Standard Blog Post With All The Trimmings

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Only one thing is impossible for God: To find any sense in any copyright law on the planet.
Mark Twain

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Our Trip in Brooklyn

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Awesome Gallery Post

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Brooklyn Brewery Mash Video Post

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Super Duper Audio Post

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Summer 2011 in Brooklyn

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Standard Post without Image

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The 5 Ps of professional happiness

A recent survey listed lawyers (specifically associates) as the unhappiest occupation in America. This isn’t a huge surprise. I know about a kajillion lawyers (which is one followed by a wad of zeroes, or ten to the wad), and way too many of them are fairly unhappy with their profession. When I stopped practicing (escaped?) two years ago, many of my colleagues gave me that look you saw as a kid when you told your friends that you’re going to Disney World — you know, that wistful, pleading look that says, “Take me with you. Please?”

In this short talk (just six minutes) at the LexThink Conference in Chicago, I explain why unhappiness abounds in the legal world. Then I give five simple steps for fixing it. And this advice doesn’t just apply to lawyers; any professional or creative person can use them to find happiness at work. So take six minutes and watch. See if it can help you find your own professional happiness.

Boston endures

(Image by D.H. Parks on Flickr, used under Creative Commons license, CC BY 2.0.)

Seventy years ago today, my mother was born.

In Boston.

Thirteen years ago this week, and then again three years later this same week, my daughters were born.

In Boston.

I grew up an hour north of Boston. Some of my earliest memories recall family trips into the city. Frigid December visits to see the Christmas-decorated windows at Filene’s and the lit-up trees on the Common. Muggy August afternoons at Fenway Park to see the Red Sox, the team I worshipped. For 22 years after returning from college, I lived or worked in the place that I will forever consider my hometown.

Boston.

I’m sharing this personal history because that is what Boston is all about: history. It’s what we’re best at. Maybe it speaks to our metropolitan inferiority complex, living in the shadow of New York and often forgotten as a major American city. Boston is like the nerdy kid with glasses in your fifth-grade class. Not as athletic as New York (and its 27 World Series titles), not as hip as Los Angeles. We trumpet our many world-class universities and hospitals the same way the nerdy kid recites all the presidents in order.

Another reason we celebrate the past is that it reminds us of a time when Boston was more important. It was the first major city in the United States, and the largest until Philadelphia surpassed it in the mid-1700s. The American Revolution began here, of course, 238 years ago this week. It is home to America’s oldest public school, oldest university, oldest subway, and oldest major-league ballpark. Even the city’s only acceptable nickname* — “the Hub” — comes from an 1858 Oliver Wendell Holmes book referring to Boston as the “Hub of the Solar System.” There’s a mix of self-consciousness and wistfulness when we use that sobriquet.

But there’s another reason that history is so important here. More than anything else, Boston endures. It’s a trait we inherited from the Puritans who settled here. Boston endures endless winters of chilly grayness and frustrating seasons of baseball ineptitude. Boston endures indicted House speakers and derided presidential candidates. Aggressive drivers and countless struggles with the eighteenth letter of the alphabet.

And Boston will endure the Patriots’ Day tragedy, an attack on another of its many historical institutions: the world’s oldest annual marathon. Bostonians will forget their differences and roll up their sleeves and work together to clean up and rebuild. Bostonians will pursue the cowardly perpetrators with New England ingenuity and industriousness. And most of all, Bostonians will remember, and will take this new Boston Massacre and weave it into the 400-year-old tapestry of the city’s history.

Because Boston endures.


*You will never hear a Bostonian say “Beantown.”

Trade Secrets — Chapter One

Trade Secrets cover art

Many of you know that I’ve just finished writing my first thriller. During my career as a trade-secret litigator, I was always struck by how fiercely corporations would fight to protect their secrets. Some would do almost anything. So I got to wondering: what if a company would do anything—even kill—to protect its secrets?

