Lawyers.com Editor in Chief : Larry Bodine Law Marketing Blog : Law firm marketing, legal marketing, attorney marketing, business development, sales training, practice development, training, marketing consultant, legal consultant, individual lawyer coaching, business development, client team, practice development, business development, law firm coach

Steve Boutwell, Director of Client Services at Kean Miller in Baton Rouge, posted In-house Insight: Outside Counsel Rules to Live By" on LinkedIn:

1) Follow my Outside Counsel Guidelines. Read them. Please don't call and ask whether or not a certain practice is acceptable, especially if it's already in my guidelines.

2) Responsiveness. Return my phone calls, and emails. Even if it's just to say, "I'm tied up right now, but I got your message." 24 hours for phone calls. End of day for email if at all possible.

3) Clear and concise communication. Keep written communications short and to the point. One page is preferred. If the communication contains a lot of detail, give me a summary up front so I can scan it and come back to the detail later.

4) Provide recommendations, not just options. Don't be afraid to opine on my matters. A list of my options is okay, but what would you do if you were in my shoes?

5) In-house counsel are making business decisions, not simply legal decisions. Remember, we have clients too. They put just as much pressure on us as we place on you. Help me look good to my clients.

6) Lawyers who "see around corners" are highly valued. Anticipate what's coming and send me alerts. And, help me avoid situations, like the one you just resolved for me.

7) Designate one person as my billing contact.

8) For publicly traded companies, strive to understand my ASC 450 reserve-setting process. This can affect our 10-Q and 10-k reports.

9) Be honest, even if it's to your detriment. If you make a mistake, let me know early. Don't try to cover it up. This can be deadly for a relationship, and especially deadly for a public company.

10) Be smart with conflict waivers and waiver requests. Think about what your request says to me. If you're asking me to allow you to represent a company that I am in litigation with, this may cause me to question your judgment.

11) Become e-discovery experts and work seamlessly with us. We expect outside counsel to be well-versed in e-discovery / ESI in state and federal court.

12) Become diversity champions. Diversity will be a part of the 2012 grade for our preferred firms. Articulate to us what you are doing about diversity in your firm, in your supply chain, and in your communities.

13) Add value. We don't have the resources to provide training on legal issues to tens of thousands of employees. For example, we have a high turnover rate in a certain segment of our security team. If you can offer a post-incident report writing class for our security team, that's valuable to us - and greatly appreciated.

14) Be a member of our team. We want long-term partners, year after year, who know us and who we know. There is an inherent value in that.

Rules to live by....

Businesses in the United States initiated and faced slightly less litigation in 2011 than in 2010. But regulatory actions and internal investigations are climbing, according to the 2011 Fulbright Litigation Trends Survey. 

As the financial crisis began to reach its fever pitch in 2008, litigation spending climbed with it: in-house lawyers reported a median spend the following year that reached $1.6 million at U.S. companies. In 2010, spending fell to a median of $1 million in the U.S. However, spending has risen this year, with U.S. companies reporting a median spend of $1.4 million.

E-discovery tops the budget list, with nearly one-fifth of all respondents—and one-quarter of large-caps—expecting budget increases in that area. While respondents, as they have in years past, are planning for budget increases in labor and employment, contracts, and regulatory litigation, a new area of budget increases surfaced in this year's report: intellectual property, specifically patents. While 16% of U.S. respondents are increasing intellectual property budgets, the retail and technology sectors are particularly prone to do so—38% of retail and 30% of tech respondents expect to budget more for intellectual property in the year ahead.

Corporate counsel want to keep costs low, but they also want to keep them predictable. Last year, the percentage of respondents who reported using alternative fee arrangements for at least some of their work reached a majority—51%. This year, the number jumped again, to 62%. The trend is expected to continue: 44% of respondents this year predict a rise in alternative fee arrangements during the next 12 months compared to 37% of respondents last year who predicted an increase.

Looking ahead, 91% of all respondents expect the number of internal investigations involving their companies to increase or stay the same, while 90% of those surveyed expect the number of regulatory proceedings their companies face will increase or remain the same.  

For more than one-quarter of all respondents, regulatory concerns are high on the radar when it comes to legal disputes. That is especially the case for large-caps, one-third of which cite them as a main concern versus only one-fifth of small-caps. 

Whistleblowers remain a concern going into 2012, with one-quarter of respondents anticipating an increase in the number of claims or lawsuits brought by whistleblowers within their industries in the coming year. 

