The legal talent matrix

Ron Friedmann at the Strategic Legal Technology blog has a terrific new post that should shift a few paradigms about how in-house counsel deploy legal talent to tackle various tasks. Ron crossed an x-axis that plotted the complexity of work with a y-axis that plotted the volume of work, and ended up with what he calls “a classic management consultant’s 2-by-2” — a graph that charts the most appropriate type of talent solution for different types of legal challenges.

The result is eye-opening and provocative. The majority of space in the chart is given over to legal providers other than in-house lawyers or outside counsel. Low-volume, low-complexity tasks are best solved by checklists; high-volume, low-complexity tasks can be addressed through automated systems. In-house and outside counsel are reserved only for high-complexity tasks, but half of that sector is occupied by temps, paraprofessionals and offshore legal talent. The dominant takeaway from the diagram is that there are a whole lot of ways to solve your legal problem, and (expensive) traditional lawyers constitute a minority of them.

Ron notes that “[e]ach person likely would draw the circles/ellipses elsewhere,” and indeed, I’d be inclined to enlarge the “temp” oval and shrink the “offshored” circle, among other adjustments. But those differences of opinion don’t detract from the fact that this is a groundbreaking way to look at the assignment of legal tasks to the appropriate level of talent. Legal departments might be already doing this on a de facto basis, but they should take steps to formalize it in this fashion; I fully expect they would be rewarded with cost and efficiency savings.

But really, it’s law firms that should seriously think about revising their own workflow processes in light of this matrix. A similar diagram reflecting current work assignments at most law firms would be an ungainly, unsightly mess of partners and associates doing work that’s beneath their level of talent and experience, but that generates revenue because it’s time-intensive. Apply this kind of workflow discipline to your average law firm, and all hell would break loose. Maybe it’s about time it did.

One more thing: Ron’s matrix as pictured necessarily suggests that the quantity of work in each quadrant is equal, although I’m sure he would agree that that’s not the case. In-house and especially law firm lawyers would be unpleasantly surprised, I think, to know just how small (albeit potentially lucrative) the high-volume, high-complexity quadrant really is. If clients start reformatting their legal tasks according to templates like this, the paucity of work that will flow to highly paid lawyers is going to come as a rude awakening to a lot of people in this profession.

Lawsuit investment and the limits of innovation

As you probably know by now, I’m a big fan of innovation in the law. But there’s good innovation and there’s bad innovation, and what’s emerging in the litigation field in the US and the UK looks to me like it belongs in the latter category.

LegalWeek reports that UK hedge funds are lining up to provide funding for lawsuits. This idea in itself isn’t breaking news: several US companies, often backed by massive hedge funds, already provide financing for plaintiffs in personal injury suits — and arguably, contingency fee arrangements in class actions accomplish the same end, providing funding in return for a piece of the expected damages award. Hedge fund investments in plaintiffs’ lawsuits has recently spread to the UK. But this newest British development contains a twist: the investors are looking to finance the defendant.

Here’s how LegalWeek‘s Editor’s Blog explains it:

The investor is likely to be a hedge fund or special situations fund looking to make high-risk investments. The investor gets a fee or premium and effectively offers to fund a substantial chunk of the defendants’ liability. The attraction for defendants is hedging and managing their exposure, despite higher upfront costs. And by introducing an outside investor that will look at a legal opinion to gauge the merits and risks of the claim, a company can effectively put a ‘market price’ on their litigation risk.

The concept of a market in plaintiffs’ lawsuits has its supporters, who contend that the benefits include creating a more level playing field between plaintiffs and defendants and bringing market-driven risk assessments to evaluate lawsuits’ chance of success. Opponents cite concerns about champerty and maintenance, though it seems to me these prohibitions have not been pursued enthusiastically by governing bodies and have lost some of their force over time (lawsuit investors argue that they’re not instigating lawsuits, which is forbidden, but financing suits already underway, which seems a distinction bordering on the specious).

