At The
Intersection

Where General Counsel and Law Firms Connect

Straight From the Horse’s Mouth – GCs Say What They Want From Outside Firms

Posted in General Counsel

 

We recently attended a private meeting held in Panama with the General Counsel of 35 global corporations. Given the differences in their businesses, geography, cultures and operational envelopes, one would surmise that they saw their practices, priorities and peeves quite differently.  Not so: it would be fair to say that there were more areas of concordance in their thinking as there were differences and disagreements.  Plain speaking was the order of the day.

Their responses were particularly telling – and particularly outspoken – when we propounded a broad meta-question: What do legal departments want from their law firms?  

We then sat back, listening intently, typing on our iPads as fast as our fingers could fly. Here, verbatim and unedited, were some of their responses:

 

Tending the Relationship

  • You would do well to understand your place in our universe.  Your role is to serve us, not vice-versa.
  • We want to work with firms that really understand our business.
  • Treat clients as partners, not as customers.
  • We would appreciate less arrogance.  A lot less arrogance.
  • Spell our company and executive names correctly.  At least pretend that you care.
  • You are not unique.  You may think you are, but from the client’s viewpoint, law firms have more things in common than things that distinguish them.
  • Above all, communicate better. No surprises, no excuses. Keep us constantly in the loop.
  • And communicate more efficiently.  Get to the point and spare us the 10-page memos.  We want the answer, not a ton of irrelevant legal analysis.
  • Make the effort to get to know our Legal Department: our goals, priorities, our constraints and pressures, our initiatives, and yes, our lawyers and our culture. Work harder at learning to work with us.
  • Want to win our trust? Skip the tickets to ball games and provide some unbilled legal advice that shows you’re really invested in us.
  • We would prefer to work with one partner only – one who really understands our business.
  • Also, please understand that our CEO is not available at your whim. Respect our time.
  • You should run our matters like they are a business and like your own money is at stake for the results and fees.
  • If you don’t know the answer, admit it. Don’t BS us, don’t hem and haw.  Just go and find out the right answer.
  • You should view our in-house attorneys as intelligent resources, not pains in the backside. We’re tired of being patronized by people we pay money to.
  • Firms should match our genuine commitment to diversity, not just pay lip service.
  • Make training available to us that is practical and really useful. We don’t need abstract theory or generic legal summaries.
  • Don’t gild your lily on our dime.  We don’t fly first-class; you shouldn’t either.

Service Delivery Issues

  • Do the right legal work for the risk at issue.  This should be so basic, but we still see a lot of overlawyering.
  • Provide strategy alternatives, and be sure to tie them to associated fees and risks. We don’t operate carte blanche any more.
  • Deadlines and budgets are hugely important to us.  Teach your lawyers to work on-time and on-budget. If you see you’ll blow through a deadline or budget, let us now immediately; don’t wait until damage is done.
  • Send over a budget before we have to ask, and give us timely updates without having to be asked 10 times.
  • Interoffice conferences should be billed, if at all, to the single lowest billing rate of the attendees.
  • Use the right attorney – in terms of level and expertise – on our matter. Don’t just throw the work to someone who needs hours or happens to be available.

About Those Fees and Fee Arrangements

  • Good idea:  offer alternative fee arrangements right off the bat, before we have to ask.
  • We really liked it when a firm proactively suggested special billing arrangements for a large document review.
  • Please re-use previous work product and then only charge us for updating or changing it.
  • Do not charge us a geographic fee penalty.

About Those Associates

  • Stop training your associates on our dime.
  • We don’t want to use first and second year associates, much less pay for them.  Their work is immature and their judgment poor.
  • Associate work should be evaluated on our satisfaction with the work product, not on how many hours they spend on it. Billable hours do not correlate with work quality.

For these 35 chief legal officers, their dominant priorities seem clear:

1) Walk a mile in our shoes.

2) Treat the law firm-client relationship as a partnership. To team with us, really get to know us and don’t demean us or take advantage of us. Collaborate better. Try harder.  Show respect – to everyone, at all times, in all situations.

3) Expend more effort – much more effort — on better communication.

4) Think and act proactively; don’t make us do all the heavy lifting.

5) Work efficiently, mind the deadlines and respect the budget.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Making Your Net Work

Posted in Business Development

When we hear business development-oriented lawyers talk about all the wondrous things evolving social media technology can do to their (or their firm’s) market visibility and reach, we’re reminded of the story of the backwoods recluse who wins a new automatic dishwasher in a contest. When a neighbor runs into him in town and asks how he likes this life-changing bit of modern technology, the rustic shakes his head and scoffs, “well, it ain’t worth a tinker’s damn.  I’ve had it for two weeks now, and so far it hasn’t even cleared the table.”

Skilled social media navigators frequently brag about all the people they are “networked in” with –  scores, hundreds or even thousands of LinkedIn connections, Twitter followers or FaceBook friends. And you have to admit that the multiplier-effect potential of today’s digital technology is pretty astonishing. Social media certainly does seem to bring the entire world within reach.

But once you get it in reach, what happens then?

For many introverted, autonomous lawyers, the answer is…absolutely nothing. We cultivate these lovely long lists of contacts, and we think and act as if having a bunch of electronic synapses means that the nerves are firing and meaningful message content is actually being communicated among all the cells.  Not true. 

Those who gauge networking success by the sheer number of contacts they can cultivate digitally need to get this through their heads: You are not “networked” unless you make your net work, which is to say, unless you work your net.

A Relationship Game, Not a Numbers Game

Particularly when you are using networking for business development, your networking efforts must extend beyond simply reaching out and touching someone (or a lot of someones). All networkers – whether zealous or reluctant – must remember this: Contact Does Not Mean Impact. 

A robo-caller may succeed in contacting me when I pick up my phone, but has no chance whatever of impacting me before I hang up. Or I may say yes to your LinkedIn request (and I usually do; what harm can saying yes do?), but that contact does not mean we have forged a functioning relationship.

