Andrew McDermott

The fear spread faster than the virus.

International law firm Quinn Emanuel Urquhart & Sullivan shut their New York office down after a partner tested positive for Coronavirus. An attorney at Lewis and Garbuz also tested positive.

Partners across the country were concerned.

Then Faegre Drinker closed 22 offices after a potential outbreak; once this happened, the industry began to follow suit. By the end of the week, firms were rushing to implement remote work protocols.  They did their best to build a virtual law firm on short notice.

Why your law firm needs to rely on remote work

Way back in December 2018, Bloomberg predicted that a smaller recession was on the horizon. A Duke University survey stated experts were preparing their worst-case projections.

“Nearly half (48.6 percent) of U.S. CFOs believe that the nation’s economy will be in recession by the end of 2019, and 82 percent believe that a recession will have begun by the end of 2020.”

This prediction was pre-COVID.

In the last decade, the legal industry experienced rapid growth — encouraging until you realize industry growth never really returned to the levels of prosperity we experienced before the Great Recession. The Great Recession was devastating; on Bloody Thursday, six big law firms announced layoffs, cutting almost 1,000 employees.

This is why firms need remote work.

Thanks to the COVID-19 pandemic, the US saw a 40 percent drop in the number of new legal matters opened each week.

“Almost 50% of the more than 1,000 consumers surveyed in April said they would likely delay seeking legal help until after the COVID-19 crisis has relented.”

Your office is a large expense that includes:

• Your rent or mortgage
• Insurance payments
• Equipment and supplies
• Network administration and security
• Utilities and upkeep

Carrying this expense makes it harder to remain competitive. Competing firms that choose to go remote will find it easier to generate more profit from less revenue. Does this mean you have to shutter your offices completely?

Not at all.

You can choose how you’d like to apply your cost-cutting measures. You can close all or some of your locations. You can relocate to a less expensive locale. You can create a fully virtual law firm. Whatever your approach, you have options.

What this means for law firms

This downturn means many law firms have begun to seek credit as a safety net to carry their firm through this period of uncertainty. Other firms have been devastated by the pandemic, beginning to enter survival mode as they fight to keep their doors open.

Competition has always been intense.

This crisis means many firms will be acting out of desperation, doing anything they can to stay afloat. The firms that survive this ordeal are the firms that understand their win conditions.

You need to define your win conditions.

Your win condition is any condition that leads you to victory; it’s something you’ll need to define for yourself. Your win condition could be:

• Survival, keeping your current staff employed and salaries intact
• Laying off the necessary staff to stay out of the red
• Decreasing billable rates or choosing alternative fee arrangements to attract new clients
• Increasing billables by making remote work permanent via the virtual law firm model
• Creating a discount brand that productizes your services, enabling your firm to generate revenue through volume

You’ll Need to Outline Your Win Conditions.

You’ll need to take your firm’s culture and compensation models into consideration. You’ll also need to consider the long-term goals you have for your firm. Do you need to become a skilled generalist to take on any available work? Or do you need to dump unprofitable practice groups to focus on the 20 percent of work that produces 80 percent of your revenue?

You have some tough decisions to make.

That’s the thing about remote work; it buys you the time you need to come up with a plan for the future. It gives you a chance to retain your top talent, loyal clients, and maintain some semblance of financial stability.

If survival is your goal, remote work can help you get there.

Fear continues to outpace the pandemic

“A second round of Covid-19 cases is ‘inevitable’ come fall, I’m almost certain it will come back, because the virus is so transmissible and it’s globally spread,” Dr. Anthony Fauci stated in a May 2nd webinar. Combined with the flu, Coronavirus could be a devastating hit to our economy.

The time to act is now.

Dr. Fauci may be wrong; in fact I hope he’s wrong — but he could also be right. This could be a phase that blows over, but it could also be the start of our new normal. None of us know the future, but we’re allowed to choose how we’d like to respond.

Believe it or not, your law firm can thrive during this pandemic. You can grow by leaps and bounds, during a global recession. But it starts with careful preparation. In my next post, I’ll show you how build a virtual law firm that outperforms traditional firms by 1.5x or more.

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You’re ready to go remote.

