2009 InnovAction Award winners

After serving two stints on the judging panel for the College of Law Practice Management’s InnovAction Awards, I spent this past year as Chair of the Awards. One of the great parts of that job is that I get to contact the winners, which I had the pleasure of doing last week. Now that the College has announced the winners publicly, I can do the same. Here’s the announcement post from the College’s blog — my sincere thanks to the judging panel (Merrilyn Astin Tarlton (Chair), Maggie Callicrate, Thomas S. Clay, Greg Siskind, and Tony Williams) and to everyone who submitted a nomination for this year’s Awards!


Israeli legal organization New Family is the 2009 recipient of the coveted InnovAction Awards from the College of Law Practice Management, while New York-based legal services provider Practical Law Company, Inc. received the first-ever InnovAction Honorable Mention Award.

For the fifth year, the InnovAction Awards have recognized outstanding innovation in the delivery of legal services, demonstrating to the legal community what can happen when passionate professionals, with big ideas and strong convictions, resolve to create effective change.

Meet our 2009 InnovAction winner!

New Family Organization
Family, Justice and Law initiative

Irit Rosenblum broke fresh ground defending a universal right to family as intrinsic to the practice of law. Rosenblum pioneered a new sphere of legal rights surrounding the family based on the conviction that the rights to marry, divorce, have children, bequeath and inherit assets, and conduct family life are human rights and must be attainable to all regardless of faith, nationality, sexual orientation or status. She founded New Family to fill a critical gap in the practice of law in Israel: to attain the right of every individual to establish a family and to exercise equal rights within it. For the two million people in Israel who are subject to discrimination due to family status, New Family’s achievements have been invaluable.

In addition, for the first time, the InnovAction Awards offered Honorable Mentions to entries that have taken an existing innovation in the practice of law, transformed it in a unique and valuable way, and made it better than before.

Here is our very first InnovAction Honorable Mention:

Practical Law Company, Inc.
Creating efficiency for business lawyers

Practical Law Company (PLC) is changing the way business lawyers work. It employ attorneys with significant experience practicing with the world’s leading law firms and legal departments (e.g. Davis Polk, Skadden, Pfizer, Sullivan & Cromwell) to provide practical, up-to-date resources that help business lawyers practice more efficiently and provide greater value to clients. PLC provides the practical, generic level of information needed by all business lawyers that allows them to get up to speed quickly, stop reinventing the wheel and focus on client and firm specific work. It launched its first US services in December 2008 to wide market acceptance. PLC began in the UK in 1990.

The 2009 InnovAction Awards will be presented on Saturday, September 26, 2009 at a special session during the 2009 Futures Conference held in conjunction with the Annual Meeting of the College of Law Practice Management in Denver, CO.

Chaos in the castle

One of my favourite expressions about innovation is that few revolutions have ever started inside the castle. (I changed it from “no revolutions” after someone pointed out that Mikhail Gorbachev was a pretty clear exception.) The idea behind the expression is that the people who benefit most from the status quo are also the ones most inclined and best positioned to maintain it — as well as the ones least likely to notice when real change is fomenting.

So it’s noteworthy when you start seeing revolutionary flags inside the castle grounds. This thought was going through my head — along with a Tom Petty song (no bad thing) — when reading this item at Legal Blog Watch about the new “Legal Rebels” project now underway. According to its website:

Dozens of lawyers nationwide aren’t waiting for change. Day by day, they’re remaking their corners of the profession. These mavericks are finding new ways to practice law, represent their clients, adjudicate cases and train the next generation of lawyers. Most are leveraging the power of the Internet to help them work better, faster and different. The Legal Rebels project will profile these innovators and describe the changes they are making.

Legal Rebels even comes with its own manifesto, which unfortunately for me appears to be only for Americans. But that’s understandable, because Legal Rebels is an initiative of the ABA Journal. I actually think it’s a very cool idea and a great magazine feature (interactive and wikified, no less) — I kind of wish I’d thought of it for my own magazine, though the InnovAction Awards (which will be announced next week) have occupied me on that score.

But what’s interesting is that Legal Rebels came from the Journal, which LBW refers to as “one of the most mainstream of all legal industry publications.” And that’s not the only example of subversive conduct by leading legal periodicals: The American Lawyer, which has so much influence over the largest US law firms that they’re referred to as the AmLaw 100, publishes in its AmLaw Daily e-zine a regular column by Paul Lippe, founder of Legal OnRamp. It’s called “Welcome to the Future” and it tracks the insurgency underway in the legal services marketplace; the newest column talks about the impending collapse of the BigLaw summer student program.  (The AmLaw Daily also just brought us an article by a Cooley Godward partner with the pointed title “Change or Die.”) Not to be outdone, the National Law Journal asks whether law schools are at a tipping point.

When the pillars of American legal journalism are promoting innovation and cataclysmic change, something’s going on.  But it’s not just the legal media — legal marketplace heresy is breaking out all over the profession’s elite and sacrosanct institutions.  Evan Chesler, presiding partner at Cravath, Swaine & Moore LLP, famously called for the end of the billable hour late last year. Harvard law student Daniel Thies has written a powerful paper about “practical legal education and the new job market.” British Lords talk about being “inundated” by private equity companies looking to invest in law firms. Bar associations, elite law schools and exclusive legal organizations are sponsoring conferences and symposia on the upheaval of the present and the new world of the future.

