Prognostication Is a Mug's Game

The British have a marvelous expression for foolish activities. They call them “a mug's game.” Well, prognostication is a mug's game.

The reason that predictions are so hard to get right is simple to fathom. In today's dynamic world, any course of action will likely be affected by unforeseeable random events that alter that course. For example, just a few years ago, who could have predicted LinkedIn, Facebook or Twitter ' much less the impact the social networks would have on society and business? Many of us remember when blogs were considered to be fads that would ultimately die or fade away. Now, blogs are ubiquitous, and an integral part of the business process. The fascinating thing about these devices is that they impacted the business world so rapidly that there wasn't time to predict them before they became important business tools.

Reasonable Assumptions

What, then, are reasonable assumptions about the future of the legal profession in this dynamic society? Here, we can surmise ' if not predict ' a future by extrapolating two things from the past.

Not as an extension of the past, but a clear view of the dynamics of the process of change itself ' its causes and our responses to causes. Change, it should be noted, is not an event ' it's an evolutionary process, the result of which is change. We must look at trends ' not trends in the legal profession, but rather in the needs of the clients, in the economy, in new law, all of which are evolving rapidly ' faster, in fact, than most law firms are changing. Trends in clients' industries portend changes in the professional firms that serve those clients.

Product manufacturers have an easier time, relatively, than do lawyers or accountants. They use market research to track consumer tastes. They use sales figures to monitor consumer purchasing habits. They have many sources and techniques to analyze and define customer buying practices, particularly for online purchases.

Lawyers' and accountants' clients tend to have distinctive or unique problems, which make it more difficult ' but not impossible ' to track and aggregate. Market research, which is too expensive for any but the largest firms, is another way. But at the same time, there is a way to divine trends that can be helpful in long range planning. That way is to track trends in the clients' industries.

That kind of information leads to an understanding of trends in the needs of clients in the near future. And the needs of clients are what define the trend in law and accounting firm management, business planning, governance, and even financial planning.

Why Trending Works

Why should this work? Because virtually all the changes in professional firm structure and management have come about in response to the needs of effective competition, and the changing demands of clients. The professional services world has been redefined by the ability and the need, to compete ' a world opened up by Bates.

Technological advances have effected changes in the mechanics of the professions, and will continue to do so. The danger is in believing that the technical advances and the new media are responsible for these changes. Not entirely so. They have facilitated changes, and created new media ' but they have not specifically caused change in firm structures and practices. Remember, Bates and the ability to compete came well before the Internet affected legal and accounting practice. The Internet, remember, is simply a new communications structure. What it has done is cause substantial changes in the print media, and caused the development of new techniques for dissemination of information. But the changes in law and accounting firm management are responses to the changing needs and demands of the clientele, to the economy, and to new laws and regulations.

Possible Changes in the-Not-Too-Distant Future

There are several areas that seem to be inconsistent with the current changing environment, and that portend possible changes in firm structure. Some examples follow.

