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What do clients want, and value?

What can law firms do to understand better what their clients want, how can they communicate value to them, manage their expectations and deliver what they’re asking for? What follows focuses on the pricing aspect of the relationship between clients and law firms. 

This article was originally published in the Solicitors Journal

Information overload

I’m old enough to remember a world without PCs, tablets and smartphones. The problem nowadays isn’t accessing information about what buyers of law firms’ services want, it’s filtering what’s out there and sensibly interpreting it. A Google search (other search engines are available) a moment ago of ‘What do clients want from lawyers?’ produced 61,900,000 results in 0.25 seconds. Page 1 of those results included both, for me, the expected and the unexpected, with links to pieces in or by Lexis Nexis, Lawyers Weekly and Law Firm Ambition very much in the former category, alongside academic treatises and articles in niche publications such as Biomass magazine. I might have expected to see the Competition and Markets Authority on there, US-based consultancy Altman Weill, maybe the Legal Services Consumer Panel or the Property Academy. None of them made the first ten pages.

A word of caution then in interpreting what you’ll find out there. The Legal Services Consumer Panel tells us for example that after reputation (78%), price is the next (72%) most important factor for a client choosing a legal services provider. But it depends on (a) who you ask and (b) how you ask the question. As to (a) are they asking experienced buyer of legal services, for example an owner of their own business, or the kind of individual that uses a lawyer three or four times in a lifetime? There’s nothing wrong with the latter, but you won’t learn anything about sophisticated buyers of legal services from them. And is the question open (‘which of these would be important to you in choosing a law firm’, in response to which case a person might tick many or even most of the boxes, giving the kind of results that the Panel obtained), or closed (‘of these four factors, which would be the most important to you in choosing a law firm’), in which case reputation and recommendation would come out far ahead of price – see for example the Altman Weill 2014 report, Law Firms in Transition, where fewer than 10% of regular buyers of legal services said that ‘lowest price’ was the approach to pricing that they wanted from their law firms.

Now in its 10th year with half of all US law firms with 50 or more lawyers participating, the Law Firms in Transition survey by Altman Weill has become a valuable resource for insight on law firm strategy and the opinions of firm leaders. Although the research and the report are US-centric, I have little doubt that if the exercise was replicated in the UK market, the results would be very similar. The report is wide ranging in its remit and worthy of reading from cover to cover but my focus is of course on what is happening in the world of pricing. The report reveals that “adding a pricing director or assigning pricing responsibilities to a current staff member“, is rated one of the top three tactics that has resulted in a “significant improvement in firm performance”. Interestingly, 85% of respondents said that they were proactively initiating conversations about pricing/budgets with clients to better understand what individual clients want. This fundamental shift from an adversarial paradigm to a more constructive and collaborative one must inevitably produce better outcomes for both the client and the firm.

What are we going to do about it?

All lawyers really need to do is pay attention! Clients are telling us what they want in a myriad of ways (in their RFPs, on their feedback forms, in the activities of our competitors, etc) and on a day to day basis. There’s a well-known slide used in many a PowerPoint presentation showing a hole in a wall. The idea is to remind the audience that people don’t buy drills, they buy holes. People don’t want a taxi, they want to get somewhere. Clients don’t want to hire lawyers: they want results, outcomes, peace of mind, communication, empathy and understanding, strategic partnerships and of course expertise. These attributes of course have nothing to do with time in the sense of the billable hour – but that’s another topic altogether!

The real question is of course not what do our client want, but what are we going to do about it? Some of the things we can do include:

  1. Focus on offering quality of service rather than legal expertise.
  2. Take time to understand the client’s point of view.
  3. Be proactive in discussing alternative fee arrangements.
  4. Develop pricing systems and templates.
  5. Learn continuously – monitor performance and identify opportunities to improve.

Other practical steps are covered in more detail hereafter.

Price and value

Value is the most important aspect of price, price management and pricing policy. Or, to put it more precisely, the value perceived by the client. The willingness of clients to pay and therefore the price targeted by the firm are always just a reflection of the perceived value or benefits of the advice and service being provided – nothing more and nothing less. I always remind lawyers that the price is what clients pay; value is what they get.

A transaction takes place only if the law firm and the client can agree on a common price. Many law firms are unhappy about the prices they have been able to achieve in recent times. The lowest price offering always seems to come out on top (that is not the reality but it is certainly the perception). The race to the bottom is still on and reminds me of John Ruskin’s famous words: “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”

As a lawyer, it’s tempting to think that clients are paying for your legal expertise. The more expert you are, the more they will be prepared to pay. But research suggests otherwise. Domestic conveyancing offers a clear example. Clients expect conveyancing to be done right, whichever lawyer they use. Cut-price, fixed-fee conveyancing services have proliferated. Your ability to charge a higher price has to come from the quality of service you offer, and the relationships and reputation this has helped you build.

The value proposition may be missing?

When law firms raise the issue of discounted headline rates, poor realisation and recovery rates and the like, I have three questions; first, what part of the market are you targeting or generally serving? Second, what added value and benefits do you offer that your competitors don’t? And third, do the firm’s pricing policies and strategies reinforce or undermine the first two answers?

In response to the value and benefits differential as perceived by clients, the usual response is silence. However, businesses and private clients are willing to pay full or even premium prices in return for higher value.

Whatever legal services you provide, the challenge is to understand what clients value – and how you can communicate the value you offer in a consistent, compelling and memorable way. This may be explicit service features: for example, visiting clients who are in care homes, or offering a fast-track service when clients need a quick response. More often than not, it’s about the culture of your firm and the quality of the staff you hire. Everything you do should reinforce the value message.

How do they do it?

While this concept applies equally to goods and services, the concept is sometimes easier to grasp within a product framework. Miele is also able to charge about 20 percent more than its competitors due to better quality, higher reliability and durability – in one word: higher value. When Gillette launched its three ­blade Mach3 razor, it charged 50 percent more than its most expensive product at the time, the Sensor Excel. Since then, new products have entered the market with even higher prices. Throughout it all, Gillette has gained the largest market share in its 50-­year history. The reason is clear: higher client value!

Apple didn’t become the highest valued company in the world by market capitalisation with a reputation for selling products at low prices, but with a reputation of selling high value. Innovation, design, brand, system-integration – these are the value creators that Apple has employed with enormous success. They are also the value creators that technically more advanced companies such as Sony have failed to utilize.

Price is not an abstract concept…

Price is not an abstract concept. Price only has meaning when viewed against a backdrop of value. Something can be cheap but poor value or expensive and poor value. Equally, it can be very costly but good value. There are still plenty of clients who understand the distinction. For them, if you represent poor value, you will get the axe, even if you are the cheapest. Equally, many are willing and able to pay well, so long as they feel that they are getting good value.

