The Challenge of Now
It might seem odd to start a piece entitled ‘the challenge of now’ with a story from nearly 15 years ago but as the historians say you cannot really understand the present unless you understand the past. The challenge of now is that in the worst recession the profession has experienced in most of our lifetimes we have the tsunami of change in the legal services marketplace just around the corner. You knew it was coming; it always seemed to be in the future but now it is almost here. Are you prepared for Alternative Business Structures? Do you have any idea of the impact they might have on your firm?
Radical then, tame now
In 1995 I gave a presentation to my partners about the need to become closer to our clients. It was and to a lesser extent still is typical of firms in the region of 5 – 20 partners that they have more than one office with duplication of accounts office, library, personnel and other back office staff. I was suggesting that we move to having one office hub in which all the back office services and fee earners were housed but the partners worked from home or in the community of their clients in Hotdesk or satellite fashion to be both physically and ideologically closer to their clients. The idea was to encourage partners to see the world through the eyes of their clients and potential clients and to offer value through the very personal service they could offer.
It was also the time of discussion about multi-disciplinary practices and most people I spoke to were scathing about this as a concept believing it would mean that the accountants would take over the legal profession. I wonder if many people take that view now. How many of you would be delighted to bail out and let another organisation take over? How many of you actually believe that a commercial operator would be interested in your business and wish to be part of an Alternative Business Structure with you? However, this might be just the type of vehicle to help you get closer to your clients. It could be sector specific and have all the relevant professionals working together in a team to provide the best advice.
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Where are you?
Someone commenting on a previous blog said to me that solicitors just don’t get it – the buying public chose not to use a solicitor and will chose for example a Will writer not based on cost but because they offer something solicitors don’t – accessibility and friendliness.
Before you start throwing things at the screen just reflect a moment. How accessible are you? Your office is probably situated on the High Street in your town and only open between 9 am and 5pm during the working week. What is your position on the increasingly important virtual High Street – the internet? About 3 million people access the internet daily, do you? What do you use it for? If you are anything like me I might:
- Get the latest news
- Compare products & services
- Purchase goods & services
- Download forms for completion to access goods or services
- Research government, legal, tax or personal information for a task
- Confirm the contact details of a supplier
- Conduct a background check about a supplier or customer
- Make contact with a range of third parties through their web site
- Make a booking
I am sure you are all doing similar and more interesting things than me on the internet but then so are your clients.
What does your web site do? Does it provide the latest news in your chosen areas of expertise? Does it give potential clients a user friendly explanation of your products and services? Does it give them the opportunity to download free information such as leaflets and help sheets or the ability to find what they want through links off your site? Can they check out who is the person in the firm they need to see about their problem and view a picture of them? Can they send you an e-mail via the site? Can they arrange an appointment or even provide initial information for you to advise?
My old idea of being in the locality of the client is rather outdated now because you can be closer to your client in the virtual world just by understanding what the client wants and providing it 24/7.
Money doesn’t grow on trees!
I realise that by now you are cross with me for suggesting seriously investing money in innovative thinking and IT when you are struggling to pay the salary bill or your new insurance premium. However, think for a minute. If you don’t change your car there comes a point where it costs you more to maintain it than is reasonably practicable and your ability to sell it diminishes. Then is not the time to think ‘Oh I wish I had budgeted for a replacement because now I am stuck with it; it hurts to pay the bills and it is unreliable’. If you don’t have a plan for how to achieve a competitive advantage once the recession has passed you will be too late to devise and implement one before the new legal marketplace is in full swing.
Most firms could generate a reasonable pot of gold if only they committed to excellent working capital management. Some of the contributors to the Practice Management section of this site have talked about this before. It means shortening the time between doing the work for the client and billing for that time i.e. collect in your work in progress & keep it low. It also means being absolutely clear to clients about when they are expected to pay and now much leeway you will give them. Stop being kind and polite and start being firm. Most people respect a firm that is efficient, after all that is a good thing for a lawyer to be. Those which abuse your goodwill and do not pay in a reasonable time are probably not the best clients to have. You might even gain their respect by not pandering to them. Cash is king and you need the money.
The greater the time which passes by before a bill is rendered and then collected makes it more likely that the client refuses to pay or looks for a discount. The better you are at recovering the full amount of effort you have put into the matter for your client the easier it will be to unlock that pot of gold.
If you are a partner you must set an example. No hoarding of fees to bill next month, or next year; bill now and bill regularly. No leaving all cash collection to the accounts department. Agree which cases need you to deal with them and which need accounts; then do it. Have a blitz.
You will be amazed how much you can raise by taking a clear and positive step towards reducing your firms ‘lock-up’. The goal is then to maintain it and have devised new ways to get more client matters to replace the billed ones. Please don’t think that this money is there to pay some drawings. The purpose of all the effort was to raise some cash to invest in the plans you have made to improve your firm’s competitive position.
The position is urgent and needs strong leadership, plenty of relevant ideas for your firm and the support of your partners and staff. Together you can make a huge difference. You may feel despondent but take the opportunity to look outside the legal world to gain inspiration from other professions. Take for example the dentists.
Very few dentists now offer NHS treatment because the contracts on offer were not appropriate to them. Doesn’t that sound like what has been happening to legal aid? Did they give up? Some surgeries did but others decided that only dealing in tooth decay was not a good way of addressing what their patients wanted. Patients wanted to look good, not just have that tooth filled. Patients wanted to feel better about themselves. So the world of cosmetic dentistry arose. Tooth whitening, veneers, crowns and caps. I am no dentist but the economics of the products on offer to-day are much greater than those connected with simple filling and plaque removal.
The key thing is to generate innovative ideas by looking around; asking the right questions and making some decisions which you actually put into practice. If you want to be part of a go ahead Alternative Business Structure it will not happen overnight and certainly will not work unless you do your homework. Now is the time if you have not already done it.
There is some good advice in the articles on Practice Management on this web site about some of these issues and how to improve the marketing of your services. If you need some help with making the right decisions I and the various colleagues would be only too pleased to help, at an appropriate fee of course!
© Gill Steel, LawSkills Ltd. 2009
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