5/30/14

Maybe It Is Broken - A Reply

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Marlene Gebauer, in a guest post, takes me to task for my recent post on how the law firm model is not broken. Based on the comments I received from that post, I told her to "get in line" if she wanted to take a shot at me, but then I decided to hand her the microphone.

Enjoy.


Every Legal Project Manager who read Toby's last post on "The Business Model Is Not Broken" is saying a big THANK YOU right now. They are pretty much guaranteed employment for life based on his musings.

I agree that financial management of legal practice, the "cost of doing business" if you will, is extremely important-whether that be in terms of hourly billing, alternatives fees or collections.

But a law firm is not exactly an assembly line for automobiles. In order to create internal efficiencies, automotive companies did create assembly lines and automate. Which many argue we can and should do at least in certain instances of legal practice. But what automotive companies also did was measure the average time it took to complete each task and communicate that to its employees. So the internal standard was established and those who purchased cars benefit from the lower cost and faster delivery times.

Law firms may have a difficult time establishing the metrics delivered in the automotive industry because they deliver a service, not a product. Law firms, billing hourly, have to standardize time entry by time increment (easy) and task code (not so easy) to determine how long a specific task will take. Some may say that alone is impossible, but let's play devil's advocate and say it is doable. People who purchase cars don't ever see (or likely care about) the internal production metrics. In contrast, legal clients review and have a say about those time entries-and they care about them a great deal. A law firms' billing classification system may not jive with a client's. A client may need certain sorts of coding to correspond to their own internal systems. While a firm can adjust to a client's needs, if done significantly, the internal efficiency metrics become meaningless because you are no longer comparing apples to apples. If that happens I guess you just hire the big guy with the cat o' nine tails.

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5 comments:

Larry Bridgesmith said...

Marlene, Great analysis and differentiation between the legal services sector and automotive. You're correct as far as that analogy goes. I find it more analogous to compare legal services to military incursions. Immense, complex with countless moving parts and the enemy is trying to get you killed (or at least neutralized). Interestingly, military exercises are no longer like DDay (everybody go out for a pass) with all the waste and carnage that model entailed. Instead, military incursions like complex legal matters require immense coordination between resources, supplies, communication, planners and performers or disaster strikes sooner rather than later. The plan changes as soon as it starts. Project management can provide the means to plan for all the expected events in order to be prepared for the unexpected as soon as it inevitably occurs. Perhaps there are more affinities than first thought and an apple to apple comparison would help us deliver legal services with the precision of a modern military exercise.

Ron Friedmann said...

If the goal is consistently measuring time by task and the problem is different sets of task codes, why isn't the answer mappings that normalize all codes sets to a consistent one?

Marlene Gebauer said...

Ron, it is a good and fair point you raise. The solution could potentially be complicated to develop and maintain. I know we have not set any parameters here, but the extent of the difference between client requirements and the amount of clients having different requirements could have a big impact on how well normalizing will work. Add the expectation of changes to the client base over time, and you have a potentially large maintenance process. Will firms commit to this sort of process is the question,I guess.

Larry Bridgesmith said...

Perhaps another question that could address the last is, "Why should lawyers process what technology can process better, faster, cheaper?" The "large maintenance process" of LPM can be accomplished through technology to allow lawyers to go back to the practice of law, which is why they went to law school.

Toby Adamson said...

One should look at other professional services industries like consulting where each project is different and clients preferences for billing is relevant. Yet at some level the work can be categorized, as Ron Friedmann indicated to provide relevant comparison points. When comparing two matters for different clients in the same area of law there will be similarities and thus statistics that would be meaningful. This analysis would provide some great insight into work that is inefficient or too expensive for the value it provides.

 

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