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THE INNOVATION ISSUE

 Table of Contents | Features | Frontlines | Technology | Business

April/May 2009 Issue | Volume 35 Number 3 | Page 50
FEATURES

LEADING WITH A FORWARD FOCUS

An innovative environment isn’t something that one usually associates with law firms. Exceptions exist, of course, including, for example, the innovation of the famous “poison pill” (invented by noted Wachtell Lipton M&A lawyer Martin Lipton in 1982, as a response to tender-based hostile takeovers). But for the most part, the legal industry is one in which true change is rare—and where drives for change do exist, they are frequently too short-lived to take a meaningful foothold. More often it’s a case of firms copycatting each other, and before anyone can finish saying “which other firms are doing this,” every firm is following the leader. But with the industry becoming even more competitive these days, some firms really are pursuing more innovative approaches to law practice. They are shooting for the kinds of initiatives that can transform a practice in its target market’s eyes for the long term. Here’s a look at some of these forward-focused approaches.

Driving Revenue with Key Client Teams

The success of any law firm depends on retaining good clients. Regardless of whether your clients are individuals, nonprofits, small businesses or corporations—or whether your firm has 2 or 2,000 lawyers—there is no more effective way to drive revenue than to focus on the people who already do business with you. Existing clients are the key contributor to more business. When you focus on providing them with the best service, you gain their loyalty and can leverage the relationships in two critical ways. First, your firm will enjoy greater retention and growth with these clients, and second, they will readily provide introductions and word-of-mouth referrals to other potential clients.

Again, though, a service-oriented focus is the key to these benefits. To illustrate how it plays out, think of the hotel industry. If the Ritz-Carlton, for example, wasn’t painstakingly focused on its customers and every detail affecting a customer’s stay, it would be a very different hotel. Now think about a law firm. Paying special attention to all of the firm’s clients, whether they’re currently active or inactive clients, makes the firm stand out in their minds and keeps them coming back.

To achieve that end, some firms have put in place what are called key client teams, which consist of one or more lawyers, and perhaps a paralegal or appropriate staffer, who focus on one primary client or on groups of clients in the same industry or with otherwise similar needs. But consider this: In a recent workshop devoted to the topic, when participants were asked which of their firms had client teams, 30 people raised their hands in the affirmative. When asked which of those firms’ client team initiatives were successful, all but three hands went down. All too often, it would seem, these types of initiatives fall flat in their efforts.

Not so at Cleveland’s Thompson Hine, which is one firm that has been extraordinarily successful at creating a client-centric culture. Through an initiative that’s now in its sixth year and boasts more than 50 client teams, the firm has been able to reap the rewards of ever-stronger client relation-ships. So much, in fact, that the teams are no longer considered an “initiative,” but rather part of the fabric of the firm and its offerings to clients.

“Our Client Service Team Program has really helped us to focus all of our resources and efforts on our clients,” explains Alvidas Jasin, Thompson Hine’s director of business development, who helped launch and continues to develop the program. “And clients have responded. Client satisfaction scores are higher than ever, and our firm now ranks among the very best in national surveys on service excellence.” Most recently, the firm ranked among the top 30 in the country for delivering client service excellence in a BTI Consulting survey of Fortune 1000 corporate counsel.

The focus on clients has been threaded throughout the firm and it’s now standard business practice. This aspect of the firm alone separates it from its competitors—and the firm actively spreads the word about it, too. A quick trip to the Thompson Hine Web site, for example, and visitors will find themselves facing “Our Client Service Pledge.” Is it lip service? Web speak? Not in this case. Thompson Hine invited its clients to tell them what they value most in a law firm and used the core principles clients identified to craft the service pledge message. Being client-centric is serious business at this firm—and the serious results prove it.

While some firms still debate the issue of which partner “owns” the client, and others continue to allow antiquated compensation schemes to hold them back from successfully retaining and growing their best clients, others, like Thompson Hine, are moving forward and capturing more market share with focused, thoughtful client strategies.

Innovation through Industry Integration

Now here’s a standout example of how to ramp up service to a core client group.

Being one with the environment takes on a whole new meaning at Boston-based Foley Hoag’s Emerging Enterprise Center (EEC). Designed around the firm’s technology-corridor suburbia office (in Waltham, Massachusetts) and geared toward emerging companies in areas such as life sciences, clean energy and technology, the EEC receives over 7,000 visitors a year through its doors. The EEC, as promised at www.emergingenterprisecenter.com, “is designed to be a center of innovation and a destination to which members of the entrepreneurial and venture communities can visit to obtain legal services, network with peers and hear the latest industry trends and developments.” Through the center, Foley offers the following:

Unlimited use of its state-of-the-art conference facilities to all the technology associations in the area. This means thousands of people annually attend meetings at the EEC facilities.

