Golden Practices

Marketing Salaries Reflecting ROI

An eyebrow raising post today on Larry Bodine's blog posits that the salaries of law firm marketers are dwarfing firm administrators' salaries.

Bodine cites two surveys that indicate median administrator salaries are in the $70-80K range and he references numerous legal marketing job ads offering $100K+ (and some in the over $400K range). The median salaries aren't quite that high, but if you visit his other site's job openings you will, indeed, find many jobs for senior marketers and even writers, editors, and knowledge managers in the over $80K range.

Bodine says:

This is GREAT news for the marketers, because it means they've worked their way out of the "overhead" category in law firms.  The marketers are able to say, "If you invest $5 with my plan, you'll get $20 back.  I can prove return on investment." 

About different roles earning different pay, I'm reminded of a wonderful bit of advice shared awhile back by Julie Lindy, editor of INSIDE Public Accounting, on the Assoc. of Accounting Marketing discussion list. She said:

Nobody is paid what they are worth. They are paid what their *jobs* are worth. As human beings, an NFL player is not worth more than a 5th grade teacher, but in our culture, the NFL player's job is valued more, so therefore, he is paid more....You can't take salary personally: It's all about what the job is worth to the person writing the checks.

I agree entirely with Ms. Lindy.

Beside the law firm administrators discussed in Bodine's post, there's another group paying close attention to the legal marketers' escalating salaries...CPA firm marketers.

I cannot help but wonder what most accounting marketers must be thinking when they see the salaries their legal counterparts are earning. The median salaries remain significantly lower (at least $20K behind) in the accounting industry. Actually, I have a pretty good idea of what accounting marketers are thinking.

Something to the effect of: "Can it be that much harder to work with lawyers?"

Uh, well, yes and no. Totally depends on the firm, the culture, and the support marketing, in general, has within the firm. Overall, lawyers aren't that much different from CPAs. In some ways they are more open about what they think and, ultimately, more open-minded about trying new things. In other ways, they are far more trying because they challenge everything (and for fun, I think!).

So...are the disparities in salary reasonable?

Inside the Firm of the Future

Exemplar Law Partners is causing quite a stir. This is the Boston firm, launched and led by CEO Christopher Marston, that touts "No Hourly Bill, No Hourly Bull."

Many are keeping a watchful eye on this firm.

Some hope beyond hope that Exemplar succeeds because it will mean they lead, in the limelight, the movement away from timesheet-based billing in the legal profession. If Exemplar pulls it off, maybe their firm can, too.

Others speculate (and I suspect even hope) that the firm won't be able to make it work. Surprised I'd say that?

I believe that some people hope the firm will fail as proof that their comfortable-as-an-old-pair-of-jeans hourly model isn't broken after all. And if it fails, they don't ever have to think about addressing such a massive change in their firms.

There's no doubt...changing IS hard to do. It requires forethought and planning. I admit that, having done it myself for a long time, hourly is most certainly the laziest way to price.

There are many skeptics to the concept of value billing. This isn't a casual topic easily dismissed with a subject change. This topic evokes more passion, on both sides of the discussion, than I've ever witnessed in the professions.

Most of those who can nod their head a bit at the idea of value pricing cannot understand or accept that timesheets shouldn't be used in a firm that doesn't bill hourly.

Actually, practitioners who've made the switch from hourly to value are the strongest proponents of ditching timekeeping. They know it keeps them mired in the thinking that time (perceived as cost) should impact price. Read a true tale of the evolving mindset of accountants that made the switch quite successfully.

The purpose of my post is to tell you that Chris Marston of Exemplar has started a blog called Inside the Firm of the Future in order to share his firm's growth in this process.

Exemplar, I admire all of you for what you are doing--especially for your "Believing is Seeing." May you succeed beyond everyone's wildest dreams.

Recruiting Is Marketing and How Training Helps Retention

This week there were some excellent ideas shared on AAM's accounting marketing discussion list. Somebody had asked for ideas and suggestions for the increasingly challenging task of firm recruiting.

Marketers strategize about recruiting because recruiting is essentially marketing to a talent audience instead of a buyer audience.

Vickie Hicks of KPM CPAs in Springfield, Missouri, shared some of what she learned when she worked in the Career Services office at Missouri State University for 10 years. She explained, "My role was to connect students with recruiters and to oversee the placement of business majors specifically."

