“The first principle is that you must not fool yourself—and you are the easiest person to fool.”

— Richard Feynman

“We deal in deception here. What we do not deal with is self-deception.”

— Captain Oliver Queenan

Change is happening. It is good.

I am not really one for New Year’s resolutions. But I do make a point to be reflective on my birthday, which, being a week later, amounts to almost the same thing. This year, in particular, I find myself inspired by Mark Cohen’s meditation on the “failure” of Clearspire. Mark is an eternal must-read. But never more so.

Mark highlights the distance between the way things are and the way things ought to be with a powerful narrative about confusing the two. I’ve made the same mistake. Like Mark, I have been seduced by the seemingly loud, prominent voices calling for immediate change. The resonance to me of this passage is hard to overstate:

The Founders believed that by creating what the marketplace said it wanted—and then some—it would be a huge success. Intrigued as the marketplace was with the vision, the Founders soon learned that “if you build it, they will not necessarily come.” There is a big difference between expressing admiration for a model and becoming a paying client. Clearspire’s Founders had not anticipated the size of that delta.

The Sirens’ call of confirmation bias is a constant source of danger in my world. I’m not immune to bullshit, especially my own. In trying to maintain perspective, I vacillate between rank cynicism and unbridled optimism. The optimism almost always wins. I need no convincing that the legal ecosystem is evolving. I’ve bet my legal career that being an agent of change will keep me gainfully employed.

So far, I’ve been right. But not nearly as right as I predicted. And certainly not right in the way I predicted.

Change is happening. It is slow, uneven, and intermittent.


My most obvious error has been predicting the pace of change. While there is sufficient demand for change to keep me and a cadre of fellow travelers occupied [though I did just complete a project that went live January 1 and have one client slot currently open], the overall pace of change keeps being far slower than I imagine even when I update my priors to incorporate the observation that the pace of change is far slower than I imagine.

This should not surprise me.

Massive passive resistance. Agency dilemmas. Institutional inertia. Status quo bias. Loss aversion. Endowment effects. Lack of urgency. KAP gaps. The Chasm. System justification. Institutional isomorphism. Reams of academic literature explain the Planckian notion that progress does not occur when its opponents see the light but only when they lose their power to oppose—that is, funeral by funeral. I’ve not only read my Rogers, I’ve read Bill Henderson’s masterful series applying the Rogers Diffusion Curve to innovation, or lack thereof, in the legal ecosystem.

This should not surprise me. Yet it does.

Keeping with current fashion, I blame the news. Legal industry news (different than legal news) is not fake. But where mainstream news is dominated by negativity bias, legal industry news has a pronounced novelty bias. I exacerbate this novelty bias by spending a fair amount of time in the New Normal echo chamber.

We talk about what’s new, different, and interesting rather than what’s established, stable, and enduring. This coverage, while accurate in the particular, can be misleading in the aggregate, especially because of a proclivity to focus on well-articulated intentions (what we’re trying/hoping to do) rather than messy outcomes (what we’ve done). Emphasis on promising outliers suggests a pace, breadth, and depth of change that belies our creeping incrementalism.

I also blame myself. I can be too easily taken by the simple logic of immediate change. This makes sense to me. So this makes sense to everyone. Thus, this will happen. Soon.

If I had been a lawyer in 1989, I probably would have convinced myself that, in the not-too-distant future, in-house counsel would be ascendant, alternative fees would displace the billable hour, and large law firms would transform into multi-disciplinary law companies.

Because change has occurred (and will continue), by 2018, I would have been quite right on insourcing, somewhat right on alternative fees, and witnessing the the nascent rise of the multi-disciplinary law company. Which is another way of saying I would still be mostly wrong almost 30 years later. Yet less wrong than I would have been in 1999, when, a decade into my prediction of major structural changes, I would have been really, really, spectacularly wrong and, most likely, insolvent.

But pace is not the only area where I’ve been wrong. I’ve also been wrong about the types of changes that would appeal to market participants in the near term.

Change is happening. But I’m not good at this game.


