Maraia's Rainmaking Blog

Every leader of an AmLaw 500 firm must answer this question: "What percentage of your partners can carry out a meaningful business conversation with the CEO or CFO of your top 20 clients?"  I've never received an answer over 10%.  If it's under 50%, you've got a serious knowledge gap in your partner ranks.  Your very survival is at stake.

 I've worked in the legal industry for nearly 30 years, both as a lawyer and for more than two decades as a trainer, speaker and coach to lawyers in large law firms.  I've been a voracious reader of business books and periodicals for over 20 years.  I've also been a keen student of business since graduating from law school almost 30 years ago. I've had the privilege of working with some of the top rainmakers in the legal profession for over 20 years.  My appreciation for their unique talent has grown in the past three years as I've watched the economic meltdown render the average partner's knowledge base almost worthless.  The result is an overwhelming majority of partners who are commodities.  

The rainmakers in any firm are highly skilled in the art of conversing with top level executives within corporate clients.  They understand the business issues first AND then craft their legal advice with the business realities at the forefront of their minds.  They are the antithesis of commodities.  The very best also help clarify a client's strategic thinking to razor sharpness.  The rest of your partners come at it backwards; they aim for technical perfection and almost totally ignore the business realities.  Heck most of your partners can't even read and understand your firm's balance sheet and income statement.  

Let's frame the issue in numeric terms:  At best, 10% of your lawyers can carry on these kinds of meaningful conversations.  That means the remaining 90% earn a failing grade!  You'd think more firms would be undertaking a massive learning effort within their offices, but that is not what's happening.  

I've been watching firms merge and add laterals at a frenetic pace during the past three years as if that will solve the problem.  That's a big strategic mistake.  What I'd suggest firm leaders do is to test the business insight of every lawyer they add to the firm to be sure they possess the requisite business acumen.  That's right, before hiring anyone, I'd require every lateral candidate to have a conversation with the C suite executives of your top clients to be sure they have the requisite business acumen to be relevant and valuable  to your clients.  You may not be able to change your current partners' skill level overnight, but you can totally control the quality of every lawyer you add going forward to be sure they can meet this standard!  

We've recently begun urging all our clients to undertake a major skills and knowledge upgrade in the partner ranks.  The reason has everything to do with value and relevance.  If your partners can't carry out a meaningful conversation with your clients top executives they are irrelevant and barely worth keeping.  Might as well cut them loose because the problem is only going to get worse.  More importantly, they won't be able to deliver value to the client.  

The training and coaching program we're developing has a real world test that all participants must pass:  

Each "graduate of the program" must be able to carry out a meaningful business conversation with the CFO or CEO of your top  20 clients.  Anything less is failure.  Anything less is lacking in real value.  Anything less puts your firm in peril.  

This is a very rigorous test and requires climbing a steep learning curve, but I'm confident that lawyers can do it.  One of the things that has made working with lawyers so enjoyable is they are extremely quick learners when properly motivated to learn.  The task before us is huge, but I really don't see a better path.  Maybe I'm missing something obvious.  

Please let me know what you are doing to close this rather gargantuan knowledge gap.  

Mark

While talking to a realtor friend of mine recently I explained that if the clients we regularly serve (large law firms) were a house they would be listed as "fixer uppers."  The Biglaw market we operate in is undergoing major and disruptive change.  This isn't just a thunder storm that will pass quickly, this is a once-every-hundred-years type storm that will redraw the legal landscape for many years.  

Structural changes are needed and will be forced upon us whether we like it or not.  The key to survival is adapting quickly to the new realities.  Most large law firms are in dire need of some major revamping in how they operate and how they think.  There is also need for a massive upgrade of their skills and knowledge base so they remain relevant to the their clients.  

Meanwhile the biggest problem with most firms is this:  They don't think they are fixer uppers.  They think the firm is in decent shape and doesn't need major revamping.  This thinking persists despite flagging revenue, sagging per lawyer billables, and frequent client defections.  Or the leaders of the firm do know what needs to be done but can't move the troops in the direction needed.  Add to that the influential partners who are blocking more draconian actions because they like the status quo and you have a recipe for disaster.  Most firms are turnarounds but don't know  it or are actively in denial about it.  

If I were the managing partner of these firms I'd focus firm resources and energy on these seven areas:

1.  Improve your relationship building and networking skills.

Make it a top strategic priority to teach every lawyer in the firm the relationship and networking skills they need to converse intelligently with the senior executives within the companies they represent and are targeting for work.  This is not a quick fix solution, but it is long overdue.  In my opinion, large law firms have been under investing in teaching these relationship and networking skills for over two decades.  Anyone who tells you there is a quick fix is delusional.  The best time to start building a robust network was 20 years ago.  The second best time is today.  In a firm with 300 lawyers, you'd be lucky to have 30 who have the skills needed.  

