Wednesday, June 6, 2018

Will your practice be Amazon-ized?

Current projections have 4.5 million American workers who drive cars, trucks and buses being replaced by computerization/robotics over the next fifteen years.  Cashiers, surgeons and tax preparers are also in the cross hairs of automation.  The ramifications for our society and economy are exciting, but it is a terrifying prospect for those who stand to lose their livelihood.  Just ask Best Buy and Barnes & Noble who are struggling to compete, or one of the many retailers that has gone bankrupt in the wake of Amazon.

Automation in the legal industry is far from prime time today.  Despite a burst of applications in the e-discovery space over the past decade, most of the automation tools designed for the legal industry are just scratching the surface, and haven't made a meaningful impact yet to industry headcount.

So, how many lawyers will be put out of work by automation?  Forecasters say lots of them 20 years from now.  Between now and then, there are few precise estimates.  One thing is for sure- the number is not zero.  Attorneys need to be focused on this risk to their profession, and may find the opportunity to benefit instead of being hurt by these changes.

What can a small law firm partner do to protect against this risk?

(1)  Adopt automation where you can.  Take the time to understand the things you can do to improve efficiency in your practice, and be willing to spend when opportunities present themselves.

(2)  Give clients access to your work flow.  Your clients will work to automate their operations, and will take you in directions that will help you keep pace with changes.

(3)  Don't lose sight of the fact that relationships the are most important asset you have.  Your clients have a sense of loyalty to you; and strong relationships are less likely to be broken by technology than weak ones.  Keep your clients close and they will help you navigate these changes.

(4)  Focus on providing an end-to-end service delivery experience.  For example, if you negotiate contracts for clients, archive them and manage deadlines/expiration that are terms in the agreements.  The more you are part of your client's process, the more likely that you are included in process changes, instead of being automated out.

(5)  Be irreplaceable.  You know you are doing something right when your clients call to ask you to do legal work that is way out of your expertise.  That means they see you as their lawyer, not their real estate lawyer or their litigator.  Clients that value the guidance they seek from their attorneys are sticky.

(6)  Educate yourself.  Pay attention to the changes that are happening, and look for ways to adapt.  This is a trend you cannot ignore away.

Staying relevant is a lifelong pursuit in any career, but the changes on the horizon in the legal industry will be particularly challenging.  Pay attention.


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David DePietto is the founder and CEO of NexFirm. He can be reached at 
ddepietto@nexfirm.com



Thursday, April 26, 2018

Automation in the Legal Industry

Current projections have 4.5 million American workers who drive cars, trucks and buses being replaced by computerization/robotics over the next fifteen years.  Cashiers, surgeons and tax preparers are also in the cross hairs of automation.  The ramifications for our society and economy are exciting, but it is a terrifying prospect for those who stand to lose their livelihood.  Just ask Best Buy and Barnes & Noble who are struggling to compete, or one of the many retailers that has gone bankrupt in the wake of Amazon.

Automation in the legal industry is far from prime time today.  Despite a burst of applications in the e-discovery space over the past decade, most of the automation tools designed for the legal industry are just scratching the surface, and haven't made a meaningful impact yet to industry headcount.

So, how many lawyers will be put out of work by automation?  Forecasters say lots of them 20 years from now.  Between now and then, there are few precise estimates.  One thing is for sure- the number is not zero.  Attorneys need to be focused on this risk to their profession, and may find the opportunity to benefit instead of being hurt by these changes.

What can a small law firm partner do to protect against this risk?

(1)  Adopt automation where you can.  Take the time to understand the things you can do to improve efficiency in your practice, and be willing to spend when opportunities present themselves.

(2)  Give clients access to your work flow.  Your clients will work to automate their operations, and will take you in directions that will help you keep pace with changes.

(3)  Don't lose sight of the fact that relationships the are most important asset you have.  Your clients have a sense of loyalty to you; and strong relationships are less likely to be broken by technology than weak ones.  Keep your clients close and they will help you navigate these changes.

(4)  Focus on providing an end-to-end service delivery experience.  For example, if you negotiate contracts for clients, archive them and manage deadlines/expiration that are terms in the agreements.  The more you are part of your client's process, the more likely that you are included in process changes, instead of being automated out.

(5)  Be irreplaceable.  You know you are doing something right when your clients call to ask you to do legal work that is way out of your expertise.  That means they see you as their lawyer, not their real estate lawyer or their litigator.  Clients that value the guidance they seek from their attorneys are sticky.

