Last week, I focused on the stupidity of competing on price as opposed to competing on quality and service. And I understand, young lawyers believe all they have is the ability to compete on price. More experienced lawyers believe they have to compete on price because today’s clients don’t care about anything but price.
You can convince yourself of anything. As for price, convince yourself of this — continue to compete on price and you’ll spend your career becoming the cheapest lawyer in town.
Now let’s talk about using the competition as a resource….
A plumber once told me, “There’s price, quality, and service — I can only give two. Pick which ones you want.”
In the service business there are those that focus on beating the competition the easy way — price. Quality and service are often assumed by unknowing clients who believe that a $500 lawyer is going to offer the quality and service of the $5,000 lawyer (sometimes that’s true). You find out your “competition” quoted a flat fee of $10,000 for the representation, so you’ll do it for $7,500.00. You’ve determined the client is only hiring on price, and you’re good at price. You would never think to tell the client that your fee is $15,000.00. You don’t feel confident in your quality or service, nor that the client cares. You’re just trying to compete at the lowest common denominator.
Focusing on the competition is a waste of time. I see it over and over again. A group of lawyers start a niche and there is a standard fee no matter who you hire. Then some young broke stud jumps in and charges $20 less. A few years later, everyone is charging 60 percent less. No one is making money, except those that aren’t focused on the competition….
Smaller firms which compete with their Biglaw brethren on cost often promote their efficiency and lower overhead. Understandably, these firms impliedly or expressly try to associate lower overhead with lower fees for their clients. Smaller firms have been so successful with this approach that overhead often seems to connote waste and inefficiency. But overhead is sometimes a necessary evil, and it behooves small firm entrepreneurs to remember the “necessary” aspect as well.
For example, forsaking a physical office in favor of a virtual shop obviously lowers a firm’s overhead and allows the firm to offer lower fees. But many people, including me, have written about the several benefits of having a physical office. I pointed to benefits such as credibility with clients and other lawyers, and helping yourself stay motivated and focused. This is an easy example of how lower overhead may impose a hidden cost on the business.
Of course, the biggest overhead expense for most law firms is payroll. Limiting the number of employees is the surest way to keep expenses under control. But is it always the right move?
Once upon a time there lived a fisherman named Jay Dee. Every day Jay went to Lake Beeglaw to fish. Lake Beeglaw was the biggest lake in the entire country, and it was home to the biggest fish. Just one fish from Lake Beeglaw could feed a family for weeks. Consequently, Lake Beeglaw was the most popular fishing lake in the country.
But fishing at Lake Beeglaw was hard for Jay. Because the lake was so popular, Jay had a very difficult time even finding a place to cast his line. Jay had only a small canoe, and the bigger and more established fisherman all had big commercial boats. Whereas Jay used a simple fishing reel, many of the other fishermen used nets. Jay sometimes went weeks without receiving a bite, much less catching a fish.
One day, Jay decided to leave Lake Beeglaw and find another, less crowded lake…
Law bloggers, including me, spend a lot of time talking about the economics of being a lawyer. This site voraciously covers news about salaries and bonuses, and often opines about the financial value of a law degree. I, too, often write about some particular financial aspect of managing a litigation boutique.
But as I have told countless prospective and current law students, if you’re in it for the money, you’re in the wrong profession. And this was true even in the glory days when six-figure bonuses were routine, and when students were only half joking when they called for starting salaries of $190,000 per year.
Virtually no amount of money can justify tolerating everything it means to be an attorney. Ask someone like Will Meyerhofer. The billable hours, the deadlines, and the overall stress makes many attorneys question why they ever went to law school in the first place. Dear 16 year old me…
For the next few months, I am working and living in San Francisco. It’s not surprising, but I have met some interesting folks since I moved here. And, I have learned not to sit down on any public space.
It is safe to say to that it is a different world here than in Chicago. This difference, I have learned, is present not only outside of the office, but inside as well. How? No, people do not go to work naked (at least not many). According to several small-firm attorneys, this difference manifests itself in a work culture that stresses healthy competition in a supportive environment.
Let’s examine this difference in a little more detail….
Isn’t it annoying when the YouTube video you’re watching just stops loading right in the middle? Or when your Skype connection suddenly starts sucking in the middle of a video conversation?
Well, it turns out that in Europe, sometimes stuff like that doesn’t happen accidentally. Internet Service Providers intentionally “throttle” certain kinds of web traffic.
The European Union is sick of this. On Tuesday, the European Commissioner for Digital Agenda threatened new legislation and public humiliation for companies that don’t allow consumers easy access to a free and open Internet. That’s right, kids; the net neutrality debate is hot in Europe, too….
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months, and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
The evolution of relationships between the genders continues. Currently, in law firms, there is an interesting conundrum; balancing the desire for a gender-blind workplace where “the best lawyer gets the work and advances” and the reality of navigating the complicated maze created by the fact that, in general, men and women do possess differences in their work styles. These variations impact who they work with, how they work, how they build professional connections and how organizations ultimately leverage, reward and recognize the talents of all.
Henry Ford sat on his workbench and sighed. A year earlier, he had personally built 13,000 Model Ts with his own hands. Fashioning lugnuts and tie rods by hand, Ford was loath to ask for help. Sure, there were things about the car that he didn’t quite understand. This explains the lack of reliable navigation systems in the Model T. But Ford persevered because he knew that unless he did everything, he could not reliably call these cars his own.
“Unless my own personal toil is responsible for it, it may as well be called a Hyundai,” Ford remarked at the time.
The preceding may sound unfamiliar because it is categorically untrue. And also monumentally stupid. Henry Ford didn’t build all those cars by hand. He had help and plenty of it. Almost exactly one hundred years ago, Henry Ford opened up the most technologically advanced assembly line the world had ever seen. Built on the premise that work can be chopped up into digestible pieces and completed by many men better than one, the line ushered in an age of unparalleled productivity.
Today, an attorney refers business because he can’t do everything the client asks of him.
There are three reasons why this is way dumber than a made-up Henry Ford story…