2. Engage in DAILY meaningful conversations with the people in your network.

Make it a top strategic priority to teach every lawyer in the firm how to engage in more meaningful conversations with every person in their network.  Every conversation, every day is a chance to add to each lawyer's knowledge base.  In my two decades of helping lawyers hold these conversations I've noticed something predictable.  Each conversation contains seeds of opportunity.  Sometimes those seeds of opportunity are a chance to help someone develop new business.  Most conversations between your partners and the people in their network are being wasted.  Daily improvements are needed.  Make every conversation count!!  In a firm with 300 lawyers, you'd be lucky to have 20 who have the skills needed.  

3.  Add one new contact per week to your network.

Make it a top strategic priority for every lawyer to add at least one new contact per week to their personal network of contacts.  Make sure this added contact is relevant to your practice.  If you're a corporate lawyer you might want to add one CFO per week to your database.  If you're a trial lawyer you might be adding one in house lawyer each week to your database.  If you're a tax expert you will want to add one Tax Director per week to your database.  

4.  Require every lawyer in your firm to understand how clients make money.

Make it a top strategic priority to teach every lawyer about how the firm's top clients make money.  One of our clients (an equity partner) showed her service delivery team how a major retailing client made money.   That kind of thing is much too rare within the legal profession.  I no longer believe it's optional that every lawyer in the firm become familiar and conversant with the P & L, balance sheet and business issues that clients worry about every day.  It's mandatory.  The net result of not doing this is more lawyers are becoming the modern day equivalent of buggy whip manufacturers.  Their knowledge gap (lack of understanding how clients' businesses work) is growing not shrinking.   In a firm with 300 lawyers, you'd be lucky to have 10 who have the skills needed.  

5. Have firm leaders conduct regular client satisfaction interviews.

Make it a top strategic priority to have your Chairman, managing partner and top leaders conduct at least 20 client satisfaction interviews (CSI's) each year.  There is no better way to get a clear picture about the direction you need to take your firm.  There are still very few firms that are doing these CSI's.  Those who do are seeing these benefits:

*  Your leaders develop a personal bond with key leaders at top clients

*  You learn more about the client's tastes, bias and predilections

*  You uncover new and better ways to work with the client

*  You gain strategic insights from each visit that give you clear ideas about how to direct the firm 

*  You discover issues and can address them before they fester to the point the client moves on to another firm.

6.  Set aside at least 3-5% of your revenues for this skills upgrade.  Anything less will be insufficient to the task ahead.   Most businesses outside the legal profession spend far more on marketing, sales and business development.  You need to get your partners attention and nothing gets their attention better than demonstrating where resources are needed.  

7.  Develop performance goals and metrics by which you will measure this major effort.  One of the failures of law firm leaders through the years is they almost never set forth crystal clear expectations for their partners.  And those expectations and metrics MUST deliver value to the client.  The typical firm expects their lawyers to meet billable targets.  That has absolutely nothing to do with delivering value to the client.  More importantly, you must hold people strictly accountable for meeting those expectations.  One modest expectation that I would set is this:  We expect every partner in this firm to have 3 meetings per week with in house lawyers or C suite executives.  One bold expectation that is more Kennedy like is this:  By 2016, we expect every partner in this firm to be able to carry on a meaningful business conversation with the CFO or CEO of our top 20 clients.  Is that an ambitious expectation?  You bet it is and completely needed to move beyond survival to thriving.  

Do these seven things and you're headed in the right direction.  Ignore them at your peril.  I'm concerned that market conditions within large law firms will get worse before they get better.  I'm an optimist at heart so I'd welcome hearing contrary views.  

Mark

Well I never thought I'd see this day but it's time to offer a requiem for the legal profession.   You've managed to become so severely lacking in business acumen and skills that corporate America is having to look elsewhere to solve its problems.    A very small percentage of lawyers in large firms is able to deliver the value its clients have been demanding for three years (http://www.acc.com/valuechallenge/).  The simple truth is this:  Less than 10% of the partners in any law firm in the USA are able to carry out a meaningful business conversation with the CFO or CEO of its top 20 clients.  How pathetic and embarrassing.  

If you're a sincere leader of your firm the task before you is huge and I'm afraid the prognosis for your firm is not good.  Even if you've made massive and unprecedented changes during the past few years MUCH MORE IS NEEDED!  I'm sure this reality has many firm leaders highly discouraged and thinking about their own retirement or stepping down from their leadership role. If that's your attitude then you're not the right person for the task ahead.  We're maybe 10-20% of the way through the transition that is needed.  New business models are needed desperately. To prove my earlier point:  Most of your partners don’t know what I mean by that last sentence.  

