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Nov 13, 2001


The Organizational Lifeblood for Law Firm Profitability – Active Coordinated Communication

The Organizational Life Blood for Law Firm Profitability:
Active Coordinated Communication
By Dr. Thomas J. Venardos

A Viable Way to Address Profits in Your Law Firm

A new generation of law firm lawyers need new tools to maximize profitability. These tools combine the marketing of the law firm services, reinventing the law practice, promoting business to business practices, having improved public relations, creating a new law firm structure, and developing goals that can be very powerful and profitable. The tool that can accomplish this is active coordinated communication.

The Problems That Exist for Law Firms What kind of information should be shared with internal and external clients? Who should receive different levels of information? Should you provide both negative and positive information to clients? Should you tell clients what they want to hear, or should you tell them what they need to hear? These are the basic questions facing management leadership in today’s law firms. This is why there is a need for consistent, up and down the chain of command, simple, active coordinated communication that can help improve profitability.
Basically all communication is “human communication.” This means communication speaks not only to the political structure of the law firm but to the personal and professional side as well. Listen to any conversation between two coworkers or two senior partners and you will hear comments that relate to law firm morale problems, fairness issues, exclusion from decision making, loyalty to the company, profit margins, as well as problems in using current technology.
Minimal communication, miscommunication, and no communication are the main factors that can cause law firms to stagnate. When these factors prevail, effective communication loses its influence. Communication is unable to be coordinated across and between practice group lines or to the clients outside the law firm. This essentially means effective communication is muffled and distorted at all levels. The best solution is to make communication a major priority so that it can be managed effectively and coordinated internally and externally. This takes leadership that is objective and not involved with rumors, willing to grow from mistakes made, and uses personal and professional incentives rather than threats or innuendo attempts to obtain desirable workplace results.

Reinventing the Law Firm Culture Positive change occurs when small steps are taken even though the big goal of reinventing the law firm culture is at stake. It begins with small successes that can be observed and measured and proceeds to a larger feeling of oneness, filled with accomplishments. It builds on itself and becomes important to everyone.
Below is the sequence for positive change:

  1. Sharing all information, data, and goals with everyone-both internally and externally.
  2. Being available to answer any questions asked by others.
  3. Informing others, in a totally honest way, that your answers and possible solutions to problems are based on facts and not biases.
  4. Building human trust using your reputation by making ethical decisions.
  5. Using face to face communication as your primary communication method.
  6. Correcting mistaken assumptions quickly.
  7. Overriding mistakes with positive solutions.
  8. Creating a legitimate and visible position for a communicator role at the highest level with total support from senior partners and staff.

The Case for Coordinated Internal/External Communication
In reality, lack of communication or confusing communication is a basic problem faced by most staff and professionals. It is the major issue to overcome. Therefore, it would seem natural to assume that the way to correct this is by having the communication enhanced by a member or team of members of the staff while giving it the highest priority in the firm.
Those responsible for communication would in turn be expected to assume the powerful role of sharing all the important and critical information that flows through and out the law firm. In essence they need to have:

Professional Traits Necessary for Enhancing This Kind of Role
In the eyes of those in the law firm a communication department of this stature must have many of the following professional traits: be credible with the public, be believable, have accurate information to share, be timely, have good professional judgment and wisdom, be sensitive to everyone they come in contact with, be accessible, And promote confidentiality. This is a tall order for any one person or group of people. But the result that it yields is greater than the sum of its parts.
The point is this, whenever you communicate law firm information, it concerns human elements. So it is important to represent the issues fairly with people in mind. There needs to be a separation of issues from personalities. Both positive and negative feelings should be taken into account. Finally there should be the realization that there are supporting and opposing opinions and perceptions that create innate conflict and must be dealt with by overcoming any potential human conflict.
Further, when coordinating sensitive information it becomes necessary to speak with one voice, simplify the message, and use a variety of communication tools. Every aspect of human relations should prevail.

