Optimizing your law firm for trust

Journalism, my former profession, is undergoing two related crises simultaneously. One of them, playing out in your news cycle right now, concerns the ways in which journalists should analyze and present important information to the public at a time when unhelpful terms like “fake news” and “post-truth” are in wide circulation. There’s a great deal riding on journalism’s ability to solve this crisis, especially starting nine days from now.

A trusted 5-time winner of the Buckeye Newshawk Award

The other crisis, one that will be a little more familiar to lawyers these days, is how news organizations can stay profitable or even stay afloat when the traditional platforms and business models that have previously sustained journalism are falling away, and there’s no obvious replacement ready at hand.

Jay Rosen, a professor of journalism at New York University who’s interested in both these crises, was attending a Newsgeist conference last month and tweeted this thought-provoking observation by speaker Aron Pilhofer, the former digital executive editor for The Guardian:

By “trust,” Rosen is referring to a news organization’s credibility with readers, the degree to which readers feel confident they can rely on the organization’s accuracy and good faith. Among the suggestions offered in reply to the tweet were: ranking your sources, moving more slowly before publishing, thinking from the reader’s perspective, diversifying your staff, using more citations, “showing your work,” and of course, developing useful metrics to measure your trustworthiness. If this interests you as much as it does me, you can read more on the subject here.

The subtext of Rosen’s question, however, is that most news organizations are not currently optimized for building trust with their users. They are optimized for speed (beat everyone else to a story), attention (improve ratings and ad dollars), and journalists’ personal interests (scoops, fame, ambition, access to the corridors of power). It should be evident that these interests do not overlap neatly with the interests of the news organization’s consumers, let alone with the larger public interest that journalism has always served.

So I’d like to ask a similar question in the context of the legal market: What would a law firm look like if it were optimized for trust? That is to say, if a law firm reordered its priorities and re-engineered its processes so that its activities were bent towards increasing the degree to which its clients completely and implicitly trusted the firm, what would that look like?

There’s obviously a subtext to this question, too, and it’s that most law firms are not currently optimized for trust. I personally think that’s pretty self-evident. Most law firms, in my experience, are optimized for the following three outcomes:

  1. Revenue generation
  2. Equity owner profitability
  3. Lawyer prestige

That is to say, the law firm’s business practices, operational infrastructure, and everyday culture are all geared towards maximizing the amount of money the firm brings in, the amount of profit that money generates for the firm’s equity partners, and more distantly, the personal gratification lawyers experience from being associated with the firm. Lower down the list, although far from irrelevant, you’ll also find lawyer convenience, lawyer risk aversion, and law firm stability. These are the interests that law firms are structured to advance and the outcomes they are designed to produce, and historically, they’ve done a terrific job of it.

The reason I can say these are the interests and outcomes for which law firms are optimized is simple: these are the only things that law firms measure and track. Law firms care deeply about the number of billable hours their lawyers generate, the profitability levels of their partners (relative to other firms and to last year’s results), and the positions their lawyers and the firms themselves achieve in various industry rankings and league tables. These are almost the only performance targets for which firms develop and track metrics, and for which consequences will ensue for failure to meet them.

Some metrics are simpler than others.

Law firms do not tend to measure client satisfaction. Many do not, as a general rule, even measure the degree to which they have achieved the goals their clients hired them to achieve. Lawyers will say that these are the firm’s true goals, and they will be sincere. But it’s hard for me to believe that something is an organization’s goal when the organization doesn’t measure it, and when the organization’s culture and incentives optimize it to generate other outcomes.

You’ll notice, by the way, that most of the foregoing goals and priorities are not even directed to the enterprise itself, but to its lawyers. As I explore in more detail in my forthcoming book, Law Is A Buyer’s Market (available here later next month), this is part of the long-standing battle between a law firm and its individual lawyers for command of the firm, a battle whose tide is in the process of turning against the lawyers.

That’s the subtext; what about the text? What would a law firm look like if, instead of optimizing to advance its lawyers’ financial position and self-esteem, the firm arranged itself so as to maximize the amount of trust that its clients were willing to invest? Here are suggestions for some steps such a firm would take:

  1. Transparently track its outcomes. A law firm would create spreadsheets for every single task for which clients have retained the firm, listing what the client has asked for, what the firm promised to do, what the firm delivered, and the client’s assessment of its satisfaction with the result in terms of outcome, budget, timeline, and responsiveness. These spreadsheets would be posted in a secure online location accessible by the client 24/7. Nothing matters more to the client than the result of the retainer; a trust-optimizing firm would give the client full access and ability to assess those results.
  2. Reliably price its services. Negotiating a predictable price or price range for a law firm’s services requires extensive conversations about the client’s goals, the importance of the task to those goals, and the value of the outcome, all of which both require and enhance trust. Moreover, a firm that guarantees a price risks a shortfall — but the willingness to take that risk will impress clients and show them that the firm is committed to the relationship. Defaulting to the billable hour achieves the opposite of these outcomes.
  3. Continuously improve its client experience. How a law firm interacts with its clients is almost as important to them as the quality and effectiveness of the outcome the firm achieves. A firm that paid close attention to its “user experience,” measuring its effectiveness and striving to achieve a better experience every time out, would redirect resources to monitor its performance in this area client by client. And every time out, the client would receive direct evidence that the firm can be trusted to put the client’s interests ahead of its own. That is not a universal sentiment among law firm clients at this time.
  4. Openly demonstrate its quality control. Clients rely on a law firm for a lot of things, but above all, they trust that the firm is really good at what it does. Top rankings in industry surveys can help build client confidence in this regard. But what would really move the yardsticks would be a transparent quality control system that showed clients how the firm vets its personnel, trains them to the highest skill levels, develops and implements processes to reduce errors and amplify effectiveness, and double-checks all work product and lawyer recommendations. You would deeply trust a law firm that took those steps. So would your clients.

