Your Law Firm has a 12% Chance of Winning an RFP

RFP proposalA law firm’s chances of winning an RFP drop to less than 12% if it hasn't helped their client prepare the RFP, according to The BTI Consulting Group’s research.

I've long been skeptical that competing in RFPs is a realistic way for law firms to get new business. Most of them are "wired," with the winner predetermined in advance, others are fishing expeditions to find out fees, and some are bullying tactics to force a company's law firms to lower their rates. Even if a law firm wins an RFP, often no work is actually assigned.

They're a bad idea all around and BTI's research confirms it. "The only people who dislike RFPs more than professional services firms are clients," the report says. "The RFP process is neither fair nor objective."

Law firms that haven’t helped their client determine what needs to go into an RFP have already lost by the time it arrives at their office.

“The RFP is a wake-up call—a signal your client relationship is at risk because you are no longer winning work on a sole-source basis,” comments Michael B. Rynowecer, President of BTI. “The RFP is your chance (in some instances your last chance) to make a mark with clients.”

BTI conducted more than 13,000 independent, individual interviews with C-level executives at Fortune 1000 companies and large organizations. Now in its 25th year, BTI conducts the only continuous benchmarking market study of C-suite expectations of professional services firms.


Larry Bodine, journalist, lawyer, law firm marketerLarry Bodine is a journalist, lawyer and business development advisor to law firms. He is currently pursuing a project to publish legal news for consumers in newspapers, TV stations and web sites. For more information, you can reach him at 520.577.9759 and larrybodine.com.

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New Statistics Illustrate the Decline of Biglaw

So what do you think about this trend? Tell me in  a comment below.

Over the last three years the relative portion of legal work given to the largest, full-service law firms has declined from 26% of legal fees billed to only 20%. The decline of the 50 law firms in the U.S. with more than 750 lawyers is quantified by new LexisNexis/Counsellink research, Enterprise Legal Management Trends Report.

You can get a copy here. In the chart below, locate the sloping, bright green line.

The decline of Biglaw has been well-documented by The New Republic, Above the Law and The New York Times. Richard Susskind has launched a book-writing career on the topic. But this is the first time I've seen actual statistics.

Another telling statistic is that legal departments are not consolidating with “Largest 50,” according to the report. Instead they are sending legal work to the new winners: "Large Enough" firms with 201-500 lawyers.

Three years ago, “Large Enough” firms were responsible for 18% of overall legal billings. In the most recent 12 months, the same firms are now responsible for 22% of legal billings, the report says. (See the red line in the chart below.) An even more dramatic shift is seen in high fee litigation cases -- those matters that generate fees totaling $1 million or more. “Large Enough” firms grew their portion of U.S. high fee work from 22% three years ago to 41% in the trailing 12 months.

Meanwhile, firms with 50 or fewer lawyers are also cleaning up. As shown in the chart below (see the purple line), they are the firms that get the biggest proportion of legal billings -- 30% of it.

Legal work moving from Largest 50 to Large Enough firms

The report represents analysis of a snapshot of data available via the CounselLink Enterprise Legal
Management platform. Currently, the collective stream of data and processed invoices represents more than $10 billion in legal spend, 2 million invoices, and well over 300,000 matters gathered over the past 4 years, with the volume of data available for analysis growing at a rapid pace.

 


Larry Bodine, journalist, lawyer, law firm marketerLarry Bodine is a journalist, lawyer and business development advisor to law firms. He is currently pursuing a project to publish legal news for consumers in newspapers, TV stations and web sites. For more information, you can reach him at 520.577.9759 and larrybodine.com.

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Corporate Counsel Shift $5.8 Billion In House

See this press release from Friday, June 21, 2013.  Click here for original source.

BTI Consulting Group’s research sees projected 2013 growth of only 1.8% in outside counsel spending.

For those not currently engaged with clients in redefining value outside of rates, we recommend a serious discussion with your clients about their goals in bringing work in house.

Corporate legal departments shifted $5.8 billion from their outside counsel budget to internal spending. BTI Consulting Group's newest release of BTI Benchmarking Corporate Counsel Management Strategies reveals corporate counsel at the world’s largest companies continue to move dollars in house—and away from outside counsel. The shift drives a paltry projected 2013 growth of 1.8% in outside counsel spending instead of a 5.1% compound growth rate had corporate counsel spent the money on outside law firms.

Corporate counsel are bringing the following practice areas in house: 

  •     IP prosecution
  •     Licensing
  •     Complex commercial contracts
  •     Litigation
  •     Regulatory and compliance

Corporate counsel’s top goal is to wring more value from their scarce legal dollars. “Shifting money in house and away from law firms is one value generating opportunity,” comments Michael B. Rynowecer, President of BTI. “For those not currently engaged with clients in redefining value outside of rates, we recommend a serious discussion with your clients about their goals in bringing work in house.” Continues Rynowecer, “devise your strategy to help your client exceed their goals faster than they might on their own.”