Since I left my in-house gig, I’ve been able to feed my family in spite of myself. My sources of income are different than expected. In many respects, my clients have exceeded my expectations. In almost all respects, I misjudged the market.

On the consulting front, I’ve been humbled to be involved in massive, impactful projects like creating a legal operations department for a Global 20 company and overseeing convergence initiatives involving hundreds of law firms. I didn’t expect that clients would trust me with so much so soon. And I’m grateful for what they’ve permitted me to help them accomplish.

With training, I’ve been genuinely surprised by the number of law departments and law firms that have taken it upon themselves to do the necessary work of getting serious about improving proficiency in core office technology. And I’ve been especially heartened by the number of law schools that have been willing to add training in practical technology skills to their curriculum, in addition to the forward-thinking state bars we are working with to develop competence-based CLE content.

I saw none of that coming.

When I left my in-house gig, I had a very specific reputation: the Word guy.

I was the guy who had gotten too literal in bringing supply-chain management practices to legal. My approach was site visits in support of structured dialogue, continuous improvement, and deep supplier relationships. Yet the pursuit of win-win collaborations to change legal service delivery did not garner the headlines. The headlines were all about me kicking the crap out of law firms for being terrible when I audited on them on using Word properly (which isn’t exactly how it happened).

We’d love to be able to do that. While I was still in-house, a few people called me an idiot to my face. In almost all cases, I offered to buy them a cocktail and provide a broader perspective (y’all know I love writing and speaking the words) than was afforded by their headline skimming. In all instances where we had the discussion, we parted on good terms having identified considerable common ground.

But more than a few people had the opposite reaction. They thought what I was doing was fantastic. At least, that is what they told me. They explained that they would be keenly interested in doing the same thing.

Until, of course, I offered to send them my audit materials. When they realized that conducting a service delivery review requires sustained attention, they were out. They would explain they didn’t have time for all that and, really, they were mostly interested in the technology competence piece that got the publicity. They just wished they had quick access to tech competence scores from their law firms.

I believed them. I automated my legal technology assessment convinced that large corporate law departments would ask their law firms for scores.

That’s not a priority right now. I was wrong. It happened. But it happened far less than I predicted. When it actually came time to pull the trigger, law departments who had told me requesting scores was a no-brainer decided more reflection was necessary.

Often times, the ultimate revelation was that the person I was engaging did not have the authority. They may have thought it was a good idea. But it was one good idea among many, and they were not well positioned to fight the internal battle. They had more urgent and expedient places to spend their political capital.

ASIDE: this speaks to one of the extant dangers of attempts to co-opt the vital legal operations movement—a challenge that CLOC and ACC Legal Ops are working hard to address. Personnel with fancy titles at fancy companies don’t necessarily have the attendant authority to fulfill their purported mandate for change. Functionally, they are administrators, not executives, with the power only to maintain current systems, not construct new ones. In this way, many corporate law departments consider themselves ‘doing legal ops’ when all they are really doing is creating one more position designed to cement the status quo (law firms have not secured monopolies on the caste system or innovation illusion).

But the discussion was rarely explicit about the internal politics of change. Rather, I was routed to someone else to make my pitch. They would react with tempered positivity but eventually explain that their firms’ core tech proficiency was not their top priority. They were quite interested in seeing their firms’ scores if their firms were “proactive” but, they explained, when it came to actually making demands of their firms, they were more interested in project management or metrics or knowledge management or…..too bad I didn’t have scores for that.

I believed them. I believed them, in part, because I agreed. Basic tech proficiency is not the biggest problem in legal service delivery. It is a problem well worth addressing. And it is low-hanging fruit—that is, among the simplest problems to solve. But I could not fault anyone for having alternative priorities.

I believed them, in part, because they were saying exactly what I wanted to hear. For me, tech competence was one piece of a more comprehensive program to improve legal service delivery. I wanted so bad for there to be a significant market for people who could address the entire legal value chain by operating at the mesh point between law departments, law firms, and law companies. Because that was precisely what I wanted to do.