No, law firms that have problems asking for profitable prices should first ask themselves what is wrong with their value proposition and their pricing strategies. The chances are that this is the root of their problems.

And then there are those jobs where we have managed to agree a decent fee with the client, but which then veer off piste for one reason or another, sometimes, heaven forfend, due to a needy, demanding or hopelessly disorganised client…

Fees – are clients part of the problem or part of the solution?

Ask any private-practice lawyer and they will tell you that clients frequently aggravate their costs through their own conduct. The result is costs that are higher than they could or should have been, a disgruntled client and almost inevitably, some sort of write-off or other concession. Clients are indeed part of the problem. This can be the result of many things including (but by no means limited to):

  • the client’s own inefficiencies,
  • with institutional clients, a lack of centralised contact with the law firm resulting in conflicting instructions and the need to communicate with multiple people on the same issues, and
  • a propensity to get the law firm involved at the last minute (saves money? – no it doesn’t!) which means that things are often unnecessarily conducted in a blind panic.

The message, and its presentation

The way law firms and clients often interact is unarguably part of the problem. The question remains however, what if anything can or should firms do about it?

Many lawyers just put up with it, regarding it as simply one of the challenges that come with the job. They feel largely powerless to tell the client that they are part of the problem, something that seems anathema and counter-intuitive in the context of a service relationship. Indeed, to some it can feel rather confrontational and provocative, unprofessional even.

But it is not. Indeed, I would argue that we have a professional obligation to do so. The key here is not the message (which is undoubtedly, ‘you are part of the problem’) but rather, as with so much about sophisticated pricing execution, it is the ‘packaging’ of the message that is crucial. For example:

(a) [After the job is completed] “I know you are not happy about how the cost has run up but you need to understand that because you are so disorganised and need so much hand-holding, the costs are at least 50% more than they are for some other clients” Good luck with that conversation.

(b) [At the outset of the job] “We don’t want this to cost you any more than is necessary. There are some suggestions we can make that will help keep your costs down, some of which can be achieved at our end, some of which can only be achieved at your end. Can we work out for example how often you want updates, what communication method will work best, who the central point of contact will be, the timeframe within which you will respond and so forth. If we have a joined-up approach to this job, you can help us to help keep your costs down. Is this of any interest to you?” It is difficult to see why any client would respond negatively to that. Quite the contrary.

It’s about managing expectations…

If you commit to a fixed fee, the management of client behaviour becomes even more crucial. Whilst you should allow for some uncertainty in any instance, a problematic client can completely blow a fixed fee out of the water if you don’t keep a tight rein on them.

Many clients don’t even realise that they are in part the authors of their own costs misfortune. Others cynically view a fixed fee as a green light to treat you like an all-you-can-eat buffet.

Forthright up-front communication and management of client’s expectations is vital but this needs to be reinforced by pricing. In short, the client needs to understand in advance that not working within the agreed protocols has a cost attached to it. This of course is why agreeing the scope, assumptions and exclusions from a retainer are so very important.

February 2019

Nigel gratefully acknowledges the significant help he has had in producing this article from his colleague Richard Burcher, not least in allowing material originally written by Richard to be incorporated

Flying start


 This article was first published in Managing for Success, the magazine of the Law Management Section of the Law Society. The Section’s website can be found here.


The appointment of non-executive directors is not common in law firms, but those that do take this step significantly outperform their competition. Nigel Haddon and Rob Lees explain how and why you should appoint a non-executive director for your firm


Nigel Haddon is a former chief executive of SAS Daniels, and now a management consultant who advises law firms on strategy and leadership issues. He is a member and past chair of the Law Management Section committee. He is an author of two Law Society publications and various articles. Rob Lees is an author of professional service firm strategy books and articles, including co-authoring the best-selling ‘WhenProfessionals Have to Lead’. He is a former global consultant advising professional services firms on improving individual, team, and firm capability


With so many law firm clients required to have independent, non-executive directors (NEDs) as part of their governance structure, it is surprising that so many law firms, with no regulatory barrier to the incorporation of NEDs into their own corporate governance, have opted not to do so.

Of course, this may be more down to lack of knowledge than anything else. Becase NEDs are relatively rare, firms may not know some of the basics: what a NED would do; what value they could bring; how to find the right NED for their firm; or how to incorporate the NED into their culture once they’d found one.

In this article, we address these questions, outline the business case for NEDs in law firms, and provide a beginner’s guide for recruiting a NED in your firm.

 Do law firms have to have a NED?

No. Listed companies must comply with the UK Corporate Governance Code, which requires at least half the board, excluding the chairman, to be NEDs. Smaller companies, perhaps more directly comparable with sub-top 50 law firms, are required to have at least two independent NEDs. AIM-listed and unquoted companies, which includes most professional service firms (PSFs), are not subject to the code.

However, there is much encouragement both in the code itself and from peers, funders and accountants for them to follow suit. This may be for a range of reasons, but one often cited is that NEDs can, when appointed appropriately and operating effectively, improve the management and operation of businesses of all types.

But appointing NEDs is no panacea. To be effective, a NED must be truly independent, and needs to be given time to really understand the business and to know when to challenge executive management. For a NED to succeed, the right person must be appointed, and an appropriate environment must be in place (or be created) for that NED to effectively operate.

 How can law firms benefit from a NED?

In a piece published in The Lawyer in August 2014 (, executive search firm Edward Drummond revealed that only one in four of the UK top-100 law firms had appointed one or more NEDs, but that those which had appointed them had grown about a third faster over the previous four years than those which hadn’t. They also identified a trend for law firms to ape corporate governance structures with a view to gaining competitive advantage.

And those which had appointed NEDs had generally done so not to gain sector knowledge, nor connections, but to add a ‘helicopter’ or external view of the business.

The benefits of appropriate NEDs being appointed to firms identified in the Drummond research and elsewhere include:

  • a fresh, external perspective
  • contribution to strategy development and performance improvement
  • strengthening leadership and management
  • helping instil a more stringent process for making strategic decisions
  • bulking up commercial expertise.

Would every type of firm benefit from a NED? With our 60 years in and with law firms, we would say that just about every firm in firm in the top-500 would benefit from at least one NED. There are exceptions – there are some firms where the cultural barriers may be insuperable, such as in a highly collegiate, regional ‘High St’ firm, and there are others at the lower turnover end of the top-500 which may not choose to prioritise investing in a NED, given a range of competing priorities. But in general, and given all the benefits, we would encourage every firm in the top-500 to at least investigate the options.

What will their remit be?

Recruiting people into any firm in any position starts from knowing precisely what you want the individual to do, and NEDs are no different. So you need to define the NED’s remit clearly before you begin recruitment. Of course, that remit may change over time, but their initial responsibilities must be clear to all parties.