Communication Tools for the Twenty First Century
Like newspaper, radio and television were communication tools for the Twentieth Century, so it is that computer technology is the newest tool for the Twenty First Century. Herein lies the potential success of the communicator.
Computer technology can be used for both internal and external communication. It is an efficient tool that has multiple uses: word processing, verbal, visual and auditory e-mail, information gathering and disseminating capabilities, monetary transaction ability, global influence and positioning, business to business relationships, record keeping materials production, creative materials development, distance education and career enhancement potential.
In turn this technology can be used as a mobile office which works best for those professionals on the go and who need to keep in contact with their office and clients. Therefore, active coordinated communication can be implemented nearly all of the time.

The Powerful Effects of Active Coordinated Communications The list below reflects how active coordinated communications can create more profits for law firms provided it is established in a professionally sound manner. It will take creative risks, planned directives, monetary support, time investments, a high learning curve, and innovative adopted business practices.
Creating a New Law Firm Structure: By creating this new active communications structure that oversees both internal and external activities, your law firm should generate a more consistent, meaningful and effective means of generating greater business. This kind of structure could in turn create the loyalty, security and growth your employees are looking for. Law Firm Objectives: These need to be established by all employees of the law firm, and should attempt to promote personal productivity, monetary aspirations, profit sharing, compensation issues, cost cutting measures, marketing strategies, and business practice skills. These shared objectives can then be communicated by everyone. Marketing Law Firm Services: This is a distinct plan for everyone to be involved in because marketing is such an important priority today. Active coordinated communications can enhance this practice via different activities: speaking engagements, newsletters, advertisements, a web site, television appearances, brochures, newspaper and magazine articles and, Internet business to business practices.
Reinventing the Law Firm and Law Practice: There needs to be a focus actively changing the way the law firm does business by establishing flat fees, using non-billable hours to work productively, offering ways to help clients keep costs down and, expanding practices by having other professionals make referrals.
Business to Business Practices: Begin to use legal resources on the Internet that deal with business to business issues like finding your law firm clients, putting out bids, allowing them to bill and collect for your firm, and marketing your firm on the Internet.
Improved Public Relations: Your active communications can lead to better public relations if you control what is said and how it is delivered to others. Your image can become valuable if you work on making it positive and more acceptable to others in the community.
Document, Document, Document: There is a critical need to measure what you are doing so that you can see any progress. This can be done by counting the number of activities each person performs in the law firm, counting increased client contacts and inquiries, reviewing accounts receivable and collections and, identifying cost cutting measures.
Can You Answer These Eight Questions in the Affirmative?

Unless you can answer at least six of these eight questions in the affirmative, there is room for improvement of law firm operations. Positive change begins with admission of the problems and proceeds with workable solutions that are openly discussed among everyone.

Where to Begin:

  1. Find someone in the firm, or hire someone, who is very comfortable with expressing themselves in written and spoken fashion.
  2. They should demonstrate clear, effective writing skills.
  3. They should be competent on the computer and with the Internet.
  4. Your clients and others in the firm should think highly of them.
  5. Involve a person who is very familiar with new technology and who is good at learning and using it, because they will have a different way of thinking that can benefit your law firm.
  6. They must be assertive and speak up when they are challenged.
  7. They need to be able to measure all the results of active communication in the law firm.

Active Coordinated Communication and Profitability Increase
The relationship between active coordinated communication and increased profits becomes clearer when hard data is gathered and analyzed. Examples where you may want to gather data are listed below:

The lifeblood of a law firm is how it effectively communicates from within. The sooner this is realized and made a reality, the quicker you will start to generate the results you want.

Dr. Thomas J. Venardos is an adjunct management consultant with Olmstead & Associates, Legal Management Consultants, St. Louis, MO, and President of Venardos Management Group, Organizational Performance Consultants, located in Las Vegas, Nevada. Dr. Venardos may be contacted by e-mail at tvenardos@olmsteadassoc.com.

Mar 29, 2001


Case Management Software For Law FIrms

Question:

We are looking to implement a case management system? Does anyone have any suggestions?

Response:

There are several good systems available. Some such as those from Elite and Prolaw are excellent systems that are fully integrated with accounting and other office systems. These systems are typically found in the larger law firms. For small firms, Amicus Attorney, CaseMaster III, and Time Matters are good systems. We like the CaseMaster III product from Software Technology since it is fully integrated with their time and billing system.

John W. Olmstead, MBA, Ph.D, CMC

Mar 29, 2001


Law Firm Marketing Budgets

Question:

We are trying to establish our first marketing budget. What are most firms spending as a percent of revenue?

