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o the Legal Profession

August 2011  

The Purpose-Driven Law Firm

What and who a law firm is for dictates its activities.


By Jordan Furlong


Two sharp observations from the business world have direct application to law firms that want to be around for the long run.

First, The Economist magazine recently celebrated the 100th anniversary of the founding of IBM. The magazine noted that the ability of a technology company to survive so long, from the days of punch cards to the age of information services, had nothing to do with tech.

"IBM's secret," the editors wrote, "is that it is built around an idea that transcends any particular product or technology. Its strategy is to package technology for use by businesses. ... Building a company around an idea, rather than a specific technology, makes it easier to adapt when industry platform shifts occur." Secondly, columnist Seth Godin recently asked, "What is your company's 'use case' - the best use of your product or service, the situation that you're organized around?"

Put differently, what and who is your business for? The answer dictates your activities. "Many organizations will take any customer, any time, and bend and writhe to accommodate money in whatever form it arrives," says Godin. "Other, happier organizations understand the benefit of optimizing for a certain kind of interaction, and they have the guts to decline the part of the market that doesn't want to use their tool/organization the way it was intended."

These are existential questions that go
to the heart of strategy, and they resonate for law firms caught in a rising marketplace storm. What is your law firm's idea? What purpose is it trying to serve? "Making money" isn't good enough -- that's got everything to do with you and nothing to do with the services you sell and the people to whom you sell them. Purpose is external, and a business lacking external market purpose shortly ceases to exist.

A story is told about the new Black & Decker CEO who walked into a directors' meeting, held up a drill and asked, "Is this what we sell?" Following nods of assent around the room, he replied, "No. This is what we sell," and holds up a board with a hole in it. The drill is only a means to an end, and it will someday be as obsolete as punch cards. The end is what customers need and value.

IBM "packages technology for use by businesses." KPMG "turns our knowledge into value for the benefit of our clients." Both these global giants can tell you why they exist and for whom they exist, and they have optimized their entire operations to achieve specific ends for specific clients. If your law firm can't articulate its "why" and its "who," you need to mobilize for that conversation as quickly as you can. Contact the author, Jordan Furlong.




The reputational differences among firms in the U.S. legal marketplace are becoming greater and that could be a big problem for some large firms.


By Ed Wesemann


When we ask general counsels what is the most important factor in selecting a law firm, the answer is usually reputation - well ahead of price. By the same token, the number one criteria for a law firm considering a merger partner is always reputation. Yet, law firms rarely do much to actually establish or maintain their reputation, in part because they aren't quite sure what reputation is.


Edge International has created a proprietary index of law firms' reputations. The Index is based on a variety of information sources but largely driven by surveys performed by Edge on behalf of our clients in which we asked law firm clients and referral sources to identify which firms have the best reputation for overall capability. We combine these surveys with publicly available rankings and ratings including league tables for transactional activity, federal litigation activity, rankings in directorys such as Chambers and Legal 500 and a variety of other sources.


The Edge Reputational Index is a percentage ranking of law firms compared to the firm that ranked the highest in our study, Skadden Arps. Therefore, Skadden is ranked as 100 percent - not because the firm is perfect, but rather because all other firms will be ranked in comparison. So a firm with a ranking of 20 has a reputation that is 80 percent lower than Skadden Arps.


We recently recalculated the Index to provide a specialized result for a client. The client wanted to look at its reputation in comparison to a number of firms it identified as peers. Specifically, it wanted to measure a comparison of reputational change among the firms. In the process of measuring the AmLaw 200 we noted a vast, and we believe increasing differentiation between the firms with the highest reputations and those with lesser reputations. Indeed, only 10 firms have a reputation rating of 50 or higher and half of all firms have an index rating of 10 or below. The average rating for the AmLaw 200 is 17.


Five years ago, when we began the Index, the average was 28. This change does not mean that law firms' reputations are declining. To the contrary, the reputations of global firms are becoming so strong and prevalent, that the standard on which the entire legal industry is judged has shifted upward and the bar has risen for all firms.   As a result, firms that do not pay attention to reputation suffer through comparison.