When investigator (and recovering lawyer) Warren Archer lends his phone to a beautiful stranger, a ruthless corporation marks him for elimination. He must confront the secrets of his past to save himself, the woman, and a city.

Here is Chapter 1 of Trade Secrets. I hope you enjoy it. Let me know what you think. Send me a tweet or .

One less grammar post to read

10 items or fewer, dammit!

The cool thing about English is that no matter how well you think you know it, there’s always something more you can learn. Every so often, I discover that I had been making a mistake. In this case, it involved the words less and fewer.

I considered myself reasonably well educated when it comes to these words. I knew that fewer dealt with countable nouns, like ducks and cupcakes. (“I have fewer cupcakes, but she has fewer ducks.” Or something.) And I knew that less dealt with uncountable nouns (or mass nouns), like body fat and waterfowl noise. (“Consequently, I have less body fat, but she has less waterfowl noise.” Who writes these examples?) The classic misstep is made by supermarkets everywhere, where the sign for the express checkout reads “ten items or less.” (Except at Whole Foods, who gets it right.)

Of course, some countable nouns still take less because they’re really things you measure instead of count, like money and time. (“Less than ten minutes,” or “less than five bucks.”)

But where I went off the rails was with the phrase one fewer. I figured that if the noun was countable, then fewer was the way to go. (“I have one fewer duck than she has.”) Turns out, I was wrong. The proper phrase is one less. The logical argument is that one thing can’t really be counted. But the real reason is that no one says “one fewer.” Well, almost no one. I did.

Until I looked it up.

The important thing, if you care about writing well, is that you continually try to improve by looking up things instead of just guessing. (I had to double-check that I didn’t mean continuously; I didn’t. I also double-checked the hyphen in double-check. Tough sentence.)

Update A couple of good posts on the same topic can be found at Jan Freeman’s Throw Grammar from the Train and Danny Dagan’s That Danny.

(Image courtesy of The IBD Blog.)

You made LinkedIn’s top 10 percent. Now, shut up about it

you're one in 20 million
Recently, LinkedIn sent out spam congratulatory emails to some of its members, telling them that they ranked in the top one, five, or ten percent of the most viewed profiles. Which sounds great, till you realize that LinkedIn has 200 million members. Now I’m no math whiz, but I’m pretty sure that ten percent of 200 million is 20 million. Even the lofty top one percent loses some of its luster when you realize it’s a distinction shared with 1,999,999 other users.

So if being a member of such a large crowd pleases you, that’s fine. But do you really want to brag about it on Twitter and Facebook? The distinction is dubious and the self-promotional element seems a little tone deaf. It’s kind of like trumpeting your Klout score or how many Google Wave friends you have. There’s nothing wrong with self-promotion, as long as it’s done with authenticity and class. By all means, shout out your accomplishments to your friends — they’ll be proud of you for the stuff you’ve actually done.

By the way, I’ve got nothing against LinkedIn for running this promotion. I give the company credit for getting people to promote the site for free.

How to calculate your real hourly rate

question mark clockDo you know what your time is worth?

If you’re a professional and you have an hourly rate, you’re probably used to measuring your time in tenth-of-an-hour increments. You keep track of the work you do on timesheets, and then you multiply those totals by your hourly rate. That calculation gives you a value of the work that you performed for your client.

Or does it?

Let’s say that you’re a CPA with five years of professional experience. Let’s further say that you spend an hour working on the audit of a client. Your rate is, say, $120 an hour. By that calculation, at least in theory, the work you performed during that hour was worth $120. And that’s the amount that the client will be charged.

But an hour is an hour. (Einstein’s Special Theory of Relativity is of course beyond the scope of this post.) So what if I spend the hour doing audit work for that client, instead of you? Isn’t it also worth $120?

“No, you idiot,” you say. “You’re not even an accountant.”

That’s true, I reply. But what if I send away for my very own CPA license from an ad in the back of a magazine? Then suddenly I’m an accountant, too. Now is my hour of work on this client’s audit worth $120?

