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EVENTS AND ROUNDTABLES

EVENTS AND ROUNDTABLES > Chief Marketing Officer: The Law Firm Change Agent (Part Two)

EVENTS AND ROUNDTABLES

CHIEF MARKETING OFFICER:
THE LAW FIRM CHANGE AGENT
(PART THREE)






Roundtable Washington

"The biggest problem? I will be a bit controversial and say the people. The people issues just accumulate on a day-to-day basis."

"The talent pool is very thin. We overpay and we overpraise, and we do not have enough time to provide adequate training. The training we are given institutionally, from the LMA and others, is basically pathetic."


Strong words! Following on from our recent CMO roundtables in New York and London, The Legal 500 and Bernero & Press held another discussion in Washington DC in late 2016. We discussed some of the issues that came up in our previous roundtables, and much more besides, with a group of experienced CMOs.


Yolanda Cartusciello, Bernero & Press;
David Burgess, Publishing Director, The Legal 500



David Burgess:

Thank you, everyone, for coming. The previous two roundtables have gone to marketing teams in law firms and partners all over the world. We want them to be reading it, either to learn and realise that they are doing things incorrectly or that there are better ways of doing something, or to make them more confident in their roles. And of course, the whole discussion will be anonymous, except for Yolanda and myself.

Yolanda Cartusciello:

Those of you who know me know that I am a little bit of a geek or a nerd. When I was thinking about starting today’s session, I was thinking of a book I read recently on the history of physics. I do not know anything about physics, but my daughter is starting an engineering programme at college and my husband is an engineer, so I thought, ‘Maybe I should learn a few things.’

There was a statement that was made but, of course, rather than thinking about the physics aspects, it made me think about law firms. The author said that “it seems that the greatest scientific advancements come not when our experiments prove our theories are even more accurate, but when we find ourselves facing a situation where the experiment no longer coincides with the theory.” I think this applies perfectly to law firms right now.

The reason why I started thinking about this as I was reading this book on physics, and of course could not help myself thinking about law firms, is I was thinking about the fact that so many law firms, in my opinion, for the most part and from what I have seen from the outside, market themselves according to capabilities, experience and expertise. However, so much of the evidence from the marketplace suggests that, in fact, it is the client experience that helps law firms distinguish themselves from each other. We are all here and none of us will be named, but I want you to be honest and, with a show of hands, tell me how many of you think that for, if not for every, for most of the practices or offerings in your firm, there is another firm that could do it just as well.

CMO 2:

Do you mean one or two?

CMO 3:

Are you asking the question for most?

Yolanda:

Yes, for most.

CMO 3:

I think that about one practice in my firm.

CMO 2:

It is one to two in mine.

CMO 4:

There are even ones where they may not even legitimately be a competitor, but firms are going to say it and clients are going to believe it, because it is very hard for them to make that distinction.

CMO 5:

I also think that one of your points is about marketing to an area versus an industry, which is a huge subject in and of itself, but also there are so many factors in who could do it better. What are the determining factors – perception, price, reputation, proven record or bench strength? It is much broader. We have a broad selection of firms represented and one may not match the other. I am not sure we all have the same competitive list.

Yolanda:

What I was trying to get to is, if you think about the practices of your firm, there are likely to be other firms out there who will market their ability to do the same kind of work. There are certainly other firms that could do the work, even if you think they cannot do it as well as your firm. What I am seeing is firms gravitating towards marketing on expertise, specialism and capabilities, and I am not seeing a shift towards client experience. I am curious about whether or not you are seeing the same thing, as it may be I am not seeing it from the outside, and what your views on it are. I will just throw that out there.

CMO 6:

I have a view. Over the course of the last two years, we have done quite a lot of work looking at what exactly our message to the market is. There is an element of expertise built into that, but actually there is a very large element of client experience too and what it actually feels like to work with us as a firm. That has been driven off the back of quite a lot of in depth client research, both formal and informal, as well as actually spending a lot of time talking to the partners about what exactly the client is buying when they instruct us.

Teasing that apart, you find that it is that combination of bench strength, particular practice expertise, and what it is like to work with us on a transaction, a dispute or a massive regulatory issue, and what that teaming relationship looks like with the client, on a day-to-day basis, as well as the relationship between the individual lawyers. They see the partners and the attorneys working very closely together in a way that is collaborative, and they know who the other lawyers are when they turn up for the pitch.

CMO 1:

They also see associates and partners run in and out of law firms. That concerns me a little. We all like to say that expertise is the price of admission, but good luck getting into the show without meeting the price of admission.

CMO 3:

We talked a lot about how all of us try to be the voice of differentiation in our firms. That was the word for the last four or five years at my former firm, but now I realise how difficult innovation is. Innovation is just the toughest thing I have to do right. I do not know if I will have a chance to talk about artificial intelligence (AI) and those kinds of things.

Yolanda:

Just jump all over. Go for it.

‘(Clients) see associates and partners run in and out of law firms. That concerns me a little. We all like to say that expertise is the price of admission, but good luck getting into the show without meeting the price of admission.’

CMO 3:

When you think how we literally have to find a way to either bring in house or outsource, in a special way, the whole research and development function, it is not a natural budget item for any law firm, I suppose. Should marketing take the lead there? There is so much data driven activity these days that, when you think that the insurance company AIG now has a unit that works with law firms to help them become more profitable and more predictive in what they are doing.

CMO 1:

They work with in house counsel to cut our bills.

CMO 3:

Exactly, that is just hard. I know it is hard for me. We keep talking about data, probably because we created big data practices groups at our law firm, whatever that means. Now we really have to be a part of that. We have to figure out what that means.