You’ve seen the benefits that come with remote work — double-digit growth year-over-year; happy clients, employees,  and shareholders. You’re excited to receive the benefits. The pandemic taught the legal industry that, not only can firms continue to survive through a crisis, they can prosper.

You can prosper.

This is great news, but it’s also a bit overwhelming. If you’ve decided to make the switch to remote work, in some capacity, where do you start?

What law firms need to go remote, successfully

If you’re looking to make the switch to remote work and you’d like your efforts to be successful, you’ll need a plan. Your plan needs to be customized and designed specifically around your law firm, employees, and the needs of your organization.

1. Identify your firm’s culture
2. Choose your remote work style
3. Create systems, policies, and procedures
4. Select tools to help you manage your systems, policies, and procedures
5. Conduct a test rollout
6. Seed your organization with influencers
7. Initiate a firm-wide rollout

This seven-step process is a concrete plan you can use to ensure your transition to remote work is successful. Let’s take a look at the first step for law firms looking to make the switch towards remote work.

1. Identify your firm’s culture

Researchers Robert E. Quinn and Kim S. Cameron, discovered there are four types of organizational cultures.

• Adhocracy cultures are temporary and focused primarily on change. These cultures are often characterized as “tents rather than palaces,” conveying the fact that these firms are quick to reconfigure themselves rapidly in the face of change. These firms require variation, are highly adaptable, flexible, and creative.
• Clan cultures are family-like; there’s a concerted emphasis placed on mentoring, nurturing, and investing in the growth of those in the clan. It’s a family-like environment that’s oriented around doing and accomplishing together. In this culture, employee development is a must, approaching clients as partners essential—engagement, commitment, and loyalty non-negotiable.
• Hierarchy cultures depend on established traditions, structures, and routines. These law firms focus their attention on perfection, efficiency, stability, and doing things the right way. Each person is expected to adhere to predefined roles. Clear lines of decision-making authority, standardized rules and procedures, structure and control, and accountability mechanisms are indispensable.
• Market cultures are utilitarian and primarily focused on returns. Internally, law firms with market cultures are competitive, achievement-focused, and driven by outcomes and prestige. In the words of General Patton, market organizations “are not interested in holding on to [their] positions. Let the [enemy] do that. [They] are advancing all the time, defeating the opposition, constantly marching toward the goal.”

This is a crucial first step.

Understanding your firm’s existing culture is crucial because it functions as a protective barrier around your organization. For example, implementing aggressive, achievement-oriented procedures in a clan culture will doom your remote work rollout to failure.

What if you don’t have a culture?

Ask the average associate or support employee in your law firm about the values in your firm; you’ll probably get a different response each time. Ask them to describe the law firm’s culture, and you’ll receive blank stares. If employees and clients don’t understand it, the words “values” or “culture” sound gimmicky or pretentious.

Nothing could be further from the truth.

Jeff Lawson, co-founder of Twillo, explains the difference between values and culture. He shares a simple formula you can use to establish concrete values and a healthy firm culture.

• Values are written down. Your values are written down and shared with everyone throughout the company.
• Culture is living values. It’s how the people in your law firm live out the words written in your values.

See for yourself.

Here’s the part most law firms get wrong.

Firm leadership decides that they’re going to come up with the values for the firm. That approach is doomed to fail. According to Lawson states that your firm’s values, to be successful, come from the tribe (your employees). They’re not created from the top-down; they’re projected from the inside out.

Here’s why this matters.

The remote work style, approach, and tone you take should match the type of culture your organization has.

2. Choose your remote work style

Remote work is a broad category.

Many assume the term “remote work” is synonymous with virtual law firms, which isn’t necessarily the case. Does remote work mean you’re going to need to convert your law firm to a virtual one, even if you’re not ready?

Not at all.

You can decide which remote work style works best for your organization. Here are some options you can use to customize, tailor, and deploy remote work in your law firm.

1. Allow top performers to work remotely, on a trial basis
2. Permit specific practice groups or employee types (freelance) to work remotely during the vetting process
3. Apply specific iterations of remote work (telecommute, flex work) where employees have specific parameters governing remote work
4. Go 100 percent remote and convert your traditional law firm to a virtual one
5. Go 100 percent remote, switch to a virtual law firm; focus on building a results-only-work-environment (ROWE)

See the differences with each one?