Should a NED be someone who can open doors and introduce the partners to potential new business, or someone who can help the firm become even more effective across all aspects of its activities? The Edward Drummond research was quite specific on this point, and all of our experience supports their research: that lasting improvements to a firm’s operations and profitability only come from appointing NEDs with the ability to contribute across the piece.

Some firms hope to combine the two roles but, in reality, finding someone with both the right business networks and the expertise to help the firm substantially improve its performance is exceptionally rare. One requires knowledge of markets, the players within them, and how the firm’s services can be most effectively introduced. The other requires knowledge of how professional service firms ‘work’ and what the best firms do, and an acute understanding of how to translate that knowledge into actions that lead to the firm making substantive increases in all aspects of its performance.

A NED’s remit must be tailored to the challenges the firm is facing. For some firms, that may be how to be develop a more effective compensation plan for the partners; in others, it may be about succession planning; and in others, it may be about turning strategy into action (which is where a lot of law firms falter). In determining what you want the NED to do, it is imperative that their remit is tailored to a real understanding of the challenges facing the firm.

 What expertise does an effective NED need?

1. First-class diagnostic skills

A NED needs to be able to offer high-quality, objective advice, and this requires truly high-level diagnostic skills – with those skills having been applied successfully in PSFs and law firms. In our experience, law firms and PSFs are different from their corporate counterparts, and it is rare for people to be able to switch diagnostic expertise in, say, a production environment, to professional services.

 2. Strategy formulation and implementation experience

We have met a lot of managing partners whose instinctive understanding of their markets is first class. They know exactly what the firm should do to penetrate them successfully, but, sadly, they do not know how to align the firm’s people and processes to deliver the actions necessary for success. Consequently, any NED must be able to both craft strategy and assist the firm’s partners in turning strategy into successful actions. To us, this is a core skill, and it is one of the reasons why we believe truly effective NEDs must have worked in professional services at a senior level.

3. An objective, external voice

This is critical, of course – but not as critical as the voice being heard and acted upon. Again, we have seen too many instances when effective external advice floundered through managing partner inaction. So, while we firmly believe firms should appoint NEDs who can help them deliver lasting, substantive uplifts in performance, we also firmly believe doing so is an absolute waste of time in firms where the managing partner’s actions (on their own or with their team) have refused to countenance any challenge to the status quo.

4. A fresh perspective

This is the key element in the challenge to the status quo. All of the very best PSFs we know actively look for new markets and new ways of doing business. They refuse to accept the status quo and also refuse to be second best. Sometimes that presents a real challenge to a practice or a team, but that willingness to look at things differently is what singles the top firms out. As a result, looking for a NED who comes from exactly the same world as you do is usually a mistake: we recommend looking for NEDs whose experience in different firms and markets will challenge what your firm does.

5. Previous experience as a NED or at a high level in the legal sector

Law firms, in fact all PSFs, contain some of the most ego-driven people we know, and they can be intolerant of people they do not consider as their equals. Partners’ initial willingness to listen to what a NED has to say is typically positively influenced by the partners’ perception of the NED’s track record – so ideally, they should have experience as a NED or at a high level in the very best law firms, and evidence of that. Also, having faced or advised on similar situations speeds up the NED’s ability to consider potential responses and to come up with objective advice that will make a difference.

6. The ability to be a critical friend

Of course, this links closely to many of the other points above – having a different perspective, challenging the status quo and a voice that is listened to. Being a critical friend means having the expertise and skill to bring new ideas and perspectives to the table, and to act as a vital sounding board and external voice to challenge the firm’s current thinking and practices. It is an exceedingly tough role for anyone to play, just as it is exceedingly difficult for some firms to be the recipients of that advice.

7. A proven track record of delivery

One of the things often forgotten when recruiting is the need for the individual to fit into the firm’s culture. That fit takes you into the NED’s characteristics – such as sense of humour, interpersonal skills, friendliness, considerateness – and you need to choose which are the most appropriate for your firm’s culture. However, without exception, any and all characteristics are usually blown apart in most firms unless the individual delivers. Professional services is an execution game and sustained success is only achievable if the firm continually delivers the right products, delivered by the right people, into the right markets, at the right time. It sounds very easy, but in today’s highly competitive markets, it most certainly is not, and the more astute firms look for additional support from skilled NEDs to help them succeed.

How do we recruit for a NED?

It’s through people you know – definitely not through advertising. Most partners have good networks both within and beyond their community, and through these contacts, names often come to the surface. So too do names of good headhunters with a strong NED practice. Using the headhunter route obviously has costs associated with it, and our advice is to only use headhunters with a PSF arm, with experience in recruiting partners, as well as their more traditional senior corporate practice.

We’ve appointed someone. How do we make sure they add value?

You need to integrate the NED into your business. This is where having been clear from the start about the role’s remit will pay dividends – integration is so much easier when both parties are clear about the NED’s remit. In our experience, successful integration is always about time and timing.

Time is about allowing the NED to experience the firm’s culture in action. The best NEDs will always ask for time in the firm to understand how it works, how power is distributed, who carries sway, which practices are closest to their markets etc. If a NED isn’t able to answer these and all of the other questions related to getting things done, they will not be able to give informed strategic advice.

Timing is about knowing when to introduce the NED into the business: when they will get the best reception, and when the partners have time to help the NED understand the firm and how it works. We have heard people say there is never a good time, but an effective managing partner knows how to position events to ensure the NED gets the right introduction and welcome.

And before you bring the NED into the firm, communicate clearly with your people about who the NED is and what their remit is. Otherwise, rumour and exaggerated rumour will abound.

What next?

An effective NED will see part of their role as educating the board and the partners, helping to uplift their skills and expertise. You should therefore see a distinct improvement in the board’s and the firm’s performance – and this uplift in expertise may ultimately make the NED redundant, and see them replaced by a NED with slightly different expertise or a different perspective.

Why do some NED appointments fail?

 Unsurprisingly, the reasons are often obvious, and many stem from the recruitment process. There can be subsequent relationship failures too, some of which simply weren’t predictable and, sadly, some that were. Anyway, here’s our list of things to avoid:

  • a failure to integrate the role into the business (ie no one understood why the individual was appointed and what they were supposed to do)
  • accepting the word of someone you know well in appointing a NED, rather than having a rigorous selection process
  • the NED not being truly independent – they are known to one or two of the power brokers and tend to side with them, especially in any contentious debate
  • the NED not providing a sufficiently different perspective, but looking and acting like the people they are working with, so they’re seen as yet more of the same, harming and not helping board diversity
  • the NED having too many other commitments and demands on their time to commit the time necessary to get to know the firm properly, making their advice too general to be really helpful
  • the NED not really having the strategic knowledge to turn effective diagnosis into effective strategy and action
  • the NED not being sufficiently skilled to challenge the ‘groupthink’ that exists in a lot of firms.


