Good enough.

Two words that are anathema to law firms.  After all, we produce perfect legal product. (cough, cough) We strive to eliminate risk for our clients, and especially for our firm, and as such, ‘good enough’ Is. Never. Good. Enough.  
I can’t and would never comment on whether a contract or agreement should be considered ‘good enough’. I would assume that no firm would ever accept, “Meh, it’s good enough”, when it comes to their legal product. But traditional legal products like contracts and agreements are, by their very nature, finished products.  They are essentially static and unchanged until they expire or are actively and deliberately supplanted by new contracts or new agreements.  That means that there is tremendous risk to the client and to the firm in not getting it ‘perfect’ at the time of delivery.
The problem comes when legal products leave the world of static documents behind and enter the world of software.  No software company in the history of the world has ever delivered a perfect product out of the gate.  They plan for bug fixes and schedule for upgrades.  Those of us in Legal IT are very familiar with Patch Tuesday. If you use an iProduct, you know that little red circle with a 1 above the settings icon that has been blinking at you for three months…? Yeah that one… that means you need to update your device ASAP. This is a way of life in the software world, users may be annoyed by it, but they expect it and most understand that these updates are meant to improve the user experience, or security, or give them additional functionality.  In fact a ‘perfect’ software that never updated would be highly suspect and most people would assume that it was derelict and no longer supported.
So how do we reconcile the traditional ‘strive for perfection up front’ approach to legal products with the reality of the software world?  We must embrace the beta.
Beta is the designation given to software which is still in development, but already deployed to at least a small community of end users.  Generally beta software is considered not yet ready for prime time, but still usable.  Google, one of the most innovative companies in the world, has taken the beta concept to new heights. Gmail was in beta for five years from 2004 to 2009.  By 2009, everyone’s grandmother had a beta Gmail account.  
Google isn’t charging for most of their products, so it’s easy for them to get away with the prolonged beta.  I’m not suggesting that we do the same, but I do think we need to learn to deliver admittedly imperfect software products, and systematically upgrade and improve those products over time.
Now, to be clear, I am not talking about compromising on the quality of legal output.  If you create a tool that outputs a standard contract for a client with your firm’s logo on top, it had better be a solid contract.  There is no compromise on that.  However, in most cases, the actual legal part of these types of tools is relatively minor and it’s the extraneous crap that holds up deployment.
If we can deliver a product with somewhat complicated navigation features next week, and it’s going to take 2 months to put a better navigation function in place, deliver the complicated navigation next week.  Explain to the client that this is a work in progress.  Show them screen shots of what is coming in the near future and give them a rough timeline.  Most importantly express how much you value their feedback, and appreciate their support during this beta development period.  And let them know that they are getting a deal on the pricing by participating in the beta.  Other clients coming later will pay the full price.
This is not rocket science.  This is software sales 101.  
With traditional legal documents, we do the legal work and hand them off to trained document specialists to format to the firms standard.  Unfortunately, we don’t have that luxury when it comes to legal software.  When you’ve contracted development, or cobbled together multiple SaaS tools to create a new product, there is no specialist to hand it off to to make it conform to a firm standard.  There may not even be a firm standard to cover every new mechanism you’ve created, which means someone needs to make up the standard as you go.  
By embracing the beta, we can deliver functionality to clients as quickly as possible, and focus on continually upgrading and improving their experience over time.  I don’t know for sure, but if I was a client of a law firm, that’s what I would want.  And if the product provided the functionality that made my working life a little bit easier, I’d probably be willing to jump through a few hoops or look past the occasional formatting snafu, to get the product on my desk more quickly.  
That’s what software companies do by necessity.  And like it or not, law firms are, or soon will be, software companies.

I’ve been discussing structured dialogue between law departments and law firms focused on continuous improvement in the use of process and technology to deliver legal services. A point I have yet to make, however, is the importance of nontraditional stakeholders to the success of such initiatives.

By nontraditional stakeholders, I mean anyone other than the law department’s managing counsel and the law firm’s relationship partner. Typically, those two roles are filled by subject-matter experts. This is as it should be. But their focused expertise and elevated positions often remove them from the more routine, laborious efforts that are most amenable to process improvement and innovation. There is no reason to automatically assume that they are multi-talented (though many are) and their expertise extends beyond their domain. Allied professionals are vital to proper client representation.

