond.

This is persuasive stuff!  If you get to go, I hope to see you there. I already got the OK from my boss, my wife/CFO who guards the family grocery money.  But then, she used to me a marketing director herself, so it was an easy pitch.

Four law firms reported partner billing rates reaching $1,000 or more: Buchanan Ingersoll & Rooney at $1,020, Foley & Lardner at $1,035, Jenner & Block at $1,000 and Locke Lord Bissell & Liddell at $1,045, according to a new survey.

Recession?  What recession?

The National Law Journal reported that the recession has forced most other U.S. law firms to temper—but not exactly eliminate—increases in what they charge for their services, according to the most recent billing rate survey conducted by the publication. The national average firmwide billing rate, a combination of partner and associate rates, grew by 2.5 percent during 2009 to $372 per hour. That increase is relatively small compared to the 4.3 percent increase firms reported in 2008 and the 7.7 percent rate climb in 2007.  Complete reporting on the study is available in today’s issue of The National Law Journal and on www.nlj.com (subscription required).

Nationwide, the average hourly billing rate for partners was $457 in 2009, up from $451 in 2008. For associates, the average rate was $287, an increase from $282 last year.

Although growth was comparatively low, most firms did hike rates. The average firmwide billing rate grew at 76 percent of the mostly mid-size firms that reported detailed billing information in both 2009 and 2008.  While most firms adopted modest rate increases, 24 percent reported average firmwide billing rates that were the same or lower than the previous year.

The survey also highlighted the growing importance of alternatives to the traditional billable hour. Nearly every firm that responded to the survey indicated that it had charged some clients fixed or flat fees, retrospective fees based on value, contingency fees or a hybrid of those options. Among the firms that reported the percentage of revenue derived from alternative fee arrangements, 57 percent said that amount represented 10 percent or more of their revenue during 2009. By comparison, 50 percent of firms during 2008 reported that alternative fee arrangements accounted for 10 percent or more of their revenue.

“Firms obviously are getting a strong message from clients to hold the line on rates — 2009’s increase was the lowest we’ve recorded in recent years,” said David Brown, editor in chief of the NLJ.  “Clearly, though, firms are facing enormous pressure to offer discounts and alternative billing arrangements, and it appears that pressure is only going to continue to grow.”
 
The law firm billing information was collected as part of the annual NLJ 250 study, The National Law Journal’s survey of the nation’s largest law firms, based on headcount. The survey period ran from Oct. 1, 2008, to Sept. 30, 2009, with 190 firms providing at least some billing information.  The complete downloadable NLJ 250 database, including billing rate information, is available for purchase online at www.almlegalintelligence.com.

At some point in fall 2009, the number of lawyers with profiles on LinkedIn crossed over the 1 million mark, and stands at 1,359,590 today, according to my calculations.

With 50 million members, this shows that lawyers realize that LinkedIn is the de facto online directory of professionals, and they have made the smart move to be a part of it. 

• What's more, a search of Companies using the terms "law firm" turns up 4,947 results -- nearly 5,000 law firms with business profiles on LinkedIn.
• The are 3,930 groups in LinkedIn with the word "law" as a part of the title.
• When you set your status on LinkedIn you can now tweet it as well, amplifying it to your followers and real-time search services like Twitter Search and Bing.
• There is now LinkedIn for BlackBerry, so you can walk into any interview, any customer engagement or client meeting with the ability to look up the details on over million professionals worldwide, in real-time. 

There are plenty of online social networks, but LinkedIn is the one I recommend to law firms.

A recent report indicates that the national bankruptcy rate rose 33 percent in the third quarter of 2009, as compared to the same time period last year, according to the American Bankruptcy Institute ("ABI").

This spike in rates represents the highest rate of bankruptcy filings since 2005.  For the last 12 months at a minimum, bankruptcy has been a hot practice area. See Bankruptcy Practice Leads Law Firms Out of Recession from August 2009.

The ABI that found that there were 388,485 bankruptcies filed in the U.S. in the last quarter, compared to 292,291 bankruptcies filed in the same quarter last year.

In the first nine months of this year, about 1.1 million bankruptcies were filed, a 35 percent increase over the same period from last year. Last year the tally came to a total of just over 840,000.

American Bankruptcy Institute executive director Samuel J. Gerdano, Esq. released a statement regarding the rise in bankruptcies. The spike in bankruptcy filings for both consumers and businesses reflect the continuing effects of today’s weak economy, he said. With unemployment surpassing 10% and credit to businesses remaining tight, consumers and businesses are increasingly turning to the financial relief of bankruptcy.

Bankruptcies peaked in 2005, just before legislation made it more difficult to clear debts in Chapter 7 filing. The nation is experiencing the highest bankruptcy rates it has seen since those new regulations were put in place.

Business bankruptcy filings and personal bankruptcy filings have each risen according to the latest reports. Business bankruptcies are up 32 percent in the third quarter of 2009, a total of over 15,000 filings.

Personal bankruptcies, which include Chapter 13 and Chapter 7 filings, increased by 33 percent in this quarter. Chapter 7 filings rose by 42 percent, for a total of over 265,000 filings in the third quarter. Chapter 13 filings rose by 15 percent, totaling 107,142 filings.