It is important to note that, although they have areas of similarity, reputation is a different issue than branding or name recognition. In the next issue of the Edge International Review (our professional journal on the management of law firms and corporate legal departments)we will have a detailed discussion of reputation: how to manage it and, most importantly, how to use it to a law firm's advantage.

If you are not now a subscriber to the Edge International Review please contact us for a complimentary subscription.  Contact the author, Ed Wesemann 


Leveraging Strategic Metrics

When complacency about real issues provides a false sense of security 


By Nick Jarrett-Kerr


Many law firm partners get obsessed with the wrong measurements. The firm's position in the league tables, its growth and relative size in terms of revenues, people and offices may be interesting but they are often not totally relevant to clients. I know of firms who have declined to divest an unprofitable practice group on the simple grounds that they would lose some revenue and thereby several places in the league table of top firms for their jurisdiction. The choice of metrics provides considerable challenges for many firms. The headline is that measuring organizational activities with reasonable frequency ensures that progress is achieved, provided always that the right things are measured.


The Metrics Journey Starts with the Strategic Plan


In refining the indicators to help the firm move to the next level, the best approach is top-down. Strategic planning incorporates a sequential approach which starts with strategic intent (identity, purpose and vision) and eventually translates strategic options into a coherent strategic plan accompanied by a series of strategic initiatives and business objectives linked to critical success factors, results indicators and performance indicators. Business Intelligence solutions and modern Practice Management Systems come loaded with hundreds of possible metrics captured by the software. What modern software can drive should not, however, determine or limit the choice of the right metric. In any event, it is sometimes hard to convert a myriad of data-driven metrics into the key indicators that will help the firm to achieve its objectives and know when it has achieved success.  


The right way round is to start with the firm's strategic plan - not with the out-of-the-box software - and from there to work out a focused group of strategically important and coherent measures. I have identified over 300 indicators in common use in law firms at present*. Some are Results Indicators which analyze and assess past performance and some are Performance Indicators which encourage appropriate action and behavior. A group of 300 indicators is clearly too many for most firms. As a rule of thumb, a firm might typically observe the 10/80/10 rule for the firm and each subsidiary business unit. This rule limits the choice of indicators to the best 100 of which ten would be regarded as Key Results Indicators, 10 as Key Performance Indicators and the remaining 80 as worthwhile subsidiary indicators for the firm regularly to monitor.


Metrics for Boards and Management Committees


A facilitated approach helps to identify the right choice of metrics. When done this way, firms often find that a large number of important strategic indicators do not readily flow from the firm's practice management systems and sometimes have to be measured manually or through surveys and market research. The table below illustrates examples of around 20 indicators (out of many) for a Board or Management Committee to consider. Some of these are surrogate measures (resources and time spent/used) and - like the billable hour - are only useful if the time is spent efficiently and effectively and delivers results.


What next?


There is then a line of sight between firm-wide objectives and indicators and the day to day activities or partners and the metrics which influence partner performance, behaviors and - ultimately - compensation. As with any journey, the starting point is critical and the measurement journey in any firm should start at strategic level.

Contact the author, Nick Jarrett-Kerr.


*Just like a keen bird-watcher, I am an avid collector of KPIs so if you have any 'beyond-the-obvious' in your firm, I would love to know about them: please email me.



Is This the Future for Law Firm Marketing?

Engaging clients today requires commitment from an entire firm.

By Sean Larkan


In small law firms it is not uncommon to hear partners or leaders say, "Damn, we need a dedicated marketing person so we can get some marketing done and can get on with our work." or in large firms, "Why doesn't marketing sort that out and free us up to do some legal work?" It seems that for partners things might be about to get worse before they get better.


Engaging clients today requires commitment from an entire firm (not just the marketing team) - and a different approach and structure for marketing. Law firm leadership - of both small and large law firms must understand:

  • Simply adding extra marketing bodies to address things like websites, social media and strategic communications is not in itself enough.
  • Clients no longer separate marketing from the practice group or industry sector specialty services we offer - marketing is the service.
  • Everyone in every firm now needs to take responsibility for marketing.
  • The buying practices of clients are now collaborative - more than ever based on word of mouth, website affirmation and objective advice about law firms that want to form relationships with them - it's now a dialogue not a monologue.

