Golf is unforgiving. An arching 300-yard drive in the middle of the fairway and a 1-inch tap-in putt are both counted as single strokes on the scorecard. Regardless of the majesty of long shots, however, the value returned from a long hit is identical to the short chips and putts on the green. Wouldn’t it make sense then to spend just as much time perfecting our short game as we do our long drives? It’s no wonder handicaps stay high!
Legal service follows the same principle. Like a long drive, legal expertise does not in and of itself ensure success. The packaging of legal services is becoming increasingly important, arguably more important, than subject matter expertise. Increased industry competition resulting from the availability of new technologies enables more lawyers to provide high level legal services to clients. As a result, to ensure continued success, 21st century law firms must not only find ways of distinguishing themselves from the competition, but also ensure services are delivered in the most efficient ways possible.
The Short Game is Where You Score
Approach shots, chip shots and putting are the most value-added shots in golf; that’s where you score. Similarly, effective request for proposal (“RFPs”) departments, practical innovation and pricing methods are increasingly becoming key enablers of law firm success.
Approach Shots – RFPs and Procurement
Approach shots, ideally from the fairway (usually behind a tree in my case) can put you close to the green. Successfully responding to RFPs and procuring work from clients are necessary for firms to maintain consistent cash flow. Every RFP should be uniquely tailored to each client for each matter. Customization, genuine adaptability and communication between the firm and client are key. Law firms should be candid in their ability to provide exactly what the client wants, both commoditized and value-added work. Acquiring a new matter from a client requires a deep understanding of a client’s legal and business concerns. This understanding, coupled with good service, make it easier to secure repeated client work in the future.
Chip Shots – Innovation
Chip shots are those short range golf shots taken in close proximity to the green. Chip shots can make a good golfer look great and help rescue a hack golfer from a potentially high score. Innovation, as the chip shots of legal service, means different things to different people when it comes to law firms. At its core, innovation is simply a deviation from the status quo, or as Deloitte Australia’s Chief Edge Officer Peter Williams puts it, “innovation is about trying new ideas”. How we embrace change, however, can shape results. The speed with which we try new things and learn from our mistakes can help create a culture of free flowing ideas.
At the outset, innovations should be slight and subtle. Pick small legal projects with easy victories. Grabbing low hanging fruit can help increase the resolve within a law firm to tackle larger innovative undertakings. It is far easier to identify specific problems that need fixing than to conclude that everything is broken and must be rebuilt.
Putting – Pricing
Long drives are worthless if a golfer four-putts every hole. Similarly, law has no value if the services are not properly priced. Effective pricing does not mean picking a round number based on average totals billed and paid by clients in the past for similar work. Instead effective pricing requires an in-depth understanding of costs and inputs.
Law firms must understand the costs associated with servicing a client matter in order to understand profitability. How much time are lawyers actually spending on a client matter, including write-down and write-offs? Firms that continue to charge by the hour should calculate the realized amount against all hours actually spent on a file, not just those that were billed to the client. Knowing the requisite profitability yield per matter against fixed costs can help shape how much firms can or should charge. Gather your data; learn from your data; respect your data; and learn how to incorporate data results into service delivery. Doing so can help bring consistency and predictability for both law firms and their clients.
There’s a reason why no winner of the annual World Long Drive Championship has ever had a successful career on the PGA Tour. They lack the finesse of a well-rounded professional golfer. Successful law firms, whose talented lawyers have long sharpened their legal expertise and knowledge, must now master the more subtle elements of effective legal service in order to remain relevant in the changing marketplace.