More respondents this year answered "yes" when asked whether their organizations have been more likely to be the subject of a whistleblower allegation in the past three years. Overall, 22% of respondents compared to 19% last year said their organizations were subjected to a whistleblower allegation.

You can download a copy of the report here. The survey is based on responses from 405 in-house counsel in the US and UK.

Struggling with reams of reports from the finance department, partners in law firms have difficulty making smart business development decisions. Too much information is little better than no information. Redwood Analytics of Mt. Laurel, NJ, now offers a executive dashboard that displays key data like:

• The direct margin (profit) for an individual client
• The progression of client cross-sell
• Patterns in a partner’s book of business
• The relationship between client age and client life cycle

"Lawyers are not trained to be business people, and firms have a hard time determining profitability. So the key is to present them information at a glance, so they can easily see the elements that hurt or improve profitability," said Brian Glauser, Business Development Manager for Redwood. "Once they become familiar with the data, they’ll start to think more like business people."

Redwood is owned by LexisNexis, the parent company of Lawyers.com, where I work. Redwood started in 1999 with 10 employees, and today has 100 employees supporting law firms across the globe.

The "billing partner view" displays hours worked, the dollar value of the hours at the standard rate, the billed amount and the collected amount in one screen, with colored pie charts showing the account balance by date. Importantly, it calculates the billing realization and the direct margin for an individual client.

"You can also see the number of days a client is past the expected payment date, and compare it to the number of days the client pays historically," Glauser said. "You can notify the billing lawyer to find out what's going on. They can inquire: Are they happy? Did they get the bill? It changes from a collection call to a customer service call," he said.

The display can be customized to show a summary by lawyer, by office and firm-wide.

The dashboard displays profit drivers individually -- standard rate, hours worked, percent of fee discount, percent of hours billed and collected, percent of writeoff -- and calculates the direct margin. This is useful because a law firm's largest clients, as measured by revenue, are often its least profitable.

By knowing which clients are most profitable, partners can tailor their business development efforts to seek out similar clients. By seeing what percent of a firm's services a client is using, partners can identify hot prospects for cross-selling. "This gives lawyers way more information that they may currently be seeing," Glauser said.

Most business law firms devote their efforts to cultivating the General Counsel in their efforts to win corporate business. However, a new study by the British Managing Partners' Forum and Financial Times indicates that this is a mistake, and law firms should be focusing more on the CEO.

75% of CEOs are primarily responsible for selecting legal advisers, yet managing partners believe this to be in the range of 5% to 15% according to the survey. The FT and MPF organized a survey of client CEOs and 118 responded, and the results are published in the September issue of the members-only Professional Marketing magazine.

Other findings show a disconnect between clients and law firms:

• 30% of clients see relationships between "C" suites (CEO, COO, CMO, etc.) as a top attribute for a healthy client/adviser relationship, yet only 2% of law firm leaders believe this to be the case.
• 50% of clients perceive law firms to be ineffective in using digital channels.
• 60% of clients are looking for quick solutions but only 20% of firms believe this to be a top client priority.

An article by Richard Chaplin illustrated many of these points. In one case, a bank was under pressure form their CEO to get more legal services for less, get pertinent advice promptly and take a firm grip on risk issues. The bank invited its law firms to present their ideas at a meeting. The client observed a stark contrast between:

• One firm where the partner had only read the email in a taxi on the way to the meeting and, after frantic action on a Blackberry, persuaded a team member to take the project. The client was unimpressed, describing this large firm as being full of sole operators.
• Another firm where the partner shared the request internally. Two sets of touch points were analyzed: law firm to in-house team, and in-house team to CEO. The managing partner had raised the matter with the client CEO to get a better understanding of the commercial pressures. A range of innovations were put forward that resulted in increased income for the firm.  The client was most impressed, telling others about this well-managed firm.

Webinar Tomorrow, September 13, 2011
Business Development for Litigators

Join Barry Schneider and me in our most popular program about how to capture more litigation files. We will show you how to grow your litigation client base, by continuing the relationship after the case is over, focusing on dispute-rich industries, picking the "hot" practice areas for trials, and prioritizing your business development efforts.

TOPICS TO BE COVERED

• Pursue groups of businesses where you have clients already.
• Focus on the "hot" areas of practice, as identified by market research.
• Use methods to create a good reputation that will attract files and cases.
• Employ the four priorities of business development.
• Build long-lasting relationships with clients.
• Use our #1 most effective marketing technique.
• Penetrate organizations of potential clients.
• Become the industry expert that every business client wants.