What are the implications of all this?

  • One can no longer pay lip-service to engaging clients or potential recruits wherever and whenever they interact with a firm - in the reception, on the phone, responding to an e-mail or an account query, a blog post or interaction at a cocktail function. All of these are important and cannot be shrugged off as minor interactions. Ideally all these key areas should be identified, awareness created and consistency in treatment addressed. Too often these are shrugged off as minor things that "someone in management will attend to."
  • Given that everyone potentially has to be involved in marketing, who is ultimately accountable? This will require careful consideration by law firm leaders and possibly some adjustment in structure and responsibilities.
  • It is likely more activities will need to be distributed by marketing to non-traditional areas such as within practice groups or industry sector specialty groups (this has already been a common trend in many firms). As a result, marketing organization charts will have many new dotted-line relationships.
  • There will need to be more group consultation between marketing and practice groups/industry sector groups or, in smaller firms, with individual partners.
  • Marketing and firm leadership will need to be far more sensitive to how interaction at the various key touch points is impacting client perceptions and ultimately the firm's brand.
  • Things like client and staff surveys will probably need to be adjusted to take these developments into account so that the right questions are asked, and the right data gathered.  

Contact the author, Sean Larkan.


Considering Outsourcing; But Do You Really Know Why?

In the rush to jump on the outsourcing trend, law firms forget about basic business objectives.

By Chris Bull


There is no getting away from the swell of interest law firms and corporate legal departments are showing in using outsourcing as a business tool. The trend has been given a very strong helping hand by the depressed economic climate but it began building back before any bank failed. The legal world operates on a 'fast follower' model and the steady growth of outsourcing means Managing Partners and General Counsel now regularly get, "Hey the competition is outsourcing - shouldn't we be doing that?"


I've been immersed in legal outsourcing from both sides of the fence for much of the last four years and believe it can offer a lot. But the first question I ask each business I work with is,  "What are you trying to achieve?" I try to get them to cycle back, delete that word "outsourcing" for a moment. At least 50% of the time, when I get the answers, I would not propose outsourcing as the first or best solution. That applies whether we're talking about legal process outsourcing (LPO) or support function / business process outsourcing (BPO).


Edge International's model for evaluating these issues has a few layers (we often assess 9 primary business drivers and then 18 criteria to determine the best location for outsourced or captive shared service operations). But right upfront there are five fundamental questions:

  • What are your financial targets? - be specific about quantum and how quickly you want to achieve it. Be honest; if you don't mean "our focus is quality not cost" don't say it. Be realistic - if you want to take 15% off your cost and a provider wants to get (at least) a 15% margin that's a big drop in spending on the service: what gets lost?
  • What is the quality the business needs? - note "the business needs" not "each Partner / Lawyer wants"; you won't get much out of any outsourcing deal if you follow that route. Law firms, often with good reason, want to be sure quality is maintained, with potential for improvement down the line. But sometimes, maybe, you could go with a service a touch slower, a bit less frequent, less "gold-plated?"
  • Are you ready for jobs to be relocated and lost? - refer to the first two questions: it is going to be tough to achieve any saving - or quality improvement - if the same folks work in the same place. There are lots of good strategies for getting the right result for your business though - focus your retention efforts on key personnel and jobs with maximum "face-time" with lawyers and clients.
  • How do you actually think a provider will do this better than you? - even if your motivation is all cost and labor rate arbitrage you've still got to be sure these outsourcing guys can do the job as well as your team. Agree to this answer before you start meeting potential providers; you know your operations and should decide what is going to change: process, innovation, customer service, economies of scale, technology, location...
  • Have you considered the internal alternatives? - I find too often management hasn't really sifted the whole range of other options to outsourcing. Always consider the alternatives, including investing in automation ("cloud computing" is throwing up some interesting options previously unavailable to many businesses), relocating to your own low-cost center or teaming up with other businesses in a consortium model. 
Contact the author, Chris Bull.  


