Not too long ago, Jordan Furlong wrote a good post on what law firms sell. Normally I would go all “Dan Aykroyd” on him, but not this time. His post got me thinking about the broader question of what law firms sell in terms of product offerings. And here’s the catch: They don’t know what they sell.

And now a car analogy …

If Ford acted like a law firm, they would know they sell automobiles. They would probably know they sell some volume of sedans, SUVs, trucks, coupes, etc. But beyond that, they would not know how many of each product they sold. Under SUVs they would not know how many Explorers versus Escapes versus Expeditions were sold. Oh, and in the SUV category there would be some sedans, trucks and coupes included.

Of course if Ford acted in such a fashion, they MIGHT know they sell automobiles

Law firms know what they sell only at the high level because that is all they have needed to know until recently. Although most firms have some taxonomy of matter types, they are rarely used effectively. For most firms, the work gets a high level categorization based on the billing partner’s practice designation. This means transactional work can be tagged as litigation if the billing partner is a litigator. The choice of matter type when it is an option, is too often made by a secretary. These well-intentioned secretaries picked the most convenient type or the one least likely to get anyone’s attention. Therefore when someone wants to see “Single Plaintiff Employment” cases, the only way to find such a list is manually – which means it never happens.

This is obviously an opportunity for Knowledge Management (KM) to shine. But I predict the usual challenges for KMers who tackle this problem. First – a firm will appoint a committee to develop a ‘comprehensive’ list of matter types. The Committee will want to make sure every possible matter type makes it on the list, since Fred’s Admiralty practice is just as important as the rest of the firms’ commercial litigation practice. The result will be a long list of never-used matter types … and we’re back to where we started.

My advice: Firms need to know what they sell, down to a reasonable product level. Finding that reasonable product level is a task for marketing and leadership and then KM can be the engine to continually support this effort. Once firms know the true volume and margins on each of their product offerings, then they will know where to focus their market efforts and product resources.

  • Tom

    Your comment about matter taxonomy is dead on. This is where you need to partner with marketing/BD to understand what are the most common types of RFPs coming, what types of reports do they most often and follow the old 80/20 rule. When we did our matter taxonomy project we started by saying we WOULD NOT try to capture every conceivable area of law, we positioned that early on and it seemed to work. For reporting flexibility, you also need to build a taxonomical heirarchy such that it's easy to report at a high level (all labor/employment litigation) and a more detailed level (all labor/employment single plaintiff litigation).

  • "Firms need to know what they sell…" because their clients/legal departments know what "it" is that they are buying. More and more legal departments are tracking their legal work, grouping like matters, understanding (at a reasonable level)the volume of work and other "contours" (cost, duration, etc) of a particular portfolio of work. Law firms need to know becaue their clients already know.

  • To know what your law firm sells is an opportunity for "just in time" but not "just in case" KM. "Just in time" KM is locating information at the instance you need it while "just in case" KM is collecting comprehensive intelligence to fill in information gaps.

    Both approaches have to fit into the law firm's workflow presumably structured to maximize efficiency. When we touch on the topic of buying/selling, I believe we need to focus on who holds the metrics within the firm as well as who examines this information to make sound decisions. In this case, the metrics reside with accounting (matter, time and billing) and the examiners would be the CFO and the managing partners.

    I normally do not advocate acquiring apps to solve problems without a thorough audit on the problems to be solved. However, to mine this information on products and services I suggest a dashboard-like app that ties into the firm's accounting system. The information presented via the dashboard should show the information gaps needed to present a picture of the firm's product-and-service scenarios.

    This strategy fits naturally with workflow– a major challenge to most integration of technology (including KM) and utilization.

  • Anonymous

    Our firm assigns an ABA practice to each matter when it is opened, and can run reports on that field to see what we're selling and how much of each "product". There's still a problem with people who open a "General Corporate" file and bill all of their time under it, but we feel we're making a start with the practice codes.

  • Love your comment on taxonomy. What a perfect analogy. And to InHouse_Bern's point it is so important for firms to know what they are selling.