The following is the 1st part of a 4 part post expanding on my short introduction to an ILTA session entitled, Do Robot Lawyers Dream of Billable Seconds? If you have not yet listened to the full session (and you have nothing better to do for the next 90 minutes), you should go listen to it now. If you would like to download and read the entire 4-part post you can get it here.



Computers

During World War II, a “computer” was a person who
calculated ballistic trajectories and published the results in books and sets
of tables that were given to artillery units and battle ship commanders. These
computers were mostly women who manually processed the calculations applying
complex mathematics and their substantial brain power to the task. They worked
in teams, checking and quadruple-checking each other’s work, as incorrect
results could quite literally affect the outcome of the war and lead to the
deaths of many soldiers on the front lines.

After the war, many of these computers were instrumental
in programming and debugging their brand new, building-sized, electronic
namesakes. Today, the term computer is never used to refer to a person.

These women were certainly not the first laborers to lose
their jobs to machines. The industrial revolution had seen many manual labor
positions replaced by newly developed engines, from coal powered steam shovels,
to electric sewing machines. But these “computers” were probably the first
knowledge workers (people that rely on their brain processing power rather than
their physical skill) to lose their jobs to machines.

Over the last seventy years that process has continued
unabated, with ever smarter electronic computers tackling more complex and
complicated knowledge work. And at every step of the process the next
profession in line had a million and one reasons why “a computer could never do
what they do.” But today we live in the world of IBM’s Watson. Watson is not a
miracle, it’s the natural progression from those World War II era computers, to
ENIAC, to the Personal Computer revolution, to the Smartphone, and eventually
to a computer that beats the best humans at the most difficult of human games;
Chess two decades ago, Jeopardy a few years back, and Settlers of Catan every
night on my iPad.

More impressive than my iPad beating me at a popular
German board game is the Watson victory on Jeopardy. Computers are now exhibiting
what were once considered uniquely human abilities: parsing and processing
natural language, understanding puns, and double meanings, and then determining
the intention of the questioner in order to select a correct solution from many
plausible answers. That is not terribly far removed from parsing the exact
meaning and intention of legal documents and then determining an appropriate
course of action based on precedent and prior analysis. The legal profession
should be on notice: the computers are coming.

What do we sell?

A few years ago I asked a number of my friends and
colleagues from other firms three questions:
  1. What do
    Lawyers think they sell?
  2. What do
    Law Firms think they sell?
  3. What do
    Clients think they are buying?
While none of the respondents gave the same three answers,
they all agreed that there were separate answers to each question. That kind of
confusion leads to all kinds of marketplace chaos and I tried to suggest a
common answer, that we were selling “access to the collective knowledge and
expertise of the firm.” That was not a satisfying answer to me, even then. The
question has continued to nag at me ever since, and after much consideration, I
am ready to suggest a new answer: We sell Legal Processing.

That doesn’t feel emotionally satisfying either, but the
more I think about it, the more convinced I am that that should be the simple
answer to all three questions. Clients typically come to us with legal problems
and we run those problems through our legal processing engines (attorneys,
established workflows) to produce advice, documents, in person counsel, or any
of the other things we commonly produce for clients. So, my original answer
wasn’t wrong, it just didn’t go deep enough. Lawyers are selling their legal
processing time, law firms are selling their collective legal processing
ability, and clients are buying the legal processing that they cannot or do not
want to do internally.

Much like the computers of World War II, the lawyers of
2014 continue to do most of that processing using their biological processing
units. These brains, as we call them, are extremely energy efficient and fast,
but are slow to train, prone to fatigue, often make mistakes, and are
notoriously difficult to network (not to mention the hardships of managing
them).

Digital Legal Processing

In recent years, we have entered a new era for the
practice of law, the digital era. The digital era probably began in earnest
with the explosion of e-discovery solutions in the last decade. These tools
were not simply technological means of improving the analog workflow, like a
Document or Contact Management System, these applications were beginning to do
the actual work that previously required lots of young associates with a great
deal of management supervision. With predictive analysis, many fewer associates
could do the same work in much less time, more accurately.