It is far more important to know how to trigger an interpersonal impact, and in successful networking, impact – positive, actionable impact — comes from one activity in particular: following up on initial contact.

Okay, I See You.  Now What?

Yeah, yeah, we know you’re going to tell us that powerful, positive impact also comes from visibility. All those articles you write, blogs you post, your Super Lawyer award (six years in a row), your year as Chairman of the Bar Association. Yeah, they count.  They do help bolster your brand, your image, your rep, your cred.  But truth to tell, they generally do not translate directly into business — into new client relationships, into client trust and rapport – into mutually interdependent interactions. Those things come most and best from the impact that results from face-to-face interactions, from relationships that have a nuanced personal dimension.

FU Means…Follow Up

Word of mouth may open the door but it does not close the sale. You must follow up! Personally. Frequently. Repeatedly. Appropriately. Effectively.  This is the part where lawyers’ self-marketing efforts most often crater, because all this following up stuff is, by and large, a huge time suck that drives socially standoffish lawyers nuts.  Lawyers hate all that follow-up stuff: the calls (and repeated calls), the banal lunches lubricated with humdrum pleasantries, the articles, the speeches, participation on conference panels, rubber chicken dinners and attendance at various events. All those things that take them away from practicing law, billing hours and showcasing their substantive legal expertise.

Making Networking Work

Online technology is not going to rescue you from life in the networking trenches. Just as social media freaks fall in love with their contact numbers, mindless networkers buy into the old salesman’s numbers myth: if I get one sale for every 10 rejections, I should go out and try to get as many rejections as I can, right? Okay, laugh, but when you only have a limited amount of time for self-marketing, there’s no possible way to follow up with all the names in your LinkedIn list, Facebook page and Twitter account (and a lot of them, frankly, are junk anyway).

Therefore, when leveraging your networking efforts – your follow up activity — setting efficient priorities becomes Job One. At the outset, you have to distinguish Tier One impacts from Tier Two contacts. That is, unless/until you have a lot of time available for mining low-probability leads, take the time to identify the people with whom you can hope to cultivate high-leverage, high-traction impact. Who are the people with high impact potential?

People you have justifiable reason to believe (because you have done thorough research) may be

  • Potential Clients because their needs and priorities fall in your legal sweet spot.
  • Referral Resources: People who respect you enough to be willing to open doors for you, as well as knowing others’ needs and what it takes to address them
  • Centers of Influence: Well-connected, high-torque people who can make things happen
  • Connectors: Those social extroverts who delight in bringing like-minded people together

Keep Your Eye on the Prize

Unless you are into affiliation for affiliation’s sake, you have to keep reminding yourself that social media, like the rustic’s automatic dishwasher, is a tool that requires human intervention in order to produce results. And to keep your networking interactions from devolving into a dull, daunting and ultimately disappointing numbers game, we suggest that you remember the fundamental characteristics of Christopher Columbus’ successful voyages: 1) They had purpose. 2) They had direction. 3) They maintained momentum. 4) They rewarded perseverance. Put another way, effective networking is a human activity, not an electronic passivity.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Cutting Corners, Part IV: The Readers Speak

Posted in Legal Project Management

If one purpose of a blog is to provoke spirited debate, we surely succeeded in our recent posts on whether client-driven pressures for greater efficiency and cost control compel outside counsel to “cut corners” in legal service delivery.  Our premise that “an inevitable dog fight erupts whenever lawyers try to discuss quality and cost in the same sentence” proved to be true.  Passionate and pointed comments filled our email inbox.

So now it’s time take the microphone out into the audience and let you hear different voices first hand.

On Guard, Sir

Unsurprisingly, we heard from law firm lawyers who took umbrage at the idea that their clients might think them guilty of overlawyering and overbilling. As discussed more fully below, one large firm partner specifically rebutted the suggestion that firms’ level of service delivery is keyed primarily to profit motives: “There are real issues here greater than Firm greed or ego…”  

Over on the client side, a General Counsel expressed equal indignation at law firms’ suggestion that they, the law firms, are uniquely qualified – on the basis of both their ethical responsibilities and their legal acumen — to weigh risks against legal costs (that is, to unilaterally make scope-of-service judgments): “Today our cost-benefit analyses are very sophisticated…When we consider various forms and levels of service delivery, we are definitely not blind to the stakes and the risks.”

Who Bears the Risk of Curtailed Scope?

For one GC, the answer to the “who should assess risk?” question was clear:

We, and only we, should determine acceptable risk because we are the experts on our companies and business strategies.  Our company takes risks every day, and we understand how to evaluate when to dig deeper and when it’s time to move on.  When we don’t want more research or memos or depositions, we have made internal decisions about cost and benefit. 

Sounds good, but who bears the responsibility for the consequences of those risk decisions?

Predictably, several law firm respondents immediately focused on the worst case scenario – the risk taken proves unwise, bad things ensue, and the law firm gets blamed, or even sued.  Of law firm lawyers tweeting or emailing responses to our posts, not one thought that clients make wise decisions regarding risk.

Law firm responders suggested that they find themselves on the horns of a dilemma: clients limiting the scope of work (and therefore escalating risk) for cost-management’s sake on one hand, coupled with their willingness to sue their outside law firms if/when things blow up in everybody’s face.

The solution, several lawyers suggested is simple: if clients agree to a certain level of risk, they should not later be heard to complain if the poor risk decisions lead to problems.

For one commentator, this took the discussion into the realm of power politics as played out in the world of insurance:

No doubt this series of posts strikes a very sensitive nerve. Missing, I think, is the issue of 1) law firm E&O [ed: Errors and Omissions insurance coverage], and 2) the tripartite relationship dynamic of an insured (brand and loss run concerns), the primary insurer who usually finances Legal, and excess who plays back seat driver and questions unturned stones.

When we first received this comment, we wrote back privately:

…When a client is well-informed and is an active part of deciding how it chooses to proceed, is it not less likely to bring suit, since it was actively deciding and instructing the firm how to proceed?  Of course, such discussions should be memorialized, and the client should be well informed of the potential risks the firm can foresee.