• The fragile partnership structure, which can slow down decision-making that should be responsive to changing economic decisions, as well as making firm capitalization difficult. What will replace it?
• Law and accounting firm billing procedures, which may have a value in informing clients of the time spent in the client's behalf, but rarely reflects the value in the service performed. Value billing is emerging, but is still evolving. Who knows for sure which method will emerge as the standard?
• Partner and non-partner compensation changed radically during the current economic turndown. What will it become as the economy recovers?
• During the course of this recession, thousands of lawyers and accountants were discharged. What will be their availability as the recession recovers? What will be the shape of the accounting and law firms in the recovery?
• Growth requires capital, which may be more than a firm's partners can contribute or even borrow. Is the publicly-held law or accounting firm in the foreseeable future? The same is true, by the way, of corporations owning law and accounting firms, which have already been seen in some iterations.
• The shortage of brains and talent in the world today is too acute to continue the caste system in professional firms. Talented professionals may not be “partner material” (whatever that is). But the need for their skills suggest that in the future, firms may be structured on talent, rather than on traditional methods and requirements such as rainmaking abilities and longevity (the two-tier system).
• Today, law and accounting schools send their graduates into the world with little or no education about the economics of practice, nor an understanding of the crucial role modern marketing plays in firm management and growth. We see signs of change here ' but only in isolated incidents. That should change ' but how?
• In the three decades since Bates introduced the concept of frank competition to professional firms, a new and distinctive body of marketing technique has evolved. It has also become clear that professional marketing is integral to the growth of professional firms. Yet today, only the largest of these firms, and a relatively few smaller ones, accept that concept. The sustaining tradition is that only lawyers and accountants have full hospitality in accounting and law firms ' despite the well proven efficacy of organized marketing in practice development. How will this disconnect be resolved in the future?
• Despite three decades of experience in professional services marketing, remarkably little innovation seems to have occurred in its practice in recent years. Part of this is because of the random education in professional services marketing; part because marketing itself is an art form in the way the process is executed ' and there are not that many artists. Yet another reason is the lack of formal education in professional services marketing, which is very different from product marketing. A significant factor is that accountants and lawyers have little foundation in how to hire and evaluate marketers, which often results in unsatisfactory marketing process, and failure to judge good from bad ' effective from ineffective.
• Because of the disconnect between professionals and marketers, many firm marketers are inhibited from innovating. The marketers either feel intimidated by the stature of professionals, or don't know how to do anything except by rote. Perhaps time and competition will temper this situation.

Functioning in a Changing World

While evolution can rarely be accelerated, nor its ultimate destination accurately foreseen, there may be ways in which it can be accommodated. Accommodation is essential, simply because control of events, when possible, mitigate unpleasant surprise.

• Several things beyond outright behavior modification can make it possible for both professionals and marketers to participate in the change process.
• Learn to fathom those elements, both economic and social, that are currently changing. For example, new technology and new media, including the new social media. New law. Outsourcing. Globalization. Even if you don't plan to participate, learn it. You'll understand a great deal of the dynamics of new aspects of society and the economy. You'll spot trends.
• Don't insulate yourself from the marketing process if you're a professional, or from the dynamic nature of accounting or law if you're a marketer.
• If you are a marketer, try to understand the lawyer or accountant. The people, as well as the process. The attitudes, the points of view on the clients, the way they think, their values. Don't try to turn them into marketers ' marketing is your job ' but rather teach them how to be participants in the marketing process. As a marketer, you're not going to change the professionals, but you can educate them within the context of their professions.
• If you're a professional, you don't have to be a marketing professional if you don't want to, but you should know enough about the process to be able to participate in it as appropriate, as well as to understand the marketers and how their minds work. Ultimately, in a successful marketing program, you're going to have to participate in the process and in bringing the prospect into the fold. Learn how to do it well. It's a process well within your training and experience.
• Read the trade media ' both the law and accounting trades and the publications serving the industries the clients are in. Not just for the news, but for the trends.
• When you spot a trend ' particularly one that veers from traditional professional practice (such as moving from hourly billing to value billing, or keeping associates or accountants who are talented but not partner material) ' don't make snap judgments. Not only are these strong trends, but even if you're not ready to bring them into your practice, they may eventually be right for you.
• If you can't innovate, at least learn to respond to external factors that can affect your practice, your firm, and your clients.
• Competitive intelligence is important. You should be aware of other firms and what they're doing that you're not ' but should be. Or that may eventually be right for you.

Learn to question everything you do. Ask yourself the question, “This is the way I did it yesterday. Is it the best way to do it today?” You'll be amazed at the answer. In every aspect of life, there is nothing ' not an article, not a process, not an event ' that is unaffected by something else. That's why everything you do, large or small, will ultimately change, whether you choose it or not.

Conclusion

Can you accurately predict a dynamically and inevitably changing future? Not very well. But you can prepare yourself for it, which is more than half the battle.

Bruce W. Marcus is a Connecticut-based consultant in marketing and strategic planning for professional firms. He is the editor of The Marcus Letter on Professional Services Marketing (www.marcusletter.com) and the co-author of Client at The Core (John Wiley & Sons, 2004). E-mail: [email protected]. ' Bruce W. Marcus. All rights reserved.

