Monday, January 31, 2011

Would Rex Ryan Make a Good BigLaw Managing Partner?


As I emotionally recovered from the heartbreaking news that the NY Jets won’t be competing in this year’s Superbowl, I decided to go back and reread a post I first wrote in September but never published (some of the people here thought that Rex Ryan was controversial so the post would annoy readers).  Aside from the fun I had watching my team prepare for what promised to be an exciting season, I was really surprised to learn about the training camp coaching process as I watched Hard Knocks on HBO.  More to the point, I was incredibly impressed with the communication techniques I saw.  The NY Jets seem to be doing a better job of managing their organization than any law firm I can think of.  What can we all learn from Rex’s management style?  Set clear objectives, provide feedback and constantly measure whether your message is being received.

An organization with a single purpose.
During the first team meeting of the season, coach Rex Ryan’s slide show starts with the objective: Win the Superbowl.  He follows up with the steps to reach this goal: “To have the most wins on offense, to have the most wins on defense and to have the most wins on special teams.”  Well, this might not be a surprise, but it surely is clear.

Do your attorneys know what it means for your organization to “win the Superbowl,” or the steps it takes to get there?  If not, communicating your goals as an organization will allow them to keep focused on what is important, to think strategically and to be motivated by something that is often forgotten these days: Purpose.

Clear communication of individual objectives with honest feedback.
The frankness of Jets general manager Mike Tannenbaum in player meetings is noticeable.  He tells one player “I am not sure that you are good enough to make it in the NFL,” and tells another “you played your best but the other guy was just better than you.” The biggest surprise is that the player always appreciates the feedback!

Your attorneys may not respond well to such harsh feedback, but they do want an honest assessment of their work, good or bad.  Well articulated objectives and uncolored feedback are tools that we all need to succeed professionally, and we all value managers that provide them.  On the flip side, failing to let your staff know how they are doing creates frustration and distraction.

Speaking the language of your team.
It seems like Rex Ryan thinks that the language of his team is exclusively four letter words; maybe not a good strategy in a law office.  But I notice that his players, when interviewed, seem to use the same phrases that he does.  In my mind, that is a sign that his message is received and processed by his audience.  Speaking in a vernacular that resonates with the team is just the first step, repeating and measuring the receptiveness of the group is the key.  Scenes showing the coach visiting players in their bedrooms at lights out demonstrated his technique, but there are many ways to get belly to belly with your team and find out if they are clear on their assignment.

How do you suspect it would help your organization if you defined and communicated the company’s goals, clearly articulated each team member’s role and provided critical feedback on their performance and spent more time talking with them to make sure that they were on the same page as you?  Give it a try, who knows, you might just win your Superbowl.
Oh, and don’t throw the ball on 3rd and goal from the one yard line.

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

Tuesday, January 18, 2011

Look Before You Sign: Learning What You Need Takes Time

Starting your business always costs more than you think, so holding onto your cash is typically going to be your primary objective when you first start out.
Many startups are founded by people who have left large firms where most, if not all, of their technology was provided for them.  So, if that’s you, you’ll have to make all of these decisions yourself.  And, if you find yourself  unprepared, you’re not alone.
If I can offer any advice, it would be these two things:
1.        Retain the right to cancel services, and pay as you go if you can.
2.       Customize your systems to suit your needs.
Sure, it’s possible to go out and buy all of the technology products and services you think you’ll need:  computer, software, phones (desk and mobile), email, Web sites, scanners, and all the other gadgets Fortune 500s take for granted. But paying a service for just what you need is a great way to try out a solution beforehand, and it helps you decide if you need to make the larger financial and contractual commitment.
By using a service that you can modify or cancel, you’re assured of keeping your initial capital outlay as low as possible while you try out services that are appropriate to your new business. For example, do you need a desktop computer and/or a laptop computer and with a myriad of options out there, which ones are right for you?  Don’t go out and buy the entire Apple store (and the 2 year contract that their mobile devices usually require) if you spend the day in your home office and only need a computer for email and word processing.  An inexpensive desktop might be all you really need.  Or, if you’ve got a lot of international clients, don’t commit to a long international phone plan without trying out cheaper web-based options, like Skype.
More than likely, you’ll need a technology environment that’s quite different than you had before you started your firm.  Rely on people who focus on small business successes (I can recommend at least one good firm) before plunking down your valuable cash on something you may have to “make do” with for three to five years.
When you do decide whether to buy or license your technology, you’ll know it works for you.
Mark Mathias is the Chief Technology Officer (CTO) of NexFirm.  He has more than 30 years of experience with large and small company technology matters.

Monday, January 10, 2011

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.