So much of the industry (and people like me who have been serving it) is in serious denial that I'm very worried about it's long term health and viability.  If big changes don't start happening very soon I fear the entire profession will shrink to irrelevance.  So here is my challenge to you whether you're an individual lawyer or the leader of the largest law firm on the planet:

To the individual:  Make it your overriding priority to meet with every CEO and CFO in your network and learn what business issues they face.  It will probably be a sobering meeting.  Learn how to carry on a meaningful business conversation with each CFO or CEO.  This is not something you will achieve overnight.  The payoff to learning is huge.  I've worked with hundreds of the top rainmakers in the legal profession for over 20 years and almost every one can comfortably carry on these kinds of conversations.  The rest of the partner ranks are nearly worthless.  I know of instances where younger associates are much more able to do this than long time equity partners in the same firm.  

To the leaders of law firms:   Issue a Kennedy like challenge to the entire partnership that says:

"By 2016, we expect every partner in the firm to be able to carry on a meaningful business conversation with the CFO or CEO of our top 20 clients."

Then do something that no law firm in the world has ever done:  Hold your partners accountable to this standard come hell or high water!!!!  This will require a massive education, training and development undertaking the likes of which has never been attempted within any profession.  

To the leaders of ACC:  It's time to issue the next challenge:  "By 2016, all firms serving our company agree to upgrade the skills of every partner so they are able to carry out a meaningful business conversation with the CFO or CEO of the firm's top 20 clients."

My final message to the entire industry is this:  WAKE UP-YOU'RE LIVING IN A STATE OF DENIAL!!

Does every meeting of the team which serves your best clients always deliver a tangible benefit to the client?  If not, I'd suggest you view the next team meeting that way.

One of my clients is a corporate lawyer and non-equity partner in his firm.  He is intent on joining the equity partner ranks as fast as he can, but he's only been with the firm for less than a year.  He told me about an upcoming meeting with the entire service delivery team for a banking client that he was instrumental in landing.  This bank has no inside counsel and is expecting this lawyer and his firm to serve in that role.  So arr, sounds great, right?

My client isn't a banking lawyer but when he was asked by his coach what his plan was for the meeting (since he was the peerson who landed the work), he had no clue.  He is not unusual, that is the norm.  That's also pitiful!  Let me be blund:  Have a clue!

One simple thing he can do is to compile a one-page list of every person on this bank's service delivery team (including legal assistants!) and explain the kinds of questions which are appropriate for each person.  I also told him this:  Make sure every meeting of your service delivery team delivers a tangible (and felt) benefit to the client!  He found that one idea extremely helpful since he's new to the partner ranks and doesn't understand everything that's involved in being the relationship partner.

That might mean creating a list of action items that flowed from the meeting or questions he will ask the client that arose during the meeting so that the client knows you're advocating for him.

If you'd adopt this simple rule at every meeting of your service delivery team, I'll bet you my house your client will be impressed...and their confidence in you will increase.

Mark

I’ve been doing a deep dive into Social Media as a method of communicating with my audiences.  For almost a year now, I’ve experimented with Facebook, LinkedIn, YouTube, Twitter, SEO, SEM, and website optimization, plus a whole lot more.  It’s been quite an experience and I'm going to keep up the effort.

One of the strings I’ve found in all of this is that electronic media, as ubiquitous as it is, cannot deliver the value one human gets from another human.  Mark Maraia calls it "Analog" and "Digital" relationships. He's spot on with that definition

I was struck this morning reading Kevin O’Keefe’s blog post about how important word-of-mouth marketing is for law firms.  Kevin is one of the leaders in blogging for the legal community   And I have the greatest admiration for what he’s accomplished through his diverse, leading-edge digital networking efforts.

In his most recent blog post, Kevin is quoting Jay Shepherd who is another fellow lawyer/blogger talking about a recent report by Total Attorneys that says the word-of-mouth is the most effective marketing tool for most small law firms.  According to Kevin’s blog, Shepherd talks about how word-of-mouth marketing isn’t very effective when in actuality, Shepherd uses word-of-mouth extensively in his own firm’s business development as well as his own personal promotion.

My sense of all of this, as well as my own experiences in stepping into the digital networking phase, is that the digital Social Media and analog word-of-mouth go very neatly together.  Yes, it makes sense that most small law firms would report that word-of-mouth marketing is their best medium.  But when you couple appropriate "digital" social media tools in front of the “analog” word-of-mouth practices, you get quite a powerful one-two punch.

I now use Facebook, Twitter and LinkedIn to start and evolve conversations with people I could never have been able to have “word-of-mouth” conversations with in the past.  Just geography and the sheer numbers in my audiences make one-on-one conversations impossible in scope.   So, I use the digital media to spread the word and that allows me to then have much more meaningful word-of-mouth relationships with a diverse group of people.

If you read between the blog lines of both Kevin O’Keefe and Jay Shepherd, you'll see immediately that they are the masters of both media.