What Do Lawyers Care About - Weekly Result

So - a whole week of analysing the news page of "The Lawyer" (on the principle that this will reflect the things that lawyers care about) and what can we say. Well - let's first look at the charts.

The split of topics discussed (and I immediately admit that my categories are completely arbitrary) is as follows (click on the picture for an enlarged version:

I then further grouped my categories into "About Lawyers" and "About Clients":

So - after a week of looking at the news topics aimed at lawyers, it would appear that most of the discussion (90% in fact) concerns lawyers themselves rather than anything at all about their clients. Given that "The Lawyer" is a public forum, I'm a little surprised to see that lawyers are apparently so little concerned about their clients. Surely the best advertisement about the quality of a firm or a lawyer is success on behalf of their clients - and yet stories about "Client Success" occupied only 3.3% of the news. Maybe it was a quiet week...

Less surprising to me was the fact that a third of the stories were to do with lawyers moving firms and that a further 16.7% were about the money that lawyers earn. Together these made up a very neat 50% of the news - and therefore, arguably, what lawyers care about.

So what?

Well - even if lawyers really do care so little about their clients, I'd suggest that their PR people work harder on positive stories about the work done for clients. We do look at these sort of news pages, you know. And if lawyers really do care about their clients - and lets say that most of them do - then they should be talking about that more, and about how much they and their firms earn a great deal less.

What Do Lawyers Care About?

As someone who works with lawyers, it is important that I should understand the people I need to communicate with - and so I need to understand what lawyers themselves care about. One way of finding this out, I assume, is to read the news that lawyers read. My thinking is that news outlets which service lawyers ("The Lawyer" for example) will be sure that they are addressing their core audience and so providing news that lawyers care about.

On this assumption, I decided to analyse the main news section of "The Lawyer" for a week. I used the on-line version and took the headlines as they were at about 9am. I should like to point out that this is far from a scientific survey - I will only be doing an analysis for five days, I will be checking at some point between 9am and 10am, and will be assigning news to categories myself, as I see fit. Nevertheless, I hope it will prove instructive.

To get things going, my analysis of the news at 9am today is as follows:

So, with the caveats above and noting that this is one morning and so may not be representative, it would appear that lawyers care most about news about themselves rather than news about their clients.

This may not be a surprise since this is a journal aimed at lawyers not their clients. I should, however, be concerned if this pattern remains. It is all very well to be interested in who is working where and how much they earn - but this is a public forum and, as a potential client, I should like to see that client success was at the forefront of concern for any lawyer. Most firms will say something similar on their publications - but the news from "The Lawyer" would suggest something else.

Watch this space for some (slightly) more reliable data.

Phew!

At last - I have finished the report I've been working on for a good few months.


Today is supposed to be the first day of our Christmas holiday, and my report was due with the publisher today - so yesterday I finished all the proof reading, gathered all the necessary files, and sent the lot off to my (very patient) editor.


The report is on the subjects of Governance and Measurements of Success in Law Firms - subjects that clients and regular readers will know are fascinations of mine. You may be glad to know that I'm not going to go into the detail of the report now - partly because I hope that you will all buy one (it's a thrilling read even if some of the characterisation is a little weak) and partly because I've thought of little else for the last few days and so am really glad to be thinking about almost anything else.


It's been interesting to set my thoughts in a structured way. Initially I was concerned that I might not be able to write 45,000 words on the subject - but towards the end the problem was more one of keeping to a maximum word count.


I hope that (a) you'll buy one when it is published (by the Ark Group - more details here) and (b) that you will at least find it useful and perhaps even enjoy it. Until it is published in the New Year, I'm planning to have a break, be very nice to my wife who has had to put up with me while I was writing it, and to catch up on some reading.


Have a wonderful holiday!