All of this looks remarkable to those of us agitating from the outside — we’re used to hearing the radicals in the streets, not inside the castle grounds. But as Paul Lippe has pointed out elsewhere, what’s most remarkable about this revolution is that no one’s manning the battlements or guarding the portcullis. No one’s stepping up publicly to defend the status quo of hourly billing and compensation, up-or-out partnership tracks, overworked and underchallenged associates, and so on. That’s because there really isn’t any good defence for them; they’re irrational. What they have been, up until now, is incredibly profitable for law firms. But as their profitability wanes, so does any illusion that they can be justified.

Revolutions fail all the time — they run out of steam, or they’re ground down by entrenched interests, or both. I don’t see either of those things happening in the law right now, and I don’t see this revolution slowing down.

Spend wisely

One of the reasons — maybe the main reason — why lawyers are so risk-averse is that averting risk is kind of the whole point of having lawyers. People hire us for two reasons: (a) to fix a problem that’s already occurred, or (b) to arrange things so as to minimize or eliminate the risk that problems will occur. In Susskindian terms, these are the ambulance at the bottom of the cliff and the fence at the top, respectively.

The idea that we’d be better off with fewer ambulances and more fences is starting to catch on within the profession. But there’s an important question in there: how many fences do you really need? Is it possible you’re installing more fences than can be justified by the reduced risk of accidents? And as sellers of both fences and ambulances, are lawyers sufficiently objective to be the ones making that call?

Ron Friedmann got me thinking about all this with two insightful and provocative posts about reducing corporate legal spend. He argues that institutional clients “need to do a better job assessing risk and deciding what warrants legal attention,” and draws an analogy to the US health care system which, by many accounts, costs so much in part because of rampant unnecessary treatment. If clients took the time to review all their legal spending and figure out what percentage could be eliminated with an acceptably small increase in risk, they could lower their legal spend without dramatically increasing the company’s exposure.

The idea that companies are over-protecting themselves against risk and therefore overspending on lawyers is compelling. Obviously, there are legal costs that can’t be eliminated — if the government tells you to comply with a given regulation or face prosecution, you’re going to comply. But if you separated corporate legal spend into two piles — one for “we need to do this or we’ll go out of business” and “we’d better do this to make sure we’ve covered all our bases” — you might find the second pile a lot higher than you expected. And if you weighed the savings of not covering a given base against its reasonably foreseeable consequences — not the possibility, but the probability of trouble — you might decide you’re buying too much legal risk aversion.

I can see more companies doing just that — figuring out what they can live without in terms of legal coverage and proceeding to live without it. The lawyer’s argument against that, of course, is that even the smallest detail overlooked can lead to devastating liability consequences in court. But as the rise of “good enough” continues, especially in what figures to be an economically difficult period of time to come, I can see rules and regulations being interpreted in similarly “good enough” fashion — threshold standards being lowered slightly, breaches looked upon more leniently, etc. In the aggregate, it could add up to a collective consensus that not every stone needs to be unturned and not every potential risk needs to be run by the lawyers. If that came to pass, the impact on lawyers would be profound.

In his posts, Ron specifically notes he’s excluding consumer legal spending from the discussion. But if anything, I think the reverse applies to the way individuals buy legal services: I think they underestimate risks and under-purchase legal protection. How many people buy and sell a house without using a lawyer, bypassing expertise and institutional protection in order to save a few hundred bucks on a transaction worth hundreds of thousands of dollars? How many people die intestate every year, even with children and extensive assets, because they just never got around to making a will? How many litigants choose to make their own way through our labyrinthine court system?

Individuals’ failure to avail themselves of lawyers isn’t entirely, or even mainly, their own fault, of course. Too often, lawyers have either failed to adequately market the value and importance of their services, or allowed their prices to balloon past the point where many people can afford to hire a lawyer without help from family members or government programs. In my ideal world, you couldn’t get a  driver’s license until you’d filled out even a basic will, and you couldn’t get a marriage license without having to take a basic course in family breakdown, support, custody and access — both at low costs.

Unless and until that comes to pass, lawyers have an obligation — not just for business reasons but also for social ones — to let people know how important these sorts of fundamental legal instruments are and to ensure they’re accessible to the majority of potential buyers. And at the other end of the spectrum, lawyers also have a responsibility to help their institutional clients tell the difference between “need-to-haves” and “nice-to-haves,” and to place the focus of their services firmly on the former. A trusted contractor won’t replace your garage if a repair will do just as well; trusted lawyers do the same.

Over the years, legal spending patterns have become habit-forming: institutions have gotten used to buying ever more risk-avoidance services, while individuals have gotten used to buying only those services that circumstances require them to buy. It would be reasonable, in an extended period of economic malaise, to expect those habits to change. Lawyers who want to stay ahead of dangerous curves like that should spend time thinking about what their clients absolutely require, and changing what they sell — more of some things, less of others — to match.

Legal Research & Writing Pro Tele-Webinar

If you have an hour or so to spare next Thursday and would like to hear what I actually sound like, tune into my appearance on this month’s Legal Research & Writing Pro Tele-Webinar. On July 16 at 3:00 pm EDT, I’ll be sitting down with the LRWP ‘s host, the incredibly bright and engaging Lisa Solomon, for a tele-webinar titled Leveraging the Media: How to Establish Your Name and Expertise in the Mainstream and Legal Press.

Wearing my legal journalism hat, I’ll be talking with Lisa about how lawyers can interact with the media to build relationships and help promote their practices. I’ll be giving listeners the perspective of a legal periodical editor who’s received more than his share of pitches and wishes more people designed these pitches with the publication and its readers in mind. I’ll be talking about the difference between dealing with the mainstream and legal business press, and looking at the impact new media is having on legal marketing and business development.