There are access-to-justice arguments in favour of allowing plaintiffs to seek financial backing to bring a claim and sharing the rewards with those who do so, and reasonable people can differ on this. But when defendants start looking for investors as well, I start getting worried. Continue Reading

NALP: the future of law firms

Back from a lengthy trip, I have a lot of catch-up blogging to do. Just to get the ball rolling, here are my speaking notes from last Friday’s plenary session at the NALP Annual Education Conference in Toronto, in case they’re of interest.

I was honoured to be part of a distinguished panel of speakers, moderated by Ida Abbott and including Ron Friedmann, Rick Matasar, Tim McManus and Vernā Myers, on the future of law firms. I’ll pick up on a few of the points raised during the wide-ranging 90-minute plenary later on, but for now, here’s what I prepared in advance: Continue Reading

Late-night marketing

Sometimes, the best innovations are the simplest — just a matter of looking at a familiar situation differently.

A dominant topic of discussion in legal practice has been the late hours many lawyers are forced to put in and the damage it does to personal life, “work-life balance,” etc. So along comes Boston lawyer James Perullo, who looks at this situation and turns it on its head: he only works late. His law practice operates from 6:00 to 10:00 pm Mondays to Fridays, and employs lawyers who, like him, have other jobs during the day (he does contract IT work).

The key to the practice, of course, is that clients have day jobs too, and they don’t like having to duck out of work to attend to a personal legal situation. So “After Hours Law,” as James has branded the firm, is immediately attractive to them.

What’s interesting, though, is that working late or unusual hours is not rare at all for lawyers, as the comments at Carolyn Elefant’s blog post on this topic make clear: Susan and Stephanie both provide examples. But the simple genius of what James has done, as he suggests in his own comment to Carolyn’s post, is to make it the focal point of his firm’s branding and marketing. The fact that the lawyers work late is the hook.

See, the rich irony is that while lawyers complain about being stuck at work past 5:00, clients picture lawyers as only working until 5:00 and being unavailable otherwise. After Hours Law glimpsed this disconnect and is exploiting it (to great effect — articles in Law News Now and Small Firm Business, posts by Carolyn and now me). It’s one of the neatest examples of innovation in legal marketing I’ve seen in a while.

What’s the next evolution of after-hours practice? Well, legal work is already being offshored to India, the Philippines, Finland and Israel, to name just four countries scattered around the global time zone map. Can the first 24-hour law firm be far away?

The perils of client interviews

Via Larry Bodine comes this Legal Intelligencer article about law firm Ballard Spahr Andrews & Ingersoll, which has hired a 30-year veteran journalist to be a full-time client interviewer, asking clients about their needs, perspectives and complaints about the firm’s services. It’s a good, innovative idea, not least because it involves a tactic that too few law firms embrace: bringing in professionals from other fields. In particular, firms could benefit by adding more media expertise to their marketing and client relations departments, including print, TV, and especially online and new media. But that’s a story for another day.

What really struck me when reading this article was the question: what is the firm actually going to do with the information gathered through the interview process? The client has given up time and energy to speak frankly and at length about its relationship with the firm — what is the firm doing to respond? This is an especially important question in light of studies that show clients who fill out surveys or otherwise reply to feedback requests have heightened expectations of future interactions with the firm: having been asked for their thoughts, they expect those thoughts to have an impact or be implemented in some way.

Ballard Spahr will shortly have reams of data from their top 300 clients (aside: “top 300” clients? I don’t think so. Do you have 300 best friends?), all of which will dutifully be circulated to the management team and to the key contact lawyers for each client. That’s the easy and fun part — everyone likes to learn what other people think about them, especially when it’s good. But what actions is the firm prepared to actually take based upon that data, especially when it’s not so good? Is anybody going to prioritize and follow up on the implementation of client suggestions, in particular the difficult or challenging ones, in the midst of the constant fire-dousing and unrelenting billing pressures of your average law firm?

Any firm that makes a point of collecting client data is also going to have to appoint a senior lawyer to ensure that at least some of what clients are asking for actually gets done. This lawyer would be charged with reporting to the management team what actions have been taken to follow through on what the client talked about in the three, six and 12 months following any given feedback session. Call it a Director of Feedback Compliance, or the Advocatus Clienti I wrote about a while ago, but this enforcement position is critical if busy, independent-minded lawyers are going to take seriously the obligation to digest and implement the results of client interviews.