“Of course not,” you scoff. (I get a lot of scoffing.) “It’s not about the license, you maroon. It’s about the knowledge I accumulated over my five years of working.”

Bingo! You just figured the whole thing out. It isn’t the hour of work that creates the value. It’s the knowledge that you’ve accumulated that creates it. You and I could spend an identical amount of time working on that audit, but because I don’t have any knowledge beyond “debits on the left and credits on the right,” the accounting work I do would be essentially worthless. So the single hour on the timesheet does nothing to measure the value that you and I create with our hour.

This is what Peter Drucker meant when he coined the phrase knowledge worker. The value created by a knowledge worker — an accountant, a lawyer, a designer, a consultant, an architect, or an advertising professional — derives from the knowledge that he or she is transferring or applying.

And where does this knowledge come from? It primarily comes from two places: education and experience. So if you’re going to use the amount of time spent to measure the value you create, then you had better account for all the time spent. (You realize, of course, that I don’t advocate trying to measure the value you create by marking the passage of time. I’m just making the point that if you choose that particular metric, you’d better make sure that you’re measuring everything.)

So let’s now try to figure out what your real hourly rate is. First we’ll look at your education. If you grew up in the United States, you were most likely required to go to school from first grade through twelfth grade, plus kindergarten. Most professionals also attended college, so you need to count those hours. Depending on the profession, you probably also attended some graduate school. During all these years of education, you amassed much of the knowledge that you now transfer to your client in your professional life. So you need to add up all those hours.

(Yes, I appreciate that some of those hours are apt to be more valuable then others. You probably learned more things in your second year of law school than you did in kindergarten. Or did you? I don’t remember much from my second year of law school, but I still know what a silent e does. But based on your current timesheet usage anyway, hours are hours. You know that some of the hours you spend working are more valuable than others. You just figure that it all evens out in the end. Using that same assumption, we can measure your education hours as a single total.)

Once you’ve added up your time spent being educated, we need to turn to your professional experience. Obviously, an accountant who has been practicing twenty years knows a heck of a lot more than an accountant who’s only been practicing for one year. So we add up the hours you’ve spent working, too.

So to calculate your Actual Hourly Amount, we need to add your total education hours plus your total professional-history hours plus the hour that you’re doing the actual work for the client. Then we take your hourly billing rate and divide it by that sum. That gives you your Actual Hourly Amount.

You can use this handy calculator to calculate your figure. Just replace the numbers with your own. The grade-school and high-school hours are built in. (If you are reading this post in an email or an RSS reader and don’t see the calculator after this paragraph, click here to go to the post on jayshep.com.)

Surprised? Now that you include all the time that you spent being able to do the work for that client, you suddenly realize that you’re only earning pennies an hour. And I don’t care how experienced you are or how high your billing rate is. Using this calculator, top lawyer David Boies, who bills at $1,220 an hour, only earns one penny for each of those hours when you account for all his knowledge-gathering time spent (education plus 46 years of practice). (I find it ironic that I earned 1.1 pennies an hour, based on 17 years experience and a phantom rate of $600 an hour. I was a very good lawyer, but I was no David Boies.)

Try the calculator with other rates or different levels of professional experience. See what you can look forward to later in your career. Go ahead; I’ll wait.

The point of calculating your Actual Hourly Amount is to show you once and for all that timekeeping is a ridiculous way to measure the value of a professional’s work. I hope that your AHA moment will lead you to realize that the value of the knowledge you sell is based on what it’s worth to your clients when you use that knowledge to solve their problems.

What kind of price is it?

We’ve been hearing about so-called alternative billing in earnest for the last five years. But many professionals today find the definitions confusing. That’s why most law firms claim to use “alternative fee arrangements,” and yet the billable hour is showing no sign of shuffling off its mortal coil.

