Law Firm Libraries Cannot Simply Be A Service… It Must Be A Strategic Partner

In the May 23rd American Lawyer article, "More Law Firms Outsource Their Law Libraries [pay wall]," is a wakeup call for some librarians, old news for many, a call to arms for others, and a confirmation of a shift in the profession for the rest. Outsourcing is a scary word, but one that cannot be ignored. We've had Deb Schwarz from LAC discuss the myths of outsourcing right here on 3 Geeks. I would be one of the first to step up and tell you that, in some cases, outsourcing the law firm library makes sense, and LibSource (LAC Subsidiary) or one of the other outsourcers (also known as "Managed Services"), would be a viable way to run the library. However, I'd also step up and say that it should not be the first or only option for struggling law libraries.

I will state this again… in some cases, outsourcing the library is a viable option for some law firms. I'm not anti-LibSource or any other Managed Services group that comes in and hires librarians, and maintains library collections and services. That being said, I also recognize that law firms, especially AmLaw 100 and 200 firms, like to copy what other firms are trying. I tend to say that most law firms do not want to be first… but, they don't want to be last, either. With outsourcing getting more press, it's bound to happen that law firm leaders will wonder if outsourcing is right for their firms. It's the nature of the beast in this industry. I'd like to give my peers, and those law firm leaders that are reading this, some ideas and talking points when this discussion comes out.

Service is a Floor, Not a Ceiling

As someone that manages the law library function (as well as other departments) at my firm, I know that the most critical function of the library is not simply about providing good service. Good service, along with a good collection, a well-maintained budget, and on-demand responses to the needs of the law firm are the absolute basics of what a law library does. If that is what you provide, you're doing the minimum. If you're a manager of people, you know what it's like to manage those that just do the minimum. You keep them around, but if you ever got a chance, you'd replace them in a minute. Think about how your firm's management committees view departments that just bring in the minimum to the firm. Your services, and your people must be viewed as an integral part of the organization.

The Library is a Powerful Resource, Leverage It

I sell my department in many ways, but one that has a great effect on the leadership is when I tell them that the Library is the conduit for all external information, and understanding how these resource tie into the overall firm needs. Whether it is tracking down assets, conducting background checks on expert witness, or finding that elusive piece of information hidden in the recesses of a county courthouse, the Library and its professionals know how to find information. They find it quickly. They leverage their peers and professional associations. They do it at a cost that is appropriate (or lower.) They are experts at this. When you have these experts, usually with some subject matter expertise they have learned while at the firm, you have a powerful resource beyond traditional Westlaw and Lexis databases. My suggestion is to find ways of embedding these experts into the Practice or Industry Groups and take advantage of their expertise. Outsourced services, even if they end up hiring your own people to stay in the library, do not become a part of your culture. There will be turnover, and those brought in will service the company for which they work, and that is not your law firm.

Don't Let Bad Librarians Bring Everyone Down With Them

This is for law firm leaders who have librarians they do not think are doing the best work for their firm. Find New Leadership! Nothing drives me more crazy than seeing someone that has lead a department into the ground. I've seen it in law firms, academic settings, and in Government Law Libraries. People that have kept their heads down, not asked for anything, kept under budget, and didn't rock the boat, be a twenty-plus year director of their law library. It makes me shake my head, and I get angry when I hear these stories. In many cases, I see that the staff has kept these zombie leaders alive by doing great work despite the lack of leadership. Unfortunately, when bad leaders retire (or finally get a buy-out package when someone discovers the lack of production), they are replaced by someone that isn't a law librarian or information professional, or the position is simply left vacant and the library becomes rudderless. That's a shame, because there are a number of strategic thinkers out there that know what a great law library can bring to the organization. By not giving these leaders a chance, and passing the library over to Marketing, KM, or IT, it brings it back to a department that simply gives good service, but not helping in accomplishing strategic goals.

Give the Law Library a Voice in the Discussion

I knew that ALM was working on an article about outsourcing, so I wrote a piece a week ago called "If You're Not at the Table, You're on the Menu" where I laid out some examples of how it is important to be involved in the strategic direction your law firm is taking. It doesn't matter how great the ideas are if no one ever hears them. The law library leadership needs a voice in the conversation. For those in other departments that think that if they allow library leaders to be involved means that your individual power is somehow diminished, then it's time for you to grow up and realize this is not a zero-sum game you are playing. Libraries that are engaged in the discussion bring ideas to the table that other departments simply don't even know about. It could be how to streamline Business Development processes, or improve due diligence investigations of lateral partners. It could be improving conflicts processes by exposing current conflicts staff to external resources. It could be exposing IT department to new products that it can then integrate into Practice Group and Industry portals. Clients are looking for firms that are efficient, have improved processes, and innovative. Outsourcing can get you to step one, but would have a much harder time getting to steps two and three.

