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April 11, 2017
IN THIS ISSUE
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LEGAL INDUSTRY BUSINESS ENVIRONMENT
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FIRM MANAGEMENT
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MARKETING AND BUSINESS DEVELOPMENT
LEGAL INDUSTRY BUSINESS ENVIRONMENT
Reality-Testing Firm Leaders' Financial Projections
April 5, 2017
Law firm leaders' financial expectations for the second half of 2016 demonstrated excessive optimism, according to a Citibank analysis. General confidence in the industry was at an index value of 112, just 12 points above neutral. Uncertainty regarding the U.S. elections and the Brexit vote had a palpable effect, as shown by the relative lack of confidence in the U.S. economy and in the global economy. Both had confidence index values under the overall level, and at an index value of 93, the outlook on the global economy was the only result that slipped below neutral. However, at an index value of 127, confidence in demand growth far surpassed overall confidence, with only 20 percent of respondents anticipating a reduction in demand from the second half of 2015. Almost half the firms reported demand boosts and the other half projected declines. However, the actual results for second-half 2016 revealed that industry demand was down 0.3 percent, with 59 percent of firms disclosing a decline. There also was positive, albeit more muted, confidence in revenue growth at an index value of 114. Still, just 13 percent of firms expected a decline in revenue, while 32 percent actually experienced a decline. Citibank does not interpret this as an indication that clients are asking for fewer discounts, but it could reflect confidence that some internal measures firms are following to enhance profitability are working. Among these are a concentration on project management and effective pricing.
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American Lawyer
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Facebook Pushes Outside Law Firms on Diversity
April 2, 2017
May Require Paid Subscription
Like other Silicon Valley giants, Facebook has faced criticism over whether its work force and board are diverse. Last year, the social media behemoth started a new push on diversity in hiring and retention and now, it is extending its efforts into another corner: the outside lawyers who represent the company in legal matters. Facebook is requiring that women and ethnic minorities account for at least 33 percent of law firm teams working on its matters. Law firms must also show that they "actively identify and create clear and measurable leadership opportunities for women and minorities" when they represent the company in litigation and other legal matters.
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New York Times
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Humans Make Law Firms Vulnerable to Cyber Attacks, Lawyer Says
March 23, 2017
A speaker at the 16th Annual Legal Malpractice and Risk Management Conference warned “the humans in your law firm are the weakest link” in terms of a firm's cyber-resilience. Hinshaw & Culbertson Partner Steven M. Puiszis offered strategies to safeguard against cyberattack, starting with ensuring the software on all firm devices is up to date. Especially imperative is getting the latest version of anti-malware protection. Puiszis' second recommendation is to replace or disable obsolete hardware. In case the firm's budget will not allow this, he said the firm should “wrap as much firewall protection around them” as possible. Listing "Patch Tuesday" on every law firm IT department manager's calendar also is vital, with Puiszis noting “if your network and servers are properly patched and up to date, up to 90 percent of exploit kits will be rendered ineffective.” A ban on firm staffers and partners from jailbreaking their devices is called for, along with implementing strong and complex passwords. Puiszis advised the use of unique passwords and passphrases, as well as making sure the network locks down access after three to five unsuccessful login attempts. He also recommended the use of dual-factor authentication, encryption of all portable devices and training staff early and frequently on security policies and practices. Other suggestions include not clicking on links or using public Wi-Fi, limiting administrative access to firm equipment, using intrusion detection and data loss prevention tools and performing regular data backups.
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Bloomberg BNA
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AI Is Doing Legal Work. But It Won't Replace Lawyers, Yet.
March 19, 2017
Advances in artificial intelligence (AI) have overturned assumption that technology will not replace professionals, like lawyers, because their work is wrapped in language. Sensing the long-term risk of AI, major law firms have launched initiatives to understand the emerging technology and adapt and exploit it. Natural language processing, and AI technique, has proved useful in scanning and predicting what documents will be relevant to a case, for example, but the adoption of AI in law firms is expected to be a slow, task-by-task process. Tasks like advising clients, writing legal briefs, negotiating and appearing in court, seem beyond the reach of computerization, for a while. Legal experts say technology is likely to unbundle aspects of legal work over the next decade or two, rather than the next year or two. Corporate clients often are no longer willing to pay high hourly rates to law firms for junior lawyers to do routine work, and those tasks are already being automated and outsourced. Highly paid lawyers will handle work on the upper rungs of the legal task ladder, and nonlawyers will perform other legal services.