To all the law firm lawyers who raised concerns about being sued if they didn’t look under every rock, we asked:

In light of the fear of being sued, why not just proceed with the work that you believe is necessary to assess/reduce the risk, and simply bear that as a cost of doing business if you can’t bill it to the client?

After all, we reasoned, if you really want to be protected, wouldn’t that additional research, contract review or investigation be like your own insurance protection in case things go badly later? For example, you would be able to say, “we read every one of the 500 contracts (even though you only paid for us to read 25), and we now know there are no significant risks or, in the event you do find something,  that there is an environmental nightmare in agreement 852 that could really cost the client.”  Wouldn’t you sleep better if you turned over all the rocks even if some of that rock-turning was at your own expense? And, if you did, wouldn’t the E&O and excess carriers be prevented from second guessing you?

You carry fire insurance even though you usually don’t have fires.  Isn’t this similar?  Should you do the extra work just in case it will save your bacon someday  if a matter goes sideways because your ignorant client didn’t follow your recommendation to expend more time and effort?

These intentionally provocative questions were not popular with law firms, and not one said they would choose to perform the extra work on their own dime.

The Profitability Argument

Moving away from wounded pride and risk management, and focusing instead on the dynamics-of-profitability issue, one respected consultant suggested that we “overstated the case” when we raised the possibility, as he paraphrased us, that “if a firm does less work it will derive less revenue on the matter, thus cutting into profits.”  His reasoning focused less on the scope of work performed than on the efficiency of service delivery:

These days, most firms have write-offs or write-downs on most matters. To the extent a firm’s efficiency improvements reduce write-offs/write-downs, then every dollar of write-offs or write-downs that can be avoided improves firm profits on a dollar-for-dollar basis.  Efficiency improvements that reduce write-offs/write-downs are among the most powerful profit improvements a firm can make – more powerful than cost-cutting to reduce the firm’s expense ratio, and even more effective than increasing leverage (which is hard to do these days).

True enough, but here we run into a stumbling block – or at least a huge asterisk – in the form of this respondent’s qualifier, “… to the extent there is enough new work to which saved lawyer hours can be applied.” Hold on there, we thought.

The respondent continued in this vein, assuming arguendo, unlimited manna from client heaven:

In fact, as long as new work is available [emphasis added] (admittedly not always the case), even a firm with no write-offs/write-downs will not reduce its profits by a single dollar by becoming more efficient.

That’s Not How It Looks to Us

Ah, but therein lies the rub.  We know of many firms that don’t have full plates and lots of work pouring in the door.  And plenty of the lawyers in those firms are being told – directly or indirectly – that they must fill those billable hour targets no matter what.   The message is clear: don’t bother being efficient, just fill up those timesheets.

Everything we see these days suggests that in fact, for many lawyers, enough new work isn’t available – that we have too many lawyers, too little work, and too many new technologies and new service delivery modalities that will exacerbate the work scarcity problem going forward.  There just seems to be no getting around the fact that client demands for efficiency and limits on scope have the real potential to impact law firm revenues and profitability. To us there seems little doubt that finding practical ways to re-establish a stable and sustainable law firm-client economic equilibrium is the biggest elephant in the room these days.

Reasonable Folks Agreeing

At the end of the day, what we think is the proper collaborative tone was struck in the response of the Chief Operating Officer of an 800-attorney firm with offices nationwide:

I believe the challenge for us, in developing a competitive differentiation, is…to address the GC’s continued focus on value. Needless to say, education and communication with both our clients and our colleagues will play a major role in accomplishing this goal.

Another large firm partner put even a sharper point on addressing the cost/risk/benefit issue:

Law firms cannot behave like a restaurant that does not include prices on the menu and presumes what should be served to the guest.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Skilled Scoping Diminishes Discord: Cutting Corners, Part III

Posted in Legal Project Management

 
Note: Due to the numerous and passionate responses to the first two posts on Cutting Corners, we have added Part IV to the series in which we will highlight the insightful (but profoundly divided) points of view we received from In-House Counsel and Law Firms.

 

In the first two posts in this series, we considered the typical law firm complaint that such efficiency-producing disciplines as Legal Project Management (LPM) and Legal Process Improvement (LPI) may actually encourage legal “corner-cutting.” Does this complaint reflect a valid concern about threats to quality of service, or is it mainly the cry of pain of firms now caught in a billing squeeze?

Who Defines the Bottom Line?

The hard truth is that the quality-versus-cost debate actually is over. In the aftermath of the global financial crisis and its draconian impact on legal budgets, almost all clients are re-evaluating their definitions of value and quality – with a constant eye on costs.

ln all manner of engagements clients wield the whip hand: they are imposing unprecedented direct constraints on legal spend, as well as pursuing new avenues for addressing basic legal needs more cost-effectively, including alternative fee arrangements, expanded use of technology, convergence programs, pulling more work in-house and sending more work to alternative service providers.  As just one example, the latest BTI Consulting Reportnotes that for IP work in 2015, in-house counsel can be expected to aggressively turn to settlements, alternative fee arrangements and efficient new work processes to keep costs in check. The result? A lot less IP-related revenue for law firms, which obviously does not make them happy.

Front End Scoping Beats Damage Control Any Day

However, firms will not improve their profitability by complaining about client-driven approaches to improving productivity and value.  Trying to position LPM as a scapegoat by claiming it erodes quality will neither improve service quality nor enhance client relations.  The parties will be better served by learning to work collaboratively to define the scope of work and the degree of risk that scope implies. This definition, in turn, will frame the amount of lawyering, billing, and overall legal costs the client will tolerate.

Rather than suggesting that the parties blithely ignore risk assessment in the name of cost savings  – now that would be cutting corners — what LPM suggests is that client and law firm jointly scope and prioritize potential risks both at the outset and during an engagement.