She made some recommendations that closely parallel marketing strategies used for new business such as targeting, consistent visibility, name recognition, and clearly communicating the unique benefits of going with your firm:

• Keep a consistent presence on campus. Attend career days even on years you don't plan to hire... speak to the clubs, speak to classes.
• It's all about name awareness. The students I worked with were often gun-shy to go with an employer their first time on campus. I worked with many a frustrated recruiter because they expected to ride in on a white horse once every 10 years and hire all the good candidates - it rarely happened. Our firm takes the Good to Great approach, we hire great people. So, on years we thought we weren't hiring, we often did anyway.
• Sometimes it's the little things. The Accounting Club on campus had a Welcome Back to School BBQ. We called and offered to bring frozen custard for everyone. This meant we were on every poster promoting the event, got a mention in every classroom presentation, and a lot of recognition at the event as our polo wearing staff handed out custard to every student there. Cost us less than $100 and was priceless.
• Consider internships. We have found that the recruiting game keeps shifting earlier and earlier. You have to pinpoint really great students as early as their junior year to show them how wonderful your firm is. Funny, but at that stage they haven't even had their hard accounting classes yet.
• Bring your partners into the hiring process. It shows you value the recruits. But also balance that with younger staff to show you value the new employee.
• Have good materials. Outline benefits, typical job duties, social activities, etc.

Mary Nielson of Larson & Company, a 35-person firm in Utah, wisely observes that the responsibilities of recruiting do not end with hiring. "Make sure you have a plan for after you've extended offers to candidates," she suggests.

"When I first started here, we did not have a formal training program at all. Even if you're small, you should definitely develop one. Otherwise," she explains, "you could end up in a situation where you hire really qualified individuals with lots of potential but they don't work out due to frustrations (on both your part and that of the new hire) that could have been easily avoided through a formalized training program.

She's absolutely right. I've seen this in several firms (law and CPA) myself.

One symptom of this problem can be owners/managers who assert that it's not really a great loss that a person left because of his or her work quality or low volume of productivity. While the person may simply be an under-performer, this can also suggest absence of training and supervision.

If a firm can spot a trend such as a particular department where there seems to be a revolving door for entry-level team members, it's pretty likely that the root cause is lack of teaching followed by lack of utilization of the person because they have gone untrained.

Without infrastructure to guide them, they are simply left to flounder. After all your hard work finding and hiring someone, not to mention the investment in doing so, it is an awful shame to lose them because processes aren't in place to properly teach them what they need to know in order to be successful.

Mary agrees. She says, "To coin a phrase from our firm, we don't like putting people in jello molds, but you do have to give them popsicle sticks...otherwise they end up being a shapeless mess with no support at all."

Overcoming the Negative Image of a Salesperson

A great heads' up post on the Selling to Small Business blog by Anita Campbell pointing readers to a podcast on selling by Greg Balanko-Dickson. Anita recaps Greg's podcast:

"Selling used to be about closing.  But it isn't anymore.  It used to be about handling objections or about preventing objections from coming it.  Selling isn't about being confrontational."

His point is that selling is about influence, trust, respect, rapport — those kinds of positive attributes.  Why? It's because we have all been jaded by all the advertising and hard selling that has come at us over the years.

Greg's 12 minute podcast (at his blog: Business Performance Coaching) offers, in a pleasantly relaxed tone, some terrific advice about selling and what skills/approaches work and, conversely, what selling is NOT. He also talks about "buyers' rules."

His advice is relevant to professional service providers.  Enjoy a nice listen...

Proposal Win Ratio

We always want to know if we are winning new business as much as our competitors.

But because all proposals are not equal--even from the same firm--comparing overall win/loss ratios across firms is not worthwhile.

Why? Because there are too many variables.

Consider different vertical markets. NFPs or governments almost always require formal proposals with most going out to bid at regular intervals, but businesses, especially the highly-desirable closely-held business market will often close a deal over a lunch or golf game and the "proposal," if it exists at all, might be a formality that accompanies the engagement letter.

If a comparison had to be made, I might suggest comparing a vertical market (construction, NFP, etc) to other firms' success ratios in those markets. But I still don't think it will be very meaningful without knowing highly result influencing factors for each proposal such as:

• Was the firm the incumbent?
• Was a personal relationship already in existence? If so, to what level was the relationship?
• Did personal contact take place before answering an RFP?
• If so, how much? And what was the quality of that contact (i.e. was it private, one-on-one? In person? By telephone? At a widely attended pre-bid conference? etc)?
• How focused was the proposal on the prospect versus the firm?
• Did the proposing firm demonstrate they really understood the prospect's situation and needs?
• Did the proposing firm meet all requirements of the RFP
• Did the firm have the experience to truly qualify for the work? If so, was it effectively conveyed?
• Was the firm already widely known as dominate service provider to that industry? Or was it a stealth provider? Or had the firm recently entered that vertical market?
• Was the proposal professional looking, user friendly, and free from typos and other signs of negligence in preparation?
• Did the person(s) presenting the proposal do an excellent job of personally demonstrating competence and trustworthiness?