Law firms typically spend millions of dollars on library resources, and if you're not allowing the librarians and others within the department to champion those resources and spread their ideas on how to best leverage them, then you might as well be pouring that money down a drain. Remember, even if the department is outsourced, the outsourcing company uses your resources, not their own.

Lead the Conversation before You Are the Conversation

Law Librarians are often risk-adverse people in a highly risk-adverse industry. We want to do what's right, serve our organization, and help in the overall success of our law firms. Most of us do not like conflict. Well, that's too bad in this situation. Start strategizing your arguments on why outsourcing is not a viable option for your firm. List out the pros and cons (and be honest), and design a plan that shows the leadership that the law library can bring much more of a value proposition to the firm as a strategic partner, than it would bring as a managed service by a third party. Step up and lay out your ideas, goals, and successes. Admit your previous failures and explain how you've learned from that and how it has made you a better group because you know have experienced and understood what went wrong. For each point that makes sense on why the law firm should outsource your group, counter with a better plan for why it makes more sense to not only keep you within the firm, but to expand what you do in a more strategic way.

There's A Battle Going on For Your Law Library - Step Up and Defend It

There's a battle going on in this profession. In order to be a winner in this battle, you must create your plan, align your resources, and be willing to step out there and defend yourself and those that follow you.

Bookmark and Share


Real Lawyers v. Cyborgs (Part 2)

Continuing with my two-year-old son, Pickle. As I laid out last post, Pickle is a cyborg. A Type 1 diabetic, his life literally depends on computers that are attached to his body. Because of him, I find myself contemplating the fact that we are almost all professional cyborgs. Technology is now an inescapable element of delivering legal services. The objection that using technology somehow differs from 'real' lawyering is misguided. If it affects the outcome or the bill, it is real enough.

Still, just because technology is essential does not mean it is all that good. With respect to my diabetic Pickle, I have one question: where the @#%& is his artificial pancreas?

My wife is also an insulin-deficient cyborg, I have therefore been reading the same damn story about the same pending breakthrough for over a decade (e.g., 200620112016). We are eternally on the cusp of the machine finally replacing humans in the labor-intensive process that is monitoring blood sugar levels and delivering insulin when necessary.

Pickle has a continuous glucose monitor. But it needs to be calibrated multiple times a day. And it is not accurate enough to be relied on for dosing insulin. So the monitor does not obviate the need to regularly prick his fingers and draw blood to check sugar levels. Indeed, the best commercially available glucose monitor is actually a trained dog-- the repurposing of 26,000-year-old technology and more evidence against functional fixedness. But a dog, like the monitor he actually has, cannot communicate with his insulin pump, which still needs to be run manually (i.e., we still have to direct the pump to dose insulin).

The cycles of hype and disappointment around an artificial pancreas gives me quite a bit of sympathy for older lawyers who have been through many such cycles re artificial intelligence. As a stand-in for older, successful lawyers, I am going to assume a law school graduation year of 1977 since that is the median and modal graduation years of the chairs of the AmLaw 10. They have been hearing how machines were going to replace since long before they took the bar.

If you believed the hype on artificial intelligence, it was silly for our successful lawyer to even attend college, let alone law school. In 1970, they would have read the following in Life magazine:
In from three to eight years we will have a machine with the general intelligence of an average human being. I mean a machine that will be able to read Shakespeare, grease a car, play office politics, tell a joke, have a fight. At that point the machine will be able to educate itself with fantastic speed. In a few months it will be at genius level and a few months after that its powers will be incalculable.
Instead, their law school graduation in 1977 was at the tail end of the first AI winter--a period of reduced interest in AI due to its failure to live up to the hype. 

A far cry from human-level general intelligence, the technological marvel of 1977 would be the Apple II. Poor predictions, of course, run in both directions. In reacting to the Apple II, Ken Olson, founder of Digital Equipment Corp. stated, "There is no reason anyone would want a computer in their home." 

