Me: Which “genius” decided savings should be a prime objective and metric of success for law departments?

Jae: [purses lips & tilts head]

Me: But…

Jae: [rolls eyes]

Me: No…like…well, actually…but see…what had happened was…

Jae: [sighs]

Me: Fine. I’ll recant and repent. But, just so we’re clear, I am not happy about it.

Jae: [shrugs]

Saving money is essential. But not as end in itself. Centering savings in our value storytelling is seductive but, long-term, counterproductive. Our story should be one of delivering business value. Delivering business value is contingent on us having sufficient resources to meet the evolving needs of the business.

To the extent I have played any role in promoting the narrative that law departments should prioritize savings for savings sake—as in, “today over half of these departments are targeting savings of 20% or more” (2021 EY Law Survey)—I seek absolution, and wish to atone, for my sins.

I remain a harsh, vocal critic of waste in the delivery of legal services—without remorse. Yet, in what may be revisionist history, I protest: I have been misunderstood. I hold nuanced views. My focus is reducing the unit cost of legal services as one component of us collectively solving for scale.

My operating assumption remains that demand for legal expertise is on a steep upward trajectory in our law-thick world; to the point where, even if we can reverse the correlated trend in relative costs, many law departments will require more, not less, budget to address the legal dimensions of business problems. Indeed, this series commenced with my observation that “Some law departments simply need more money. Not all of them will get it.” This was the conclusion to a post I wrote about ever-increasing demand for expert legal guidance, the rise in relative costs, the failure of corporate legal budgets to keep pace, the limits of insourcing, the resulting productivity imperative, and our need to improve at value storytelling.

I built on this observation last post contending that superhuman efforts to do too much with too little (excessive MacGyverism) sabotages our legitimate ask for allocation of incremental resources to the legal function. I maintain it is incumbent on us to do the uncomfortable, including saying “no” and “I told you so” the right way. Our natural state is a reflexive “yes” followed by extraordinary, unsustainable effort. Holding the line on strategic prioritization is an unsettling but necessary exercise, as is elevating our effectiveness at the “executive art of the business case.

Herein, I posit that savings, as an end in and of itself, should not be a strategic priority and, like excessive MacGyverism, undermines our business case.

This is supposed to be hard. This is the big leagues. Corporate dollars are fungible but finite. The opportunity costs of apportioning incremental funds to legal are considerable.  I am intimately familiar with how challenging it can be to secure budget. I am also intensely familiar with how it becomes increasingly impossible to satisfy ever-expanding business needs with an ever-shrinking budget—we can only do so much extraordinary gap filling. It is essential we do the hard things well to avoid facing the impossible. When put in a no-win situation, we lose.

Our general value may be self-evident but our marginal value probably isn’t. “We need more resources because we’re busy” is only moderately useful as an argument for the allocation of marginal dollars. It is, however, quite common because it is inherently logical—if we accept the premise that legal support is necessary to the proper functioning of the enterprise.

“what we do is important” + “don’t have enough resources to do it” ≠ more resources

We often face a high evidentiary burden when requesting incremental increases in resource allocation even where the foundational case for our existence is treated as axiomatic. We ratchet up the difficulty setting when we suggest we already have more resources than we need—or worse, have been wasting resources for years.

Corporations underinvest all the time, for many reasons. Organizational underinvestment is endemic. This includes underinvestment in legal, which is often a budgetary rounding error (in percentage terms, even where the raw dollars are massive). Sometimes, corporations underinvest because they must consciously make hard choices. Sometimes, corporations underinvest because they unintentionally make poor choices.

Good value storytelling will increase the likelihood of adequate investment in legal but is no guarantee. In crafting a compelling story, centering savings can be enticing in the near term. But, long term, framing savings as end in itself can prove to be an unforced error as it perpetuates the attractive fiction that corporations can, and should, spend less on the legal function.

Saving money is easy in the short term. Just fire someone. Who? Doesn’t really matter. A reduction in force will eliminate nominal costs from one area of your budget. Too crude and close to home? Fine. Demand ever deeper discounts from your law firms. Or hold a reverse rate auction. Or add another dozen items to the list of what you won’t pay for in your outside counsel guidelines. Keep going back to the well; double down on whatever “worked” before (or has purportedly worked elsewhere).

The levers available to superficially cut costs in the near term are legion. Most of them are fine as far as they go—they just don’t go very far.

We absolutely must make decisions about the size and shape of our law departments. We must regularly revisit and refresh our relationships with external providers. But we should do so with an eye towards long-term sustainability, not only short-term savings. The associated messaging should be about optimal reallocation of finite resources to better support strategic enterprise priorities—not a net, permanent reduction in resource requirements.

