Sometimes the change you seek causes problems you didn’t foresee. That’s not all that surprising for those of us who deal with change on a consistent basis, but it does still catch some of us off-guard when it happens.
Sometimes the change you seek causes problems you didn’t foresee. That’s not all that surprising for those of us who deal with change on a consistent basis, but it does still catch some of us off-guard when it happens.
Recently, I’ve encountered something that I’ve found unsettling. Compromising seems to be something that we equate with failure. In fact, people would rather watch something fail – even things they say they value – rather than take ownership of the change needed to make it succeed. I couldn’t understand why the current environment seems to promote and all-or-nothing approach in how we deal with other people, the management of processes, or the allocation of resources. I brought this up with a group of my peers, and I got a very insightful response from one person in the group.
|image [cc] Angelskiss31|
Let me start out this post by saying that I like David Perla, President of Bloomberg Law and Bloomberg BNA’s Legal division, and consider him to be an ally for the law librarian and legal information/knowledge profession. However, I have to say that I am a little disappointed at his Above the Law article yesterday called “A Challenge for the Gatekeepers.” His article starts out with a warning to the legal industry saying that “change is coming – with or without you,” but then he spends the rest of the article singling out Law Librarians and Knowledge professionals as the gatekeepers. Although David says this isn’t about Bloomberg Law’s new roll out of a Tax Product, quite frankly, it reads like it is. I’m really disappointed that he took to Above the Law to vent.
Transitions in how a legal products perform for practice areas is something law librarians deal with practically on a daily basis. One of our primary responsibilities for our firms are to evaluate these products and present an initial evaluation report to the Practice Group Leaders or power players within the practice area. Law Librarians have a diverse legal expertise, and some are legal area experts. I know law librarians that are more savvy when it comes to understanding practice areas like Tax or IP than most Associates or Junior Partners in their firms. We understand our firms, we understand our Practice Groups, and we are tasked with the responsibility to know when it is right to push for new products, and when it isn’t time.
I can’t speak for everyone, but I push for change every day! EVERY SINGLE DAY!!
I constantly evaluate new products, establish training sessions to teach attorneys and others the value of the very expensive resources we purchase with our law firm partners’ money. I work to de-duplicate resources so we are not wasting money. I also make recommendations on keeping similar products because I understand the way the attorneys work and know that sometimes it pays to have those resources, even if on the surface it seems irrational. I make sure that we have team members that go to PG meetings to observe, listen, and engage. It’s not gatekeeping. It’s called being a leader and making sure that we are implementing the overall strategies of our individual attorneys, our Practice Groups, our Offices, and our Firm as a whole.
I’m a little confused when David wrote:
I attended a session at AALL [American Association of Law Libraries] where librarians were brainstorming how to be more relevant or get lawyers to pay more attention to them. But when the moment comes to actually introduce change at law firms, they flinch out of fear. Afraid that the attorneys they work for will find change uncomfortable, they balk—just as Monster’s executives balked at upsetting the site’s customers.
Not buying a new legal information product is not the same as “flinch[ing] out of fear.” I find that statement to be a bit misleading, and way overly broad in the assumption that law librarians can’t pull the trigger on change.
I appreciate Bloomberg BNA being a disrupter in the legal information field. But, I will say that when the disruption initially affects the Tax and the Labor & Employment groups, it makes for a very difficult sale to those groups. Not that they are change adverse, but that they are either well served by their current products and have a comfort level with them, or that they are a group with very narrow profit margins that have to have concrete evidence that new, much more expensive, products will truly make their work more efficient and not decrease that narrow margin.