WHO SHOULD ATTEND

• Experienced litigators who want to smooth out the peaks and valleys of their practice.
• Young litigators eager to build a career in litigation.
• Marketing partners who plan to build up their firm's litigation practice.
• Managing partners seeking to maintain and grow the revenue from a solid litigation practice. 

Registration fee: $300. Click here to register instantly with a credit card. You can display the program in a conference room, put the telephone on speaker mode, and invite as many attendees at your firm as you wish. One connection per registration.

Did you know that advertising, unsolicited newsletters and the legal press are irrelevant in getting legal work from a medium sized business? 

However, there are several sure-fire ways to reach decision-makers at these companies, and we'll discuss them during our Webinar next Thursday June 9, "Winning Legal Business from Mid-Cap Companies."

Our featured guest is Silvia Hodges, Ph.D. Professor of Marketing and Management at Fordham Law School. She spent 4 years studying how mid-sized companies find and select law firms and just published a book on the topic: Winning legal Business from Medium-Sized Companies.

In the webinar, I will interview her on how to communicate, market and sell to these excellent, paying clients. 

But medium-sized companies are different -- they don't have an internal legal department and typically lack legal expertise. They don't issue RFPs and will consider one or two law firms before making a choice. Often the CEO or the HR director will search for and choose the company law firm - not the purchasing or procurement department.

Among the topics Dr. Hodges will cover are:

• The unique two-stage process that mid-size companies use to find a law firm and then select a lawyer.
• Why many standard types of marketing - like branding and advertising - are a waste of money to reach mid-size companies.
• The communications, marketing and selling techniques that are proven to work to reach the CEO or company executive who makes the hiring decision. A tip: they don't have to justify their decision so being a brand-name firm doesn't matter.
• How to position yourself as a lawyer so that mid-cap companies will find you.
• How modern Internet applications like blogs, Facebook and Twitter have become important. 85% of executives consider law firm websites important sources of information in their search for lawyers.

Please see the description of Winning Legal Business from Mid-Cap Companies to find out more.
MORE INFO: Program Director Laura Kresich; (Tel) (773) 966-9273 or Lkresich@LawMarketing.com
WEBSITE: http://bit.ly/ilfrRh

The good news is that the US economy is recovering. From a legal marketing standpoint, this means there are fewer files for lawyers practicing in bankruptcy. The Administrative Office of the U.S. Courts reports that in the first quarter of 2011, there were 12,376 petitions filed by businesses -- down 15% from the same period a year ago. This is less than the 4th quarter of 2008, the year when the recession got really ugly. 

Quarterly Business Filings by Year (1994-2011)

Typically, 96% of bankruptcy filings are filed by consumers. Many lawyers prefer to handle business bankruptcies because there is an estate with assets. A bankrupt company, the debtor, might use Chapter 11 to reorganize its business and try to become profitable again. Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court.

Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to liquidate (sell) the company's assets and the money is used to pay off the debt.

There are several bankruptcy hotspots where lawyers can focus their law firm marketing. States with the highest per capita filing rate (total filings) for the 12-month period ending March 31, 2011 were:

1.     Nevada
2.     Georgia
3.     Tennessee
4.     California
5.     Indiana
6.     Alabama
7.     Utah
8.     Michigan
9.     Arizona
10.  Colorado
 
Districts with the highest percentage increase in total filings for the 12-month period ending March 31, 2011 (compared to the identical period in 2010) were:
 
1.     Southern District of Florida: 26.5%
2.     Central District of California: 22.8%
3.     District of Utah: 19.7%
4.     District of Hawaii: 18.1%
5.     District of Arizona: 11.9%

What is the best way to regulate lawyers in the US? The ABA Commission on Ethics 20/20 is considering a new proposal for uniform regulations for the delivery of legal services. Now you can have your say in a public online survey expressing your point of view.

Simply visit:

http://www.zoomerang.com/Survey/WEB22CAK9UBVDZ

and take 2 minutes to complete the simple 8-question survey. Please spread the word about the survey and give your colleagues the link.

23 major law firms have joined business clients in the Association of Corporate Counsel to call for a uniform set of lawyer regulations, so that American lawyers can compete in the global economy. See http://bit.ly/g9EJsD. 

The results are public and you can see them by visiting

http://www.zoomerang.com/Shared/SharedResultsSurveyResultsPage.aspx?ID=L26GQL26V6VQ

The Network of Trial Law Firms today launches its YouTube-powered TRIAL.COM Online CLE Center at www.TRIAL.COM/cle. Amazingly, the service is 100% free and attorneys watching the videos can qualify for CLE credit in CA, FL, GA, HI, IL, LA, NJ, NY and other states.

