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 Ponderous Thoughts (4/14/06)
Here is to a few lighter reflections, shared by a friend:
• Good health is merely the slowest possible rate at which one can die.
• Give a person a fish and you feed him for a day; teach a person to use the Internet and he won't bother you for weeks.
• Why does a slight tax increase cost two hundred dollars and a substantial tax cut save thirty cents?
• In the 60's, people took acid to make the world look weird. Now the world is weird and people take Prozac to make it look normal.
• The Department of Agriculture knows exactly where the one cow with mad-cow-disease is located among millions and millions of cows but no government agency has a clue where the thousands of illegal immigrants and terrorists are located. Maybe we should put the DOA in charge of immigration and homeland security.
Globalization (3/30/06)
 Yes, it was inevitable. Globalization is beginning to take small bites out of industries previously thought inedible. Consider what is happening in education and health care. People go to Rio or Mexico for cosmetic surgery, we are told. They may even go to India for a heart operation. The English slip across the English Channel to take advantage of free medical care - of high quality, too - in France. And now comes news, in London's Sunday Times, that the English are sending their children to private schools abroad in order to save money. We have friends who send their son to Winchester School in Britain. The tuition, they tell us, is about $40,000 per year. The average British boarding school, according to the Times, now costs about $30,000 a year. The International School in Bangalore, by contrast, only costs about $15,000 per year. Hilton College in South Africa charges about $17,000.
Meanwhile, for my part, I will be participating in discussions at the Indiana University School of Law next week (April 6th) concerning Globalization of the Legal Profession. Here is the website for the symposium, which lists out the current
program: http://www.law.indiana.edu/front/special/2006%5Fglobalization/
Much has been written on the process of globalization and its effects on international and individual state law. The impact of globalization on the legal profession has received far less systematic attention, despite a universal recognition that the practice of law and the economic and personal lives of lawyers may be on the brink of profound transformation. The purpose of this unique symposium is to initiate dialogue about how globalization is fundamentally changing the work lives and professional opportunities of lawyers in the U.S. and abroad.
Prominent figures in the global legal industry will explore various interrelated themes on the issues facing legal profession, including law firm strategy, the relevance of geography, the lawmaking role of transnational lawyers, and how cultural norms affect or shape our perceptions of ethical lawyering. The program will include presentation of scholarly papers and responses by symposium participants.
Fight Established Routines (3/24/2006)
Your routines represent all of those memoranda, reports, e-mails, and trivia that conspire to sap your strength and smother your ability to direct your attention to those activities that are really the highest value-added use of your time. Routines will get you into ruts, dull your senses, stifle your creativity, constrict your thinking, remove you from real world stimulation and destroy your firm’s competitive vitality.
Many of the things that made us successful in the past may now prove to be nothing more than time worn assumptions about what clients really value, or what services remain worthwhile offering, or what constitutes profitability, or what ensures quality performance. We all need to regularly examine our various assumptions to see if they are still viable.
Constantly question “the way things are done,” and never, never allow your partners to rest on their laurels. (“Can we really count on having that client’s work for a long time to come?”) Some partners can be like those old spring-powered watches . . . they have to be shaken hard to get them going.
Beware one of the fallacies in the mindless espousing of “best practices” – you can’t just be “as good as” the competition . . . that NEVER leads to market leadership. Put these questions on the agenda of your next meeting: What are we best at? What makes us unique? How are we going to serve our clients in a way that nobody else can? And what are we going to do that will truly lead the market this year?
So What Is Your Contingency Plan? (3/10/2006)
This Spring, Iran could launch an attack on the American economy. The media has made a lot of noise about President Ahmadinejad's nuclear ambitions, but have said little about his more devious weapon of destruction. By the start of the Iranian New Year, March 20, 2006 on your calendar, Iran intends to open its own commodity market for oil and gas. This new bourse will be similar to markets in New York and London with one critical exception . . . Trades will be conducted in euros, not US dollars!
Oil is traded in dollars on the New York and London exchanges, and oil-exporting countries deposit much of the proceeds, commonly called "petrodollars"- - into western banks. That gives the U.S. a huge advantage when prices go up. We can simply print more paper dollars to pay for oil. It is also a big reason foreigners have been stockpiling dollars and dollar-denominated assets like Treasury bills. But once foreigners no longer have as big a need for dollars, they may stop buying our dollar-denominated debt. Not only will we no longer be able to finance our runaway trade and budget deficits with printing presses, international demand for the greenback could drop like a stone. Already, the central banks of China, Japan, Taiwan and Korea have announced intentions to lighten up on the U.S. dollar holdings in their currency reserves.
America's rivals have been trying to shift the oil economy toward the euro for years. They hope that if enough major oil producers switch, the rest will flee the dollar weakening the U.S. role in global oil and gas markets in the process. And the moment oil becomes denominated in a different currency, such as the euro, the U.S. becomes like every other country in the world. We would have to earn euros in order to pay for energy instead of simply printing more dollars . . . not a happy prospect when you consider that the dollar has plunged 27% against the euro in the last 4 years.
Overall, Iran is now the fourth-largest oil-exporting nation in the world. It also holds 25% of the world's natural gas reserves. The U.S. doesn't buy any of this oil, but many other nations do - - to the tune of 2.6 million barrels per day. That means we can't bully Iran. The threat of nuclear weapons in Iran is real this time. Yet an embargo or a military attack against Iran could leave key U.S. allies and trading partners facing an even greater energy crisis.