With an eye towards quick, tangible wins, too many law departments have seized on building their fiscal bona fides through aggressive, explicit efforts to save money. This is understandable. “Less-expensive alternative to outside counsel” is the origin story of many law departments. But after quick wins are quickly forgotten, a savings-centric value proposition positions us poorly for our next magic trick. One-time lifts do not lend themselves to repetition or, at the very least, are subject to diminishing returns. Worse, foregrounding savings creates, or cements, the expectation that the law department should be judged on our ability to spend less money. This expectation is at odds with our true purpose (meet the needs of the business) and long-term reality.

One hope is that by showing ourselves to be conscientious stewards of corporate resources with an established track record of fiscal prudence, we will garner credibility that serves us well in our quest for more resources. It rarely works this way. In some narrow contexts, savings are a path to glory. Most of the time, however, the sole reward for spending less of your budget is less budget going forward. Short-term cost savings only imprint to short-term memory.

Track record matters. But, most places, goodwill is earned through recognized value delivered to the business, not cutting legal costs (a fractional amount of a fractional amount). We are remembered best when we help make or save real money. The job is to enable the business. The symbiotic responsibility is to secure sufficient resources to do the job.

What about doing more with less? Sure. We must do more with less—on a relative basis. We face a productivity imperative grounded in ever-increasing demands with which our budgets will simply not keep pace. Our resource/demand gap can only grow so large, so fast, until something critical falls into the gulf.

Business activity is increasing. Government activity—legal complexity in the form of statutes, regulations, investigations, etc. compounded by cross-border complications–is increasing in response thereto. The related costs of doing business escalate with the amount of business being done. Specifically, legal is a cost of doing business on an explicable upward trajectory.

Given the uptick in total demand (more economic activity in a more densely regulated environment), there is no self-evident reason to expect total spend on legal will be reduced in the foreseeable future.

Process-driven, tech-enabled legal service delivery can reduce the unit cost of legal services while moving upstream to address business drivers of legal spend (e.g., #dolesslaw, prevention) can reduce the number of units of legal services required per quantum of business activity. But I am still hard pressed to imagine a world where aggregate spend decreases even if we materially increase our yield per dollar expended. Costs in raw dollars will still likely trend up, even if we bring relative costs down dramatically. Pretending otherwise is a recipe for pain. Frankly, our expectation should not be more with less, regardless of how common that refrain has become. Rather, we will need to do more with more. Embedding this expectation with our stakeholders requires us to be expert in arguing for more in an environment where that is the opposite of what anyone wants to hear.

A word of caution even about relative spend. Measurement is a tricky beast. Goodhart’s law, for example, tells us that once a measure becomes a target, it ceases to be a good measure. The answer is not to abandon data. Rather, we are best served by a balanced bundle of meaningful metrics and the attendant ability to weave them into coherent stories—raw data is not a story.

Legal Spend as % of Revenue, for example, is a solid benchmark and KPI. No argument here. In a stable environment, reducing spend as a percentage of company revenue can help tell the story of our ability to control unit costs relative to company activity while simultaneously reinforcing the proposition that the legal budget should remain on a smooth upward trajectory. Yet spend as a percentage of revenue can be wildly misleading in a volatile environment or during periods of punctuated equilibrium.

The fun version of budgetary chaos is a healthy, well-run, growth-oriented company going on a smart acquisition spree, injecting a large bolus of M&A activity that spikes legal spend. Great. We exist to support the enterprise in creating new business value. Totally understandable if previously unbudgeted expenditures on deal counsel, due diligence, and post-merger integration do some violence to our expected outlays.

Alternatively, our company could find itself in new regulatory environment or on the wrong end of a government investigation. Less awesome from the company perspective. But legal’s role in value preservation is no less vital—and no less expensive. Per Jae, when we look at the prevalence and severity of fines against large corporations, the upward pressure on legal budgets presents as an organic outcome.

We should not erect false idols (“reduction in legal spend is our objective”) to which we can be sacrificed when events outside our control force us to violate self-imposed strictures. Instead, we need to properly manage expectations by meticulously crafting a convincing story of how corporate funds should be spent, and why. Exogenous events will shape our story, so we should be exceedingly careful not to paint ourselves into narrative corners.