I did not leave my day job when the LTA launched. I left when conversations around the LTA convinced me I could sustain myself doing service delivery reviews.

Not that. Not here. Not yet. I was wrong, again. I have been hired to conduct service delivery reviews, but they represent a small percentage of my income. If I had not also been wrong, in a good way, about the other consulting opportunities available to me, the Flaherty Family would be in a bad way.

Discussions about service delivery reviews go much the same way as the dialogue surrounding requests for LTA scores. There is general agreement that problems exist and should be remedied. But, ultimately, there is no appetite to address them in any meaningful way.

The conversation is rarely explicit. Still, my takeaway is that I am among an exceedingly small group (as a percentage) of people who genuinely take the relational view of the legal value chain. In my world, law departments are channel captains and urgency drivers. They must play an active role in integrating processes with their external suppliers in order to create “seamless, cost effective, higher quality workflows.”

By contrast, the people I pitch mostly implicitly subscribe to the lawyer theory of value, which Bill Henderson summarized far better than me: “Because in-house and law firm lawyers are the same people, they have the same go-to move — stand back and let me lawyer….The lawyer theory of value — solving legal problems one at a time with smart lawyers — is an unstated and unexamined preference of lawyers, not a viable long-term solution for the clients they serve.”

I’ve had the same conversation many times. In a variety of ways, in-house departments explain that, with respect to outside counsel, (a) the most important thing is to hire smart lawyers and (b) they already do this exceedingly well. When pressed, they mostly extol the amazing job they’ve done securing discounts. When asked specifically about service delivery—leveraging expertise through process and technology—they mostly abdicate responsibility, falling back on “our firms should do that anyway” regardless of what “that” happens to be.

I’ve had the same conversation so many times that the guidebook I wrote for the ACC has a FAQ responding to the common variants of the above, including:

• Shouldn’t we be focused on finding great lawyers?
• Should we really have to ask our firms to do things they should already be doing?
• Aren’t we too busy to run someone else’s business for them?
• Wouldn’t much of this be addressed by a transition to AFAs?
• Shouldn’t we use our leverage to ask our firms for deeper discounts on billable rates?

My friend John Grant made a mistake.

Many moons ago he was consulting on process improvement for a large law department. He surveyed in-house counsel on their biggest complaints about outside counsel. The response was that outside counsel:

• Don’t understand my business
• Can’t tell me how long anything will take
• Overwork a problem/introduce complexity
• Don’t give me output in a format I can use 

Familiar enough. And so far so good. John’s misstep is that he put the same question to internal clients of the law department. The response was that in-house counsel:

• Don’t understand my business
• Can’t tell me how long anything will take
• Overwork a problem/introduce complexity
• Don’t give me output in a format I can use 

This result was not well received by the law department.

The Lawyer Theory of Value

Law departments face a principal-agent problem that I covered in a piece with the subtle title What’s The Matter With Inside Counsel.

There are few discernible differences between the modal in-house lawyer and the modal law-firm lawyer. They are the same people. Ultimately, they value the same thing: lawyering

The lawyer theory of value states that the key to value is having smart lawyers. Lawyer time is the primary resource and the primary unit of measure even in law departments that have no compensable time sheets.

The lawyer theory of value tends towards the transactional and discrete. Resources (lawyer time) allocated to sequential, individual legal tasks: this question, this contract, this motion. Systems thinking and relative reductions in demand for legal labor (prevention, Lean, #DoLessLaw) are ancillary concerns to be addressed when convenient or absolutely necessary (that is to say rarely).

Given their lawyer-on-task orientation, ask most lawyers what they need to be more effective, and the first answer is more time in their own day. The second answer is more time from other skilled lawyers they already work with. The third answer is more budget to hire additional skilled lawyers. Maybe somewhere in there is a paralegal who is “just as smart, if not smarter, than most lawyers” (because lawyer is the measuring stick). That’s how it all gets done. Smart people working hard.

