post on productivity helped bring my thinking in to the clarity of this blog post. From what I am seeing, the market is setting lower prices and now firms are trying to reduce the cost of their services, which translates in to productivity growth.
To Ron’s points on growth in productivity, law firms need to become ‘better, faster, cheaper’ (BFC). Obviously LPM plays a role in this. However, I believe LPM is necessary but not sufficient for BFC. Because in most respects (and I’m sure other bloggers may chime in here) LPM is about doing something the same way only with more discipline. It’s about defining how we do things and then institutionalizing that effort in a standardize way.
I have touched on this point before, however the BFC angle refined my thinking and I drove me to the following BFC definitions:
Better: Doing it (a task, matter, etc.) with the same or more resources but driving an improved outcome (a.k.a. higher value).
Faster: Doing it with the same resources and with the same outcome, but in a shorter period of time.
Cheaper: Doing it with fewer or cheaper resources and driving the same level of outcome.
Translated in to ‘legal’ these become:
Better: Doing it with the same or more hours, but getting a better result.
Faster: Doing it with the same hours, but in a shorter time-frame (probably with more people).
Cheaper: Doing it with fewer hours or by using people with lower rates or with technology.
There is an old engineering adage that says "Faster, better, cheaper — pick two." This idea basically argues any system can optimize at most two factors, to the detriment of the third. Using LPM, at best you can restructure the project plan to improve one or maybe two of the factors, but only by sacrificing a reduction in the third one. Clients seem to be pushing on ‘cheaper’ with minimal attention to the other 2 factors. This begs the question of where should the focus be?
Real productivity growth comes when you change the system, which leads us to process improvement. This is where most businesses gain a competitive edge. They employ long-term process improvement techniques, along the lines of Six Sigma.
Which brings me back to my point: LPM is necessary but not sufficient to drive improvements in law firm productivity. Project management brings discipline to a process, but is not about improving a process over time. I believe growth in productivity is what clients really want, whether they see this explicitly or not. Discussions about ‘efficiency’ are too often vague with no real discussion about what that means (e.g. no first year associates on the bill). Instead the presumption is that ‘cheaper’ equals efficient.
So I’ll start my campaign now for BFC to become the heir-apparent buzz phrase for 2013. Instead of being a technique like LPM, it's actually the desired goal.