So we shouldn’t save money or talk about it if we do? We should continuously strive to maximize the value derived from every dollar spent. This will often involve creatively identifying ways to reduce costs in one area so we can reallocate money to other underfunded mandates. We absolutely should talk, proudly, about how we saved company money but should be careful not to speak as if saving money is itself an objective. Rather, the mission is to better support the company’s strategic priorities. Our emphasis should be on the enhanced business value the savings enabled, not the savings themselves. Our framing therefore should be focused on more optimal allocation of scarce resources, not the reclamation of excess resources.

What about when the enterprise requires us to reduce spend? Then we reduce spend. The foregoing is not some pollyannaish take willfully blind to the realities of operating in a corporate environment. The reality is, even with exceptional value storytelling, most legal functions will remain chronically underfunded relative to the intensification of demand, and will also have to weather episodic cost-cutting mandates. I’m not saying it is easy. I’m saying don’t make it harder than it already is by falling prey to the Siren Song of Savings and centering cost cutting in our narrative as some sort of intrinsic, independent good.

More about more for more in the next post in this series.

Ironclad‘s Chief Community Officer, Mary O’Carroll, has spent the past two decades bringing business acumen to the legal industry. In an industry run by lawyers, most of whom had little to no business training, Mary points out that it is logical that legal ops teams are needed to be the right-hand people in helping lawyers in the business process. Her experience with Orrick, Google, CLOC, and now Ironclad has one common thread, and that is the need to drive change. Mary says that it is just a part of her personality to be laser-focused on efficiency and find ways to clean up the mess she uncovers in the legal industry.
It is that desire to drive change through the use of the legal community that helped her make the decision to join Ironclad and the hot field of Contract Lifecycle Management (CLM). Mary points out that the industry has worked to improve efficiency in many areas, but when it comes to contracts, we are continuing to do business as usual. Creating a digital contracting system will help scale the industry, as well as enable us to leverage data, which has always been trapped in contracts, and create new methods for the legal department to help drive the overall success of the business, and no longer be seen as a department where ideas and innovation go to die.

Information Inspirations
Our own Casey Flaherty advises us to stop trying to be a hero, and learn to say no when it comes to spreading resources too thin. Check out his latest article, “Maybe, Don’t Be MacGyver – The Value of Value Storytelling.”
Singapore is launching a couple of Dalek-looking robots to monitor “undesirable behavior” among its citizens. Is this a logical use of technology or a slippery slope toward technology overreach?
O’Melveny and Myers is the first law firm to join Peloton’s Corporate Wellness Program.
The next time you go through a drive-thru, you may hear the crisp, clear voice of an AI program taking your order. Will the robots take more and more of the service jobs away, and will there be a shift in the way the government taxes those robot workers who replace humans?
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Contact Us
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Voicemail: 713-487-7270
Email: geekinreviewpodcast@gmail.com.
As always, the great music you hear on the podcast is from Jerry David DeCicca who has a new album coming out in October!
Transcript

Continue Reading The Geek in Review Ep. 130 – Mary O’Carroll – The Power of Community in Driving Change

I posit that the most valuable skill that every corporate law department needs in 2021 and beyond is the executive art of the business case….The reasons for this are many, but I’ll give just one: This is a task that cannot be outsourced.  Without the ability to secure the budget and investment required by the demands on the function, corporate clients will remain forever trapped in a never-ending cost-cutting exercise, to the detriment of everyone involved.  Worse yet, sustained strain on the corporate legal function and its outside supply chain introduces net-new risk — legal, financial and compliance risks — not only for the enterprise but for the social system to which we all belong.

Jae Um

I concluded my last post, on ever-increasing demand and our resulting productivity imperative, with the observation, “Some law departments simply need more money. Not all of them will get it.” In what may be a mini-series of follow-up posts, I try expand some on the value of value storytelling with a bias towards the uncomfortable and controversial. As I have been recently helping some GCs with annual budgeting, my primary orientation here is in-house but many lessons are more generally applicable.

It depends (on context). As Jae says, the business case cannot be outsourced. While good questions tend to be universal, good answers are almost always context dependent. We are responsible for achieving mastery of our own context. Mastery entails being able to navigate our context successfully, a higher bar than issue spotting for outsiders as to why “that won’t work here.” Having an information advantage over outsiders is meaningless. Your audience, and your competition, are inside your organization.

This is supposed to be hard. The Australian women smashed the world record in the 4x200m freestyle relay during the 2021 Summer Olympics—and still only won bronze. Falling short is common when competing against the best in the world. In seeking to secure finite resources within a world-class organization, we likely face world-class competition.