It’s not about throwing up barriers for change. It’s about understanding our environments and applying our expertise, experience, knowledge, and wisdom to every single change we see, every single day. I’m not a gatekeeper that flinches at change, I’m an experienced leader for change that make sense for my organization.
|Image [cc] evan p. cordes|
One of the biggest question marks in the legal industry is around driving change in law firms. We all know change is needed, but it tends to come very slowly for law firms [insert shocked exclamation here, soaked in sarcasm]. There are a number of classic law firm change methods in use, but none tend to increase the rate of change at a level consistent with change in the real world. I suggest fear as a strong motivator and fear around money as the penultimate motivator.
And this is where profitability comes in.
We’ve covered the subject of profitability in the past about what it is, but here I want to suggest it as a tool for change. More specifically, law firms should create cultures of profitability in order to drive change.
The Profit Methodology
The first step in creating a profit culture is deciding on a profit methodology. This first step can be the one that brings the entire effort to a grinding halt. Partners can easily see that any profit method will eventually impact them, so they spend hours arguing about what it should or shouldn’t be, trying to tilt the model in their favor. This is of course understandable. However, given the proclivity for and skill in arguing lawyers possess, having all of them engage on this at once is what usually kills the plan. In actuality, a given model favoring one partner over another is so minuscule, the arguments are not worth making. But remember our guiding light about fear over money, and you will understand this behavior. So the solution is helping partners understand the low value of arguing and that the real goal is having a method that is not focused on an unachievable, absolute profitability, but instead on one that is instructive for how partners can improve profit.
I won’t go into detail here, but there are three basic profit methodologies a firm can utilize:
Each model treats partner compensation in a different way, either treating all as:
Which ones firm picks is not as important as just picking one.
Once a firm moves past adopting a methodology, they move on to step two.
In this step it needs to be somebodies job to go around the firm presenting and talking with partners about the profit methodology. Relatively simple presentations showing how the model works for various types of work should be given. And then given again and again and again.
An ideal person for this is a pricing director, since they are in a primary role on this subject and over time will be the person who puts this all into action. Absent that, someone with a finance role will work, provided they present well to partners.
Step two is never done, since partners need to hear this message a few times for it to sink in. And firms are always adding new partners to the roster.
Once we have some reasonable level of understanding, then a deeper education effort should be made. This puts the model into action with partners’ own financial information. This can be done with pricing requests or even better, with existing, ongoing matters. As we all know, clients are keen on cutting spend, so many matters have budgets or caps or some other fee deal that require partners to stay on top of fees. This is a great opportunity for them to see profit in action.
Throughout all three steps in this process, firm leadership should be supporting and sharing the message in firm-wide situations and in practice group meetings. In the third step, education can be done in individual partner evaluation situations too.
The Compensation Caution
When a firm pursues this path, they should be prepared for the compensation questions. Once partners figure this all out and understand that the way they price and manage their work drives profit, they will want to know how and if this all will impact their comp. Most firms at this point in time do not factor profitability in to individual comp. Even under this circumstance, it’s relatively easy to talk about how a rising tides raises all boats. And that story is going to be a good one to tell throughout this entire journey. The real goal of a culture of profit is not beating up people with marginal numbers. Instead the real goal is driving the whole range up.
Lawyers tend to see things in black-and-white, so they may see any numbers below an average or benchmark as failing. Throughout this culture change effort, you would do well to use the message that the goal is to increase profit across the board. You will have matters with high profit that can be made more profitable with minimal effort. Just because one is above average does not mean one has reached their potential. Of course you will find some work with “negative” profit. Be prepared for that. Firms chose to have a range of practices for many reasons beyond the profit of specific work.
As firms go down this road, it will raise new debates and discussions within the partnership. Firms will face new questions and may not have immediate answers. This is part of the value of creating a culture of profit. These are discussions you need to be having, but have been avoiding. The results will be a financially healthier firm. But a firm will need to be prepared and willing to openly discussing the new issues that come up.
Hit the Road
You may be thinking this road to profit sounds a bit bumpy, and you would be right. However, here’s the deal: You have to go down this road. Firms that avoid or delay this quest will be significantly handicapped in this changed, competitive legal market. Long-term, they will likely go under or at a minimum, be marginalized as lower profit firms.