Who should talk to whom depends on the situation. Because of my personal background, my instinctive response includes the head of law department operations talking to the law firm CIO, and the head of legal sourcing talking to the law firm pricing director. Additional pairings might include frontline lawyers, paralegals, paratechnicals, project managers, or IT staff from the respective parties. For example, in the exemplar findings I posted, I recommend that the project managers from the client and law firm discuss ways to harmonize the respective workflows and better share KPI’s.

But it is important to get beyond the notion that the law firm and law department should mirror each other and dialogue must occur between direct peers. BigLaw may service lean law departments, and mammoth law departments may rely on boutique law firms. The fundamental question are, “What are the objectives?” and “Who are the subject-matter experts with respect to the objectives?”

For example, an in-house counsel may be concerned with the high percentage of a firm’s bills allocated to research costs. While the in-house counsel recognizes that the case types the firm handles demand some research (simply prohibiting research costs is not a viable option), her impressionistic sense is that the associates spend far too much time reinventing the wheel. Tired of cutting information-poor invoices by arbitrary amounts, she initiates a Service Delivery Review.

The SDR demonstrates to her that (a) the bespoke research her cases require is more substantial than she believed, but, still, (b) the practice group handling her work does not take advantage of the firm’s knowledge management offerings, and (c) the associates staffed on her matters do not rely on the firm’s research services because her predecessor refused to pay for them. The in-house counsel will reverse the policy on paying for research services and look at research-related time entries with a less jaundiced eye if the firm demonstrates progress on reducing research costs. Besides the relationship partner and her associates, nontraditional stakeholders from the law firm who may participate in the conversation include:

  • Library & Research Services to discuss how research specialist can be integrated into the workflow.
  • Knowledge Management to discuss the tools and methodologies available to reduce repeat investigations of the same issue.
  • Project Management to discuss how the initiative to reduce research costs can be tracked and measured.
  • Pricing to discuss alternative ways to budget for research and share the risks of wheel reinvention and goldplating.
  • Workflow to discuss how to ensure that the right people are doing the right work.
  • Client Development to understand what the client is asking of the firm, to act as the client’s internal advocate, and to ensure the initiative is proceeding according to the client’s expectations.

The ultimate objective in the above scenario is to improve client satisfaction by generating higher quality research in less time and at lower cost. The firm would be rewarded with higher realizations/profit and goodwill, which means a better working relationship and, possibly, additional work in the future.

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).

I keep using the term “structured dialogue” to describe an important piece of my Service Delivery Review. I want to dig into what I mean.

I believe law departments, law firms, and individual legal professionals have an ethical obligation to do things Better, Faster, Cheaper wherever possible regardless of the economic incentives. But the trouble with incentives is that they work.

As businesses, law firms really do need to concern themselves with the return on investments in process improvement, training, or technology. If we do X, will we get more business? Will our profits increase? While it is relatively easy to make the case as to how a particular innovation might improve quality or reduce labor, it is less straight forward to demonstrate that clients will actually care. And clients are a rather important piece of the economic equation.

Clients are right to frequently give their firms low marks on cost-consciousness and innovation (see chart above from George Beaton). I am among those in-house counsel who have exhorted law firms to be more cost-effective, efficient, tech savvy, etc. But where I depart from many, but not all, of my former colleagues is that I recognize that adjectives like “innovative” and “efficient” are vague. Nebulous mandates to ‘do better’ fail to offer much in the way of concrete guidance.

If a law firm were suddenly to get 10% more efficient, would their clients notice? Would their clients reward them with more business? Or would their clients continue to demand the same discounts and cut invoices by the same amount? I don’t have the answers. But the problem is that no one else does either. This inability to project ROI is an obstacle to making the business case for investments in process and technology.

The presumptions against law firm efficiency are so ingrained that it surely not enough for law firms to simply say they are efficient (which all of them already do). And it probably isn’t even enough to be efficient (few are). It is likely necessary for them to prove they are getting more efficient. But how?