Dedication to their craft does not make lawyers bad at their jobs:

Most lawyers don’t pay a penalty for their acute focus. When they do, it is usually not obvious, especially to them. They can still make valuable contributions to client success and be well regarded in their profession. Lack of broader interest in the process, technology, and business of law (T-shaped) rarely makes them bad lawyers. It just limits their effectiveness when more lawyering is not the optimal solution to a particular problem.

Sometimes, they may actually volunteer “technology” as a catch-all and panacea. But peel that onion just a layer or two, and you soon realize they want magic. They expect a black box that produces superior outputs from the same inputs. And the urgency driver for finding magic is to free up time to do more lawyering. Once you start impinging on that time and their comfort zone—process redesign, training, change management—you trigger the defense mechanisms of professional issue spotters.

The threat of an implementation dip does not eradicate the faith in tech-centric improvement. But the “we” in we should be using technology more no longer includes “me” but rather transforms into more a generalized “we” encompassing other people in the department and outside counsel. Innovation continues. But without buy-in and participation from key stakeholders, much of it ends up being only skin deep. Meanwhile, the perception that innovation is happening elsewhere feeds the accountability-reducing innovation illusion.

There is, however, an important distinction between being (a) an enemy of progress and (b) a barrier to innovation. I encounter very few lawyers who actively oppose innovation. I find lawyers who support it in theory and simply don’t have time for it in their personal practice. They don’t have time for it because they are extremely busy with mission-critical work.

This has become a go-to cartoon in my echo chamber because it is funny in a way that resonates with outsiders and prospective change agents interested in more systemic innovation:

But from the perspective of the modal member of an in-house team, reality feels much more like:

This time pressure buttresses inherent status quo bias. When you view yourself as operating in a delicate equilibrium, you have a much lower risk tolerance. Different is risky. Different demands time and attention, both of which are in short supply.

Importantly, the lawyer theory of value is not without merit. It is incorporated into my personal worldview. I am convinced that legal guidance is only growing in importance to business outcomes. But assumptions, especially when implicit, can have a constraining effect when they go unexamined.

The constraints of the lawyer theory of value have trapped us into a local optimum for an extended period. The only conceivable solution to the interlocking challenges of scale and complexity was to throw bodies at them.

Faced with the legal cost disease and the more-for-less conundrum, in-house departments have been on a two-decade hiring binge. In the United States, there are now more lawyers working in-house than in the AmLaw 200. How much of the supposed disruption in corporate legal services is attributable to the simple redistribution of labor?

My take: there is a continuum. In-house growth was necessary and good for a variety of reasons, including specialization and the attendant sophistication. But too much is too much. We’re pursuing a path of diminishing returns. The continued overhiring is justified by an oversimplified ‘savings’ calculation. When you move lawyers in-house, you get them at a discount and on a fixed fee. But the math ignores the overhead costs (management, infrastructure, flexibility) of operating an in-house function at scale.

Finding a different avenue to hire the same lawyers to do the same work the same way is implicitly premised on the lawyer theory of value—we are replacing extremely expensive external labor with moderately less expensive internal labor while embedding a chorus of high-status, autonomy-seeking stakeholders who stand ready to proclaim “but we’ve always done it this way.” When it avoids the fundamental demand driver—the relationship between legal labor and business outcomes—insourcing is not a sustainable approach to bending the legal cost curve.

The result is that we have law departments that suffer from the same pathologies as the law firms to which they were supposed to be the cost-effective alternative. When it comes to true alternatives to lawyer time, most law departments still need to overcome the stifling persistence of not here, not yet.

Outliers and Outsized Expectations 

Most. Not all. Before you @ me with #NotAllLawyers and #NotAllDepts campaigns listing prominent counterexamples that confound my narrative, ask yourself, “Is my counterexample prominent because they are an outlier?” If the answer is in the negative, then I welcome the spirited debate about how the landscape has evolved quicker than I realized (which would be great). If the answer is in the affirmative, we are in agreement. There are prominent, praiseworthy counterexamples.

But there is also a genre of writing predicated on these outliers that tends to imply that law departments have it all figured out, unlike scleoritic law firms. Admittedly, I’ve fallen into this trap myself. You pair opinion data (clients are not happy) with empirical trends (stagnation) and cite to prominent outliers (example, example, example). Then extrapolate.