But there is a legitimate question as to how long a prediction has to remain valid to be considered accurate. While Mr. Olson was dead wrong in the long run, a decade later, in 1987--when our successful lawyer had already made partner--only 10% of households had a personal computer. In the midst of that not-so-disruptive diffusion of computing power, important publications would continue to print pablum about the coming robot revolution. The New York Times ran stories with ledes like, "Before today's teen-agers finish college, computers will interpret changes in tax law and plan tax strategies for business."

Yet 1987 was also the year when economist Robert Solow observed his eponymous paradox, "You can see the computer age everywhere but in the productivity statistics." In related news, another brutal AI winter was coming. After a resurgence in AI research and hype, the collapse of the Lisp machine market in 1987 presaged the imminent failures and fall from grace of the early expert systems, "fifth generation" computers, and the Strategic Computing Initiative leading to New York Times articles like "Computer Fails as Job-Killer." 

In 1997, the machines finally won...at chess. IBM's Deep Blue topped Gary Kasparov under tournament conditions. The press went nuts:

When Gary Kasparov beat IBM's chess computer in 1989 he arrogantly told the programmers to "teach it to resign earlier". Yesterday, though, the world champion found himself humbled by a 1.4-ton heap of silicone in a victory for IBM's Deep Blue that marks a milestone in the progress of artificial intelligence. It is a depressing day for humankind in general. (here)
In brisk and brutal fashion, the I.B.M. computer Deep Blue unseated humanity (here)
Elsewhere in 1997, our successful lawyer had been a partner for more than a decade and practicing for two decades. The home computer market had not yet broken 40%. The still nascent home internet market had not yet cracked 20% penetration. In developments that would actually make an impact, the domain and famous spelling error www.google.com would be registered, almost a year before the company would be incorporated.

In 2007, our successful lawyer had been a partner for more than 20 years and practicing for 30 years. They could read increasingly more about the coming singularity and contemporary regurgitations of the Life article from 1970:
Social security will have to be expanded, introduced at lower and lower ages, till essentially everyone lives on social security. The taxes will be paid by fully-automated businesses run by robots. And human beings have to deal with the problem of excess leisure...I am afraid that the long term future we are building will have no space left for human beings...a world where we have these robots and better and better artificial intelligence, where systematically those systems replace humans, human services, human work...Is it a good or bad thing if robots become our natural successors and we fade into extinction?
But evidence of true machine intelligence outside of very narrow domains like chess remained illusory. As a practical matter, the tangible breakthroughs were mostly about being able to take the office with you everywhere. In 2007, Blackberries were a thing, and Apple announced the iPhone.

We are closing in on 2017 when our successful lawyer will celebrate 40 years in practice with more than 30 of those years as a partner. Much closer to the end of their career than the beginning, they can still read the same damn story about their imminent obsolescence. Or they can read the counterprogramming. We should forgive them for being a bit skeptical.

Yet there is something disingenuous about my account. It is accurate, as far as it goes. But it is also needlessly reductive in a way that I think is best captured by the incomparable xkcd:

Returning to my understandable focus on the perpetual promise of the artificial pancreas. In fixating on a closed system that eliminates the human factor post installation, I  miss the genuine progress being made. What used to be a death sentence is now an inconvenience. And that inconvenience has gotten considerably easier to manage now that we can do things like monitor my son's blood sugar remotely on a watch--continuous glucose monitor links to his iPhone; his iPhone transmits to my wife's iPhone; her iPhone transmits to her Apple Watch. None of those devices were commercially available when my wife was diagnosed a decade ago. That is amazing even if it is the technological perfection we were promised.

One way to react to hype cycles is to laugh at the peaks in hindsight. Another is to pay attention to the progress that follows:

Because the story I told above focused on the more sensational claims of machines making humans obsolete, it treated the PC, the internet, and mobile as inconsequential asides that only served to demonstrate the hyperbolic nature of the press coverage. But like a good lawyer, I could use the same facts to tell a very different story in which technology crept into every aspect of our professional lives. There will be real similarities between the immediate lived experience of a lawyer who graduated in 1977 and the one who graduates in 2017. But there will also be real differences that would have seemed like bad science fiction to someone entering an analogue professional environment four decades ago.