The British have a marvelous expression for foolish activities. They call them “a mug's game.” Well, prognostication is a mug's game.

The reason that predictions are so hard to get right is simple to fathom. In today's dynamic world, any course of action will likely be affected by unforeseeable random events that alter that course. For example, just a few years ago, who could have predicted LinkedIn, Facebook or Twitter ' much less the impact the social networks would have on society and business? Many of us remember when blogs were considered to be fads that would ultimately die or fade away. Now, blogs are ubiquitous, and an integral part of the business process. The fascinating thing about these devices is that they impacted the business world so rapidly that there wasn't time to predict them before they became important business tools.

Reasonable Assumptions

What, then, are reasonable assumptions about the future of the legal profession in this dynamic society? Here, we can surmise ' if not predict ' a future by extrapolating two things from the past.

Not as an extension of the past, but a clear view of the dynamics of the process of change itself ' its causes and our responses to causes. Change, it should be noted, is not an event ' it's an evolutionary process, the result of which is change. We must look at trends ' not trends in the legal profession, but rather in the needs of the clients, in the economy, in new law, all of which are evolving rapidly ' faster, in fact, than most law firms are changing. Trends in clients' industries portend changes in the professional firms that serve those clients.

Product manufacturers have an easier time, relatively, than do lawyers or accountants. They use market research to track consumer tastes. They use sales figures to monitor consumer purchasing habits. They have many sources and techniques to analyze and define customer buying practices, particularly for online purchases.

Lawyers' and accountants' clients tend to have distinctive or unique problems, which make it more difficult ' but not impossible ' to track and aggregate. Market research, which is too expensive for any but the largest firms, is another way. But at the same time, there is a way to divine trends that can be helpful in long range planning. That way is to track trends in the clients' industries.

That kind of information leads to an understanding of trends in the needs of clients in the near future. And the needs of clients are what define the trend in law and accounting firm management, business planning, governance, and even financial planning.

Why Trending Works

Why should this work? Because virtually all the changes in professional firm structure and management have come about in response to the needs of effective competition, and the changing demands of clients. The professional services world has been redefined by the ability and the need, to compete ' a world opened up by Bates.

Technological advances have effected changes in the mechanics of the professions, and will continue to do so. The danger is in believing that the technical advances and the new media are responsible for these changes. Not entirely so. They have facilitated changes, and created new media ' but they have not specifically caused change in firm structures and practices. Remember, Bates and the ability to compete came well before the Internet affected legal and accounting practice. The Internet, remember, is simply a new communications structure. What it has done is cause substantial changes in the print media, and caused the development of new techniques for dissemination of information. But the changes in law and accounting firm management are responses to the changing needs and demands of the clientele, to the economy, and to new laws and regulations.

Possible Changes in the-Not-Too-Distant Future

There are several areas that seem to be inconsistent with the current changing environment, and that portend possible changes in firm structure. Some examples follow.