I have seen no fewer than 5 contract review applications
in the last few months that promise to reduce processing time and to increase
accuracy by large percentages. Eventually, these tools will most likely replace
biological processing units entirely. Even now, a large document review that
relied entirely on human ability, engaging no computer assistance at all, would
most likely leave a firm open to a malpractice suit. It is not a huge stretch
to imagine a time in the near future, when biological processing interference
of any kind, might do the same.

E-discovery and contract review applications are one type
of digital legal processing. They are essentially highly skilled and ever
improving pattern recognition tools, but obviously the practice of law does not
boil down to simply better pattern recognition. It also requires an
understanding of current laws, an ability to apply a client’s particular
circumstances to the current laws, and to make inferences, calculations, and
recommendations based on that understanding of the law. This is where Expertise
Systems enter.

Expertise systems allow firms to capture an individual
lawyer’s (or an entire practice group’s) knowledge and understanding of a
particular law, in a way that allows other lawyers or clients to use that
knowledge, even if they do not have access to the original lawyer(s). In other
words, with an expertise system, it is possible to build legal processing
engines that handle the routine aspects of practicing law, leaving the novel
and unique to be handled by the firm’s biological legal processing units
(attorneys).
Everything to this point is preamble to the next concept.

(Tomorrow: The 6 Ds: An Exponential Framework)

I had the privilege and pleasure of moderating a terrific panel at the ILTA conference this year.  The title of the session was the title of this post.  And the intention of the session was to explore, not WHAT new technology was coming down the pipe, but HOW that technology would fundamentally change lawyers, law firms, and the practice of law itself.

I am indebted to Jess Hutto-Schultz and the ILTA Committee for suggesting the topic and for allowing me to pick a truly ALL-STAR panel.

The panelists were:

Joshua Lenon, Lawyer in Residence at Clio (blog)

Noah Waisberg, CEO and Founder of Diligence Engine (blog)

Stuart Barr, Chief Operating Officer at HighQ (blog)

and Michael Mills, President and Chief Strategy Officer at Neota Logic (blog)

Each of the panelists have already posted their personal accounts of the session and I urge you to read them via the blog links above. This was truly an amazing session and I’m not just saying that because I was involved. Take a look at what some of the attendees said:

“Another fantastic session with a great panel. Please bring them back for more.”

“Can’t emphasize enough how superb this session was. Excellent and well-informed panel with excellent moderator…” (Bonus points for whomever said this one. – RM)

“This should have been earlier in the week”

“Fantastic! Best session at ILTA!!”

“Great panel. Very thought provoking.”

“Great session that used the panel format well to put forward alternate views.”

“INCREDIBLE SESSION!! All speakers were amazing. Content was relevant, informative, interesting, and fun!”

“Outstanding panel, wide scope, though-provoking but realistic.”

“Thoughtful and provocative. I especially enjoyed Michael Mills’ commentary.”

Lest you think I cherry-picked only the best comments, those are ALL of the comments.  Some of them went on much longer and I shortened them so as to not completely embarrass our brilliant and humble panelists.

My personal thoughts, inspired and informed by this session, will be posted here starting on Monday morning. And yes, I do have a tendency to go on a bit, so those thoughts will continue through until at least Thursday.  But for your Friday afternoon and Weekend enjoyment, I present the full presentation of Do Robot Lawyers Dream of Billable Seconds? from ILTA 2014. 


The video is about 90 minutes long, so go get some popcorn. If you are interested in the future of law, or robot lawyers, you will not regret it. If you are not interested in those things, I’m not sure how you stumbled onto this blog, but welcome!

(If the embedded video is not working, go to YouTube.  It is working there. )

736-hp VW Golf

Toby Brown and I have had a number of discussions over the past few months on how law firms gather information during the new business intake (NBI) process. Toby comments that all of the focus on NBI is process driven, and that we are speeding up the process, but not really doing a great job of creating better information that can help the firm create a competitive advantage at a later time. Very little in the NBI reform/reinvention process is about better data. It focuses more on faster input of information to speed up the time to open a new matter, thus creating a faster turnaround on when attorneys can start (legally) billing time to a matter. It’s kind of like putting a huge engine in a Volkswagen Golf. Sure, it looks impressive, but if keep the same overall structure of the vehicle it doesn’t matter that you have amazing horsepower, if you can’t get those wheels to actually stick to the road. The same is true with the NBI process improvements.