I think there will be an artificial pancreas soon. Machines will be able to do that one sequence of things well enough. Likewise, I suspect that machines will continue to progress at doing other things well, including some things traditionally done by lawyers. But I am doubtful* that we are nearing artificial general intelligence meaning that our resources should remain directed towards the automation of tasks, rather than jobs. As Robin Hanson has observed, while technology gains are exponential, the impact may be linear because job power levels are distributed lognormally:
I often meet people who think that because computer tech is improving exponentially, its social impact must also be exponential. So as soon as we see any substantial social impact, watch out, because a tsunami is about to hit. But it is quite plausible to have exponential tech gains translate into only linear social impact. All we need is a lognormal distribution, as in this diagram:

Imagine that each kind of jobs that humans do requires a particular level of computing power in order for computers to replace humans on that job. And imagine that these job power levels are distributed lognormally.
In this case an exponential growth in computing power will translate into a linear rate at which computers displace humans on jobs. Of course jobs may clump along this log-computing-power axis, giving rise to bursts and lulls in the rate at which computers displace jobs. But over the long run we could see a relatively steady rate of job displacement even with exponential tech gains. Which I’d say is roughly what we do see.
For our successful lawyer, however, the felt impact of technology progress on their professional accomplishments may be less than linear, it may be negligible. This has consequences for how lawyers in position of power react to those of who emphasize that we are all cyborgs now. More on that in Part 3.

D. Casey Flaherty is a consultant who worked as both outside and inside counsel. Find more of his writing here. Connect with Casey on Twitter and LinkedIn. Or email casey@procertas.com.

*I'm way too dumb to have a smart take on the timing of general artificial intelligence. But the implications are so profound that it almost makes them not worth talking about. It would be similar to debating how the legal profession might change if the Earth were again struck by a meteor like the one that wiped out the dinosaurs. Everything changes, and almost no one is going to care what effect it has on profits per partner. Until then, I am in Ryan's camp. It is only AI/magic until we start to use it, then it is software. It is only a human-displacing robot until we start to rely on it, then it is a dishwasher.

Bookmark and Share


Real Lawyers v. Cyborgs (Part 1)

My two-year old just got his first iPhone. Now, Pickle (yes, Pickle!) is never without it. The iPhone goes everywhere with him the way other kids might drag along a stuffed bear. We are even thinking about getting Pickle a haute couture fanny pack to ensure his iPhone is on him at all times.

I'll give some of you moment to catch your breath.... Scrambling to ascend that high horse so quickly probably took a lot out of you. Yes, I am familiar with the research on screen time and brain development. I don't care. I don't care because we didn't get Pickle an iPhone so we could subject him to the perverse moral dystopia of Thomas the Train.

We got him an iPhone because he was recently diagnosed as a Type 1 diabetic. The iPhone links to his continuous glucose monitor and transmits the readings to his mother and me. It alarms if Pickle's blood sugar gets too high (so we can dose him with insulin) or too low (so we can pump him full of sugar). If you don't think that is a good enough reason to get a two-year old an iPhone ( an older model donated to us), you can take it up with my wife. Let me know how that works out for you.

Of course that means that my kid is a cyborg. How sweet is that?

Pickle's life literally depends upon computers--a glucose monitor and an insulin pump--that are attached to him. He is a being with both organic and biomechatronic body parts. He is an organism that has restored function due to the integration of some artificial component or technology that relies on feedback. My Pickle is a cyborg.

Using the term a little more loosely, however, aren't most of us professional cyborgs at this point? I know that I feel my ability to conduct business draining away anytime the battery life on my iPhone or laptop approaches critical level. How exactly does a modern lawyer operate without relying on modern technology?

How do you not Google? How do you exchange documents your clients without email? How do you file anything according to local court rules and efiling protocols without an entire array of hardware and software? How do you conduct a litigation of any appreciable size without some understanding of ediscovery? How do you handle divorces without knowing about Facebook? How do you complete an M&A transaction without considering IT and information assets?

You can actually be ignorant of all those things and still be an obscenely successful lawyer. The trick is to already be an obscenely successful lawyer. I was there a few years ago when the great Ted Olson gave the opening remarks at Legaltech. His talk was not well received because he made it clear at the outset that he considered the audience a bunch of nerds (which, to be fair, we are). After all, a yellow pad was all the tech he needed to be Ted freakin Olson. And that's fine, for Ted Olson. Ted Olson is so ridiculously good at the things that Ted Olson is hired to do that no one should care that Ted Olson doesn't use tech. If Ted Olson decided to incorporate augury into his preparation for oral argument, most clients would happily pay for the birds.