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New York Times
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FIRM MANAGEMENT
Getting Serious About Document Security Means Balancing Access and Productivity
March 31, 2017
Tightening control of document related processes is a simple way for law firms to incorporate security features into their everyday practices. However, law firms must balance the effort to restrict access only to those who absolutely need the information to complete their duties with their drive for productivity, writes Tracie Sokol, vice president and general manager, Marketing, Business Imaging Solutions Group, Canon USA. Individuals in the firm may forego best practices when handling their client's sensitive material. In many cases, the process for integrating paper into case workflow is reactive and built in an ad-hoc nature in response to immediate needs and might not include proper vetting or consideration of exposure. A good first step for law firms that are looking to transform document management is to establish a functional go-forward process that accommodates the volume of existing material and does not hinder workflow. Secondly, law firms should utilize an outside expert consultant or managed document services strategy when getting started. Establishing firmwide policies can be very challenging and may require a custom design based on the firm's practice areas.
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Legaltech News
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Using Gamification to Drive Business Development Performance
March 28, 2017
May Require Free Registration
"Gamification" is a different management approach that can be used to teach, remind and inspire lawyers to sell. One of the hottest management tools for increasing employee engagement, gamification is a corporate best practice that should be incorporated into the operations of law firms. Brian Burke, a consultant with the Gartner Group and author of “Gamify,” defines gamification as ” … the use of game mechanics … to engage and motivate people to achieve their goals.” However, design elements are key. Gartner Group estimates that 80 percent of corporate gamification efforts will fail because of poor design. Truly well-designed approaches incorporate intrinsic rewards -- elements that provide a sense of personal satisfaction. Law firms can gamify initiatives like client service, cross-selling, team activity, conference participation, individual business development, leadership, writing blog posts or publishing alerts, alumni relations, LinkedIn activity and innovation. They should start small, realize that they are working with a bell curve and remember to praise lawyers who are taking on the challenge. A successful gamified program has the potential to transform organizational energy and provide significant returns to the law firm.
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American Lawyer
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Law Firms Lag in Client-Focused Investments: Survey
March 30, 2017
A new survey by Bloomberg Law and the Legal Marketing Association reveals that law firms are trying to differentiate their firms, rather than investing in client satisfaction surveys and other initiatives to improve the client experience. While most respondents agreed that investing in the client experience was important (87 percent), less than half (48 percent) said their firms were actually doing this. The most-used tactics for differentiation are writing and social media, according to the survey of 167 law firm marketing and business development professionals. The results show law firms need to focus on what matters to clients, says Jennifer Manton, chief marketing and business development officer for Kramer Levin. “Law firms need to develop a culture of listening to and understanding their clients' needs and preferences and then align their service approach accordingly,” says Manton. Survey co-author Nancy Furman Paul, who oversees the business intelligence resources on Bloomberg Law, expects law firms to make investments in client experience a priority in the years to come. “It's just a matter of time before it catches up and what they're doing is what they think makes a big difference,” says Paul.
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Bloomberg Law
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Law Firms Promote Flexible Work Arrangements Lawyers Don't Use
March 22, 2017
The Diversity and Flexibility Alliance says even though many Big Law firms highlight progressive flex-time, reduced hours and telecommuting policies, most of their attorneys are not taking advantage of these policies. In a survey of 28 Big Law firms published March 22, the alliance found that 26 have formal flexibility policies with least one type of reduced hours or full-time flexible work arrangement, 17 offer flexible start and end times and 15 offer telecommuting and annualized hours. However, just 8.8 percent of lawyers at firms with reduced hours policies actually have reduced schedules. Among those with reduced hours, women are over-represented (at 66.3 percent) while lawyers of color and LGBT lawyers remain underrepresented, according to the alliance. In addition, the majority of attorneys who take reduced hours are not on the partnership track, the alliance found. The people who are working a flexible schedule are primarily low-ranking staff and lawyers. On a positive note, however, 14 of the participating firms promoted at least one lawyer working a reduced schedule to partner in 2015, which is double than the previous year. Reduced hours lawyers are also represented among firm leadership in 12 of the 28 firms, including three chairs or managing partners, 11 department chairs or practice group leaders and four office heads, the alliance found. Of the 28 respondent firms, 18 are in the AmLaw 100.
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Big Law Business
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Twin Cities Law Firms Embrace Ideas From Factories to Lower Costs, Improve Efficiency
March 18, 2017
Law firms nationwide are increasingly turning to business management principles typically used in manufacturing, such as legal project management (LPM). LPM can involve leveraging data and tracking progress to offer clients a greater sense of transparency. A related concept is legal process improvement, or LPI, in which firms broadly map out steps in their processes to look for ways to improve. Many LPM and LPI professionals also use a variation of the Lean manufacturing methodology to eliminate waste of resources and Six Sigma quality management techniques, which traditionally are used to find the cause of product defects. Bree Johnson, director of strategy, pricing and legal project management at law firm Stinson Leonard Street, says more corporate clients are requesting predictable pricing and want to negotiate alternative fee arrangements (AFAs). He adds that the practice last year took part in a handful of reverse e-auctions in which firms competed online for a client's business. "As clients started to ask law firms for this type of service, legal project management and AFAs, there had to be people available to respond to that," Johnson says. "While our leadership has been exceptionally supportive of what we do and has really genuinely supported us, it's really because clients are asking for it." Johnson's LPM team consists of four legal project managers and two pricing strategists, who help Johnson manage requests for proposals and assist attorneys with clients' requests for pricing analysis, among other tasks.
