It will be interesting to see how this 'Digg Dialogg' interview goes. I don't think they will be taking only softball questions, and I was impressed to see that Jim Lentz had a generic link to other Digg conversations about the Toyota recall issues, that were not cherry-picked by someone in the PR department. Toyota has taken a black eye on all the recall talk, both in the traditional media and in the social media. For a brand that is built on quality, safety and owner loyalty, Toyota should be working hard to make sure that it also understands that today's public not only gets its information from traditional media, but also 'talks' to a wider social media audience. The email I received this morning at least it makes it seems that Toyota 'Diggs' where we're coming from.
For more than 50 years, Toyota has produced safe, reliable, quality vehicles and provided first-rate service. Because your safety and confidence in Toyota is of the utmost importance to us, we want to ensure that we are providing you with the latest recall information. To get further details, please visit toyota.com. Additionally, Jim Lentz, President and COO of Toyota Motor Sales, U.S.A., Inc., will be interviewed live on Digg Dialogg on Monday, February 8, at 2 p.m. PST to answer the top questions as voted on by the Digg community. Watch the interview here. Your safety is important to us, and we will continue to do everything we can to keep you informed.
So, in the SmartPhone world, here's the breakdown of how phones compare to computers:
- iPhone = MS Windows
- Android = Mac
- Blackberries = Mainframes
- Palm OS = Linux
- Windows Mobile = OS/2
Jim Hassett’s post on Keys to New Business finally put me over the top on the whole Loss Leader thing (Jim was actually quoting a lawyer – so these were not his words). In my AFA role I have seen numerous examples of low-ball bids from law firms desperate to get the work in the door. These deals are consistently referred to in the market as Loss Leaders.
What is a Loss Leader? Originally this term applied to advertising items at a price below the actual cost (thus the loss) to ‘lead’ customers into the store and sell them other products. One example of this is the car advertised with monthly payments of $229. There’s one car on the lot that with $4000 down you can have for that payment (subject to your credit). The car you actually want (and end up purchasing) has a $500 payment. This concept was eventually renamed more appropriately as the “Bait-and-Switch.”
The Loss Leader concept then evolved to include pricing certain commodity items at a loss, with the full intent of having the customer simultaneously purchase other, high-in-profit products to offset the loss. Grocery stores do this with eggs and milk, which are placed in the back of the store, forcing customers to pass by and pick up the high margin items.
So how are law firms actually treating the Loss Leader concept? By pricing the non-commodity, high-end stuff at a loss. I would argue that M&A deals and complex, large dollar litigation cases would not technically fall into a Loss Leader category. This is akin to the car dealer selling Escalades at a loss, hoping you’ll buy … maybe some nicer wheels? Law firms using this technique are expecting the customer to be so happy they come back next year and buy another Escalade - at full price. The likelihood of this: Zero.
What law firms are actually doing is getting into price cutting wars. And they will be much better off if that see it as such and treat it accordingly. In the words of Yogi Berra, “The future ain't what it used to be.” We’re not going back to full rate deals. Smart firms will face up to that – dropping the whole Loss Leader charade.
I've been discussing this with a number of people lately and one of them said that in a market that is built upon recruiting talent from other firms, you have to be careful not to recruit the "third-stringers". By that, they mean that there are a number of lateral partners that are riding the coattails of others in their firm, getting their names on important matters, or assigned to important clients, but haven't really done anything great on an individual basis. This sort of thing happens in almost all industries. Where you bring someone in during an interview, they look and sound great, have an impressive resume, tell you all of the people they've worked with and all the deals they've worked out, only to bring them on board and discover that they don't quite live up to your expectations. These third-stringers hint that they will have a number of people that will follow them to your firm and that the clients will jump ship from the previous firm and rush to bring all their legal business to your firm. Six months after the lateral joins the firm, you look around and the only person that followed them was a secretary (whom you didn't really need.)
So how do you avoid these third-stringers? One answer I got said that you could cut through the smoke by asking just a few questions and watch how the potential lateral partner answers those questions. When a potential lateral starts mentioning all the General Counsels (GC) they've worked with, ask this simple question - "Have you ever had [name of GC] over to your house for dinner?" Watch to see the expression on their face. If they answer 'yes', then see if they begin telling you about the experience, why they had dinner, and what their current relationship status is. If they fumble around on this question, then perhaps their relationship isn't as close as they are saying.
I also saw a series of questions posted on the Lateral Attorney Report back in November 2009. These are much more straight-to-the-point questions to back up the statements that the potential lateral partner has made. Dan Binstock uses the phrase "narrow-pause" to define that period of time when the potential lateral is trying to conjure up an answer for which they were not prepared. Questions like "How were your reviews?" or "Were you asked to leave your current firm?" and how they react to those questions can let you know if this is a quality lateral, or a third-stringer.
One thing you should probably keep in mind during this era of 'free-agency recruiting' is that all of those partners that you've managed to push out of your firm because they either didn't fit the personality of the firm or didn't create the book of business that he or she should have given their position, they usually wind up somewhere. So, for all the times you thought "thank goodness we off loaded that partner", or chuckled when you read on law.com that a peer firm "raided" one of your third-string partners, someone else might be chuckling and saying the same thing about that third-string partner you just brought in to your firm.
