the [non]billable hour

Managing Partners, Report to the LAB

My friend Patrick McKenna has been working hard on a Leadership Advisory Board (LAB) for Managing Partner magazine. Though populated with large firm lawyers, the LAB is shaping up as a pretty amazing resource for managing partners for all sized law firms. Here's a description:

The LAB was formed as a resource to provide pragmatic advice to assist new managing partners with their critical burning issues and help them succeed. The LAB is comprised of the following distinguished current and former law firm leaders: Angelo Arcadipane (Dickstein Shapiro LLP); John Bouma (Snell & Wilmer LLP); Brian K. Burke (Baker & Daniels LLP); Ben F. Johnson, III (Alston & Bird LLP); John R. Sapp (Michael Best & Friedrich LLP); Keith B. Simmons (Bass Berry & Sims PLC); William J. Strickland (McGuire Woods LLP); Harry P. Trueheart, III (Nixon Peabody LLP); together with Patrick J. McKenna (Edge International).

Check it out, and keep on eye on Managing Partner Magazine for more.

Charge $297 per hour and not $300.

Here's a fascinating article in Scientific American titled Why Things Cost $19.95 that discusses the psychological impact certain prices have over others. If you've always wondered why we see odd prices so often ($19.95 vs. $20.00), the article gives the answer. Two University of Florida marketing professors studied how consumers relate a ticketed price to the perceived wholesale "cost" of a good or service:

There were three scenarios involving different retail prices: one group of buyers was given a price of $5,000, another was given a price of $4,988, and the third was told $5,012. When all the buyers were asked to estimate the wholesale price, those with the $5,000 price tag in their head guessed much lower than those contemplating the more precise retail prices. That is, they moved farther away from the mental anchor. What is more, those who started with the round number as their mental anchor were much more likely to guess a wholesale price that was also in round numbers. The scientists ran this experiment again and again with different scenarios and always got the same result.

Why would this happen? As Janiszewski and Uy explain in the February issue of Psychological Science, people appear to create mental measuring sticks that run in increments away from any opening bid, and the size of the increments depends on the opening bid. That is, if we see a $20 toaster, we might wonder whether it is worth $19 or $18 or $21; we are thinking in round numbers. But if the starting point is $19.95, the mental measuring stick would look different. We might still think it is wrongly priced, but in our minds we are thinking about nickels and dimes instead of dollars, so a fair comeback might be $19.75 or $19.50.

I'd really recommend you read the entire article, but the initial takeaway for me is this: If you want clients to believe your rate (or set price for a given service) is close to your actual cost, price in odd numbers.

Bill before the 'moneymoon' is over.

The Urban Dictionary's Word of the Day today is Moneymoon, defined as:

The time after your purchase of a good or service and before 'buyer's remorse' happens. "The moneymoon is over, I realzie now that buying that boat was a waste of money."

Made me think of the number one rule of small business cash flow: Bill your clients before the moneymoon is over.

Are your customers, or your employees, always right?

For another worthwhile read this morning, check out the Top 5 Reasons Why "The Customer is Always Right" is Wrong from the Chief Happiness Officer Blog.  Reason Number 4, it results in worse customer service:

[W]hen you put the employees first, they put the customers first. Put employees first, and they will be happy at work. Employees who are happy at work give better customer service because:

• They care more about other people, including customers
• They have more energy
• They are happy, meaning they are more fun to talk to and interact with
• They are more motivated

On the other hand, when the company and management consistently side with customers instead of with employees, it sends a clear message that:

• Employees are not valued
• That treating employees fairly is not important
• That employees have no right to respect from customers
• That employees have to put up with everything from customers

When this attitude prevails, employees stop caring about service. At that point, real good service is almost impossible - the best customers can hope for is fake good service. You know the kind I mean: courteous on the surface only.

Do you put your customers first, or your employees?

How to Run Your Law Firm Like a Startup ... or Not.

Jason Calcanis heads up Mahalo, a human-powered search engine.  In this post, widely circulating around the tech/startup blogosphere, Jason gives 17 tips on saving money while running a startup that will (I didn't say should) surely resonate with some BigLaw managing partners.  Some of his "really good" ideas (since toned down a bit in an update to the post):

• Buy everyone lunch four days a week and establish a no-meetings policy. Going out for food or ordering in takes at least 20-60 minutes more than walking up to the buffet and eating. If you do meetings over lunch you also save that time. So, 30 minutes a day across say four days a week is two hours a week... which is 100 hours a year. You get the idea. 
  
• Don't buy a phone system. No one will use it. No one at Mahalo has a desk phone except the admin folks. Everyone else is on IRC, chat, and their cell phone. Everyone has a cell phone, folks would rather get calls on it, and 99% of communication is NOT on the phone. Savings? At least $500 a year per person... 50 people over three years? $75-100k
• Buy your hardest working folks computers for home. If you have folks who are willing to work an extra hour a day a week you should get them a computer for home. Once you get to three hours of work a week from home you're at 150 hours a year and that's a no brainer. Invest in equipment *if* the person is a workaholic.
  