The full description of the program and information on how to register for it are available at the Legal Research & Writing Pro website, with a copy below. If you’re going to attend and there’s a particular topic you’d like me to touch on, leave it as a comment below and I’ll do my best to get to it during the webinar.


Who says mass media is dying? As newspapers and magazines migrate onto the web, the reach and brand power of these periodicals is actually going to grow—along with their capacity to promote your practice. With reporters and editors hungrier than ever for low-cost, high-quality copy, there has never been a better time for lawyers to build relationships and leverage their expertise with both mainstream and legal media.

In this course, you’ll learn how to get noticed by, published in, and interviewed by the publications that lawyers—and clients—read:

  • initiating contact and building relationships with editors and journalists
  • establishing your credentials as the go-to person in your area of practice
  • understanding the media perspective: what they need, when they need it
  • writing for print versus web publications; writing for lawyer versus client publications
  • preparing for an interview: setting the ground rules, preparing for surprises
  • turning your media profile into a marketing advantage

Presenter Jordan Furlong is a lawyer, journalist, award-winning legal magazine editor, and award-winning legal blogger. His blog, Law21: Dispatches From a Legal Profession on the Brink, tracks the extraordinary changes underway in the legal marketplace. He is the Editor-in-Chief of National, the magazine of the Canadian Bar Association, and chairs the InnovAction Awards at the College of Law Practice Management.

This program will be presented as a “tele-webinar.” In a tele-webinar, you call in to a conference call line to receive the audio portion of the program. If you have access to your computer, you can follow along with a Power Point presentation as well. There is no need to install any software on your computer. If you will be calling in from outside the office, don’t worry: you can view or print the slides before the program, if you wish.

Join us for this tele-webinar on Thursday, July 16 at 3 p.m. Eastern (noon Pacific).

Your registration includes participation in the live teleseminar and a copy of the program recording (mp3). To register, visit our Products page and add a Silver Membership to your cart.

Time bomb

“This,” says The Economist in a recent special report, “is a slow-moving but relentless development that in time will have vast economic, social and political consequences.” Peak oil? The fiscal crisis? Climate change? None of these  — it’s the fact that the world is aging.

Specifically, people are having far fewer children and living much longer than at any time in recorded history, which means that by the year 2050, 22% of the world’s population (more than three billion people) will be over 60, twice today’s rate. We already knew that in developed countries, the birth rate has fallen to 1.6 children per woman (below the replacement level of 2.1), but some people will be shocked to learn that the birth rate in developing countries — 5.2 children per woman as recently as 1970-75 — has dropped to 2.6.  At the other end of the cycle, worldwide life expectancy will increase 8 years (from 68 to 76) by 2050, reaching an average lifespan of 83 in rich countries. What that comes down to is far fewer workers supporting far more retirees (by 2050, there will be two adults aged 20-64 for every adult 65 or over, half today’s ratio), which figures to result in dramatically lower levels of productivity than we’ve seen for many decades.

As The Economist explains at length, this is an extremely serious issue for every country, with financial consequences that dwarf the expected impact of the fiscal crisis. The legal industry isn’t in the top 100 things that governments will worry about in this regard, but if you have any interest in the profession’s long-term future — which is to say, if you expect to be in practice 20 or more years from now, or if your firm plans to be a going concern in 2050 — you should be thinking today about the potentially devastating combination of demographics and the simple passage of time.  Here are a few places to start.

1. Get ready for the end of retirement, warns The Economist: “few governments, employers or individuals have yet come to terms with where retirement is heading: the end of the whole concept. Whether we like it or not, we are going back to the pre-Bismarckian world, where work had no formal stopping point.” Unless you’ve made a boatload of money by 65 and managed it very well, you should assume you won’t be retiring then or anytime close to it. Picture older partners staying on with a firm indefinitely, starting with those whose investments were decimated in the market crash and can’t afford to retire. Active lawyers in their 70s and 80s will become commonplace, perhaps as Net-connected solos working with select clients from home on a full- or part-time basis.

2. Four generations in one firm will not be unusual. Keep in mind that the Millennial Generation has run its course; since the turn of the century, every new baby has been part of the next cohort — call it Generation Z for the moment. The first Z’ers will enter law school around 2025 and the practice of law by 2030. During the 2030s, law firms will include young Z’ers, Millennial partners, scattered 60-something Gen-X holdovers, and a surprising number of aged Boomers still cranking out work into their 70s and 80s. Generation Z won’t be a huge presence: Millennials will be by far the most numerous and powerful generation in law firms, since the slimmed-down firms of the future won’t require the vast grazing fields of associates familiar from the 20th century.

3. The massive partner incomes of today could well be considered relics of a bygone era, reminiscent of how we now think of railway barons’ fortunes. Partly, this will be because the revolution in the legal services marketplace will take billions of dollars away from law firms, as outsourced practitioners and sophisticated technology snap up formerly lucrative lower-end lawyer work.  But it’s also because there will simply be far fewer working-age adults —  industries of all kinds are going to be smaller and less lucrative than before. There won’t just be  fewer lawyers to do the work; there’ll be fewer clients to provide it.  Barring major breakthroughs in the latent legal marketplace — lawyers learning to sell preventive legal services and good legal health services to clients that competitors can’t — the volume of legal work ought to be lower, just like everything else.

