Managing Internal Committees and Leadership
As the lines between partners, associates, and staff continue to blur committees that were once comprised strictly by partners are now comprised of members from various positions throughout the firm. Managing these committees well is critical and often includes working with people who have goals and expectations that sometimes differ with others in the group. There is value in these differing opinions, however, and the Chief Operations Officer (COO) should work through them to find the right solution without dismissing either side’s opinion or siding with one person over another. Conflicts like this can help provide insight on issues such as how to reduce staff turnover, maintain partner profits, or identify areas for cross collaboration or process improvement. It can also help set partner and staff expectations and solve nagging issues, like communication, throughout the firm.
Like committees, leadership in the firm is no longer limited to partners. Leaders are now found in other C-level executives, staff members, and even associates. The COO often has a unique, bird’s eye view of the firm and has the opportunity to bring leadership efforts together into a single, focused vision that ensures all parties are working toward a common goal while reducing duplicate work and wasted effort.
The COO should also be on the lookout for up and coming leadership. With an industry focus on succession planning for individual attorneys, leadership planning is not always a priority and firms can experience difficult times when leadership changes occur. Mentoring potential leaders earlier in their careers can help negate these issues and promote a smooth transition during times of change.
Cross Selling and Upselling Clients
Cross selling and upselling clients can be a difficult task for some attorneys. Attorneys are not always natural salespeople and asking them to cross sell or upsell to their clients can induce stress, fear, or flat out refusal to cooperate. The COO can help alleviate this burden by changing the sales process.
The firm’s clients and practice areas should be monitored for potential sales opportunities through the use of business and competitive intelligence tools. When an opportunity is defined, the COO should work with the client’s current attorney to determine the appropriate resources for the opportunity as well as a plan of action. This plan could take many forms, including the COO assisting in or leading the pitch to the client.
In order for cross selling and upselling efforts to be successful, the COO should be familiar with the skills of the firm’s attorneys in order to make appropriate recommendations for sales resources. In absence of having acquired this knowledge holistically, which can take considerable time, the firm can implement a resource that allows the attorneys’ skills and practices to be captured, cataloged, and made searchable to both the COO and the firm at large. These tools use information like clients, matters, practice areas, work product, professional development, and biographical information to determine skill level and recommend an expert based on the topic queried.
In addition to changing the sales process, the COO should also look at the way that origination bonuses are applied. Attorneys tend to guard their clients closely due to the bonus structure and this behavior can become a road block to sales efforts. The COO will need to address the way these bonuses are handled to maximize cross and upselling efforts without marginalizing the originating attorney.
Alternative Fee Agreements
Alternative fee agreements (AFAs) are a hot button topic in the legal industry right now and the demand for them continues to increase as clients put more pressure on firms to deliver better service for less. The COO plays an integral part in helping set pricing for each matter that is competitive within the market yet still profitable for the firm. Previous matters of a similar nature should be reviewed to help estimate the amount of work and resources that have typically gone into that type of matter, which then drives the pricing model of the AFA. The COO should also understand the client’s expectations to ensure that the agreement offered is inclusive of those expectations.
There is also a need to look at the way a matter is staffed and what resources are being used, which can help reduce the cost for the client and increase profitability for the firm. The COO needs to be familiar with what level and type of resource each task within a matter truly requires. Assigning work to a non-partner attorney, associate, paralegal, or additional staff member will allow the firm to offer their client a better agreement while maintaining profitability on the matter. It also provides the partnered attorney more time to complete higher level work and develop additional business for the firm. Using new technology and resources, such as artificial intelligence for contract review and research, can drastically improve the speed and accuracy of document review and legal research, allowing a matter to be completed more quickly with fewer errors.
Evaluating and Analyzing ROI
Return on investment (ROI) is not only measured by dollars and cents. Ask any librarian who still has to buy statutes in print for his or her attorneys. Sometimes, even though the books are an extra cost to the firm and duplicate online content, it is easier for the attorney to work with the print. In this case, the ROI is justified by the attorney’s ability to work more quickly with reduced frustration.
When reviewing ROI on matters, if two outcomes of a similar nature return the same profit, the time spent and resources used should be reviewed to determine if one process is faster or used less expensive or fewer resources. Depending on the firm’s objectives (speed versus staffing), one process may outshine the other and help guide the COO about how to use the firm’s resources more efficiently as well as plan for the future needs of the firm.
Another important aspect of non-financial ROI, and possibly the most important aspect of ROI in general, is better client service. If clients aren’t happy with the work and the rate they receive, they will take their business elsewhere even if they have an established relationship with the firm. The COO needs to ensure that the firm’s work product and resources used are, at minimum, meeting a client’s expectations and constantly look for ways to improve service while working within the firm’s objectives.
Read Part One here.