Law departments and their core law firms should engage in structured dialogue about what the efficient delivery of legal services looks like. This starts with an honest mapping of the value stream. Identification of areas needing improvement should be followed by prioritization and collective decisions about deliverables, timelines, and measurement. This should be a true dialogue in which both sides are accountable for achieving shared goals. Just as law firms can do better at delivering legal services, law departments can do better at sharing information and integrating their law firms into the client’s legal supply chain. System efficiency, rather than individual efficiency, should be the overarching objective.

Structured dialogue should be an iterative process focused on continuous improvement, not a discrete project. Previous initiatives serve as the baseline for subsequent discussions. Where have we improved? What difference did it make? What lessons did we learn and how can those lessons be applied in selecting new priorities and establishing new targets?< Law firms should be more than just participants, they should stand to gain from demonstrably improving their value proposition and fulfilling their commitments to better serve their clients. This may mean more work. This may mean higher rates. This may mean less pushback on invoices resulting in higher realizations and profits. Law firms must invest real resources to improve service delivery. As businesses, they should see a return on those investments. To be more concrete, below is some output from my Service Delivery Review. These are exemplar findings that seek to mesh what the firm is doing with the client’s priorities. (Click to enlarge)
Importantly, these findings are intended to be a starting point for dialogue. Once the dialogue is concluded, commitments, timelines, measurement, and deliverables will all be memorialized. Clear expectations follow informed, structured dialogue.

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).

I received a press release from Lexis this morning with this eye-catching headline: “Recent LexisNexis Survey Uncovers Gap in New Attorney Readiness for Real World Practice.”   The first thing the whitepaper mentions is that 95% of hiring partners and associates believe that recently graduated law students lack key practical skills.  The deficient skills include “advanced legal research, writing and drafting skills, practical application and an understanding of how litigation or transaction occurs in real life.” 

Duh. 

Any law firm librarian who works with summer associates and recent law school graduates can tell you how ill-prepared they are for the “real world” in a firm.  And, as fellow Geek Casey Flaherty will tell you, clients don’t want to pay for this group to learn to these skills.  Nor should they have to. 

Part of the problem is the law school system itself.  Looking at just these examples you can see why:

Litigation:  The focus is primarily on Federal Litigation.  The problem is that only a small percentage of graduates are fortunate enough to practice in this arena.  When the graduate gets into practice, they are likely to end up dealing with a myriad of state and local court systems that have very little in common with what they learned in school.  Even if they were fortunate enough to spend time in a legal clinic, that experience will not help much if they leave that jurisdiction. 

Legal Research:
This is the Google Generation.  For this group, Google is the first place they turn for legal research (Regular readers of 3 Geeks know how I feel about that).  They are comfortable with Google and are freaked out by the idea of incurring charges on the paid services.  I’m not aware of a required course of study that adequately covers the professional responsibility dangers of inadequate (and inaccurate) legal research.

I don’t fault our law school brethren.  They are genuinely concerned about this problem.  Each AALL meeting for the past 4 years has featured conversations between law school and law firm librarians about how to address these issues.  The conclusion that I have reached is the best way to address these issues is to make a “prepare to practice” curriculum a requirement for graduation.  This curriculum would address variances between jurisdictions in style and practice as well as the business of law.  The latter should include coursework designed to emphasize the importance of good, efficient legal research in a professional responsibility context.

Thank you Lexis for quantifying what law firm librarians have known for years.  I hope this serves as a wake-up call to the legal industry to fundamentally re-examine the legal education system.  Of course, change is hard.  I think it will happen only when the Clients and the Malpractice Insurers demand that their lawyers know what they’re doing when they enter the marketplace.

Who knows, there may be an opportunity out there for a CLE provider to offer this training to law firms.  Hmm…maybe Bigweld was right when he said “See a need, fill a need.”

Now…back to your normally scheduled programming.

Clients are not the only ones who act as if outside lawyers are inefficient. Individual outside lawyers censor themselves for inefficiency. Their firms then cut their time for perceived inefficiency before sending it to the client. The clients cut their time even further. Everyone seems to agree there is considerable waste that must be excised from the bill.