4.  Unfunded pension liabilities could crush some firms well before 2050. Those employees (staff as well as lawyers) who do eventually retire are going to live longer, and their numbers will multiply as the Boomers finally slide out of working life. This will constitute a major ongoing cost center for firms, and if those liabilities aren’t funded, bankruptcy is a real possibility, as a recent ABA Journal article pointed out. The fear of massive pension obligations will motivate firms to cajole their elderly employees into staying on in some paid capacity, if for no other reason than to delay having to provide them retirement benefits. If your own firm hasn’t addressed this yet, it could be in serious trouble.

5. Say goodbye to a lot of law schools. If the coming wave of legal education reform hasn’t already knocked many law schools out of the game, they can expect to be finished off by a simultaneous drop in both the supply of law students and the demand for new law graduates. The profession will have enough trouble finding work for the older lawyers who won’t or can’t retire; there just won’t be a compelling business case for many new hires. And remuneration for new lawyers figures to drop — keep those clippings about $160,000 starting salaries for posterity — making law school a less attractive option. It’s not a stretch to anticipate that half the law schools in your country will be gone by 2050 — a legal education system that grew fat from the Boomer years onwards simply won’t be able to survive a period of scarcity like this.

These won’t be entirely dire outcomes — there are good news stories here. Many lawyers in their 60s have long felt obliged to quit the profession even though they still had contributions to make and wisdom to pass on; the bias against older workers is as prevalent in the law as anywhere else. And the legal profession today suffers from serious bloat; a little demographic-powered surgery would not be a bad thing. But the force and breadth of the upheaval will still come as a shock to us, because it’ll be incredibly different from what we’ve long assumed is normal but is in fact a product of a particular demographic period that’s now ending. As The Economist points out, the US set its retirement age at 65 at a time when the average American died at 62. Lengthy retirement is a very recent phenomenon, and its time is already ending.

So start wrapping your mind around having to work well into your 70s or even later, with associates 50 or even 60 years your junior, for much less money than today’s lawyers take for granted. Unless you’re 50 or older, this likely describes the legal profession you’ll encounter when you reach the soon-to-be-just-another-age of 65 — and even 50-something lawyers should proceed carefully. Of all the trends now acting to change the practice of law, this one might be the most significant — and it’s certainly the only one that’s flat-out guaranteed to happen.

2009 Futures Conference

As you might know, I’m a Fellow of the College of Law Practice Management and attend its annual meeting every fall (not least for the bestowing of InnovAction Awards, the winners of which will be announced soon — see the College’s blog for an ongoing roll call of this year’s nominees). The College’s annual meeting always produces discussions and debates of the highest order from among its members, who include legal industry luminaries from around the world. This year, though, the College has gone a dramatic step further, and I think you should know about what it has planned.

From September 25-26, 2009, in Denver, Colorado, the College is hosting the inaugural edition of the Futures Conference, a dynamic, interactive event in which leaders and visionaries of the legal profession lay out the future course of this industry. In presentations, workshops and small-group discussions, delegates will have the chance to hear from and exchange views with the profession’s most innovative law practice management minds and benefit from the extraordinary insights that will result. I’m expecting it to be an amazing experience, and if you have the opportunity, I’d strongly encourage you to attend.

Keynote presentations will be made by Ward Bower of Altman Weil, Bruce MacEwen of Adam Smith Esq., and Harry Trueheart, Chairman of Nixon Peabody LLP. Conference speakers include Andy Adkins of the Legal Technology Institute, Ross Fishman of Fishman Marketing, Ann Lee Gibson of Ann Lee Gibson Consulting, Mark Greene, CMO of  Nixon Peabody, David Hambourger, CIO of Seyfarth Shaw LLP, Sally Fiona King, Regional COO of Clifford Chance, Carol Phillips, Director of Administration for the West Coast Offices of Sidley Austin LLP, Dan Pinnington of LawPRO,  and John Tredennick of  Catalyst Repository Systems, among others. And that’s on top of the College members themselves in attendance, leaders in the law in their own right.

All of which is to say, it figures to be a tremendous event — even (and especially) in challenging times like this, the Futures Conference makes a great case to be on your must-attend list. I’ll be there — let me know if you will be too.

Measuring lawyer productivity

Recently, Carolyn Elefant at Legal Blog Watch summarized an interesting debate over a question that many lawyers will soon be asking themselves. Let’s say your law practice succumbs to the logical and inevitable, stops routinely billing by the hour, and institutes other system(s) of pricing and selling your work. Query: do you still need to docket your time? There are two schools of thought: continue to track your time because it allows you to determine your costs and your lawyers’ profitability and because clients might demand an accounting of the time you spent; or, stop tracking your time because it’s entirely irrelevant to your profitability and it’s none of your clients’ business anyway.

I fall into the latter category, for the reasons provided by Allison Shields in a comment on Carolyn’s post…

Why would a client care about time records or how the work gets done as long as it’s done based upon agreed-upon specifications? Clients only really care about time and time records because they perceive that’s what they’re paying for – and lawyers back that up by claiming that what they sell is time, instead of focusing on the value and the services they provide to clients. Lawyers don’t sell time and clients don’t buy time.

…and Jay Shepherd in a separate post at his blog:

Now folks at other law firms will whine that they need to know how profitable an associate’s work is, and how profitable a particular matter or client is. Without tracking and billing for time, they can’t possibly tell.

Nonsense. Take an accounting class. Profit is revenue minus expenses. The question is whether the firm is profitable, not whether an associate or a client is profitable. The relevant question for a client is whether you’re delivering enough value to the client to justify the best price they would pay. The relevant question for an associate is whether he or she does good work for your clients.

The whining continues: But if we don’t track associates’ time, how do we know if they’re working? After your accounting class, take a management class. You know by managing your associates.