Of course, with any of these process improvement projects, the idea is to solve problems that actually exist. Problems that “keep partners up at night” are usually the best ones to solve, and with NBI, the time it takes to open a new matter tends to be the biggest issue that partners dislike. Moving the NBI process from paper to electronic (even if the work flow process remains exactly the same) usually will speed up the time it takes to open the new matter. Tapping into existing client information, human resources, and accounting databases can help normalize some of the data, as well as auto-populate some of the fields. However, the information being gathered is essentially the same as you would get if you still had a paper-based system. Speed and accuracy have improved, but quality and better strategic data gathering has not.

So are we putting too much emphasis on the intake process, and not finding ways to improve identifying key data points of the matter? Once the matter is opened, no one wants to go back and update the data again. What if the matter type was wrong? What if the summary of the matter was wrong? What if the estimates of what this matter’s estimated costs were wrong? The typical reaction that I’ve seen to these questions is, “So what? If the matter is open, and we can bill… then let’s bill!”

Many of us depend upon the information gathered in the NBI process. Toby’s group attempts to analyze matter budgeting, matter management, and costs to take on a matter using details gathered in the NBI process. Marketing uses the data gather during the NBI process to determine big matters for Public Relations news releases, and submissions to third parties like Chambers. Business Development uses this information to determine what types of work the firms is strong and weak. Conflicts uses the information to determine what work we may not be able to take on in the future. Incomplete, or bad information gathered during NBI can have a long-range negative impact on the firm.

Let’s just call the new NBI process what it truly is: A way to open a matter quickly and ethically. Now, let’s identify what new NBI process is not: A competitive intelligence, business development, knowledge management, big-data tool. At least, not by itself. Perhaps if you combine the data from the NBI system with other pieces compiled along the timeline of the matter (e.g., billing data, financial data, personnel data, document records, docket information), you can improve the ability to make good decisions and streamline other processes, but bad data in the beginning can cause a domino effect down the line. If a matter type is mislabeled during the NBI process, it can cause a shift in results in later analysis. So, what do we do?

I’m reminded of a post we did a couple years ago on firms needing to do After-Action Reviews for matters. If we don’t ask ourselves what happened, and how can we get better, we tend to continue to act in a similar fashion (good or bad) in the future. If we misidentify information, and never incentivize partners to correct that information, we’ll continue to misidentify. Most firms have absolutely no incentives for partners to identify when information gathered during NBI process needs to be clarified or corrected. We also give almost no incentives to close matters. Yet, both of those processes are key pieces in our quest to better know our clients (KYC), gather BI/CI information, assist in identifying cross-selling opportunities, and gathering historical information to better plan how we price and staff similar matters in the future. I would think that the return on investment in beefing up a mid-matter review (MMR), and the closing matter process (CMP) would be substantial.

Just off of the top of my head I could think how a quick MMR and a sustained CMP process would help trim down the time it takes to identify key matters to be used for PR purposes. How it would accurately identify which attorneys are experienced in certain matter types. And, how it would assist in business intelligence gathering when pitching for client RFPs or new firm industry business pushes. I understand that the MMR and CMP procedures require billable attorneys to take time out from billing and actually identify the business development and overall matter management needs of the overall firm. Our first instinct would be to place this responsibility on the shoulders of the Billing Partner or Relationship Partner. We all know where that would lead… well, actually, that’s probably why were where we are at the present time. Instead, how about we look at this as a Professional Development, or as a Mentoring, or as a Succession Planning process? The MMR might be handled by a Senior Associate or Junior Partner and allow them to see how a matter is being staffed, and determine what has happened between the opening of the matter and the current state of the matter. The CMP could be handled by another Partner that worked on the matter, and allow them to also review what could be handled better the next time a similar matter is opened. A quality MMR and CMP structure allows for better data, better matter management, and a better leader for the next matter.