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Minneapolis Star Tribune
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3 Ways to Find the Right Network for Your Law Firm
March 21, 2017
The law firm network offers law firms a creative way and means to provide value to clients. However, there are 170 global, regional and specialty networks in the industry, so firms will need to find the one that is right for them. Law firms will need to consider, for example, whether they are a specialty firm, the type of work that they mostly do and whether their clients operate globally in order to identify the type of network that is best for them. At this stage, it is important to focus on their outgoing needs. Work with others the firm trusts, so start with those that the firm and its partners are already referring work to. Make a list of these firms, and reach out to the partners to ask them whether they are members of a network, and whether that network has a representative in their jurisdiction already. The next step will be to speak with the network administration itself to discuss the possibility of the firm's membership. Law firms should make an administrative phone call or visit, conduct member due diligence and attend one of the network's regional or annual events as a guest.
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Zen & the Art of Legal Networking
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MARKETING AND BUSINESS DEVELOPMENT
8 Dire Questions Every Law Firm Should Ask of Their SEO Agencies
March 16, 2017
May Require Paid Subscription
When choosing an agency to provide search engine optimization (SEO), it is imperative that law firms ask the right questions to determine which ones are most likely to deliver the most effective services. These questions should set expectations, legitimize their marketing approaches and give a sense of their ability to make an impact on a law firm, writes Ryan Klein, a partner at Market My Market. Law firms should ask if the agency has worked with lawyers, worked in their area of law, worked with other firms in their geographic area and if it is familiar with the ethics of their state's bar. As law firms become more specialized (especially in the form of engaging in legal SEO for B2B), there is no present “Of course, we've done that” for appellate law, corporate law or taxation law, notes Klein. Law firms should ask about reporting and how long will it take to receive the results. Moreover, they should ask if the SEO agency will be writing content for their website and can help with getting the firm on the maps. "Legal marketing is so unique, competitive and (frankly) difficult that I strongly feel that you can't just hop into a meaningful SEO relationship with someone without a qualified background and expect it to work," concludes Klein.
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Forbes.com
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Trend Is Law Firms Moving Blogs Off Websites
March 29, 2017
Blogs are an effective and accessible form of legal publishing. However, law blogs should be located off websites on a separate domain to build influence, achieve better search engine performance (SEO) and generate business, according to a new ABA book. In “Creating an Online Publishing Strategy for Law Firms,” authors Steve Mathews and Jordan Furlong explain that distributed publishing is a growing trend in the legal industry. The approach involves a "hub-and-spokes" model of content delivery that marks the law firm website as the central hub, complementary content platforms (blogs, microsites, etc.) as an "inner ring" of spokes and third-party content production and distribution engines (trade periodicals, online news services and social media) as a huge "outer ring" of spokes. The three components of this distributed publishing ecosystem work together to establish the powerful, diverse, interlinked network of the law firm's online presence, according to Mathews and Furlong, veteran and widely respected legal publishers and business development professionals. A diverse presence can help impress the increasingly sophisticated client market. Among the most important factors people will consider is information about the lawyer located elsewhere than the lawyer's website, according to Mathews and Furlong.
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Above the Law
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Large Law's Not-So-Secret Weapon in Marketing and BD: The Library
March 14, 2017
More law firms are creating parallel groups in their libraries to help drive competitive intelligence, business development and marketing. They are also building competitive intelligence functions within their libraries. Four of the 50 largest firms in the country have placed their libraries, organizationally speaking, under chief marketing officers, which is a new kind of thinking, writes Scott Mozarsky is president of Bloomberg Law and Bloomberg BNA's Legal Division. To those immersed in the profession today, and for those who believe marketing is most effective when it involves valuable, data-driven content, there is logic behind having the library and the marketing department working closely together. To differentiate themselves, law firms have begun actively producing thought leadership, content marketing (including research), and academic-style studies on topics of interest to their clients. Such materials allow firms to show their mastery of a subject and differentiate themselves while teaching their clients and prospects something new. Producing those materials often calls for analyzing and drawing insights out of raw data and information, which is the stock in trade of law firm librarians. In this way, the library has become critical to some law firms' marketing and business development efforts, according to Mozarsky.
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Above the Law
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