BTI conducted more than 300 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations. Now in its 13th year, BTI conducts the only continuous benchmarking market study of corporate counsel worldwide.

Find more information about this and other compelling research at http://www.bticonsulting.com or contact BTI at 617.439.0333. BTI is the undisputed leader in providing high-impact strategic research to professional service firms and their clients.

Am I making the right business choice?

Today's post is a by a guest author from LFS Legal, Belinda J. Darling.

Running a business of any kind- be it a hairdressing salon, a media monitoring business or a national chain of furniture shops- entails making multiple decisions every day. Some of those decisions have small consequences- who is going to man the phones while the receptionist takes his break?- while others have much larger and far reaching consequences. Learning how best to approach the decision making process will mean your business runs in a more harmonious and productive manner.

Many of the business choices you’ll face will involve staff. People managing is a tricky business but with a considered and respectful approach, you’ll create a positive and proactive working environment. Let’s look at some examples of the types of decisions you might face. Your chief sales manager is good at her job- but it’s fast becoming apparent that her skills and knowledge would be better suited to a marketing role. You can see that installing someone else in the sales role would boost revenue, while utilising the skills of the sales manager in the marketing department would be beneficial in drumming up new business. The problem is, your sales manager loves her job and has never registered any interest in switching departments.

The key here is to make your sales manager feel she’s an invaluable member of the team. It’s been repeatedly established in studies of the workplace that employees thrive when they feel valued. Suggesting to your sales manager that the marketing role needs HER unique contribution will help her understand and accept that rather than being pushed out of her job and cornered into another role, her talents are being recognised and her skills put to use accordingly. To learn more about making the right business choice, get in touch with the experts at LFS Legal.

The benefits of making the right business decisions, particularly where your employees are concerned cannot be overstated. Happy employees work harder, feel personally invested in the business, and have better retention rates.

 

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Survey Finds Slow Adoption of Alternative Fee Arrangements for Legal Services

lexisnexis, law firm marketing, attorney feesThis just in from ALM: In spite of all the buzz, an increase in use of AFAs proving much more gradual than forecast in aftermath of 2008-2010 recession. [See the chart below for the reasons behind the slow adoption of AFAs.]

According to results from a new survey conducted by ALM Legal Intelligence, alternative fee arrangements (AFAs) for legal services -- billing methods based on metrics other than an hourly rate – are becoming more pervasive, but still failing to gain the traction that was predicted by industry experts in recent years.

The survey report, “Speaking Different Languages: Alternative Fee Arrangements for Law Firms and Legal Departments,” indicates that only 6 percent of law firm respondents used an AFA in 2011 for more than half of their legal work last year, with the majority (67 percent) using AFAs for less than one quarter of their billing. Similarly, only 12 percent of legal department respondents said they used AFAs for more than half of the legal work they assigned to outside counsel in 2011.

Perhaps even more telling about the lackluster adoption of AFAs is that 6 percent of legal departments and 17 percent of law firms did not even know what percentage of their legal work was billed using a method other than the billable hour or discounting.

These results are among the thought-provoking findings of the survey, which was conducted last month by ALM Legal Intelligence and sponsored by LexisNexis® CounselLink®. To download a free copy of the report, please go to http://almlegalintel.com/Surveys/AFAreport.

“To get an all-around and fresh take on the adoption of AFAs, we connected with more than 200 law departments and more than 200 large law firms in the U.S.,” said Kevin Iredell, vice president of research and continuing education products at ALM. “The results of this survey suggest that the billable hour remains entrenched, despite widespread reports that clients are dissatisfied with the practice. However, we also found that the vast majority of both corporate legal executives and law firm partners expect the adoption of AFAs to continue to rise in the next five years.”

According to Iredell, other highlights of the survey findings included the following:

  • Law firms’ and companies’ opinions differ as to who they think is responsible for the lag in AFA adoption.  According to law firms, the top obstacle to increased use of AFA billing focuses on either side feeling more comfortable with hourly billing in general.  Legal departments agree, but they go on to find lack of experience in defining and managing work and billing matters on a basis other than hourly as big a stumbling block for both parties.
  • Despite the slow adoption rate, the use of AFAs is clearly growing. About 62 percent of law firms saw an increase in the use of AFAs in 2011, with only 2 percent citing a decrease and the remainder seeing no change. Half of legal departments saw an increase, with 49 percent saying that the number remained the same and only 1 percent that experienced a decrease.
  • The top three choices for types of alternative fee arrangements used by both firms and departments were: flat fee (89 percent of departments, 93 percent of firms); blended rate (47 percent of departments, 89 percent of firms); and capped fee (57 percent of departments, 83 percent of firms)
  • About 70 percent of legal department responses predicted an increase of AFA use from 2012 to 2016, with 26 percent thinking the amount will stay the same and just 4 percent expecting a decrease. Almost three-quarters of law firms (74 percent) expect an increase in AFA work over the same time period, while 14 percent think that things will be the same and, again, just 2 percent expect a decrease.