The existing economics of law are such that it is easy to reconcile improved quality and lower costs for clients with better realizations and higher profits for law firms. Five years ago, I did not know this. I thought we were playing a zero sum game. Nor would I have cared if anyone had told me. As detailed in previous posts, I’ve evolved in my thinking about coprosperity. This change in perspective means I have to work at trying to understand what makes for a prosperous law firm. In helping me appreciate how realizations and profit differ from raw revenue, I have to thank Toby and our mutual friend Vince Cordo of Shell. Please do not blame them, however, for the simple-minded drivel that follows.

Understandably, we lack hard data on time that lawyers decide not to record (let alone how this practice may have changed over time). But my anecdata (frequently, a lawyer who performed poorly in Basic Technology Benchmarking would inform me that I need not worry because they cut their own time) lines up with the few bits of empirical speculation I can find. These surveys suggest that 33% of worked time is not billed. The primary culprit is identified as administrative tasks but another factor is individual lawyers deciding “to purposely ‘discount’ the actual number of hours worked in order to keep clients happy.” Similarly, back when firms reported such things to NALP, the average associate at DLA Piper, for example, worked 2,462 hours to bill 1,831 hours (74% of worked time was billed). To use round numbers then, let’s assume for discussion that an exemplar lawyer works 2,500 hours and bills 75% of it (1875 hours). Let’s further assume (I’ve got no statistics on this) that a minority—say 20%—of the unbilled hours are due to self-censorship.

Lawyer Janes works 2,500 hours of which 2,000 are eligible to be billed. She bills 1875 hours.

The 1875 hours is what the firm sees. But 1875 hours is not what the firm sends to its clients. We have good data that billed realizations—the percentage of the 1875 hours billed to clients—have dropped from 93.5% to 86.7% in the last decade. But the data does not tell us how much of the recorded-hours-not-billed-to-clients are due to writedowns versus pre-negotiated discounts. The concept of standard rate, on which realization figures are based, is a maddeningly vague, used differently in different reports, and often reliant on self-reporting (Toby will have to explain). Because I can find it with Google, I will just accept previous findings that pre-negotiated discounts account for about half of the spread (this, admittedly, remains a crude exercise) between time recorded and time billed. Thus:

In 2004, Lawyer Janes works 2,500 hours of which 2,000 are eligible to be billed. She bills 1875 hours. The firm has already negotiated discounts that bring her total down to 1813 standard hours. In addition, the firm writes down her time to 1753 hours actually billed to clients.

In 2014, Lawyer Janes works 2,500 hours of which 2,000 are eligible to be billed. She bills 1875 hours. The firm has already negotiated discounts that bring her total down to 1746 standard hours. In addition, the firm writes down her time to 1625 hours actually billed to clients.

That is not the end of the story. Clients have grown much more aggressive in cutting legal invoices since the Great Recession. Or so the story goes. The story is true. Comparing collected realization pre- and post-Recession, clients increased the average amount they cut from bills by 500%. That’s a big jump. But this framing obscures the low baseline. In 2004, the average client was paying 99.1% of their billed invoices. In 2014, the average client is still paying 95.7% of their billed invoices. So:  

In 2004, Lawyer Janes works 2,500 hours of which 2,000 are eligible to be billed. She bills 1875 hours. The firm had already negotiated discounts that bring her total down to 1813 standard hours. In addition, the firm writes down her time to 1753 hours actually billed to clients. The firm collects 1738 hours.

In 2014, Lawyer Janes works 2,500 hours of which 2,000 are eligible to be billed. She bills 1875 hours. The firm had already negotiated discounts that bring her total down to 1746 standard hours. In addition, the firm writes down her time to 1625 hours actually billed to clients. The firm collects 1555 hours.

I’ll go Excel on the 2014 numbers and add a $400/hr billable rate with some additional crude data on the cost of an associate. And we’ll spread the billed work evenly among 4 clients.


Now, let us imagine an alternative scenario where some initiative (e.g., a Service Delivery Review) leads both to (i) actual improved integration of process and technology into the workflow producing modest BFC (Better, Faster, Cheaper) results and (ii) a structured dialogue between the client and law firm that convinces both sides there is less waste in the delivery of legal services. In this hypothetical, the law firm lawyers, who are closest to the improvements, are more convinced of the gains than their clients. Because of the increased efficiency, the law firm can serve more clients in fewer hours. 
 