Maybe, just maybe, don’t be MacGyver. When we are under-resourced, the temptation is to fill in the gaps through extraordinary effort augmented by ingenuity. Yet any system predicated on extraordinary effort is unsustainable.

In one sense, it is laudable to meet several unfunded mandates with a paperclip, chewed bubble gum, and some duct tape, while working nights/weekends. Then again, if our organization is accreting operational risk by underfunding mission-critical work, it is our responsibility, as a conscientious steward of said organization, to make this manifest and pursue adequate resourcing. Superhuman gap filling can be counterproductive. We undermine our own case. Extraordinary yet unsustainable performance masks deficiencies and gives outsiders the illusion we have all we need—almost no one cares how busy we are perpetuating the illusion.

I recognize not doing things that, ideally, should get done demands uncomfortable choices and uncomfortable conversations. That’s the job. Sometimes, it is incumbent upon us to be correct, consistent, and persistent (Andy Dufrensene) rather than heroic (MacGyver).

Be prepared to say “No” and “I told you so” often (and ever so politely). Not being MacGyver requires saying No more often, and more clearly. I am deeply familiar with the angst this triggers. Many legal professionals have rightly cultivated a service mentality and are committed to doing everything in their power to meet the multifaceted (and multiplying) needs of their organization. Saying No reeks of disappointment, if not outright dereliction of duty. Continue Reading Maybe, Don’t Be MacGyver – The Value of Value Storytelling (1/N)

While technology is part of innovation, technology alone is not innovation. We brought in three guests this week to talk about what they are doing to innovate in the area of process improvement and give us some examples of some of the projects they are working on.
There is a methodology when it comes to how law firms handle process improvement. O’Neil’s process starts with communicating with the attorney and staff teams to determine what pain points they have and evaluate the current workflow. Sometimes it is as simple as tweaking the processes that already exist by adding or removing steps in the workflow, or by adding or removing the number of people involved. Sometimes it means reaching out to Alana and Jack to see how a technology tool like HighQ can improve the overall workflow through automation and improvements in communications and clearly defining and assigning steps in the overall process.
The firm’s clients are also involved in the process improvement design as well. Carson and Godsey mentioned that including clients in the overall process enables them to define what they need, and makes the law firm/client relationship stickier so that the clients really feel like a part of the firm’s efforts toward process improvement and creating a better value for the client.
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Contact Us
Twitter: @gebauerm or @glambert.
Voicemail: 713-487-7270
Email: geekinreviewpodcast@gmail.com.
As always, the great music you hear on the podcast is from Jerry David DeCicca who has a new album coming out in October!
Transcript

Continue Reading The Geek in Review Ep. 129 – Zen and the Art of Process Improvement – Tiffany O’Neil, Alana Carson, and Jack Godsey

I will represent the 3 Geeks Blog on the upcoming Reuters Events: Legal Leaders 2021 (October 19-20, Online). This industry-leading event is uniting the biggest names in corporate law to help General Counsels supercharge their expertise as strategic business advisers, enhance enterprise value, and leave behind a proud legacy.

I am very excited to moderate the panel, Cultivating the Next Generation of Legal Talent which features the following GCs:

Speakers

  • Desiree Ralls-Morrison, Executive Vice President, General Counsel and Corporate Secretary, McDonald’s
  • Terry Theologides, Executive Vice President, General Counsel, and Corporate Secretary, Fannie Mae
  • Caroline Tsai, Chief Legal Officer and Corporate Secretary, Western Union
  • Amy Tu, Executive Vice President, General Counsel, and Corporate Secretary, Tyson Foods

What an amazing panel!

If you’ve listened to the podcast, you know that recruiting diverse talent and understanding the Gen Z mindset is one of my passions. So, I am looking forward to listening to what this diverse group of GCs has to share on how they approach recruiting talent.

Stefan Mullan, Head of Legal Events for Reuters Events reached out and talked me into moderating this panel. As he was putting the panel together, his thoughts were that:

Legal leaders of today must ensure that the legal leaders of tomorrow look and think differently, and help organizations continually evolve. However, lawyers often operate in silos and lack adequate opportunity to learn from each other which can lead to a disengaged, demotivated department rife with departures.”

Cultivating the Next Generation of Legal Talent will take place on October 19th at 12:25 EST and will help you:

  • Discover how a legal department head coach can foster collaboration and development of professional skills to transform your lawyers into the legal leaders of tomorrow
  • Understand and accommodate what drives your colleagues to embed a positive work culture in your department
  • Equip your team with that they need to handle unforeseen challenges and capitalize on future opportunities

Reuters Events: Legal Leaders 2021 (October 19th – 20th, Online) is uniting senior corporate lawyers with a focused agenda covering five core areas that are driving or undergoing change across the legal industry; Leadership and Strategy, Resourcing and Talent, Regulation, ESG & Diversity, and Transformation.