Any or all of these things weigh significantly in the outcome and that is why I don't think an industry-wide comparison is worthwhile.

The only truly meaningful benchmark is to measure the firm against itself now and later.

Compare results under various circumstances seeking to find the best formula for each type of business or each industry the firm is pursuing. And study proposal processes to determine where the firm could use improvement.

Value Pricing Isn't Easy, But Neither is Writing off a Bill

I was writing to Bay Street Consultant Rick Telberg today on another matter and mentioned that I’ve been enjoying conversations with Ron Baker and our other VeraSage colleagues about this recent reply submitted to Rick about his CPA Trendlines blog post “You Are What You Charge” about value pricing.

Personally, my suspicion is that the gentleman didn’t implement value pricing (VP) properly in his firm. Or fully (which he openly states). First, it is really hard to see it work if you don’t implement fully. I can say this with conviction because of my own personal experience.

I started implementing a couple years ago and just went “all the way” (i.e. no timesheets) very recently. I can really see both sides of the pro/con argument when it comes to operational barriers to implementing VP. 

I implemented VP in my practice for ethical, practical, and customer satisfaction reasons. It is the right thing to do both with regard to customers and employees. And if I believe that, and believe it is best for other professional service firms, then I absolutely have to practice what I preach.

HERE IS WHAT I LEARNED:

It IS a lot more work up front to thoughtfully consider the scope and document it before just jumping into the work. But on the back end, there are NO ugly fee discoveries (we spent HOW MUCH time on it??) or those horrible conversations with the client (after the fact and when pricing leverage is completely gone) about why the bill is so high (meaning “time got away from me").

This is really the way it should be...respecting the customer’s choice to buy or not buy at a price you are comfortable with.

If the customer isn’t willing to pay a price at or above what you’re willing to do the work for (your lowest walk-away price) both you and the customer know it up-front. No time invested or written off, no hard feelings. Better expectation management, more enjoyable doing the work because you don’t need to fret over the ever-growing WIP.

And when Baker says your “gut” knows what to charge, he is absolutely right.  Anyone who’s been in business for any length of time knows roughly where to start in discussions with clients about what “it takes” and what it is “worth” from a value standpoint to the client. I maintain that the biggest hurdle to overcome is the temptation to equate your past “hourly” price with the current “value” price. Big mistake. Easy to do and I’ve fallen victim to it myself, but it IS curable!

The thing is, this level of thinking about the scope should be done ANYWAY in order to provide excellent service and properly understand/manage customer expectations. But this usually isn’t done. Instead, we delve into the work living in this false sense of security that the customer will pay us that hourly rate “because that’s how long it took to do it” — it being whatever we thought the customer wanted but we never really took the time to define.

THE IMPORTANCE OF SCOPE

On April 9, professional service firm management guru David Maister shared an excellent blog post called “What Do You Want From Me.” His post addresses what should occur no matter how you price. It is excellent advice:

Whether you are being given work to do by a client or a boss, it’s common that people will assign work to you badly, and that will cause you problems.

How can you do what they want if they don’t tell you clearly what they want? The key is to take responsibility and ask permission to ask questions.

When someone gives you a task to do, say something like ‘I really want to do a great job for you, so can I clarify a few things?’ Most people will say ‘Yes.’ You can then be sure you understand the following details about your assignment —

1) The context of the assignment — ‘Please could you tell me what you are going to do with this when I get it done, tell me who is it for, and where does it fit with other things going on?’

2) Deadline — When would you like it, and when is it really due?

3) Scope — Would you like me to do the thorough job and take a little longer, or the quick and dirty version?

4) Format — How would you like to see the output of my work presented? What would make your life easier?

5) Time budget — Roughly how long would you expect this to take (so I can tell whether I’m on track or not?)

6) Relative priority — What’s the importance of this task relative to the other things you have asked me to do?

7) Available resources — Is there anything available to help me get the job done? For example, have we done one of these before?

8) Success criteria — How will the work be judged? Is it more important to be fast, cheap or perfect?

9) Monitoring and scheduled check points — Can we, please, schedule now a meeting, say, halfway through so I can show you what I’ve got and ensure that I’m on track for your needs?

10) Understanding — can I just read back to you what you’ve asked me to do, to confirm that I got it down right?

11) Concerns — before I get started can I just share with you any concerns about getting this done (e.g., other demands on my time) so that I don’t surprise you later?

Yes, your client...should be good at delegating or assigning work and giving you this information anyway. But the truth is that many people won’t have thought through what they really want from you until you guide them through their ‘either-or’ choices.