Perhaps we stop thinking of the New Business Intake in a vacuum. Instead we combine the NBI, MMR, and CMP into an overall process of cradle-to-grave matter management. The NBI is step-one, and should be improved to help speed up the process of getting matters opened, conflicts checked, people assigned, and have the firm start working on behalf of a client. But it is step one only. If we ever want to leverage our prior work in order to improve or gain new work, then the NBI cannot be the first and only step.

Someone asked me recently why I think more and more law firms are creating CI roles or increasing their CI capacity, encouraging their BD and Library staff to work more closely so forth. I didn’t really have a good answer on the spot, “cause it makes good business sense, or because market competition and consolidation is increasing” seemed all to obvious and do not address this specific moment in the evolution of the modern law firm.  Last month, I participated in a webinar presented by Ann Lee Gibson, long time law firm CI consultant as a part of the IntelCollab webinar series and unknowingly, Ann Lee answered the question in part.  Her presentation was titled How Competitive Intelligence Helps Professional Services Firms Succeed, and you can view the entire presentation here.  The focus wasn’t specifically on law firms, but by not focusing, certain things became clear.  To begin the various US based professional services firms are compared  by revenue, number of employees and number of professionals.  According to the data, law firms had the highest revenue in 2013, but also the greatest number of employees (costs) but NOT the highest growth rate, nor does the profession represent the largest number of businesses in the professional services.  Furthermore, when compared to Accounting firms, the 2013 data  points out that 75% of revenue in law firms comes from 53 firms, whereas in the Accounting sector that same percentage of revenue is drawn from four firms.  So putting on the CI analyst hat here, what do the numbers tell you? Not surprisingly, especially if you follow any of Toby’s posts, law firms are running inefficient organizations, with leverage issues as a result of the many many owners. I am not the economist so won’t get into the numbers except to say that law firms are increasing CI as way to minimize the impact of the figures.  But even forgetting the economics for a second, you can see from the literature, the blog posts and the new titles that are popping up all across law firms that something is happening.   

Twenty, even 15 years ago firms only had to worry about appeasing clients, doing good work and getting more work from the same or other clients. Few firms were concerned in any systemic way about their competitors and even fewer were thinking about clients in terms of their needs and wants. Today, that landscape has entirely changed.  Clients are driving change at firms by demanding attention be it through: AFAs, LMP, LPO, and/or e-billing. Add to that the growing impact of technology on both the business and practice of law, industry consolidation nationally and internationally, growing in house legal teams, changes to the ownership rules for law firms and firms are forced to be more competitive.  How a firm chooses to be more competitive can (and does) come in varied forms.  Some are shrinking administrative costs and reducing overhead by creating pools of assistants rather than the traditional 1:1 of firms, shrinking headcount or budget for things like KM, Marketing and Library services. Others are taking a different approach choosing to focus on understanding their clients, their markets, their competitors and their own business savvy better.  That’s where CI enters the mix and helps to set the course.  CI is a strategic endeavour in understanding the market condition, the forces of pressure and their impact while also being tactical in informing RFP responses, filling the pipeline and providing colour in addition to background information.  CI, when done well can be the centre point for collaboration and competitive advantage within in a firm. 

There is no denying that the legal industry is changing. The speed of the change depends on where you sit, what you see, and where you want to go, but no one can deny that as the legal industry ship is steering in a different direction, and firms are realizing the power of CI as the compass to help navigate the waters. 

For those of you that attend the ILTA conferences, you may be aware of the (in)famous band called Legal Bytes. Legal Bytes is the world’s only band made up entirely of current and former Chief Information Officers from law firms. At this year’s ILTA conference, Legal Bytes will actually be releasing a 12-song CD of original material called “Bright Lights… Big Data.” The August 17th release at ILTA, presented by Recommind, will talk about the joys and pains (mostly pains) of managing technology in the BigLaw world. Our very own 3 Geeks’ contributor, Scott Preston, is the drummer of Legal Bytes (way to go Scott!!)