We’re still not convinced…

If, despite our hopefully persuasive arguments, you are not sure that you should go down the NED route, ask someone you trust who has done so, or a consultant who has worked with firms who have. In our experience, which is supported by an ever-increasing amount of research and anecdotal evidence, using NEDs to improve board and firm performance is unequivocally the right thing to do.


© Rob Lees and Nigel Haddon, December 2017



This article was originally published in the Law Society’s Probate Section magazine. Their website can be found here.

Many law firms are using fixed-fee billing, despite a suspicion that fixed-fee work is risky and unprofitable. Nigel Haddon provides some techniques for doing it profitably.

Without question, the legal sector is seeing an ever-greater use of fixed fees. This isn’t something we lawyers should take pride in – it’s come about almost entirely as a result of pressure from the client side. Time and again, clients have expressed dissatisfaction with hourly rates, which can border on distrust of lawyers charging in this way. And it’s not difficult to understand why our clients feel like that.

First, what kind of ‘experts’ do we think we are if we don’t know how much something is going to cost? Second, there is a conflict of interest inherent in time-billing: we don’t mind how long the job takes – it’s all grist to our mill – but the client wants us to spend the least amount of time possible on the matter, commensurate with doing an acceptably good job.

But how can you fix fees in a way that ensures profitability is enhanced and not impaired? How do you price sometimes complex work where there are both variables and unknowns (and not just of the ‘how many bank accounts do you think your mother had?’ variety)?

I have a friend who heads the commercial litigation team of a top-100 firm. I was surprised to learn from him that his team now prices 95 per cent of their work on a fixed-fee basis. Once again, this was client-led, to the effect of ‘If you can’t give me a fixed price, then I’ll find someone who can.’ His team is now only time-recording for the sake of the courts’ costs budgeting regime and internal management purposes. Now, if you can price litigation on a fixed-fee basis, surely it might be possible to price private client services in the same way?

Airlines don’t say ‘it depends’ or ‘there are too many unknowns’ when we try and buy tickets from them. Yet air traffic control strikes, congestion, delays, bad weather etc can all cause significant overtime and incur costs. But your ticket price won’t change after you’ve bought it. Gyms offer membership at fixed prices, not knowing the precise usage each new member is likely to make of their facilities and equipment. If they can price like that, why can’t law firms?

Jay Shepherd, an American attorney quoted in Ron Baker’s book Implementing Value Pricing (John Wiley & Sons, 2011), suggests asking just one question to find out how good your lawyer is: ‘How much will it cost?’ Five words only, but it’s the whole ballgame. If your lawyer can’t correctly answer it, then you’ve got the wrong lawyer. Now, for the ‘teacher’s guide’:

  1. Every case, every matter and every job will have a different answer.
  2. The answer your lawyer gives you won’t necessarily be the same as the answer they give another client.
  3. ‘It depends’ is not an acceptable answer. Neither is: ‘Well, there are variables…’.

The argument runs like this: airlines and gyms know their businesses. Does your firm?

It is possible to put a fixed fee on anything, as most readers will know or have some experience of. The Shard, possibly the most innovative and challenging construction project of the past decade, was built using a standard form fixed-price contract.

Why lawyers don’t like fixed fees

Many lawyers object that they cannot quote a price at the outset because they simply don’t know how long a job will take. This confuses cost and value. Your client doesn’t care how long the job is going to take. They care about how much it will cost, and whether that ‘feels’ like good value. For that reason, many firms advising clients on probate work will estimate costs billed on a time basis as close to two per cent of the value of the estate, possibly accompanied by a fixed-price offering based on that.

I have seen some very impressive spreadsheets used by firms to help with the pricing of estate administration work. This could include, for example, drop-downs allowing the user to enter the number of pecuniary legacies, savings or bank accounts etc, which, when all added together, gives the firm a reasonable idea of how much the job will cost them to complete. That’s a start, but it leaves value out of the equation, and we can’t afford to do that.

Charging clients a ‘value element’ in probates largely went out of fashion when clients started pushing back during the last global financial crisis. But I know of many firms which price probates almost entirely that way. Don’t overlook it – it’s another tool at your disposal. Many of us forget the basics as our careers progress, and I find it useful to remind practitioners of article 3 of the Solicitors (Non-Contentious Business) Remuneration Order 2009. This is – or should be – the starting point in pricing any non-contentious legal service. If you bill every client using the same hourly rate, then you won’t be capturing the value in the job. You won’t, for example, have recognised in your price the importance of the matter to the client or the novelty or difficulty of any issues which arise. And yet our regulatory framework not only tells us we should do so, but relegates ‘time spent’ on the matter to just one of nine factors to be taken into account when considering whether costs are fair and reasonable.

Value is completely subjective – it is the maximum amount which any client is willing to pay for a service. For example, a bottle of water bought at a major sports event on a hot day may be worth considerably more to someone than a glass of water taken at their kitchen sink (an example used by pricing expert Ed Kless).

The most significant problem we face when pricing on a fixed-fee basis is risk. Under the time-billing model that most of us grew up with, the client took all the risk as to price. There was no incentive for firms to reduce costs or work efficiently. If you ‘nail your colours to the mast’ by fixing a figure, the risk moves entirely onto your firm, and you now have a vested interest in undertaking the work as effectively and cost-efficiently as possible. The trick is to fix your fees at a level that maintains or improves profitability while giving clients what they want: greater transparency and cost certainty.

If we leave ‘price risk’ with our clients, for example by charging on an hourly rate basis, then our prices should to a degree reflect that. Conversely, if we assume all price risk by charging fixed fees, our prices should reflect that assumption of risk. Once we have fixed our price, that’s it (so long as the agreed scope of work doesn’t change). But clients understand that under one model they’re fully exposed to an uncertain final bill which might be much higher than the estimate given, while under the other, they have certainty. And clients will knowingly, willingly and happily pay a premium for that certainty.

There is a perception too amongst law firms that fixed-fee work must be unprofitable. Jobs have a habit of going ‘off piste’ and the firm ends up doing a lot of work for nothing. No wonder clients are so keen on fixed fees!

These objections are understandable – to a point. What is often lost on lawyers is that fixed-fee billing, if handled correctly, can be very profitable – sometimes even more profitable than alternatives such as time-based billing. The problem my firm encounters time and again is that lawyers can see how this works for others, but not in their practice area, or with their own clients – hence the prevalence of fixed fees at the commoditised end of the market (conveyancing, wills, lasting powers of attorney etc). But it is a mistake to think that only such ‘commoditised’ work can be priced in that way.

Getting it right

In the face of more clients wanting certainty around legal pricing, there is an opportunity to gain competitive advantage and set your firm apart from its competitors. If firms can offer fixed fees in commercial litigation, why can’t they offer fixed fees in, say, estate administration? Below, I outline some techniques to manage the fixed-fee process effectively and profitably.

