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In the new multi-channel trading model, traders will choose among traditional bilateral execution, SEFs or DCMs, and the use of swap-like futures.  Attend our upcoming webinar exploring the impact of derivatives reform on trading technology to learn about how trading technology will have to adapt to meet the needs of this new multi-channel model.

While these conversations are certainly steps in the right direction and may reduce outside spend, dependence on law firms to offer and establish these processes is at best, half of the equation.  World-class legal departments often implement internal processes, independent of their law firms, to ensure they are maximizing the quantitative and qualitative value of their outside counsel relationships.   As I reflect on this article, I wonder if the much publicized email exchange would have been different had there been clear guidelines established and enforced by this legal department.

Although the number and complexity of these internal processes vary, there are three key steps to consider:

1. Draft a Law Firm Staffing and Billing Guideline and Enforce it

Big Law Firm Associate 1: I hear we are already 200K over our estimate . . . this bill shall know no limits.

Big Law Firm Associate2: “Actually, this client’s staffing and billing guidelines require that we inform them when we go over our monthly budget.  Also, there’s tons of block billing in this month’s invoice, and twelve new names billing half hour increments which the client’s policy does not allow.  Our Managing Partner certifies compliance with their policy on a quarterly basis – he may not be able to sign off on this.” 

Legal departments often implement law firm staffing and billing guidelines to better define the scope of the engagement with their firms, and more critically, to clearly communicate their expectations on issues such as: invoice format, block billing, staffing levels, rate increases and diversity.

A strong policy, however, is only effective if it has an equally strong enforcement mechanism.   Understandably, checking every invoice can be a tedious (and sometimes unproductive) effort for time-constrained legal departments.  Increasingly, legal departments are investing in e-billing technologies which have significantly streamlined the ability to ensure law firms are complying with pre-determined billing practices.  For legal departments that do not have e-billing in place,  “spot checking” invoices has also been a successful strategy in sending a clear message of enforcement to their law firms.  We also have several CEB Legal members that have successfully shifted this task to non-lawyer professionals, as well as to business colleagues in Audit and Procurement.  Finally, we have seen an increase in legal departments hiring third party vendors that specialize in invoice review.

2. Develop a Law Firm Scorecard and Leverage these Analytics

Big Law Firm Associate 1: I hear we are already 200K over our estimate . . . this bill shall know no limits.

Big Law Firm Associate2:  Actually, 20% of our fees are tied to how we score on this client’s law firm scorecard.  Two of the metrics we are getting assessed on are Budget Accuracy and Efficiency, if we are already $200K over, we will probably get dinged on these metrics.  Additionally, this client looks to these scorecard performance on an annual basis, ranks us against other firms they work with, and removes their underperforming firms from their panel, so this extra $200K may actually end up costing us much more.

Leading legal departments understand that in addition to keeping rates flat and negotiating volume discounts, they must also focus on implementing quality controls.  The most effective way of ensuring that quality does not suffer when pushing cost control initiatives is through the implementation of law firm scorecards.  While we have seen numerous ways legal departments evaluate their law firms, there are a few commonly used attributes that tend to make the short list, these include:

• Responsiveness – are calls and other communications responded promptly and effectively?
• Expertise – are partners, associates, and paralegals being deployed at an appropriate level?
• Efficiency – are these timekeepers billing an appropriate number of hours?
• Budget accuracy – barring any extraordinary circumstances, has the law firm remained close to their initial cost prediction?
• Invoice clarity- are the law firms invoices submitted on a frequent basis and in an easy-to-read format?

Finally, the frequency of these evaluations tends range from a “per project basis” to a formal annual review for law firms receiving significant amount of work.

At the most basic level, providing consistent and clear feedback to law firms, leads to improvements on specific areas of concern (i.e., they become more responsive).  But savvy legal departments have used scorecard data to maximize the value they receive from their law firms.  For example, some CEB Legal members tie a percentage of total law firm fees to how well that law firm performs in a scorecard.  Most notably, a few legal departments use scorecard metrics to create a friendly sense of competition between the firms in their panel.  They do this by not only assessing their law firms against a series of metrics, but also by sharing with their firms how their performance compares to other law firms in their panel and what distinguishes top quartile from bottom quartile firms.  We have also seen legal departments remove law firms that remain in the bottom quartile for an extended period of time.

3. Better Understand your Law Firm Spend Data and how it Compares to Others

Big Law Firm Associate 1: I hear we are already 200K over our estimate . . . this bill shall know no limits.