Support staff to assist with all reservations of the EEC, as well as meeting confirmations and facilities preparation.

Use of office space and conference rooms for start-up companies that may require an office or more upscale space for meetings with potential investors or customers.

Packaged pricing of services at a fee targeted at the start-up venture’s needs.

“Foley Hoag’s heritage of serving entrepreneurial and venture-financed companies makes the EEC an important firm asset as we continue to meet our clients’ legal needs,” says David Broadwin, Foley Hoag partner and head of the EEC. “We already had a great team of science, technology and business lawyers and experts working together to serve this community. But the EEC places us right in the heart of one of the fastest-growing and most active business areas in the country, reinforcing our commitment to being an engine for emerging business growth.”

While some firms struggle with whether (or how much) to focus on industries, others, like Foley Hoag, have stopped the navel-gazing and are immersing themselves in target industries and building strong partnerships with their clients’ industry groups.

Strengthening Value through Process Improvement

What’s in a process? Well, to start with, competitive advantage. With the Association of Corporate Counsel (ACC) pursuing its Value Challenge, more firms are paying attention to how improving firm processes can help unlock the door to additional revenues. To gain the advantage offered by taking up the Value Challenge, which seeks to get law firms to connect value to cost for legal services in more transparent ways, a handful of savvy firms are applying what’s known as a continuous improvement process.

The continuous improvement process is a management process whereby delivery (i.e., client-valued) processes are constantly evaluated and improved in the light of their efficiency, effectiveness and flexibility. Each one of the areas where a law firm intersects with its clients has processes associated with it. (The use of technology systems to deliver work product, described in the sidebar at the end of this article, is one such intersection.) By mapping out a given process, the firm can begin reviewing how to improve that process. What type of real-world results can a firm achieve?

Two examples come to mind. The first involves a billing process. One top 20 global firm with a 94 percent realization determined it could do even better. Since it views its process management initiative as firm confidential, the firm declined to comment, but what it did share was direction on how it went about reviewing and improving its billing process for a higher realization rate.

Step one was selection of the process team, which included the director of billing, the firm’s CFO, two influential partners with excellent billing procedures and the corporate group’s practice manager.

Step two was to map out the entire billing process, from completion of a project task or call, to time entry into the billing system, on through to the reviewing, editing and sending out of a final bill and any follow-up collection procedures. (Collection was viewed as another process.)

The timeframe for examining the process and making recommendations for improvement to implementation was five months. Today the firm’s realization has jumped to 98 percent, a statistically significant improvement factor.

A second example (and one that has been presented in open forums) is the process improvement initiative that 10-office Seyfarth Shaw has put in place. Susan Hackett, senior vice president and general counsel for the ACC, praises the firm for its focus on applying process management to its legal processes. “The firms that ‘get it’ are not just focusing on whether they’ll raise their rates or offer discounts—they are focused on rethinking the way that they do business, staff legal teams and cost their services,” Hackett says. “To do so requires firms to assess their costs through careful examination and continuous improvement of the processes they engage in when work comes in the door. Only then do you actually begin to understand how much services really cost, where the efficiencies and inefficiencies lie, and how to save time and money for the clients.”

Seyfarth Shaw has gone so far as to hire a Six Sigma Black Belt (a professional certified in leading process improvement projects) to help implement its process improvement focus. The firm’s managing partner, Stephen Poor, is clear about his strategy for the firm: “It is a new relationship paradigm built on a shared definition of success, benchmarks, and tangible quantitative and qualitative results.”

In terms of results, he adds, “Seyfarth Shaw and our clients have gained unique clarity about how projects will be managed, how value and success are defined, and the specific results to be achieved. We not only work to improve our own process efficiencies, but we deliver ongoing value to our clients by working with them to develop and implement their own.”

Seyfarth Shaw is not only forward focused in this area, it is serving as a leader and showing how, for this partnership, the competitive market helps drive the innovation.

The Key to Long-Term Success and Industry Leadership

One may argue about the true definition of the word “innovation,” and if the several examples given here are a 1 or a 10 on the innovations scale. Yet all these roads—be it building a client-centric culture, taking a branch office to another level, exploiting the use of technology to create a market leader position, or refining firm processes—are leading to competitive advantage, alignment with client goals and increased revenue opportunities for the firm. These law firms have jumped out of the box and are helping to redefine the industry and the playing field.

About the Author

Silvia L. Coulter is Vice President and Chair of the Client Development and Growth Practice at Hildebrandt International, where she specializes in business development, strategic account management and service initiative strategies. She is an advisor on the LPM Section’s ABA Women Rainmakers Committee.

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