Currently 16 videos are online and more will be added shortly. The Network of Trial Law Firms has created dozens of videos in which defense trial lawyers from its 24 member law firms offer practical advice on managing the trial and litigation problems with which in-house counsel grapple daily.

“Education, coupled with the practical trial and litigation examples that we provide, is the best way to improve legal representation and achieve great trial and litigation results for the clients of our member firms,” said Tony Lathrop, a trial lawyer at Moore & Van Allen in North Carolina, and chair of the Network. “We believe that CLE should always be free of charge.”

What makes TRIAL.COM’s Online CLE Center unique is that, subject to accreditation rules in each state, the service permits lawyers to fulfill some of their CLE requirements online from any device and any browser. The service also allows viewers to download course materials and slides while watching the videos.

Each video runs approximately 20 minutes (panels run longer), and is divided into four short sections. Attendance is confirmed using codes embedded in each section which the viewer types onto the same screen that displays the video, following which a certificate of compliance is issued by the Network.

Currently available programs cover keys to winning a case, relationships with in-house counsel, corporate compliance and ethics.

Ten new videos will be recorded live at the Network’s Litigation Management Supercourse in Florida in May. Going forward, approximately 30 videos will remain online, with new videos replacing older ones every six months.

The Network of Trial Law Firms, Inc. is a not-for-profit membership association producing cutting-edge trial and litigation continuing legal education. The goal is to provide clients with high quality trial and litigation representation through advances in education, technology, business and science. The Network’s CLE disseminates information on trial and litigation techniques free online without restriction.

For further information contact Ellis R. Mirsky, Executive Director and General Counsel at 914-332-4400.

GCs Jeff Novak, John Lewis, Jr. and Stephen Kaplan.

"We got sued in New York," GC John Lewis said. "One firm came to us and said they knew the judge and had beaten the opposing counsel.  I had heard that pitch before. But I was impressed when they said, 'we are so confident we can win a motion to dismiss, we've already drafted it. We'll charge you a flat fee of $25,000 if we win. If we don't win, you don't have to pay us anything.'" He hired the firm, which won the motion, and his company now uses the law firm.

Three GCs speaking at the LMA national conference in Orlando described the novel approaches that are required to displace an incumbent law firm.  The program was sponsored by InsideCounsel, and the discussion was led by Group Publisher Tom Duggan and Editor-in-Chief Cathleen Flahardy.

The GCs were: 

• Jeff L. Novak, General Counsel, AOL Paid Services. He was a partner at McGuireWoods, and he has cut company's outside legal spend in half.
• Stephen B. Kaplan, Senior Vice President & General Counsel of Connextions, Inc.
• John Lewis, Jr., Senior Managing Counsel-Litigation of the Coca-Cola Company.

Legal fees

"Firms we have grown relationships with understand that cost is a big issue," Novak said. "Few of our firms actually ask us 'how do you measure out success?' 'How can I make you look good?' That's the law firm's job."

"Marketing is a core competency that is missing among lawyers," Lewis said. "You can't find unmet client needs unless you get to know the client. Law firms are spectacularly bad at asking 'what keeps you up at night?'"

"When my budget was cut, some law firms stopped calling," Kaplan said. "Other firms took the law firm and thought about what complimentary things they could offer me, and make me look good in my desperate hour. These are the firms I will be hiring in the future."

Novak said lawyers should be like a therapist to in-house lawyers. Law firms should look for work that can be "de-lawyered" and transferred to a paralegal.

"I could tell a firm was worth the spend when they asked me, 'what does a win look like for you?'" Kaplan said. "I thought that was novel thinking." He added that other law firms that charge $1,000 per hour have "self-selected themselves out of my work."

"We have changed from a profession to group of vendors who compete against each other based on price, and that is a race to the bottom," Lewis said. "Think of the airlines. They used to compete against each other based on the level of service." 

Knowing the client's business

"I hired a young lawyer to work in-house at the company. She did something no one else did: she read our 10-K form. She came in prepared. It's not acceptable today not to know about the company."

"I need to know what's going on with the company if the CEO gets on the elevator with me," Lewis said. "I appreciate when a law firm tells me, 'here's something you may want to see.'"

Diversity

"I don't know when the talent pool for diverse lawyers is ever deeper. Not having a diverse law firm is unforgivable," Kaplan said. "We always ask ourselves how can we sell to an emerging market? How can we look like them? Law firms have a disconnect with reality on that point."

"85% of the purchasing decision are made by women. Latinos will become the dominant demographic in this country," Lewis said. "Law firms need to reflect that."