So here’s a handy info graphic that my VeraSage colleague Michelle Golden and I created to clear up some of the confusion. With it, you can figure out what kind of prices you’re using.

What kind of price is it?

Click it to embiggen. You can also download it as a PDF. Feel free to share it.

How to price mediocrity

I know this lawyer. Let’s call him “Bob,” because, quite frankly, palindromes are fun (and “Stunt Nuts” doesn’t work as well). He’s not the best lawyer in the world; he’s not the worst. In fact, he’s far from either extreme. He’s right there in the middle.

He’s mediocre. When it comes to mediocrity, he’s the best. I’m not being judgmental here; he’s fine. As in when you go to a restaurant and your steak is overdone and your fries are underdone but you don’t want to sound high maintenance so when the waitress asks how your meal was, you say, “Fine.” That kind of fine.

Now because the work that Bob does is mediocre, the very best way for him to price it is by billing his time on an hourly basis.

You see, there is nothing fundamentally wrong with doing mediocre work. It’s incredibly common. In any profession or industry, if you were to draw a bell curve to show the normal distribution of quality, you would see that most performers end up in the middle. Only a few would be truly poor performers, and only a few excel.

And not every customer needs excellent performance. Sometimes, people just want to get the job done adequately, and they don’t want to pay for a higher level of quality when they don’t need to. So I mean it when I say that I’m not criticizing people who choose to do mediocre work. There is certainly a market for it. There are plenty of times when I have chosen not to pay more to get higher quality. If I’m hiring a lawyer to do a basic real-estate closing, for example, I don’t need David Boies to handle that for me.

Because Bob does mediocre work, there’s no need to differentiate the work that he does. The clients who come to him for that level of service all expect roughly the same from him.

For that reason, when all the work and all the clients are essentially equal, then the best way for Bob to price his work is by merely measuring the time spent and multiplying it by his standard hourly rate (which is, unsurprisingly, average for his market). In other words, Bob is effectively “weighing” time on a scale, rather than assessing the value and quality of the work. When a consumer is buying a commodity like sugar, it makes no sense to do sophisticated lab analysis of each individual crystal. Just weigh it. Five pounds of sugar? That will be five dollars, please.

So if Bob is content doing mediocre work for customers who aren’t looking for more, then by all means he should bill his hours. It’s the most efficient way to track his work when all of it is essentially the same. It’s only when work is differentiated — based on the types of customers and the value that they place on the results — that it makes sense to price.

As I said, Bob is fine (as a pseudonymous, palindromic, mediocre lawyer). If you’re a professional and you want to be like Bob, keep billing your hours. But if you’re not interested in being mediocre (or if you suffer from aibohphobia), then it’s time to learn how to price.

New York Times “oppresses” workers worse than Apple

Today’s Sunday New York Times used two and a quarter pages of its front section — including the top-left quarter of its vaunted front page — to blast Apple for oppressing its workers. Which is ironic, because the New York Times Group is even worse to its employees, using the paper’s own metrics.

As it often does, the Times launches its attack on the most successful company in the world by focusing on how much revenue it takes in:

Worldwide, its stores sold $16 billion in merchandise.

But most of Apple’s employees enjoyed little of that wealth. While consumers tend to think of Apple’s headquarters in Cupertino, Calif., as the company’s heart and soul, a majority of its workers in the United States are not engineers or executives with hefty salaries and bonuses but rather hourly wage earners selling iPhones and MacBooks.

But the most interesting twist in this particular harangue is the use of a blunt-instrument metric, revenue per employee, to show how unfairly Apple treats its workers. According to the story, Apple took in $473,000 per Apple Store employee. When you consider that Store employees only take in about $25,000 a year, the conclusion is inescapable: oppression. Amirite?

Glass houses, New York Times. Glass frakkin’ houses. Turns out that according to its own reported numbers (from its 2011 Form 10-K), the New York Times Media Group had 3,056 serfs employees toiling for it in 2011 and made $1.554 billion that year. Yes, with a b. Whipping out my favorite iProduct (note my obvious fanboy bias), that works out to to a revenue-per-employee figure of $508,507.85. Oh, the humanity!