But there’s another important point here, voiced by Doug Cornelius in a further Blog Watch comment:

When you go to non-hourly billing, the time sheets are focused on the internal process and business analysis. You can focus on the efficiencies and inefficiencies of your operations. You can use this data to better target your fee and find ways to get it done better, faster and more efficiently. Putting more money in the lawyer’s pocket.

Generally, I agree with this, though I actually don’t think a traditional time sheet by itself would be the best way to track productivity and efficiency, for a couple of reasons. One, lawyers are notoriously inconsistent docketers — many time sheets are filled out at the end of the day or the week through recollection and guesswork, meaning lawyers overestimate (or, with surprising frequency, underestimate) the number of hours they spent on a given matter. And two, forcing a lawyer to record her time, even if the sheets aren’t used to support invoices, reinforces the importance of “time spent” and encourages the belief that time really is what the lawyer is selling.

But Doug is correct — law firms need ways to measure the productivity of their lawyers, the efficiency of their practices, and the overall effectiveness of their working  days. Firms need lawyer performance metrics — that is, they need to (a) identify a lawyer’s activities and accomplishments that contribute the most value to the firm, (b) come up with ways to effectively measure those activities and accomplishments, and (c) create systems and encourage habits by which a lawyer can improve her performance in these respects. Larger firms would create performance metrics for individual practice groups, or regional offices, not just for individual lawyers. (And firms of all sizes should start with the definitive discussion of performance metrics in the law, John Alber’s July 2005 “Delivering Actionable Information To Front-Line Lawyers”).

Jason Anderman took a good step in this direction with a recent blog post 3 True Outcomes: Sabermetrics for Lawyers? Using Michael Lewis’s baseball best-seller Moneyball as a resource, he kicked off a discussion of legal practice metrics by echoing the concept of the only “three true outcomes” (strikeout, walk, home run) over which a pitcher has complete control. He suggested identifying and measuring the only aspects of a given legal process over which a lawyer has complete control (for example, time spent on a first client meeting, time spent to deliver a first draft to the other side, and revision turnaround time) and gathering them together under a “cycle time” statistic. While he acknowledges there’s more to the process than timeliness — a negligent lawyer who barely reviews documents would have very good cycle time stats — he thinks, and I agree, that it would be a good start.

Jason’s post drummed up a lot of interest when it was featured at Legal OnRamp. From a litigator’s perspective, Patrick J. Lamb agreed that total cycle time from engagement to resolution of a matter would be relevant, and suggested interim steps such as how quickly documents were obtained and examined, how long it took to draft written discovery, and average time of depositions (while noting that these aren’t all under a lawyer’s complete control). Fred Bartlit added measures such as preparation and examination of a two-day expert damage witness and research and drafting of a motion to dismiss. But he also observed that the ultimate metric from any litigator’s (and client’s) perspective is victory — as important as lawyers’ productivity and efficiency are, they’re secondary to the outcome. (See Ronald Baker for more on client-focused productivity metrics.)

What all this illustrates is yet another aspect of law firm business that needs to be re-examined and adjusted in light of new marketplace realities: how to measure a lawyer’s value to the firm. Pretending that billable-hour totals can pass for a productivity metric (as some firms still believe) won’t work anymore — firms are going to have to identify reliable lawyer performance metrics and, more importantly, figure out ways to help their lawyers improve the performances that those metrics reflect. Time spent on a task can be an acceptable piece of the puzzle, so long as everyone understands it’s only a piece and not all that big.

Lawyer productivity metrics will have to move away from the effort-based measures of the past (e.g., hours billed) towards metrics that focus on accomplishment, usually measured against a series of predetermined criteria. Firms that have decided to move away from lockstep compensation for associates have already committed themselves to going down this path anyway. It’s yet another perfectly ordinary aspect of running a business that lawyers have shied away from, but just as there’s a process revolution coming to the law, a productivity revolution is now also well underway.


Momentum is one of those things everyone talks about but nobody can ever precisely define or quantify. It’s that sense that things are turning around or gathering speed in a certain direction, usually for the better — with a corollary borrowed from physics that the larger the object and the greater its velocity, the more powerful the result. Skeptics dismiss it — baseball managers like to say that “momentum is tomorrow’s starting pitcher” — but I think there’s something to it, especially right now in the corporate legal marketplace. You can feel the pendulum swinging, the weight shifting — you can sense a gathering wind in the sails of change.

Exhibit A, which you’ve surely read about by now, is the decision by international mining giant Rio Tinto to send $100 million worth of legal work annually to a team of lawyers in India. This is not back-office administrative work of the type that, say, Clifford Chance has been sending overseas. This is associate-level legal work like document review and contract drafting, and you can call it “commodity” work if you like, but there’s tons of it and it keeps many large firms profitable. It represents $100 million that Rio paid its outside law firms last year but won’t pay this year or, probably, ever again. With an offshoring project of this size and scale, Rio is obliterating the “legal work” distinction that many firms have long believed insulated them from the effects of outsourcing.  And it won’t stop there, as Richard Susskind notes in a commentary for the Times:

People often assume that outsourcing and the options are applicable only to high-volume, low-value legal work. The Rio Tinto deal confirms this is wrong. There is no legal job whose complexity and value elevates it entirely beyond market forces. The reality is that significant parts of even the biggest transactions and disputes are repetitive and routine; and in-house lawyers will be delighted that these can be packaged out to less costly providers.