Now, it may sound funny that there were enough musically talented CIOs to actually come up with a band, but it is really not as strange as it may seem. In fact, I would say that my (anecdotal) experience with techies in the law firm world has been skewed heavily toward those techies having musical and fine art skills. Last night, I watched a Ted Ed video from Anita Collins that put the CIO and Music puzzle together for me. Turns out that playing a musical instrument is like a “full-body brain workout.” It also helps build connections between the right (creative) and left (mathematical) halves of the brain. Exactly what the creative/mathematical CIO needs to be successful. Watching the video below might help you understand how your own CIO’s brain works, and why he or she acts the way they do.

Also take a look at Legal Bytes’ first song off their new album. Make sure to pick up a copy of the new album. The first release, iPad Girl, is already on YouTube.

Image [cc] Moyan Brenn

Three posts recently caught my eye. One was on the imminent demise of BigLaw. The other was on how small firms are about to have their day. In the third one Thomas Sager, the GC for Dupont takes GCs to task for not pushing hard for change from outside counsel. In his words, “Until that happens, I don’t know how you are going to beat this.”

Right … on all accounts?

The impending doom and demise of BigLaw is getting to be a very old story. Old enough, we should all be asking; So when is this actually going to happen?

The rise of small law post brought back memories. In my bar association days I used to bring up this topic. Although I didn’t predict any rise. Instead I would suggest to small firm  lawyers they have an advantage over large firms when it comes to adopting change. They don’t have to form a 20 member task force to study an issue for 18 months, then make a recommendation that is too late and going to be ignored. However, the reality of small firms is that they are also owned by lawyers. And hence, they have no interest in change. They “just want to practice law.”

The article on Sager actually hit a note with me. I fully agree that clients are not really pushing firms to change. They are pushing instead for discounts. Discounts aren’t really a change driver.What sort of change do discounts motivate with outside counsel? I actually asked this question to an audience of in-house counsel in a presentation recently. After thinking about it, most people there shrugged their shoulders and said “not much.” One finally raised her hand and said “It motivates firms to raise their rates.” She may be right. But the bottom line is discounts do not drive changes in the way legal services are delivered.

So adding these three thoughts together, lead to one of my infamous epiphanies. My mind drifted to patent litigation, as it often does. What will drive change in this type of service? Other than some incremental, marginal changes, to really change this practice the courts would have to change the way patent cases are litigated. Chance of this happening: Approaching Zero. What about deal work? Somehow we would have to restructure due diligence, negotiation and documentation for all deals. Right.

This all brings Jeff Carr’s comment to my recent post to mind about “complexifying” legal services. Most legal services are built on known models – which are complex. A number of years back an attempt was made to simplify litigation using arbitration. This just created a new subset of complexity. Even at the low end of the litigation market – try getting a divorce. Unless it’s uncontested, you will enjoy the complexified experience of the US court system.

So what’s my point? BigLaw may suffer on the edges (ala Patton Boggs), but clients still need their services. Small Law can’t or won’t step into the breach (except in certain circumstances). And LPO’s will continue to nibble at the edges, but are not apparently taking away large portions of legal work from large firms. So the Big Disruption seems unlikely any time soon.

I think Sager is right. But I am also bearish on the idea of clients embracing change at that level. That side of the market is just now fully embracing e-billing. This might give them better data, but it doesn’t really change their operations. Maybe if we see in-house legal teams dramatically change in structure that will be the sign that Armageddon is upon us. But I will point out (again) these teams are made up of lawyers. I suppose they have more immediate pressures to save money, but I’m not seeing the kind of direct pressure Sager notes bearing down on them to actually change.

Of course I could be wrong. Or maybe I am just impatient.

They say that everything is bigger in Texas.  Apparently that even includes self-deluding opinions. Yesterday, a friend pointed me toward an article in Texas Law Book entitled Get Wall Street Out of the Practice of Law. (Subscription Required) In this opinion piece, the author, a former Big Law partner and current Legal Communications Advisor, offers her own opinion on the Texas Bar Opinion No. 642.  Opinion 642 is the one that says that “Texas Law Firms” (Is that any firm with an office in Texas? Firms with offices only in Texas? Or, firms with headquarters in Texas?) cannot have non-attorney staff with the title of Officer or Principal. So, in other words, no CMO, CTO, CIO, CDO, COO, or CXO unless, they also happen to have a JD. WTF?