(Curiously, the David Segal article quotes Apple blogger Horace Dediu, who has written about these metrics before. Dediu says that revenue-per-employee ratio is like that of a consulting company. Given how incredibly reasonable and intelligent Dediu’s writing is, I have to think that his quote is taken out of context.) (Update: Read Horace’s excellent piece explaining the job growth at Apple stores.)

The truth is that no one goes to work for the Times or for Apple for the money. (Yes, I realize that Times CEO Janet Robinson got a $23 million severance package late last year, but that’s for leaving her job. Totally different.) People work at these two institutions to be a part of something bigger than themselves. The Times used to be the most respected newspaper in the country. (Sorry. Too soon?) And Apple keeps changing entire industries. Even Segal’s article recognizes that an hourly wage is not what makes people work in Apple Stores:

But Apple’s success, it turns out, rests on a set of intangibles; foremost among them is a built-in fan base that ensures a steady supply of eager applicants and an employee culture that tries to turn every job into an exalted mission.

“When you’re working for Apple you feel like you’re working for this greater good,” says a former salesman who asked for anonymity because he didn’t want to draw attention to himself. “That’s why they don’t have a revolution on their hands.”

Indeed.

Don’t do what you’re good at

Here’s a short (19:47) video of a talk I gave recently at Super Conference II in Boston. In it, I warned over a hundred lawyers that the advice that they’ve been given — “Do what you’re good at” — is actually bad advice. Instead, they should find their outstandingness. (Yes, I know: that’s not in your dictionary. Well maybe your dictionary is broken. Or quite possibly, I made it up. Either way, you already know what it means.)

By the way, even though I was addressing lawyers, this advice holds for anyone in business.

Thanks to the Massachusetts Law Office Management Assistance Program and the Massachusetts Bar Association for hosting the conference and providing the video.

How to increase revenue 43%

Ron Baker, the Yoda of value pricing, spoke about the use of options in his talk at the AICPA PSTech Conference in Vegas today. He showed a terrific short Dan Ariely video, which I wrote about on The Client Revolution a couple years ago. Here is that post, along with the video.

How can you increase revenue by 43%?

Short answer: offer an additional pricing choice. Even a stupid one.

Longer answer: Check out this video. It’s almost perfect. It shows how adding a single pricing choice can add 43% to total sales revenue. It’s presented by Professor Dan Ariely, a delightful MIT economist. And it’s only 114 seconds long.

Why don’t you take the 114 seconds to watch it? I’ll wait …

Here’s the math on the different options:

With two choices:

68 x $59 = $4,012

32 x $125 = $4,000

Total: $8,012

With three choices, one of which is stupid:

16 x $59 = $ 944

84 x $125 = $10,500

Total: $11,444 (an increase of 43%)

OK. Interesting, huh? Ariely’s main point is that customers often aren’t very good at knowing their own preferences, and they take cues from outside indicators of value, such as pricing options. By offering a third choice, even a ridiculous one, customers end up perceiving more value in the more-expensive choice. That’s why Wendy’s sells a triple cheeseburger — not to sell lots of triple cheeseburgers (they don’t), but to sell more double cheeseburgers.

The moral of the story is not to offer ridiculous choices; it’s to offer choices that lead your customers to find differing amounts of value in the various options — something you can’t do if you bill by the hour.

The rest of Ariely’s TEDtalk lecture is here. It’s great, and it’s only 17 minutes long. His book, Predictably Irrational, is here.

What do you think? What kind of options can you offer to help your clients discover their preferences? Share your ideas in the comments below.