• Fire people who are not workaholics... come on folks, this is startup life, it's not a game.  Don't work at a startup if you're not into it.  Go work at the post office or stabucks if you're want balance in your life for realz.
• Get an expensive, automatic espresso machine at the office. Going to starbucks twice a day cost $4 each time, but more importantly it costs 20 minutes. Buy a $3-5,000 Jura industrial, get the good beans, and supply the coffee room with soy, low fat, etc. 50 people making one trip a day is 20 hours of wasted time for the company, and $150 in coffee costs for the employees. Makes no sense.
• Stock the fridge with sodas---same drill as above.
  

Sound like BigLaw to you?  Well, except for the awesome coffee machine.  That's not a cost like copies that you can pass on to clients.

New Research Explains Billable Hour's Staying Power!

Well, not exactly, but this article in the Telegraph discusses an experiment exploring humans' preference for a familiar (though less efficient) path, and found:

most of us are happy to play follow-my-leader, even if we are trailing after someone who does not know where they are going and taking the most meandering route.  Even more striking, even when we are shown a faster route, we prefer to stick with the old one and tell others to take the long road too, a finding that could have lethal implications when it comes to evacuating a building or ship in an emergency.

In the study, participants were led from one room to another. When asked to return to the first room, almost all took the familiar path back, even when they were aware of a shorter path:

All but one person took the route they had been led. What we were surprised by was how strong this effect was, even when the alternative route was much shorter .... They preferred the long route even when the experimenter had drawn attention to the alternative route, or when the experimenter took the long route solely to pick up a fallen poster, eliminating the possibility that participants thought the experimenter had a good, but unknown, reason to take the long route. By asking participants to collect the next guinea pig in the experiment, the scientists observed that each person in the chain copied the route of the participant before them: a simple tradition that meant the alternative route was never discovered.

Interesting food for thought, don't you think?

Don't Forget the List

My friend (and XPLANE co-worker) Bill Keaggy put together The Ultimatest Grocery List that you should check out and modify for your office.  Create a list of all the things you regularly buy -- even once a year -- for your practice and add each item to the list.  Check off the boxes when things are getting low, and you'll save at least one or two trips to Office Depot or Best Buy each year.    

Tags: Keaggy, Grocery, Lists

Kill Your Projects, Not Your Clients

Here's an interesting idea from Scott Young that may just help with your growing to-do list:  Set up a Project Kill Day. In short, you schedule a distraction-free, off-site day to "kill" off one of your projects.  Check out the entire post for his step-by-step guide.

Not sure which projects you have that merit an entire day?  Try writing down the first client-related task you think of in the morning and the last one you think about before bed.  If it is the same one for more than a day or two, kill it before it kills you!

A You-Tube for Legal Docs? Check out DocStock

Here's a profile of DocStock, a site allowing people to find and share professional (including legal) documents. 

The profession is changing, my friends.  What are you doing to be ready?

15 Thoughts for Law Students: A Mini-Manifesto

I've written a few mini-manifestos for clients and lawyers before and remain quite enamored with the format.  Here's one for law students with some random (semi-related) thoughts on law school and the legal profession.  Let me know what you think, and feel free to add your own in the comments.

1.  Law school is a trade school.  The only people who don't believe this to be true are the professors and deans.

2.  Want to piss off your professors?  Ask them if they've ever run a successful law practice.

3.  Being good at writing makes you a good law student.  Being good at understanding makes you a good lawyer.  Being good at arguing makes you an ass.

4.  You can learn more about client service by working at Starbucks for three weeks than you can by going to law school for three years.

5.  Law school doesn't teach you to think like a lawyer.  Law school teaches you to think like a law professor.  Believe me, there's a huge difference.

6.  You can get through law school without understanding anything about what it is like to be a lawyer.  That is a terrible shame.

7.  The people who will help you the most in your legal career are sitting next to you in class.  Get to know them outside of law school. They are pretty cool people.  They are even cooler when you stop talking about the Rule Against Perpetuities.

8.  Your reputation as a lawyer begins now.  Don't screw it up (and quit bragging on your MySpace page about how drunk you got last night).

9.  Law is a precedent-based profession.  It doesn't have to be a precedent-based business.  Be prepared to challenge the prevailing business model.  Somebody has to.

10. Experienced lawyers work with clients.  Young lawyers work with paper.  You like working with paper, right?

11. You are about to enter a world where getting your work done in half the time as your peers doesn't get you rewarded.  It gets you more work.

12. Except for prosecutors and public defenders, nobody tries cases anymore.  Especially not second year associates.

13. You have a choice:  You can help people and make a decent living, or you can help corporations and make a killing.  Choose wisely. 

14. There are plenty of things you don't know, and even more things you'll never know.  Get used to it.  Use your ignorance to your benefit.  The most significant advantage you possess over those who've come before you is that you don't believe what they do.

15. People don't tell lawyer jokes just because they think they are funny.  They tell lawyer jokes because they think they are true.  Spend your career proving them wrong.

