7/24/17

For Lawyers, Fear of Change Trumps Loss of Billable Hours

Photo by Charlz Gutiérrez De Piñeres on Unsplash
What I am about to write is completely anecdotal, but I think is relevant to the current disruption that we are seeing in the legal industry when it comes to automation of legal tasks. I know, most of you are asking, "how does that vary from all your other posts, Greg?" Quite frankly, it doesn't, but I wanted to warn the readers that this one is my experience, and your mileage may vary.

I want to paraphrase something that I heard last week from a guest speaker at the AALL conference in Austin.
Lawyers don't like automation of tasks because it cuts into their billable hours, and thus it costs them money.
This is a good line to say to a bunch of law librarians and legal tech professionals, but it's kind of a cheap line, and in my experience, not all that accurate. It's a line that has been said in different forms for the twenty years or more that Knowledge Management processes have been hailed as best practices for law firms. Add to that the history of business process improvements, Six-Sigma implementation, and now Artificial Intelligence and Machine Learning, and you've got a new platform to tell the story of "the attorneys won't adopt these ideas because it will cut the time they charge their clients."

I have to say that I have yet to talk with an attorney that hinted that this was a serious barrier for efficiency. Oh, I am positive that some of you have run into these attorneys, I'm just saying that it has not been my personal experience.

What I have seen, however, is the challenge of implementing these processes and tools into the workflow of the attorney without causing a major disruption, at least initially, in their ability to do the work. Sometimes this disruption lasts for months. Again, I'll give you another anecdote.

When I was at ILTA last year, I watched an amazing presentation from some very forward thinking lawyers who created automation tools and machine learning techniques to process a type of transactional documents. The outcome was pretty amazing, and reduced the time to process documents down from dozens of hours down to a few minutes or hours. Plunk in the data... press the "go" button, and watch the machines do the work. The idea was to make the lawyers focus on what they are really good at, and that is dealing with the highest risks the clients face, and not waste time on no-risk, or low-risk items in the portfolio. Lawyers could then charge an alternative fee deal that still made them a nice profit, but at the same time, reduced the clients overall spend. On top of all of that, it also sped up the time spent on the matter.

Now, you might read that last part and say, "I can see why lawyers would refuse to do that. It cuts their own throats by making less revenue." That sounds like a solid interpretation. However, let me add in one more detail to the story which I got after the presentation when I asked the presenters this question. "How long did it take you to automate this one type of deal, and how many people did it take to get it operational?"

The answer was that it took six to eight months, four or five consultants and programmers, and two or three attorneys who could test the system as it was being created, and give feedback. That was for one type of deal. I don't think I'm going too far out on a limb here to say that the cost of this was probably in the mid six-figure range or higher.

Granted, the first item brought to market is the most expensive, and it is very possible that the next type of deal would only take a few weeks to bring online, and a diminishing amount of time for the next deal type, and the next deal type. How many law firms are going to take this risk with the upfront costs in the hopes that eventually they will get a return on their investment?

So let's get back to the idea that lawyers don't like automation because it costs them billable hours. I think that the real answer is that most lawyers don't like automation because the change is too costly, both in time and money. High risk can mean high reward, but it is still a high risk.

Perhaps the story I'm using here is a situation where we attempt to do too much all at once. I'm a big believer that law firms don't lack for resources which improve overall efficiency. What they actually lack is actually applying the existing resources they have. Instead of looking at the latest bleeding-edge technology that promises reducing months of time to seconds, look to the tools you've already bought that will reduce ten minutes off an hour of work. It's not as cool, but it is more likely to work.







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2 comments:

Gene Turner said...

Hi Greg, this is a great post.

On the point about time and cost, that was the problem I faced in practice. We spent an obscene amount of time and effort trying to automate banking and corporate precedents with little to show for it, but a large part of that was because we didn't want to pay for proper document automation software. We tried every "free" option available without accounting for opportunity costs.

Once we licensed HotDocs we started to get somewhere, but as a lawyer and team leader I still had to spend a huge amount of time writing instructions to our IT people about what I (thought I) wanted, wait for them to deliver something, and find time to test it and try and work out what they had done. The things we work on as lawyers aren't linear (we work with combinations of options), and words within each sentence matter, so the instructions got incredibly complicated as I tried to get something similar to what I would draft myself. When a programmer left, I had to start again with someone new. Again, very expensive.

The game changer was when I realised I could learn how to use HotDocs myself. It's a mature product, and there is lots of training and help available. It's been a lot of effort for sure, and when I look back on some of my earlier automation, it's not as good as I would do it now, but it worked. We can now do automation of very complex documents very quickly, working through the programming with a legal mind, and have built a business offering that service to lawyers and others that want advanced document automation as a service.

We can turnaround simple documents within a day, and complex documents or sets of documents in 1-2 weeks, for a fraction of the costs you are suggesting (often similar to what law firms charge per transaction). On a recent job involving 17 complex banking documents, the partner said we would reduce 8 hours of senior associate time to around 30 minutes. Because we are lawyers and business people ourselves, we don't need a lot of hand-holding to explain how a document or set of documents works, so our customers can send us the documents, let us provide a scope they can agree to, and then let us do the heavy lifting until its ready for testing. Because we know what we can and can't do, we can guarantee outcomes and only invoice on successful delivery. The risks you talk about can be managed.

We are based in New Zealand (but happy to work internationally), but I know that in the US Barron Henley from Affinity Consulting (http://www.affinityconsulting.com/about) is an expert on HotDocs and wouldn't cost anything like the amounts you mention either.

There are solutions out there if your readers look. As you say, the key is not to look at the latest bleeding edge technology, but work with market leading products that are already proven and either dedicate some serious lawyer time to learning how to use them yourself, or work with experts who can help you to use them.

Gene Turner
www.lawhawk.nz

Moe said...

Great post and it really hit home ay my new gig. Can you share or PM me the session ID from last year you referenced? I would like to listen to it. Thanks!

 

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