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: In Search of Perfect Client Service

"Maybe this will make us live the way we should have been living."

By Patrick J. Lamb

A man who owned a shoe repair store was being interviewed this morning.  He said his business was up big time.  People are being more thrifty, having shoes repaired, zippers replaced and so forth rather than simply disposing of these things and buying new.  "Maybe this [referring to the bad economy] will make us live the way we should have been living," he said.  Some, like my mother, a child of the depression, never stopped living that way.  But for many of us, maybe the new ways will stick.

That sentiment should be kept in mind as we review the latest economic and legal news.

4th Quarter GDP revised from -3.8% to -6.2% with no sign that the pace of decline is slowing Consumer spending continues to decline as a precipitous rate An additional 600,000 jobs were lost in January Business purchase of new equipment plunged at a 29% pace, the most since 1958 Fed Chief Ben Bernanke said we are experiencing a "severe contraction" and warned that the recession could continue into 2010.

The losses in the legal industry and the resulting termination of staff and associates have been chronicled here and elsewhere.  I read with interest Bruce MacEwen's The "Index Fund" of Law Firms in his Adam Smith, Esq. where he discusses the Latham terminations.  Deep into the post, you'll find this important discussion:

I have a hunch, which [Latham Chairman] Dell obliquely confirms when he remarks that "current and future client demand would likely require less leverage."

My theory—which I'll devote more ink to in future—is that, among many other things, we as an industry are going through our own "de-levering" period, and that on the other side of this interregnum firms will, by and large, have lower associate: partner ratios.   Many are the implications of that, presuming I'm right, but Latham seems to be acting as if they think it's accurate.

And then there's this:

Finally, this morning's news out of Latham tells us something with all the emphatic insistence of a fire-truck air horn:  Firms are businesses.  I hope that by now that comes as news to no one.

Before firms can live to thrive again another day—which, trust me, they will—they first have to live. 

True, to be sure, but it seems to me the pressing question is how do firms change to live?  Because I included the recent bad news about the economy adjacent to the discussion about the legal market, I bet many of you read those two parts as if they were one.  But they are not.  The first part is more about our clients and the ever more challenging world in which they struggle to survive.  Latham partners (and other BigLaw partners) will make out just fine in 2009.  Maybe they'll take a domestic vacation or delay a big purchase for a year.  Hardly soup kitchen stuff.    But our clients operate in a world where most can't see when or how their downward spiral ends.  The pressure to reverse the downward spiral is enormous.

Maybe this will make us live the way we should have been living.  Maybe it will make we lawyers remember those in a service business do best when we truly walk with our clients arm in arm, not when we negotiate with them in a mere vendor-vendee relationship.  Maybe the troubles will cause use to figure out win-win ways to deliver legal services at a dramatically lower cost and still increase our profit margins.  It can be done.  Now, more than ever, it must be done.

 

Full post as published by In Search of Perfect Client Service on February 28, 2009 (boomark / email).