These are modest gains. Yet, the client is spending 15% less, and the law firm is profiting 16% more, while the individual lawyer spends 50 less hours in the office (an hour per week or a real vacation). The foregoing exercise also drives home one of Toby’s favorite points: discounts and writedowns come entirely at the expense of profits. What may only be a small percentage of raw revenue can be a substantial percentage of total profit. The margins are where the magic happens.

The above assumes that the law firm has picked up a new client. It is nice to believe that improvements in quality paired with reductions in cost would result in additional work and new clients. But even if the total work is finite, the law firms can still increase profits without charging their clients more. This, however, means fewer lawyers. While subsisting with fewer lawyers may sound like a post-apocalyptic hellscape straight out of Mad Max (water, gas, bullets, and lawyers all in scare supply), it is the world in which we have lived for the last half-dozen years. Using the preceding scenarios, compare how many lawyers are required to collect on 200,000 hours of time and the attendant impact on profits:

The gains can still be shared. The finite client base can spend appreciably less (i.e., save money) on legal services while the law firm profits more:

The foregoing is an admittedly crude explanation of why we are not necessarily playing a zero-sum game, even in an environment still dominated by the billable hour. Client cost reductions need not come out of law firm profits. Increased law firm profits need not come at the expense of clients. Structured dialogue between the two can result in Better, Faster, Cheaper benefiting both parties. 

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).

If you follow the automotive industry (I was in-house counsel at a car company), you follow Toyota (usually the top selling automaker in the world). If you study process improvement (I am a Lean Six Sigma Black Belt), you study Toyota (the Toyota Production System is the precursor of Lean). If you are interested in sourcing (like Toby, I wrote a chapter in the Legal Procurement Handbook), you are interested in Toyota (posterchild for deep supplier relationships). I do not pretend to be an expert on The Toyota Way. But I have been convinced that a strong-arm approach to strategic supplier relationships is a sub-optimal strategy over the long term.

I already told the story of how experience with stellar outside counsel changed my outlook on the inside/outside counsel relationship. But the most influential narrative in the evolution of my scholastic understanding of supplier relationships comes from automotive industry after the SUV bubble popped in the late 90’s.

For the first time, the Big 3 experienced the Japanese automakers as an existential threat. In studying their competition, the Big 3 found that the supply base was a substantial source of the Japanese cost advantage. The Big 3 sought to mitigate this advantage by leaning on their own suppliers for cost reductions, which they got—just not enough. The Big 3 also had to deal with the fallout from the rapid transformation of their supplier relationships. This fallout included inferior quality parts and a depleted, antagonized supply base, many of whom went bankrupt in the Great Recession.

The Big 3’s cost savings were insufficient because the Japanese automakers responded with cost reduction targets of their own. In addition to lower costs, the Japanese also mandated quality improvements. The Japanese automakers achieved both reduced cost and improved quality while emerging with an engaged, profitable supply base, which included many American suppliers. The distinguishing feature in the Japanese approach is that the Japanese assisted their suppliers in hitting their targets.

Consulting teams were dispatched to strategically important suppliers with the sole purpose of helping the suppliers achieve the twin mandates of cost reduction and quality improvement. The effort was not only about developing better processes at the suppliers but also better integration of the suppliers into the overall economic value chain. The objective was more than just better performing suppliers, it was deeper supplier relationships, which are founded on a commitment to coprosperity.

(Source)

It is hard to imagine a well-regarded law firm run by smart lawyers going bankrupt (well, not that hard to imagine). And not even I am arrogant enough to entertain the notion of inside counsel telling outside counsel how to run a law firm (which has always struck me as akin to herding drunken cats). But I have first-hand experience with how structured dialogue, clear expectations, and collaboration can benefit both sides of the relationship. Law firms can do better. So can clients. It is much easier to pursue better together.

In my next post, I will discuss how, even in an environment still dominated by the billable hour, improved quality and reduced costs for clients can result in higher realizations and profits for law firms.

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).

