134SMART COLLABORATION
a professional’s reputation beyond her direct collaborators. The
more colleagues a professional collaborates with, the more first-
time referrals she will receive from others who have learned about
her through word of mouth. At one firm, for example, it took
working with just two extra partners to generate a work referral
from a brand-new contact—who, presumably, had learned about
the partner’s expertise through word-of-mouth recommendations.
And because getting work referred from others is more efficient
than prospecting for new work on your own, these referrals are
highly valuable in helping you reach your revenue targets.
My analyses show, conclusively, that the more a partner col-
laborates on client work that others generate, the more his or her
own revenues will grow in subsequent years, regardless of office,
practice group, organizational tenure, or present-year revenues. To
put it in concrete terms, for each additional partner collaborated
with in year 1, the originating collaborator is able to bill about
0.5 percent more in year 2. For example, for the average lawyer in
the American Lawyer Global 100 who increases his collaboration
network by just one extra partner per month, that translates into
incremental billings of $22,000—even before accounting for the
associated increase in hourly rates, which are discussed in the next
section.
True, that sum alone might not be substantial enough to change
a professional’s behavior. But consider figure 5-1.
This graph, based on one firm’s actual data, shows how the
effects of collaboration compound over time for two different
partners—let’s call them Jen and Kim.
6
Imagine they start with
the same number of work referrals—in this case, five. In the first
year, Jen (represented by the top, thick lines) works hard to build
her collaboration network both by accepting referrals sent to her
and by sending some work to others. By the end of year 1, she has
reached the firm’s top quartile in terms of the number of partners
she’s worked with. Also, the number of work referrals she receives
from both new contacts (thick solid line) and prior collaborators
(thick dashed line) has risen significantly; the effects continue to
swell over time, as Jen’s teammates spread her reputation.
Chapter_05.indd 134 05/10/16 11:51 pm
Collaboration and the Contributor135
On the other hand, Kim (represented by the figure’s thin lines)
starts building her network more slowly; by the end of year 1, the
number of referrals she gets from both prior and new contacts is
still in the bottom quartile. As a result, her reputation continues
to spread much more slowly over these four years. By the end of
this period, Jen is receiving more than twice as many referrals as
Kim. Granted, this illustration is based on the average effects of
collaboration across many partners in a firm—some will probably
gain a bit more and some a bit less from collaboration. But over-
all, understanding that the effects of collaboration definitely com-
pound over time—in part the result of the significant growth in the
professional’s reputation—might well prompt a partner to invest in
their collaborative future.
Collaboration drives your reputation and rates
Professional services are notoriously opaque—that is, hard for
clients to judge their value, even after a service has been per-
formed—either because they are so deeply intertwined with
0
10
20
30
40
50
Start
Year 1 Year 2 Year 3 Year 4
Number of work referrals
Jen (high collaboration): New contacts
Jen: Previous contacts
Kim (Low collaboration): New contacts
Kim: Previous contacts
Referrals from new vs. old contacts
FIGURE 5-1
Impact of collaboration on work referrals over time
Chapter_05.indd 135 05/10/16 11:51 pm
136SMART COLLABORATION
many other client actions and decisions, or because the results
appear only after a considerable time lag, or both. Despite
the uptick in clients’ use of metrics to parse and analyze their
“spend” on knowledge-based services, that nagging uncertainty
remains. The practical result is that many clients still make their
hiring decisions largely on the basis of a professional’s repu-
tation, gleaned from word-of-mouth recommendations. The
implications for you, as a contributor who is contemplating
collaboration? Working on other people’s projects can spread
and burnish your reputation in clients’ eyes, and increase the
demand for your services.
Obviously, you won’t be surprised by the assertion that a strong
marketplace reputation allows you to charge more. But what may
surprise you is the clear effect of collaboration on these rates.
Across the many firms I studied, the more cross-disciplinary proj-
ects that the partners worked on, and the more complex each
project was, the more their hourly rates increased in following
years. These analyses all statistically controlled for other ways of
explaining variations in rates, such as a partner’s practice, office,
seniority, gender, and other variables. The simple fact remains:
cross-practice collaboration experience is a very robust determi-
nant of your ability to raise your rates faster than your colleagues
who do more siloed work.