Marketing lessons from the Romney iPhone gaffe

Twenty years ago, Vice President Dan Quayle made headlines for correcting a schoolboy’s spelling of the word “potato.” The boy had of course correctly spelled it, but Quayle told him that he had forgotten the silent e at the end of the word. Pundits and late-night talk-show hosts excoriated him mercilessly. It was, to say the least, an embarrassing gaffe. No one really believes that this meant that Quayle was uneducated or unintelligent; more likely, he suffered a momentary brain-lock and flubbed the word. (Although he later blamed a cue card that the school had given him.)

Now the Mitt Romney presidential campaign has suffered a similar bout of spelling ineptitude. The campaign released an Instagram-like app for the iPhone that allowed users to share photos emblazoned with pro-Romney slogans. At first glance, it seemed to be a pretty cutting-edge effort for a campaign that has long struggled to connect with voters. What they hoped to accomplish by enabling supporters to create digital postcards is unclear. (Seriously: who’s going to send them to people?) But in the end, the app made news for a completely unintended reason.

One of the templates that users of the app could choose was a small graphic of the lower 48 states with the caption “A Better America.” Only problem is, they managed to misspell the name of our country. Instead of “America,” the caption said “Amercia.” Which sounds vaguely like a medical diagnosis. (“I thought I contracted nasal amercia, but my doctor said it was only allergies.”)

A Better Amercia

from @DaveStroup

Not surprisingly, this mistake was caught quickly and went viral, with thousands of tweets poking fun at the mistake. Inexplicably, the app was still available in Apple’s App Store the day after the typo had gone viral. (It was fixed soon after.)

In one way, this mistake wasn’t as bad as the one Quayle made, because here the candidate himself didn’t actually make the error. (Presumably — Romney doesn’t seem the coding type.) But in some ways, this mistake is actually worse. People can forgive a momentary brain lapse like Quayle’s. But this was something else.

In all likelihood, the programmer who created the app knew how to spell America. It was very likely a typo: the digital equivalent of Quayle’s “potatoe.” Everyone makes typos. As a writer, I do it all the time. When writing the 90,000 words in my book, I probably made hundreds of typos. But the difference is that I reread every one of those words at least four times. And at least five other people reviewed my work as well. The reason for this is that I care about making mistakes and I try to pay attention to detail. And so do the people at Apress who published my book.

The programmer who created the app should have reread his work. The campaign official to whom he reported certainly should have checked the 10 or 12 templates in the app and made sure that there weren’t any mistakes. Given the size and import of the national campaign, there were probably several other officials whose approval was needed before releasing the app. In fact, it’s not beyond reason to expect that the candidate himself would at least take a look at it before it hits the App Store. The mistake was so glaring, anyone should’ve caught it.

But they didn’t. Since no one believes that the intelligent people who work at the Romney campaign actually have difficulty spelling the word “America,” this can only mean one thing:

They didn’t care enough to check.

And yes, we can all agree that in the scheme of things, this is a very minor mistake. But it’s a very visible one. And it sends the wrong message to the public.

It’s also not the first gaffe for the campaign. There was the time when Romney appeared in a commercial touting the value of American-made cars while driving in a Chrysler 300 that was actually manufactured in Canada. Or the time a senior aide compared the political map to an Etch A Sketch. Or the time that Mitt Romney named his son “Tagg.” (Just kidding.)

To be fair, I’m sure that the people involved in the campaign care very much. Many of them have put their lives on hold while they work tirelessly to get Romney elected. But the message they’re sending is that they don’t care.

Back when I had my law firm, I frequently received letters from law students and lawyers seeking employment. I was always amazed at the number of times that my name would be misspelled. I mean, “Shepherd” is a common English noun. It means, literally, “someone who herds sheep” (or “shep,” which isn’t a real thing.) Of all the variants of the name Shepherd in the United States, my spelling — the correct spelling, ahem — is the most common. But for some reason, people insist on spelling it with an a. (Actually I know the reason: it’s because astronaut Alan Shepard and his family didn’t know how to spell their name. Stupid astronaut. Nobody “ards” sheep. Or shep.) Other people double the p or lose the h. Many times, I’ve had people misspell my name as I was spelling it to them aloud. When I bought my first house, my name was spelled three different ways in the purchase-and-sale agreement. And none of them was correct. (Stupid lawyers.)