After instituting mandatory scoping discussions whenever the legal department assigns work to outside counsel, the General Counsel of a global hotel company found that outside counsel really focused on the client’s goals, chased fewer rabbits, concentrated work to advance the goals, and provided significantly more useful advice.  And, not insignificantly, there were fewer billing disputes.  The GC noted, “law firms did not take the reins with scoping even when we asked them to.  Instead, we decided to lead the way because upfront scoping is the best practice for effective use of our budgets.”

Once law firms accept that today’s rules of legal engagement no longer support carte blanche lawyering except under extraordinary circumstances, LPM provides a bridge for aligning all parties’ content, cost and quality expectations. Time spent at the outset defining in-scope and out-of-scope activity will both diminish the likelihood of scope creep and result in less surprised and angry client responses if unexpected events threaten the budget later on.  And, BTW, it reduces those pesky write-downs and write-offs that erode profitability.

Houston, We Have a Problem

The problem is that most law firm lawyers are pretty dreadful at scoping. Sophisticated scoping involves intensive front end engagement with the client. It also requires the courage to embrace change and examine alternative service delivery approaches, rather than defaulting to the-way-we-did-it-last-time pricing and planning. Yes, good scoping may require a considerable investment of front-end time and effort, but it helps avoid charges of either overlawyering or corner-cutting down the road.

This is because the parties have taken the time to discuss not only project phases, tasks, costs/budgets, and desired outcomes, but also how the client will define quality and value at every step of the engagement. The client – now fully informed – can make informed decisions about what work should be deemed in or out-of-scope.  If nasty things happen down the road, a fully-informed client is unlikely to allege malpractice.

Any risks incurred by initially limiting which tasks are undertaken and which are bypassed can be diminished by carefully discussing both the likelihood and the potential impact of alternative courses of action or various unexpected events. Indeed, we know of several instances where firms expressed concern that omitting certain activities might create malpractice exposure, and the clients agreed to indemnify them or hold them harmless for any consequence deriving from leaving certain T’s uncrossed or I’s undotted.

All in all, it makes little sense to blame Legal Project Management either for today’s dramatically altered legal landscape or for the realignment of the bargaining leverage between clients and law firms.  LPM is a response to these changes, not their cause. The best way to align issues of quality and cost is to discuss them in detail early and often, rather than have the parties sling great handfuls of mud at each other.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Perfection Is the Enemy of Good – Cutting Corners, Part II

Posted in Legal Project Management

In this second of three related posts, we consider whether clients’ increasing efforts to control outside legal spend force their outside counsel to “cut corners.” Are firms being forced to compromise service quality and integrity in order to meet client price points?  Are Legal Project Management (LPM) and Legal Process Improvement (LPI), which are supposed to foster efficiency and cost-effectiveness, actually having the paradoxical effect of pushing law firms past “doing more with less” to the point where it becomes acceptable “to do less with less?”

Maybe You’ve Got a Point There

This is not a frivolous concern. LPM is a client-oriented control mechanism intended to help both clients and law firms exercise better operational and financial control over budgets, outside legal spend, the impact of unexpected events, and other unpleasant and costly surprises that pop up as matters progress.

Ideally, all this controlling is supposed to be accomplished without compromising the quality and value of the legal services delivered. However, as we noted in our last post, there’s the rub: it is indeed a stiff challenge to reconcile cost-containment pressures with quality and value-conferred.

Lawyering:  How To and How Much?

LPM’s mission is to translate the goals of efficiency, predictably and cost-effectiveness into a consistent set of lawyer processes and behaviors. LPM suggests that the parties pay a lot of attention not only to how lawyers do their lawyering, but also to how much lawyering they do.  In other words, work processes and work scope end up being equally important in managing legal costs.

Does “Working Smarter” Equate to Losing Money?

Although LPM’s fundamental purpose is not to reduce the amount of legal work being billed on a certain project, undeniably sometimes it clearly does exactly that.  Meticulous case management does in fact often result in tight reins on project scope, less duplication of effort, and fewer do-overs.  In other words, less time billed. Sometimes, therefore, application of LPM methods may indeed result in less revenue generated, thereby threatening to put a dent in firm profitability.

This is a touchy subject for law firms. Historically, firm lawyers have parried allegations of greed and runaway billable hours by reminding clients that they are obligated to pursue perfection. To try to minimize every risk. To expend every effort on the client’s behalf. Indeed, they claim such comprehensive lawyering is their ethical responsibility, and that to do anything less exposes the client to potential risks and therefore is tantamount to malpractice. Corner-cutting clients, they argue, expose themselves to undefined or unmanaged risks when they impose cost or work scope limits on outside counsel.

Cost of Risk, Risk of Cost

But is it the law firm’s job to decide how much risk a client should accept?  As a matter of both business and legal judgment, in-house counsel quite often assume the risk of not having their outside counsel turn over every rock if the cost will make no sense.

For example, it obviously is not worth paying outside counsel to conduct $100,000 of research in order to reduce $20,000 of potential risk in a matter (although historically law firms have happily done so).  Or consider an M&A deal where the acquisition target has, say, 40,000 contracts. Perhaps, due to the need for speed or pressures to control costs (or both),  in-house counsel  instructs outside counsel to review only the first 100 contracts (or the 100 highest-dollar contracts, or a random sample of 100 contracts) to see if any “doom darts” fly out.  Yes, by limiting the review, in-house counsel does indeed assume the risk that there may be problems lurking down there in contract  22,673. But weighing the costs and benefits of paying for more lawyering versus the foreseeable risks is the client’s right, not the firm’s.

“Cutting Corners” vs. “Overlawyering”

The corollary to the “we must provide perfection at all costs” argument is that every lawyer is unique, that every matter he or she handles is unique, and that every case or transaction should be designed afresh from the ground up. And so we hear the perfectionists speak dismissively of “commoditized” legal services or derisively of clients who are willing to “cut corners on quality simply to save a few bucks.”

Clients counterpunch by complaining long and loud about firms’ “overlawyering” and their tendency to “constantly re-invent the wheel,” not to mention “training their junior lawyers on our dime.” This kind of sparring and name-calling can create plenty of acrimony, but it never resolves the whole quality-versus-cost debate.