If you are a regular reader of this blog, you may recall my own opinion of Opinion 642.  As is my habit, I responded to the short-sighted and misguided ramblings of the Texas Bar with ridicule – in verse no less – which frankly took way more time than I should have ever devoted to such nonsense. And yet, here I am again writing about it. But I could not leave this one alone.

I’m just going to pull a few of my favorite quotes.

“…non-lawyers actually do control Big Law and the Big Titles are the proof.”

Yes, we’re starting off slow, but I’ve never even heard of a BigLaw firm where the C-level officers have anything close to the power, standing, or pay of their corporate counterparts. Still, hang in there with me, it gets worse. I promise.

“…ever since the non-legal managers gained power starting in the mid-to late-1990s, the hourly rates for lawyers have skyrocketed to the point that even the biggest corporate clients feel the pain.“

Setting aside the issue of how much power “non-legal” managers actually have in law firms; correlation does not equal causation. That’s science and statistics 101. Maybe they should teach that in law school along side the business classes that don’t exist. Also, I hate to be petty, but doesn’t the term “non-legal” imply illegal?  My guess: an editor complained about using the non-word “non-lawyer” 8 times in a thousand word post so they changed 3 of them to the non-synonym “non-legal”. It was probably the same editor who used the term “Wall Street” in a title for an article that doesn’t mention Wall Street in any way and that has nothing at all to do with investment banking, stock markets, or a street in lower Manhattan. But that is pure speculation on my part, I could be non-right.

“…the hourly rates have to pay for the Big Titles of the ever-increasing non-lawyer management ranks. As a result, every lawyer needs to bill more hours at a higher rate each year for the firm to look profitable in the year-over-year metrics that the non-legal managers live by. They have trained the lawyers to live by them too.”

Here’s where we start to pick up steam. Those poor lawyers SLAVING away to pay for the gigantic titles of all of the non-lawyers they are forced to hire. How much do titles cost anyway? Truth is those “big titles” are often given in lieu of big salaries or bonuses.

“…I know most [Lawyers] are decent, hardworking, ethical people. But I also know that too many of them have become slaves to a system where managers focused on accounting and profits-per-partner metrics control the livelihood of the lawyers whom they are supposed to support. “

Admit it! You thought I was being overly dramatic using the term “slaving” above, didn’t you? No. She actually says it.  Lawyers are “slaves to a system where [presumably non-attorney] managers [who are] focused on [those crazy nonsensical things like] accounting and profits-per-partner metrics control the [much much larger] livelihood of the lawyers whom they are supposed to support.”

So, is she saying that focusing on accounting and increasing profits-per-partner are not supportive of the poor little attorneys who are just trying to make a living?

I can almost – almost – believe that the Texas Bar is legitimately concerned about intelligent and well-qualified people running law firms in a way that makes their membership look bad.  That would at least explain, if not justify, their ridiculous Opinion 642. But I am truly baffled as to how anyone could honestly believe that this opinion is intended to hold the line on skyrocketing legal costs. Thankfully, I have an easy way to test that hypothesis.

If Opinion 642 stands, and firms change the titles of their “non-legal” Officers in Texas, we’ll check back in a year and see just how much the average billing rates of Texas attorneys have come down.

See, science baby!  Stuff I learned outside of law school. Sometimes it really does come in handy.

Jeff Carr in his Race Car

Jeff Carr announced his retirement from his GC role at FMC Technologies recently. For those who follow the legal change landscape, Jeff has been a consistent beacon, advocating for change for quite some time. His model at FMC is one of (if not THE) most successful client implementations of legal cost savings in the world. His recent Forbes article noted how the company has grown significantly since he took on the role, while his legal spend has decreased. Fortunately Jeff has stated that even though he is leaving FMC, he will not be leaving the fight for change. We would all do well to follow his future efforts.