Focus on the Client

There seems to be something wrong - either with law firms or with the way that the industry is reported. I offer as evidence the main news stories (as shown on the front page of the web site) from "The Lawyer" on Sunday 17th January 2010, which I believe is fairly representative:

1. K&L Gates smashes through $1bn turnover mark
2. Former Mayer Brown partner gets seven years for fraud
3. Jackson proposes sweeping reforms to cut litigation costs
4. Simmons named Stonewall's top gay friendly law firm
5. Withers faces Commons investigation over email to MP
6. Eversheds covets commoditised market with South African pilot
7. Fried Frank and Simon Thacher to advise on Virgin Media's £1.5bn bond
8. Ashurst acts on National Express' £350m bond issue
9. Linklaters names next Asia head as Shao departs for JP Morgan
10. Ashurst revamps management board as Sparrow vacates seat
11. White & Case sends London partner to head Singapore arbitration practice
12. Latham scoops Ashurst partner for City corporate push

This from one of the two industry voices. What can we tell from the list: two stories from ten about clients (and both about money); the big news is "look how much money we made last year; two worrying stories (numbers 2 and 5) about the sort of people who may be in the industry; and the rest of the stories very inward looking. Perhaps no client has ever read "The Lawyer", but there certainly doesn't seem to be any interest in them as a group - other than from the point of view about how valuable (in cash terms) they are. Even the stories that don't seem to be about individual earnings often are. "The Lawyer" has a story about legal fees ("Legal costs emerge as defining issue of 2010’s biggest cases"). In all the discussion about high costs in cases, there is no mention of the fact that the high costs come from the high fees charged by the lawyers - i.e. personal earnings.

From reading this news, and from further digging in the web site, it would appear that the industry and the lawyers who make it up are obsessed with their own earnings, their own position within the industry and see clients as "cash cows". This cannot be good.

In case this is normal in any industry, I also examined "Third Sector" on the same day, one of the main "voices" for the charity sector. I'm not going to list the news stories out again, but lets look at the break down:

1. Stories about fraud - or poor practice: 1
2. Stories about training or new developments in the industry: 4
3. News roundup: 1
4. Appeal for funds (for the DEC): 1
5. Industry news: 1

Note, please. No stories about people inside the industry. No stories about personal earnings. No stories about how much charities turned over (and surely that is something that one can be proud about..?)

My point is this. The law is about clients - serving them as well as possible and serving them as efficiently as possible. The client's wishes should be at the fore-front of the industry. If this was true, it would inevitably be reflected in stories about the industry. "The Lawyer" would be reporting the benefits of cases won  - the benefits to the client that is. There would be stories about pro bon work - and I know that there is a good deal of this done. There would be stories about new practices in the industry which are designed to save costs to the benefit of the client and not to protect or improve PEP.

Focus on the client and the rest of your business will fall into place. Make every decision by saying - what benefit does this have for our clients. Save money so that your firm can charge less or do more pro bono work - not so that PEP can increase.

Follow up: this piece from "Legal Week" seems in line with what I'm saying.

Too Early to Tell?

I read "The Lawyer" this morning. It carried, as its main story on the web site, "Streamlined firms emerge from ashes of annus horribilis". I wasn't initially sure whether I was going to read a good news story or a bad news story, although I was fairly sure that "The Lawyer" would try for some sort of sensational take.

I've read the story a few times now. It is based on a table of "information" about law firms, which I reproduce here:

The table shows partial results for ten firms, although four have no data for the turnover in the first half of this year. Some of the data seems strange. Have Freshfields really only made 4 people redundant? As it turns out no - I quote from the same article:

The total number of partner resignations at Freshfields Bruckhaus Deringer - the only magic circle firm not to have had a substantial redundancy programme - was much lower at 14.

So which is it?

The ten firms show an average reduction in revenue (for those showing data), of about 10% or so. All in line with what the firms have been saying we should expect. My point is this - is this really news? I'm not convinced that this story was ready:

1. Only 60% of the data was available
2. The top 10 UK firms are only really representative of the top 10 firms - they certainly are not representative of the rest of the top 100, never mind the bulk of smaller UK firms
3. The conclusion reached is that firm have performed much as expected
4. Do redundancies equate to streamlining?

So far as the last point is concerned - my view is that the two are rarely the same. If the redundancy round has been a strategic decision rather than a knee-jerk reaction, and if the people chosen for redundancy are the worst performing over a period of time, then this could be thought of as streamlining. I suspect this has been the case in most of the top 10 since I like to think that this huge firms will be reasonably well run. My experience with other firms - both mid-sized and small - is that there was rarely this amount of though given to the process.

