A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

We can do better for our firms’ people

Monday, July 30, 2018

By Justin Whealing, Partner, Eaton Capital Partners


The law is a people’s profession, yet we often treat our own shabbily. Justin Whealing looks at how there is a strong business case for putting your people first.

The law firm environment contains many inherent contradictions.

Externally, there is political uncertainty home and abroad, nationalist sentiment is on the rise globally, Donald Trump is tweeting merrily and markets are fluctuating.

Internally, law firm competition is white hot, global law firms continue to arrive into what is a crowded market, law firm mergers are commonplace and clients continue to put pressure on rates and resources via secondment opportunities.

You would think that with such a perfect storm, law firms would batten down the hatches and look to make do with what they have got.

But the contrary is true.

Law firms are hiring, and many of them are doing so in large numbers.

What did a recent “Law Firm Partnership Survey” reveal?

At Eaton Capital Partners, in conjunction with The Australian newspaper, we have just put the finishing touches on the Law Firm Partnership Survey for January to June 2018.

Survey participants included many of the biggest global and national firms in the marketplace, as well as a number of mid-tier and boutique firms.

For the first six months of this year, 27 of the 34 law firms featured in this survey saw an increase in the number of lawyers hired below partner level compared to the last six months of 2017.

Law firms are tough. They survive through cyclical downturns, changes of government, technology and scandal.

Private practice lawyers are both in demand when the party is raging and also needed when the bottom falls out of the market. They are stoic beasts, and their structures are resilient.

From this position of structural strength, the greatest weakness within law firms is how it treats its people.

Law firms often demand a level of personal resilience that is unreasonable, and quite often make demands that stray into the unconscionable.

Changing behaviours

The high rate of depression amongst lawyers is a continuing blight on the legal profession.

In terms of looking for a good place to start to arrest this, I think the following guidelines from the Tristan Jepson Memorial Foundation should provide the bedrock of what a harmonious and respectful law firm should look like. 

  1. People receive feedback at work that helps them grow and develop

  2. Supervisors are open to employee ideas for taking on new opportunities and challenges

  3. People have opportunities to advance within their organisation

  4. The organisation values employees’ ongoing growth and development

  5. People have the opportunity to develop their “people skills” at work

Law firm leaders recognise that law firm culture needs to change; they are just unsure of the best way to go about it.

Putting people first is a start.

If you ask law firm leaders what the most important part of their brief is, you will be surprised by their answers.

In 2016 I surveyed 20 law firm leaders

Participants included Danny Gilbert from Gilbert + Tobin, Peter Slattery from Johnson Winter & Slattery, John Nerurker from Mills Oakley, Dunstan de Souza from Colin Biggers & Paisley and Tony O’Malley from PwC.

When I asked these law firm leaders what the most important part of their job was, 60% of respondents nominated the ‘strategic’ focus, with the next best response being the ‘people’ focus.

“Our people deliver our service to clients, so they must be at their best”, commented one managing partner.

For people to be at their best, they need to feel valued.

That starts with law firm leaders establishing clear and transparent policies with regards to promotion and remuneration.

Law firms should be a meritocracy.

It is not acceptable to deny promotions to your cohort after lawyers reach or exceed previously agreed benchmarks.

Law firms do this too regularly, trying to shift the goalposts when a successful lawyer is ahead of the game.

At a partner level, it is imperative that a partner’s remuneration is not just based on tenure, practice size, and billable hours.

Money changes everything, especially behaviours.

By linking a percentage of partner remuneration to cultural goals, such as mentorship and collaborative behaviour, you will have a happier, more productive and empowered workforce.

“Large firms depend on culture. Without it they are just a web of mutual self-interest,” said another managing partner in the 2016 Survey.

In discussions about what the law firm of the future might look like, the emphasis is too often on the use of technology.

It is people that make a law firm, and the best law firms frame policies that reward good behaviour and good performance. The definitions of ‘good performance’ also need to be clear, as do the timelines that frame policies around career progression.

Successful law firms of the future will attract the best and brightest if they feel they are being valued. They will then stick around if that law firm lives by the policies it puts down on paper.