(6)  Educate yourself.  Pay attention to the changes that are happening, and look for ways to adapt.  This is a trend you cannot ignore away.

Staying relevant is a lifelong pursuit in any career, but the changes on the horizon in the legal industry will be particularly challenging.  Pay attention.

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David DePietto is the founder and CEO of NexFirm. He can be reached at 
ddepietto@nexfirm.com


Friday, January 5, 2018

10 Observations from 2017


As the CEO of NexFirm, I see the good, bad and the ugly when it comes to law firm management, as I watch from the cheap seats my clients around the country brave the trials and tribulations of law firm entrepreneurs.  NexFirm's clients skew to corporate practices with experienced attorneys that have AmLaw 250 pedigree.  They grow quickly and are quite profitable.  Even as the elite of the industry, they have their challenges.

1) Biz development works- for anyone.  It's a simple formula- Time and energy yield results.  Those who cop out with "I am not good at it" are hurting themselves professionally, and needlessly.

2) Hiring wrong eventually comes back to bite you.  When my clients lose a great employee, we typically find that the reason is bad communication at the time that they hired them.  Being thoughtful about compensation, and creating a career path for all on your team is your primary job as a law firm partner.

3)  Partners should "re-marry" every few years.  I see too many successful practices break up because of disputes that could have been avoided.  We encourage partners of new firms to talk exhaustively about expectations, to avoid disputes.  Time is the enemy of the understandings they arrive at before the launch of the firm.  It is important to sit down periodically and check in on goals, expectations, and perceptions of partners as they relate to the practice.

4)  If you are not hosting events, you are crazy.  There is no better return on investment than an event that puts you in a room with your clients.  Host a lunch or dinner.  Take a group to a ball game.  Present a CLE.  Just get yourself belly to belly with your clients.  The results will please you.

5)  Don't ever say no to a new matter; but use price to make it worthwhile.  If you like matter but are not sure about the client, increase your rate instead of passing.  And get paid in advance.   My clients are rarely correct when they pick and choose, and at least when you are unpleasantly surprised, you get paid for your time.

6)  Don't ask, don't get.   Insurance carriers said yes to price increases from clients who haven't seen them in years, because they asked.  Be sure to increase your rate every year, or at least try.

7)  Retainers are easier than collection agency.   I see so much wasted time, trying to collect unpaid bills.  Do the hard work up front, and don't waste your time if you are not going to get paid.  The time you save not doing unpaid work can be used in wonderful ways that can improve the success of your firm.  

8)  Trees don't grow to the sky.  When things are good, build up your cash- there is always a possible down cycle is coming.  A strong balance sheet, both personally and at the firm, can make the difference when the slow times inevitably arrive.

9)  If there is one thing that can put you out of business overnight (and I have seen it happen), it is a data breach.  Spend what is costs to be on the leading edge of data security.  You don't want your reputation hurt by this.

10)  Make your team a top priority.  Employees leave if you don't value them, especially when the labor market is as tight as it is now.  When you have a resignation, will you ask yourself if a gift card have made the difference? A dinner, a pat on the back, any sort of acknowledgement.

David DePietto is the founder and CEO of NexFirm. He can be reached at 

Saturday, September 30, 2017

Tracking Time On Time

There has been an interesting flow of news stories lately about BigLaw firms cracking down on late time keeping.  Hughes Hubbard plans to cut the salary of attorneys by as much as 20% if they don’t get their time items in on a timely basis (their definition being “within 5 days”).  Simpson Thacher is doing something similar.  Akin Gump’s managing partner Steve Pesner recently penned an email to his team on the subject that was unforgettable—“For those of you who think you are exempt from doing time sheets on a daily basis, I’d suggest that you re-evaluate your importance and get ready to prove that (a) you are busier than I am on legal work, (b) you are busier than I am on client development work, (c) you are busier than I am on firm work and (d) [redacted] and I do not have better things to do with our time than beg you to be responsible … and incidentally, it is my understanding that the job market is not so good right now in case you did not know.”