CMO 5:

There is also an internal challenge in selling the value of that data and substantiating that from a budgetary perspective, demonstrating the need and value of the data, and how it is effective in targeting business and client development efforts, and educating people who do not use these tools day to day as to why we need them, how they are valuable and how use of them can point to an actual opportunity vis-à-vis manual labour in the short term.

David:

When we talk to in house counsel, often when they are talking about the use of data and firms being more sophisticated, they are very suspicious that actually what you are doing is using that information to try to make as much profit, rather than actually using it to work with the client. Would you say that is fair?

CMO 1:

We are suspicious that they are using the data just to cut our fees. You know what? We also fetishise in house counsel. They come from our firms, so the same partners I worked with yesterday are now running the in house departments. What suddenly gave them this insight that they never had before?

CMO 3:

It is easier for our client just to hire them, because typically it would be less expensive. Why would you not just do the whole thing? It becomes an issue of whether or not you want to be a data driven law practice, where you are doing predictive modelling and looking at analytics, or if you want to be a rules based practice, which is fabulous stuff. It is like TurboTax; you ask a question and you automatically get what you want and need as a next step.

CMO 5:

It is monetised.

CMO 3:

We are not doing it at my firm and I am scared to death of it, not to mention that I am over a certain age and just trying to work all this stuff. It is crazy.

CMO 1:

Are you too young for it?

CMO 5:

I worry every day about them coming to me with a new tool. I just learned Twitter.

CMO 3:

Financial technology and all of that are just a part of it. I have been fortunate in the firms I have worked with that the CFO, the CIO and I have gotten along. I know of many law firms where that is not the case. We are coming together, because ultimately it is about helping our clients and ourselves internally to figure out how to price risk and ensure we are not taking on too much risk as a law firm. We need to do that for our clients. Clients ultimately want us to do that, and what AIG is doing is selling it as pricing and costing out our risk.

CMO 2:

That is interesting. I am curious about how, between marketing, business development, and also the development of practice management, how many of us have pricing as part of our role, as part of partnering with the unit that does practice development and pricing. That is something that I think is a challenge for me, right now, in terms of internally collaborating with all partners to form consensus on pricing and proposing a new matter. I am just curious.

Yolanda:

Are you saying that you have that or are you working with a pricing officer?

CMO 2:

I am working with a practice management group that has that responsibility, but we are really overseeing that. That role is newer than marketing in law firms, but also it is obviously very influential. Some firms have combined them and some have separated them. I am just curious.

David:

Certainly some of the firms have dedicated pricing directors at a very high level.

CMO 3:

Sometimes they report to the CMO.

CMO 2:

Or to the CFO.

CMO 3:

You have to team with them so much over fees and bringing pitches.

CMO 4:

Ours is another chief level who reports into our executive director. Since that role was formed about a year ago, I have seen that department grow and grow. You think of the number of RFPs, pitches and requests coming in, and we are seeing so much competitive pricing too. Clients are increasingly asking for secondments, even at partner level.

CMO 3:

Clients know more about our pricing structure than we do.

CMO 2:

Clients are now deploying software that analyses legal bills and tells them whether or not we are staffing their matters. I do a lot of different things with our firm and I am trying to make them hire some kind of a practice management person to help me, because I need a partner in my work to help me deal with all the partners with some of the things they should be doing.

CMO 1:

Clients are basically creating internal law firms. They are hiring operational people, who are now mostly very sophisticated. Some law firms, but very few, have replicated that. Bryan Cave has, to some extent, and a few others, where they have their own internal operations groups that are cross disciplinary, as you say. Most of us are piecing it together. I work with the pricing person, the project people and other people. It works out for the most part, because we are used to working with lots of different kinds of people. We are used to fighting with IT from most of our careers. We are used to doing that, and I have lived my life fighting with HR, but it does not feel right to me. It does not feel like we are really in step with the clients, at this point.

‘We also fetishise in house counsel. They come from our firms, so the same loser partners I worked with yesterday are now running the in house departments. What suddenly gave them this insight that they never had before?’

CMO 3:

You are right about the changing nature of our competition. You have the LPOs and the Big Four, and you are not going to see any fewer of them, particularly not in Europe.

CMO 1:

PwC announced today that they are going into Singapore in a big way.

David:

Look at the recent reports from Deloitte about how many lawyers it has, plus a huge amount in its war chest, even if it is under the radar.

CMO 3:

They have more lawyers at Deloitte than many law firms.

David:

Exactly.

CMO 1:

They have an awful lot of money.

CMO 3:

It’s is a whole new profession. I must say that the whole notion of running an in house legal department seems cool to me. A lot of us now have that kind of experience, so we can probably bring a lot to bear to that profession. I know a former chief operations officer who went in house to run the legal department. He is not a lawyer; he is not even that smart.

CMO 1:

I caught on the operations point a couple of years ago and saw one of the first articles about them. I have gotten to know a lot of them and they do not know much more than anybody around this table; that is for sure. In fact, I would say that we all know a lot more than they do.

If you went to the LMA P3 thing, you would start to see the same situation. It is a sea change in the industry. We should be leading it, but I do not really have the sense that we are. Especially CLOC out in Silicon Valley is a little ahead. The ACC operations group has just published a big paper about how to tell your outside law firms what you want from them and how to get more out of them. They are all over it. It is something on which I think we could have more of an impact.

Yolanda:

Coming back full circle to the first comment -- having conversations directly with the clients, and not just anecdotally but thoroughly analysing and really investing in client conversations, bridges that gap.