But you know who is probably using tech pretty heavily? Some of the people on Ted Olson's team. I believe Ted Olson when he claims that he operates without any device that requires electricity. I doubt the same can be said for his team, let alone his firm. As a client, you want Ted Olson as your lawyer (if it is the kind of case that demands Ted Olson) but you would not necessarily want Ted Olson chairing the firm's technology committee.

Ted Olson telling a room full of legal tech folks that the only tech he needed was a legal pad would be like him telling a room full of legal marketing professionals that the only marketing he ever had to do was establish himself as one of the most prominent and successful appellate lawyers in history. True enough. But not exactly replicable at scale.

I am reflecting on this because I often get lured into pointless philosophical debates about what constitutes 'real' lawyering. Frankly, I am ill equipped to discuss such lofty Platonic ideals. If it affects the outcome or the bill, it is real enough for me. Delegation to associates or nonlawyers does not make it any less real or obviate the duty of oversight. (As always, I hate the term "nonlawyer" and prefer allied professional, but the ABA did not put me on the drafting committee for the model rule).

If I am feeling generous, I try to reframe what the person is saying. Usually, they are not actually arguing that tech is unnecessary. Rather, they are often expressing a belief that the tech-related work is not where lawyers add the most value. On this we almost completely agree. Which is why I find it so tragic that lawyers (and staff) waste so much time on tech-dependent activities because they have never trained to properly use the basic tech at their disposal. We often find a place of consensus where we would both prefer a world where lawyers spent more of their finite time devoted to applying their learned judgment to solving client problems.

Sometimes, however, I discover that we are having a different discussion. It is not the one about whether lawyers should use tech. It is the complaint that while lawyers have to use tech, the tech has not lived up to the hype. Here I have even more sympathy. I'll express it in Part 2.

D. Casey Flaherty is a consultant who worked as both outside and inside counsel. Find more of his writing here. Connect with Casey on Twitter and LinkedIn. Or email casey@procertas.com.

Bookmark and Share


If You're Not at the Table, You're on the Menu

If you've ever been on a committee, or on any type of board, you know that if you miss a meeting, there is a good chance you will be assigned to lead a project that no one else wanted. It's something that we all dread, but come to expect when you're not there to defend yourself. Now, imagine that you're never there, but still have to take on all those unwanted projects. That's what many of us on the administrative side of law firms face. It really doesn't matter what department you are in... if you have no say in the decision making, there's a good chance that decisions will be made for you.

I was at a meeting this weekend, and heard this succinctly said by former Houston City Council member, Sue Lovell, when she was discussing political decision making. "If you're not at the table, you're on the menu." That made me sit up and pay attention because it resonated with me about the law firm environment, and how business decisions are made, and tasks are doled out to those that are absent, and even worse, those that had no voice or representation during the decision making.

How many times have we found ourselves tasked with projects that we know are fruitless, but by the time we understand what our role is, the other pieces of the project are already in motion? There's no turning back, and if you jump in and say "hey, what you're wanting me to do is not possible!" No... you don't want to be seen as that person that tosses the monkey wrench into the project, so you do what you can, and hope that someone else fails before you do.

We all have to find ways to "be at the table." Now that doesn't mean that you have to physically need to be sitting at the table when decisions are made, but it does mean that your voice has to be represented in some way before decisions are finalized and action plans are put into place. I have a "C" title, but that doesn't buy me a seat at every management committee meeting at my firm. Nor should it. However, it does buy me a 'voice' at the meeting. It buys those that report to me the ability for me to relay legitimate concerns or ideas to the committee, and a chance to rebut unworkable initiatives before they are put into action.

I've listened and watched some of my peers talk about their firms as if they have absolutely no say in what tasks are assigned to them, or what their roles are in the strategic goals of their firm. That is both sad, and frustrating for me to hear. Sometimes there is a general dysfunctional decision making process at their firms. If decisions are pushed down without any input on the part of those being tasked with those action items, then the firm is rolling the dice on whether the objective can be accomplished at all. It is setting people/departments up for failure without even giving them any chance to succeed. That is a bad situation, and if that is happening to you, and you cannot fix it, my only suggestion is to beef up your resume and look somewhere else for employment.