A better argument for clients is that careful budgetary resource allocation does not require all legal work product to be judged by the same quality standards.  As one general counsel told us, “When it comes to addressing the full spectrum of our legal needs, ‘perfection is the enemy of good.’  Today our cost-benefit analyses of various matters are very sophisticated. It is not cutting corners to apply our limited dollars as cost-effectively as we can, and when we consider various forms and levels of service delivery, we are definitely not blind to the stakes and the risks.”

In our final post in this three-part series, we will explore how law firms and their clients can better collaborate to align the amount of legal service provided with the cost of those services.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Cutting Corners and the Question of Quality

Posted in Legal Project Management

As you might expect, proponents of Legal Project Management (LPM), Legal Process Improvement (LPI) and other approaches for driving greater efficiency and value into legal service delivery get a lot of blow-back.  One of the more common gripes we hear is that “LPM encourages corner-cutting.”

Two Ways to Complain

In fact, in this form the complaint puts rather too blunt a point on the issue. So let’s be more precise: the substance of the corner-cutting charge actually derives from two quite distinct allegations. One, driven by market competition, might be labeled the “my competitors are all slime” complaint. It sounds like this:

“The reason our competitors are eating our lunch on price and stealing clients is because they are cutting corners on quality. They must be doing sloppy work or leaving important stones unturned. They are low-balling us to get work, but they can’t deliver good service at those prices.”

The other complaint derives from today’s law firm-client dynamics, as impacted by legal department economics, costs and budgets. We could call this “the client made me do it” complaint:

“When our clients’ budget pressures force them to demand greater ‘efficiency and cost-effectiveness’ from us, what they’re really doing is asking us to cut corners – to compromise our standards of quality service delivery. In so doing, they expose both themselves and us to unprecedented risks.”

We’ll discuss the first of these provocations in this post, following up with the second one next time. However, there is a common theme to these posts:

An inevitable dog fight erupts whenever lawyers try to discuss quality and cost in the same sentence.

 

If I’m Good, I Must Be Efficient

“Excellent lawyers” i.e., the ones who consistently produce legal outcomes that satisfy their clients, invariably assume that their way of lawyering is the best way of lawyering, perhaps even the only way of lawyering. This calculus tends to lump legal knowledge, quality, value and efficiency into one undifferentiated bolus, one clients have swallowed with scant protest for decades.

This time-honored (i.e., fossilized) line of thinking holds that if one’s approach to service delivery produces “good results,” it must be “worth it” to the client.  In other words, historically, law firms viewed their inputs (no matter how inefficient) as leading to an acceptable outcome, without regard to whether a comparable outcome could result from an improved (and efficient) process.

As the Worm Turns

So imagine their shock when, in the wake of the global financial crisis, clients suddenly began defining value as much in terms of costs as in terms of outcomes.  Many “excellent lawyers” simply did not know what to make of the notion of efficiency. This was because they seldom had had to subject their work product to a cost-benefit analysis before. A corollary problem was that law firms often had not bothered to measure the costs of doing business, because they could always pass them through to the client.

Run, Rabbit, Run

The fact is that most lawyers tend to fall into habits or routines of getting work done without really examining whether there might a better, faster or more efficient way to deliver the same (or better!) quality work.  They assume that if a piece of work is completed more “efficiently” – meaning that it took less time to do or otherwise imposed fewer costs — some essential step must have been omitted.  Some corner must have been cut, right?

It Ain’t Necessarily So

But this simply is not so. If a lawyer, at any level, whether working on a novel challenge or a redundant task,  can find – or be taught — ways to accomplish that task more efficiently (and thus can both charge less and/or stay on budget), s/he has not necessarily done a sloppier job or put the client at greater risk. It simply does not follow that the more time one spends on a legal activity, the higher the quality of that activity. In fact, in study after study into the relationship between productivity and hours worked, the results show that more time spent working on a matter does not lead to better results.  Robert C. Pozen, former executive at Fidelity Investments, former chairman of MFS Investment Management, and current lecturer at Harvard Business School argues this premise convincingly in his book Extreme Productivity: Boost Your Results, Reduce Your Hours. 

A Model of Efficiency

Enter LPM and LPI. These related process disciplines help lawyers re-examine and re-think the way they do work. They help lawyers identify superfluous steps, unproductive activity or missed opportunities to re-use prior work product as their starting point (rather than starting every matter afresh with a blank screen or legal pad).  LPM and LPI reduce redundancies, re-invented wheels, do-overs, communications babel or law firm-client disconnects, scope creep, budget creep, disorganization, internecine team battles, delegation disasters, having high-level lawyers doing low-level work, and vice-versa. They are tools for improving quality, not excuses for eroding it.

Work quality and process efficiency are not co-extensive, although the latter certainly may enhance the former. LPM’s emphasis on thorough front-end scoping, comprehensive project planning, and detailed budgeting are invaluable tools for defining – clearly and consistently – all the necessary corners, not cutting them.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Plugging Profitability Leaks: A Simple Tip for Great Delegation

Posted in Legal Project Management

UPDATE: This article won the BigLaw Pick of the Week award!

We’ve long known that vague, incomplete or misunderstood instructions from partners to associates is a prime source of profitability leaks — revenue lost because of all the time spent on reinventing the wheel, because  of do-overs, and because of significant amounts of time written down or eventually written off.    We’ve also long known that an amazingly simple delegation improvement technique can help reduce write-downs of time by up to 18%.

The Trick Anyone Can Master

What is this marvelous magic trick?  Whenever a task is assigned and instructions are given, the assigning partner should simply ask the associates to immediately play back their understanding of what they are being asked to do: task content, task priority, starting points or resources, client budget, level of accountability, time frame, questions.

This in the moment replay doesn’t have to be a hostile cross-examination or test.  On the contrary, a friendly reality-check to assure alignment of both parties’ understanding and expectations works just fine: “Jack, just to make sure we’re on the same page, take a moment to play back to me your understanding of the assignment we just discussed.”   This quick exchange allows for any missed information or misunderstandings to be cleared up before work gets underway, and it assures that the partner’s implicit intentions are made explicit.  It’s simple, it’s constructive, it’s collaborative, and, it turns out, it’s very, very effective.