Change is as Change Does
The real power of the profit culture comes in to play in driving change. People love to talk about all of the change that is needed in the legal industry. It’s been a while since I heard anyone say AFAs were a passing fad or that clients are going to pull back from discount requests. But even with the need for change being common knowledge, change is coming too slowly.
With a profit culture in place a firm creates a sense of urgency around change. Partners now have a clear reason to adopt change. It will no longer be a theoretical good idea, it will become an obvious, pressing need. Partners will now know what drives better margins and what they need to do to attain them. More importantly, they will know that everyone else also knows this and what their grade is within the partnership. And we know how type-A lawyers are. Having low profit numbers is like getting a C- in a law school class. No lawyer wants that grade, especially when your peers will see it.
So – putting this all together, creating a culture of profit is necessary for law firms that want to thrive or even survive. It will be critical to their ongoing financial success and it will drive the change they desperately need to stay competitive in the market. As an added benefit, it will drive cost savings for clients.
So why aren’t all firms doing this?
|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.
|Image [cc] Gail|
A recent post on how law schools need to embrace technology (#1), along with a recent overblown debate on the law firm business model (#2), combined with a conversation with a colleague on “disruptive” technology for law firms (#3), got me thinking. So this time, it was three events instead of three beers that lead to higher thinking.
Bluntly – Technology is not the answer.
Re: #1 – Does the legal profession need to embrace new technology.? Duh. But it is not where change will come from. For years I have watch law firms attempt to recreate the “email killer app” event. The thinking is that good technology will be adopted by lawyers – just like email was. “The next upgrade will remove all of the objections to this application and our lawyers will start using it.” Right. Stop doing that.
Just like the prior debate (#2 – which I won) about blaming the business model for law firm woes, I think blaming the lack of innovation on the absence of disruptive technology is bass-ackward.*
The conversation with my colleague (#3) focused on which disruptive technologies firms should pursue. This brought back memories from a former firm. There we pursued what I consider to be the most disruptive technology available for law firms: KMStandards (formerly KIIAC) from Kingsley Martin. This technology displaces lawyer effort. Done – lawyering disrupted by technology. Of course – at my old firm, no one really used it.
And now, for once, I will not use a car analogy: The thinking is that by deploying these cool new technologies, it’s like placing a bowl of chocolate in front of a group of people. They will start eating it. Isn’t that what happened with email? (Well … not really.) Following the ‘chocolate’ analogy, I propose we are really putting out a bowl of brussel sprouts. A few people may grab one when no one is looking, but the vast majority will walk by, casually notice (and smell) them, and keep on walking. Until we make eating brussel sprouts an integrated part of our business, they will sit in the bowl and the smell will grow (OK – now I regret not using a car analogy).
For lawyers to adopt change, they need to start with Change. Then they can identify the technologies that will enable and drive that change.
In an irony of sorts, at the former firm mentioned above, there was one partner who truly understood this. One day he said to me: “Toby, if we wait until we have the right technology in place, we will never make this change.”
* Ask me how long I have been waiting to use that word in a post.
|Image [cc] Joakim Jardenberg|
Since the demise of Google Reader, I’ve been a little less frequent in going through my RSS feeds using the Feed.ly platform. Over the long weekend, I tried to catch up (and am still trying), and came across an article from bwagy on the different approaches that Apple and Google take when it comes to preparing their customers for change. Apple takes a slow, methodical, periodic approach. Introducing the next #Version in the series, followed by the next #S version about every two years. There are significant changes with each upgrade, but not so much that the customer feels unfamiliar with the product. Apple seems to hold back on some changes so that they do not get too far ahead of its customers. Google, on the other hand, pushes out changes as they come available, sometimes at the expense of leaving some customers very uncomfortable with the changes. The interesting thing that has happened over the past few years is that Google has become cool, and Apple has become the stable platform for the masses.