Rio Tinto’s move is bad news for traditional law firms in two ways. First, the outsourced Indian lawyers are doing this work for one-seventh the cost of traditional outside counsel. Think about that: firms have lately been offering their clients rate discounts of up to 10% and feeling magnanimous about the sacrifice, and here comes CPA Global doing the same work for 85% less. That’s a stunning cost savings, and it doesn’t just change law firms’ playing field, it destroys it: it reduces any proffered “rate discount” to  irrelevance. Rio Tinto has served notice to its outside counsel that the price bar for this type of work  has been reset at a radically lower level, permanently. It should go without saying that traditional law firms can’t compete for that work at that price, not as they’re currently structured.

But maybe more importantly, Rio Tinto’s move feels like a momentum shifter. Its own sheer size as a client, and the mammoth scale of the outsourcing commitment it’s making, should have enough critical mass to really get things moving within a legal marketplace that, despite recent upheavals, has yet to make real, radical alterations to its business. Rio is not the first law department to send legal work offshore, far from it — but it’s a very visible example of what Seth Godin called Guy #3 , the participant whose entry breaks the ice and gives everyone else “permission” or cover to join.

Rio is sending a message to other law departments that legal work can be exported en masse to India without GCs having to automatically fear for their jobs. And it’s sending a message to law firms that the game has changed — a message some firms have received. Just a couple of days after Rio’s move, large UK firm Pinsent Masons announced it’s sending litigation work to lawyers in South Africa, while competitor Simmons & Simmons is preparing to send its own legal work to India, Australia or South Africa. This quote from Simmons managing partner Mark Dawkins is gold: “We’re not going to defend a business model that clients don’t want to have to pay for.” It’s really as simple as that — it always has been — and the reality on the ground is now starting to reflect that.

What’s really interesting, though, is that this momentum isn’t restricted to outsourcing — look around the legal marketplace and you can start to feel real momentum shifts in numerous places.

Consider firms’ treatment of new associates: after peaking  at $160,000, starting associate salaries have been in retreat for a few months now, to no one’s surprise. What was surprising was last month’s decision by Philadelphia-based firm Drinker Biddle to chop those salaries to $105,000 but add training and apprenticeship services for these new lawyers. “In some ways, we intend for your experience in your first six months to be a bit of a throwback to how lawyers ‘grew up’ in their firms literally only a few decades ago, before the rise of the billable hour,” the firm wrote to its incoming associates. Within a month, Cincinnati firm Frost Brown Todd followed suit. (Defenders of the articling year at Canadian law firms are probably feeling pretty good right now.)

And then, just a few days ago, large international firm Howrey LLP played the Rio role and announced it was cutting associates’ pay but increasing their training. Howrey has a track record of paying attention to how its lawyers learn (and, interestingly enough, in outsourcing to India too) — its Howrey Virtual University has been providing coordinated firm-wide web-based lawyer training since 2005. Howrey managing partner Robert Ruyak’s words are also noteworthy: The old model is broken. You’re bringing on these extremely bright individuals and letting them waste their careers buried in documents where they aren’t really learning the practical skills it takes to be a lawyer. The comment board at Above The Law, which invariably trashes any law firm decision that doesn’t involve more pay and less work, reacted positively to Howrey’s move overall — nearly 70% of poll respondents said they’d take the deal if it was offered to them. My guess is that right now, many large law firms are watching Howrey closely and treating it as their advance scout — like Rio, Howrey is a substantial player whose participation can and should tip the balance toward change.

There are other examples. Look at the recent frenzy of reports of law firms pricing their work at “fixed fees” — we’ve heard about flat-fee or fixed-fee initiatives underway at traditional firms like Alston & Bird, Lightfoot Franklin & White, Kirkland & Ellis, Simmons & Simmons (there they are again) and Morrison & Foerster, to name a few. Law firms generally still don’t understand fixed fees — here are some excellent critiques of their mindset and methodology from Tim Corcoran, Patrick J. Lamb and Jay Shepherd — and “alternative fees” are by and large still that, alternative.

But now along comes respected midsize firm Saul Ewing, creating a “cost certainty commitment” that standardizes fixed-fee arrangements with clients. Again, what’s unique here isn’t so much the offering as the prominent, high-profile way in which it’s being rolled out — the key to building momentum is to be seen to build momentum. From the Legal Intelligencer article: “Altman Weil’s Pamela Woldow said Saul Ewing’s cost certainty commitment is certainly unique. She said she isn’t aware of any other firm that has created such a program and made such a public, formal commitment by putting it on its website.” All of these moves — Rio Tinto’s, Howrey’s, Saul Ewing’s — are significant largely because of the signal they’re sending, quite intentionally, to the other members of the marketplace that things have changed.

Going first, and doing so conspicuously, is incredibly important to change in the law. It’s conventional wisdom to blame lawyers’ reluctance to innovate on the fact that they hate being first movers, that they much prefer to stand back and let someone else make the initial move. And that’s true as far as it goes, maybe even more so  for in-house lawyers than for private practitioners.  But the corollary to that is that lawyers also don’t like being the last ones to join the club. Ron Friedmann explains this very well by using “a discontinuous step-shaped function” to describe lawyers’ willingness to change:

Consider adoption in the legal market of e-mail, document management, marketing, lateral moves, or mergers. For each, there seemed to be only a few firms doing it and then, quite suddenly, many or all were. The “step function” reflects lawyer decision making: the first few adopters change slowly, gingerly, and quietly. Everyone wants to follow so once you have a dozen adopters, “the coast is clear” and the rest rush in.