CMO 1:

That is a big deal. At a recent meeting, a GC from a well-known Silicon Valley company was stunned to hear a group of legal marketers say their top priority for the year was redoing their websites. “What the heck are you people doing?” he said. “Who cares about your website?” Then he said, “Why do none of you ever take me out to breakfast and really focus on my problems?” That was very eye opening for a lot of people, I thought, but we do not do that very much and I do not think most of our lawyers would love us to do that. But some CMOs and client relations staff do it.

CMO 3:

Sometimes it is just by virtue of the fact that you are there at a firm-sponsored event or you pull together the general counsel panel for the annual partner retreat. There are three or four GCs that just naturally gravitate towards me because I get things done.

CMO 2:

You have gone on pitches too? You have been used on pitches, as well?

CMO 3:

It is not the norm, but yes.

CMO 4:

I think it also comes more naturally to us.

CMO 5:

It is social skills, but it is also when you are at that big win dinner. I always tell this to people. Every firm throws a big dinner if we have a big win, but none of the lawyers innately turn to the client and say, ‘How do you do? What are you worried about next? What can I talk to you about? When we have lunch next month, what do you want to talk about?’ If we are in that seat though, we can say that and the truth comes pouring out. That is gold, but it does not come innately.

Yolanda:

Why do we not move to the next topic, which is very much related to what you were saying? If you had the autonomy to choose what it is that you worked on and what the priorities would be for your firm marketing and direction, where would you focus? What would you be doing? How would you go to market?

CMO 3:

I do not know if you saw this month’s Harvard Business Review. There was an article called ‘Putting Products into Services’ or something like that. It was really very well done, but it comes back to the same issue of understanding finances and technology. I would like to be in a position of being able to figure out how we, as a firm, can provide more and better value to our clients. There is an awful lot in just the words ‘better value’ or ‘more value’. It could be technology, financials or the services that we provide, but I do not have 15 minutes to think about that. That is just terrible. It is a terrible order of priorities.

Yolanda:

Let us hear more about what other people would do if they could and then we will come back to your point about not having 15 minutes and talk about what we would get rid of.

CMO 4:

I am doing a lot of what I want to be doing. One of the big things that I launched last year was our client feedback programme. I was very pleased. I know a lot of us already buy into the need to do client feedback but, of any firm I have been in, this had the quickest reception to doing it and setting it up. In between September and February, when we have our partners’ meeting, I did about 40 interviews. That is something I am very happy about. On the point about not having 15 minutes, I would like to do more a lot of it. I was side-tracked by a few marketing technology projects.

David:

Most people have programmes to go and interview your clients, but something that came up in the London roundtable was about pitch feedback. Go the clients and say, ‘Why didn’t we win? What was missing?’ How much are you involved in that, because that can be more critical in some ways, because that is how you grow?

CMO 3:

We only do it for RFPs. It is very useful and it just so happens that we respond to a lot of RFPs, but we typically do not solicit feedback on recently completed deals.

CMO 6:

We have three levels of client feedback. Every two years, we do a large formal client feedback research project. The last one was 18 months ago and covered 200+ clients, and that was done externally. We get aggregated scores and then, if the client permits it, an individual report on the client. That report is shared with the individual partner and the practice group leader. The second piece are the pitch debriefs, which is done by an internal resource. The third is post matter reviews.

CMO 5:

You have started programmes, but we have a huge resistance to any type of formal feedback programme. In my ten years here, no one has ever been able to implement one. It sounds like you were the one who drove this one. In ten years, we have not been able to.

CMO 2:

I am right there with you. I cannot even imagine it. I am so far away from getting them to have the conversation.

CMO 5:

He said 200 and she said 40. I cannot even get one done.

CMO 2:

Exactly.

CMO 4:

What I try to push is having a culture that is all about relationships. People buy people. Where are those relationships and how do you audit them? Hold people accountable. If you can even look at a select group of lateral clients coming in, how do you care for them and feed them? How then do you make them feel good and thank you for giving you their business? How do you follow up? That is one segment. That is an easy sell, but you always have difficult ones, an ex partner or an ex client. You are never going to break into that, because they do not want anybody to talk to you.

‘Clients are basically creating internal law firms. They are hiring operational people, who are now mostly very sophisticated.’

David:

Why is there so much resistance?

CMO 2:

I do not think our partners are concerned about anyone talking to their client, because we have a firm culture of sharing. I think it is more about the partner autonomy and that thought of whether what is going on here at the firm has any impact on that. It is not that they are not sharing; it is just what it means. What are you going to use the information for?

David:

Do you have partners who you think would be quite amenable to this?

CMO 2:

My firm is not amenable to this.

David:

I appreciate that, but if a couple of partners are amenable to it, could you not somehow slip in a little test programme to show the value of it.

Yolanda:

One thing that I would suggest you consider, which may work, which has worked for a couple of CMOs, is to pick a couple of clients who are also alumni and start there. Do not call it ‘client feedback’; call it ‘alumni interviews’.

CMO 3:

That is a very good suggestion.

CMO 4:

Again in building some momentum, for one of my prior firms, I was out in another region and I wanted to do client feedback for the firm. There was, ‘We’re never going to be able to do it this year,’ but this particular region had a very entrepreneurial culture and the partners said, ‘If you want to do it, you do it. Just go do it,’ and so that helped. I do it very much by not overcomplicating it. I know that there is value in getting the detailed book, as some of the consulting firms do, but for me I go in, chat, write it up in a few pages, sit down with you right away and say, ‘Here’s what they said.’

CMO 2:

Do you go back to the relationship partner and share that with them or anyone else?

CMO 4:

I share it with others on the team, but start with the relationship partner.

CMO 1:

We share with the relationship partner and then with firm executives. Everybody knows we are doing it. It started before I joined the firm and had a lot of backing from leadership, which made it easier.