About our Guest Blogger


Justin Whealing is one of the foremost experts on the Australian legal profession and a leading commentator on the Asia-Pacific legal industry.

Justin was formerly the editor of Lawyers Weekly for many years, where he helped position it as Australia’s premier online legal publication.

Since joining Eaton Capital Partners in 2015, Justin has played an instrumental role in the growth of the business and that of its clients.

He is one of Australia’s foremost partner search experts, having sourced partners, including managing partners, for international, national and boutique firms in Sydney, Melbourne, Perth and Brisbane.

He has also assisted international firms in establishing Australian practises.

Justin continues to produce numerous thought leadership pieces and compile extensive surveys, and his research is regularly featured in national publications such as the Australian Financial Review and The Australian.

Outside of work, Justin enjoys spending as much time as possible with his wife and three daughters,  listening to Bob Dylan and PJ Harvey and stretching the legs where you can hear the kookaburras and not mobile phones.

LinkedIn:  https://www.linkedin.com/in/justin-whealing-a342b523/

Twitter:  https://twitter.com/JustinWhealing






What comes after Generation Z? Introducing Generation Alpha

Monday, July 23, 2018

By Mark McCrindle, Social Researcher and Demographer


Australia is in the midst of massive generational transition. Today’s grandparents are part of the Baby Boomers, born from the late 1940’s to the early 1960’s. This generation is followed by Generation X, born from 1965 to 1979 who, at the oldest edge, are moving through their mid-life. Today’s new parents and those entering their peak fertility years are part of Generation Y, born from 1980 to 1994. Today’s children and teens are Generation Z, born from 1995 to 2009 and Australia is home to almost 5 million of them.

From 2010 Australia has seen the start of a new generation and having worked our way through the alphabet, we call this new generation, the first to be fully born in the 21st Century, Generation Alpha.

They have been born into an era of record birth numbers, and there are around 2.6 million of them nationally. When this generation is complete, in 2024, Generation Alpha births will total almost 5 million over the 15 years from 2010, compared to 4 million births of the Baby Boomers for the 19 years from 1946.

The oldest of them commence Year 3 next year and will be the most formally educated generation ever, the most technology supplied generation ever, and globally the wealthiest generation ever.

They are a generation of “upagers” in many ways: physical maturity is on-setting earlier so adolescence for them will begin earlier and so does the social, psychological, educational, and commercial sophistication which can have negative as well as positive consequences. Interestingly for them while adolescence will begin earlier, it will extend later.

The adult life stage, once measured by marriage, children, mortgage and career is being pushed back. This generation will be students longer, start their earning years later and so stay at home longer. The role of today’s parents therefore will span a longer age range and based on current trends, more than half of the Alphas will likely be living with their parents into their late 20’s.

Generation Alpha have been born into “the great screenage” and while we are all impacted by our times, technology has bigger impacts on the generation experiencing the changes during their formative years.

The year they began being born was the year the iPad was launched, Instagram was created, and App was the word of the year.  For this reason, we also call them Generation Glass because the glass that they interact on now and will wear on their wrist, as glasses on their face, that will be on the Head Up Display of their driverless cars, or that will be the interactive surface of their school desk will transform how they work, shop, learn, connect and play.

Not since Gutenberg transformed the utility of paper with his printing press in the 15th Century has a medium been so transformed for learning and communication purposes as glass; and it has happened in the lifetime of Generation Alpha.


Meet the author, Mark McCrindle at the ALPMA Summit in September

Leading Teams in Changing Times

Mark McCrindle: Social Researcher and Demographer

This session will look at the implications of the big trends transforming Australasia on client expectations, staff engagement and brand perception. In this era of complexity and message saturation, the importance of thought leadership, brand experience and communication that cuts through is essential.

These times create the need for leaders to create a culture of collaborative innovation through effective and engaging leadership. Mark will deliver insights into how to best communicate, lead and futureproof organisations in this era of unprecedented disruption.



About our Guest Blogger


Mark McCrindle is a social researcher with an international following. He is recognised as a leader in tracking emerging issues and researching social trends. As an award winning social researcher and an engaging public speaker, Mark has appeared across many television networks and other media. He is a best-selling author, an influential thought leader, TEDx speaker and Principal of McCrindle Research.