Each of these options provides law firms with the flexibility they need to achieve their desired outcomes. If you’re dealing with a market culture, you may want to present remote work as an exclusive privilege for top performers. If you’re part of a clan culture, you might pitch it as an option that maximizes employee health and well-being.

Everything about your approach needs to be customized.

3. Create systems, policies, and procedures

As I mentioned in my previous post, the structures you need to build a successful virtual law firm are the very same ingredients you need to develop a successful traditional firm. They’re fundamental components every organization needs to grow successfully. Here are the essential elements you need to build a successful legal practice.

1. Financial management. Cash flow is to a business what blood is to your body. This is the foundation of your virtual law firm. If you don’t have a clear set of guidelines to govern cash flow, you won’t be able to keep cash flowing into your firm.
2. Communications management. Poor communication = a cash-poor legal practice. Communications management covers internal and external communication — sales, marketing, business development, origination, etc.
3. Systems management refers to the rule sets that maintain standards and performance. It shows employees (who aren’t knowledgeable veterans) how to produce the results you need and how to sustain firm-wide quality standards you’ve set.
4. Legal management is your area of expertise. From a firm management standpoint, legal management is all about managing risk.
5. Service management. The part of your business your clients pay you for. It’s an important part of a healthy law firm; it’s also the client-facing portion of your organization. That said, it’s also the least important part of your firm. If your service is amazing, but you have poor cash flow management, for example, long term survival is unlikely.

Using remote work as a guide, you’ll have the tools you need to amplify, negate, or circumvent the class structures in your firm.  Here are several guides you can use to establish the systems, procedures, and policies you need.

• Establishing your law firm
• Essential tools to launch your virtual law firm

I’ve shared additional guides for each of the sections covered in my previous post, which you can find here.

4. Select tools to help you manage your systems, policies, and procedures

The right tools amplify your firm’s performance and productivity. In the right hands, these tools create leverage and growth — attracting and retaining top shelf clients, saving you time and money, boosting and compounding employee productivity.

Your tools typically fall into one of five categories:

1. Feeders provide you with important must-have information, e.g., legal research software, case management software, communication portals, and data analysis tools.
2. Organizers, arrange people, information, resources, and time. Specialist tools i.e., practice management software, ensure firm-wide standards are met consistently with minimal input from firm leadership.
3. Unloaders unburden. Unloaders manage tedious, repetitive, or unsuitable details and tasks. Unloaders are guardians of the 80/20 rule. This includes specialized tools like time tracking, calendaring, client portals, and CRM tools.
4. Dealers create openings and opportunities. These tools notify you of opportunities, e.g., upcoming projects or client matters, platforms that provide business development or speaking opportunities.
5. Enforcers act as policemen. Enforcer tools ensure firm-wide standards are met consistently (i.e., minimum billing increments). Enforcer tools like practice management software protect your time, schedule, and boundaries from intentional or accidental abuse.

These tools are important because they protect your billable time. They manage the amount of time associates and support teams spend on nonbillable work. As we’ve seen, this has a significant impact on your utilization and realization rates.

The better your toolset, the better your performance.

It’s a layered approach requires the upfront work we’ve invested so far to get to this point.

5. Conduct a test rollout

A phased rollout is generally a good idea. When it comes to changes and growth you’ll need to account for two specific details:

• Transitional pain: The period of time where you switch from the old to the new, during which the “pain” that’s supposed to be relieved actually gets worse. 
• Murphy’s Law: An adage that’s typically stated as “Anything that can go wrong, will go wrong.”

How you count for these events?

You ask your top performers to lead the charge. You give your best employees, the top 10 percent, the opportunity to go remote first. You give them a chance to weigh-in, asking them to share their insights, feedback, and experiences while working. These top performers are capable and efficient. They’re also far more likely to adapt to a drastic change in circumstances.

Why make things harder for your top performers?

Because they can handle it. You can reward them with incentives, additional privileges, and details. Then, use their feedback to improve remote work conditions.

Who are these employees? More importantly how do you go about finding them?