CMO 4:

That is another key point.

CMO 1:

If the firm leader gives you his client to do it, it is a big deal.

CMO 3:

Our biggest impediment is the compensation structure at the firm, which was not the case at my former firm, but definitely is at this one.

Yolanda:

The alumni point is one that people gravitate towards when I say it. The other thing I would say to you is, to the extent that you have a good relationship with the managing partner, presiding partners or executive, tell them – and this has the benefit of being true – I recently did a roundtable with a group of partners from law firms. One was a managing partner and he said, ‘It was so much easier to effect change by using feedback from clients.’ If you tell them it is a tool for them, they may be more amenable to try to meet with one or two.

CMO 6:

That is where ours started. It started as an initiative from a managing partner eight years ago. He had some concerns about our perception in the market. He commissioned some internal and external work to look at what that was, which involved talking to a small number of clients. He presented that at a partner conference, which triggered, ‘We need to know more,’ and from there it expanded over time.

CMO 4:

Another way too is that, if you have friends in-house, even if they are not at GC level, and talk to them, just say, ‘What are you seeing?’ Ask some very broad questions. What I did for some of mine was to type it up in an email and say, ‘This wasn’t a formal interview. However, I thought you would find it interesting to know what they are seeing. This other firm they work with is doing this,’ and that slowly builds, ‘Oh, actually that is interesting.’

CMO 2:

Those are great tips.

David:

Also, making it seem like it is their idea is always the way to do anything. That does not apply just to law firms, I would say. We wanted to come back to what you would get rid of. That was one of the questions.

Yolanda:

This is the old consulting 10%/10% or 20%/20%. If you had 20% more resources, where would you put them and what would you do with them, whether time, money or people? If you had 20% fewer, what would you cut? What would you like to be doing with your time, people and resources?

CMO 4:

I want more people thinking more like business owners, getting out there, going to the offices of partners and managing. I say that to them all the time. If we have an RFP, do a pitch or if there is an e alert that has to go out, it gets done and I appreciate that. They are great at that. They will do whatever it takes, but then there is other stuff that does not have a deadline to it per se. It does not get done. If you have to meet the partners, what have you done for your individual business plans? Where are we on the practice plans? What is happening with this relationship? Are you doing that? I understand, because I did it for myself coming up the ranks, that pitches get done, but I want you to apply that same mentality and discipline, even if it just 20 minutes a day. Just see a couple of partners. Go out there to the practices and make sure they are driving the business.

CMO 3:

Focus on the new recent laterals. Lawyer integration is where so much falls down. You can have the brightest, shiniest penny come in, who is fabulous for the business, but three months later they might feel so neglected, but we in marketing can make a difference. It is one of the reasons why I insist, and this has worked out for me at a couple of firms, that I am part of the team that meets laterals right from the start. It is a huge time drain for me; it is about 40% of my time, when 80% of the laterals who come through do not end up being voted into the partnership.

‘Every firm throws a big dinner if we have a big win, but none of the lawyers innately turn to the client and say, ‘ What are you worried about next?’. If we are in that seat though, we can say that and the truth comes pouring out. That is gold, but it does not come innately.’

CMO 2:

Do you mean non partner laterals?

CMO 3:

No, I mean just partner laterals.

CMO 1:

There are firms that are just starting to develop a lateral integration director. That is what we did in my last firm and it is interesting, because you need somebody internal who really knows the firm, which makes it difficult. You cannot just add this magically.

CMO 3:

It is a huge role.

CMO 5:

We do that at ours too and I make it part of our business development plan. Lateral recruiting is part of what the practice coordinators are doing and part of our plan. I just did my client interviews, so that I was really quiet. It was the second time in 40 years, so I was really excited. We are having our annual meeting in two weeks. We are giving some debriefs beforehand, but we will give a broader debrief to the big groups.

CMO 4:

If I had 20% more time, I would get better technology for my team to be more educated about the client base, the partners and what they do, with that at their fingertips, so that they could be more educated and thoughtful in their interactions, as ambassadors for the work that we do. The 20% less I would take away is the dump from the rest of the firm, which is generally the things that just get funnelled to the marketing department. It is events related and internal communications. It is everything from retreats to functional and task based initiatives that blow up your overheads and your team, when you really want to focus on investing on those who can be your ambassadors, mini CMOs, directors of business development and business development managers, with more education and data at their fingertips.

Yolanda:

You clearly struck a chord with everybody when you were talking about that, because this is something we have heard in other groups as well. You end up in a situation where you are asked to do a lot of things. It is irresistible flattery, to a certain extent, and also a sense of responsibility. It is easier to get it done than to fight about it.

CMO 2:

Exactly.

CMO 4:

You just care.

Yolanda:

I am just curious, because one of the things I started to do in my last firm, before I left, was to institute a programme whereby we were actually educating the partners’ assistants to take on more and more work to help us out. Frankly, to be honest with you, they were delighted to do it after the recession.

CMO 3:

It is exciting for them.

CMO 2:

I do not have that at all.

CMO 3:

You want to take events totally off their plate.

CMO 1:

I tried to do that and they ended up teaching me how to do home shopping from my computer.

CMO 5:

At least they had more to do, because they have more attorneys than they used to. We tried that three or four years ago. We had way too many who did not have enough to do. They were under utilised, but we have all this that we could train you to do. It would be wonderful, because the attorneys work with you all the time, so you could be doing the data.

CMO 1:

We put them on client teams and give them interaction training.

CMO 5:

Yes, we do all of that.

