“Price is what you pay, value is what you get.”
~Warren Buffet quoting Benjamin Graham (2008 Annual Report of Berkshire Hathaway Inc.)
If you were to ask seasoned lawyers to describe their job to a classroom of students, you won’t hear about arguing motions for summary judgment or drafting operating agreements for member managed LLCs. You’ll hear about how lawyers help clients solve problems. Inside and outside of the courtroom, we are the problem solvers our clients turn to and rely upon, as that is our business. From the time the client walks in the door (or sends an email in this day and age), lawyers apply their training, skills, and knowledge to provide a service in assisting that client with a need. It’s the value we provide.
The uniqueness of each client or potential client walking through the door compounded by the varied methods of addressing their problems make it difficult to put a price on legal services, let alone a value. This is why value remains a relative concept rooted in what your service is worth to a client, and thus what a client is willing to pay for it.
So, when clients demand more value from lawyers providing the same service product, focus must not only encompass what is being delivered, but how it is delivered. Clients are asking: How are you listening to and communicating about my needs? What makes you a dependable resource to service my current and future legal needs? How do you embrace efficiencies through technology to serve me better and faster, and for less cost?
Utilizing Legal Skills To Greatest Potential
Starting with retooling the billable hour, many firms are examining how they might utilize their most valuable asset – their legal skills – to their greatest potential. All the while firms hope to increase efficiencies of practice management to develop a more robust service product for current and prospective clients. For example, a holistic compensation model for law firms called SMART (Solutions to Measure, Advance and Reward Talent) determines compensation and advancement based on eight “pillars,” including billable and pro bono hours; business development; advancing diversity; quality of work; client satisfaction; lawyer development; leadership and initiative; and external visibility.
More Value With Advancements In Technology
Emerging technologies and new resources continue to help simplify the functionality of the practice of law. And the clients know this. Tools for quicker, sustainable growth, e.g. legal research to bookkeeping to cloud-based data management products, should reduce overhead costs, at least over time. Technology has been allowing lawyers to focus more on complex, intellectually demanding legal craft over the years while revolutionizing how lawyers actually practice law each and every day. Clients recognize these advancements and expect to find an improved return on their legal services investment. Translation: more value.
Clients Decide Value Based On Quality Of Service
Other firms are going so far as allowing the client to weigh in on the value they have received by giving them the final decision about what the firm gets paid. Chicago-based law firm Valorem Law Group, founded by a “small band of BigLaw refugees,” is one such alternative fee arrangement firm. Valorem uses a “value adjustment line” to allow clients to adjust legal fees according to the quality of service received. Hear from attorney Nicole Auerbach, a founder of Valorem, at The Future Is Now Legal Services 2.017 conference on May 18, 2017.
Project Management To Improve Value
Lawyers continue to seek improvements to client management, knowledge management, communication, and cost analysis. At the cutting edge of process improvement is Seyfarth Shaw, which for years has invested substantially in Lean Six Sigma, a process used by manufacturers to eliminate errors and waste in processes. Project managers distill legal matters down to a process that can be managed more efficiently, with greater quality and at a lower cost. The project management team works with the attorneys (and sometimes clients) to “process map” which means identify each step of a matter and then follow it through to see how long the step takes and where there are redundancies. To accomplish this, SeyfarthLean has more than 30 Project Management Professional (PMP)-certified individuals on staff who participate on client teams and help oversee project management.
As the Chief Strategy Officer at Seyfarth Shaw LLP, Josh Kubicki works closely with business model design by SeyfarthLean. Kubicki will join Auerbach at The Future Is Now Legal Services 2.017 conference where he will discuss how he implements techniques to distill legal matters down into a simplified process, eliminating redundancies, and increasing efficiency while lowering costs. The goal remains: improve value to the client.
Our clients are demanding more value for the price they pay. This is a new norm for which we must think like true innovators to best thrive and even survive. How will you increase the value delivered to your clients? Join the discussion at our legal services conference on May 18, 2017 in Chicago.
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