His advisory, communications and research company, McCrindle, count among its clients more than 100 of Australia’s largest companies and leading international brands. Mark’s highly valued research and reports, presented through infographics, data visualisations, videos, media input, resources, and blogs, have developed his regard as an expert demographer, futurist and social commentator.

Mark brings a fresh approach to his research-based boardroom briefings, executive workshops, strategy sessions and keynotes. Armed with the latest findings and presented in a customised and innovative way, Mark is an in-demand communicator.

Mark McCrindle, BSc (Psychology), MA, is the author of three books on emerging trends and social change. The ABC of XYZ: Understanding the Global Generations, Word Up: A Lexicon and Guide to Communication in the 21st Century and The Power of Good.

Twitter: @markmccrindle   |   Facebook: @mccrindleresearch   |   Linked in: linkedin.com/in/mccrindle









Your clients hire you to be effective, not efficient

Monday, July 16, 2018

By Tim Williams, Founding Partner, Ignition Consulting Group


The executives on the front lines of your law firm must understand that you’re in the business of providing solutions, not services. Services can be procured from a lot of other sources, often at lower cost, and the professional buyers in client organisations know that. But if you present your offering as effective solutions to business problems, you’re putting your real value in perspective.

Behavioural economics teaches that one of the easiest and most powerful ways to enhance the perceived value of what you do is to reframe your offering. One of the most impressive examples of this principle is Howard Schulz’s reframing of the 50-cent cup of coffee into an experience that made a caffeine fix worth four dollars. Starbucks reframed the product as an experience and has been extracting incredible value from it ever since.

Before you jump to the conclusion that “This doesn’t apply to professional services,” stop and think about how little effort goes into framing the services of most firms. Visit a typical law firm website and you’ll see their offering isn’t really framed at all; it’s just a bullet-point list of widely-available services.

If what you sell are services, that’s what clients will tend to buy. If on the other hand, you package these services as solutions intended to produce positive business outcomes, your clients and prospects will place much more value on what you do.

Moving Up the Value Hierarchy

There is, in fact, a value hierarchy for professional firms. The least valuable offerings are services, which are associated with “labor,” are seen as widely available, and aren’t really scalable.

At the very least, consider packaging these services as programs - unique combinations of services designed to achieve a desired outcome that is important and relevant to current and prospective clients.

Taken one step further, these programs can sometimes be turned into products - branded solution sets that produce value for your clients (and recurring revenues for your firm) independent of any notion of labor or time spent.

Speaking of time, this is by far the worst way to frame what you do. Time (hours) simply represents effort, and no reasonable buyer of professional services would want to buy effort. While you may feel pressure from your clients to be “efficient,” this is only because you’re choosing to sell units of cost instead of units of value.

Under the hourly rate system, clients push for “efficiency” only because they don’t want to pay more than they have to for a particular output or outcome. If what you sell is the output or outcome itself, you’ll soon see that the emphasis shifts to where it really belongs: are we being effective?

Not Just Effective, But Efficacious

A better word still is “efficacious.” Yes, that’s a real word. In the pharmaceutical business, efficaciousness is an absolute requirement, defined as “the power to produce a desired effect.”  The concept of efficaciousness is infused with the kind of energy that can inspire teams inside professional firms to produce positive outcomes for their clients.

As Pine and Gilmore observe in their outstanding book The Experience Economy, if you just sell services you’re in the service business. But the goal of professional firms is to renovate, recharge and reform the business success of their clients. By recasting the skills and talents that reside in your business, you can move up the value chain to where you really belong: the transformation business.



About our Guest Blogger

Tim Williams leads Ignition Consulting Group, an international consultancy devoted to helping professional services firms create and capture more value. Tim is a noted author, international speaker, and presenter for major industry associations and business conferences worldwide.  As a career marketing professional, Tim’s seminars and keynote presentations have taken him literally around the world, including North and South America, Europe, Asia, India, and Australia.

Tim is author of the book, “Positioning for Professionals: How Professional Knowledge Firms Can Differentiate Their Way to Success.” He is also a regular contributor to business and marketing publications worldwide, in addition to writing for LinkedIn, where he serves as a global Linkedin Influencer. 