The whole concept of how to approach change made me think about the way law firm librarians package the mass amounts of online, print, and on-demand resources we buy for our firms. We all know that most of our lawyers, paralegals, and other members of the firm that use research products are usually creatures of habit, and don’t adapt very well to new platforms. Many of us know that there are partners out there that are still upset that WordPerfect 4.2 was taken away from them. However, change is the one constant, and there are many times where we know the products we are familiar with are transitioning into new platforms, or have been purchased by one of the big legal publishers, and eventually will become either completely obsolete, or with just completely go away altogether. So how do we approach the inevitable changes? How do we prepare our customers for the changes?
Some of us push the next level of technology or research platforms out to our users much in the way that Google pushes change. New product comes out. Buy it. Push it out. Train, train, train. Then use the early adopters as champions to show that it can be done, and that everyone needs to get on board. The Google approach can also include bringing in a wide variety of unrelated products that address a broad range of needs. Changes come quickly, and sometimes a product can change multiple times over a relatively short time period.
Some of us push the Apple approach to change. We coordinate contracts so that they align and the changes come periodically. Since we know we have two or three years before we need to make changes, we hold back the changes and have them fit a set life cycle to fit those two to three year periods. The information about the changes come well in advance of the change itself. Many times the customers watch as their peers from other firms discuss all of the new bells and whistles of product version #S, while they are still stuck using the pre#S version. This can create an interesting dilemma of driving demand for change from a base that is usually change-resistant.
The common thread between the Apple and the Google version for addressing change is that they plan for the change and the customer base understands the pros and cons of how their favorite technology companies push change to them. Take a look around at your change policies. Which version do you take when it comes to pushing change to your customers. Do you even have a policy? If you don’t, it might be time to consider implementing one. The only thing worse than pushing change out to your customers, is blindsiding them with it.
|Image [cc] lowjumpingfrog|
We were talking about whether lawyers will embrace internal messaging apps or any other type of social media apps as KM or just communications tools. I commented that IT clings to some false hope that the next application they install will be a killer, one that gets used by everyone just because it’s there – just like email was. It’s my opinion that email has been the only true killer application for lawyers. It was the only one lawyers embraced simply because it was there. Since then firms hold out hope that the next application they install will be so useful and cool that their lawyers will jump on it.
This never happens.
We were talking about why that is the case, when Greg said, “I think they embraced email since it allowed them to avoid using their phones.”
Oh sweet epiphany.
We all know lawyers prefer to avoid change. But the epiphany tells us they are even more willing to avoid talking to clients (or maybe anyone else). One of my Golden Rules: Lawyers will doing anything to avoid talking to clients about fees. Likely this ‘avoidance rule’ extends well beyond that of fees and in to client conversations in general.
The lesson here is that those in search of the next Killer App for legal should build tools that focus on delivering a level of ‘Client Conversation Avoidance’ above useful features.
Commence with development.
Hello! And welcome to the inaugural post of our brand new “Dan and Jane” series here on 3 Geeks.
At a conference recently, a fan mentioned that she missed our old Elephant posts. We loved getting outside opinions and ideas, but frankly it was a lot of administrative work and we’re not really administrative people. Well… actually, we are administrative people, but only in our day jobs. We don’t want to do it in our free time too. We’d rather spend our time writing our opinions than cobbling together a whole bunch of different opinions. So, we’ve decided to split the difference with our Dan and Jane posts.
These will be the written equivalent of the Ultimate Fighting Championship in the style of Dan Aykroyd and Jane Curtain’s Saturday Night Live Point/Counter-point sketches. (Oh, c’mon children. Google it.) We will hit beneath the belt and above the intellect. We will have Dan and Jane tackle big controversial topics that you or we, probably wouldn’t write about under our own names. We have a couple of examples lined up in the next few days, but ultimately, we want you to submit topics and arguments for Dan and Jane to discuss. Don’t worry about being funny or insulting, we will take care of that. Send us your tired and poor arguments, your huddled whiny complaints yearning to be published. We’ll sufficiently tart them up and put them in Dan and Jane’s voice. And if you want it, we’ll even give you full credit.