So, for example, the average noncollaborating lawyer who billed
$500 an hour in 2008 would now bill about $600 an hour. But
if that same lawyer had done a significant amount of complex,
cross-practice work in the interim, his or her rate would now be
well over $750.
7
Even if you’re not the kind of professional who
bills by the hour or day, you should realize that in this context,
money is a proxy for reputation. In other words, it’s an easy way
to quantify the link between your collaboration experience and its
market value.
Why does that happen? Clients recognize your ability to pro-
vide strategic direction, rather than just pure technical expertise.
They’re willing to reward you for delivering value when they’re
considering their most sophisticated issues.
Chapter_05.indd 136 05/10/16 11:51 pm
Collaboration and the Contributor137
Even in the short term, collaboration helps boost rates. In one
firm, for example, professionals who have worked on a project orig-
inated by a partner in a different practice typically charge rates 8
to 10 percent higher than for in-practice work. Part of this discrep-
ancy comes from clients’ inclination not to push back on smaller
components of the bill—that is, in cases where the out-of-practice
partner billed relatively few hours. But senior people on the client
side tell me that they’re willing to pay for specialist expertise when
it clearly enhances the outcome.
The evidence is compelling: the greater the proportion of your
billed hours spent working outside your practice, the higher your
rates will be relative to average colleagues.
Collaboration can help you weather the next storm
Collaboration insulates professionals from the worst financial
effects of an economic downturn. This argument is only a big
deal when it’s a big deal—and at those times, it’s a very big
deal.
For example, in one firm, partners who collaborated with at
least ten other partners each year in the three years prior to the
2008 recession maintained their revenues in 2008–2009, whereas
the revenues of those who were isolated practically fell off a cliff.
What’s more, collaborative partners’ revenues climbed much more
quickly afterward.
There are two explanations for this phenomenon. The first is
a version of portfolio theory, drawn from Finance 101. Just as a
competent financial adviser will warn you not to put all your retire-
ment savings into a single kind of investment, smart partners in
the knowledge industry spread their bets over a range of different
clients. By the law of averages, some of those clients inevitably fare
better than others during a recession. At the same time, the most
collaborative partners are apt to be involved in multiple sectors,
some of which are likely to be countercyclical. Finally, different
practice groups fare differently in different phases of the economic
cycle. Contributors who had the benefit of strong relationships
Chapter_05.indd 137 05/10/16 11:51 pm
138SMART COLLABORATION
with their bankruptcy- and restructuring-oriented colleagues had
plenty of work flowing their way in 2009.
The second explanation is psychologically based. We humans
are tribal, at heart, and when food gets scarce, we “take care of our
own”—the phrase that one partner used to explain his recession-era
behavior to me. And as he further explained, he didn’t consider the
whole partnership to be his tribe. Instead, he was referring to the
small cohort of tightly knit partners who were sharing work before
the downturn really started to bite down.
Of course, very few partners began collaborating in order to
protect themselves from calamity. If they’d seen the downturn
coming, they’d have hedged stocks, made a killing, and retired
when the economy turned. So think of this sort of protection as a
nice by-product of collaboration—that insurance policy that turns
out to be a very wise investment. It’s not a big enough reason to
change behavior, in and of itself; but it’s a nice benefit, nonetheless.
Strategies for collaborating as a contributor
Collaboration can feel like a risky gambit: as we’ve seen on both
the individual and firm level, it requires up-front investment, but
yield rewards only over time. However, the would-be collaborative
contributor can adopt strategies to reduce his or her costs, increase
benefits, and shorten the payback period for collaboration.
Let me suggest two overall strategies: cultivating relationships
with appropriate partners, and developing your own skill set in
ways that will make you more valuable to potential collaborators.
Cultivate relationships with high-profile partners
You need to work on collaborative projects with partners who are in
charge of prestigious client accounts. The higher the profile and sta-
tus of their network, the more influence those partners have on the
perceptions of people both inside and outside the firm. So how do
you get yourself on the radar of partners who can benefit from your
expertise and help you build your capabilities and your revenues?
Chapter_05.indd 138 05/10/16 11:51 pm
..................Content has been hidden....................
You can't read the all page of ebook, please click here login for view all page.