When I read Toby's post from yesterday on hiring the 'C' students, it got me to thinking about the type of first-year associates that firms hire and whether we should bring back the old HLS model for first years. Imagine the situation where on the first day of starting a firm the associates were told by the Managing Partner that a third of you will not be here this time next year. That would be a scary thought for most associates, perhaps preventing many from even taking a job with a firm if they knew that they might be cut after a year. It might, however, be the best thing that a law firm could do. It could also open opportunities for graduates that would never be on a law firm's radar. Perhaps the firm refers to this first year as a 'clerkship' thus creating a way for even those that get laid off to spin this as 'experience' rather than not making the cut at a firm.
My thoughts behind implementing the HLS system in first-year associate hires would go something like this:
- Cut your current associate wages by at least one-third.
- Hire one-third more associates than you planned. (This could get you some of those 'C' students that Toby mentioned.)
- Assign the associates to a group of partners that will mentor and monitor them throughout the first year.
- Set specific goals for the first year's. The goals should surround all facets of law firm life... traditional legal work (hours or projects worked), training (both mandatory and voluntary), research and writing skills, and pro-bono work, just to name a few.
- All first year attorneys would be 'staff attorneys', and would not be called 'associates', or put on 'partnership' track until after they make the cut at the end of the first year.
- At the end of the first year, make a decision on who stays and who goes.
- My post on January 8th (the one I pulled down because they told me it was full of factual errors) wasn't very far off the mark (and I was a little miffed that the Project Cobalt team made all of us sign a CDA and then gave "exclusive" interviews to the ABA Journal and the NY Times about the product. But, the CDA has expired and you'll now see great things from those of us that took the trip to Eagan to talk with the Cobalt team. [Note: my apologies to Bob Ambrogi for listing him earlier, he was under the same CDA, but was notified it was lifted before he posted yesterday.]
- This one is actually funny. When I get back to the office this morning, I see a package from ThomsonReuters that looks a little... shall I say, weird, and a little beat-up. When I look inside the package (which was supposed to be some Louisiana resource materials) I find horseshoes. Now, I've gotten a lot of SWAG from the folks at ThomsonReuters in the past (see all those calendars behind the horseshoes...) but this was probably the best! Not only were they horseshoes, but they were used horseshoes to boot!! Nails and dirt and probably horse sh... er poop all ground in the grooves. I'm assuming that this 'package' got misdirected by the USPS, because the package had obviously been opened before it arrived at my office. So, I'm thinking this was someone's idea of a joke... at least, I hope this wasn't the calling card from someone up at ThomsonReuters.... or was it???
In the not so distant past, if an associate was able to make partner and through the good-old-boy network find some sizeable clients, he could count on sitting back and enjoying the fruits of his labor and get by with taking the client out to lunch every once in a while.
Well, if no one has figured it out by now, those days are long gone.
Now, you gotta hustle.
And, I am sorry to say, most lawyers are not predisposed to hustling. First of all, they don’t dance (did anyone get this joke?).
Most lawyers go to law school because they—and I apologize for any stereotyping here but I can be semi-excused since I am a lawyer—are bookworms who either like to study and/or argue. It is the rare exception that was one of the popular kids in high school. If anything he or she was probably doing these kids’ homework for them.
So here these lawyers are—in the 2000s and facing a continued recession—and their partnership is telling them not only do you have to practice law, “you have to go out and drum up business.” Or else.
Well, I am sorry to say, most of these guys just don’t have it in them. It is no slight to them. It is just a personality thing. You wouldn’t want an extrovert handling your funeral or an introvert planning your wedding. And lawyers, typically the studious types who either love examining proxy disclosures or holding forth on their latest court battles, are not very skilled at up-selling their professional services.
Hey, I could be wrong. I have met a few anomalies—lawyers who are great marketers. But these lawyers are usually freaks of nature. Kinda like super-models.
But the pressure on these guys to be someone they are not can be excruciating and, dare I say, down-right cruel. How would you like to be told, I know I hired you to be a hair dresser and all you have ever trained to do is to be a hair dresser but now have to be a heart surgeon and I don’t care if you don’t know how, you still have to do it. I think every single one of us would be terrified.
My suggestion? Hire people who are skilled business developers, people who make a living every day selling professional services, to help lawyers identify and close business deals. Let them sit at the table and be a part of the conversation.Believe me, in this market, it is going to get worse before it gets better. And since law schools are still not attracting kids with these skill sets or teaching them how to develop them, these business development skills are becoming more important than ever before.
- Former Practicing Lawyer who is brought on to be a full-time PM
- PM (non-lawyer) who has some type of experience working with lawyers, or can at least speak the 'language' to the lawyers and prove that he or she does know how lawyers work
- Green Energy Practice
- Sub-Prime & Financial Crisis Practice
- Electronic Discovery Practice
- Guantanamo Bay Practice
Q: Hey, what do you call a person that speaks two languages? A: BilingualQ: What do you call a person that only speaks one?A: An American!