First, take a look at your top performers (you know who they are). Then, out of your top performers, identify those who are highly conscientious. If you’re not sure how to find them use OCEAN to identify the conscientious employees in your firm who are a good fit.

What I mean by conscientious?

Conscientiousness reflects a tendency towards trustworthiness, self-discipline and reliability instead of spontaneity. Highly conscientious people are hardworking, reliable and focused. Employees who are conscientious will either be industrious, hard working and focused on performance and competence or orderly more organized and less cluttered (e.g. highly organized, efficient and neat).

These employees will provide you with a mountain of data, especially if they’re agreeable.

6. Seed your organization with influencers

 You’ve done it, you’ve ironed out the majority of the bugs in your remote work rollout. What happens next? You ask your top performers to your remote work initiative internally to other employees. These top performers have a considerable amount of clout in your organization.

This gives them influence.

Ask your top performers to use this influence to get weigh-in from the rest of the employees in your organization. This ensures you’ll be able to earn their buy-in when it’s time for a firm-wide rollout. As you prepare for a firm-wide rollout you’ll want to collect the following data:

• Employee objections to remote work
• Concerns about possible risks
• A list of the most common failure points
• Employee desires, goals, fears, and frustrations

Work to alleviate each of the issues as they appear. This doesn’t need to be done overnight, you can do this one person at a time over many months. Things will continue to get easier as you help your employees.

7. Initiate a firm-wide rollout

If you followed steps one through six and you’ve addressed the concerns listed in each step, you’re ready for a firm-wide rollout. Provide your employees with the tools and resources needed to maintain performance standards.

What if something goes wrong?

Don’t be afraid to roll things back, to take a step back and analyze things from a different perspective. If a rollback is necessary be open and transparent with your employees. Let them know what’s going on, why it’s happening, and the steps are taken to address any problems that have occurred.

Go through steps one through six on an as-needed basis.

Watch for any issues, ensuring that you’re ready to deal with any complications that crop up.

This is what law firms need to go remote, successfully

It sounds like a pipe dream to some.

Double-digit growth year-over-year. Happy clients, employees, and shareholders for eager to continue their remote work initiatives. Success in the middle of a pandemic, recession, or temporary downturn.

It’s all possible if you have the right system.

400 of the largest law firms in the United States struggled to grow at 1 to 2 percent per year. Virtual law firms and those who rely on remote work experience growth between 15 to 30 percent year-over-year. Traditional firms are fighting for an ever-shrinking piece of the paying client pie.

This doesn’t have to be you.

With the right approach, careful planning, and a structured rollout you’ll find remote work provides your law firm with the performance benefits you need to build a thriving and successful law firm.

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Contractors are in a constant struggle.

According to a recent McKinsey study, 98 percent of all large construction projects experience a cost overrun of 30 percent; 77 percent of these projects are 40 percent late.

It gets worse.

These projects take 20 percent longer to finish and are 80 percent over budget. Completing projects on-time and in-budget are increasingly difficult for construction firms. For most firms, cost overruns aren’t the exception; they’re the rule, a worldwide problem for contractors.

But it doesn’t have to be.

What contractors need to 2x their revenue

You can’t fix your cost overruns if you’re not sure what’s causing it. Research by Edyta Plebankiewicz at the Institute of Construction Management lists the following causes of cost overruns.

The causes listed are categorized as:

1. Technical causes specifically price increases, poor product design, changes in scope, inadequate planning and decision-making, and inappropriate organizational structure.
2. Economical causes include a lack of incentives, resources, or inefficient use of resources.
3. Contractual causes include inappropriate tendering strategies and procurement options.
4. Psychological causes refer to optimism bias in decision-makers and cognitive biases in construction and client teams.
5. Political causes point to deliberate cost underestimation (low bids combined with contractor clawbacks) and forecast manipulation

Here’s a summary of the items included in her research.

If you’d like to increase your revenue, it’s essential to gain a clear understanding of the causes that routinely bleed your budgets dry. This is where time tracking makes a significant difference in your construction projects. The impact is significant whether you pay your team by the job or the hour.

Here’s how time tracking helps you with each of these categories.