His retirement, combined with other recent challenges got me thinking. A recent trend has been the involvement of the procurement department in helping legal departments control costs. The use of procurement is obvious, since their role is controlling costs and saving money for clients. Silvia Hodges has done a lot of work on this subject, and the role of procurement continues to evolve in this aspect.

However …

If you look at what Jeff has done to drive his success, procurement is not the driving factor. Instead, if you dig into his “budget with consequences” thinking, what you will find is not procurement, but instead project management.

Jeff began developing his approach based on a few core ideas. One of them was the lack of feedback built into the purchase of legal services. For years he had noticed that when law firms performed poorly, instead of giving them constructive feedback, clients would just stop sending those firms work. This meant opportunity for new firms to come in, but eventually the new firms would make some mistakes (since everyone does eventually) and then they would be marginalized too. The result was not good for Jeff as a client. There was never much improvement, only a stream of new faces.

So Jeff’s approach was designed to change this aspect. If you have ever heard one of his presentation (and I have been privileged to actually present with him), he will note that if you do one thing as in-house counsel to change things, it is to implement after action reviews of matters. This one thing will drive a lot of positive changes.

After action reviews are all about project management. These efforts drive better planning and budgeting for the next engagement, creating a project management life-cycle.

So in thinking about Jeff’s approach and contrasting it to the rising trend of procurement in the legal space, a thought occurred to me. If I were a client looking to better control my legal spend, I would not be knocking on Procurement’s door. Instead I would be calling up the Project Management Office and getting them involved pronto. Effective project management will drive sustained cost savings, as clearly demonstrated by Jeff. Procurement will work to understand the cost per unit of service, and then drive down that per unit cost as best it can. And we all know what “per unit cost” is in the legal space: Billable Hours.

I rest my case. And I wish Jeff the best in his future endeavors.

P.S.: I shared a preview copy of this post with Jeff to make sure I wasn’t full of it. He responded with this wonderful comment:

Like most things law-related, we tend to complexify things.  Perhaps it’s because we make money from complexity – either because it take more time to navigate the complexity and ambiguity, or because we’re needed to play the role a Sherpa through the mist (or more likely both).  As I’ve gotten older, I’ve tended to become more of a Zen GC – there is beauty in de-complexification (what the non-law world might call simplification).   Project Management is one of those things – it’s really a quite simple three step process – Who, does What, When.  This is then the first step of the grander P3 process of Plan, Perform, Perfect.  The after action part you focus on occurs in the Perfect stage.  The interesting thing to me is that the Perform step is relatively unimportant – just follow the plan with zero defects or deviations.  It’s the Plan and Perfect stages that actually matter.  

 But then again, as Confucius might have said:  The solution to the problem is simple.  But those with the Power to solve the problem find it quite difficult.

Image [cc] Vyperx1

We very often hear from bloggers on this site regarding the struggles associated with change and innovation.  Fear of failure, lack of inertia, protecting territories—all seem to be stumbling blocks that many firms face when initiating change.  It seems, however, some organizations have found a way to successfully encourage and nurture new ideas internally. 

I had the pleasure of speaking to Karl Florida, Managing Director of Small Law Firm Business Segments and Innovation Champion, at Thomson Reuters, about a new innovation program the company has instituted.

For many years (as many of us are well aware), the Thomson Reuters model has been to acquire business units and manage their growing portfolio.  More recently, the model has shifted, with a focus on knitting the units together to drive more organic growth between them. 

One way Thomson Reuters is accomplishing this is by establishing a cross-unit Innovation Task Force (ITF) and a Catalyst Fund to support new ideas.  Thomson is looking for great ideas from within and establishing a system that rewards creative thinking to further serve their business goals.  How it works is this:  On a monthly basis, ideas can be informally submitted across the company via a home-grown tracking system (no business plan is required, but there is a template to gather certain information).  There are a small number of administrators who collect the proposals and submit them to the ITF.  The ITF prioritizes the ideas, develops Proof of Concept (POCs) and sends the top 5 to a C-level suite of decision-makers. They, in turn, determine if any will move forward into the funding stage.   The appropriate business units and a business sponsor are chosen, and a prototype is created and tested in-house and in the market.  If successful, the product goes to market based on a timeline.  The entire process is tracked through each stage of the pipeline process. 