“Both corporate counsel and law firms continue to struggle to find ways to make alternative fee arrangements work for them,” said Kris Satkunas, director of Analytic Consulting for LexisNexis CounselLink. “LexisNexis has developed advanced solutions to help both law firms and corporate legal departments identify the types of matters that best lend themselves to AFAs, to model different fee arrangements and pricing scenarios to achieve better cost predictability, and to track performance throughout the lifecycle of the engagement.”

alternative fees, law firm marketing, attorney marketing, legal fees

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How Much Law Firm Media Professionals Earn

LFMP YEAR-END SPECIAL EVENT—THE WORLD TRADE CENTER

When: Wednesday, June 20, 2012 from 5:30 - 8:00 p.m.

Where: 7 World Trade Center, 250 Greenwich Street

 

Join us at The World Trade Center, where we will gather, earlier than usual, to hear a few words from one of the project leaders about the iconic site, enjoy cocktails and light snacks and then have the opportunity to visit the stunning, celebrated Memorial Garden.

 

Click here to RSVP

A compensation survey conducted jointly by the Law Firm Media Professionals and Hellerman Baretz Communications revealed that the average salary among all respondents was $130,391.

This is down nearly $8,000 from the 2010 survey. The most interesting findings of the survey included:

  • Only 59% received a raise, as compared to 76% in 2010.
  • West Coast and Northwest respondents had the highest average salary: $160,000. Respondents from the Northeast reported an average salary of $133,627.
  • $135,650 is the average salary for a respondent whose firm budgets for social media, compared to $132,643 for a respondent whose firm doesn’t budget for social media.
  • $152,582 is the average salary for a respondent whose firm uses an outside PR/communications agency, while that of respondents whose firm doesn’t use an outside PR/communications agency was $102,535.
  • $132,047 is the average salary for a respondent whose firm maintains at least one blog ($150,720 for those who blog three or more times a week), while that of respondents whose firm doesn’t maintain a blog was $125,322.

The survey was conducted from February 13 to February 24, 2012. LFMP members were polled, and there was a total of 76 respondents. Zoomerang.com collected the confidential data, which was analyzed using Microsoft Excel and third-party analytics software.

Full details are in the Law Firm Media Professionals / Hellerman Baretz Communications Compensation Survey.

 

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Big Firm Litigators Heading to Boutiques


Ward Bower
I picked up this story on the Texas LawBook. The move by big firm litigators heading to small firms is caused by of conflicts, clients unwilling to pay big-firm rates and the ambience of smaller offices.

In-house counsel, legal recruiters and law firm management experts say there is a fundamental shift in the practice of business litigation in Texas. More than 40 large firm partners and associates in Austin, Dallas and Houston made lateral moves to litigation boutiques during the first four months of 2012, according to research by The Texas Lawbook.

Texas Lawbook says that big law firm litigation sections have been slowly shrinking during the past decade. Some are half the size they were in 2000. Meanwhile, litigation boutiques, which often specialize in areas such as employment law, intellectual property or securities matters, are booming.

Affected big law firms include:

  • Vinson & Elkins
  • Fulbright & Jaworski
  • Locke Lord

“Major corporate firms are seeing clients take their litigation work to litigation boutiques, and the lawyers at those major law firms are leaving to follow the work,” said Ward Bower, Altman Weil principal and consultant.

Businesses such as AT&T Inc., Dell Inc. and energy companies have become increasingly sensitive to litigation fees.

“Most large, full-service law firms have overpriced themselves, and most businesses simply cannot afford $800 or $900 an hour,” said Michael Lynn of Lynn Tillotson. “We’ve deliberately priced ourselves at $650 an hour, and we clearly are not starving. We are busier than we have ever been.”

He gets about 30 résumés a year from lawyers at large law firms who want out.

“The two primary inhibitors to business development for a litigator at a major law firm are inflexible rate structures and client conflicts of interests,” said Sherrard “Butch” Hayes, former Fulbright parner-in-charge, now a partner at Weisbart Springer Hayes in Austin.

Legal recruiters and consultants told Texas LawBook that few of these lawyers are pushed out of their large corporate firms. But the firms aren’t necessarily begging them to stay, and they certainly aren’t replacing them with other litigators.

