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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).

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).
Image [cc] Rachel

As I was rolling around the Future Law conference via my Beam vehicle on Thursday, Twitter was lighting up with a series of tweets from the actual presentations (as well as about my robot form.) During his State of the Art of Legal Technology session, Professor Oliver Goodenough fielded a question that even he admitted was loaded. “What is the biggest obstacle to integrating technology in the legal field?” Everyone kind of chuckled when they heard the question because everyone saw the answer coming… “Lawyers.”

Now, to be fair to the audience and to Prof. Goodenough, the answer was a bit tongue and cheek, and the good professor did discuss the number of issues and situations that contribute to a lawyer’s inability to fully adapt new technologies, or to take advantage of certain advancements in technology. Not every advancement is practical for the lawyer to adopt. Not every lawyer has the ability, either personally or financially, to jump in and integrate new technologies that might streamline his or her practice. Now… that being said, let’s talk about low level advancements that are really no-brainers for practically every attorney to adapt, but which most are still struggling to adopt.

MS Word

Casey Flaherty’s tweet to Ron Friedmann and I nailed this one. Even if you threw out all the really cool technology advancements in the past ten years, you still have one that most lawyers adopted twenty years ago… Microsoft Word. Casey has sent ripples throughout the legal profession by simply asking lawyers to show they know their way around a few tasks in MS Word. Little tasks such as formatting a pleading or contract in MS Word are things that could save attorneys, and clients, time and money.

Adobe PDF

The legal industry is flush with PDF documents, and equally flush with people that don’t know how to do anything much more than open a document in Adobe Reader. PDF documents can be edited, Bates stamping is a common task, and a number of other features that would allow attorneys to efficiently produce documents and file these documents with the court. For many, however, getting beyond scanning existing paper documents and attempting to OCR these (for the really advanced) is the big obstacle.

MS Excel

Being semi-proficient at Excel should almost be an entry-requirement for lawyers, and almost any other employee that deals with budgets or other data driven information. Sorting, filtering, creating simple Pivot Tables, and even some basic function utilities are very easy to learn, and can open opportunities to better understand information in a few simple clicks. Not knowing some of these basic functionalities is a disservice to yourself and your clients.

MS Outlook

This is actually a tool that many attorneys use as an advanced time tracking and document storage device. Which is a great thing to know, but this is the wrong tool for those functions. Gigabytes of data being stored in your profile causes slowness for you and practically everyone else on your network. Learn how Outlook functions with your DMS, your CRM, and your time entry system. It is not a Swiss Army knife.

Document Assembly

I could go on and on about the basic tools that attorneys could use to make their lives easier, cut down on risk, and save their clients money, but I’ll end with something that may seem like a more advance technology tool, Document Assembly. Ron Friedmann jumped on this on twitter in response to Prof. Goodenough’s answer. The fact that attorneys are handling complicated drafting of contracts and other documents without using a document assembly resource is simply risky behavior. For a profession that is so adverse to risk, not using this type of resource is counter to everything we advise our own clients. If you work with contracts and agreements… become familiar with a good document assembly tool.

Where Do We Go From Here?

I’m sure many of you are thinking of other simple or common tools that are underutilized in the legal industry. If we can’t get a good understanding of these basic tools, it erodes the foundation on which we would like to develop and implement more advance tools. So where do we start? I’d suggest establishing an organizational wide strategy to develop training and development for those entering your organization. Clearly established methods of training along with measurable results that show who is understanding these basic tasks, and who needs help. It’s taken us twenty years of using this technology to be this bad at it… let’s set out a three to five year plan to get a little bit better at using these basic technologies.

Geek #1 had the opportunity of asking Casey Flaherty a question during a presentation recently. One of his takeaways is that clients still do not trust their outside law firms. After posting my recent piece on SOLP 2013, a thought clicked in my head. Consumers of any product will grow angry if they believe the providers are extracting profits at higher-than-market levels for any length of time.

Consider oil companies. During the mid 2000’s, the price of oil per barrel was jumping dramatically. There was much talk about what was driving this. Some claimed it was due to speculators. But the result was higher and higher prices at the pump. In a relatively short period of time gas prices increased by 50% and then stayed there. It was not long after that the Majors started announcing record profits. It was not long after that people started clamouring for Congressional investigations into price gouging and the like.

History is replete with examples of customers who react negatively when they think providers are using market power to raise prices and extract higher than normal profits.The Sherman Antitrust Act is the embodiment of this reaction.

I should point out that lawyers do not have a monopoly on legal services in the classical economics sense, since there is competition in the market from a large number of providers. However, there are definite restrictions on who can enter the market. These restrictions were placed as a protection on consumers, keeping them from receiving significant legal harm via untrained and incompetent providers.

At that top of the market (a.k.a. BigLaw) there has been a more restricted set of provider options for customers. I recall a consultant telling me as recently as 2008, that clients were afraid to ask for bigger discounts since their BigLaw providers might choose to not take their cases. Of course that has changed.