Extrapolation is fine for futurism. But where I and others have steered wrong is when the predictive gets muddled with the descriptive. We create the impression that, instead of harbingers of the future, the outliers are representative of broader trends that are already ‘disrupting’ the status quo. Which they are. But not nearly to the degree or at the rate we may seem to suggest.

There is nothing new except what has been forgotten

There have been prominent outliers for a very long time (here, here, here). Yet like the decades of deaths of the billable hour, systemic change has not quite followed individual experimentation (and the attendant industry expressions of support/interest/intent) at the anticipated pace. I say this from a place of optimism. Not only do I think we can do better, I believe we are doing better. I have bet my career that this time is different—that the combination of trailblazers and structural forces are coalescing to put change on an accelerated trajectory.

I may be wrong (I don’t think I am). I have certainly put too much stock in outliers before.

First, I’ve taken in-house counsel at their word. I’ve relied on stated rather than revealed preference. The delta between public pronouncements and actual practice is not all virtue signaling. Rather, absent context, we have no way to gauge relative importance and intensity of preference. The desire to change may be genuine. But that in and of itself does not make change a priority.

As a result, I’ve assumed change efforts are more appealing and durable than they have proven so far. I expected more law departments to be fast followers. Instead, we’ve repeatedly witnessed innovations by prominent law departments remain outliers. Meanwhile, among the outliers, there is churn rather than accretion. Once the awards are won and the principal champion of change moves on, the jungle swiftly retakes civilization. The progressive GC/CLO gets replaced by a more traditionally minded lieutenant or outsider. Years of change efforts get reverted to the status quo ante at an astonishing clip.

Time to Pay Up

Everything I just wrote about law departments could have also been written about most law firms. The symmetry that comes from the shared lawyer theory of value is foundational to the relationship dynamic.

While they share assumptions, the modal in-house lawyer and the modal law-firm lawyer do have one crucial difference: positional authority. Like the Supreme Court, inside counsel are not final because they are infallible, they are treated as infallible because they are final.

What do you get when in-house counsel who make retention decisions think they want different, but, at the end of the day, really want a vaguely ‘better’ version of the same? You get law firm marketing bullshit.

Three months ago, I laid down a marker:

Bullshit begets bullshit.

There was an overwhelming response to my last post on law firm marketing bullshit. So here I am writing an entire series. That’s how it works.

If you reward bullshit, you get more bullshit

Which also happens to be my rejoinder to my sole (known) critic. While most commentary was positive, a friend chided me for ultimately making clients responsible for the surfeit of bullshit.

Bullshit is bad and, ipso facto, law firms should not traffic in bullshit whether or not bullshit is effective was my friend’s line of reasoning. Fair enough. But that’s hope, not a plan. I will respond to my friend at length (argument by attrition) in another [a series of] bullshit post [posts] about how the legal market is not a morality play.

This post is my down payment.

While I have touched on clients’ contribution to the perpetuating the bullshit cycle in every single post in this arc, I have not given clients my undivided attention at extraordinary length. I wouldn’t want them to feel neglected. More to come.

The full bullshit arc:

• On Law Firm Marketing Bullshit
• More Law Firm Marketing Bullshit (Door Law Edition)
• Law Firm Marketing Bullshit—Tier 3
• Law Firm Marketing Bullshit—Tier 2
• Law Firm Marketing Bullshit—Tier 1
• Law Departments and the Foundations of Law Firm Marketing Bullshit
• Me Being Wrong (More BS)

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D. Casey Flaherty is a legal operations consultant and the founder of Procertas. He serves on the advisory board of Nextlaw Labs. He is the author of Unless You Ask: A Guide for Law Departments to Get More from External Relationships, written and published in partnership with the ACC Legal Operations Section, and the Service Delivery Review Primer, written for the Buying Legal Council. Find more of his writing here. Connect with Casey on Twitter and LinkedIn. Or email casey@procertas.com.