“I Would Never Do That!”

At a recent Legal Project Management training workshop, however, several partners expressed disdain for this basic suggestion for materially improving delegation.  “Just uses up a lot of extra time!” said one. “Not my job to mollycoddle associates,” said another. “The best learning comes through trial-and-error. That’s how I learned!” A surprising protest came from another partner: “This idea is just incredibly demeaning to associates. Asking them to parrot back instructions is patronizing. It treats our younger lawyers like they’re stupid, like they can’t follow simple directions.”

This is Delegation?

All the partners in the workshop agreed that their own delegation skills were just fine, thank you, an opinion we find is generally shared by partners: they think they are good communicators: clear, succinct, focused, thorough, non-threatening.

But the people they delegate to often think just the opposite. Frankly, a lot of partners’ delegation skills are abysmal. Awhile back we were given the transcription of instructions an associate, eager to assure that she “got it right,” recorded on a pocket recorder. It sounded like an FBI wiretap of the mafia: “Get me, you know, that thing we talked about, and, you know, talk to that guy, and write up something I can, you know, show to the people, so we can move ahead with the other thing, you know, the one about that new standard. And you know I need this ASAP.”  Er, what?

What Do the Associates Think?

Back at our workshop, some of the associates attending this workshop were shifting uncomfortably in their seats, so I turned to them. “How would you feel about an informal feedback loop every time you were assigned work?”

“I’d love it!” exclaimed one. “A lot of our partners think associates are all just the same – that we all have the same background information on the matter, that we all have the same levels of expertise. So their instructions come in a kind of flood of verbal shorthand without any testing for comprehension. Frankly, I often struggle to figure out just what they do want. Sometimes their instructions are kind of simplistic, and sometimes they absolutely go over my head, and I have to ask other associates what they think the partner was saying.”

“I don’t think it’s insulting at all,” said another. “Many associates don’t want to ask questions because they are afraid it will make them look dumb. If double-checking our understanding was a routine step in delegation, it would take a lot of that fear away. Rather than being demeaning, I think it is respectful of us and our desire do work right.”

An experienced senior associate put in the final word: “I work with several partners, all doing the same kind of matters.  And they all have their own unique way of doing things. But they all think everybody does it their way. I hate it when I get chewed out or my time gets written down not because my work was lousy, but because it wasn’t done the way a particular partner prefers.  Anything that would help assure that I understand how each partner wants things done will go a long way in improving both the quality and efficiency of our work.”

So true, so true.  And, why would partners – business owners of their firm — resist a simple way to reduce write-downs of associate time by 18% and thereby amp up profitability?

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

How You’ll Know When Your Firm’s Been Fired

Posted in Law firm practices

UPDATE: This article won the BigLaw Pick of the Week award!

I sat in on a meeting recently when a major corporation’s General Counsel, CFO, and COO made the unanimous decision to fire a law firm that had been serving the company for over two decades. There had been no catastrophic we-bet-the-company-and-lost kind of screw-up, no egregious failure of expertise, no utterly dropped balls — just steadily increasing client dissatisfaction.

This firm was shown the door solely on the basis of the same five-count indictment that has become increasingly common:

 

  • Too many surprises
  • Too many blown budgets
  • Overlawyering and overbilling
  • Failure to respect client internal deadlines
  • Indifferent communication and poor responsiveness to client needs.

Quietly Into the Dark Night

This firm was not told it was being fired. It was not ceremoniously stripped of its buttons and epaulets in full view of the whole regiment in the noonday sun, not told to pack up all its litigation files for immediate dispatch to another firm. It was not even initially told anything was amiss with the client relationship. It was given no chance to protest, argue, defend or negotiate.

The fired firm was just quietly going to be choked off, using a tactic the GC called “the long tail,” meaning don’t jerk ‘em around or humiliate ‘em, just gradually turn down the wick until the light goes out.

Ear to the Rail

As a group, lawyers are remarkably conflict-averse, prone to avoidance when confronted with uncomfortable situations, emotionally-charged interactions, or the need to deliver hard news. Accordingly, managing partners, relationship partners, business team heads and practice group leaders should never assume that no news is good news. They should keep a moist finger in the air and ear to the rail, ever alert to any of the five classic signals that the door is slowly closing on their firm:

1. Drought and Denial: If you’ve long handled a high volume of similar matters and the pipeline is presently full, it may take a while to realize that no one is loading the front end anymore. If the client denies any change in the relationship when you ask about the flow becoming a trickle, you may be getting let down easy. “We’re just going through a flat spell” or “we are re-distributing the cases across our firms” may just be a “humane” way of saying goodbye. Get the facts and call the question.

2. New RFPs: If you suddenly start receiving RFPs (requests for proposals) for types of work long handled solely by your firm on a no-bid, just-keep-sending-it-over basis, it’s a sign you no longer enjoy most favored nation status. It’s possible a firing decision is being cloaked in the mantle of due process and hiding behind the claim that the client is just “leveling the playing field” (satisfied clients don’t feel any particular need to level the playing field).

3. Quibbling: Any change in the tenor or content of your working relationship should trigger a concern that the status quo…isn’t. Any quibble that seems disproportionately trivial – billing disputes over minor amounts, pointless protocols, sudden challenges to how your firm manages work – may go beyond suggesting that you are in disfavor. They may signal that you are done – and the client is making a record to rationalize a decision already made.

4. Radio Silence: A sudden drop-off in client responsiveness either to your voicemails or your emails might just be a sign that the client, like you, is overloaded. But your clients are supposed to need you. If they are delaying in getting back to you or declining to talk to you altogether, it could signal that they don’t need you.