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US Law Firms Earned $7 Billion from Alternative Fee Arrangements

One of the elements demonstrating that the legal profession has changed permanently in the last five years is that the 100 top-grossing US law firms earned approximately $7 billion from alternative fee arrangements (AFAs), according to a new white paper “The Evolution of the Legal Profession.”

Written by Ari Kaplan, Principal of Ari Kaplan Advisors, the paper is based on interviews with 30 lawyers, in-house counsel, law professors and other legal experts. “By relying more heavily on alternative billing arrangements than we ever have before, we were able to bring in a lot more work,” said Crowell & Moring’s chairman, Kent Gardiner. Arent Fox, Akin Gump and Skadden Arps also derived income from unconventional billing.

According to Fulbright’s 2011 Litigation Trends Survey Report, 52% of US companies are using AFAs. Companies with bigger gross revenues use them to a greater extent. Lower costs are the overwhelming reason for using AFAs, followed by their predictability.

Company use alternative fees, afas, law firm marketing, legal marketing

Law firms and corporations are still not focusing enough attention on creating efficiencies in internal processes, according to Beth Anisman, a consultant with B&Co. and former Global Chief Administrative Officer for Legal of Lehman Brothers.

Some efficiencies, such as software that reviews e-discovery, have actually eliminated the need for thousands of junior associates, who have been laid off.

To maximize their value, lawyers need to focus on prior work produce and experience as opposed to solely billing hours, according to Jeffrey W. Carr, General Counsel of FMC Technologies.

There’s no looking back, according to the report. 74% of the respondents agreed that the changes will be permanent.

 

San Francisco Does Lawyers a Favor and Bans Yellow Pages Distribution

yellow pages dumpters, law firm marketing, legal marketing, lawmarketing"Mass over-distribution of Yellow Pages has degraded our environment and blighted our neighborhoods," said San Francisco Board of Supervisors President David Chiu, the lead sponsor of a law banning the unsolicited distribution of Yellow Pages.

For years I've been annoyed with the dumping of various yellow pages on my lawn, like so much trash. The delivery people don't even both to hang it on my door knob.  I use Google instead as does the rest of the world, and I use the yellow pages only for seat cushions and door stops.

For years I've advised lawyers not to advertise in the money-wasting yellow pages. I think the San Francisco mayor and the Board did lawyers a favor, by demonstrating that the yellow pages are considered to be composting matter. Under the law, which won't go into effect for a year, companies cannot leave the directories at the front doors of residences and businesses without prior permission.

Overall U.S. yellow pages revenue declined 11.8% in 2010.  The industry’s revenue slide continued in 2010 as the transition from print to digital products continued, according to Simba Information. This marks another year of continuous, multiyear double-digit losses in revenue from the major publishers.

National yellow pages spending is projected to decline an additional 12% to $1.47 billion in 2011. Simba believes that the current environmental challenges are a “ticking time bomb” threatening the industry with increased government-imposed controls and “do not deliver” lists scattered around the 50 states.

As I wrote in 2007:

Cancel that #*$%! expensive yellow pages ad.  This was the clear advice I gave to attendees at our conference "Developing Your Personal Marketing Plan" in Chicago.  I repeated the advice at the Chicago Bar Association technology conference.  You now have permission to save yourself a small fortune.

Fewer people are reading the Yellow Pages every day. It's last century's marketing. Instead, they are using the Web to find attorneys. Take the money you save and plow it into your online presence.  People now use Google to look up phone numbers, addresses and law firms.

Ask yourself -- when was the last time you personally opened that thick, hard-to-read yellow directory?  It's been a long time, hasn't it? There are multiple yellow page directories anyway -- which one did you use?

By advertising in the yellow pages, you are doing what thousands of other lawyers are doing.  You are simply making yourself more like the competition, not distinguishing yourself. There's no way to break from the clutter -- there are hundreds of lawyer yellow page listings.

Besides, most yellow pages ads are written by their salesmen.  That's why they all look the same. Save your budget while you still can. Get out now.

What Lawyers Earn: Find Yourself on the Chart

Lawyer salaries, How much lawyers makeThe following chart is from the 2011 Salary guide published by Robert Half Legal.  Find yourself on the chart and see if you are earning as much as you should be.  Please go to http://www.roberthalflegal.com/salarycenter to use the company's salary calculator.

 

Information in the guide is derived from a wide range of sources, including:

  • Thousands of full-time and interim placements made by Robert Half across North America
  • Local insight from our staffing and recruiting professionals throughout Robert Half's branch network
  • Exclusive workplace research Robert Half conducts regularly among senior lawyers with the largest law firms and corporate legal departments in the United States and Canada
  • An analysis of the hiring environment and an extrapolation of current trends into 2011.

 

 

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