Law firms put a fair bit of pressure on their marketing professionals to show ROI on marketing; I’d be more interested in knowing the ROI on client communications. Interviewing clients is a great idea, but unless the suggestions they make are fulfilled with real change in how the firm and its lawyers operate, it’s not only a waste of time and money, it’s also raising client expectations that will never be met, which will only cause bigger problems down the line.

Frankly, I’d appoint the Compliance Director first and hire the interviewer later — create the structure for feedback follow-through first, then collect the feedback. Real change only happens when serious enforcement measures are attached to it.

Preparing for the storm

The “About” entry in the column over on the right there states my belief that the practice of law is heading into “uncharted territory.” If you’re skeptical about that, or if you’re unconvinced of the reality of imminent upheaval in this profession, here are two items you might want to look at.

The first is the Legal Transformation Study, a co-production of Decision Strategies International (DSI) and Legal Research Center that’s sponsored by, among others, Altman Weil, Jomati Consultants, and Dupont’s Legal Department. Subtitled Your 2020 Vision of the Future, the report makes plain the intensity of the shockwave heading towards the industry and discusses four potential scenarios that could play out in the near future. An executive summary is available for free; the report itself costs rather more. Here’s an excerpt from the preface:

The truth is, we dare not take any aspect of the future for granted. Paradigms shift, and age-old truisms will be reversed. Prudent and prepared legal leaders will be those who extend their minds beyond traditional thinking and anticipate a variety of outcomes and possibilities. …

During the next decade, operating discipline alone (e.g., “how” we work) will not be enough to meet the challenges our corporate clients face. In the more global, volatile, and uncertain future, “what” we work on with our corporate clients will increasingly define the client’s success (or failure). This is not just repositioning Legal’s relationship with our business colleagues. It is a fundamental shift in the nature of our work.

To truly engage our businesses differently — and better — we need to radically rethink our approach to risk, uncertainty and value creation. As our future unfolds, being absolutely right will be far less important than being nimble and adaptive. Studying every aspect of an issue will yield to a new, more rapid style of decision-making where the predominant belief is that even a decision that proves to be wrong is likely to provoke more useful information than could be learned by delaying decisions pending further study. …

Legal must learn to adapt to the speed of business at the speed of business, while continuing to adhere to our company’s core values and our own professional ethical obligations. Continue Reading

Cheating or collaborating?

All I can say is, I’d love to see the law school that tries to flunk a student for setting up a Facebook study group, as Ryerson University in Toronto did this week. Maybe this is a generational thing — I’m officially an X’er, though my leanings are more millennial — but I can’t see how an online discussion group does anything but facilitate learning, not circumvent it. And more to the point, how it’s any different from students gathering in an empty room on campus to do exactly the same thing. I expect Ryerson will change course within a matter of days.

What strikes me, though, is that the way in which we expect students to accomplish tasks in school is very different from how we actually accomplish tasks in our workplaces. If you’re working on a factum or a memo and you’re not sure about something you’re writing, do you head down to the library for an afternoon of thrashing through the authoritative source materials till you’ve learned what you need, “showing your work” as you go? No. You walk down the hall and ask a colleague who’s more familiar with the subject to explain it to you. It’s faster, easier, cheaper for the client, and almost certainly more effective in understanding the concept.

Teamwork is how things get done now, without exception, in the professional world. Law firms boast about “open-door policies” whereby lawyers exchange ideas with each other, and they make great efforts to pool collective knowledge into KM systems. New recruits are quizzed on their ability to work well in groups and contribute towards successful team dynamics. Corporate deals and major litigation require concerted, collective efforts to achieve goals. Online listservs like Solosez are a lifeline for sole practitioners. Corporate law departments want closer working relationships with their outside counsel. In short, no one succeeds in the legal environment by shunning collaborative efforts.