Most of the time, however, I see it as a lack of willingness on behalf of the individual to step up and work to have his or her voice represented at the table. Sometimes it's a cluelessness in reading the situation, and understanding that the lack of engagement is causing the powers-that-be to see them, or their department as expendable. I've seen it during leadership transitions when managers do not understand that the way it's always been done, is no longer the standard within the organization. I've seen it during downturns in business when shifts in business models make certain services obsolete, yet department heads keep churning out irrelevant work product as though nothing has changed.

Now back to the saying that Council Member Lovell so eloquently stated. "If you're not at the table, you're on the menu." If you are a leader in your organization, are you at the table? If not physically, is your voice and those for whom you lead, represented at that table? If you are unsure, you need to step up and find ways to be heard. It could be as simple as asking for a seat. In many instances, it means finding a champion that has a seat, and lobbying them to represent your ideas and fighting on behalf of you and those you lead. The worst thing you can do is nothing and hope for the best. If you do that, you will find yourself one day as the main course on that menu.

Bookmark and Share


Client-led Change: Toward a More Perfect Legal Market

The CLOC Institute last week was phenomenal. I barely tweeted because I was so engaged by the content and conversation. I did, however, transcribe one quote that got some attention from the legal commentariat:

I gravitated to the quote because it was consistent with my pre-existing notions of the role clients and structured dialogue play in driving improvements in legal service delivery. But because the statement only reinforced my extant beliefs, it did not inspire any sort of reflection. Another speaker from the same Big Thinkers panel, however, added another dimension to my musings on collective conversations.

Firoz Dattu used to teach economics at Harvard. Among many other cogent points, he talked about getting past the failings of individual firms and thinking more about how we can correct market failures. In particular, he emphasized the lack of perfect information. As someone who has long labeled law a credence good subject to Baumol’s cost disease, this observation resonated with me.

Perfect markets are purely theoretical. The textbook conditions for competitive markets—perfect information, rational market actors, homogeneity, free entry and exit, numerous participants, no regulation, no externalities, no principal/agent problems, etc.—exist in degrees, not absolutes. But understanding how and why a particular market deviates from the competitive ideal is critical for efforts to correct how that market functions.

In a perfect-information condition, all consumers and suppliers have perfect knowledge of price, utility, quality, and production methods. This differs from omniscience. Perfectly knowledgeable participants can still compete. Chess is a competitive game with perfect information. Both players have seen every move and can derive the range of possible future moves from the rules.

Backgammon is also a perfect-information game despite the role of the dice. Rolling the dice introduces quantifiable exogenous uncertainty from chance events—i.e., we do not know what numbers will come up, but we do know the range of possibilities and their probabilities. Working from a fresh deck, blackjack and poker with all cards facing up would be perfect information games. But stacked decks and hidden cards result in an imperfect-information condition and also much of the fun of gambling.

Legal action is a gamble with plenty of stacked decks and hidden cards. There are known unknowns and unknown unknowns that drive activities like discovery and due diligence. But even the basic decisions, like which lawyer to hire, are fraught with imperfect information. With the billable hour still dominant, we are generally guessing about price. With contingent outcomes, we have limited ability to judge utility. We have almost no barometer of quality apart from the poor proxy of pedigree. And we harbor deep suspicions but traditionally have had no real transparency into production methods.

We can’t eliminate risk or uncertainty. We can’t have perfect information. So shouldn’t we just get back to doing the law stuff? This is the point where many market participants throw up their hands. Having cogitated for a few painful minutes, most people return to their days jobs with some implicit, if grumbling, acceptance of the status quo.

Firoz Dattu is not most people. One of the founders of the General Counsel Roundtable (now CEB Legal Leadership Council), Dattu is the CEO of AdvanceLaw. AdvanceLaw has brought together the GC’s of over 100 of the largest corporate clients (e.g., Google, McDonald’s, Nike, Sony, Deutsche Bank, Mastercard) into something that looks from afar like a loose consortium. Rather than buying together, the GC’s of these legal service consumers pool resources to vet law firms and, once firms qualify for the go-to list, commit to sharing feedback on quality of service.