While these might seem like rude and forceful reactions I, for one, don’t think that these are overreactions.  The timely recording of billable work enables three critical outcomes for a firm:  the precise collection of billable time, the rapid collections of receivables and real time analysis of staff utilization.  As you can imagine the bottom line effect in a BigLaw firm is significant, ranging in the millions each year.  While the dollars are smaller, the effect on a small firm is more dramatic.
Take for instance the precision of time collection.  I’ve heard higher estimates, but in my experience (at NexFirm), a timekeeper can lose as much as .3 hours per day by delaying the recording of entries to the end of the day as opposed to making them in real time.  To be conservative, let’s round it down to .1, or six minutes per day.  At $400 per hour, it is $10,000 per year in lost revenues.  For a firm of three, call it $30,000 of pure profit out the window.  I think any small firm would find this to be a meaningful amount.
Utilization management can drive even larger profitability gains. In the business of legal services, each minute that ticks away is gone forever and can no longer be monetized.  Using real time entry data, a managing partner at a small firm can more efficiently allocate work to those who are not busy.  If these efforts result in an additional .1 of billable hours per attorney per day, tack on another $30,000 of profit to our theoretical three person firm.
Sending bills out to your clients on time starts by having all of your time entries in the billing system, and drives a shorter cash collection cycle.  It’s a bit harder to put a dollar amount against this benefit, but if you run a small firm you are undoubtedly well aware of the need to drive cash collections.
Encouraging your attorneys to track their time entries in real time can pay big dividends.  To make this happen, create a billing environment that is user friendly and easily available.  Create a culture that encourages real time recording of entries; start by explaining the importance of these efforts to your team, set a good example by doing it yourself and provide reminders and policing that prevent timekeepers from getting off track.

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David DePietto is the founder and CEO of NexFirm.  He can be reached at dd@nexfirm.com.

Friday, March 31, 2017

Every Position, Every Player, Every Game

I have three active children; so I spend a good deal of my free time coaching a variety of sports teams.  It’s fun, rewarding, and at times quite challenging.  Everyone wants to win every game we play (I am talking about the parents, of course).  It's nice to win, but youth sports are about learning, not just winning.  The kids have to make their own mistakes on the field if they are going to develop.  So every game I coach, I create a substitution grid that allows me to ensure that every player plays every position in every game.  If it is our weakest player's turn to be in the scoring position in a tight game, so be it.  Sometimes we don't win as a result, but the kids gain valuable experience and grow to be better players in the long run. 

In the practice of law, it seems difficult to risk taking a "loss" in the name of cross training and professional development.  But, in terms of the long term strength of your team, providing access to skill building is key.  You, your clients and your staff benefit tremendously from these activities.  So, how can you incorporate training into your workflow without sacrificing the firm's work quality or reputation?

Here are a few things that have worked for our clients:

Capitalize on teaching moments.  Identify matters that are good teaching opportunities and get junior people involved in a meaningful way.  Leveraging inexperienced resources to provide assistance on a complicated case may increase billing opportunities, but it is unlikely to further their learning.  Assigning more comprehensive tasks on less complicated matters allows junior attorneys to learn to assume responsibility of deliverables, and is more likely to create lasting teaching experiences.

Delegate parts of matters.  Give a junior team member part of a matter with clear deliverables.  Not only will this give the junior member a chance to work and learn under your supervision, but it will also give you a chance to observe the workproduct of your staff.  With feedback and time, you will be able to trust in the quality of your staff's workproduct.

Use mentoring teams.  When a matter is large enough to require two attorneys, assign one more-experienced team member and one less-experienced.  The more-experienced attorney gets the opportunity to advise and mentor the junior member, and the junior member gets hands-on training.  It's a win-win situation.  This will also help your firm develop a culture in which junior members don't hesitate to ask for advice when needed, and senior members take an interest in junior members' development.

Perform an autopsy.  After a matter project is completed, or an issue occurs, dissect and critique the performance and overall results with your whole staff.  This is an excellent way to ensure that your entire team will learn from each others' positive and negative actions.  It's also an effective way for the managing partner to lay out a definitive process for similar instances in the future.  Performing regular project critiques may even inspire your team to generate new and innovative ideas. 

At some point you have to let people take the plunge and do something different.  If you can't ever feel comfortable that your team can exceed expectations without your supervision, you don't have the right people working for you.


David DePietto is the founder and CEO of NexFirm. He can be reached at dd@nexfirm.com.

Friday, September 30, 2016

You are Wrong, I am Right.

Quite often I converse with attorneys who start their sentences with the phrase "The right answer is...”  It's absolute and it feels reassuring and neat; for every problem, for every question, there is a perfectly right answer.  This phrase always gets me wondering: who are they trying to convince, me or themselves?  Are they giving me the right answer, or are they just forcefully making the case that it is not the wrong answer?  Or more to the point, that they are not wrong. 