• Technical causes: Minute-by-minute time tracking exposes technical weaknesses and obstacles. Are hourly crews making too many trips to the store for supplies? Are they offering customers extras or favors (e.g., out of scope repairs or additions) because they’re already on-site? Time tracking provides you with the data you need to dig deeper.
• Economic issues: Do your employees have the financial motivators they need to perform at an efficient or high level? Using time tracking as a confirmation tool, you can experiment with incentives and rewards (i.e., completion bonuses) to see how employees perform.
• Contractual causes: This could provide you with the data you need to renegotiate the terms of your agreement with customers. If you’re getting an unfair deal, aggregate time tracking data could provide you with the edge needed in negotiations with both current and future clients.
• Psychological causes: Time tracking can expose unfounded optimism and cognitive biases in customers/decision-makers. By using time tracking data, your proposal/bid can include checks and balances to prevent unfounded optimism. A word of caution, though. Aggregate time tracking data should be used with care. It’s essential to provide customers with high-level data in a way that minimizes harm to your company (e.g., 55 new construction projects over the last eight years have shown us that it takes X amount of weeks to complete Y).
• Political causes: You can use aggregate time tracking data to disqualify low ball competitors, getting customers to second-guess their bait and switch tactics. Many customers want a low ball bid; time tracking data will provide you with the bargaining power you need to command higher fees (all things being equal). Bonus points if your customers receive supporting data (e.g., photos, videos, plans, etc.) to validate your proposal/bid.

A simple detail like precise, as-it-happens, time tracking is an extraordinary tool in the right hands.

How can contractors use time tracking to 2x their revenue?

Here are several strategies construction companies can use to 2x their revenue. Use your time tracking data to control the following areas of your business.

• Costs. Vetting your team provides you with the assurances you need to qualify your project teams. However, time tracking is one of the tools you can use to verify that costs are in line with expectations. With adequate time tracking, you can identify whether employees are productive and consistent.
• Payables. Time tracking, when combined with accounting data, gives you a clear idea of the amount you’re paying out to material suppliers, subcontractors, and laborers.
• Billable Leakage. A Trimble report discovered that construction workers lose 45 to 90 minutes per day searching for the equipment, tools, and data they need to work. These billable leaks increase project costs unnecessarily over time, impacting your firm’s cash position. Inaccurate time tracking, poor estimates, and unnecessary rework also contribute to billable leakage.
• Cash position. If your team is paid hourly, time tracking should provide you with an estimate on the amount of cash on hand you have at any given time—income and assets minus assets and liabilities, typically outlined in a single account. Delayed or withheld payments and unpaid bills impact your firm’s cash position.

How do you use your time tracking data to 2x your revenue?

1. Collect 30 – 90 days of accurate time tracking data. You’re looking to collect data routinely so you can forecast, predict, and assess your team’s performance.
2. Look at your time tracking data. Find and make one improvement based on the data you’ve accumulated, e.g., eliminate downtime due to lost equipment, then reduce or eliminate rework, and so on.
3. Use time tracking data to eliminate waste across your organization. Are crews standing around for large portions of the day (skills waste)? Are they waiting for the data equipment or instructions needed to work? Use your timesheets to eliminate transportation, inventory, motion, waiting, overproduction, over-processing, defects, and skills waste.
4. Use your time tracking data preemptively. e.g., negotiating bids, poisoning the well to eliminate low ball competitors from bids, increasing prices, shaping customer expectations, etc.

Repeat these steps over and over.

If you’re attracting a regular stream of clients, you’ll make a surprising discovery. The amount of revenue you generate per project will begin to go up. You’ll find you’re making huge gains in productivity and profits while your costs go down.  

It’s a repeatable series of steps you can follow.

This is what you need to 2x your revenue

It’s an uncomplicated series of steps your construction team can follow. As we’ve seen, the vast majority of projects take 20 percent longer to finish and are 80 percent over budget. Ninety-eight percent of all large construction projects experience a cost overrun of 30 percent; 77 percent of these projects are 40 percent late. It’s a worldwide problem for construction crews.

How are two percenters able to avoid this problem?

These high-performance crews use their data, time tracking, to understand and improve their team’s performance. You can do it too. With step-by-step improvement, you’ll find the day-to-day struggle becomes optional in time.