But how much can you really vet law firms? Law firms look pretty much the same. There are no agreed upon measures of quality. Likewise, there are no bright lines for judging outcomes. Who is the better trial attorney: the one who ‘won’ a case that should have been worth $10M to the plaintiff or the one who ‘lost’ the case while limiting the damages paid by the defendant to $100K? How do we measure the outcome if the parties avoided trial by settling for $1M? How do we evaluate the deal or contract that never resulted in litigation? As Deming said, “Without data you're just another person with an opinion.”

That is probably what it would be: opinion. I don’t have any insight into the AdvanceLaw methodology, but I suspect it involves a fair amount of subjective evaluations on both the front and back end. Kind of like Yelp or the reviews on Amazon. Not exactly hard science.

But it does not need to be hard science to be useful. General accuracy is preferable to false precision. I find the scores on Yelp and Amazon to be quite informative (and AdvanceLaw is far less susceptible to fake reviews). Customer satisfaction is inherently subjective but terribly important. Knowing that 100 people subjectively determined they enjoyed a meal is a better guide to action than having a precise measurement of the max temperature of the oven in which the food was cooked.

While we can’t have perfect information, we can have better information. We can reduce, rather than eliminate, risk and uncertainty. A few well-informed customers sharing their opinion provides infinitely more information than nothing and is more credible than advertising (either you have no information or you believe what the seller tells you). There are numerous methodologies for capturing qualitative metrics. But these measurement methodologies work best with scale and diversity of sources—the two things the AdvanceLaw loose consortium approach provides.

Think about the advantages from the buyer’s perspective. One major barrier to dynamism in the legal market is high switching costs. Despite long-standing dissatisfaction with their incumbent law firms, client purchasing behavior reflects a devil-you-know conservatism. This behavior is rational in a low-information condition where the primary method to determine if there is a better alternative is a resource-intensive vetting process followed by a risk-intensive trial run.

Pooling resources on the vetting process reduces the burden. Sharing feedback reduces the risk—someone credible has already done the trial run. The formal system for building reputational capital also creates an extra level of market discipline for the participating firms because a bad customer experience will have effects beyond the individual client relationship. Law firms go from operating in an environment where they are almost guaranteed that their performance will not be shared to an environment where they are almost guaranteed that it will. Incentives affect behavior.

Clients are not the only ones who suffer from an information deficit. Firms believe they do great work. But only a third of corporate counsel would actually recommend their primary law firm to a peer. Returning to the quote that opened the post—“I’m at a large law firm. The only time I have seen changes is when clients have initiated it”—think about the advantages from the seller’s perspective. Single-source vetting combined with a robust feedback mechanism from over a hundred clients does more than preserves resources. It introduces consistency and transparency.

Often, law firms that do not get past the vetting process have no idea why. Those that make it on a panel list then have little insight into the circumstances that lead to the ebbs and flows of business volume. The conventional way to fire a law firm is to stop calling them. The lack of dynamism among law firms is not just because clients don’t switch often. Clients’ reasons for switching, or not, are usually opaque

Presumably, AdvanceLaw tells firms why they don’t make it on the go-to list and what they would need to improve in order to so. Likewise, I’m assuming that law firms are made aware of the feedback so that they have guidance on how to get better. The subsequent rewards for getting better and doing exceptional work are amplified by the transparency to other potential clients. Law firms move from a situation where there is often no feedback to one with constant feedback that is shared with over a hundred existing and potential clients.

Moreover, the dynamism driven by better information is not limited to individual clients and firms. There are system implications. Where thorough vetting and detailed, quantified feedback displace brand and pedigree as indicia of quality, the playing field becomes leveled for smaller firms and challengers. This does not necessarily presage the death of BigLaw, but it does intensify competition and accelerate the pace at which law firms are remade.

I’ve been focused on information problems for years with my Service Delivery Review and Legal Tech Assessment. The market needs more information. But the market also needs to be structured in a way that facilitates the dissemination of information. Recently, I’ve been reflecting about the roles played by geography (Toronto) and organization (CLOC) but Dattu, along with some exciting things my friend Bill Henderson is working on, has really got me ruminating on the importance of collective feedback loops. Structured dialogue is a powerful feedback mechanism, but it can be amplified if it is embedded in the proper collective structure.

We need to make a better market rather than focus on the shortcomings of individual market participants.

D. Casey Flaherty is a consultant who worked as both outside and inside counsel. Find more of his writing here. Connect with Casey on Twitter and LinkedIn. Or email casey@procertas.com.

Bookmark and Share

© 2014, All Rights Reserved.