Response:

This can vary widely based upon type of firm, philosophies, etc. Surveys show, that on average, firms marketing spending, as a percent of revenue, is approximately 2-3%.

John W. Olmstead, MBA, Ph.D, CMC 

Mar 27, 2001


Reducing Staff Turnover in Law FIrms

Question:

Our firm is having a lot of difficulty keeping our clerical employees for longer than 12 to 16 months. Our reimbursement plan appears to be competitive. What suggestions do you have that might help us keep our employees longer?

Response:

Usually turnover problems of this nature can be traced either to poor personnel selection practices or the firms management practices. Today employees want more from their organizations than just having a job — they want to be part of the firm and to contribute.

John W. Olmstead, MBA, Ph.D, CMC

Mar 20, 2001


Law Firm Advertising

Question:

What is your opinion regarding law firms that advertise extensively?

Response:

It should be remembered that advertising is only one form of promotion and promotion is only one of the four elements of a firm's marketing mix. Other elements such as service strategy, pricing strategy, and service delivery strategy are often more important to the firm that its promotion strategy. For firms that are providing commodity type legal services such as personal injury, divorce etc, extensive advertising can work very effectively. However, for firms that are providing customized differentiated legal services this form of promotion is usually not effective nor appropriate. This is why it is so important for law firms to formulate their business and marketing strategies and plans before implementing specific marketing promotional programs.

John W. Olmstead, MBA, Ph.D, CMC 

Mar 04, 2001


Differentiation From Other Law Firm Competitors

Question:

I find it very difficult to differentiate our firm from the competition with respect to marketing, etc. What specific suggestions might you have regarding methods and/or ideas that we could use to increase our market share?

Response:

You need to begin asking you clients about their needs and thinking from your client's perspective. Budgetary certainty and knowing in advance how much a matter is going to cost is important to clients. Efficient operations and the general office environment is important. Lawyers that can listen to their clients and understand their clients problems. We believe that satisfying client needs and expectations, providing outstanding service quality, and adhering to the highest level of ethical standards is a strong beginning.

John W. Olmstead, MBA, Ph.D, CMC 

Feb 12, 2001


Threats Facing the Legal Profession

Question:

What are the primary threats and challenges that the legal profession will face in the next decade?

Response:

The biggest threat is the public perception of the image of the legal profession. In addition the continued saturation of the legal market, reduced demand for legal services, and oversupply of lawyers. Law firms are going to have to change their mindsets and their organizational cultures as well as their methods of doing business. Quality of legal services must be improved. New delivery methods must be implemented and new price options offered.

John W. Olmstead, MBA, Ph.D, CMC 

Jan 27, 2001


Leadership and Accountability in Law FIrms

Question:

What do you see as the primary management problems in law firms?

Response:

We are frequently asked to assist law firms in areas such as management reviews, marketing, compensation, and strategic planning. However, these are often symptoms of another problem – leadership, trust, and accountability. Frequently we find that unless proper leadership is in place we are all wasting time on attempting to treat the symptoms. Without sound firm leadership at the partner level other initatives are never able to get off the ground. Law firm leadership is the top challenge facing the profession today.

John W. Olmstead, MBA, Ph.D, CMC

Dec 12, 2000


Law Firm Retreats

Question:

Why are more legal firms using management retreats?

Response: 

Retreats provide management with the method for resolving major concerns quickly and efficiently. You can get solutions to reducing wasteful costs, tips on increasing client satisfaction and, techniques for improving bottom line revenues, an honest exchange of ideas and a lot more. What do you have to invest? A little time, money and some hard work. It's a small price to pay for taking a step toward being on the cutting edge.

Dr. Thomas J. Venardos

Oct 12, 2000


Committment To Higher Standards and Higher Education

Question:

How can we effect change in our law firms?

Response:

Changing professionals and law firms takes a personal commitment on the part of the staff involved. It requires a deep sense of wanting to invest in themselves. This type of investment demands long-term professional commitment with an understanding that time and money must be invested. If you want to yield real results with bottom line gains, the commitment must come from the professionals in the law firm.

Dr. Thomas J. Venardos

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