In the last two weeks, the MLB’s Toronto Blue Jays have made trades and acquisitions from all over the U.S.  The team is on fire, the Rogers Centre is selling to its 45,000 person capacity and there is a winning energy in the air.  But the Blue Jays,  their fans, and their latest string of new players are not the only ones who are noticing this great city.  Yesterday, Littler Mendleson, the Bay Area Headquartered AmLaw 100 Labour and Employment boutique opened its doors in Toronto and Canada.  Aside from the new spellings it will need to adopt, the opening signals what I have always held true.  Toronto is a world class city, with opportunity for the legal market that expands beyond the “6”.  I could be lamenting the consolidation of the industry and pain of the current exchange rate or the price of oil, but today, I am (possibly naively), buoyed by the energy of the announcement and the paradigm shift it represents for this legal market.  All eyes are on Toronto and thankfully this time, it’s not because of our drama generating former mayor but because of the vitality of the city and the country.  There is no doubt that the legal industry is changing, if you only ever read 3 Geeks, you’ll get a pretty good sense of the angst and possibility of the current climate, and moves like this one, remind me that not all change is bad and in fact change is the necessary evil that forces us to grow and evolve.  So, as the Canadian “Geek”, let me welcome you to Toronto.  May you enjoy the city and its energy as much as I do and Go Jays Go!

I’ve been labeled a Legal Rebel, an Innovator, and a “humorless moron.” The last one I understand. But the first two have always struck me as a slightly silly. I feel like what I am best known for—the suggestion that legal professionals should get slightly better at using the machines they’ve been staring at eight to eighteen hours a day for the last twenty years—borders on banal. I took a while to realize that the innovation was not in the call for increased proficiency but in the approach.

Instead of throwing work over the wall and then reactively complaining months later about inefficiency while reviewing information-poor invoices, I tore down the wall to proactively address root causes. I defined the problem. Measured it. Analyzed it. Then I sought to improve on the status quo and maintain control of the improvements. One would think some form of this methodology would had have been in use for the past 60 years, at least. Unfortunately, in the legal market, any disciplined approach to process improvement is somewhere between innovative and revolutionary.

What was once the Legal Tech Audit is now the Service Delivery Review (“SDR”) because (a) the word “audit” makes people uncomfortable, (b) the audit concept is too one-sided, and (c) a comprehensive vendor management program has become confused (my own fault) with its most well-known component, Basic Technology Benchmarking. While the lack of basic technology training garnered the headlines, it is only one out of ten categories in the SDR. The categories are:

  • Hardware/Software
  • Mobility
  • Training
  • Staffing
  • E-Signatures
  • Document Assembly
  • Process/Project Management
  • Knowledge Management
  • Data/Analytics
  • Billing Hygiene 

Each category is supplemented by an onsite review. I will discuss each category and the onsite review in subsequent posts.

The conceptual foundation of the SDR is this: with people and pricing in place, process offers the most levers to drive continuous improvement. When deployed correctly, the SDR serves as far more than just a finger-wagging exercise. 

The SDR is the initial step in an ongoing structured dialogue. As inside counsel, it was my responsibility to set priorities and communicate clear, achievable expectations for my outside counsel, rather than just complain in vague terms about inefficiency. It was also important for me to listen and understand how my internal team and I could assist outside counsel in achieving their objectives.

To take one example, my first SDR was of a firm that preceded my tenure in-house and, no matter what happened, was going to be there long after I left. They were the quintessential sacred cow. And for good reason. They turned out to be some of the finest lawyers (and people) I’ve ever had the pleasure to know. Not only were they true substantive experts in a rather niche area, but their institutional knowledge of our mutual client was also unparalleled. While I do not think incumbency should be unassailable, it does confer legitimate advantages, which this firm had earned.

But to say that they were the very best at what they did is not to say they were perfect (no one is, author included). To their eternal credit, this group of domain experts was genuinely interested in improving the more generic aspects of their legal service delivery. They greeted the SDR with open minds (despite being professional issue spotters). When the SDR was complete, the relationship partners and I had a frank dialogue about what the findings meant and the concrete steps that should be taken as a result. They committed to a number of process improvements, which they delivered. These included better associate training on basic technology. But that was only one aspect of the review and one area in which they measurably improved.