“Gradually and then suddenly,” as Hemingway once put it — lawyers hate being  the first to change, but equally they don’t want to be the last ones left out in the cold. Law firms constantly monitor each other and the legal marketplace to see what’s going on, who’s doing what, and whether there’s anything big happening they should be part of. They’re watching for the “prominent first movers” Rees Morrison talked about in the Rio Tinto context. Once they feel that enough people have jumped into the water and declared it safe — once the reputational and financial risks of change have been taken and minimized by others — then they’re ready to leap, and if they sense a rush of movement among their competitors, they’ll even push each other out of the way to be the next ones in line.

I think that’s where we are today. In all sorts of ways, in many different aspects of the legal profession, first movers are forging ahead and dictating a new energy and direction, while the great silent vastness behind them watches closely and prepares to shift and follow. Momentum — mass times velocity — is an incredibly powerful force; we’re about to see it channeled through the legal services marketplace.

The UK crucible

North American lawyers have been fretting lately about the effects of this recession and what it means for their future. But the recession is only an amplifier or accelerator of change, not its source, and it doesn’t tell us much about the shape of things to come. If you  really want to know what the future looks like, peer across the Atlantic at the revolution now firmly and irreversibly underway in the United Kingdom. But be prepared before you look — otherwise, you might feel like the valedictorian in Say Anything: “I’ve glimpsed our future. And all I can say is … go back.”

* Last month, the Legal Services Board (the new overall regulator of all UK legal services providers) issued a discussion paper asking for lawyers’ input on what Alternative Business Structures (ABSs) should look like. An ABS allows traditional legal services to be delivered through a vehicle other than the traditional partnership of lawyers — most famously by non-lawyer financing or ownership — and constitutes the keystone change to law firm structure envisioned by the Clementi Report and subsequent Legal Services Act. Responses to the paper are due within two months; ABSs themselves are scheduled to be unleashed in just two years. This excerpt from the paper’s executive summary should make the Board’s mandate and outlook very clear:

For centuries, legislation and professional regulatory rules have tightly restricted the management, ownership and financing of organisations that are permitted to offer legal services. Although the UK’s legal services sector is internationally competitive and highly regarded, these regulatory restrictions have stopped it from realising its full potential. Regulation has limited innovation and competition in the way that legal services are delivered. It has constrained consumer choice and restrained normal market pressures on law practices to deliver their services efficiently and effectively. Regulation has gone beyond what is rightly necessary to protect citizens from the unethical practices of a tiny minority to a framework which has restricted businesses and consumers alike. At the heart of the new regulatory environment for legal services is a process for scaling back these restrictions.

* Earlier this month, the Solicitors Regulation Authority (the lawyer governance body spun off from the Law Society earlier this decade) issued its own complementary consultation paper on ABSs. Here’s a summary posted by leading UK consultant Nick Jarrett-Kerr at Linkedin’s Legal Innovation Group:

“[T]he SRA lists 11 possible models for [ABSs] and asks for comment. They include the current [Legal Disciplinary Practice] model (mainly lawyers, but with some non-lawyer managers), two models of totally externally-owned law firm, the [Multi-Disciplinary Practice], the co-op model (externally owned, providing funeral services, etc., as well as legal), PE investment model, floated company, “hub & spoke” (where a non-licensed hub such as an administration company provides back- and middle-office services to law firms who make up the spoke), the Australian Integrated Legal Holdings model of consolidated ring-fenced firms, not-for-profit firms, and in-house teams.”

* Small-firm and sole-practice lawyers are not taking these developments lightly. The introduction of the ABS model “demonstrates utter contempt for the consumer of legal services,” QualitySolicitors.Com CEO Craig Holt told the BBC. “The solicitor profession faces being all but wiped out by a government seemingly intent on robbing the public of access to good quality, local legal advice.” Mr. Holt’s organization pressed its point at a protest last week outside a UK supermarket chain that, as the current saying goes, could soon be selling legal services along with tins of beans.

* Whatever the merits of their position, lawyers opposed to these changes have legitimate reasons to be anxious. More than 16,000 legal jobs disappeared from the UK in 2008 and 10,000 more are expected to go within the next two years. The prognosis for these unemployed practitioners is ugly: Lawyers who fall out of work have little hope of finding new jobs, with vacancies for associate solicitors down by 95 per cent this year, recruiters said. “It’s the worst year ever, by some margin,” Nick Root, founding partner of Taylor Root, a leading recruitment agency, said. “Those people who are being let go will not get another job.”

And there’s more. Linklaters’ managing partner Simon Davies: “[B]ecause of the changes brought about by the developments of the past year or so, much of that work will never come back – or at least not in the foreseeable future.” Stikeman Elliott’s London managing partner Derek Linfield: “This is like nothing any of us have seen, and no one has any idea how this is going to end up.”

* North Americans might not realize that the recession is hitting the UK and Europe harder than the US and Canada. But the changes to legal practice prompted by the downturn will last well into the recovery. Here are two to get used to. First, the UK government is instituting a reserve auction system for criminal legal aid work that will essentially award legal aid contracts to the lowest bidder in the name of “efficiency,” with predictable effects on the defence bar. Meanwhile, putting a major scare into big firms, gigantic Anglo-Australian mining company Rio Tinto has announced it’s outsourcing large chunks of its legal work to a dozen lawyers with CPA Global in Delhi. Rio aims to cut $100 million from its annual legal budget in the process and free up its internal lawyers for more complex work — and it expects its outside counsel to play along. (More on this in a separate post next week.)