The fact is, you can optimize your law firm for any number of different outcomes and priorities. But simply because the traditional law firm has long optimized itself for its lawyers’ financial well-being doesn’t mean that’s the only way to go about it. What would your firm start doing if it decided, tomorrow, to optimize itself to maximize the trust its clients place in it? What would your firm stop doing tomorrow to achieve the same end? The beginning of a new year would be an excellent time to reach out to your clients and invite them to join you in answering those questions.



4 Comments

  1. Adam Beschloss

    It is interesting (ironic?) that very early in my professional career (non-lawyer) I was introduced to the phrase “enlightened self-interest” by an attorney client: The “enlightened” refers of course to putting your clients’ interests first, and by doing so, you ultimately serve your own interests best. Increase in revenue (per partner or otherwise) is not a goal, rather it is a measure that you have done a whole host of other things well.

  2. Gary Luftspring

    Jordan you qualify your suggestion with in your experience and therefore I can’t directly challenge your premise. However I must say that the premise that most firms optimize the 3 cited things is in my view and experience not the case. There are a myriad of factors and matters that many firms do not the least of which is to provide interesting work for its lawyers, provide a level of camaraderie and mentorship, help develop skills etc. In my experience these aren’t talked about that much but in good places just happen. I think with respect you are stereotyping to make a point and the point needs to be made but I challenge you that it is the norm

  3. Jordan Furlong

    Gary, I accept your challenge! I agree wholeheartedly that law firms undertake a great many activities, and deliver a great deal of value, beyond the three factors I enumerated in the post. They do provide interesting work, camaraderie, and skill development for lawyers, among many other positive outcomes. But my argument is that these activities, while useful, are not the activities for which most firms optimize themselves — they’re not what these firms build systems and bend efforts towards maximizing.

    There are two ways of looking at this. The first is to identify the financial and cultural incentives that a law firm creates and enforces, because these incentives are the clearest signals of the firm’s real priorities. The strongest financial incentives in most (not all, but the great majority of) firms are directed towards bringing in client business and billing out client work; bonuses are awarded for exceeding billing targets, not for mentoring juniors. The cultural incentives lean in the same direction: promotion opportunities and leadership positions are easier to attain for revenue heavyweights, “underperformance” is used to weed out lawyers who bring in less money than others, etc. What does a law firm encourage, measure, track, and demand improvement on the next year? The answer to that question is what the firm is optimized to achieve. I know very few firms that measure, track, and demand annual improvement on client satisfaction survey results.

    The other way to look at it is through an exercise in bracketology. Make a list of all the things a law firm does and all the priorities a law firm values. Randomly assign them all into brackets, like a college basketball playoff matrix. Then go through each “matchup” and ask: “Which of these things is more strongly promoted by the firm’s leadership and more systematically driven by the firm’s structure and culture?” As between “providing interesting work” and “supplying good legal training,” maybe that’s a tough call. As between either of them and “growing partner profits annually,” it’s no contest. I’m pretty sure I could set up the Final Four matchup in most law firms right now.

    What’s more, even the three alternative examples you provided are all lawyer-directed, not client-directed. I maintain that there are very few law firms that could point to systematic, financial and cultural incentives, metrics, and enforcement mechanisms that are specifically geared towards continually improving client outcomes, experiences, and trust in the firm. And even in those firms where such systematic measures have been taken, they are pursued with significantly less vigour than the three factors I identified in my post: revenue generation, partner profit, and lawyer prestige.

    Again, there are honourable exceptions to this rule, and I’m encouraged by the fact that more of these exceptions are emerging all the time. But they’re still exceptions to the traditional law firm model that is, in my and others’ experience, still the default setting throughout most of the legal market. That default is changing, to be sure, and not a moment too soon. But if a firm really wants to reorient itself towards clients in this buyer’s market for legal services, it needs to systematically monitor and motivate great client outcomes just as ferociously as most firms now systematically monitor and motivate great lawyer outcomes.

  4. Gary Luftspring

    it may be that I have only dealt with honourable exceptions in my career however in my experience terminating the employment of a staff member, dealing with older partners, dealing with lawyers with personal problems and illnesses are dealt with more compassionately than would be the case with most business clients. In fact on a purely “business” basis firms have been faulted by consultants for their inability to deal in a “business like” manner with all such situations. As I said I do think your point needs to be made but it has to be acknowledged that in a very material way the professionals I know and have dealt with over the years are among the most caring and compassionate individuals on a personal and group basis


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