  • Mine your data Use historical information to build up a picture of what similar jobs have cost in the past. This isn’t just about time-cost records; you should also looks at staffing, timescales and fees.
  • Consider which of the factors in article 3 of the Solicitors (Non-Contentious Business) Remuneration Order 2009 apply to your clients and their matter(s) How should the presence (or absence) of any factor affect your pricing?
  • Consider where process improvements and efficiencies can be achieved This can be best done often in consultation with the client and might include, for example, some unbundling (the client does some of the ‘donkey work’). Can your software or newer technology assist? Just because we’ve always done the job in a certain way, do we have to do it the same way every time?
  • Spend more time scoping the work We all know that the majority of jobs have a tendency to go off track. The more rigorous we are in scoping, the more likely we will be able to agree extra fees for the work that is beyond its original scope.
  • Interrogate assumptions Ask yourself what assumptions your client is likely to be making, and what assumptions you are making. There will be several. Every good scope of work will have a number of assumptions behind it, and these need to be identified and set out in the engagement documentation.
  • Monitor and review progress As we have seen, a firm, having given a fixed price, has a vested interest in working as efficiently as possible on a matter. Simply put, your firm mustn’t allow its own inefficiencies to result in things going wrong.
  • Manage scope creep, but do it swiftly and effectively If you have scoped properly, then when something unexpected happens which is clearly outside scope and assumptions, you must then re-engage with the client and agree a revised scope, timescale and price.
  • Accept that you’re in a learning process You will make mistakes, but don’t give up just because you have mixed results to start with. You’re learning a new skill – it takes time and practice. Persist, and watch your confidence and your bottom line grow.

It is fairly common to encounter wills where, while some gifts are expressed to be free of tax, nothing is said about the burden of tax in relation to other gifts. Often it will not be evident whether this is due to carelessness or if the draftsman thought remaining silent would render a gift subject to tax


Being a member of the HR team in a professional service firm can be a soul-destroying activity. In too many firms, HR is seen as having little to offer and adding little value (it was once called ‘burden’ in one of the firms I’ve worked with). Sometimes the lack of value is because the firm’s partners, including the firm’s executive have little, or no, idea what HR should do; sometimes it’s because the HR team, themselves, don’t know and so accept the role that’s given to them, and sometimes it is a because a former fee earner has been moved into the role and has little understanding of anything other than the basics.

That role, no matter who originates it, is more often than not the manager of the transactional services that are seen to constitute the relationship between the firm and its people: recruitment, remuneration, employment contracts, disciplinary and grievance procedures. All of them important and needing to be done well – but none of them what HR’s main focus should be.

To understand what that focus should be, we need to step back and think about the market for professional services and how one firm differentiates itself from another in order to gain a competitive advantage. Or, put simply, how it can win more business and be more profitable than its competitors.

It’s over twenty years since I first heard Jack Gabarro, one of my co-authors of When Professionals Have To Lead, say that professional services is an execution game; he was right then and he’s just as right now. Success in professional services is down to what a firm’s partners and staff actually do. It’s always what the people do and how they do it. Whether that’s a simple piece of tax advice or guidance on how to avoid a hostile takeover, the expertise (capability) of the individual(s) providing the advice is paramount.

Which makes the question of how a firm differentiates itself from its competitors extremely easy to answer. Its people must be able to relate to its clients and deliver its services more effectively than its competitors’ people.

Also, therefore, extremely easy to answer is what HR’s prime function should be. It has to help the firm develop the capability of its people, from its new entrants through to its partners. And, as assignments are rarely won or delivered by one individual, that capability must include operating effectively within a team and collaborative context, whether that’s across functions, offices or, as firms grow in scale, states and countries.

So, what should a firm expect from its Head of HR?

Let’s start with the obvious: a set of ideas that take the firm forward and that get implemented. To be implemented successfully, the ideas must be contexted in the firm’s operating reality and be completely aligned with its strategy. So, the HR head needs both a clear strategic understanding of what professional service firms (psfs) need to do to be successful in their different markets and an holistic understanding of how firms ‘work.’

The markets for different types of professional services operate differently and the matrix below indicates how the markets segment. With this knowledge, it is easy to determine the capabilities firms need to operate successfully in the different segments. The operating reality of most firms is that they compete in two or three segments. Only with a clear understanding of which segments the firm competes in, as well as an equally clear understanding of the firm’s position relative to its competitors in each of its markets, is it possible to develop a world-leading strategy to develop the capabilities of all the people in the firm. But, developing is the easy part; implementation is always much harder.

Successful implementation needs more than knowledge of markets and best practice learning systems. It needs something much more personal – the ability to make the case and win an argument with the partners about why developing capability is critical to the firm’s success and the ability to convince the partners you are on their side. That, you are ‘one of us.’

Partners, by nature, tend to be sceptical and non-strategic, so it’s absolutely key that the HR head ‘works’ the partner constituency and persuades them that they, personally, can make a difference. That they can become even more effective and that they must be the people, who lead the firm to the next level. After all, change only occurs where the work gets done – and that puts the partners front and centre.

Although this note has concentrated on the need for the head of HR to primarily focus on developing capability, they must also know what best practice is in all of the constituent parts of the HR function, and be able to put people in place to lead those parts effectively and make the function valued within the firm. And, naturally, they, like all of the firm’s leaders, need to be a skilled team leader.

And, finally, the head of HR must be able to make a contribution to the ‘top table’ debate about the firm’s future. The head of HR that firms need will never be able to do an audit or provide legal advice (other than in employment law), but they must be able to bring their strategic knowledge of how to achieve market success and their holistic understanding of how firms ‘work’ to bear in any debate.

And, what should the head of HR expect from the firm

The first thing here is also obvious – the resources to do the job. It’s pointless having someone with the ability to help the firm make a difference if you don’t give them the resources to make it a reality. And, ‘resources’ does not mean simply cash and people, it includes the freedom to operate.

The second, also obvious, is support and inclusion. Real support and inclusion – not lip service. There will always be some partners, who don’t see the value of paying ‘top dollar’ to someone, who doesn’t bring in fees. When that happens, the firm needs all of the top team to actively support their HR colleague and persuade the partners that he or she will make a difference to what the firm does. Active signalling and support is critical.

A final comment on soul-destroying

There is another soul-destroying reality that can occur even when the head of HR has all of the capability necessary to help change the firm for the better, and that’s asking the HR head to report to a partner, whose knowledge and capability are inferior. While there are some great examples of heads of HR working for partners, who truly understand the value of the function and who actively champion it and its people, there are still too many examples where the opposite is true.