Outsource Your (Non)Legal Practice

I'm a big fan of Tim Ferriss' book The 4-Hour Workweek, though some of his suggestions are a bit impractical for an office-dwelling professional.  That's why I really liked this post on 43 Folders that gives several realistic examples of ways to outsource your personal and professional life.  Well worth a read, if only for this fantastic advice for those to whom "delegation" is a four letter word:

It’s easy to tell yourself that it would take too long to figure out how to explain a project to someone else than to do it on your own.  After all, you’re the only person who has the grand picture, understands the purpose of the work, and is familiar with the details. But with a bit of pluck and a capacity for seeing projects for what they truly are (collections of discrete actions,) you’ll be astonished at how much you can rid yourself of.  I have often found that what at first seemed daunting to explain to someone else actually just required a few moments thinking about how the problem needed to be approached—which is a process I was going to have to go through anyway if I were ever going to complete the task in the first place.

 

The Mobile Lawyer 2.0

It has been a long while since I've been so WOW'd by a business model as I've been this morning.  Simply put, this is the BEST template I've seen for building a home-based practice from, of all people, a physician.  Dr. Jay Parkinson, MD is building a web-based medical practice.  From his website:

• I AM A NEW KIND OF PHYSICIAN.
• I strictly make house calls either at your home or work. 
• Once you become my patient and I've personally met you, we can also e-visit by video chat, IM and email for certain problems and follow-ups.
• I'm based in Williamsburg, Brooklyn.  My fees are very reasonable.
• I'm extremely accessible.  Contact me by phone, email, IM, text, or video chat.  Mon-Fri 8AM-5PM.  24/7 for emergencies.
• I specialize in young adults age 18 to 40 without traditional health insurance.
• When you need more than I provide, I make sure you wisely spend your money and pay the lowest price for the highest quality.
• I've gathered costs for NYC specialists, medications, x-rays, MRIs, ER visits, blood tests, etc...just like a Google price search.
• I mix the service of an old-time, small town doctor with the latest technology to keep you and your bank account healthyl

How much for this service?  According to the "How it Works" on his site, his fee is "far less than your yearly coffee budget but a little more than your Netflix."  His web site also provides "Real Life Examples" that describe, in plain English, how you'd use his service.  Oh, and he's blogging, too.

Lawyers, if you are looking for a real dose of inspiration (or a glimpse to the future of mobile practice) you HAVE to check this Parkinson's site and business model.  Simply brilliant.  Great idea, great web site, amazing copy.  If I were still practicing, I'd steal it in a heartbeat.  Look at it now.

Via: Zoli's Blog.

To Make More Money, Charge More Money

Reluctant to raise your fees, check out this article from CNNMoney.com on how to raise prices while keeping customers.  Worth a read.  Here's a taste:

Many business owners assume that any price increase will drive customers away. But consultants who work with small companies say they often under-estimate their pricing power. Those owners know their costs are rising but sometimes forget that fuel prices are soaring worldwide and that workers are demanding higher wages even in China, India, and other developing countries. Many small U.S. manufacturers, in particular, become so focused on price competition with larger rivals or foreign ones that they don't appreciate the value of the added quality they offer, their fast and reliable delivery, or other superior services they provide - or could provide - to justify higher bills.

Hat tip to Barry Moltz.

Thoughtful Law Blog

David Bilinsky has a great new blog:  Thoughtful Legal Management.  Check it out!

Remind Yourself It is Your Money You're Not Earning

Just got back from the American Immigration Lawyer's Association annual convention.  I presented twice there, hosted an Idea Market and an Idea Gallery (more on those later) and hung out with a bunch of cool immigration law practitioners.

One tip I shared at a round table discussion that really resonated with a practitioner who had a mountain of accounts receivables is this one:

Every month, when you print out your bills and your accounts receivable statement, clip a family photo to the top of the stack.  Whenever you are tempted to write down a bill or not try to collect on one, look at your family before you make the decision.  While there are dozens of great reasons to reduce a bill or not collect upon an amount owed, every dollar you don't collect is a dollar your family doesn't get to spend on something important, or you don't get to donate to a worthy cause. 

Forget Big Associate Salaries

My friend Kareem shares the best three-step compensation scheme ever (from Alfie Kohn):

1. Pay people well.
2. Pay people fairly.
3. Do everything possible to take money off people's minds.
   

Law Firm Economics in a Nutshell

From Hugh:

Extreme Outsourcing

I just happened across Timothy Ferriss' site (blog) and saw this article on "Outsourcing Life" that I'd like to share.  If you are experimenting with outsourcing work in your firm, check out some of the extreme suggestions on outsourcing a few other things.  Timothy has a book coming out.  I've asked for a review copy and will share my thoughts if it comes my way.

Unlimited Vacation?

Once lawyers get past the billable hour and are judged on the quality of their work, perhaps their firms may implement a vacation policy like Netflix's:

When it comes to vacation, Netflix has a simple policy: take as much as you'd like. Just make sure your work is done.

Employees at the online movie retailer often leave for three, four, even five weeks at a time and never clock in or out. Vacation limits and face-time requirements, says Netflix Chief Executive Reed Hastings, are "a relic of the industrial age."

"The worst thing is for a manager to come in and tell me: `Let's give Susie a huge raise because she's always in the office.' What do I care? I want managers to come to me and say: `Let's give a really big raise to Sally because she's getting a lot done' - not because she's chained to her desk."

