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Never Trust an Expert?

15/9/2013

2 Comments

 
Ok, Ok, this is a book recommendation. But bear with me as there's more to it than that.

Since talking about making Smart Decisions in a Confusing World at a recent legal conference, the interesting thing is that more people have clicked on the link on my Recommendations page for this book than for any other. Why would that be?


I think the answer is confirmation on another subject that I blogged about a while back; lawyers like to give advice and they don't like to be seen to be taking it!


The point of the talk was two-fold.  


The first is that as perceived experts, lawyers exist to perform a vital and valuable function in life. Yet this "expert status" is being eroded, and in some cases, blown away by customers who challenge everything they hear from their lawyer; customers who "research" their particular circumstances and in many cases dispense with a lawyer altogether and construct their own contracts simply because their 30 minutes of internet based research suddenly puts them on a par with their 7-year studied and 3+ year practised lawyer...and why spend money when you can do it yourself?  This erodes law firm revenue and profist.  The evidence for that can bee seen by downloading law firm accounts from Companies House.

Secondly, lawyers and law firms who have taken a decision to invest in their future and who do their own research into contracting with helpful collaborators, coaches or mentors need to be able to see through the information overload and spot the snake oil salesmen from the real deal.  They need to make better informed decisions for the sake of their future.  And also to justify their decisions to their partners. (Probably the biggest single reason! )


I won't bore you with the full 40-minute transcript here but the gist of the event is summed up in the above two paragraphs and the final bit of wisdom taken from Hertz's book;


1. You make a better decision with a full stomach and a full bladder (The Wise Old Woman, the Jewish Mother and the sages' of the past were right after all doh!)


2. Always have someone to hand who tells you what you don't want to hear!


I've always been happy to tell lawyers and law firms what they don't particularly want to hear (check out some of the columns from a few years back!)  Some shrug their shoulders, some you never hear from again (the majority) and some decide that they should check it out and do something about it (fewer than I would like) but until I set up the links and directed people to them, I never had any statistical evidence that.


I do now.

2 Comments

Is Your Lawyer  Lying About His Prices?

9/7/2012

6 Comments

 
“That will be £8.42 sir.” the barista requested flatly.

“I thought it was £1.20.” I responded, a bit puzzled. “Isn’t that what the sign says?”

“Yes sir, but you asked for a cup. That’s an extra pound.” she said as she glanced over my shoulder at the growing queue.


“So coffee is £2.20? You said it was £8.42?” I asked as I nudged the steaming cup back towards her.

“Sir, the coffee is £1.20. The cup is another pound, milk and sugar are optional extras. Plus, we had to pour it for you. And don’t forget the bathroom service and heating surcharges.” she explained.

“Bathroom? Heating surcharges? You’d like me to pay for heating the restaurant?” I grumbled.

“Don’t be silly sir, of course we heat the restaurant for free,” she said plainly. “But unless you’d like your coffee cold, we have to charge you for warming your coffee.”

Leaving the coffee on the counter, I turned and headed for the door.


Hard to Imagine

It is hard to imagine any business pricing their products and services like this coffee shop, but look no further than the legal industry. Many legal firms seem to have deliberately gone out of their way to price their products and services in the most confusing manner possible. Customers may put a premium on simplicity and transparency in the post credit-crunch business world, but it seems that the majority of the legal industry still hasn’t caught on.


For example, check out this offer from a "Fixed Price" legal services provider.

“Shareholder's Agreement for just £499 !"

Sounds great value, right? So what’s the catch?

The Agreement is only for 2 shareholders. Each additional shareholder adds a further £50

You also need to take company secretarial services with the firm to qualify for the "Offer".

To amend the Shareholders' Agreement you need to adjust the articles of association, that costs a further £150

Board minutes are also required, another £100 for a simple set

That £499 is going to cost you £1,099 for the first year! (£1,291.33 inc VAT)


So , its a full £600 more than what the offer promised in the first place!

£499 Shareholder's Agreement indeed.


Playing Games

Legal firms who price like this also love to play games with how much they charge for other services such as company secretarial. Almost every other day I get a call from a customer who wants to bring their business back to us. Typically, they’ve left us because of an amazing deal another fixed price legal firm offered them for their company legal work. Then, after the first year, the remarkable price disappears and the customer ends up paying much more than what we were charging them in the first place. Some legal firms call this a “loss leader”, but it sounds more like “bait and switch” to me.

I’ve certainly heard the justifications about how this isn’t a scam, its just savvy marketing. After all, these unbelievable low prices all carry asterisks pointing to fine print. 

My question to you is, do you want to do business with a law firm or company that forces you to read the fine print? 
6 Comments

Trust Me - I'm a Lawyer

8/8/2011

4 Comments

 
I wrote a blog piece in January 2011 on why a Partnership may not be the best model for a law Firm, and I touched on an issue know as Pluralistic Ignorance.

The gist of that article is that some partnerships are inefficient because when it comes to driving a law firm forward or doing “non-lawyer” work, such as marketing, or being innovative, no one wants to take any action because they think that someone else will do it, so nothing gets done.  Nothing useful anyway.