The ‘the partners only have confidence in a partner’ argument that usually goes with it is both spurious and demeaning. The real argument should always be about capability, about having the right people around the top table, regardless of their backgrounds. It’s an absolute waste of time and money recruiting top HR professionals if they don’t get the status and recognition they should have. It sends a clear signal about what and who is important, and it’s why some firms fail to hold on to the very people who can help make them even more successful. And, in an execution game, that’s madness.

© Rob Lees and Mike Mister, September 2016

Rob Lees is a co-author of the best selling When Professionals Have To Lead and, until retiring last year, a consultant to the leaders of professional service firms worldwide. He can be reached at

Mike Mister is the head of the leadership practice at Moller Professional Service Firms Group, one of the leading psf consulting firms. Mike helps firm leaders across the globe improve their firm’s strategic and leadership capabilities. He can be contacted at

Lost or retained your crime duty provider contract?

Whether you have lost or retained your contract your firm will now have to face up to major decisions – decisions which cannot and should not be delayed.

Strategic direction.

We have long believed in the merits of the Boston Matrix which classifies income streams in accordance with relevant market share and the attractiveness of the market:





Legally aided crime has for a long time been a challenging market and with reduced rates is even more so. It follows that you have either a ‘Dog” if your firm has a low market share or a “Cash Cow” if you have  a high market share.  If you lost your contract and had a small market share you may be relieved (whether it was an active choice or not) that you are now out of the market and now need to consider what services you should be providing.

If you retained your contract and have a significant market share then now is the time to “milk your cows” – meaning maximise your profitability but use that profit to diversify and to invest in alternative income streams.

Profit Protection

For those who have lost their contract and as a result have spare staff capacity they face an immediate drain on profitability.  Staff costs will be the highest overheads and regrettably there will be a need to make immediate cuts in headcount to maintain at least a semblance of ongoing profit.  While there will inevitably be staff to whom you have long term loyalty, some of which you will hopefully be able to retrain, the rule of thumb is to cut deeply at the outset so as to protect the positions of the remaining staff.  By cutting deeply – in fact possibly over cutting – you can avoid the death of a “thousand cuts” and the inevitable damage to morale & loss of staff you wish to retain.

For those who have retained their contract the issues you face are no less fundamental – if a little less pressing. With the cut in rates this must reduce your profitability and potentially threaten the viability of the practice. The focus must be on “process re-engineering” and examining carefully how and in what way you service the contract so as to reduce the cost of so doing.  This is by no means easy but must be undertaken.


“Mergers” are often a euphemism for sale or purchase.  For those who have lost their contract they may be facing the unpalatable truth that there is no viable alternative to finding a buyer by way of “rescue” and indeed simply “closing the doors” may be the only option if there is little by way of an ongoing income stream without the contract.  Given the obvious implications for run off cover and TUPE for potential acquirers, finding a “white knight” may be difficult but must be the first, and urgent, option to address – often with the help of dispassionate  expert and knowledgeable advisers.

For those who have retained their contract now might be the time to make judicious acquisitions of firms in distress but who have a core – but now unutilised – expertise.  Such acquisitions my well be part of process reengineering with a view to reducing the cost of providing the service down to sustainable levels.

There will of course also be firms who have retained their contract but who have insufficient market share or an inability to re-engineer their cost base to maintain sufficient profitability.  These firms are best placed to seek an acquirer and this may present the best opportunity to obtain economies of scale and increase market share – probably after all the MoJ’s objective.  The challenge is for the stronger firms to find targets and for the weaker firms to truly recognise their weakness and their need to find a buyer.

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Howard Hackney & Nigel Haddon

Your pricing can set you apart

Most law firms still price by charging on a strict time spent basis, with invoices detailing work done by each fee earner and the rates applicable, or where the firm believes it appropriate, on a fixed fee basis. But is that what clients want?

What clients really want is:

  • Real efforts to reduce production costs. In other words, to move away from a cost-plus mentality;
  • Greater cost-consciousness – ‘spending’ our clients’ money with care, as if it were our own;
  • More pricing and payment options;
  • Greater client involvement in the pricing aspect of the relationship;
  • Greater pricing transparency;
  • Greater pricing certainty and budgetary predictability – ‘no-surprises’;
  • Greater correlation between price on the one hand and the perceived value of the results achieved on the other hand.

By adopting a new approach to pricing which puts the client’s needs and value delivered at the centre of the pricing conversation (a) much tension is removed from the pricing process and (b) the firm will be doing something that few if any of its competitors are doing.

The process begins, counter-intuitively, with the client, not the service to be provided. The lawyer needs a clear understanding of what is important to the client and what they are happy to pay for, what is less important to them and for which they would prefer to pay little if anything, the extent to which they wish to assume price risk or prefer the firm to do so or whether they want to share that price risk. From there, the firm can quickly develop pricing choices for the client to select from.

And that is key here: clients have made it clear time and again that they much prefer to be given choice rather than being presented with a single option. The options might include:

  • fixed fees for the entire case and/or stages of the matter;
  • abort and success fees;
  • bundling/unbundling;
  • gold, silver and bronze services,

and so on.

The list of alternative fee arrangements available for an innovative firm to use is surprisingly long! The important thing to bear in mind is that whichever option the client chooses and however the particular matter plays out, the client needs to feel that they have had good value and the firm needs to feel that it has been paid properly.

With the vast majority of law firms struggling to differentiate themselves from their competitors, some go-ahead firms are finding that an innovative approach to pricing really can set them apart.

Nigel HaddonimagesUD5R2LBC

Pricing Consultant

Burcher Jennings Pricing & Costs Consultants

Guest blog – banking of a different kind, part 2, by Rachel Brushfield

Rachel kindly submitted a blog published on this site a few weeks ago, entitled ‘Banking of a different kind’. Here I’m delighted to publish her follow-up piece. The words which follow are all Rachel’s own. Enjoy! This blog shares the benefits of coaching and personal development and 11 useful resources; personal development books, personal development courses and personal development seminars, videos etc. Time is precious and business pressured, so what are the benefits of personal development? This is what our clients say:

  • Time to reflect/think through where you are and where you are going
  • Time to think about you
  • Time to build on your strengths and address weaknesses
  • Understanding that you can choose to respond to others better
  • Better understanding of yourself and how to relate to others
  • How to address day to day issues better
  • Identifying problems, weaknesses and opportunities and how to work on them
  • How to use strengths to overcome weaknesses
  • Skills to be more confident about yourself and dealing with others
  • A forum to discuss issues/goals/frustrations and how to resolve them
  • How to see situations from others’ perspectives
  • Greater understanding of self, how to reframe, pause and reflect and insights into problem solving
  • Feeling supported and empowered
  • More aware, reflective and reasoned
  • How to be more balanced, composed and in control
  • The opportunity to discuss key personal & professional issues in a non-judgmental and objective environment
  • Time and space to express feelings and thoughts
  • An opportunity to refocus attention
  • Vocalising goals so they seem more real and obtainable
  • Breaking down big scary overwhelming change into small steps, making it easy
  • How to achieve goals
  • A platform to concentrate on the things you’ve been putting off or avoiding
  • Understanding the cost of not addressing important issues
  • Feeling more in control and that you have choice over thoughts & actions
  • Feedback, reframing, support & challenge from someone there for you
  • Courage to do what you want to do
  • Unravels the confusion, identifies the route to be taken and prioritises the abilities that can best be utilised and where
  • A supportive, objective and confidential sounding board