In a role that has expanded beyond the law, the best GCs today are strategic business partners, who are central to the leadership of their organizations. Legal Leaders 2021 equips senior corporate lawyers with what’s needed to excel in the new paradigm.

I hope to see you there.

View the full agenda here.

 

 

 

 

My partners and I made a thing. We hope you enjoy it.

We poke light fun at lawyers (which all three of us are) for remaining too analogue in an increasingly digital world. Our central premise is that digital transformation is inevitable (and already happening and good and hard and we at LexFusion can help). Underpinning the premise are some hypotheses about the shape, pace, and drivers of change in legal service delivery. We might be wrong. But our bets match our predictions. We all left excellent jobs to push our chips in on an accelerating growth curve in legal innovation. In short form:

  • The absolute demand for legal expertise is increasing; this will continue
  • The relative cost of legal services is also increasing; this will continue until we dramatically improve productivity
  • The uptick in demand powered the rise of BigLaw for decades; this peaked in 2007
  • Next came in-sourcing to meet demand, somewhat keeping costs in check, largely through labor arbitrage; this has likely peaked, or will soon
  • Now, to satisfy growing demand while truly bending the cost curve, we must also materially improve productivity—i.e., innovate through process and tech (the trend LexFusion is betting on)
  • Innovation is necessary but hard; we need to upskill in many respects, including value storytelling

As is appropriate here, I nerd out slightly on our hypotheses below (for an even deeper treatment, let me commend to you the inimitable Jae Um, one of our advisors, from whose magnificent five-part series I borrow liberally–or check out Jae’s recent Tweet storm).

Cost 🡹 The clip hits on the general dissatisfaction with how lawyers operate in the modern age, seemingly not taking full advantage of tools that have transformed much of our world.

The world has changed; lawyers, not so much.

For $600, Amazon will next-day deliver a pocket computer (phone, camera, browser, word processor, gaming device, rolodex, clock, calendar, calculator ….) that remains constantly connected to a searchable repository of nearly all human knowledge (real and fabricated). This technology barely existed in recognizable form twenty years ago. My favorite piece of context: less than a decade after their introduction, iPhones were 120,000,000x faster than the $23,000,000 computer that weighed 600 lbs. and guided Apollo 11 to the moon. (“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks” – Bloomberg, 2007 😂)

Alternatively, also for $600, a junior BigLaw associate will allocate one heavily discounted hour to a client matter. Despite the apparent opportunity to be tech enabled, this associate hour is hard to distinguish from the same associate hour that cost $200 two decades ago. And because legal complexity has outpaced productivity, the number of hours required has also gone up.

Clients “feel” they get less for their legal spend dollars because they do—relative to the trajectory in electronics, logistics, consumer goods, transportation, clothing, food,  etc.

Law suffers from a cost disease, previously covered here:

This is Baumol’s cost disease, an economic phenomenon that undercuts the classical theory that wages rise with productivity. The classical theory: the more productive you are, the more you are paid. The reality is that (across industries, as opposed to within them) the less productive you are, the more we need to pay you (unless there is a glut of qualified workers competing for your job). Unsurprisingly, the eponymous Baumol identified “legal services” as subject to the cost disease. And recent scholarship has concluded, “Legal services are decidedly in the stagnant sector.”

Continue Reading Explaining the joke: lawyers lagging behind

Listeners know that we love asking our guests to pull out their crystal ball and tell us about the future. Joseph Raczynski is a futurist who works with Thomson Reuters, so he came prepared with a crystal ball ready to answer our questions on what the future has in store for the legal industry. We even get into the “red pill”, “blue pill” Matrix when it comes to how AI and emerging tech can go for good, or for evil. Joe gives us a peek into a future where some estimated 85% of the jobs of 2030 don’t exist today. While that might sound a bit scary to most of us, this futurist says there will be plenty of new opportunities emerging for those ready to take on a more decentralized world.