If you have not received answers to these questions, you don’t yet know what to do, and the risk of being judged a failure is high!

Don’t rely on your...external client...to give you all this information. Pull it out of him or her.

Scope definition is essential to VP. And it should be just as important to apply even when pricing by the hour. The point is to create accurate expectations for your customer and then meet them. No matter how you price, no customer likes billing surprises or service disappointments.

(originally posted at VeraSage.com)

Service and Leadership or Role Modeling (Call it What You Will)

I didn't get past the first bullet-point of Guy Kawasaki's "The Art of Customer Service" without needing to post this immediately:

1. Start at the top. The CEO's attitude towards customer service is the primary determinant of the quality of service that a company delivers. If the CEO thinks that customers are a pain in the ass who always want something for nothing, that attitude will permeate the company, and service will be lousy. So if you are the CEO, get your act together. If you're not the CEO, either convince her to change her mind, quit, or learn to live with mediocrity--in that order.

When I think of leadership faltering, this is the most prevalent thing I see. In every industry. But definitely in professional services.

It bears repeating: "The CEO's attitude towards customer service is the primary determinant of the quality of service that a company delivers."

In firms, though, it's not just the Managing Partner. It's every partner/owner/shareholder/director, etc. Every partner has been tagged a leader. As such, each partner's behavior is equally influential throughout the firm when it comes to setting the tone of "acceptability" for service attitude.

If your firm has "leaders" who think less than stellar service is just fine, even if there are some others devoted to excellence, the firm's standards will never exceed mediocrity overall.

Now, I'll go back and read the rest of Guy's post! If there's more that moves me, I'm sure I'll be posting about that, too.

Best Law-Related Blog Reference

Ian Best of 3L Epiphany is a 3rd year law student at Moritz College of Law at Ohio State University who built an enormous public resource.  He developed a nearly complete listing of law related blogs (I say nearly because my blog is missing!) (Thanks for adding me, IAN!) as part of his studies. 

He started a blog to study legal blogging. On beginning this effort, he explained his purpose (emphasis mine as is the comment in red):

First, 3L Epiphany will be a typical, personal blog where I can learn the practical aspects of blogging. I sincerely believe that the skills which I learn from this endeavor will be marketable ones, since blogging is becoming more prevalent and ubiquitous in the legal community.

Second, I plan to utilize 3L Epiphany as a  resource to demonstrate the many potential uses of a law student blog. In particular, I believe that blogging will eventually provide an entirely new model for displaying legal and professional skills to potential employers [and customers, too!!!], and I expect to make 3L Epiphany an example of how this can be done.

Third, I plan to study "blawgs" directly, especially those of legal practitioners. I will tour the legal blogosphere in order to discern the benefits and consequences of blogging. And I will interact directly with lawyers who blog to ascertain their personal observations and conclusions.

Not only has Ian tackled a massive project with terrific big-picture perspective (organizing it very effectively), but he demonstrates his strong sense of the type of thinking that will make him a very successful lawyer!

Understanding the role of blogging -- transparency to, and direct relationships with, your market -- will take him far in his career. Kudos, Ian!

(so...any 3rd year accounting students out there who want to do this in the accounting industry??)

VeraSage Institute Launches New Site and Blog!

Finally! We've "pushed the button" and launched the much anticipated website and blog for our think tank--a project we've been fast-tracking over the last 2 months.

I'm really proud of this work because:

1) it is always a joy and privilege to work with Ron Baker and my fellow VS colleagues

2) I had this fun and interesting creative opportunity to deviate from law, CPA, and financial/investment advisory firm websites

3) I got to work closely with Peter Flaschner The Blog Studio and Flashlight Design) whom I met at BlawgThink! last November. Peter is very talented and performed miracles to meet our entire programming wishlist as well as a very aggressive time-line. Peter is awesome and further supports my claim that I have never met a Canadian I didn't like. Looking for his link to post, I see he has blogged about working on the site here (thanks, Peter, you are very kind)

4) The functionality of our website/blog really kicks a**!  This site is still being populated but has (will have) an enormous amount of intellectual capital. The search-ability and indexing is outstanding. Peter recommended Expression Engine for the site's programming and his advice was excellent. The power for administering the site (set up as multiple blogs) is tremendous.

If you are involved in any professional service business and are at all interested in value pricing, alternatives to hourly billing/time tracking, understanding and motivating knowledge-workers, and so much more, you will want to spend some time going through this site. There is a ton of information and samples too. Lots there and much more to come.

VeraSage invites discussion in the form of new ideas, shared experiences and even dissension.

We are still working out a few quirks, but as VeraSage's webmaster, I certainly appreciate any feedback at all about the site.