5. A Blossoming Decision Tree: If a client conversation starts with “if it were up to me, Joe…” push the panic button. One way clients can avoid the pain of delivering bad news is to claim that the “upstream” decision-making matrix has become complex and convoluted, requiring lengthy reviews that cause lengthy delays (in everything, from time-sensitive decisions to payment for outstanding invoices). The client figures that if you don’t hear anything or can’t get a decision for an abnormally long time, you’ll get the point and just go away. Or even not get the point, but just go away anyway.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

DISPATCH TO MANAGING PARTNERS: 5 Key Observations on Law’s Tectonic Shifts

Posted in Law firm practices

UPDATE: This article won the BigLaw Pick of the Week. BigLaw is a weekly email newsletter that provides helpful information for the world’s largest law firms and the corporate counsel who hire them.

For several years now, all us bloggers and pundits have been pushing the Chicken Little button and trying to get your attention. We all have been saying pretty much the same thing: Law firm practice and economics are morphing into a “New Normal,” major paradigm shifts impend, it’s change or die time, yadayadaya. Yes, we do get pushback from law firm leaders, to the effect of, “as far as my firm is concerned, you’re all peddling alarmist tripe because for us and our clients, it’s pretty much business as usual. And oh, yes, we had quite a nice 2013, thank you.” So are the predicted trends really trending?

Where do trends start – and where do they take hold? Where the stakes are highest. That means we can look to the largest law firms and the pushiest clients to see the signals of where we’re all headed. Things trickle down from there to smaller firms…and friends, they are trickling.

Based on my work with a spectrum of clients, here are five trends in large firms I can report with absolute confidence:

  1. Your firm has too many Income and Equity partners,and this is a major problem because client demand remains down and your clients have a rapidly-growing number of excellent – and cost effective – alternative sources of legal work. Partners are expensive assets if they can’t bring in the bacon, and lots of them cannot these days.
  2. Half of what your lawyers do now will soon be accomplished by technology or alternative (i.e., non-lawyer) providers for a fraction of what you’re charging clients. Everything routine will soon be delegated to technology platforms and solutions. Think back to the dawn of ATM’s, when you thought, “You can’t replace bank tellers with machines. Customers won’t stand for the lack of human touch.” Hah, you ain’t seen nothing yet. Incredibly sophisticated algorithms and expert systems are going to snap up commoditizable tasks so fast it’s going to make your head spin. Legal technology is attracting huge capital infusions that will allow even greater strides. Witness: already, GCs are using Neota Logic and Kiiac to accomplish work that used to go to law firm lawyers.
  3. Those rate increases that traditionally grew your firm’s revenues faster than any economic indicator will hit the wall. Even your most loyal clients will decline to support your firm’s swollen ranks of partners, overpaid and inefficient associates, and expensive back office functions. Corporate counsel are looking to secure truly efficient legal services from the likes of Axiom, Clearspire, Project Counsel and other tamperers of the traditional legal service delivery paradigm. Budgets for legal matters are being scrutinized with magnifying glass and fine-toothed comb, and there is decreased tolerance for increased budgets for the same work. In fact, some savvy GCs, like Cisco’s Marc Chandler, believe that budgets should decrease as a firm becomes familiar with a company’s matters. How do you like them apples?
  4. Your associates are not loyal to your firm. Really. Small wonder: as the cattle chute drastically narrows on the way to equity partnership, most associates know that their tenure is tenuous and their prospects dim. Firms are increasing the length of the walk down the aisle with no guarantee that there is any marriage in sight. Associates, hyper-specialized and increasingly undertrained, are anxious about their future, and they have become flight risks. Unless an associate is a gifted natural rainmaker/BD whiz, s/he knows it’s going to be impossible to make equity partner. Income partners or contract partners? Hell, the streets are awash with them. The era of the “service lawyer” is behind us, and the legal marketplace is saturated with lots of great talent. Moreover, law schools compound the labor glut by continuing to pump out 44,000 new law grads each year for only 21,000 jobs. In such a tight marketplace, associates are grabbing any job they can get, and they think nothing of jumping at any opportunity that looks better and safer, or that provides more career leverage.
  5. Unique Firm Cultures are a Dying Breed. Shared informal norms and values disappear quickly when competition and self-interest define the rules of engagement. “Eat what you kill” is not a recipe for collegial sharing, and today’s tightening economic squeeze and pressures on partners to deliver revenue and clients has obliterated incentives for collaboration. Your Millennials don’t buy into your firm’s culture because they see that the partners don’t walk the talk. As noted above, they can’t afford to be joiners. And your Gen Xers are not invested in firm culture because they’ve never been invested in any collective identity. As former latchkey kids, they are more autonomous and care more about business metrics than bonhomie. Your senior lawyers? They miss the good old days with their bonds of fraternity (not sorority), but they know that successor generations will soon shove them outside the igloo to freeze. Some submit passively, some kick and scream to stay atop the food chain, but none is trusting his or her future to the warm hug of their firm’s now irrelevant culture.

So, were you alarmed or comforted to be confronted by these accelerating trends? That depends on whether you and your firm are being overtaken by events or shaping events. If you are a change catalyst poised to surf the waves of change, you’re attuned to these trends and have already taken steps to maximize damage control and turn the tides of change to your firm’s advantage. If not, be prepared for the possibility that Chicken Little was right.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Game Your Way To Longer Life

Posted in Gamification, New Normal

In our last post we discussed legal “Gamification,” that is, approaching certain legal tasks as if they were a competitive game in order to maximize both individual and team engagement and produce superior legal outcomes. In this post we look at “personal gamification” — how you can create stronger personal motivation and resiliency by drawing on some basic game principles. And oh, yeah, live longer, too.

How’s Your QWL and SWB?

 It’s no secret that many lawyers feel that they are living the Sisyphus myth, constantly pushing the same rock uphill and then having it steamroll them as it rolls back down. They report that overall they’re pretty dissatisfied with their lawyerly existence and, largely because of work demands, unhappy with their lives in general. Many lawyers report that they are overworked, overstressed, chronically fatigued, and constantly behind the eight ball.  In research jargon, this means that their QWL – Quality of Work Life – is subpar and that what scientists call their SWB – Subjective Well Being (also called happiness)is uneven at best.