Twitter: @TimWilliamsICG  |  LinkedIn: www.linkedin.com/in/TimWilliamsICG  |  Web:  http://www.ignitiongroup.com/



Merger fever in the air

Monday, July 09, 2018

By Sam Coupland, Director, FMRC


2018 is shaping up as the year of the merger.  Somewhat understandably the legal media only report the larger mergers and there have been three of them – one concluded and two announced - and we were not even at the end of March. 

Far greater numbers of smaller firms are entering into or examining some sort of merger.  Over the past 12 months I have been involved with a number of these mergers or sales and this year I already have another two on my books.  Some logical questions are:

  • What are the motivations for firms to seek mergers?
  • What is the reception of target merger partners?
  • What are the likely outcomes?


Motivations

Motivations for mergers will vary from firm to firm.  On the positive side, firms with an expansion mindset see acquiring a firm or practice group as the fastest and cheapest way to grow their business. They will usually have a support structure that can accommodate – both physically and managerially – an additional practice or two which provides economies of scale. 

At the other end, an acquisition or merger can provide a firm with a circuit breaker for some of their managerial challengers or deadlocks. This could be anything ranging from succession to disparity in contribution or a hollowing out of market share.

Those firms who see succession as a looming issue, cite their lack of success in developing or retaining likely internal successors. The hope is that by joining with another practice there will be a larger pool of talent that can service the clients as retirement of the partners looms and the newly merged firm (or one of the youngsters) will have the financial resources to purchase the equity of the retiring partners.

There are a lot of moving parts in this scenario and the likelihood of success is based on the idea that a larger merged firm will have the staffing and financial resources to effect an outcome.


The reception of targets

In my experience all potential targets I approach are happy to talk. Nothing is lost from a discussion about what is possible and humans are naturally curious; particularly if they think someone is interested in them. It is not that different from the school yard.

A meeting of the minds is the first step before any information is shared.  The crucial question is ‘do I want to be in business with this person’?  More often than not the answer is yes, or ‘I am not against being in business as long as the deal stacks up’.


Likely outcomes

Assuming the threshold issue of cultural fit has been cleared it then boils down to the financials and many perfectly good mergers have floundered on the rocks once the due diligence is complete.

The right financial fit is important. I have been involved with a smaller firm that sought to be acquired by one of Australia’s national firms. There was a good fit in terms of complementary practice areas and experience of the partners.

Where it fell down was the smaller firm was profitable in its existing lean structure but the modelling showed when the gross fees were put into the structure of the larger firm the profitability of the partners would be halved. 

As attractive as the brand of the larger firm was to the smaller firm’s partners, the financial haircut was too much for them to swallow. Ultimately they ended up merging with a similar sized firm with an equally lean structure.

In most cases, discrepancies in profitability between merger parties will exist but the merged entity should be able to deliver economies of scale (or cost savings by removing duplication) with the result that the financial might of the merged entity is greater than the sum of its parts.

There are of course many factors that need to be taken into consideration for a merger to be successful and a quick internet search will provide you with any number of comprehensive due diligence checklists if you don’t already have one. 

What I wanted to convey in this article is appetite for mergers, or at the very least exploring the opportunities, is high and firms who are considering their options should explore the market without fear of rejection.   


Meet the author, Sam Coupland at the ALPMA Summit in September

Getting your structure right

Sam Coupland - Director, FMRC

The difference between those firms that thrive and those that don’t often has more to do with personnel structure than anything else.

This session will explore the optimal ways to structure your practice groups to enhance profitability; the impact of structure in assessing performance; trends in partner compensation and successful succession.



About our Guest Blogger


Sam Coupland

Sam joined FMRC in January 2000 and became a Director in July 2006. His client facing roles span direct consulting and management training. Sam’s consulting work is predominantly providing advice to smaller partnerships. Sam is considered the foremost authority on law firm valuations and would value more law firms than anyone else in Australia. He has developed a robust valuation methodology which calculates an accurate capitalisation rate that assesses the risk profile, cash flow and profitability of the firm.

