So here is a distillation of the 3 major things that are wrong with the majority law firms today (and I have to thank Mark Bradley from Marque solicitors for verbalising this so well in his recent talk)
1. They still charge for their services by time, not value.
2. They think they are special and behave and act accordingly.
3. They structure their business in a way that is directly opposite to the best interests of their customers (Clients if you’re an older lawyer reading this!) and that is therefore, in direct contract to their own interest.
Firms that still do that are the reason why the old legal market business model is in terminal decline.
So allow me to elaborate further.
Time: The business of law today is in conflict with market forces. There is much more supply than demand. There are thousands of lawyers and hundreds of law firms and therefore, you have thousands of competitors. So using basic Marketing 101, the simple way to stand out from your competitors is to be different. Differentiate and you will start to capture more business.
A recent survey of in-house counsels showed that over 90% don’t like time costing. Anecdotally, I can tell you that a similar amount of business and private client customers don’t like that method of charging either, but a lot of them think that there is no alternative and that is because the law firms don’t offer an alternative. If you want an alternative, check out this blog article of July 2010.
But, the law firm crowd nearly all behave in the same way.
Special: A lawyers attitude in what is a service industry, seems destined to alienate their customers. This attitude is demonstrated in the culture of their firms and can especially be seen in the relationship they have with their non-legal staff (most of whom are unhappy, but hey, they need a job, so will put up with what can only be described as Dickensian work practices. “No pay rise again this year Mr Cratchit!)
What is wrong with being happy at work and not just when you leave? It’s what makes you human and customers will sense that.
Structure: Buried deep inside every law firm is its purpose and it lies in the way it does business.
Law firms have a vertical structure. Each person’s value is measured only by numbers, usually the chargeable hour (Billable hours for the US cousins reading this).
So success or failure comes down to 6 minute increments and everyone’s job is to deliver these hours.
This leads to intense internal competition which, over the past few years has become a real struggle and in any competition, as Darwin so eloquently put, it’s a survival of the fittest. The “winners” are the ones that bill the most hours. That means in an “up” market when there’s good times, the corporate or commercial and residential property lawyers bill the most and in bad times, it’s the litigation department that become top dogs.
There are two fatal flaws with this;
1. This system has nothing to do with the interests of the customer (client). In fact the focus is on anything but their interests
2. Working in an environment where your work colleagues are also your main competitors is not a recipe for human happiness; in fact quite the opposite. It’s very stressful. It will eat away at your soul - in 6 minute increments. And this is borne out by some facts; mental illness amongst lawyers is 4x the general population.
Performance should not be measured by these numbers. The only incentive should be the happiness of staff and customers.
I’ve heard a lot of lawyers who berate me and tell me that the law can and never should be commoditised. I have news for you, it already is. It is a business factory where the workers churn out a product called time.
Lawyers on this treadmill have a working life that in the most part is devoid of meaning and this creates an emotional void. They are climbing a pole to the top of a big pile of nothing. They may have money but what’s the use in that if you are sacrificing daily happiness to get it. Why not get it and be happy at the same time. It can be done, it is being done and the more law firms that can do it in the right way, the better is it for everyone.
A business that can tell you what it does and why it does it is a very nice place to be.
I strongly suggest more of you strive for it, for your employees sake, your customers sake and your own health…before it’s too late.