We have identified 5 client types who benefit from personal development.  Which type do you relate to? “I ‘have it all’, so why am I so tired and dispirited?” “I know what I want, but I’m not sure how to best achieve it.“ “I don’t know what I want, but I know it’s not this for much longer!” “I know/I’ve been told that I need to acquire a new skill/adapt my behaviour or habits, but show me how to fast!” “I need someone confidential/objective to talk to and bounce ideas off who I trust” 11 personal development tips

  1. Get a coach
  2. Get a mentor
  3. Look at Ted talks
  4. Get in touch about our Energise personal development articles. Topics include busyness addiction, how to do absolutely nothing, managing procrastination, overcoming overwhelm, fear, beliefs, safe risk, insight mining etc.
  5. Read the iconic book Stephen Covey ‘7 habits of highly effective people’
  6. Define your personal values
  7. Do a psychometric test to increase your self-awareness about your personality type and what impact this has on you and others e.g. Myers Briggs, Insight, Belbin, Talent Dynamics
  8. Create a personal development plan with S.M.A.R.T. objectives which will benefit yourself, your employer and your clients
  9. Write an account of your life and what has influenced it
  10. Keep a worry diary to monitor what you worry about
  11. Do a mindfulness class

Are you interested in coaching? Get in touch for a no obligation conversation. What’s the best action you can take to explore personal development for yourself or someone you supervise/manage? Rachel Brushfield

Rachel Brushfield

Talent Liberator



+ 44 (0) 845 22 55 010

+ 44 (0) 7973 911137


So, what are we going to do about pricing?

Although lawyers are generally highly effective negotiators on their clients’ behalf, many are less good at discussing their own fees with those same clients. This is due to a number of factors. First, the all too easy use of hourly rates and occasional fixed fees was rarely challenged by clients, who until the last recession weren’t powerful enough or ‘savvy’ enough to ‘push back’. Second, when clients did start to push back, lawyers felt awkward or embarrassed or simply that they had to capitulate and take the fee the client was willing to pay. And that awkwardness had and has its roots in a lack of training in pricing skills, resulting in a lack of confidence in negotiating with clients.imagesZ4O29889

If a firm, and all those lawyers within it who have pricing conversations with clients, learn pricing skills, practice those skills and master them, then there is no doubt but that both the law firm and the client can benefit. Lawyers leave less on the table, and clients benefit from greater choice, transparency and control.

Firms often know that pricing is something that they need to address, or at least would benefit from addressing but aren’t quite sure where to start. Managing Partners often bemoan the fact that they have had a couple of attempts at implementing change from within but have been met with indifference if not resistance.

So, where might you start?  There are broadly speaking three areas you need to tackle; the list under each heading below being anything but exhaustive, they are:

1. Pricing governance and policy:

  • Each firm needs a shared and consistently implemented strategic approach to pricing
  • Pricing policies need to be well understood and universally enforced – for example do you have firm wide policies about what is written off, by whom, for what reason and up to what level?
  • Price and market position disconnect – most firms do not understand that price is a powerful proxy for quality. Firms claim a certain market position in relation to quality of advice and service and then price below that, thereby undermining the message.
  • Poor or non-existent induction training on pricing – the blind leading the blind?

2.  Pricing analytics & reporting:

  • Practice management software has historically provided plenty of data, but data on its own is largely useless unless it also provides actionable insights
  • Fixed fee arrangements in particular suffer from high write-offs and poor realisation rates due to lack of historical analysis
  • Any firm serious about utilising conditional fee agreements must invest in proper analytics capability, and not simply something cobbled together in an Excel spreadsheet

3. Pricing execution:

  • A broad lack of price negotiation skills and a lack of awareness or understanding of the many pricing strategies and tactics available to lawyers results in pricing that is often a poor ‘fit’ for the client and/or the firm
  • A lack of pricing collateral, templates and pricing precedents
  • Confidence is absolutely critical to good pricing behavior. Do you set and negotiate prices confidently or through fear of losing the client and/or fear of losing the job?

Lawyers are highly skilled in devising bespoke solutions to their clients’ problems. But few presently meet the wide-ranging needs of their clients by devising pricing solutions tailored to the needs of ‘this client, this time.’

The ability to deploy a wide range of matter specific and client specific pricing and payment options, of which the hourly rate is but one, mitigates the often confrontational dialogue between lawyer and client. When lawyers are able to engage in sophisticated pricing discussions, the results are twofold: a closer-to-optimal fee for the firm, and happier clients, who see that they are being given choice, certainty, and control. In other words, a ‘win-win’ for the firm and its clients.

There is in fact abundant evidence that what clients really want are pricing choice, certainty and control. Yes, some want the lowest price available, but there are far fewer of these than you might imagine (about 10% according to research). Offering clients an hourly rate is offering Hobson’s choice, as would be a fixed fee.

Offering clients a choice between an hourly rate and a fixed fee is a start. But there are many, many more pricing options available, and, once understood and practised, these can be offered too, either singly or in combination. It’s no bad thing to offer a client three or four pricing options, then adding a payment option too, such as a discount for payment in advance. Some of the many pricing options now being offered by innovative law firms are:

  • Conditional fees                                                                    imagesUD5R2LBC
  • Cap & collar
  • Abort/success
  • Retainers
  • Service level guarantees
  • Bundling/unbundling
  • Versioning (eg gold, silver, bronze)
  • Premium for urgency
  • Combining one or more of the above

One of the consequences of the recession and the increasingly competitive nature of the legal sector has been that law firms’ approaches to pricing have tended to the defensive and reactive, aimed at preserving existing relationships and getting every last job across the line.  Not enough have grasped that sophisticated pricing strategies can be a central plank in the firm’s business development strategy.

In fact, smart pricing can be used both a sword and a shield. Once a firm has mastered smarter pricing, and put in place policies and the infrastructure to support those policies, it can begin to use its now extensive pricing repertoire as an icebreaker with prospective clients and intermediaries. Pricing is a skill that is just as essential to the business development toolkit as networking or selling, yet has a more immediate impact on the bottom line.