Connect with Sam on LinkedIn:  https://www.linkedin.com/in/sam-coupland-b216474a/








Technology is changing the landscape of legal correspondence

Monday, July 02, 2018

By Whit Lee, Executive Director Strategy & Software Solutions, APAC - LexisNexis


Anyone who has stood in line at the post office recently will know that the need for a postal service isn’t waning as quickly as experts once predicted with the digital age, and yet email services aren’t going anywhere soon. A Radicati report on email statistics predicted that by the end of 2019, the world will be seeing 246 billion emails sent and received worldwide every day. That figure indeed makes it sound like the postal service is fighting a losing battle.

There are those too that predict email itself will be obsolete around the same time as the postal service, but even Stewart Butterfield, co-founder of business communication disrupter Slack, commented that, “Email is not going away anytime soon.” However, he agrees (and has built success on the fact) that the way in which businesses and consumers communicate is changing.

At LexisNexis, we know both the legal and the technology industries. We can see how particular technologies are changing the shape of the legal profession by enhancing the ability of lawyers to do their jobs, rather than replacing their jobs entirely.  But technology can disrupt a traditional way of doing things and industries must respond by evolving.


The move from postal delivery letters to correspondence by email

Readers will recognise the changing trend in legal communication where letters have progressed from being physically sent via the postal service or courier, to becoming digital attachments within emails. Lawyers have swiftly adopted this practice, and it is now time to look to the next evolution in this area: utilising the body of an email itself as a vessel for legal correspondence.

In the realm of practice management software, technological developments should focus on improving productivity and outcomes through enhancing the user experience. Many practice management software solutions can now leverage precedent tools to convert letter precedents from Microsoft Word documents to email templates quickly and easily. Using the body of an email to deliver legal correspondence increases productivity by reducing the burden of administration tasks, but it also raises several questions around the future of legal correspondence – for example, can email be used to officially deliver legal notice?


Now regulation and legislation needs to keep up with technology

There is no doubt in our collective minds that email has already become the norm for legal correspondence, but we are in the murky area of change – in Australia, at least – whereby best practice has not yet been formulated, and the regulations around using email as an official method of correspondence are still being decided across the jurisdictions. It remains that some documents must always be served by a personal service or via post. Many questions remain unanswered. Special reports – such as this one from PWC 2 years ago – are attempting to un-muddy the water around this issue, indicating there is a growing desire in the legal industry to adapt to and adopt new technologies and ways of doing things.


Automated notification on the increase – from push notification to pull services

Push notification tools – including email – on phones and computers are inundating workers in all industries, and recent times have seen a move toward “pull” services – whereby would-be target audiences seek information themselves without being prompted. These kind of communication tools are already available in legal practice management software, where clients can update themselves on the status of their matter.

Another technology being swiftly adopted by the legal profession is the use of digital signatures. Whereby once looking after clients located out of town, state or even country was a time-consuming affair of sending original documents back and forth for signatures, lawyers and clients can now sign documents digitally by utilising several digital signature technologies.  By sending an email with a special attachment, clients are able to click a special link to sign in and confirm their identify online. And voila – the process of obtaining a legally binding signature has been simplified and accelerated.

But there are many questions around using email for legal correspondence that run deep, and a comprehensive legislative change is required before full-scale adoption of digital communication in the legal profession can take place. In the meantime, lawyers have the opportunity to be a part of the change, and to adopt technology for legal correspondence where it makes sense. Our advice – only line up at the post office or book a courier for important things that truly will get you in trouble for missing… like sending birthday gifts to the in-laws.



About our Guest Blogger

Whit leads the Legal Software Solutions (LSS) team, which delivers cloud-based and on-premise tools that drive improved outcomes for clients, helping them to make better decisions by combining world-class LexisNexis content with practice management workflow solutions.

Solutions that Whit is responsible for include Lexis Affinity. Whit is also responsible for strategy and business development for the LexisNexis Asia Pacific business. As strategy lead, Whit is focused on how the organization is executing today as well as planning for tomorrow – ensuring we have the right resources allocated to deliver on both short and long term goals and that our investments in new products and solutions deliver value to customers.

Whit holds a Bachelor of Science degree from the University of Tennessee and an MBA from Harvard Business School.

Connect with Whit on LinkedIn:  https://www.linkedin.com/in/whitlee









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