Thanks to Creative Class for the link.

Who is Going to Pay for Those 18 Minutes?

NYT article on the perils of multitasking.  The money quote:

In a recent study, a group of Microsoft workers took, on average, 15 minutes to return to serious mental tasks, like writing reports or computer code, after responding to incoming e-mail or instant messages. They strayed off to reply to other messages or browse news, sports or entertainment Web sites.

There are some other good studies mentioned in the article.  Worth a read -- if you've got the time.

The Bonus Boost: Better Peformance

File this one away in the "things that make you go hmmmmm" department.  This article in Science Daily (hat tip: Guy) suggests employee bonuses work WAY better then pay raises in motivating employees:

Giving a 1 percent raise boosts employee job performance by roughly 2 percent, but offering that same money in the form of a bonus that is strongly linked to a job well done can improve job performance by almost 20 percent, finds a new Cornell study on the relationship between pay and performance.

Full study here.

Building the Perfect Innovation Retreat - Call for Help

Readers, I need your help.  I'm designing an intensive, two-day, innovation-focused law firm retreat that I can sell to medium and large firms.  Before it goes "live" I need to do it at least twice to iron out the kinks and make it hum.

Here's what I'd like to do:

• Do the retreat for a firm of 10-20 lawyers, their staff and selected clients (yes, I said clients).  The cost to the firm will be my travel, lodging and retreat materials.  I'll also ask the firm to pay me an amount commensurate with the "value" of the retreat to the firm -- but only if they thought it was the best retreat they'd ever done.
  

• Assemble a group of 10-20 small firm or solo lawyers for a two-day innovation retreat here in St. Louis in early June.  Because most solo and small-firm lawyers don't get the benefits of a law firm retreat, I want to bring several of these lawyers together to collaborate with one another and to bring innovation into all of their practices.  Also, I want to see if the concept of a solo/small firm "retreat" will work.  If I get enough people, I'll set the fee at an amount sufficient to cover my costs (probably at $250 per attendee or so).  Each attendee will be on their own for travel and lodging.
  

Let me know if you are interested.  You can e-mail me at Matt@LexThink.com if you or your firm would like to participate.  Thanks.
 

Start Wine-ing in Your Business

Hugh at Gaping Voidingvoid recaps some "lessons learned" in his first two years of working with Stormhoek winery.  Just a few of his points should resonate with anyone (including lawyers) trying to build an amazing business:

14. We can make this as lucrative and as intellectually stimulating as we want to. The ball is in our court.

16. What's driving innovation and sales on our end is not a technological issue, it's a cultural issue. Get the right culture going, and the tech looks after itself.

17. When I started working in the advertising business as a young buck in London, back in the late 1980s, Bartle Bogle Hegarty were considered the best game in town, even if they were not the biggest agency. Every young advertising student aspired to have a gig there one day, everyone daydreamed of one day having John Hegarty return their calls. The were considered the Praetorian Guard. Within two years from now, I want every smart, driven young person in the wine trade to be thinking the same way about us. That to me would be a far more worthy definition of "success", than how many cases we sell.

Make Tomorrow E-Mail Free

How about implementing "No E-Mail Fridays" at your office?  Check out this ABC News article to learn why it may be a good idea.

Office Motivation Hack: Complete a Puzzle

Here's another fantastic Parent Hack that could work wonders in an office setting:

My 7 year-old son can be particularly stubborn and no matter how much we beg, plead, or reason with him, he stands his ground. Sometimes I resort to bribery. He likes puzzles so I came up with puzzles to help him do certain things.  It started the summer before Kindergarten -- he already knew how to tie his shoes, but claimed that he “forgot” how over the summer since he wore sandals all summer.  So I found a pair of running shoes that he wanted online (I used Zappos.com) and printed out two full-sized  pictures.  One was in color and the other black and white.  I then decided that I wanted him to tie his shoes for two weeks on his own before I would buy him the shoes he wanted so I cut the colored picture into the appropriate number of “puzzle” pieces.  Then every time he tied his shoes on his own he earned one piece that he could tape onto the black and white picture in the correct spot.  When the puzzle was complete we ordered him his shoes.

What are the goals for your office, and what is an appropriate reward when the goals are met?  Can you make a huge "puzzle" for your workers to complete as they reach appropriate milestones?

Send Your Staff to the Store with Gift Cards

Quick tip from Parent Hacks that would work for office personnel too:

Our nanny does a lot of our food shopping for us. It's something for her to do with the baby, and she likes helping out. Usually, I give her a chunk of cash that seems like enough to cover things, and then she gives me the change along with the receipts. Last week it occurred to me that I should just pick up gift cards for her to use! She usually goes to Trader Joe's and Whole Foods. Both of these places sell gift cards (as do most supermarkets). I can put a big lump sum on each card, and then she no longer needs to worry about keeping my cash separate, etc.

Relationship Economies for Professionals

I highly recommend this essay by Doc Searls on "Relationship Economies."  In it, he recounts a conversation he had with a Nigerian pastor about markets and transactions:

"Pretend this is a garment", Sayo said, picking up one of those blue airplane pillows. "Let's say you see it for sale in a public market in my country, and you are interested in buying it. What is your first question to the seller?"