I got to thinking about being wrong, and the fear that we all have about being wrong after watching an interesting TED Talk.  Kathryn Schulz lays out what we all know and see every day; we have been trained not to be wrong.  As an attorney, you are indoctrinated even deeper into a code of always being right.  It is generally a good instinct to possess as an attorney; clients do not like to work with lawyers who provide incorrect advice or work product that contains mistakes.
As a small law firm owner, or an aspiring one, you need to wear another hat that is critical to your success: that of an entrepreneur.  Successful entrepreneurs take risks, try new things that are uncertain and yes, they make mistakes.  Successful entrepreneurs make lots of mistakes.  Often, doing it wrong is the only way to figure out how to do it right.
How can you start taking calculated risks when it feels so uncomfortable?  The answer is planning.  By leveraging the best available information to determine possible outcomes, comparing risks of action against no action and establishing ways to measure success, you will feel empowered to take smart calculated risks and make good decisions. 

To get started, focus on the following:
-You are never going to have perfect clarity.  At NexFirm I spend my days helping aspiring founders and managing partners of small firms launch and grow their businesses.  We look at critical decisions from every angle and bring to bear all of the information we can put our hands on.  In the end, we determine the probability of potential outcomes and make the best decision we can.  Often it comes down to one simple point, can we live with this decision if the worse (not worst) case scenario plays out.  You will never have perfect information or the “right” answer; if you wait until you do you will never affect change.
-You are likely to overestimate the risk of the unknown, and underestimate the risk of no action.  If you are working at a BigLaw firm and you think that you will “probably” make partner, the odds are against you.  If you think you can’t do better for yourself as a small firm founder than as an associate, you are again playing against the odds.  Staying with the status quo always seems more comfortable, and the unknown feels risky.  Planning levels the field, allows you to measure the risk of no action fairly against proactive decisions and move ahead.
-In the small law firm business, the odds favor those who pursue growth.  Many small law firms tend to suffer from the same problem; when they are busy they don’t have the time to engage in business development, when the work ends they starve while they feverishly work on bringing in billable hours.  Growth brings diversification and richer financial resources, and it is a key to longevity.
Try to step out of your comfort zone and seek out some calculated career risks, investigate and quantify all that you can to make the best decision possible and don’t focus so much on not being wrong.  You may not get the right answer, just the best answer.

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David DePietto is the founder and CEO of NexFirm. 
He can be reached at ddepietto@nexfirm.com

Thursday, March 31, 2016

Networking With Your Clients

Networking with your clients may appear to be a science, but I submit it is an art form that should not be dismissed because you say to yourself; "I'm not a good networker".  While it may be difficult to feel this as I did when I tried it, I found following the process below over time became easy and it has worked will for me, as I believe it will for you:

Make a client list that you want to focus on:  Be careful not to choose just the ones you have the best relationships with, but also those that understand and focus on relationship development.  If they have asked you to make introductions to them, they belong on your list and should be focused on all year.  Those that resist, you may want to put on the bottom of your list.

Get  dialog going.   This is the easy part; call, have breakfast or lunch, take in a ball game or just visit their office with cookies.  Focus on getting to know them better and asking for business will be much easier.

Be helpful.  Once you are passed this point, then you can figure out how to help them.  Who do you know that might make for a good introduction?  Can you help them resolve issues that they are focused on?  Even just being a sounding board helps.

Follow up.  Just like keeping the weight off is harder than losing it, so is follow up. But it is most important.  Try and think of creative ways to regularly stay in touch.  I have sent books I've read, email articles or TED Talks that I think may be interesting, share things from my life (by now you all know my passion for cricket), or just to check in on the thing we spoke about last. This approach I believe builds a strong connection between you and your client.  And when you are at a point that they will accept a dinner invitation that includes their wife or husband, then you have arrived!

Ask for help.  Now comes the biggest challenge: asking for help.  Difficult to do, maybe, but if you don't, your relationship will not blossom.  If you treat their contact well and help them, it's as much a favor you are doing for them that they do for you.  When they introduce you to someone that hires you, it validates their decision to work with you, which also makes them feel good.

Keep up the activity and results will come, and before you know it you will believe that you are "good at networking”! 


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David DePietto is the founder and CEO of NexFirm. He can be reached at 
ddepietto@nexfirm.com