It is worth noting, however, that, beyond their substantive expertise, these long-time incumbents also had the best knowledge management practices I ever reviewed. While, like every other firm, they got dinged where they performed below expectations, the SDR also resulted in them earning substantial goodwill in the many areas where they excelled. Combined with their commitment to, and subsequent delivery of, process improvements, the end result of the SDR was a deeper, more collaborative relationship.

Collaboration runs both ways. I, for example, needed to get more disciplined about putting new matters into the system earlier (most matters were initiated with an email, and the matter management system was updated later) in order to facilitate better accrual practices and quicker turnaround of invoices. We also developed a secure file sharing protocol that meant they had ready access to the regular reports, rather than waiting for my paralegal or me to respond to an email request. This firm was a critical piece of our workflow and better integration benefited both parties.

In short, without yet knowing the term, I had adopted a strategic sourcing perspective on supplier relationships:

All this was a bit of a surprise to me. I moved in-house with the attitude that many of the problems with the legal market are result of inside counsel being too soft on outside counsel. I still think that is true to a certain extent. But, as I will detail in my next post, there are different approaches to taking a firm line with long-term suppliers. My initial impulse to rely solely on strong-arm tactics was misguided. I owe a debt of gratitude to the law firm partners who showed me a better way. Commitments to collaboration and coprosperity were important evolutions in my thinking about the relationship between inside and outside counsel.

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).
Regardless of whether you love this concept, or hate it, the University of Michigan’s Medical School may have just laid out the future of the Librarian as “Informationist.”

In its announcement regarding the opening of the new A. Alfred Taubman Health Sciences Library (THSL), U-M Med School removed all of the books, and bookshelves, and created a 137,000 square foot “natural light-filled medical education hub that supports in-person, collaborative, active learning.”

Books are off-site and available via “rapid delivery upon request.”

The Library is staffed by “Informationists” that serve the University and general public to access the “stored knowledge of medical and health science.”

Space is for learning, training, teaching, connecting, simulation, and collaboration. Not simply for housing “stored knowledge.”

I, for one, like this concept. I like the idea of having Informationists. I like storing massive amounts of books off-site and focusing more on digital access, and quick retrieval of information from a stored location. I like the idea of using the space for hands-on training, collaboration, and interaction.

I know that there are some things that are missing. The happenstance of browsing the shelves and coming upon the one book that has the answer that you would have missed online. The ability to sit in the middle of a quiet area of the library and study without people having a disruptive discussion. The ability to find a spot deep in the shelves and hideaway from the rest of the world.

All of that has been replaced with digital catalogs, and study rooms (probably with big glass windows and lots of outdoor lighting.)

Despite this, and other things that may disappear with this style of library, I think this is the future. If we do not embrace this, or something similar that creates a more interactive space, then libraries will not evolve, they will shrink and disappear. Traditional Librarian roles will struggle to maintain, but Informationists or the next iteration of engaged and interactive Librarian will thrive and innovate their way into the future.

Watch the video of the ideals behind the new library design. As you are watching it, think about how the concepts apply to your library space and service strategy. Replace “medical” with “legal.” Replace “school” with “court” or “firm.” Think big and imagine what you could do beyond storing and retrieving knowledge in your own library.

When students come to the University of Michigan, they don’t just think about becoming a doctor, a medical scientist, or a health professional; they think about making the world a better place.

Now we’ve created a better place for them. A place to learn, to connect, and to grow.

Welcome to the new, vastly improved Taubman Health Sciences Library.

What was once a traditional library has been transformed into a light-filled, technology-driven, dynamic learning space. Our students envision a future where learning, technology, and passion combine to help patients, and enhance the public’s health. So we designed the renovation with those same ideals in mind.

Now students and their professors can connect and learn in dozens of classrooms, small group rooms, simulated patient care rooms, and an all-digital library environment. 

The building allows students from different health profession programs to come together in new ways. To learn how to care for patients as a team. To problem solve. And, to learn from one another, as well as faculty. 