CMO 1:

We make sure that they learn how to do stuff, and they appreciate it. They feel like they are part of something, as long as you make them feel a part of something and not that you are dumping work on them.

CMO 2:

They also have five attorneys now and that is the excuse. ‘Oh, I went from supporting one attorney three years ago, to supporting five.’

CMO 5:

Ours have total responsibility for their partners’ CRM. They are trained and there are extensive programmes. They have total responsibility for maintaining contacts.

David:

What are the incentive programmes?

Yolanda:

Jobs!

CMO 1:

Is that zero attorneys that you work for now?

CMO 6:

There are contests to see which secretary has completed each of their five lawyers’ CRMs completed in time and what percentage have been tagged. They had to use relationship tags, so they were charged with sitting down with their attorney and saying, ‘Is this one through five? What is the actual relationship you have?’ You have a card and an event, where you actually have a relationship. They were tasked with doing those rankings and maintaining them. That is written in their job descriptions now.

In Europe, we have done a much better job, particularly in the Paris office, at giving them responsibilities for helping to maintain files, so that we can easily pull rankings and things like that. They are charged with helping to maintain those. It has been much better in London. There has been a union dispute that that is not part of their job and never has been, nor will they do it, for some of the union job descriptions in the London office. The Paris office is ruled with an iron fist. In the US, it has been the younger, the easier.

‘We have a huge resistance to any type of formal feedback programme. In my ten years here, no one has ever been able to implement one.’

CMO 4:

It is interesting, because I rolled it out first in Asia, then Europe, then the United States. It was so much easier that way. By the time it got to the United States, assistants in all the other offices were already doing it.

CMO 6:

Asia has been the hardest for us.

CMO 3:

I guess it all comes down to process improvement. When you think about what is happening with Six Sigma, Lean and what Seyfarth Shaw does with some of their practices, we have to be there.

CMO 1:

They have those processes, but have they made them that much better? Are they now the Coke of law firms?

CMO 7:

Take a look at their profitability; they are a bunch of fakes. They know how to market that. If they are changing their finances, they are not doing anything that special.

David:

Can I just say that we have just completed our Cient Intelligence Report, with 9,000 interviews, and Seyfarth came out as the clients’ favourite in the United States.

CMO 7:

Yes, that is because they have marketed this successfully. They were well out in front of it. Bryan Cave is now doing the same thing and doing a good job of it. I am not saying we should not do it but, if you want to fake it until you make it, that is one thing. That is a big deal.

CMO 3:

BakerHostetler just hired an artificial intelligence lawyer named Ross.

Yolanda:

That was going to be our next topic. Do you think AI is beginning to change the way legal services are being delivered? Are you actually seeing it?

David:

Also, is it changing legal services for your firms, rather than other people doing it and you having to think how it affects you?

CMO 2:

There is a media request out there today, which I circulated to the head of our corporate group, with a reporter asking about AI replacing associates in M&A. Did you see that? Did you hear about that? He said, ‘I would really like to take time to think about this?’

CMO 3:

Is that for due diligence?

David:

Was that based on the Slaughter and May story that came out recently?

Yolanda:

Yes, I think it is. The publication is looking to interview heads of corporate groups to see that. He actually said that it is something to be considered. ‘I want to think about it before I respond?’ If you identify X things that are forms in M&A you can generate that way…

David:

The story was that Slaughter and May is investing in AI to take work away from their associates, so they have a better work/life balance there. Read into that what you want.

CMO 1:

It feels to me as if it is growing from e discovery and that intense cost. The level of data is beyond belief now, with data analytics now able to deal with it, to some extent, so you are seeing a lot of that technology slop over into over areas. That is not a bad thing; it could be really beneficial. Firms are working with IBM Watson, Ross, Neota and other companies to develop interesting products and service enhancements. I do not believe in the robolawyer thing because, in talking to people involved in these endeavours, such as those at IBM Watson, they are finding out that it exposes just how much we have been overcharging clients for low-end, commoditized work. Clients are catching on to that.

David:

The classic thing is that law firms only change when they are absolutely forced to. They will not do it because they think they have found a great way of working with their clients. It is when they get caught and, therefore, have to change.

CMO 1:

We are starting to be forced to.

Yolanda:

I do not know how many people have been following or are interested in the subject of blockchain and distributed technologies. Clearly you have heard it associated with bitcoin but, far beyond that, the expectation is that the application will be in every industry. It could be as powerful, if not more, than the existence of the internet itself.

CMO 3:

Does Steptoe not have a blockchain practice now?

CMO 4:

I believe that Steptoe has a blockchain practice.

CMO 1:

Is it not mostly about contracts at this point?

CMO 4:

Yes.

CMO 1:

We are not doing that anyway right now. Clients have taken that in house.

‘I want more people thinking more like business owners, getting out there, going to the offices of partners and managing. I say that to them all the time.’

CMO 4:

To the extent that businesses are going to adopt this kind of technology, not only to enforce contracts through automatic payments, but also to create automatic ledgers, firms will need to be able to create code friendly contracts.

CMO 2:

We have had so much success with people coding.

CMO 1:

That is also the kind of thing they are pulling in house. They are pulling work in house in droves right now, by the billions, and we are competing with our clients for the work more than we are with our competitors. We all know what is happening; we are driving for the same little bit of high end work. It is not sustainable.

CMO 5:

Not everybody is driving for the high end work though, right?

CMO 1:

Some firms want to drive for the low end work, but not the firms around this table.

CMO 3:

That is where this whole financial technology business comes in. If you start finding a method to productise repeat work, it may be okay to keep the low end work, as long as you have volume.

CMO 1:

It is okay as long as you are a Wal Mart and know how to do it well.