This posture – constantly rocked back on their heels — puts them right in the cross hairs of various experts looking for practical ways to sustain personal stamina and momentum in the face of extraordinary work-related stresses.  Among these experts is professional game designer Jane McGonigal. In a TED talk called The game that can give you 10 extra years of life,”  McGonigal suggested that highly-stressed people (which certainly includes lawyers) should invest time creating a personal game based on exercises that produce a lot of small wins over minor but nettling adversities.

She calls these little wins “power ups.” Pursuing power ups can, she says, be made into a kind of game that you can weave into your everyday life and work. More important, it can provide positive emotional momentum that, over time, can produce what shrinks might call “a corrective emotional experience.” The result? A calmer, healthier, and actually longer life. McGonigal suggests that the entire planet – which obviously is hurting and needs a lot of healing — would be far better off if it spent a total of about 21 billion hours a week playing the kind of  resiliency-building game, she calls SuperBetter.

Thank You, Mr. Nietzsche

Here’s the predicate for resiliency games like SuperBetter: Not all trauma (including the traumatic aspects of your work) produces the damaging consequences of post-traumatic stress and its worst-case cousin, post traumatic stress disorder (PTSD). Research has shown that when perceived and managed in a certain way, traumatic events may actually trigger post-traumatic growth (this may remind you of Friedrich Nietzsche’s famous pronouncement: “that which does not kill us makes us stronger”).

People experiencing post-traumatic growth report a new sense of meaning and purpose, revised personal priorities that place a stronger emphasis on what will make them happy, and increased ability to actualize their hopes and dreams. This has the admirable healing effect of immunizing them from negative stressors to some degree.

Put differently, for lawyers and other stressed-out performers, post-traumatic growth generates greater overall personal resiliency, which, in turn, is comprised of four components:

  1. Physical resiliency that allows us to resist stress better.
  2. Mental resiliency that enhances our focus, discipline, determination and will power.
  3. Emotional resiliency, that is, the ability to take a licking and keep on ticking.
  4. Social resiliency, the strength we derive from relating to others in order to adapt, improve and excel.

Generally speaking:

  • Physical resiliency is promoted by engaging in frequent physical activity.
  • Mental resiliency is developed by consistently confronting and overcoming small, manageable challenges.
  • Emotional resiliency is evoked by cultivating positive mental images focusing on curiosity and relationship.
  • Social resiliency derives from personal interactions in which we consciously give and receive both trust and reward.

According to University of Chicago professor John Cacioppo, PhD, “social resiliency is not equivalent to warm hugs, unconditional positive regard and anti-competition sentiments.”  Here, he suggests, is where the competitive aspect of games comes in: “Both science and the Olympics rest on competition as well as cooperation. Both involve intense training and criticism, and both enterprises are high in social resilience.”

Where Gaming Comes In

To rebut lawyers’ natural skepticism of any activity not expressed in terms of billable hours, gamers cite considerable social research evidencing that games are not a waste of time. The psychology of games teaches that when we play a game, we tackle tough challenges with more creativity, optimism and determination.

Corporate Counsel Magazine recently reported that former Kirtland & Packard litigator Michelle Moyer now works for New York-based LRN Corporation, which applies gaming techniques to law and ethics training. She became part of a team that created a seven-part series of video games called “Resolver.” “We were talking about how to reengage employees who have become bored with traditional modes of education in the workplace, so we decided to apply gaming techniques and design.”  Moyer reports that when employees played Resolver, “for the first time in our history we had employees repeating their education, so that they could move higher on the leaderboard. They became very competitive in a fun way.”

Proponents of personal gaming also pitch the health and happiness benefits of shared games in reinforcing social relationships and fostering group collaboration. Particularly striking are the results of recent ground-breaking clinical trials showing that engaging – key word here: engaging — in video games does a better job of alleviating anxiety and clinical depression than various types of pharmaceuticals.

Other research indicates that people become healthier and more resilient overall if they experience a “3-to-1 Positive Emotional Ratio,” meaning three positive experiences for each negative one. The trick, of course, is to devise a continuous supply of positive vibes while working in an environment that may not be inherently stimulating or gratifying.

Game designers like McGonigal argue that devoting half an hour a day to your “gaming face” (as opposed to honing your lawyer’s “game face”) really can produce significant improvement in stamina and your personal SWB quotient.

Building Your Own Private Resiliency Game

To develop the most effective kind of resiliency-building game for yourself, gamers suggest that you first actively practice small, short reframing exercises – the “power ups” we mentioned earlier — intended to bring a bit of positive juju into otherwise oppressive days and events. Can you make a game out of answering 20 pages of repetitive interrogatories? You can if you create a set of performance metrics, no matter how trivial, for the task. How fast? How efficiently? When your self-defined metrics create a win for you, you have a power up. Should you turn everything you do into a competitive game?  Why not – as long as it does not impair the quality of your legal performance or efficiency?

Next add another twist: five years of Stanford research has shown that playing a game in which you create an idealized and powerful alter ego – an avatar – can actually recast your sense of your “true self” and make you more ambitious and more courageous.

In other words, in your personal resiliency game you mentally create a powerful, self-actualized version of your self, and set it to the task of combating the challenges of your work and personal life. You can keep score, if you like, just like in video games, to reinforce your increasing sense of mastery.

Your own personal version of McGonigal’s SuperBetter game should therefore integrate five elements:

  • Inventing and adopting powerful personal identity.
  • Battling bad guys (or negative forces you depict as bad guys).
  • Recruiting supporters and allies to share your game with you.
  • Continually activating different kinds of power ups to produce a robust stream of success experiences.

The Play is the Thing

If you feel a little silly recasting your work and life as if they are pieces to be moved about in one long challenging game, remember that playing games can add to your longevity; you don’t have to tell the judge or your litigation adversary that you are recasting them as part of a resiliency-building game. They may note your inscrutable smile, more assertive demeanor and calmer personal “game face,” but they don’t need to know what’s going on. That’s between you and your avatar.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.