For our medical students, the renovation means a quantum leap – as big as their innovative new curriculum. Here, they will learn the core principles of doctoring to prepare them to become members of outstanding patient care teams at the University’s nearby hospitals and clinics. The walls and tables will become canvases for their ideas and questions. They can even spend time in the new medical student lounge. 

Rows of bookshelves may have vanished from this library building, but the vast holdings of one of the nation’s best medical libraries are still available for rapid delivery upon request. 

The Library’s Informationists are still here to help the university community and the general public access and use the stored knowledge of medical and health science. For those who learn and those who teach it’s all about making the world a better place, one place at a time. [emphasis added]

Long-time reader. First-time poster.

Does the following resemble anyone you know? “Far too many people—and especially people with high knowledge in one area—are contemptuous of knowledge in other areas or believe that being ‘bright’ is a substitute for knowing.” Peter Drucker’s biting observation is likely familiar to anyone who has spent time working in the legal market. We have an abundance of well-credentialed domain experts with little interest in areas outside their comfort zone no matter how important those areas might be to their success or the success of their organization. Suggestions that legal professionals—lawyers, in particular—should concern themselves with pricing, marketing, technology, project management, etc. are often met with some blend of confusion and disgust.

And so begins another installment of lawyer bashing. But not this time. Or, at least, not yet. I want to thank the Geeks for providing me a platform. I hope to deliver more nuanced thoughts on the legal profession than may have previously been associated with me. When The American Lawyer introduces you to the world with the headline “Big Law Whipped for Poor Tech Training”, it is hard to break out of the mold of inside counsel berating outside counsel—especially when there is some truth to it and playing the big bad is so much fun. 

My first couple of posts will serve as an introduction to who I am but also highlight many of the ways in which I have been wrong–the ways in which I was the person described in the Drucker quote above.

I am former BigLaw lawyer turned corporate counsel turned consultant. The reason people might recognize my name is coverage of my tenure in-house where I subjected my outside counsel to what was then called the Legal Technology Audit (now called the Service Delivery Review because the word “audit” makes some people uncomfortable). I visited my law firms to examine how work was handled. The focal point of the review was how the law firms integrated process and technology into the delivery of legal services—rather than  substantive legal acumen, a threshold requirement the firms had already satisfied. I investigated hardware, software, project management, document automation, knowledge management, staffing, etc. But training on the basic technology is what got everyone’s attention (including Greg). The Washington Post, for example, was intrigued that (a) someone had the audacity to test legal professionals on their proficiency with common desktop software (e.g., Word, PDF, Excel) and (b) legal professionals fared so poorly. So I became the guy who bashed outside lawyers for not knowing Word, and I relished it.

At a recent meeting with a prominent law firm, one of the partners confessed at the end, “I expected you to have horns.” That’s great fun. But it is also a problem. The big bad persona obscures a more constructive approach to what it means to be sophisticated providers and consumers of legal service. As Connie Brenton of NetApp and I wrote in a recent column, “Law firms are easy targets. But law departments are the largest impediment to change in the legal marketplace. We set the incentives.” An antagonistic posture runs counter to my thoughts on the ways in which inside and outside counsel should collaborate, as well as my evolution on how that collaboration should occur and why it matters. More on that in my next couple of posts.

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Casey Flaherty is the founder of Procertas. He is a lawyer, consultant, writer, and speaker focused on achieving the right legal outcomes with the right people doing the right work the right way at the right price. Casey created the Service Delivery Review (f.k.a., the Legal Tech Audit), a strategic-sourcing tool that drives deeper supplier relationships by facilitating structured dialogue between law firms and clients. There is more than enough slack in the legal market for clients to get higher quality work at lower cost while law firms increase profits via improved realizations.
The premise of the Service Delivery Review is that with people and pricing in place, rigorous collaboration on process offers the real levers to drive continuous improvement. Proper collaboration means involving nontraditional stakeholders. A prime example is addressing the need for more training on existing technology. One obstacle is that traditional technology training methods are terrible. Competence-based assessments paired with synchronous, active learning offer a better path forward. Following these principles, Casey created the Legal Technology Assessment platform to reduce total training time, enhance training effectiveness, and deliver benchmarked results.
Connect with Casey on LinkedIn or follow him Twitter (@DCaseyF).