UPDATE: You can submit topic ideas for Dan and Jane to DandJ3Geeks@gmail.com.
For those of you not wanting to fully enter the Dan and Jane fray – feel free to voice your opinion on whether Dan or Jane wins the day, or if you think they are both completely off point. Leave a comment, or just vote in the box to the right.
Episode One finds Dan and Jane arguing about whether change is possible in BigLaw…
|Image [CC] – Kili|
DAN: Listening to everyone harp about how stupid BigLaw is, or even how stupid lawyers are in general, has got me thinking lately. First – I grow tired of hearing about it. Second – we (as an industry) are not that stupid. The industry may be risk-adverse, or even at times fully risk avoiding. However, stupid is not usually on the list. Things HAVE Changed and I have proof.
DAN: This approach drives cost savings and drives some minimal project management. With a limited number of team members, it means resources have to be allocated more thoughtfully.
JANE: No more “matter parties”, where every associate in the office gets drunk and naked and bills a couple of hours to the client they pull out of a hat.
DAN: Look, you smarmy little cynic, perhaps it’s not full-on project management, but it is a greater focus on managing to budgets. And that IS a definite change from the way they used to do things.
DAN: Will you shut the heck up and let me finish! Lastly, there is much more interest in new technologies. Prior to 2007 any technology that cut the number of hours on a matter was not very popular. Now, there is a clamor for these types of tools. Admittedly there is limited adoption, but the mere fact that opinion has swung around so hard is a sign of change.
JANE: I’ll tell you what’s swinging around hard… The idea that this interest in new technologies is in any way related to a real change in the mindset of lawyers. The only thing driving new legal technology is the iPad. You just try selling a new time-saving project management tool that doesn’t have an iPad app.
DAN: Jane, you ignorant sludge monger. That is simply not true. There is real change going on and I am seeing it at all levels of the market. Just last week I heard about a small firm (20 or so lawyers) utilizing AFAs and efficiency approaches. Granted, much of this change is a refinement of the old way of doing things.
JANE: Much of this change is masking the old way of doing things.
DAN: I still think the legal market needs to embrace deeper, more structural changes. However, to say lawyers are stupid and not changing is missing the real picture.
JANE: Dan, PEOPLE are stupid and you’ve just proven it. To the extent that lawyers are people…well.
DAN: Change is occurring!
A consultant recently asked “Are you making this decision for the firm, or are you making this decision for the club?” The question has stuck with me and it is one that I’ve asked others when it comes time to make decisions that are going to cause some people to have to change their habits. It is a pretty straight forward question, but there is a lot of meaning behind it. Do you do something that benefits everyone, and causes pain to a few, or do you do something that has little to no benefit for everyone, but keeps a few select people happy?
Whenever hear something like this, I immediately think of the scene in the movie Office Space where there is a banner hanging over the staff that asks “Is This Good for the COMPANY?” The Draconian concept of stiffling innovation and individuality and relying upon following every rule and playing your part as a single cog in a great big machine. With “The Firm or The Club” question, however, I don’t think it falls into this “Is this good for the Company?” category. Instead, I think it allows for creativity and innovation and discourages the collective and blindly following the rules. In fact, I would say that this question gets raised whenever new ideas and innovation are shot down rather than when new ideas are accepted. Most times when new ideas are dismissed, it tends to fall under the idea that “we can’t do that because Partner X, who has been with the firm for 150 years, wouldn’t like it.”
So the next time you have a discussion about changing the way you are doing business, and the idea is challenged or dismissed, ask those making the decision if they are deciding upon what benefits the firm, or what benefits the club?