The Scrouge of Face Time

This is not a rant against video conference technology for your tablet or phone. This is about a different kind of face time.  This face time refers to the policy that requires lawyers to be physically present at the office even if they can work just as productively elsewhere.

Twenty years ago, law face time was more justifiable than it is today.  Back then being physically present was highly correlated with increased productivity.  It was difficult to work outside of the office and get as much as done as when you were in the office.  The internet was in its infancy and most of the applicable resources were primarily available in hard copy.

Face time was also used as a way to measure an associates’ desire to become partner.  The longer someone was in the office, the more likely they were to be able to socialize with partners, and to be available when a choice new assignment came through the door.  Humans have a natural tendency to equate being physically present with commitment and dependability and requiring associates to be physically present was a manifestation of that.  Likewise, it used to be natural for a law firm partner to walk by an empty office and assume that the person who usually inhabits that office is not working.

Today, law firms that require face time are increasingly likely to be at a competitive disadvantage.  As a consultant to law firms, I have interviewed scores of associates who have expressed everything from mild resentment to outright hostility to policies that require them to be physically present a minimum number of hours a week.  Associates are particularly likely to be upset when partners are permitted to be out of the office to take care of children or other personal matters when associates are not.  This kind of rank hypocrisy undermines morale and increases turnover.

There is a generational element to policies that require face time, but it would be a mistake to dismiss the opposition to face time as something confined to millennials.  Too many law firms are focused on measuring inputs, such as billable hours, at the expense of evaluating outputs, such as the quality of work done on behalf of clients.  In a world where a significant amount of legal work can be done remotely, face time policies are often more about the limited managerial abilities of law firm partners than the needs of clients.

For too many partners, requiring face time is a means of controlling associates.  In some extreme cases, I have suspected that partners like face time policies because it makes associates more dependent on the firm by isolating them in the office and making it harder for them to network with other law firms and potential clients.

Law firms do, of course, have a legitimate interest in ensuring that lawyers be able to communicate with each other in person.  The ability to go down the hall and ask a colleague a question is a real benefit of sharing an office.  Ironically, in my experience, law firm partnerships suffer because the partners don’t spend enough time together in each other’s company.  There is a reason why a vast majority of the most successful law firms operate out of shared physical spaces.  This fact is not likely to change in the next five years.

There is, however, a critical difference between appreciating the significant benefits of sharing a physical space with colleagues and requiring associates to be there in person even when being physically present isn’t necessary to serve clients.  The sooner law firms abandon face time polices the more likely they will be to attract and keep talent and otherwise compete in an increasing competitive market for legal service.

What’s Wrong with Law Firm Marketing Budgets

How much would you spend to promote a service that generated a $500,000 profit?

There isn’t one single correct answer, but so long as you didn’t have more lucrative options, it certainly wouldn’t be irrational to spend $100k in marketing to generate such a profit.

Too many aspects of law firm marketing and budgeting aren’t evaluated in terms of their projected or actual returns. Instead, law firms create preferred and forbidden zones of marketing that often have no relation to the returns they generate.  A partner wants to take someone out to lunch or dinner? No problem, that expense will be approved. The firm has been sending its lawyers to bar association events for years?  That sponsorship will often be renewed whether or not that event has generated a decent lead since the turn of the century. There is a seemingly unwritten rule that certain kinds of marketing are just what lawyers or law firm do.

This approach to budgeting is especially pernicious when applied to the marketing budgets that some firms allocate to individual partners. I have encountered numerous firms with 50 or more attorneys that allocate marketing budgets to partners in dysfunctional ways. One firm rewarded partners who had larger books of business; they received larger marketing budgets. Numerous firms enacted policies that allocated the same amount to partners, often between $5,000 and $10,000 a year. And like many government budgets, partners needed to exhaust that budget before year end or risk getting a reduced allocation the following year.

Together, these policies cause firms to misallocate and under investment in marketing, especially for projects and clients that have higher than average returns. A partner who can only spend $5,000 on marketing in a year will be deterred from going after a very big fish, whatever that term means for that particular firm.  And given that it generally doesn’t take ten times as many marketing dollars to bring in a case that generates ten times the revenues, this creates exactly the wrong incentives.

If firms want to increase their ability to grow rapidly, they need to make strategic choices to invest in marketing decisions that have the potential of generating high returns. And like a well-balanced investment portfolio, law firm marketing budgets should be diversified. They shouldn’t just replicate low-risk strategies that have been used before. Nor should firms solely rely on speculative strategies that might hit a homerun.

I can tell you from personal experience that it can be a challenge for law firm leaders to try to measure ROI on marketing expenditures. The very act of asking this question can be perceived as threatening. But there is a reason why ROI is a universally accepted concept in the business world. It has its drawbacks, but law firms would greatly benefit by evaluating marketing budgets on a ROI basis.