Client Panels: A Retreat Checklist

To get optimum results, panels must be carefully prepared.

By Gerry Riskin


A Client Panel is a potentially powerful tool for getting your attorneys to reflect upon their client service performance and improving it; however, to get optimum results, one has to prepare the panel very carefully. Let's assume a mix of existing and prospective clients comprised of CEO's and General Counsel.


I strongly recommend that the initial comments of each panelist be limited in time - let's say to "seven" minutes each.  The presentations are limited in favor of allowing ample time for questions and answers and open discussions following the presentations - let's say the balance of a session that is 90 minutes in its entirety.


It is essential that your panel moderator conduct a preparatory interview with each panelist a few weeks in advance.  This will make a world of difference to the quality and value of the panel presentations. 


Here is the checklist:

  • Review the panelist's CV before contacting them and begin by making it clear that you have done so.
  • Communicate the purpose of the briefing which is to be a catalyst to help the panelist formulate thoughts for the seven minute presentation.  Remind the panelist that they are free to make whatever points they think appropriate but that this fifteen minute preparatory interview may stimulate the creation of a useful list of bullet points around which the presentation can be built.
  • Ask the panelist a question or two that will assist in making a more meaningful and personal introduction, for example, for General Counsel, "As a lawyer working inside "ABC", from what do you derive the greatest professional satisfaction?" or for a CEO, perhaps "As CEO of "DEF", what do you believe has been your greatest achievement in recent months or years?"  The answers to these questions allow an introduction on the day that significantly transcends a mere recital of the CV.
  • Ask the panelist to reflect upon law firms that they have preferred over others, now or in the past, and to articulate what it was about those firms that distinguished them from the firms that were not preferred.  Here is where the moderator can make a huge difference.  In almost all cases, the panelist's initial response will be abstract and conceptual "I preferred the firms who gave us better service"; or "understood us", or "understood our industry."  These are potentially valuable answers but worthless without illustrations and examples.  This is an opportunity to get the panelist thinking in more concrete terms by asking: "Can you give me an example or illustration of specific behavior that demonstrated to you that a firm understood your business?"  By digging deeper and deeper for examples and illustrations, you are gently and appropriately enhancing the preparation of the panelist and the utility of their address to your firm.  Indicate to the panelist what you have just done and ask that as they create their bullet points to please reference the illustrations or examples that they think will best illuminate each point.
  • The next question is the corollary of the last one: ask the panelist to reflect upon law firms that they have not preferred and perhaps have discontinued relationships with and to articulate what it was about those firms that disappointed them.  Examples and illustrations are equally important here.

By ensuring that the presentations and discussions surround specific illustrations and examples, the attorneys will instead realize how the illustrations apply to most of them and will be genuinely concerned, perhaps enough to improve.  After all, isn't that the purpose of the exercise?


Contact the author, Gerry Riskin.


Top 10 RFP Tips

Ideas on how to increase your law firm's "hit rate" on RFP responses.

By Pam Woldow


In the last 24 months, the legal industry has experienced a 300% increase in the use of Requests for Proposal (RFP) to procure legal services.


Why do Companies use RFPs?

Corporate legal departments, under increasing budget pressures are favoring RFPs because they provide a fair mechanism:

  • To compare firm-to-firm
  • To gain insight into how firms would handle matters
  • To exercise cost control

When do Companies use RFPs?

The most common circumstances that trigger a RFP initiative are:

  • New general counsel or a change of leadership
  • Legal Department is unhappy with an incumbent firm
  • A matter poses a unique issue or occurs in a jurisdiction that is not covered by the incumbent firms

What should Firms Consider?

Because firms, large, medium and small, are facing an ever-increasing number of RFPs, it is critical that they develop clear guidelines and protocols about how to respond to RFPs.   On average, a response "costs" a firm about $35,000 in time (lawyer and staff), so answering every RFP that finds its way through the proverbial door can be a serious time and money sink.