• The fragile partnership structure, which can slow down decision-making that should be responsive to changing economic decisions, as well as making firm capitalization difficult. What will replace it?
• Law and accounting firm billing procedures, which may have a value in informing clients of the time spent in the client's behalf, but rarely reflects the value in the service performed. Value billing is emerging, but is still evolving. Who knows for sure which method will emerge as the standard?
• Partner and non-partner compensation changed radically during the current economic turndown. What will it become as the economy recovers?
• During the course of this recession, thousands of lawyers and accountants were discharged. What will be their availability as the recession recovers? What will be the shape of the accounting and law firms in the recovery?
• Growth requires capital, which may be more than a firm's partners can contribute or even borrow. Is the publicly-held law or accounting firm in the foreseeable future? The same is true, by the way, of corporations owning law and accounting firms, which have already been seen in some iterations.
• The shortage of brains and talent in the world today is too acute to continue the caste system in professional firms. Talented professionals may not be “partner material” (whatever that is). But the need for their skills suggest that in the future, firms may be structured on talent, rather than on traditional methods and requirements such as rainmaking abilities and longevity (the two-tier system).
• Today, law and accounting schools send their graduates into the world with little or no education about the economics of practice, nor an understanding of the crucial role modern marketing plays in firm management and growth. We see signs of change here ' but only in isolated incidents. That should change ' but how?
• In the three decades since Bates introduced the concept of frank competition to professional firms, a new and distinctive body of marketing technique has evolved. It has also become clear that professional marketing is integral to the growth of professional firms. Yet today, only the largest of these firms, and a relatively few smaller ones, accept that concept. The sustaining tradition is that only lawyers and accountants have full hospitality in accounting and law firms ' despite the well proven efficacy of organized marketing in practice development. How will this disconnect be resolved in the future?
• Despite three decades of experience in professional services marketing, remarkably little innovation seems to have occurred in its practice in recent years. Part of this is because of the random education in professional services marketing; part because marketing itself is an art form in the way the process is executed ' and there are not that many artists. Yet another reason is the lack of formal education in professional services marketing, which is very different from product marketing. A significant factor is that accountants and lawyers have little foundation in how to hire and evaluate marketers, which often results in unsatisfactory marketing process, and failure to judge good from bad ' effective from ineffective.
• Because of the disconnect between professionals and marketers, many firm marketers are inhibited from innovating. The marketers either feel intimidated by the stature of professionals, or don't know how to do anything except by rote. Perhaps time and competition will temper this situation.

Functioning in a Changing World

While evolution can rarely be accelerated, nor its ultimate destination accurately foreseen, there may be ways in which it can be accommodated. Accommodation is essential, simply because control of events, when possible, mitigate unpleasant surprise.

• Several things beyond outright behavior modification can make it possible for both professionals and marketers to participate in the change process.
• Learn to fathom those elements, both economic and social, that are currently changing. For example, new technology and new media, including the new social media. New law. Outsourcing. Globalization. Even if you don't plan to participate, learn it. You'll understand a great deal of the dynamics of new aspects of society and the economy. You'll spot trends.
• Don't insulate yourself from the marketing process if you're a professional, or from the dynamic nature of accounting or law if you're a marketer.
• If you are a marketer, try to understand the lawyer or accountant. The people, as well as the process. The attitudes, the points of view on the clients, the way they think, their values. Don't try to turn them into marketers ' marketing is your job ' but rather teach them how to be participants in the marketing process. As a marketer, you're not going to change the professionals, but you can educate them within the context of their professions.
• If you're a professional, you don't have to be a marketing professional if you don't want to, but you should know enough about the process to be able to participate in it as appropriate, as well as to understand the marketers and how their minds work. Ultimately, in a successful marketing program, you're going to have to participate in the process and in bringing the prospect into the fold. Learn how to do it well. It's a process well within your training and experience.
• Read the trade media ' both the law and accounting trades and the publications serving the industries the clients are in. Not just for the news, but for the trends.
• When you spot a trend ' particularly one that veers from traditional professional practice (such as moving from hourly billing to value billing, or keeping associates or accountants who are talented but not partner material) ' don't make snap judgments. Not only are these strong trends, but even if you're not ready to bring them into your practice, they may eventually be right for you.
• If you can't innovate, at least learn to respond to external factors that can affect your practice, your firm, and your clients.
• Competitive intelligence is important. You should be aware of other firms and what they're doing that you're not ' but should be. Or that may eventually be right for you.

Learn to question everything you do. Ask yourself the question, “This is the way I did it yesterday. Is it the best way to do it today?” You'll be amazed at the answer. In every aspect of life, there is nothing ' not an article, not a process, not an event ' that is unaffected by something else. That's why everything you do, large or small, will ultimately change, whether you choose it or not.

Conclusion

Can you accurately predict a dynamically and inevitably changing future? Not very well. But you can prepare yourself for it, which is more than half the battle.

Bruce W. Marcus is a Connecticut-based consultant in marketing and strategic planning for professional firms. He is the editor of The Marcus Letter on Professional Services Marketing (www.marcusletter.com) and the co-author of Client at The Core (John Wiley & Sons, 2004). E-mail: [email protected]. ' Bruce W. Marcus. All rights reserved.