While the program is only a few months old, it is already gaining in popularity.  Some of the areas where ideas are being generated are Big Data analytics in relation to law, scientific, tax and financial sectors, data visualization tools, regulatory compliance and (wait for it), wearable tech! 

Karl tells me Thomson Reuters is finding the most opportunity in the space between units.  He compared this to the genius of a Reese’s Peanut Butter Cup.  You have chocolate, which is awesome on its own, and you also have peanut butter, equally wonderful.  But put them together, and well, then that is where the magic happens. 

While Thomson Reuter’s program appears mostly devoted to product development, law firms could certainly take advantage of this sort of model to solicit and promote ideas from within regarding client service and delivery, along with development of administrative efficiencies.  The model, along with variations, allows and in fact, encourages a small, but safe space (with funding!) to experiment with new ideas without the associated pressure and demands to be “the right” solution out of the gate.

FYI, if you want to learn more about innovation tournaments, I highly recommend the book, Innovation Tournaments:  Creating and Selecting Exceptional Opportunities, by Christian Terwiesch and Karl Ulrich (hat tip to CCH, for giving me the opportunity to see Karl Ulrich in action).  Because don’t we all need some more peanut butter cups?

In the last several weeks, I have been called, emailed or otherwise pitched to by a variety of solutions providers. I have to tell you despite having a great memory, I can’t remember a single company name nor what any of the companies who wanted my firm’s money do.    The reason I can’t recall any of those fine details is because I was too put off by the approach, lack of planning and general disrespect for my time that within two minutes of each call, I zoned out.  I have also had a series of great sales pitches in the past while, where halfway through the call I wanted to purchase the service or product regardless of the price, because the person pitching to me understood my need, met a challenge or was generally on the ball. I get that sales can be a tough a grind and I generally applaud the tenacity and bravery of sales people.  But to the sales people who fall in the first group, I offer this:

Do your research
There is no excuse today to not research targets. Ten minutes on LinkedIn, Facebook, even the good ol’Google should provide insight into me as an individual, my role with the firm and how your product or service might be work for me.  Failing that, ask me what I do in the realm of whatever you are trying to tell me and then listen to my answer.  Use my answer to probe further or offer up a synergy of some kind.  I recently had a sales person fail at this exercise when, after hearing my answer to her question, responded with (and I am loosely paraphrasing) “oh, well this product is not for you then, we have better success with firms who want to be innovative”. I hope she wasn’t suggesting that I am the poster child for stagnant approaches to laws firms. A quick read of my LinkedIn profile suggests otherwise, I think. I shouldn’t have to say it, but don’t insult your prospective clients either. 

Study the Site
As it happens, laws firms, like any businesses today, have websites.  The websites, like the firms, vary in their sophistication but at the very least the sites will tell you something about a firm. Visit that site before you pick up the phone. Don’t, for example, try to sell a litigation boutique access to your corporate database or a Canadian firm exclusively US content without making the case for why I should listen beyond the initial pitch.  If a firm very obviously can’t benefit from your product or service don’t pick up the phone or draft the email. 

Avoid Jargon
I work in Marketing we invented catch phrases and slogans. Please use your own language when you call me to tell me about your product or service. I don’t deal well with jargon or salesy chatter that describes specifically nothing. Don’t tell me what “law firms” all over are doing or are interested in, as it assumes that I don’t know my business and that I am relying on people like you to tell me what I need. I don’t.  I do my own research, but if you were to call me and tell me how another firm in a similar geographic area or with similar practices is benefitting from your product or service, I am all ears. 

I love learning about new products and services in the market, I thrive on hearing how other firms are using products to their competitive advantage, or to increase efficiency. Don’t stop contacting me –  ever.  All I ask, is that before you do call or email me, please spend a bit of time doing your homework if you want me to listen.