Weather seemed to factor into almost everyone’s travel into Chicago last week for the P3 conference, and unfortunately, it resulted in the cancellation of our keynote speaker for the morning. Instead, we were treated to an open and interactive discussion – as one of the speakers joked "We wouldn’t be business leaders if we didn’t know how to adapt."
And adapt they did – had we not known the schedule in advance, you never would have guessed that the session wasn’t well-thought out and planned.
Challenges for the People of the Three P’s
The main challenge to pricing is the obvious one: overcoming culture and history to make these changes within our firms. Setting a price and managing costs are two different things, but both of them have this same challenge of getting lawyers on board. Lawyers want to press an "easy button," but it’s more complex than that.
Wrapped up in this challenge is another one – that of being able to empower our attorneys to say "no." Firms don’t have to agree to pitch everything that comes in the door (and shouldn’t). But there must be sound business reasoning behind these decisions.
For those tasked with these concerns in law firms (that of pricing, process improvement and project management – because, yes, they are linked), there is no greater strength than to be the voice of the customer within our firms. In order to make pricing strategies successful for the client AND the firm, you need strong project management as well.
Failure is always an option here – there’s a learning curve for all of this, and we will get pricing wrong before we get it right (but as Kat Cole said during her speech, the faster we fail, the faster we succeed). In addition, there is a cost to doing nothing, and we have to factor that in as well.
How do we handle all of this? By making a business case for every decision we make, and having the backing of the CEO or managing partner. If you have a process in place, it becomes much easier to say no to requests to support engagements. Communication during this process is also vital, especially when saying no to an RFP. These decisions aren’t just about saying no – it’s about choosing good opportunities over bad ones.
Communication also helps in managing the element of fear that drives the decisions of some partners. Attorneys have never before been asked to think of the firm before their own book of business, so we must inform the conversation with data and a sound business case. In doing so, we’re engaging the attorneys in the process, which can help them to understand what the pricing team can do.
As an aside: one of the speakers offered an excellent tip with respect to putting together an RFP – "unless it’s a government contract, if the RFP says ‘don’t call,’ you should still call to ask questions."
An audience member added that for their firm, a best practice has been to do a budget debrief after each matter to see what worked well and what didn’t. This helps to inform future decisions and give them additional data with which to work.
Another audience member commented that the legal industry is now adopting processes that have been in place in business for a long time – there were a lot of nodding heads at this statement. We were fortunate to be joined by a number of lawyers in the room as well, one of whom added that there are many attorneys in firms who WANT to do this, and pricing professionals should seek them out. With many law firm projects, the most effective thing to do is to find champions in order to drive change, and that proves true for process improvement and pricing as well.
As catalysts of change, there will become a tipping point where it becomes "everyone’s" idea, and one of the speakers joked that if we’re looking for credit for our ideas, we may be in the wrong industry. Success is achieved when partners think process improvement, etc. is their idea (I absolutely measure my success in this way with my attorneys).
This may be a surprising fact, but as a speaker said – firms can profit more from a lower cost of delivery than they do from raising fees. But in the beginning it may be easier to motivate attorneys by paying them "bonuses" for doing the right thing.
We’re in a precedent-driven profession."
Attorneys want to see where something has worked before, so bonuses can be a way of easing them into it while you gather the data to show why and how it works at your firm.
The Sun Never Sets on Toby Brown
Toby Brown (@gnawledge) is the Chief Practice Officer for Akin Gump, who oversees the operations of the firm’s Pricing, Legal Project Management, Practice Innovation and Alternative Staffing efforts. Toby was one of the speakers for the interactive discussion, and he kicked off the discussion of workload for professionals in this sphere – he’s working from dawn to dusk, in every timezone worldwide (so fellow attendee Ian Turvill – @ianturvill – joked on Twitter that the "sun never sets on Toby Brown.")
The speakers agreed that being on a pricing team is like being in the mafia – you’re either in, or you’re out. You need to be extremely motivated and capable to be in this space. Their advice? "Be available all the time. You’re never going to be able to hang up your phone."
Attorneys work very hard and are always available, so you need to be too in order to gain their respect (PS, this is true for ALL law firm positions, not just those in pricing). Attorneys aren’t going to give these "chiefs" the resources they need to do their work if they’re not constantly working and available.
However, additional resources can also create MORE work – there’s a cycle of trust-building and learning:
[So] as a good leader, you’ve got to delegate, delegate, delegate, even when the partners come to you." –Toby Brown
Another important piece of being an effective leader in this space is being able to socialize yourself as well as your ideas – even with a fantastic CV and experience, attorneys may not trust you.
Marrying Technology & Process
In the past, we’ve had a tradition at law firms of the "hero culture" to overcome poor processes. Now we’re trying to operationalize these, and that takes effort. But technology doesn’t define the business process – it’s the other way around.
The best marriages of technology and process are when you know what you’re doing manually, and then find the technology that works, says Tim Corcoran (@tcorcoran). A good service provider will be able to help their attorney clients to work smarter and more efficiently…eventually. But first, you should rely on your internal resources to help you to figure out how to build a process.
Toby said that the best use of technology starts with designing new processes around client needs and THEN using technology to implement those processes.
Nat Slavin (@natslavin) of Wicker Park Group added from the audience that in the last 25 client interviews he’s done, he added in the question of what resources they have in terms of technology. 24 of those said none.
Nat’s comments about client interviews turned the conversation to assessing ourselves – doing a needs’ assessment early on with clients can help to ensure project success. This feedback is key – when clients and their attorneys discuss their priorities, it is surprising how close they usually are. That feedback is key to the process.
But it’s all in how you phrase it. Tim Corcoran suggests "What are we doing well, and what can we improve?" We need to be able to "own" what we’ve done wrong, and see how we can learn from it.
Don’t just talk to clients though; look internally as well. It may turn out that those clients who provide the most money to the firm are not actually the mix of clients that you want to keep. So it’s important to define your "scorecard" to be able to make the business case for each client and matter.
Lawyer Jason Moyse (@jasonmoyse) with Cognition LLP tweeted the perfect summary for the first session:
Lot of discussions on being overwhelmed. THAT is the new normal, but also MUCH better than the alternative."
What say you, Zen readers?
We’ll be back tomorrow with the next session from the conference, but please feel free to join in the discussion in the meantime in the comments below!