Information Inspirations
Tim Corcoran’s “When and Why Clients Hire Consultants” walks through four reasons organizations hire consultants. If you are wondering if you may need a consultant, this article is a must-read.
Carl Malamud and Public Resource.org may be setting their sites on another government publication which states are claiming copyright. This time it is Jury Instructions in Minnesota
Speaking of courts, Paul Hastings has a nice database tracking the status of courts across the United States during the pandemic.
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If you like what you hear, please share the podcast with a friend or colleague.
Contact Us
Twitter: @gebauerm or @glambert.
Voicemail: 713-487-7270
Email: geekinreviewpodcast@gmail.com.
As always, the great music you hear on the podcast is from Jerry David DeCicca who has a new album coming out in October!
Transcript

Continue Reading The Geek in Review Ep. 128 – Joseph Raczynski – The Red and Blue Pill Matrix of AI and Emerging Legal Tech

Our good friend April Brousseau joins us to discuss her role as Director of Research and Development at Clifford Chance’s R&D Hub. The fact that a law firm has a dedicated R&D group shows how innovation cannot simply be a part-time task that someone at the firm takes on. April’s diverse background as a law librarian, lawyer, and knowledge management leader paved the path to her current role in the R&D Hub and the innovation program. She discusses how they’ve adapted the Three Horizons Strategy from the likes of Gartner and McKinsey, and how they are transforming the core of their operations to complementing services and business assets at the firm, and looking at the future of legal services to stay ahead of the disruption curve. We also learn what a HiPPO is inside a firm.
Links:

Apple Podcasts LogoApple Podcasts | Overcast LogoOvercast | Spotify LogoSpotify

Information Inspirations
Electronic filing of court documents was supposed to speed up the process of getting court information accessible. But according to this opinion piece from Courthouse News’ Bill Girdner, it’s actually hampered access, specifically to the Press.
Just when you thought there couldn’t be anything new under the sun, Twitter conversations uncovered there is a 3rd Amendment Lawyers Association. And they are raising #3A arguments with the CDC’s new eviction moratorium.
The First Edition of Introduction to Law Librarianship is out. This free e-textbook, open access publication is designed to help those considering entering the law library profession, as well as those teaching others entering the profession.
Legal tech is definitely a part of practicing in the legal profession. Some think it is so much a part of the profession that it should be tested on the Bar Exam.
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If you like what you hear, please share the podcast with a friend or colleague.

Contact Us

Twitter: @gebauerm or @glambert.

Voicemail: 713-487-7270

Email: geekinreviewpodcast@gmail.com.

As always, the great music you hear on the podcast is from Jerry David DeCicca who has a new album coming out in October!
Transcript

Continue Reading The Geek in Review Ep. 127 – April Brousseau – Innovation in the Legal Industry Can’t Be a Side Gig

In an industry focused on revenue and profit, where does something like customer experience stand in the priorities of legal providers? Leigh Vickery, Chief Strategy and Innovation Officer at Level Legal, as well as CEO and founder of Queso Mama, says that we need to look at the corporate and legal industry world differently. Instead of putting shareholders and partners first, they need to fall much further down the list. If you take care of your employees and your customers first, there will still be plenty left over for the shareholders and everyone is better off in the end. 
We dive into the topic of how other industries approach customer data and use the information to create a better experience. Can examples like Eleven Madison Park restaurant teach the legal industry better client interactions? Vickery believes so. Metrics like Profits Per Partner might show the industry how profitable the law firms are, but perhaps we need different metrics to show how satisfied the law firm’s clients really are. See Leigh’s article on Economics of Mutuality.

Information Inspirations
Casey Flaherty has an excellent article on how incremental improvements can create better returns on investment than big moon-shot projects. Check it out, right here on 3 Geeks
Wikipedia biographies are surprisingly difficult for women to not only get them on the platform, but to also keep them from being deleted. UNC Professor Franchesca Trapoti discusses the bias in her paper, “Miscatagorized: Gender, Notability, and Inequality on Wikipedia” and Marketplace Tech breaks down some examples.
Bob Ambrogi’s two-part article/podcast focuses on the unique resurrection of UpCounsel’s “legal as a service” model, as well as the interesting crowdfunding to raise capital. It’ll be interesting to see how well this crowdfunding goes, and if other legal services use this model.
Hey kids, lemonade stands are “legal” in New Hampshire and Illinois.
The Netherlands is using AI to pick up butts on the beach. Cigarette butts, that is.
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Please take the time to rate and review us on Apple Podcast. Contact us anytime by tweeting us at @gebauerm or @glambert. Or, you can call The Geek in Review hotline at 713-487-7270 and leave us a message. You can email us at geekinreviewpodcast@gmail.com. As always, the great music you hear on the podcast is from Jerry David DeCicca.
Transcript

Continue Reading The Geek in Review Ep. 126 – Leigh Vickery on Creating Top-Shelf Customer Experience in Legal

“They’re so busy that our practitioners need to realize not a 10% improvement but a 10x improvement in productivity before they will take the time to investigate, let alone implement and incorporate, a new tool” is an observation the always astute Kyle Dumont of Morgan Lewis made to me the other day.