"What does it cost?" I said.

"Yes", he answered. "You would ask that. Let's say he says, 'Fifty dollars'. What happens next?"

"If I want the garment, I bargain with him until we reach an agreeable price."

"Good. Now let's say you know something about textiles. And the two of you get into a long conversation where both of you learn much from each other. You learn about the origin of the garment, the yarn used, the dyes, the name of the artist, and so on. He learns about how fabric is made in your country, how distribution works, and so on. In the course of this you get to know each other. What happens to the price?"

"Maybe I want to pay him more and he wants to charge me less".

"Yes. And why is that?"

"I'm not sure."

"You now have a relationship".

Though price still matters in the developing world, the pastor suggested, relationships matter more:

It's a higher context with a higher set of values, many of which are trivialized or made invisible when viewed through the prism of price. Relationship is not reducible to price, even though it may influence price. Families and friends don't put prices on their relationships. (At least not consciously, and only at the risk of cheapening or losing a relationship.) Love, the most giving force in any relationship, is not about exchanging. It is not fungible. You don't expect a payback or a rate of return on the love you give your child, your wife or husband, your friends.

Read the entire essay the next time you are deciding whether to focus your energies on attracting new clients vs. building stronger relationships with existing ones.

What About Billable Hours?

John Moore passed on the Jack Welch Quote:

The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse—the key vital sign of a company.

If Jack Welch ran a law firm, do you think he'd abandon one, two or all three to focus on measuring billable hours instead?

Join Me March 8th for a Teleseminar

I'd like you to join me for a teleseminar on March 8th, titled: Think Real BIG -- Ten Creative Strategies for Building an Innovative Law Practice.  It is part of the online-only Career & Practice Development Conference. 

I will share ten unique and easy-to-implement strategies to help you create an innovative, service-centered law practice that you'll love as much as your clients do.

The teleseminar takes place from 1:00 - 2:00 pm EST and the cost is $59.00.  You can register here.

Define Your Firm's Rules of Engagement

Guy Kawasaki shares some "Rules of Engagement" from a company called SuccessFactors.  Here they are:

Rules of Engagement

1. I will be passionate—about SuccessFactors’ mission, about my work. I will love what we do for companies and employees everywhere.

2. I will demonstrate respect for the individual; I will be nice and listen to others, and respect myself. I will act with integrity and professionalism.

3. I will do what it takes to get the job done, no matter what it takes, but within legal and ethical boundaries.

4. I know that this is a company, not a charity. I will not waste money—I will question every cost.

5. I will present an exhaustive list of solutions to problems—and suggest actionable recommendations.

6. I will help my colleagues and recognize the team when we win. I will never leave them behind when we lose.

7. I will constantly improve Kaizen! I will approach every day as an opportunity to do a better job, admitting to and learning from my mistakes.

8. I will selflessly pursue customer success.

9. I will support the culture of meritocracy and pay for performance.

10. I will focus on results and winning—scoring points, not just gaining yardage.

11. I will be transparent. I will communicate clearly and be brutally honest, even when it’s difficult, because I trust my colleagues.

12. I will always be in sales and drive customer satisfaction.

13. I will have fun at work and approach my work with enthusiasm.

14. I will be a good person to work with—I will not be an asshole.

I agree to live these values. If my colleagues fail to live up to any of these rules, I will speak up and will help them correct; in turn, I will be open to constructive criticism from my colleagues should I fail to live by these values. I understand that my performance will be judged in part by how well I demonstrate these values in my daily work.

Any professional service firms out there with similar "Rules" for their employees?

Don't Be Later, Aligator

Joyce Wycoff shares an interesting strategy to keep employees from being late to work:

On Monday morning, my CEO and I stood at the company’s entrance lobby at 8:30 am sharp, the time employees were supposed to report for work. There was a constant stream of latecomers. As people strolled in, my CEO and I gave a warm smile and shook their hands, greeting them with a hearty ‘Good morning!’ ... then we handed each a slip of paper ... still smiling.

It read, "Thank you for coming to work today. I was here at 8:30 am to welcome you. Would I have the pleasure of greeting you tomorrow morning at the same time? Signed, CEO"

After a few days, there were no more latecomers. And we saved a big chunk in production costs.

This would be a lot harder in those law firms where 2000 billable hours is the norm.  In those firms, the managing partner may need to stay in the firm’s lobby and keep people from going home. ;-)

Some Times You Just Have to Bucket.

Michael McDerment writes about the benefits of pricing services in “three buckets” (tiers) compared to a totally customized pricing strategy:

[W]hat is better: buckets or custom pricing?  Buckets.  How do I know we learned this?  Since changing the pricing page on our site, our sign-ups/trails have increased 30%.  We had VERY good conversion rates prior to that.  This bump is great.  What’s amazing is our actual prices are identical, but just by presenting our pricing in three easy to understand buckets, conversions of first time visitors to trials have increased about 30%….that will affect our bottom line from here on in…Amazing the power of a single web page, no?  You know what I find weird?  The exact same number of people exit our website on the Pricing page as they did before.  Had the redesigned page not been the only site change, we never would have been able to be certain about the BUCKET FACTOR.  That is why we try to make on design change at a time and track the results.  (See the pricing page he is talking about here)

I have long believed lawyers and other professionals can implement a tiered pricing plan that would make it easier for clients to buy our services – in fact, I’m working with a firm right now to do just that.  What “buckets” could you offer?