So whenever I received a job application from someone who hadn’t bothered to check the spelling of my name, I immediately threw it in the wastebasket. It’s possible that some of those candidates would have been exceptional lawyers. We’ll never know. Because they didn’t show that they cared.

The way I see it, being a lawyer is a job that takes attention to detail. (Just as being the president does.) If someone couldn’t demonstrate that attention to detail when they were trying to get the job, what would make me think that they would later show that attention after they got the job? Was I being too tough? Maybe a little overly sensitive? It’s certainly possible. But did they show that they cared? No, they did not.

In business, you often have opportunities to show that you pay attention to things and that you care about the work that you do. Nobody’s perfect and everybody makes mistakes. But if you want people to trust you — to believe that you care — you will make every effort to catch those mistakes before they cause harm.

Should a typo in a silly iPhone app have any effect on the outcome of the presidential election? Of course not. But when we evaluate people, we look at signs. And this is an unfortunate sign that the Romney campaign just doesn’t quite care enough.

Check your work. Show you care.

A political note: some people might read this and think that I must therefore support Obama for president. Not at all. I am a member of that rare species known as the Massachusetts Republican. (There are like six of us.) I actually agree with many of the positions that Mitt Romney campaigned on in the nineties when he ran for the Senate and for governor. In other words, I agree with neither candidate now.

Every little bit doesn’t add up

Back when I had my law firm, we would sometimes take business that didn’t really seem ideal for our practice. Either it wasn’t the right type of client, or they didn’t really have enough money to truly be able to afford us, or something else was wrong with them. But in the end, we would compromise our principles. There was always pressure to bring in more revenue. We had to pay the rent, the payroll, and other expenses. You couldn’t have too much revenue.

Every little bit added up.

And that’s what a lot of people say when they’re trying to justify doing the wrong thing. “Every little bit adds up.” The only problem with that is, it’s not true.

Every little bit doesn’t add up.

Taking on business because it’ll bring about a marginal amount of revenue even though it’s not the right type of client for you is a bad approach. Sure, it’s true that incremental amounts of revenue add up to more revenue. But what that fails to take into account is the hidden costs of taking on bad business.

The time you spend doing the wrong kind of work or doing it for the wrong type of client is time that takes you away from the work you really want to do. And when professionals are doing the wrong kind of work or doing it for the wrong kind of client, they tend to be unhappier. It becomes harder to do the work. Quality suffers. Morale suffers. Yes, every little bit of revenue adds up. But too many professionals fail to account for the emotional costs of doing this incremental work. And they justify it by saying that every little bit adds up.

All kinds of companies make this mistake. For example, look at this rate card from a Las Vegas hotel. I’m not going to name the hotel, because I’m staying there in the near future. But it’s one of the largest hotels in the world. They do a robust business, and they make plenty of money. And yet they have this rate card of incidental charges connected to its business center. This is serious nickel-and-dime nonsense. Eight dollars for the first page of outgoing faxes; a dollar per page for incoming email. (Of course, who even uses faxes anymore?)

hotel price list
While I am not privy to the strategies and mindset of this particular hotel, I am certain that someone there reasoned that every little bit adds up. If they can make a little bit of money on every fax, email, and package received, it will add up to a lot of money. But what they fail to take into account are the costs associated with that. I’m not talking about the actual expenses of receiving packages or sending faxes. Those costs are negligible anyay. I’m talking about the emotional cost of ticking off its customers. Nobody likes to see this sort of nonsense on their hotel bills.

