Don’t Be The Best, Just Better: Lessons From Obama To Law Firms About Measures Of Success

The latest jobs report from the Bureau of Labor Statistics shows unemployment at just 6.1 percent—the lowest since 2007. This means President Obama outperformed Reagan on jobs growth and investing, reports Forbes.

This is great news. But in a way you may not expect.

A study by researchers at the University of Warwick and Cardiff University found that money only makes people happier when they perceive this money as being higher than their friends and colleagues. In a nutshell, people are only happy when they’re doing better than others.

“Our study found that the ranked position of an individual’s income best predicted general life satisfaction, while the actual amount of income and the average income of others appear to have no significant effect,” said lead researcher Chris Boyce about his findings in the paper “Money and Happiness: Rank of Income, Not Income, Affects Life Satisfaction” published in the journal Psychological Science.

“Earning a million pounds a year appears to be not enough to make you happy if you know your friends all earn 2 million a year.”

So when it comes to unemployment numbers, Americans are less satisfied to know that an additional 2.5 million new jobs will be created in 2014, or that 142,000 jobs were created last month alone. These are just numbers, not statistics.

Americans are only happy if they discover this year is better than the year before it. And, while this decade will never outperform the last, the 2000s-2010s could have the 1970s-1980s beat.

In the 1980s, President Reagan dealt with a recession much like the one President Obama is grappling with today, which is why the two are so often compared.

“President Reagan has long been considered the best modern economic President. So we compared his performance dealing with the oil-induced recession of the 1980s with that of President Obama and his performance during this ‘Great Recession.’” said Bob Deitrick, CEO of Polaris Financial Partners and author of Bulls, Bears and the Ballot Box, to Adam Hartung for Forbes.

And what did the comparison show? President Obama’s job creation prevented unemployment from peaking at as high a level as President Reagan, pushing people into the workforce faster than President Reagan.

“President Obama has achieved a 6.1% unemployment rate in his sixth year, fully one year faster than President Reagan did. At this point in his presidency, President Reagan was still struggling with 7.1% unemployment, and he did not reach into the mid-low 6% range for another full year. So, despite today’s number, the Obama administration has still done considerably better at job creating and reducing unemployment than did the Reagan administration.”

Which is great news for those who are keeping score—and studies show, we are all, consciously or not, keeping score.

Taking the lesson of comparative gains into account, law firm managers might consider reassessing some of their policies of business practices. For example, you may not be able to offer bonuses to employees this year, but perhaps you can offer comparatively better benefits (that cost your firm less to offer).

Clients may not care as much about the price per hour for your legal expertise as much as the fact that it is comparatively lower than your closest competitor.

Last year, two-thirds of law firm revenue involved flat rates and other “alternative fee arrangements” or pre-negotiated discounts to billable hours. What are these discounts, and can your firm offer comparatively better ones?

The Center for Competitive Management offers a webinar that explores the latest tools and approaches that law firms are using to set prices that are fair, collaborative, and align firm pricing with client-defined value.

This means providing a comparative advantage when you can’t provide an absolute one.

Sign up for the webinar titled “Law Firm Pricing: Developing a Pricing Capability, Negotiating Fees, and Locking in Clients,here. It takes place from 2:00pm to 3:15pm EST on Thursday, September 25, 2014.

During this interactive session, you will learn real-life strategies as employed by top pricing managers/directors in the field, including:

  • What clients really want from firms in terms of value and pricing (and how to deliver)
  • The latest pricing practices at top firms and how they might work for you
  • How to assure that pricing and overall firm strategy intersect (and make fiscal sense)
  • Why project management data is essential for developing successful pricing
  • Latest Alternative Fee Arrangements trends in 2014, and how legal AFAs have changed in the last five years
  • Factors to consider before your firm brings in a pricing director/manager (and what to do with them once they arrive)
  • A day in the life of a pricing manager: responsibilities, who they should report to, etc.
  • Getting Started: steps your firm can take today to begin a pricing culture reinvention
  • Top five pricing mistakes and how your firm can avoid them
  • Much more…

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