Put The Higest Price Items First On Your Menu

Found this link via The Church Relevance Blog:  A-Z Retail Tricks to Make You Shop. If you can get past the annoying graphics on the page, there are some interesting tips that may make you rethink your office’s design.  Here’s something I didn’t know that has multiple practical applications:

Order Of Price- Shops will often be laid out in order of price with the most expensive items being encountered at the beginning of your visit and the cheapest at the end. This is done to play on our sense of comparion, we are much more likely to spend money on accessories etc if we have just agreed to buy an expensive item, as in comparison they will seem cheaper than had we encountered them first.

If you are offering a “menu” of prices for multiple levels of service (estate planning, for example) try placing the more expensive services at the beginning of the menu, instead of the end.

And continuing down my trail of links, from the Retail Tricks site, I found ConsumerPsychologist.com that has some great articles on consumer behavior.

Don't Worry, Hire Crappy

Bob Sutton has written a thought-provoking article called Crappy People versus Crappy Systems that discusses the importance of good systems and the misguided emphasis on hiring great people as the panacea for all of a company’s woes.  In other words too many businesses:

focus excessive energy on hiring stars and weeding-out mediocre and poor performers, and insufficient energy on building a great system that enables most competent people to succeed.

The system, not the people, matter most.  As he explains:

some systems are so badly designed that when smart people with a great track record join them, it seems as if a “brain vacuum” is applied, and they turn incompetent. Jeff often jokes that this is what happens to many business school deans, and indeed, these jobs have so many competing and conflicting demands that they are often impossible to do well.

The entire post is worth a read.

The Thirty Day Rule for Technology Purchases (and Irrational Client Demands)

I liked this idea from Get Rich Slowly:

The 30-day rule is a simple method to control impulse spending. Here’s how it works:

1. Whenever you feel the urge to splurge — whether it’s for new shoes, a new videogame, or a new car — force yourself to stop. If you’re already holding the item, put it back. Leave the store.
2. When you get home, take a piece of paper and write down the name of the item, the store where you found it, and the price. Also write down the date.
3. Now post this note someplace obvious: a calendar, the fridge, a bulletin board. (I use a text file on my computer.)
4. For the next thirty days, think whether you really want the item, but do not buy it.
5. If, at the end of a month, the urge is still there, then consider purchasing it. (But do not use credit to do so.)

I can think of so many places this would work.  First, for those firm technology and gadget purchases or upgrades, sit on the impulse for a month.  If you still think you need it, make the purchase.

Second, if you have an irrational client demand you do something that you don’t think is particularly prudent (like filing that motion to compel to get the lawnmower back from their neighbor in the middle of winter), suggest that you wait 30 days, and if they feel it is still important then, you’ll do it.

Office Design for Employees

Designing your firm’s new space?  Take a look at this post about a printing company in Montana.  Some of the unique office features:

Day Care and 'family' is built in; there are no other options!  The first thing you see when you come walk the parking lot to the front door are little kiddos playing under the Montana sky.  All employees pay a pitance to have their young kids on site with them.  It's a fundamental.  Andrew made it a key design driver.  And the # of Baby Bjorns in the office was an indicator that for many of the employees, a family 'quality of life' decision was made without compromising their careers.  And its a spectacular daycare.  Small adult/kid ratio.  Healthy environment.  Kids loved.  And obviously very happy teachers and parents on site.  It wins all visitors over the second they come into the building.

The main floor is designed for humans, not executives or administrators.  Andrew had been told by the design team at first that a 'traditional' executive/client floor was needed.  Sends the right message.  Fits the design.  Tradition.  Andrew felt that didn't match the company's feel.  Instead, the upper floor does have all of those elements -- like a typical 'entry' to a school -- but for any visitor, the real sense is that it's an open series of collaborative spaces that are designed for all team members (regardless of rank) to relax, create, rest, and connect. 

Every space is a learning space.  Man, there just weren't any spaces in the building that didn't suggest learning, collaboration, experiment, and team.  Sure, business had to be done and things were divided up by tasks and teams, but the real take-away had to do with energy and collaboration.  I'd have given anything for teachers/administrators and school designers alike to have spent time on the bottom floor (ground level, due to the slope that building sits on) where the teams were moving at full speed, serving clients around the nation, and providing rigorous real-time design/printing solutions.  Spaces were vibrant.  Team members were free to work in a variety of settings. And the place had a learning buzz about it.