Yet law schools still devote the majority of their time to testing what an individual student can do on her own, not what she can accomplish in a group setting. Unlike MBA programs, where students work on cases in group after group, many law students can graduate without ever having contributed to a team project, learning how to integrate their expertise into a diverse set of personalities and workflow preferences. If there’s any truth to the old charge that law schools “don’t prepare students for law practice,” it’s not in failing to teach professional skills per se, but in failing to train students to learn from each other, to treat knowledge as a gift to be shared, and to give the best of themselves towards the success of the team.

Any law school that wants to earn a real competitive advantage, in terms of producing graduates ready to professionally collaborate, should think seriously about revamping its curriculum to encourage the academic equivalent of Facebook groups: live, in-person, problem-solving working groups, with rotating memberships to ensure you’re not just working with people you like. Increasingly, lawyers will succeed or fail on their teamwork skills; law schools have an obligation to reflect that.

Update: With a hat tip to the Law School Innovation blog, here’s a school that gets it: Washington and Lee University Law School in Virginia is completely overhauling its third year:

• The new third year curriculum will be entirely experiential, comprised of law practice simulations, real-client experiences, the development of professionalism, and development of law practice skills.

• All students will participate in a year-long professionalism program that will include the participation of practicing lawyers and judges and assist students in the development of professionalism in all its aspects, including legal ethics, civility in practice, civic engagement and leadership, and pro bono service.

• The core intellectual experiences in the third year will be presented entirely through a mix of practicum courses that simulate legal practice environments, legal clinics, and internships.

• The demanding intellectual content of the third year will instead be presented in realistic settings that simulate actual client experiences, requiring students to exercise professional judgment, work in teams, solve problems, counsel clients, negotiate solutions, serve as advocates and counselors—the full complement of professional activity that engages practicing lawyers

There’s much, much more, and it’s exhilarating. Read the summary of the new program for more, as well as my earlier thoughts on the third year of law school.

White-water change management

If you help make the decisions at a large law firm anywhere in the world, I assume you’ve been keeping tabs on the developing impact of the UK’s Legal Services Act. There’s been talk about the fallout from the Clementi Report for quite awhile now, especially regarding share offerings by law firms. Seminars are coming up and commentaries have been published; now, we might be about to see a practical application of all the talk.

A Legal Week story published late last week contains this striking opening paragraph: “Lyceum Capital has become the first investment house to openly target legal services, as the private equity firm moves to position itself ahead of sweeping deregulation of the U.K. profession.” Lyceum is not fooling around: the investment house has set up an advisory panel that includes, among others, Richard Susskind and Tony Williams. Any project with those two people on board is to be taken seriously. Big, creatively destructive change is coming, and fast.

This leads me to think that a lot of firms are not taking the ideal approach to change management. There’s a tendency, in any change initiative, to imagine that your organization is fixed, your environment is fixed, and all you’re doing is moving your organization from A to B — shifting the furniture, basically. This overlooks the reality that (a) every organization operates in (and is affected by) multiple external environments simultaneously, and (b) the organization itself is changing every day, whether its members know it or like it.

A better way to approach change management might be to envision your environment as a wild river, the kind you go white-water rafting on: fast, unpredictable, dangerous in parts, requiring constant course corrections. Your job is to navigate that river by guiding your craft along it as best you can — while understanding that the shape of your craft, the people handling the paddles, and your overall water-worthiness are constantly in flux, often in ways that are beyond your control.

The legal marketplace has never been a fixed room full of furniture, but for many years it was a pretty sedate stream. It’s been a rougher ride than that for quite a few years now, but I’m here to tell you: there are white, foaming rapids ahead, maybe steeper than we’ve ever seen, and a lot of boats aren’t going to make it. Those that do will be focused on riding the waves, staying alert to the dangers, keeping one eye on the far shore, and most of all, understanding one key thing: you’re not in full control. The river has more to say about your destination than you do.

Successful change management in this environment requires both a commitment to do whatever it takes to survive coupled with an appreciation of the modest influence you can exert over the end result. As we enter a time of true upheaval in the legal profession, place your highest priority on alertness, adaptability, acceptance of powerful forces, and a focused, unified effort on the goal. Give your full attention to what you can control, keep a respectful eye on what you can’t, and make sure everyone understands and accepts the difference between the two.