Big Law Firm Associate2:  Actually, this client had reviewed past invoices on similar projects and had set clear parameters on the appropriate cost and duration for this type of matter.  An additional $200K puts us beyond even their highest acceptable levels. 

World-class legal departments make a habit of analyzing their law firm spending.  Specifically, they understand how much they spend per law firm, per practice area, and in some case, per certain time period.  While this information can be generated with ease through the use of e-billing or matter management technology, it is still possible to obtain useful data even without e-billing in place by getting this information from their law firms.  In fact, most law firms can generate very granular reports about their client’s spend since these reports are used for billing. By reviewing their own data, legal departments can spot trends (i.e., on average, we purchase 1500-1600 hours for Law Firm X, or year over year, the average we pay our Labor and Employment firm $200,000) and set the right expectations about billable hours, staffing levels and duration with their firms.

While understanding how much you are actually spending with law firms is a critical step, a few CEB Legal members have also began to examine how much they should be spending with law firms.  With resources such as The Real Rate Report, legal departments can benchmark their hourly rates against a dataset of almost $10 billion.  CEB Legal members have used this strategy to push back on law firm rate increases, negotiate a fair rate with new law firms, and better establish fixed fees and other alternative fee arrangements.   Our outside counsel analysis can take this even one step further.

While recent events may prompt useful and honest conversations with your law firms, consider that there are steps you can take, independently, to maximize the value of this important, albeit costly, relationship.

Here’s the thing. I was wrong about Vine. It’s actually pretty amazing, and it might be the coolest social tool for brands since, well, Twitter itself. Do I think it’ll make or break your next campaign? Of course not. But the limitations of the medium provide a cool platform for brands to do certain things very, very well. Below, check out our guide to the effective use of Vine.

What is Vine? Simply put, Vine is a mobile app that allows users to record very short (six seconds or less) snippets of video. When viewers go to watch the video (itself called a Vine), it loops, creating a rather mesmerizing effect. Here’s a Vine of the CEB Marketing team, hard at work.

Vine was originally a separate company, it was bought by Twitter last fall, and it launched to users in January. You mostly run into Vines via Twitter, although I’ve seen them shared elsewhere (Facebook, embedded on pages) as well.

Why is Vine cool? In general, for the same reason Twitter is cool and haikus are cool: imposing restrictions – arbitrary or otherwise – on communications often leads to lots of creativity, as users try to pack as much meaning through the channel as possible.

For marketers specifically, Vine offers the opportunity to quickly impart reasonably complex messages in a channel that seems to compel multiple viewings. In other words, it gives us the opportunity to create audiovisual memes – snippets of information that are so short and so digestible that we can’t get enough.

How should we as marketers be using Vine? Obviously, this technology has only recently reached our phones, and so this list is far from definitive. But the most interesting Vines I’ve seen from marketers and brands so far have all had to do with illustrating the characteristics or potential uses of a product, in ways that are so infectious so as to nearly compel sharing.

Here’s an example from pursemaker Monica Botkier, showing just how much you can fit in their Valentina Mini line of purses.

Here’s another great one, from Bacardi UK, illustrating how to use their rum to make a Cuba Libre (aka a rum and coke):

Here’s Gap, illustrating what kind of shoes you can wear with a new line of colorful pants: You get the idea. If you’ve got a product that lends itself to quick feature display, or, you’ve got a unique use for a product that you want people to quickly grasp, Vine is an amazing tool. For more inspiration, check out Bon Appetit’s gallery of six-second recipes.

How should I avoid using Vine? So, there’s two levels of things I think people should try to avoid when using this tool; tactical and strategic. When making Vines themselves, you should probably try and avoid using too many camera angles – that can just make the video very confusing. Don’t go in without a plan; consider doing some lightweight storyboarding – six seconds is a surprisingly long amount of time. Pay attention to sound: sound is muted by default when watching Vines, but some users turn it on.

From a strategic perspective, though, you should be thinking hard about the capabilities of the medium and how they relate to the product you’re creating. So, if you’re just taking some random video around the office to “humanize” your brand, that’s probably not the best use of Vine. If you’re using a stop-motion technique, as in this GE video, to build brand engagement, that’s a lot better. Don’t just use Vine as an excuse to put more branded content in social media feeds; explore the creative space the platform offers and create something interesting and worth sharing.

But CEB Marketing members – we want to hear from you. How have you successfully used Vine, and what kind of cool examples have you seen in the wild?