All workers are humans, learners and team members first.  I was struck by one programmer/service expert that had forgone the chair entirely. He used a yoga/exercise ball as his chair -- not only did it help create a different dynamic, but it also had a huge impact on his back problems.  I also liked that it allowed him to move.  To bounce.  To fidget.  To shift.  Mmmm....imagine if kids were given the same option.  Imagine. We talked about this a bit, but what really struck me was that the 'trappings' of professionalism were tossed out the window with a grand investment being made instead to support 'how' people worked, created, succeeded, and collaborated.  Every team member looked happy/healthy.  And the spaces reflected that -- not choosing expensive design but instead being creative and letting the teams be able to gravitate towards what worked best for them.  Solo. Small groups. Large groups.  Formal.  Informal.  Inside. Outside.  In other words, every space a learning space.  Even hallways.  Very little wasted...and a far more vibrant learning organization because of it!

Check out the entire post for more.

The Key(s) to Attorney Motivation

Here’s an idea to motivate law firm employees:  Give the “Employee of the Month”  the keys to the company car.  From Autoblog:

[At Infusion Software], if you're deemed the month's top performer, you get the keys to the "Infusion Z," the company's silver Nissan 350Z. The car sports the Infusion logo on the door, so they get some free advertising wherever the Employee of the Month drives. That's a fair trade if you ask us. When you're cruising in the Z, it's not like you can see that from the cockpit, anyway. Oh, and should an employee get into an accident with the car, he or she has to pick up the insurance deductible.

What kind of car should law firms use?  A Mercedes, a BMW, or perhaps a Bentley?  What kind of car would motivate you to bill those 220 hours this month?

Tick is Slick: Time Keeping the Web Way

All right, we all know the name of this blog is The [Non]Billable Hour, but you’ve got to check out Tick, a really cool Web 2.0 application for tracking time (and measuring it against budgets).  Very slick, and free (for now).  Are any of the legal technology vendors making anything this cool, intuitive, and pretty?

Tick is Slick: Time Keeping the Web Way

All right, we all know the name of this blog is The [Non]Billable Hour, but you’ve got to check out Tick, a really cool Web 2.0 application for tracking time (and measuring it against budgets).  Very slick, and free (for now).  Are any of the legal technology vendors making anything this cool, intuitive, and pretty?

What Start-Ups Want in a Lawyer

OK, so Andy Lark is talking about hiring a PR agency, but I think he could just as easily be talking about hiring a lawyer:

But I don't want $15,000 dollars worth of service. I don't even know what that is!

I want results. I don't care what it costs or whether an agency has to under or over service to deliver it. I just want results against the agreed budget. You commit, I commit, we all commit together.

What is more troubling to me as a Valley CMO is:

1) finding a great agency is bloody hard work. They are few and far between. At any billing rate. Few CMOs I know get the value of PR or AR, let alone the value of a good agency... I accept we are part of the problem, but...

2) finding an agency that gets your business and has a real enthusiasm for contributing to the growth of the business - harder still

3) finding an agency that understands that great ideas get funded - near impossible. They are caught in the conundrum or belief that ideas require budget prior to being generated. Bullshit. (and I am talking about real ideas, not those regurgitated from the last pitch)

4) finding a team that can explain why they should get paid more and then associate some kind of outcome with the result - well, if you find them, let me know. The most common justification - "we've been over servicing your business for six months now, you need to pay us more" - is nuts. Nuts!

5) finding an agency - the word is a bit of an oxymoron. It implies some kind of powerhouse of ideas and execution - the strength of a team. What you generally end-up funding is one very dedicated individual surrounded by some other folks - generally you aren't quite sure what they are doing but they all arrive for meetings and scribble madly into notebooks.

What is needed is a new kind of agency. One not built on billable hours and 10k budgets. Maybe one built on the power of ideas to drive a startup's growth curve? One with the courage and conviction to articulate a value proposition that resonates with the CMO of a start-up and ability to explain what the budget should be.

You see, we live less in the conceptual world of brand and reputation and more in the real world of qualified opportunities, pipeline growth and time to sale.

Until then, 10k sounds like a nice round number to start with. Agencies shouldn't let it end there. We will pay more. And I am willing to put my money where my mouth is.

If you want to serve this market, listen closely to Andy’s complaints.  Make it your number-one priority to contribute to the growth of your clients’ businesses, not to extract the maximum amount of money from their coffers.  Build client-centered teams — and make sure your client meets everyone on the team BEFORE their time shows up on a bill.  Finally, start your representation by focusing on the goals of the client and the results they desire.  Then agree upon a budget (or, gasp, a fixed price) to meet those goals and achieve those results.

Get Your Lawyers to Use Technology

Here’s an interesting tip to spur firm-wide adoption of  new technology:  Cut Off Non-Adopter’s E-Mail. 

Make Someone Else's 'Employee of the Month' Yours

Gerry Riskin and Michelle Golden have been talking about the importance of having a great receptionist.  Having had two amazing secretary/receptionists (Janelle and Sandy, thank you!) in my last two jobs, I second (third?) this sentiment. 