Kyle’s insight reminded me of one of Jason Barnwell’s most quotable lines, “If capacity must increase by 10x, our current approach breaks, as the option of a 10x increase in hiring is simply off the table.” (btw, congrats to Jason for being recently appointed as Microsoft Legal’s first ever General Manager for Digital Transformation—a development worth noting)

Bruce MacEwen introduced his own 10x into the discourse in the conclusion to his excellent post on our scalability problem:

Some years ago the head of “Google X”–the name at the time for its totally out-there incubator for new projects–described their ambitions with an analogy: “If you tell me to build a car that gets 50 mpg, I can do it with off-the-shelf stuff put together with that express end-goal in mind; if the goal is 500 mpg, I need to forget everything I know and leave it behind me.”  (Google X is now named “The X Company,” and they call themselves “the moonshot factory.”)

I concur that the threshold for investing in change is high (Kyle), yet the need for material change is inevitable (Jason/Thanos), and such change requires a fundamental rethinking (Bruce). But to avoid being too agreeable (#boring), permit me to suggest that, maybe, the way we think about change is rather incomplete—in part, because we underestimate the impact of seemingly incomplete changes.

Simple Math, Hard To Intuit. I’ll take advantage of Bruce’s mpg example as a jumping-off point (for our friends on the metric system, think km/L). According to the EPA, the average new car sold in the United States is rated at 25 mpg. As noted, already available, conventional methods can improve this to 50 mpg. You would, however, need to achieve Emmet Brown levels of inventiveness to ramp up to the 500-mpg moonshot.

The objective is to consume fewer gallons of gasoline (the constraint). But what if I told you improving mileage from 25 mpg to 50 mpg (2x, +25 mpg) conserves more gas than improving mileage from 50 mpg to 500 mpg (10x, +450 mpg)? For most of us, this violates our intuition—yet it is correct, nonetheless.

       

A slightly different frame may enhance clarity. Once we reduce baseline resource costs by 50%, there is no further improvement we can make—save eliminating the cost entirely (e.g., go electric)—that can ever have an equivalent impact.

That is, many forms of productivity improvements are subject to diminishing returns when solving for specific constraints. Most of the benefits are realized at the low, unsexy end of the spectrum. Thus, improving from 1 mpg to 2 mpg (2x, +1 mpg) saves 500 gallons while improving from 100 mpg to 500 mpg (5x, +400 mpg) only saves 8 incremental gallons on the same 1000-mile trip. The 2x leap from 1-2 mpg at the inefficient end of the spectrum is therefore 62.5x more impactful than the 5x leap from 100-500 mpg at the efficient end of the spectrum. This is an area where our intuitions let us down.

No Time To Save Time. Let’s apply the same calculations to something closer to home.

What if I told you improving productivity from 1 contract per hour (“cph”) to 2 cph (2x, +1 cph) saves more time than improving from 2 cph to 50 cph (25x, +48 cph)?

I presume you already updated your priors. But if seeing the arithmetic helps:

       

Feel free to substitute any legal unit of production for “contract.” The math holds where time is the constraint.

And let us not kid ourselves about the centrality of time as a constraint. Despite our decades of debate as to whether time is a useful proxy for value, time remains, indelibly, a resource cost and rate-limiting factor. As Drucker writes, “Time is the scarcest resource and unless it is managed nothing else can be managed… Everything requires time. It is the only truly universal condition. All work takes place in time and uses up time. Yet most people take for granted this unique, irreplaceable, and necessary resource.”

We are time constrained even where we are not money constrained. One of the better talk tracks I’ve encountered recently is Kira co-founder Noah Weisberg discussing the concept of total diligence. Noah notes that the standard due diligence approach on even the least price-sensitive megadeals results in only a small percentage of potentially relevant contracts being reviewed. Not necessarily because of worries about accumulating too many billable hours. Rather, everyone involved is invested in maintaining deal velocity, which limits the time available to conduct diligence. Yet there can be material issues lurking in the presumptively non-key contracts (Noah shares some striking examples of these “deep holes”). Certainly, AI can be used to review the typical small percentage of contracts faster (and it is). But Noah is keenly interested in using AI to augment the review process so that 100% of contracts can be reviewed in some fashion with minimal additional time—i.e., total diligence.