Nigel Haddon

Pricing Consultant with Burcher Jennings, Pricing and Costs Consultants,

[This blog is based in part upon ‘Chapter 10: Pricing and Fees’ of the Law Management Section Guide to Business Development, published by the Law Society, February 2015, and co-authored by Nigel and Richard Burcher. Nigel is one of the joint General Editors of that work, which is available from The Law Society bookshop:]

Guest blog – The Legal Sector and Cybercrime, by Norman Denton

images8This guest blog is by Norman Denton, Senior Associate and Compliance Consultant at Legal Eye.

The Legal Sector and Cybercrime

Latest figures suggest that 69% of UK companies were hit by cybercrime in 2014. So what can the legal sector do to protect itself?

Increasing attractiveness of the sector….

The legal sector, like many others, places ever greater reliance on processing power for efficiencies and differentiation.

As the conveyancing market recovers, the volume of money pumped around the electronic banking system becomes more attractive to the unscrupulous. Picking off just a few transactions will easily amass a 6 or 7 figure sum!

Ranged against businesses are a variety of threats, but cyber-attack is rising.  As a sector, we are facing unprecedented levels of attack from individuals and others, intent on a range of damaging raids – be it intercepting client funds, gaining access to confidential information, or simply to highlight shortcomings in the sector’s defences.

Regulators turning up the heat..….

To counter these threats, Regulators are increasing the pressure on the regulated:

  • The SRA recently issued a guidance note, warning of your very real accountability if clients suffer financial loss, alongside numerous scam alerts and extensive coverage in informative publications like the Risk Outlook, Spiders in the Web and In the Shadows;
  • The ICO threatens to make examples in the sector in a sad, and often not unfounded, belief that many firms are unable to cope with the protection of paper files, let alone the complexities of cybercrime and espionage – you are seen as the weakest link; and
  • Lexcel Version 6, arriving this month, introduces new procedural requirements including managing user accounts, detecting and removing malicious software and training for staff on data security.

This won’t go away anytime soon and you could be, or have already been, the next unsuspecting victim, since sometimes you won’t even be aware of an attack.

Cybercrime brings reputational damage, significant distractions and potentially heavy fines to destabilise your business, especially if your security procedures don’t measure up.

Clients on the street make damaging headlines. Whether a lender’s mortgage is involved or not, your position on lender panels will evaporate within hours!

Strengthen your defences, before it’s too late!

For starters, download the SRA publications and information on the Governments Cyber Essentials scheme launched in June 2014.  Have a good read.  Revisit your risk assessments and make sure you have a manageable plan to include:

  • Ensuring you install the latest Virus, Firewall and Malware protection with regular updates. Replace obsolete software such as Windows XP and Windows Server 2003.
  • Revisit procedures for strong passwords, remote access, laptops, tablets, memory sticks and their security in use and off premises. Do you still need these devices?
  • Consider encryption for those devices and particularly the most confidential of emails – there are some effective low cost solutions around.
  • Enforce external download policies – malware comes in a variety of attachments, including job applicant CVs, so ensure staff only download material from a reputable source and after checking for viruses and malware.
  • Be alert to the other side and the potential they might not be who they say they are. What precautions will you enforce amongst your team to satisfactorily identify the Vendor firm?
  • Ensure that staff recognise the dangers and remain alert to dealing with emerging risks such as the current crop of requests for bank details and banking passwords, particularly at busy periods.
  • Protect your own organisational ID, so quickly close user accounts for those that leave the firm. Manage your outsourced IT resource and their access into your systems. Monitor your appearance online – has it been tampered with such as phone numbers altered, names added?

Don’t become the next statistic!norman-denton


Evaluating Managing Partners

This guest blog is by my friend Rob Lees, former global head of HR at Ernst & Young, later a director at their Global Leadership Center in Cambridge, Massachusetts, and more latterly a consultant to professional service firms. Rob is co-author (with Tom Delong and Jack Gabarro) of the ageless and invaluable book “When Professionals Have To Lead” (Harvard Business School Press, 2007). This piece was originally written for Managing Partner magazine. The words that follow are Rob’s own.rob-lees_height-165


Evaluating Managing Partners when you’re not sure what they’re supposed to do!!


When my colleagues and I were conducting our research into what truly effective managing partners do that differentiates them from their peers, we also asked the partners we spoke to how they evaluated their managing partners when there was often little or no clarity around what the managing partners were supposed to do.

Obviously, when there was a specific action or set of actions the managing partner was elected to deliver, that greatly aided the evaluation process, but nearly all of the partners we spoke to included the performance of the professional management group in their evaluation as they considered the managing partner was specifically responsible for the selection and performance of that group. Unfortunately, in too many instances, the perception of the performance of the professional management group had a negative impact on their view of the managing partner’s performance. The question is why? And, of course, what can managing partners do to ensure they avoid the negative impact?

Undoubtedly, the major issue facing the majority of managing partners in their dealings with the professional management group is their lack of knowledge about what ‘good’ is, although there is an understandable belief that, in the finance function, a fellow professional will know what to do.

Let’s use Human Resources as an example. If we asked most managing partners what the most important task is in Human resources, we would be likely to get a range of responses. But, in professional services, which is an execution game, there is only one answer and that’s to create a development process that enables the firm to develop its professionals faster and more effectively than its competitors – and, by doing so, to create both a competitive and economic advantage. It’s an answer that should be a ‘no brainer’, but sadly it usually isn’t.

Without an understanding of what ‘good’ is, when managing partners assess what their head of HR is doing they can get it badly wrong. And, if they do decide they want to change their head of HR, they usually sub-contract the selection process to a head hunter – assuming, often wrongly, they will know what good is. So, in the end, the selection process often ends up solely about fit (critical, of course, but only after capability) and without a robust discussion about how the individual will create a development process that will deliver what I call ‘speed to experience’ and give the firm three significant advantages over its competition. Not just the competitive and economic advantages I mentioned earlier as there is a clear third. The market for top talent is highly competitive whichever way you cut the market, and all of the research indicates that one of the critical factors in an individual’s choice of which firm to join is the quality of the development experience. The highly competitive people who live in professional firms like to constantly add to their knowledge and experience so they can continually improve and do more challenging work – and they like to do it as quickly as possible. So, if one firm has a reputation of having a discernibly better development process they will attract better people. As I said earlier, it really should be a ‘no brainer’!

So, managing partners must know what ‘good’ is. And, if they don’t know (and in my experience they always know whether they do or not, even if they can’t quantify it), they have to find out. One of the other things that differentiates great managing partners is an unwillingness to accept second best in any aspect of the firm’s operations. And, as the performance of professional management group influences the firm in multiple ways, including the partners’ opinion of their managing partner’s performance, knowing what ‘good’ is and making sure it is delivered is key for every firm – and every managing partner.

You can read more about Rob’s book, WPHTLand indeed buy a copy here