CMO 5:

If you do not have that, it is huge. If you are still back dealing with outside counsel guidelines, doing e billing or whatever, you would not be there yet. I may be naïve, but most of us are not yet at the point of jumping to that. Most of our clients are not yet ready to jump to that. Yes, we need to be aware, but it is interesting and would be helpful to understand who is already there. It is important to understand where you are marketing. Are you marketing to those companies already there or do you know where your clients are, understand what they want and know what they are going to ask?

CMO 3:

It is predictive stuff, sensing ahead. We call it ‘sensing ahead’ at my firm and it actually works. It started as a marketing and branding instrument and clients love it.

In our proposals we include a section about what is around the corner. It is harder than you think to stay ahead of our clients.

David:

We should come back to the point about innovation, because it seems to be something that everyone talks about and no one can actually prove or do particularly well, except that it seems to me that the people trying to innovate are not the traditional law firms. It is outside that and law firms try to react to it, rather than actually innovate themselves. When you talk to law firms about innovation, if there is any, most of it comes from the marketing and business development side, rather than lawyers, because lawyers are so far behind.

CMO 4:

They are risk averse.

CMO 3:

That is for sure. Martin Lipton was the one guy. Is there a more stellar example of law firm innovation other than the poison pill?

CMO 5:

Try advertising lawyers.

David:

Do you think innovation is overstated? It has become a thing that everyone should do, but no one quite knows.

CMO 3:

It is the next new thing after differentiation. I understand differentiation. I can differentiate myself on a regular basis, because I am talking to laterals, but for innovation in a firm to help clients get better and more value, I am stuffed.

CMO 4:

I laugh. I think of when we used to do the FT Innovative Lawyers. You would really sit and brainstorm. At my last firm, we used to think about what we could do that was innovative.

CMO 3:

Our strategy was to submit seven innovation proposals and we always won one.

CMO 5:

I tell everybody to ignore it, because it falls under my silo and I, we, have actually been really fortunate in many of our submissions. I said that ‘It is the way we think. Ignore the word “innovative”. What was the hardest thing you did or the only you did that was special and different?’ ‘Innovative’ is the worst word in the world. We are not innovative. To one guy I talked to I said, ‘We just did the largest one in history?’ ‘How did you do it? What was innovative?’ He goes, ‘It’s not innovative.’ We just cannot use that word.

CMO 1:

If they are making millions of dollars and they are going to have incremental change from being ‘innovative’, they are never going to do it. I would not.

CMO 7:

I would agree. Usually, when I go out to do the same thing and the FT stuff, you really have to dig in. You really have to dig in and interview people. You find that lawyers just do not think what they do is innovative, but it often is quite innovative.

‘It is everything from retreats to functional and task based initiatives that blow up your overheads and your team, when you really want to focus on investing on those who can be your ambassadors, mini CMOs...with more education and data at their fingertips.’

CMO 5:

They start talking to me and the light bulbs start going on.

CMO 7:

We can position it to those at the FT that it is innovative and we will get away with it.

CMO 5:

It is the storytelling.

CMO 7:

Yes, it is for me too. It is hard to get at for lawyers. Do you know Adam Smith, Esq.? When he first started, he came to my firm. There was a partner there with whom he had practised, way back when, at some firm that blew up. He wanted to know if there was any room left for innovation in capital markets. That was the discussion, and I am like, ‘This is going to be a loser discussion.’ I felt really bad about the discussion and I said, ‘There was so much cool stuff going on, which I do not know enough about. I am a lawyer, but I do not practise law, so I do not know what is happening.’

David:

The point of storytelling is absolutely critical. It is what differentiates you, the storytelling and how you do your submissions for us and no one else. It is the storytelling. When you are trying to bring in laterals in front of clients, what is the story you are trying to put across? People do not do it enough; they fall back on old clichés.

CMO 7:

People think of innovative as a big light bulb over your head. That is not the way innovation works. It is from the ground up, ploughing the fields and finding incremental change, and lawyers do that all the time.

CMO 4:

That is why I was thinking about what you were talking about before. Maybe you would not term it ‘innovative’, but on some level that ‘sense ahead’ work that some firms are trying to embrace is innovative.

CMO 3:

It is a bit of a differentiator for us, but one of the things I have found useful, and I push this as often as I can, is that I have been doing more of these SWOT analyses. Take a 50 lawyer practice and, if you have a normal, good three or four hour SWOT session in a big workshop, if it is done properly – I moderate the whole thing, try to make it funny, dig and be provocative – you can find out a lot from it. There is more going on than you imagine. A lot of us do not have the time to do many three or four hour SWOT sessions, but I am trying to make time in that area.

David:

Do you ever do them just with the associates? When you include partners it can be difficult.

CMO 3:

It is for partners and all lawyers.

David:

If you do them just with associates, you get a very different picture and you find out where the gaps are for the future.

CMO 4:

Here comes the demise of your firm.

CMO 6:

We ran an internal innovation awards programme last year.

CMO 3:

My firm may have too, but they did not advance the firm with our clients.

CMO 1:

I have to say that we have one too and I won. I changed the ply count in the toilet paper, which was pretty low ball.

CMO 6:

For the programme, we used somebody external to help us co design it and we had 200+entries worldwide. We went through a submission process akin to that which you might do for an external set of innovation awards. We went through a shortlisting process with a partner panel to reduce that to about 20. That was then put in front of a senior group of partners and clients to look at the 20 and narrow down, in a couple of categories, those which we thought were best in breed across the firm.

The culmination of that was at our global partners meeting where partners had the opportunity to vote to determine the overall winner.

CMO 3:

Did it have an effect on the firm or the clients, or was it just a lot of work that made people feel good?