Not all RFPs are worth the time and effort to respond. Here are some key questions to consider:

  • Do we have a realistic shot at winning AND getting revenue producing work?
  • Do we want this client? Does it fit in our firm's client profile and overall strategy?
  • Do we want this type of work? Can we do it competitively? Profitably?
  • What is the revenue potential? Is our time better spent nurturing better opportunities?

Here are my 10 top tips:

  1. Ask questions to clarify the company's needs and priorities. The #1 mistake firms make is failing to gather enough information to provide an accurate response. If you miss the target, your response gets tossed.
  2. Tailor your answers to the scope of the questions. Don't dump your website copy into an answer.
  3. Carefully integrate the client's perspective into your answers. This may mean being attuned to client values, so you need to know what those are.
  4. Answer the question that is asked, not the one you wish had been asked.
  5. Brevity is beautiful. Consider the folks who have to read responses. Use only one example in the RFP; if you can't restrain yourself, add more in a Supplement.
  6. Provide tangible evidence of the capabilities you claim.
  7. Do include a quote from a satisfied client.
  8. Be on-point and clear about what you are proposing (no fluff, procurement people cut through it quickly).
  9. Make sure you can absolutely DELIVER what you are proposing (no bait-and-switch and no low bids "to get the work.") You are supposed to be a trusted advisor, not a huckster.
  10. The goal is to get to the next level of the RFP process - to get in front of decision makers.

Contact the author, Pam Woldow. 




In This Issue
Jordan Furlong on The Purpose-Driven Law Firm
Ed Wesemann on Reputation
Nick Jarrett-Kerr on Leveraging Strategic Metrics
Sean Larkan Asks Is This the Future for Law Firm Marketing?
Chris Bull on Considering Outsourcing
Gerry Riskin on Client Panels
Pam Woldow gives her Top 10 RFP Tips

  Gerry Riskin

Gerry Riskin




 Ed Wesemann

Jordan Furlong 


Pam Woldow

Doug Richardson


John Plank 

 John Plank







At The Podium: Upcoming Appearances by Edge Partners    

August 5, 2011: Jordan Furlong speaks at the ABA Annual Meeting in Toronto, ON

August 8, 2011: Sean Larkan gives the Keynote at The Boss of the Year Convention in Johannesburg,South Africa

August 9-10, 2011: Nick Jarrett-Kerr speaks at the CLT Management Conference for Lawyers in London, UK

August 22-23, 2011: Jordan Furlong speaks at the International Legal Technology Association Conference in Nashville, TN

August 23-24, 2011: Pamela Woldow speaks at the International Legal Technology Association Conference in Nashville, TN

September 9-10, 2011: Gerry Riskin speaks at the LAWASIA Conference in Hong Kong

September 17, 2011: Nick Jarrett-Kerr speaks at the Welinkar Institute of Management in Mumbai, India

September 22-23, 2011: Pamela Woldow speaks at the Association of Legal Administrators Large Firm Administrators' Retreat in Chicago, IL

October 5, 2011: Gerry Riskin gives the Keynote at the LawAustrralasia Conference in Freyeinet, Tasmania

October 7, 2011: Nick Jarrett-Kerr gives the Keynote at the Lawnet Annual Conference in Forest of Arden, UK

October 17, 2011: Nick Jarrett-Kerr gives the Keynote at the Strategy at UK200 Group Conference in Liverpool, UK

October 18, 2011: Nick Jarrett-Kerr gives the Keynote at the Association of Personal Injury Lawyers Business Conference in London, UK

October 20, 2011: Pam Woldow speaks at the ACI National Forum on Reducing Legal Costs in Philadelphia

October 22, 2011:  Pamela Woldow speaks at the Association of Legal Administrators Conference in Las Vegas, NV

November 17, 2011: Pamela Woldow speaks on Best Practices in e-Discovery in Pentagon City, VA

November 17, 2011: Nick Jarrett-Kerr gives the Keynote at UK200 Group Annual Conference in Liverpool, UK

Edge Blogs

Jordan Furlong's 


Ed Wesemann's: Creating Dominance

Pam Woldow's At The Intersection

Gerry Riskin's Amazing Firms, Amazing Practices

Nick Jarrett-Kerr's NJK
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