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 3^rd and goal from the one yard line.

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

Starting Up – What to Spend, Where to Scrimp, How to Save

If you have just started or are contemplating starting a firm, it is critical that you keep costs low so that you can maximize returns.  However, just like the old adage “penny wise, pound foolish,” in some instances it is important to make the investment up front to set your firm out on the right path. Below are answers to commonly asked questions relating to some of the bigger expenses so that you can make smart decisions from the outset:

Do we need an office?

Making a real estate decision can be tricky for a new firm.  Some law firms can work “virtually” forever, for others a physical office will be critical to building your client base so that you can demonstrate your stability. You need to know enough about your existing and prospective clients (and your working habits) to know how important this is to your reputation and productivity, and whether a virtual office, shared/temporary offices or a dedicated office for your firm is the right decision for you. In all cases, if you are just starting off, postponing a lease can be a great way to save on a major expense.  If you can work from home or a friend or client’s offices for the first 3-6 months, you will save while you build cash reserves for future expenses. 

What about a website?

Yes, your firm will need a website. It lets people know who you are and what you are doing.  Unless you have experience building websites, this is one case where hiring a professional from the outset makes sense.  Typically this is something that can be done well at low cost.  Ask your friends who they used, or look at websites you like and contact the developers listed on the site.

Should we hire a marketing firm?

Marketing firms can be expensive.   For firms delivering atypical services, honing your message to the marketplace can be critical to attracting clients, and it might be necessary to hire a professional to help you deliver that message.  For firms offering more straightforward services, a marketing firm is likely not necessary at the outset so long as the message about what you are offering is very clear.  Marketing firms can also help you develop your logo, business cards, presentation templates and brochures, so they can be very helpful in defining your message if that is important to your business. Please note that often website designers can help with logos and business cards, so a marketing firm is not necessary unless you have a complex message or look that you are trying to convey.

We have computers.  What else do we need?

 A law firm cannot deliver services to its clients without the right technology.  What you need (and how much you need to spend) varies significantly depending on what you are doing and how many attorneys you have.  See Mark's post for a longer discussion, but at the very least you will need computers, phones and probably a PDA. Your software needs will vary, but many firms will need a robust document management solution to keep the vast quantity of open files organized.  This is particularly true for litigation practices, but it is critical that all attorneys have an effective way to store and retrieve their documents. A comprehensive billing system will also be necessary so that you can track time and get bills to clients in a timely fashion.  Shop around and make sure you aren’t overspending, but having the right technology is critical.

Should I hire an assistant?

There are many third party services that can provide you basic administrative support without the expense of hiring someone full time.  If you need phone answering and basic calendaring and presentation support, many third party providers can assist you.  If you require more fulsome support, and it allows you to devote your time to higher revenue tasks, hiring an administrative assistant might be the right decision for you.  As with many of these decisions, you need to be honest with yourself about what you really need to get your job done efficiently and effectively, and spend wisely.

For a new firm, the variety of services and related costs can be confusing and overwhelming.  Spend your money where it is needed and put off whatever costs can be put off without sacrificing the quality of your services. The “right” choices are different for everyone, but the more you can smartly save up front, the better your chances of success.

Beth Anisman is the CEO of B&Co., a NYC based consultancy and an executive advisor to NexFirm.  She can be reached at banisman@bandcollc.com.

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.

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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http://abovethelaw.com/2010/12/hughes-hubbard-is-the-latest-firm-to-crack-the-time-keeping-whip/

http://abovethelaw.com/2010/11/akin-gump-partner-pens-email-fantasy-about-firing-delinquent-time-keepers/
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David DePietto is the founder and CEO of NexFirm.  He can be reached at dd@nexfirm.com.

Business Development, Making Rain and Growing Roots

“You’re either growing or you’re dying.”  This is the motto of a former colleague who is now responsible for generating tens of millions of dollars of annual revenue for his firm.  While this sounds like a somewhat trite aphorism about business development, after several years of advising small (and large) businesses, I have come to understand just how true this is, and how ignoring this advice can lead to disaster.

Many firms are started on the strength of one or two large relationships which they hope will continue to support them for decades.  While having one or two significant sources of revenue is very helpful to starting a new business, it is critical from the outset that you focus on diversifying your client base so that you are not overly dependent on any one client relationship to sustain your firm.

In addition to diversification of your client base, it is crucial that you have both deep and broad relationships with each of your clients.  As people change jobs and companies more and more often, a multi-million dollar relationship can dwindle to zero in just months if you don’t have multiple champions in the firm when your key point of contact moves on.  Similarly, your firm can go from stability to teetering in that same period if you don’t have multiple other clients to backfill that revenue.

In order to avoid these common pitfalls, it is imperative that you both stay in front of multiple people within each of your client firms as well as work consistently to broaden your relationships.  This can be done in numerous ways, including writing newsletters that are distributed to your network, offering on-site training sessions to both existing and prospective clients,  and spending as much time as possible meeting in person with members of your network to make sure that you are top of mind as potential assignments come in.  In addition, it is always a good idea to be meaningfully involved in industry associations and philanthropic organizations so that you can continue to broaden your contacts and increase both your and your firm’s name brand recognition in your community.

While all professionals are busy with servicing existing clients, business development is as much a part of any successful professional’s job description as delivering work product to clients.  Without consistent growth, your firm and future are in jeopardy. But when business development is a constant part of how you operate, you will find that you have increased “stickiness” with existing clients and routinely bring in new clients and projects, which is the key to sustaining a successful and healthy business for the long-term.

Getting your professionals started on business development takes activity on your part.  Help them to identify and target contacts that are potentially important to your firm.  Show them how to leverage the people they know to get introductions to those that they don’t.  Encourage them to get out and spend time with the people they are targeting; meals, drinks, concerts and ball games are all time better spent than in the office where there are no clients.

Keeping focused can be the hardest part.  Meeting regularly to discuss progress of business development efforts is critical.  Meetings should focus on the discussion of next steps for each target, feedback on what has worked and what has not and the exploration of how connecting people can assist the process.  Encourage your professionals to include others in your firm when they can.  When progress isn’t occurring, don’t hesitate to reassign prospects and let someone else have a try.

Keeping your firm growing will help you to reach a number of objectives, apart from simply driving higher profitability.  Employees engaged in business development will feel more connected to the objectives of the firm, as well as cultivating important skills.  New clients and deeper client relationships will likely bring in different types of work, variety that attorneys will find interesting and motivating.  And the success of the firm will keep employees proud to be a part of it, with the knowledge that they are directly helping to build its success.

 

Beth Anisman is the CEO of B&Co., a NYC based consultancy and an executive advisor to NexFirm.  She can be reached at banisman@bandcollc.com.