If you’re a B2B marketer, chances are, you’ve heard us or our colleagues in CEB Sales talk about the Challenger Selling approach. If you haven’t, the idea behind Challenger is simple: the key way to maintain margin and preference as an individual salesperson is to actively attempt to change the mind of your customers about their business problems in ways that lead back to you as a supplier. In other words, if you sell Product X, and your customer complains that it’s not like Product Y, don’t apologize - tell them why they’re wrong for wanting Product Y. That reason why the customer is wrong is called a Commercial Insight, and it’s at the heart of successful Challenger approaches.

Most of you guys probably agree that this is important. But it opens up a second question: what happens in a world where Sales doesn’t get in until later and later in the buying process? Because that’s the world we live in today (see “Owning More of the Funnel”). In a world where customers are setting their expectations without the benefit of a Challenger salesperson to point out things they might be missing, Marketing’s role necessarily expands – and that means we must create content that embeds the Commercial Insight and performs the Challenger role in the absence of a salesperson.

That’s what our new workshop, Building a Challenger Content Ecosystem, is all about: how can Marketing engineer an entire content portfolio – from tweets to videos to whitepapers – that maximizes the chances of changing customer mindsets about their core business problems before they ever contact a salesperson?

In our workshop, we’ve designed a few key exercises that try to draw out the ingredients in a successful Challenger content portfolio. Here’s what you’ve got to know to make it work:

The discrete mental model shifts customers must make to accept your insight. Our Commercial Insight is a powerful thing: at its best, it should compel action from those who hear it. But just talking about the Insight isn’t enough: you have to think about the discrete things customers believe that supports their own model of the world, and understand how those beliefs must shift in order to ensure acceptance of the Commercial Insight.

How hard those shifts are to prove, and how you can prove them. In a world where alternate information is always at the click of a mouse, proving your claims becomes more and more important. You must have a sense of which claims are likeliest to meet skepticism, as well as what kind of data and analysis you can bring to bear to prove yourself correct.

How to create content across the attention spectrum. Thinking about the broader world in which your content lives is important. Customers are constantly bombarded with e-mails, white papers, tweets, blog posts, and the rest of the kitchen sink. Therefore, successful content has to do three things: it has to spark attention, introduce the problem in a general way, and confront the customer with what they’re personally losing as a result of the problem.

Sounds like a lot, right? Well, it is, but we can help. Consider attending the next session of Building a Challenger Content Ecosystem. It’s an all-day session, June 19 in Atlanta, and you’ll emerge from the day with a map for your Challenger content and specific to-dos to begin the process back at the office.

When we think of Twitter, we naturally associate it with hashtags but the thing is, hashtags didn’t exist until a year after its launch.  Twitter didn’t even invent them!  Hashtags were a user innovation: in 2007, Chris Messina tweeted, “how do you feel about using # (pound) for groups?  As in #barcamp [msg]?”  This concept caught on relatively quickly as people started inserting hashtags to lump conversations together by topic, thereby making it possible to see all the tweets associated with that subject.  Categorizing tweets to make conversations more searchable was a big hit so Twitter.com made it official by supporting hashtags (Thanks, Chris!).  However, consumers took that idea and ran with it.  Creating hashtags morphed into a way to add status to your internet persona.  People use Twitter hashtags for things you would never think to search for.  To make my point, here are some hashtags I pulled from my own Instagram and Twitter accounts on May 14:

• #whatdiet: box of Krispy Kreme donuts (Instagram)
• #ohboydoilovethis: A link to Kate Spade’s 75% off surprise sale (Twitter)
• #moremorewewantmore: the trio of new Lays Potato Chips flavors available for a limited time (Instagram)

Be honest.  Would you think to categorize the products above with those hashtags?  Probably not.  Now that you know these hashtags exist, does it make sense that those are the hashtags the consumers chose?  Absolutely.  The pressure to be witty in 140 characters or less transformed the hashtag into contextual “asides” that add a certain air to the tweet.  The first example is ironic, the second is indulgent, and the third is quirky-cute.  I should note that those hashtags all came from the same person, which proves my point: Your consumers are moving, changing targets who make up new conventions and behave in new ways all the time. 