CMO 6:

Both.

CMO 3:

You are right.

CMO 6:

The managing partner is pursuing an agenda, which is to make innovation tangible. The point you made was that it comes from the grassroots, from ploughing the field, as opposed to this sudden, magic lightbulb moment. That is what we found, that it is the incremental things here and now that actually made a difference.

Interestingly, I was talking to a CMO a few months ago who was telling me about his firm. It is not exactly the same as what you described, but there are some similar strains in that, prior to the partnership meeting for the year, each office is required to come back with five ideas. The office decides how they put those five together, whether they all have a contest or a vote. He works from the New York office, where they do it one way, but some of the other offices make each partner write something down and have a meeting to talk it through, then they go through a lot of them during the partnership meeting.

‘I understand differentiation. I can differentiate myself on a regular basis, because I am talking to laterals, but for innovation in a firm to help clients get better and more value, I am stuffed.’

I am just curious whether any of you have used client experience or journey mapping as a way to produce some concepts for innovation, in the way you deliver services to your clients?

Yolanda:

Interestingly, I was talking to a CMO a few months ago who was telling me about his firm. It is not exactly the same as what you described, but there are some similar strains in that, prior to the partnership meeting for the year, each office is required to come back with five ideas.

I am just curious whether any of you have used client experience or journey mapping as a way to produce some concepts for innovation, in the way you deliver services to your clients?

CMO 5:

That would involve the client reviews.

Yolanda:

It does not necessarily have to be formal. One idea, if this is of interest to you, if you have clients come in to talk to associates as part of what you do, give them something akin to a client journey map and make them fill it out while the client is talking. That way, they are not sitting there like this the entire time and it might also inspire them to ask questions. If you can make the partners do it too, it might be a very interesting dialogue between the client and the lawyers in the room.

CMO 5:

I would just offer that our map for a client journey is usually given to us or derived by what we see and what we derive from all the data. We look at who is an institutional client, what has happened with that client and try to gather as much data as we can, as to what the lifecycle of that client is, why and where we should focus. If we pick those on which we need to focus, we can delve into the relationships around them. Having the value of true knowledge of the relationship intricacies is the icing on the cake. Often I find that I try to come to the table with the data, make people have that conversation and then try to invoke that conversation around the relationships at each level, within the organisation.

Going back to what we could focus on if we had more hours in the day, I would love to have more data about who are going to be our most profitable clients or where we should spend our time. That would be great, but the reality is that you have to be educated and use that percentage of the time you have for the highest and best use. Much of the time you have to push them for that and really make them think about it.

David:

One other thing is that we know that, outside of law firms, for businesses trying to grow, which everybody is trying to do at the moment – everyone is trying to grow and compete – they start spending more money. They start putting more resources into marketing and BD, and they go up massively. Law firms do the exact opposite; they cut to try to make themselves more profitable.

CMO 2:

That is especially when you go up to $180,000 for associates.

David:

Do you see that changing or do you think it is just going to get worse? To be honest, we speak to a lot of marketing people who say, ‘I feel valued by the firm,’ but actually to feel valued they also have to put money into it, but we are not seeing that. Everyone is trying to do more with fewer people and still produce the same results.

CMO 1:

I am curious; does everybody feel that?

CMO 3:

No.

CMO 4:

I do not.

CMO 1:

I do not feel that.

CMO 3:

I really feel that, if I need more resources and make the business case, sometimes it is just a phone call. It is not like a forum.

CMO 2:

You can really plead the business case.

CMO 1:

I was surprised that that was such a big issue in the former roundtable. I am a mercenary, so I parachute into law firms and usually they are asking me to come in because they have a problem, they want me to fix things and get rid of everybody. Usually, they are willing to throw some money at that, so I have an unusual situation, but I am not sure whether many CMOs are not in the same position.

CMO 4:

If you have the metrics and the data behind what has been spent, what has been useful and what has not, it speaks. If you manage everything and the allocation of resources such that you can push a button and report on where research is going, why and what the revenue result is or not –

CMO 3:

You raise the pertinent point, which is that the biggest frustration with any law firm is when you say, ‘I want to do this. This is a new initiative.’ The first question is: ‘What is Covington doing? What is WilmerHale doing?’ I want people to ask, ‘What is Uber doing?’ What is Boston Consulting doing?’ but they are often not interested in that.

‘People think of innovative as a big light bulb over your head. That is not the way innovation works. It is from the ground up, ploughing the fields and finding incremental change, and lawyers do that all the time.’

David:

It is a sheep mentality.

CMO 1:

You have to say, ‘Well, Skadden does it. Latham does it. We’re in,’ and it always works.

CMO 2:

That helps when you want to use that to your advantage. I now have a chart of everybody who has an informal alumni person to justify having staff in front of them. I went out and asked 20 people, ‘What have you got?’ Here we are; this is what everybody else does. We should get in line with the Joneses.

CMO 5:

There is a strange reluctance. I am doing a summit next month for our practice group. I used to do budgets and business plans and, because of the growth and what is happening in the market, I think there is a lack of consistency and quality. If I use any kind of language that is more business minded, they will not think of it as their business. I want to think of it as being a public company with shareholders, but I will stay away from that type of language, but have the same sort of mindset. It is interesting that they do not think that way.

CMO 1:

I think everybody is becoming more comfortable with data and analytics, and starting to expect, so there is an opening, but it is baby steps at this point.

Yolanda:

Are those firms that have a practice management function, role or department considering themselves businesses? Do they talk and think in that way, or do you have practice management people?