Not everything coming to pass in the UK will migrate to the New World — but a lot of it will, and the changes that do occur are likely to stick. Expect some form of regulatory reform in the US and Canada within the coming decade, law firms forced by regulators or clients to redefine themselves and their business models, more lawyers losing full-time jobs and fewer full-time lawyers hired to replace them, lawyers figuring less and less prominently in the provision of publicly funded legal services, and nastier competition between remaining lawyers for fewer client dollars. Love it, like it, fear it or hate it, but don’t ignore it or pretend it couldn’t happen here — there’s not much here so unique to the UK that it can’t be exported worldwide.

The UK legal profession is entering a trial by fire, a crucible from which it should emerge smaller, leaner, more entrepreneurial by necessity and more captive to the demands of the client marketplace. Take a good look at that crucible, because it’s coming soon to a law practice near you.

The best and the brightest?

It’s a small thing, but it’s been bothering me disproportionately, so I want to say a few words about one of my least favourite current phrases in the law:  “the best and the brightest.” It’s normally used in a talent recruitment or institutional marketing capacity to describe the very small group of the very best lawyers and law students, and I must have come across it a half-dozen times in the last week alone. An archetypal example was uttered in April by US Supreme Court Justice Antonin Scalia, in response to a question put to him by a law student who asked what she had to do to become “outrageously successful” without “connections and elite degrees.” Justice Scalia’s response eventually came around to her chances of clerking for his court:

“By and large, I’m going to be picking from the law schools that basically are the hardest to get into. They admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, OK?”

Justice Scalia’s criterion for identifying excellent future law clerks is depressingly common within the profession. He doesn’t actually know how to identify the best and brightest law students and new lawyers, and he’s hardly alone in that. He’s one of many people who rely upon a law school or law firm’s exclusivity, elitism, household name or other purported quality signifier as a substitute for having to actually determine “bestness and brightness” for himself. It’s a habit hardwired into tens of thousands of annual decisions about  which school a 1L should attend and which schools a law firm should recruit from, and it doesn’t do us any good.

Let’s start with the law schools. Everyone knows there are elite schools and non-elite schools, right? Even if you don’t read the noxious US News & World Report law school rankings or their equivalents in other countries, you “know” which are the “best” schools, especially if you graduated from one of them. How do you know? They have the best reputations, of course — even if you couldn’t name one aspect of the educational experience that justifies “elite” status or name three elements of substance that differentiate any one school from another. “Reputation” and “prestige,” based on countless dimly illuminated factors poked into the crannies of our minds, might hold sway, but we have no empirical evidence that an “elite” law grad is any better or brighter than a “non-elite” grad. Magazine rankings and law blog chatter serve only to confirm our existing region- and class-based prejudices about what places one school above another.

The great majority of law schools are largely indistinguishable from each other, in terms of the nature of their education, the quality of their teaching, and the (negligible) practical elements of their training. Almost every law student is smart and works hard — that’s the baseline standard of admission (along with, in most cases, tremendous pre-existing socio-economic advantages). Some schools keep class sizes intentionally small or raise tuition beyond most peoples’ reach, but while that may make them more “exclusive,” it doesn’t make them any better at teaching students the law. If there are ways of determining the “best and brightest” law students, finding out where they take their classes hasn’t proven to be one of them.

None of that keeps law firms (and Supreme Court justices) from relying on school pedigree to make interview selection and lawyer hiring decisions for them. But that raises an even more pernicious problem: let’s say you could figure out who the “best and brightest” law graduates are — how do you know which of them will turn out to be great lawyers? Law school prowess has little relevance to eventual lawyer success — the absence of correlation between LSAT scores and lawyer success has been proven. Yet those who hire new lawyers continue to rely on law school performance as a hiring factor, even though it tells us little about whether a student possesses or can quickly acquire the skills that practising lawyers need, the appetite and aptitude for client service, business management, persuasive advocacy and ethical steadfastness.

Now, here’s the funny part: the system has in fact come up with a way of determining which are the “best and brightest” law students  — they’re the ones who get hired by the “best and brightest” law firms! And how do we know which firms fall into that category? Well, they’re usually very old, very large, and very well-known (and big old famous organizations are all but guaranteed to prosper, right?) But the main reason these firms are considered the best is — wait for it — they recruit only from the best law schools! The Cravath system has been around for so long that the “top” law schools and the “top” law firms now perform a little pas-de-deux, each using the other tautologically to confirm its own higher sense of self (“our graduates go to the best firms”; “we recruit only from the best schools.”)

And that brings me to the final aspect of the “best and brightest” phenomenon that’s so problematic: this belief  that the “top” lawyers are to be found at the “top” firms. I am not saying, not a for a nanosecond, that large well-known firms don’t count among their  ranks some of the finest lawyers the profession has produced. Of course they do. But they don’t own the exclusive monopoly on that particular asset. I’ve met brilliant lawyers of extraordinary skill in midsize regional firms, solo practices, corporate law departments and public-sector environments. And I’ve met lawyers who work for famous law firms whose skills and talents are pedestrian. Succeeding in a BigLaw environment is undoubtedly a sign of the fact that you have the qualities to thrive in that kind of environment — but those qualities are not automatically equivalent to superior talent and execution. In our big-firm, AmLaw-obsessed legal culture, this obvious truth keeps getting lost.

All of which is to say, if you find yourself talking about “the best and the brightest” the legal profession has to offer, or you hear someone else saying it, ask a few questions: Best at what? Brightest according to whose standards? Based on precisely what criteria, and how many of those criteria are irrelevancies, assumptions, stereotypes or conventional wisdom? Let’s not buy into a myth that puts you down or puts other people up without sufficient cause. I think a powerful, sweeping assessment like “the best and the brightest” deserves and requires more scrutiny than that.