Look at the airlines, and their growing tendency to nickel-and-dime passengers for almost anything they can charge them for. What used to be covered in the cost of buying a ticket is now an additional charge. Baggage fees and change fees are the biggest offenders. Last year, American Airlines took in half a billion dollars in baggage fees and change fees. Arguably, this mitigated its $2 billion net loss for the year. You could say that this is an example of the mantra “every little bit adds up” coming true.

That is, until you look at Southwest Airlines. Southwest is the only major airline to show a profit. Not coincidentally, Southwest is also one of the few airlines that eschews baggage fees and change fees. By avoiding the emotional costs that those nitpicky charges exact on passengers, they run a more successful business.

I’m sure that the bean counters at American Airlines look at the revenue that comes in from baggage fees and change fees and say, “Every little bit adds up. If we didn’t have these fees, we would have suffered an even larger loss.” But I believe that if American were more like Southwest, they might actually make money from flying passengers rather than charging fees.

Another area where the “every little bit adds up” mentality comes into play is in cost-cutting. A lot of companies believe that if they skimp on certain things, “every little bit” that they save will add up to substantially lower expenses and higher profits. But that mentality is misguided.

At one point, someone at my law firm raised the suggestion that we start using less-expensive paper. The paper that we had been using was an expensive, heavier bond that was brighter, whiter, and more substantial than what most other law firms used. It was also much more expensive. And over the course of a year, we spent thousands of dollars on paper. If we switched to cheaper paper, we would save money. Every little bit would add up.

But I wasn’t willing to compromise on that. To me, the written documents that we filed in court or sent to opposing counsel or delivered to clients represented a major part of the value we provided. Sure, it was the words on the paper that mattered, and not the paper itself.

But there is an emotional quality that attaches to the physical documents and to the paper. The paper sent a message that our firm cared about the details. That we cared about how our documents looked. That we put a lot of effort into making sure that our documents were just right. That’s why our documents used a carefully selected font rather than Times New Roman. That’s why our document design was painstakingly developed, rather than merely relying on the default settings of Microsoft Word. And that’s why the paper we used was expensive Hammersmith rather than the bargain Staples generic copy paper. Because every little bit didn’t add up.

Now don’t get me wrong about expenses. Paying attention to important expenses is good business sense. You can make a much bigger difference by saving money on expensive office space rather than using chintzy, generic copy paper. It is the major expenses that actually add up onto you bottom line.

But enough about expenses; let’s go back to revenue, where most professionals have difficulty.

I’ve been there. I know what it’s like to worry about where the next bit of revenue is going to come from. I know what it’s like to not have enough in your firm account and have the rent or the payroll due. It is very difficult in times like those to turn away any client that comes in with a pulse and a checkbook. But trust me: it’s worth it.

Here’s what you can do to help get through it:

  1. Tell the client that it’s not a good fit. Turn away the work politely. If you can, refer them somewhere else.

  2. Figure out how much attention you would’ve had to pay to doing that not-right work.

  3. Commit to spending that time and attention doing tangible things that will lead to getting the right work and the right clients. Get a speaking gig. Teach a continuing-education class. Get an article published. Write a couple posts for your blog. If you don’t already have a blog — hey, it’s 2012: time to start a frakkin’ blog.

Do these things and you will soon find that you’re doing more work that you want to be doing for more clients who you want to be working with. Because here, every little bit does add up.

How not to handle an unfavorable story

Massachusetts senatorial candidate Elizabeth Warren can’t seem to get clear of the story that she listed herself as a minority despite zero evidence that she is Native American.

From The Boston Globe:

“Politics 101: On issues that are potentially unfavorable, put all the information out, take the one-time hit, and move on,’’ said Darrell M. West, vice president and director of Governance Studies at the Brookings Institution, the nonpartisan Washington think tank. “That makes it a one-day story. The worst-case scenario is the story lingering for weeks and weeks, because it just creates doubts about the candidate.’’

Oops.

The Globe‘s story also has a box with links to the chronology of her statements and the relevant Harvard documents.

Want to learn more?

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