CMO 3:

There is a fine line between hoping that the marketing and business management team will be successful, and doing what is right by the client and ensuring that cross selling is ingrained in the practice. Sometimes the practice management function leads to the return of silos, which is my big issue. I think we are best as a firm when we are all sharing information about our clients and cross selling to industries, practice groups, offices and those kinds of things. Practice management can become a slippery slope because, if you start running like a business, at some point the practice group is going to say, ‘I want to be responsible for my own marketing manager and my own business development manager. As a result of that, I am going to manage them, and they do not even report to the CMO. It is not about a reporting structure, but it becomes so siloed that it is awful.’

CMO 2:

It would be more beneficial if that one group that is extremely successful, rather than siloing themselves off, became the leaders and the stars for what could be done in other areas.

CMO 4:

That is my plan: to share that best practice.

CMO 6:

We sometimes find that practice group marketers, because they are embedded in the practice group and sit on the same floor as the lawyers, not in some central hub, can go native. That has its advantages, - they are then closely associated with the lawyers, but sometimes they can start to take on the same perspectives and characteristics of the people they are working with.

David:

We are almost at the end. We normally finish this with a very quick opportunity for everyone to have a proper old moan about the things that they hate most, which drive them up the wall about their jobs. What do you hate? When do you say, ‘Just get it out of my way’? Be honest.

CMO 4:

Lawyers cannot say ‘no’ to each other. There is often a lack of leadership and ability to say ‘no’ from the top. It is an impediment, and then we have to do it in our roles.

CMO 3:

That manifests itself in requests for RFPs.

CMO 1:

Lawyers think that they were all created equal.

CMO 2:

They are not.

CMO 3:

I do not want all of our problems to be because of lawyers. That is our chosen profession.

David:

You have to accept part of it.

CMO 1:

It is The Godfather: this is the world we have chosen.

CMO 6:

I will be a bit controversial and say the people. The people issues just accumulate on a day-to-day basis.

‘I would love to have more data about who are going to be our most profitable clients or where we should spend our time.’

CMO 2:

That is exactly what was on my list.

CMO 1:

We have a quorum now. We are basically finance and HR people. I am an accountant. Do not pick on the millennials.

CMO 5:

I will tell you – and my name is attached to this, so all the people who have ever worked with me will know I said this about them – that I do not actually think that is specific to millennials. I have found in my career, with my personality, that I have a lot of trouble with people like that. What ends up happening is that I tend to gravitate towards not hiring them. I do not know if I have picked that up along the way but, when I end up with them, they quickly learn that it is not going to work very well.

David:

Controversially, if that is what they are like and you are not going to change them, do we have to adapt a little more?

CMO 3:

That is where I come from.

CMO 5:

I have been in that class. It is my responsibility as manager to adapt to them.

CMO 1:

That is a bad class.

CMO 7:

It is a big class.

CMO 5:

It was not here, but absolutely because I am always the oldest person in the room. I think I have at least four people working for me who are younger than my youngest child. It does amaze me how their mind works; it truly does. I like to think I filter them out. I am really fortunate that the last two people I hired did two years for me as interns, via a Drexler programme. I knew what their work ethic was, but it is really difficult, particularly in junior roles, to figure out who is going to fit. I wrote down staff retention because, having been one of the longest tenure people in our marketing department, I have ended up training everybody, helping or being the person who they called to say, ‘Tell me who does that.’ In particular with the junior people, 18 months in, I have to start over.

CMO 1:

My feeling is that the talent pool is very thin. We overpay and we overpraise, and we do not have enough time to provide adequate training. The training we are given institutionally, from the LMA and others, is basically pathetic.

CMO 3:

I am fortunate to have relationships with about a dozen or more CMOs. If their résumé come to me, all I do is send them a text with the name of the candidate and ask for a thumbs up or down. We know each other well enough to do that.

CMO 1:

I just had a comment from somebody who left the core group about 18 months ago. One person has been with me since I came here, I have somebody celebrating five years and another person who said, ‘Why would I stay? Your people do not leave. I am not going anywhere.’ I am like, ‘You’re 18 months out of college and you are telling me you want the job of somebody who has been here doing this for 10 years.’

CMO 5:

It is delusional.

CMO 1:

I would say a different thing. I would say, ‘The chances that you and I are going to be here in a year are slim to nil, and I’m not going anywhere.’ What happens all the time is that they end up with a better job, which kills me. They make more money and they go to a different firm, because the talent pool is very thin. I am really talking about the lower level, the coordinator level, and they tend to be life blood of the organisation. They are the people I rely on.

CMO 2:

They are the worker bees. I think New York is the hardest market to maintain people though.

David:

The thing is that, if the talent pool is very thin, it becomes your responsibility to raise it.

CMO 1:

You generally have better people in the UK, because they are trained.

David:

If they are not good enough, you have to make them somehow.

‘The first question is: ‘What is Covington doing? What is WilmerHale doing?’ I want people to ask, ‘What is Uber doing?’ What is Boston Consulting doing?’ but they are often not interested in that.’

CMO 1:

You never have the time to train them and do not have training programmes. It is very difficult.

CMO 4:

I have to say I disagree a little about talent pools.

CMO 1:

But you are a nurturer; I am not.

CMO 5:

I know of one CMO whose famous line with staff is: ‘I’m not Julie, the cruise director. This is not The Love Boat.’

CMO 3:

I want young people to be liberal. That is the problem.

David:

It is looking very rosy for the future. We want them to be old, or go away and be better.

CMO 1:

You should do a whole sidebar on this.

CMO 2:

One of those millennials will be here telling us what to do.

David:

Thank you very much; I think this would be very much the right time to end this, but I think we will pick up on some of these latter points at our next roundtable.