Time is not the only constraint. But time is a key constraint, even where money is not. There is an underappreciated interplay between better, faster, and cheaper—in part, because a narrow view of, and overemphasis on, “cheaper” often induces a counterproductive myopia.

CONCLUSIONS

We rarely recognize the outsized impact of reducing low-end friction. Less eloquently than Noah, I have long ranted and raved that my obsession with legal professionals improving their facility with the core technology tools of their trade (Word, Excel, Email, PDF) is not about lawyers using such tools more but, rather, about being able to use them less (bc more efficient). This is decidedly unsexy. But it is a simple means to reduce low-end friction—i.e., the type of minor improvement that can deliver massive time savings when starting from a low baseline (e.g., that small but significant leap from 1 contract per hour to 2 contracts per hour).

I share Kyle’s assessment of stakeholders’ demonstrable, 10x improvement threshold for adoption. Spending much of the last decade, including my current role, engaging in these conversations, I am confident the way most decisionmakers think about the 10x improvement is the leap from the 50-mpg conventional vehicle to the 500-mpg moonshot vehicle, instead of the counterintuitive understanding that the more impactful 10x can be the smaller steps getting from 1 mpg to 10 mpg  (depending on what we are solving for).

I am confident most decisionmakers think this way, in part, because of most of us think this way about most things, and are mostly correct to do so. Indeed, remaining acutely aware of the unavoidable implementation dip, there is wisdom in demanding fairly substantial ROI on any improvement initiative that consumes finite time and attention, especially in an environment of significant opportunity costs. Most marginal improvements are, in fact, marginal. If you are already driving the 400-mpg vehicle, the modest gas savings of upgrading to the 500-mpg vehicle is unlikely to be cost-effective—better to spend that energy investigating going fully electric. But this can go too far. We encounter too many instances of professionals stuck in a 5-mpg antiquated vehicle unwilling to upgrade to the available, if conventional, 50-mpg alternative because, as they correctly point out but too heavily weight, it is not in fact a 500-mpg moonshot.

Our intuitions are mostly reliable. But we remain subject to some predictable irrationality where they fail us. We frequently fail to recognize sources of low-end friction, let alone understand the outsized impact this friction has on the allocation of our finite resources.

We don’t need to do it all at once. The other day, I committed the minor sin of straining a sportsball metaphor (apparently, I’m a “big metaphor guy”). In my defense, he started it.

I was speaking to a formidable in-house leader who made an observation similar to Kyle’s. He insisted with respect to expectations around innovation, “Our stakeholders will not be content with us just hitting singles.” (I’m paraphrasing)

I pushed back, respectfully, “If the singles are in separate innings, probably not. You will just strand runners on base. But if you string together singles in the same inning, you put runs on the board, which is key to winning the game.”

There are passing few grand slam opportunities. But there are many opportunities to put runs on the board. If we make potential grand slams our threshold for taking a swing, our strikeout percentage will be high, and we will miss out on many wins.

Just like the steps from 5-mpg to 50-mpg, the leap from the 50 mpg  to 500 mpg would not be the result of an isolated grand-slam innovation but the combinatorial result of many complementary innovations (cumulative innovation and the expansion of the adjacent possible). The aggregate impact of marginal gains can be significant when they compound.

As Alex Hamilton writes in his new, must-read book Sign Here, “We need to recognize that there is no sweeping fix that will make everything alright and that instead, we will have to make lots of small changes to keep improving how we work…so, while it is very human and understandable to wish it weren’t so, there is no silver bullet that will solve everything.”

Alex consoles us, “You might find it depressing to discover that that there is no single solution…but there is good news here, too: because many changes can be made as relatively small tweaks, they can also be cheap, fast, and low risk.”

Indeed, many of the success we see are not the wholesale replacement of an entire process/system (though, sometimes, this is simply unavoidable—for example, a legacy DMS or CLM) but, rather, successes building on each other as teams re-engineer pieces of their process/system until, eventually, they have developed something entirely new without any single, iterative improvement making it feel completely different (the Ship of Theseus effect).

There are many interconnected pieces in our processes. We should consider all of them, and prioritize the limiting factors—i.e., the key constraints—in constructing optimal, integrated operating environments.

Towards this end of thinking in integrated processes, systems, and, ultimately, platforms, I commend to you Rob Saccone’s exceptional exploration of interoperability.

Indeed, let me conclude with a sentence from Rob that made me smile so much I stole it for the title of this post, “Succinctly stated, we need to advance our thinking about how humans and technology can better work together, as humans alone are not going to be able to compete against humans + technology….Let me repeat the key part: we need to advance our thinking.”