A major shift in the global energy economy may now be underway, and you had better begin to factor these possibilities into your firm’s strategic plans.
UNDER CONSTRUCTION !??! (2/15/2006) 
For those of you who are gracious enough to make this your occasional pit-stop, my apologies. I'm having the engine and transmission worked on and it may be a few weeks before we're back up and running. Not changes that will be immediately apparent, but adjustments that will allow me to make some innovative new additions over time. Please stay tuned.
Overused Phrases (1/6/2006)
As consultants get accused (and for good reason) of using consultant-speak, so too have professional firm leaders developed their own versions of bland platitudes, bromides, banalities, cliches, and plain old hyperbole. So, for 2006, here is to us all dispensing with the gobbledygook that we've endured for far too long and has been known to cause me to break into either a cold sweat or sob hysterically:
"We're all smart people in this room". Actual meaning: "I don't know what to do with the bunch of mediocrities that I have to deal with!"
"That's a great question" - Actual meaning: "Why the hell did you have to ask me that, are you trying to get me to actually say something important?"
"We're completely focused on execution" - First cousin to the profession's favorite New Year's Resolution: "All we have to do now is execute." Usually indicates the opposite.
"We believe in delivering added-value to our clients" - This statement is usually declaimed with the assertive air of one who feels that, by simply stating this bromide, they have established a clear distinction between themselves and their closest competitors. Listeners remain bewildered.
And other overused and often meaningless bromides: "You've got to pick the low-hanging fruit", "You do the math", and so on.
HAPPY NEW YEAR!
When You Absolutely Must Provide a Discount (12/16/2005) Your last resort should be to discount fees. In such situations, you must extract a reasonable quid pro quo in exchange for the discounted fee. This is because we all know, giving away a service will only cause your client to attach no worth to it, and also create a precedent for repeating the practice. Here is a short list of quid pro quos that you might want to consider:
* I am constantly surprised at the willingness of sophisticated professionals to offer discounts unconditionally. If you are going to offer a discount, that by definition affects your firm's profitability, it should only be in exchange for a commitment from your client that the deal is your as a result of the concession.
* Your request might be that the client pay your accounts on a monthly basis and render payment electronically within two business days of receiving the account. The effect of this quid pro quo is to enhance your cash flow and profitability.
* It may be somewhat easier to provide a fee concession if you can reduce some of the time you or your people might have to spend on the more mundane aspects of the transaction. If your client then would be willing to provide some human resources to supplement the effort, the effect would be to reduce your costs.
*
There could be enormous compensatory value to your firm in having a client agree to serve as a spokesman for your firm or as a reference with interested prospects.
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Fees As A Differentiator (12/2/2005) As you shop for Christmas gifts for friends and loved ones . . . Ain't it cool! Price really does influence our perception of quality.
Now let's take that same learning back to our professional practice. If your fees are high, clients assume that you deliver quality. Why? Because lots of us still believe that you get what you pay for. Since many purchasers of legal services have few objective ways of distinguish good from great quality, high fees is often a determinant in defining excellence.
However, too many professional service firms want to ensure that they have priced themselves somewhere in the middle. In fact they will go to great pains to research what their competitors are charging so that they can say that they are not the most expensive, but neither are they the cheapest. So what
are they really saying?
If you are communicating that you are not the best, but neither are you the worst, then what persuasive value proposition does that communicate? Your message should be, but only if you really do want to differentiate yourself as a provider of premium services, that you charge premium fees, but that your quality is definitely worth it!
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A Few Thoughts
on Law Firm Strategy (11/22/2005) Growing Your Market Share: You can't "grow" market share. Nor does anyone really "share" it. You can only "take it away" from competitive firms.
The Principle of Comparative Position: Your choice of strategy is totally dependent on your position, relative to your rivals.
How Clients Choose: Clients choose based on how good they perceive you to be versus how good they perceive your competitors to be.
One Way To Discover a Strategy: Think of the opposite of your objective. Thus, if you want to make more money, figure out how to make it for someone else.
Consider the Ying and the Yang: Every strength has an equally powerful but opposite potential weakness. Watch for it in challenging your competitors, guard against it in defending your own firm.
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Helping Partners Follow
Through (11/11/2005) Researcher Randy Garner (2005) wondered whether sticky notes, better known as Post-It Notes, might have the power to enhance compliance with a written request.
In one study, he sent out surveys to colleagues with a request to complete the survey. The survey was accompanied by either (a) a handwritten sticky note requesting completion of the survey; (b) a similar handwritten message on the cover letter, or (c) the cover letter and survey alone. The researcher found that the surveys with the sticky note attached to them had a higher compliance rate (76%) than did the either of the other two groups (48% and 36%, respectively).
Why was a simple sticky note so successful? The researcher's reasoning went beyond the mere fact that sticky notes are attention-grabbing in all their neon glory. Garner posited that a handwritten sticky note conveys a more personal request, one that urges the recipient of the request to reciprocate this personal touch by agreeing to the request. Garner also found that those who returned the survey with the personal sticky note message returned their surveys more promptly and gave more effortful and attentive answers to the questions. Moreover, in a subsequent study, he found that including even more personalized information on the sticky note proved even more effective, especially when the request was relatively large.Â
The implications for you are clear: Regardless of whether it's a partner or client, including a personal message with your request is likely to motivate the request recipient to comply. What's more, the timeliness and quality of the compliance is likely to be enhanced as well.
You heard it here first!
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