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)

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

“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…

Many of the Luminaries agreed that we are likely to see a big increase in demand for LPM services.

Legal Value Network Council of Luminaries Meeting Report: COVID-19 Crisis Series

As director of (what is to the best of my knowledge) the largest legal project management team of any law firm, I was not the…

At the recent, excellent Law 2030, Vijay Govindarajan observed, “There is only so much Six Sigma you can do.” Despite my affinities, I concur. Low baselines can have an outsized impact on the efficacy of interventions—but then baselines stop being low.

Consider buying a car with an eye towards better gas mileage.

Which technological leap saves more gas? Improving a car’s miles per gallon (i) from 10 mpg to 20 mpg or (ii) from 20 mpg to 100 mpg?

Put another way, from the perspective of gallons saved, what is the ‘bigger improvement’ (i) +10 mpg/2x or (ii) +80 mpg/5x?

Since I’m asking the question, you already surmised the answer is counter intuitive:

One simple takeaway is that once you cut something in half, there is nothing you can do, save eliminating it entirely, that will ever again deliver the same raw level of improvement.

In the legal context, for example, we have good reason to accelerate contract review. Start with a standard review that averages 20 minutes and reduce it by 60% through basic interventions (harmonized templates, checklists, playbooks, deviation matrices, etc.). You save 12 minutes per contract. Next, throw on some razzle dazzle AI that reduces average review time by another 60%. You save less than 5 additional minutes. That’s not nothing, especially with large volumes. But it comes at a cost, including the opportunity cost of addressing other chokepoints, constraints, and rate-limiting factors.…
Continue Reading The Limits of Incremental Improvements

January was a busy month on my LinkedIn. Birthday and a work anniversary. The automatic notifications prompted some splendid exchanges with old friends. And I received a few questions worth answering more publicly.

Where you been?

Working. Took the new job at the beginning of 2019. It was exciting at the time. Even more exciting…

The United States military is the most formidable fighting force in the history of warfare, and the rightful birthplace of SNAFU, FUBAR, BOHICA, etc. Jordan’s Bulls were teams for the ages, and a hostile work environment. Breaking Bad is a crowning artistic achievement, and a show whose writers regularly painted themselves into ridiculous narrative corners. Every institution, no matter how venerable, looks like a goat rodeo from the inside.

As we pass the year’s mid-point, I’ve had the good fortune to conduct more site visits at law firms and law departments. And, as always, I’ve attended an obscene number of conferences [at one right now]. I’ve seen quite a bit and heard even more. Overall, I’m optimistic. An admittedly skewed sample of major industry players are moving in directions I applaud (confirmation bias is only a few degrees away from social proof). But the inescapable conclusion from gaining visibility into so many organizations is that everyone—and I mean everyone, me included—has plenty of room for improvement. Those who refuse to concede their imperfections, even in private, are doing the industry a disservice.…
Continue Reading The Legal Department Goat Rodeo