(Yes, there are a number of firms that have partnership models and do grow, but they tend to have a nominated leader or quasi-dictator; but in general, in these recessionary times, a partnership model is not the way to go)

I had thought, in researching that article, that pluralistic ignorance in itself prevented law firm growth, but there was always that niggling suspicion that something else was at play and it wasn’t until I read some of Edward Banfield’s book, The Moral Basis of a backward Society, that I realised what it was.

Banfield’s book describes a fictitious town in Italy called Montegrano, where the people share a great deal of trust with their own family members but they are highly suspicious of anyone outside of the family network and so they were unable to build businesses that were bigger than an extended family unit. 

Because of this inability to grow, they became stuck. They had placed a ceiling on what they could earn as a community and it was entirely self-generated.

Banfield established that Montegrano's predicament was entrenched in the ”distrust, envy and suspicion displayed by its inhabitants' relations with each other”. Fellow citizens would refuse to help one another, except where their own personal material gain was at stake. 

Many attempted to hinder their neighbours from attaining success, believing that the others' good fortune would inevitably harm their own interests. Montegrano's citizens viewed their village life as little more than a battleground. Subsequently, what transpired was social isolation and ultimately poverty.  An inability to work together to solve common social problems, or even to pool common resources and talents meant that they were stuck in a progress-resistant culture.

But to take this in context, I could see that within law firms - even quite large firms - that lack of trust in something bigger than a family unit survives and inhibits growth.

I’m sure you’ve heard or read the phrase “operating within silos” as it relates to legal firms.

Quite a lot of firms operate as large entities but in reality they are nothing more than a collective of small firms or silos with a partner as the “head of the family” and they tend not to trust other silos or “families” even within the same organisation.

That lack of trust is what really inhibits growth.

When it comes down to it, partners in (some) law firms don’t really trust their fellow partners. They may say that they do, but their actions betray otherwise.

Partners meeting are often fractious affairs where individuals hold on to their people and fight to make sure that any work they or “their people” have done is correctly billed to their department. This sort of attitude does not bode well for customer service and also inhibits cross-referrals within the firm.

Yet Trust is the glue that binds commerce. Business relationships are forged in trust and when people working together communicate effectively and co-operate with each other, they build up trust.

Trust creates the perfect environment for growth to take place and the lack of has the opposite effect. 

As a culture, the law is and lawyers are, naturally suspicious.

Anything that is said, suggested or especially written needs to be corroborated. Every action they undertake as lawyers needs to be exact, certain, precise. 

To be otherwise is to invite criticism, a complaint or even a lawsuit, so this manufactured tendency will naturally permeate through all aspects of a lawyer’s life; and dealing with fellow partners is no different.

There therefore tends to be suspicion seen in every action no matter how small and this in combination with pluralistic ignorance is the real reason that many law firms fail to grow or even fail to get themselves to a position where they are even ready to be taught to grow.

The firms that can encourage a truly trusting culture will be the firms that go on to dominate the legal marketplace.

I wrote another article stating that if you were to start a law firm from scratch, now, today, there is no way you would want to follow the partnership model; but if you did, and you decided to use the traditional methods, you would at least have a name for it…and here it is…I give you… Montegrano & Co.

4 Comments

Don't Do Your Best - Do What's Required

31/7/2011

1 Comment

 
"It's not enough that we do our best; sometimes we have to do what's required." Winston Churchill

I like Churchill quotes.

There are so many situations where they are suitable and they have stood the test of time.

I chose this one for this blog because I was chatting with a lawyer from a well-known firm that is clearly struggling in the present climate and he said that he couldn’t understand it because they (the partners) were all “…doing their best to generate new business…”

I dug a little deeper.

By “..doing their best…” he went on to explain that “…they had increased their advertising spend and were doing a lot more marketing…”

He said that they had done all the traditional advertising in magazines, newspapers and corporate sponsorships but that it had been a waste of time and money.

Traditional advertising is one of the least effective ways to advertise a law firm. Unfortunately, most lawyers think that marketing and advertising are the same thing. The result is that you end up wasting money and have no new prospective customers to show for all the effort.

Here are three major reasons why advertising in the traditional sense does not work.

1. It does not move people along in the sales cycle. It's only effective in the first stage when the potential customer is getting to know you.

2. Frequent advertising is too costly for most budgets. Lots of advertising research has shown that you need to reach your prospects multiple times – usually from 5 to 7 times -  to make enough of an impression so they will remember you when they need you. 

3. Most adverts are often poorly designed or written, even to the point of being boring instead of influencing your target market. Often they are created by lawyers themselves and tend to drone on about how great at law the firm is and how long it’s been going.

The other problem with their approach is that “their best” was the advertising industry’s worst.

Imagine if an ad agency had decided to create their own contracts, do the legal work on their own property lease or handle their own employment law issues and you start to get the picture.

If they had been a little bit wiser and not so smart, they could have measured the results and gone on to target their future ad spends in the right areas.

That was what was required.

1 Comment

    Author

    After many years paying lawyers,I became one in 2005 Just in time for the largest upheaval in the law since records began. Brilliant. Exiting times ahead.

    Disclaimer.  The thoughts, ideas and comments on this Blawg ("Blawg - a legal Blog) are my own and not to be confused (unless otherwise stated) with anyone else and certainly not of anyone in the Firm where I used to work and they are not the views of the firm where I used to work.

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