Now, how do you find that perfect receptionist?  Here are some tips on recruiting great retail employees, from a blog I’ve just moved from “probation” to my regular reads called Just Looking, that may give you some ideas:

Find the Employee of the Month wall in the retailer.   Normally this is back near the offices in a hallway that is accessible by the public.   Write down the names of the last 6 people who won, and then go find them in the store.   Walk up and congratulate them on winning and ask why they got the award.  You might have a great conversation that could end with "Here is my card, if your interested in examining other opportunities give me a call"

Look at stores that are not in your industry.   Too often, sales managers will only recruit from of retailers like themselves.  I found great luck recruiting in retailers outside of my industry.   Blockbuster Video was a great place to recruit entry level sales and customer service reps.     Anyone who walked out from around the counter to ask me if they could help me find something, got my attention and my card.    

Always Be Recruiting.   Don't ever stop, because you never know when you might run across someone that would be a great member of your team.   I can remember two instances of this happening.  One was when I was out to dinner with some friends.   The waitress was amazing and during our chatter I found out she was looking for a part time job.   I ended up hiring her for for the holiday season and we both were very satisfied with her 4 month stay.  The other instance was when I answered the phone and a telemarketer began his pitch on the other end.    It was one of those telemarketers that didn't give up at the first no, but kept the tone very light hearted.   He came in and interviewed for a full time position.

Recruit for the right traits not just sales skills.     There is no way you will ever be able to evaluate a potential recruits selling skills effectively but you can get a good feel for their passion and enthusiasm.    My goal when recruiting is to find someone who is outgoing, passionate and enthusiastic about what they are selling.     I can't teach passion but I can teach someone with passion how to channel it into selling better.

Set a Recruiting Goal when you go out.     If you head out to go recruiting without a goal, all you will get is 2 to 4 hours of walking around.    Set a goal of coming back with 4 to 5 names to call and at least 2 business card drops.   A business card drop is when you introduce yourself and give them your card with a suggestion they call you.     The list of names are of people who you will call later that day and invite them to come in for an interview.

Keep a People Pool.   Don't toss out information from old interviews.  Make a file and keep it around for later job opportunities.   You never know when a position will open that might be perfect for someone you didn't consider before.

Network with other Sales Managers.   Find sales manager in other stores that do not compete with you directly.    They might be interviewing a candidate that needs more hours or income then they can afford, that might be perfect for your job.    A lunch, once a month with a few of these other sales managers could help you locate the people you need.  Who knows, maybe they might have a current employee who is looking for a change that is the perfect recruit.

Charge Late Fees for Missed Appointments?

What do you do when clients don’t show up for scheduled appointment?  Rob May’s new doctor has a pretty good idea:

A few weeks ago I started going to a new doctor, and was made to sign a document explaining their late fee policy. It was unique. If you miss a scheduled visit, you are charged a $20 fee. If you are late by more than 10 minutes, that qualifies as a missed session. But the doctor's office doesn't keep the money. All money from late fees is donated to the local children's hospital.

I haven't missed a visit, but if I did, I can't imagine arguing with the penalty. I think it's brilliant. It turns the debate from a me vs. them fight for my money to a decision about whether to give money to a third party charity. In essence, it diffuses customer anger while still imposing a penalty. It reminds me that innovative solutions to business problems do exist, but they sometimes require you to step a little bit outside the lines of conventional wisdom.

Make Money by Specializing? Bank on it.

In an interview in the New York Times, the Chairman of ING Direct shares explains why his company specializes and avoids cross-selling:

Q. Does the question simply become one of pricing, of being able to offer the highest return?

A. In every country where we are, we have competitors offering higher rates than we offer. But you've got to be very careful, because, you know, consumers are smart. We have a product offering that has no commissions, no minimum, no tricks. Does the competition offer any tricks, like ties to something else that you have to do to be there, or a minimum balance, or a minimum usage? We have to be better than the next most comparable alternative.

For us, cross-sell is not what we want to do, because we want to keep it simple. We know that out there, the largest pool of earnings in the retail banking world comes from savings and mortgage — those are the only two things that we want to do. If you try to cross-sell too many products, you confuse the clients about what you are and your costs escalate exponentially.

Here are three questions every small business person should be able to answer: 

1.  What is your most pofitable service or product?

2.  If you focused exclusively on selling that service or product, could you sell more?

3.  What’s stopping you?

I’m not suggesting that small business owners abandon their passions to concentrate on making the most money possible, but I do believe that most business owners — and this goes double for lawyers — don’t even know what their most profitable service or product is.  Answer the first question, then the second, and finally the third, and you may be on your way to a more profitable business.  And if not, at least you’ll understand the trade-offs you are making in your business and your life.

Your Customers Don't Want to do Business With You

Mark Cuban said something Friday that really struck home for me.  Writing about the struggles of promoting movies through traditional newspaper and magazine channels, he tells those industries:

Each of us is looking for the  holy grail of promotion.  A way to leave you as a customer.

How scary is that ? A huge customer of your industry would prefer not to do business with you.

I think the same can be said for most people who deal with lawyers.  If there is a real alternative to using lawyers, how many of our clients would jump at the opportunity?  What are we going to do about it?

Mark’s advice to the magazine and newspaper businesses:

So its time to buck up. You either squeeze what you can and cry when it happens, or you step up and create cost effective alternatives.  The days of a movie review and the ad for the movie wont cut it for much longer. 

So those of you in the entertainment sections and sales