Societal pressures have always existed but they happen a lot faster over the Internet.  People think it’s important to gain followers and they do that by using common hashtags.  Then, once that’s established, they need to keep those followers entertained by creating these ironic and witty categorizations.  There’s also the worry of offending people by “abusing hashtags” and creating long unnecessary lists, which cancels out whatever message the post is trying to get across. We’re in an age where no one seems to have enough time anymore and everyone is more easily distracted so this most recent hashtag evolution into “meta-commentary” makes perfect sense.  People have to cut down their ideas, their words, and their meaning in order to even get heard in the first place.  The hashtag gives audiences a filter for how to perceive a post, allowing for interpretation-shortcuts.  It’s a quick way to add commentary without explaining why.  Let’s hope plugging hashtags into verbal conversations won’t be the next chapter in the hashtag saga.

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Customer behaviors and channel perceptions have changed dramatically over the past several years.  Customers now place the same amount of value in self-service to resolve their issues just as much as they value the phone.  And this isn’t necessarily a bad thing.  In fact, customers are saying things like:

“The website referred me to a phone number.  If I wanted to call I would have.  I preferred using the site!”

“Your agents are very nice and I always have a good experience when I talk to them.  I just don’t always want to have to talk to them…” 

So certainly the demand exists from customers around the ability to self-serve, as opposed to being served by the phone, email, or even a live branch. And the reason stems from the fact that, just as technology has evolved, customer expectations have evolved as well.  Customers simply care about receiving tailored, low effort service that achieves issue resolution as quickly as possible.  However, being able to guide customers according to the right solution according to their unique issue is never simple.  How can we understand which channels to keep versus the ones to dismiss?

The most successful companies I’ve spoken with engage in dialogue to consider what the best issue-to-channel matches are.  A dangerous assumption that is always made is that every customer and every issue are the same.  Absolutely not!  So should all live contact channels (like bank branches) be removed and replaced with self-service?  Absolutely not!  Not necessarily. Mapping out the best issue-to-channel matches allows you and your team to create a starting point.  A starting point to uncover what channels make the most sense for your service organization and for each customer considering your customers’ issues, your internal capabilities, and your core competencies.  I always tell other service organizations not to act prematurely when deciding to add or remove certain channels.  What works for them may not work for you.  Understand your desired outcomes and consider all possible alternative solutions, all anticipated and hidden costs, and all benefits.

We’ve seen companies add/remove channels for a variety of reasons whether it is cost constraints, competitive pressures, or the desire to improve the overall customer experience.  What will drive you to invest or divest?

Related Links

Cost Savings Customers Want

Modernizing the QA Function

Issue-to-Channel Mapping Tool

Ending the Customer Expectations Race: Service Offering Investment/Divestment Rules

By accessing our extensive network of wealth management executives, you will learn that over 50% of respondents have already adopted financial planning technology and have no plans to change it in the next five years.  Thirty-eight percent of surveyed executives indicate that they do intend to adopt or replace financial planning technology by 2017.  Also, discover how much wealth management firms intend to spend on financial planning, as well as other technologies, using our 2013 Financial Services Technology Adoption & Investment survey.

This post, and the related research brief, was recently written by our colleagues of the CEB Sales Leadership Council. 

A CRM system is not only an integral part of the sales (and customer support) workflow, but is the lifeblood of the sales (and support) process, providing reps with the right information for the right customer at the right time.

The deep integration of CRM with the sales process has led some executives to take CRM for granted. Yet, these systems require huge yearly investments, and should be subject to the same scrutiny as any other investment. However, “How do you track the ROI of your CRM?” is a question no Sales Ops executive wants to, or can easily, answer.

Such was the case when we took this question to four member organizations. Most of the conversations began with a laugh or a sigh as we proceeded to uncover the complexities of each members’ processes of tracking and reporting the various elements of their CRM. We asked four main questions:

1. What CRM do you use, since when, and why?
2. Does your organization formally track and report on the ongoing value of your CRM system?
3. In what informal ways does your organization measure the ongoing value of your CRM system?
4. What benefits has your organization realized from CRM implementation?

None of the companies we spoke with formally track the ROI of their CRM. While increases in business metrics could be seen parallel to a CRM implementation or enhancement, there was no proven correlation between CRM and business performance. Instead, the way companies sought to measure their CRM’s effectiveness was through tracking adoption and utilization metrics.

Only with high levels of adoption could any potential benefits or enhancements of the CRM be realized and applied to produce growth. These benefits can be largely subjective but ranged across business units to help with internal collaboration and visibility, sales process efficiency, and rep mobility. (Read more about getting employees involved and using internal technology platforms)

The CEB Sales Leadership Council has shared its findings of this research with us, so CEB Customer Contact members you can now check out the full report: Tracking the Ongoing ROI of a CRM system and use the profiles to validate or compare your organization’s CRM processes and benefits.