Moneyball, women and law

Google my name and you’ll find I’ve written a few things about baseball, mostly during my time as a co-founder of and contributor to Batter’s Box, a top-notch Canadian baseball blog. As it happens, one of my favourite baseball books (outside of Thomas Boswell’s and Bill James’s works) isn’t really, I don’t think, about the game at all. Moneyball, a Michael Lewis best-seller about the innovative team-building strategy of the Oakland A’s, is, to my mind, a business book that happens to be about baseball.

If you’ve read Moneyball, you might agree with me that its fundamental lesson is the importance of identifying undervalued assets in a marketplace and stocking up on them before the competition figures out what you’re doing. The A’s front-office combo of Billy Beane and Paul DePodesta figured out that players who reached base a lot contributed as much as or more to victories than did players with more dramatic talents (e.g., stealing bases), yet commanded much lower salaries.

For a team with one of the lowest payrolls in the game, it was a no-brainer for Oakland to pursue the high-value, low-regard personnel, even in the face of derision from richer teams who favoured highlight-reel players. And that’s just what they did. In the result, the A’s were one of the winningest teams of the late ’90s, equalling the performance of New York Yankee clubs with five times their payroll.

It wasn’t a perfect story: Beane conceded that his, um, “stuff” didn’t work in the playoffs, and some of the young players most highly touted in the book never fulfilled what the A’s expected of them. But other teams vindicated this strategy by starting to follow his approach, so Beane switched gears — he began targeting top defensive players as his next “market inefficiency” to exploit. Today, the A’s, when healthy, continue to be a perennial contender.

Looking for the law connection? Others have found it before now: the Moneylaw blog is a great example, as is a terrific blog titled Empirical Legal Studies, which challenges conventional wisdom in the law through the careful application of metrics and reason. Ever since I read Moneyball, I’ve been interested in identifying inefficiencies in the legal talent marketplace.

One of the most obvious is women lawyers, especially those in their 30s and 40s, who are driven out of many law firms by relentless billing demands and inflexible workplace cultures. Continue Reading

Professional collaboration networks

The January 2008 edition of the ABA’s Law Practice magazine contains an intriguing article by Tom Mighell about a social network for Texas lawyers. (Hat tip to Larry Bodine.) Tom describes the Texas Bar Circle, which is less than a year old but already has 2,200 members who build profiles, link to colleagues’ or friends’ pages, read State Bar news, create groups, browse a careers section, and participate in discussions. The TBC is restricted only to Texas lawyers, making it another of the gated communities on the web that I wrote about last fall. Altogether, it’s a fantastic development and, I hope, one that creates a precedent for other state bars and provincial law societies to do the same.

Services like the TBC, of course, are essentially a variation on the basic social network model made über-famous by FaceBook: a self-assembling online community of people who connect with friends and make new ones, acquire and share information, and establish an identity for themselves on the Net. You could describe an online community like this as existential — the value it provides lies in the experience of the community itself, in the gathering and intermingling of lives. A business network like the TBC or LinkedIn adds a professional angle, but at the end of the day, these sites are primarily about connecting and are a lot of fun, which is obviously a good and sorely needed thing in the law.

But I’ve been thinking recently about what the next generation of social networks will look like — networks that don’t just connect people, but also put them to work. It lies, I think, in the difference between connectivity and collaboration. Facebook is, at its heart, a simple connectivity application: an ongoing global experiment to see if everyone really is separated by six degrees, and which of them is single at the moment. But it doesn’t, and isn’t meant to, produce anything — outside of massive groups whose very size and presence is intended to publicize a particular cause, Facebook is not a collaborative space.

Collaboration is applied connectivity – we’re all together here, so now let’s accomplish something. A truly collaborative online network for professionals would allow them to both connect and construct – to accomplish tasks, build knowledge, or move a project ahead in some way. Achieving this goal requires more than just lawyers, who tend to hoard information and expertise when left to their own devices. It requires clients, too — and when you add them to the mix, new possibilities emerge. Continue Reading