I'm not sure, too, that the story showed a pattern of streamlining leading to recovery - which is suggested in the title.

Come on people - we can all do better than this, surely? If it's too early to tell with regard to any recovery, please don't suggest otherwise.

When is a Law Firm like a Football Club?

Any regular readers will know that I am passionate about moving law firms (well actually any firm) away from too much short term thinking.

Listening to the news today, it occurred to me that managing a law firm must be a little like managing a football club. Only a very few football managers are given much time to produce results and almost every manager is judged over an incredibly short period. This morning's news item was in connection with Liverpool FC who, apparently, have lost 6 of their last 7 games. They play again this evening and the report stated that a poor result might cost the manager his job. Notwithstanding the media's need for catastrophe, it does underline the "results now" nature of football management.  The six matches from 29th August were all won and included a 6-1 win against Hull. The one win in the last 7 matches was against Manchester United. So is this really the sort of performance that should require the termination of the manager's contract?

This sort of attitude reminds me of law firms. Performance is (rightly) reported monthly to the partners - but this can mean that time frame for decisions is much much shorter than it should be. One month of bad results, and partners can be demanding that "something must be done" and ordering management to turn around the firm's performance.

Both types of organisation would do better to expand their view so that they can properly analyse short term performance in a longer context. I remember talking with a law partner who spent the first 10 minutes telling me how worried he was that the recently released figures for the preceding month were poor. He was very concerned and had asked the Managing Partner what new cost-cutting measures could be implemented. I asked what the results were for that month in the previous years, and he did not know. I called him the day after our meeting, however, and he had found out that the month in question was a bad month every year - and in fact that this year had been less bad than usual. He had to admit, however, that he had not gone back to the Managing Partner to say that further cost cuts were not necessary...

One other similarity between law firms and football clubs struck me. Both are organisations built around highly trained specialists. Both have a fair number of prima-donnas. And in case of poor performance it is often the second-string team, management, and support team who suffer the consequences. Have you ever heard of a football club sacking first team players because of a string of 6 losses - I certainly never have.

My point? Short term results must be viewed in context. Medium and longer term results are usually better indications of the true performance of the organisation. Make sure that you performance manage everyone - "stars" included. Poor results are as likely to be the result of poor performance as they are poor management.

Leave the Analysis for the Experts

My colleague, James Dunning, suggested that I should look into (again) the way that the Swine Flu issue is being reported. In examining the way that the reporting is being done, I'm very grateful to Ben Goldacre who has a long running campaign against poor reporting of statistics in the press.

This week, the UK press has been obsessed with the figure of 65,000 deaths from swine flu. An article in the "Guardian" gives a wonderful example of how the figures have been used by journalists who either do not understand statistics or who don't care in the face of a good story. I really do recommend the story as a case study in the use of statistics.

There is a wider point to be made, I believe. The "Guardian" story shows the importance of using experts - or at least using people who understand the data. Sadly many businesses - and in my experience, most law firms - have the same "good enough" attitude to their own financial reporting, and certainly to their budgeting. A straw poll of law firms (well the four who answered my questions on the understanding that they would not be identified) showed that all of them were going to budget for a substantial reduction in revenue for the 2009/2010 budget year. Well that sounds quite sensible, so far. The range of reductions was from 10% to 30%.

Let me just emphasise that - one firm was budgeting for a 30% drop in revenue. One of my posts earlier last week shows an average of 2.8% increase in revenue for a sample of firms between 2007/2008 and 2008/2009. None of the firms I polled were able to provide any data or sensible explanation for the reduction they proposed.

This is the law firm equivalent of the tabloid press shouting "65,000 deaths!". The various finance committees or boards (or whoever decides these things) seem to have noticed there was a downturn and decided that their business would almost disappear. One firm was willing to speak anonymously in detail. This firm was looking at a budget of 25% less revenue - in the face of proposals from the business units which showed a maximum of 10% reduction.

Data is very useful - firms should have as much useful data as possible. It is vital, however, that the analysis is done by someone who understands what data means; who understand caveats about statistical significance; and who can explain what the data actually means to non-experts. This is vital to both law firms and the tabloid press.