The real crux of this issue is that many clients perceive legal providers as engaging in price gouging. One can easily argue the market has been setting prices (via hourly rates), just like the case with the price of gasoline in 2007. Law firms have been behaving ‘rationally’ in an economic sense, as their price increases were accepted by the market.

The main difference between oil companies and law firms is that alternative legal providers are more readily available and more are emerging.

The old saying goes “Perception is Reality.” Therefore firms need to find a credible way of responding to this market influence. I’ve noted recent record profits from big banks. Back in 2008 these clients asked for their firms to work with them through the downturn by holding the line on rates. I wager that even with the market turnaround, they will not be going back to their firms with offers to raise prices and will continue their downward pressure on legal costs.

This is the market we now live in.

While I was in Seattle at the 2013 AALL Conference, I had a chance to listen to, and briefly talk to Casey Flaherty of Kia Motors America, Inc. As many of you have read recently, Casey is making waves by giving his outside counsel some basic skills tests on how long it takes them to update contract language via MS Word, print to Adobe Acrobat, and resorting MS Excel lists. His testing of ten outside law firms associates (9 total firms and 1 took it twice) came back with all ten failing his technology competency audit.

He gives one example in most of his talks where an additional indented sentence is added into a contract. He shows the crowd what should take about 12 seconds to do (if the attorney is tech savvy and understands form automation tools), usually takes about 10 minutes for most attorneys to complete because they are manually updating paragraph numbers and reformatting the document piece by piece.

Now, the question I presented to him was this:

Why should the associate be the one doing the word processing updates in the first place?
Shouldn’t those tasks be assigned to Secretaries or WP Staff members who:
1. know how to use the resources effectively and
2. are either billed at a much lower rate or aren’t billed at all?

His answer was a bit simplistic, but typical of today’s corporate counsel expectations (I am completely paraphrasing his response):

Technology is so entrenched in the day to day operations of the associate, that it is expected that they have (or should have) the skills to complete these simple tasks so quickly that it doesn’t make sense to outsource it to a secretary or Word Processing Department.

Implied in that paraphrased answer was the idea that even if it went to WP, the lawyer would still review it (and charge for his or her time), so why add in an extra layer of work to do such a simple task that the lawyer should know how to do already.

Here’s a couple of observations that I walked away from Flaherty’s talk:

  1. Flaherty is either going to be a hero or a goat for discussing this and calling out his outside counsel for having such poor tech skills, and that his ‘tech audit’ is simply the beginning (he is also asking for access to daily time entry by firms so he can find associates that are billing .3 hours to 10 different matters each day, or those that enter time in weeks after the work was actually performed.)
  2. The basic message that Flaherty is giving is that:
    a. Corporate Counsel simply have lost trust in the firms they hire (this is the biggie!!)
    b. Poor skills equal higher costs billed to the clients
    c. Firms that bill by the hour have no incentive to improve these skills
    d. Clients will need to be the drivers to improve the skills required of their outside counsel
    e. Clients will either need to negotiate alternative fee arrangements with outside counsel, or
    f. Clients will need to assess skills and decrease fees for those firms that fail these skill tests
    g. Clients will need to monitor firms more closely, and even require firms to disclose processes used (such as up-to-the-day time entry exposure on all of the client’s work) and force changes that are deemed, by the client, to be inefficient.
  3. There are ‘opportunities’ for firms as well:
    a. Firms that work on tech skills and pass the audit can use that PR to use as an advantage over other firms
    b. Firms willing to take the temperature of their clients on what technology skills they want their outside counsel to have can use this a leverage within the firm to improve the skills that are important to the client
    c. Firms that have internal discussion can motivate the law firm leadership (both on the Attorney side and on the Administrative side) to evaluate basic skills needed on products that attorneys use on behalf of the client. It could start by asking simple questions like:
    i. Can an attorney print from Word to PDF?
    ii. Can an attorney resort information in an Excel spreadsheet?

    iii. Can an attorney update a basic form using the automation resources found in MS Word?
    iv. Are there customized resources we have within the firm that already improve the time it takes attorneys to do basic tasks (and are we telling our clients about these resources?)
    v. Is our work flow set up to take advantage of the professional staff we have to either push these tasks to the appropriate level, or leverage the skills of the staff to train the attorneys on simple tasks that can save enormous amounts of time?

All in all, what Flaherty is doing is an attempt to dictate the minimum skill level that his outside counsel has and decrease the costs to his company by requiring those improved skills, or punishing firms when they lack those skills (usually through a flat across the board fee discount.)

It should be interesting to see how much more traction Flaherty gets, and how soon it will be before a third-party snatches him up and he becomes a consultant for other companies to improve tech skills for their outside counsel.

A law blog addressing the foci of 3 intrepid law geeks, specializing in their respective fields of knowledge management, internet marketing and library sciences, melding together to form the Dynamic Trio.
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