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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.

It’s All in the Game: Managing Partners Come to Grips with “Gamification”

Posted in Gamification, Law firm practices

Many managing partners tell us they are struggling to get their arms around new tools and techniques for driving more efficiency and cost-effectiveness into legal service delivery. Firms are seeing more and more RFPs in which clients make increasingly draconian demands for better management and control of legal work. AFAs (alternative fee arrangements) are reshaping not just pricing and profitability, but the whole way in which matters are staffed and billed.

LPM (legal project management) and LPI (legal process improvement) map out prescriptive approaches for scoping, budgeting, performing and monitoring engagements. And, in a threat to traditional law firm turf, LPOs (legal process outsourcers) and other alternative forms of service delivery threaten to take over huge amounts of commodity tasks that were historically handled by law firms.

Game On

Now another neologism has popped up to bedevil law firm leaders:  “Gamification.” In plain English, this describes approaching work as if one were playing a videogame. Gamification is not the same as game theory, which describes the study of strategic decision-making using mathematical models. Gamification, which first took hold in Silicon Valley and has since gone viral, involves translating the features that motivate players in video games into non-game settings – settings like litigation, transactional work, business development and other high-stakes legal activities.

When applied to law, gamification is not about making legal service delivery into a game, or even about having fun. It’s about knowing the score. A fundamental axiom of legal project management is that “if it can’t be measured, it can’t be managed,” and let’s be clear: today’s legal services need to be driven by effective performance metrics. New generations of legal software are popping up that, if embraced actively by law firms, can help lawyers budget, track costs, and measure productivity in unprecedented detail. The bottom line of all this measuring, of course, is the goal of providing clear, consistent, and cost-effective value to the client.  Unfortunately, however, most law firms have an abysmal record for adopting even the most basic metrics and tools.

But all is not lost, because we know one thing for certain:  in any setting, and particularly in law firms, employees do what is measured, incented, and celebrated.  So what do law firms do?  They measure billable hours, they incent billable hours, and they celebrate (that is, give bonuses for) billable hours.  So, guess what clients get?  You got it  — billable hours, lots and lots of them (and as we’ve often said, there is no direct correlation between the number of billable hours and the amount of value conferred).

Conversely, what do law firms fail to do?  They fail to measure, incent or celebrate the types of behaviors that clients value — like efficiency, creative ways of resolving matters faster, cost predictability, adhering to realistic budgets, and effective monitoring of legal activity and legal spend in order to avoid surprises.

Getting Lawyers into the Game

So here’s where gamification comes in. As Frank Strong, communications director with the Business of Law Software Solutions division of LexisNexis puts it, “gamification is a novel idea, and while the label itself may not endear itself to the nature of law, the concept is spot on: using the concept of games to drive user engagement and solve problems…If we as an industry can tap into [lawyers’] competitive nature to drive change…then we’ll be in a better place.”

We all know that lawyers are challenge junkies: they love personal success experiences where excellence is clearly established by objectively-measurable outcomes. If and when it evolves more broadly within law firms, gamification will engender a work environment where – just like videogames:

  • Every action is meticulously tracked and scored
  • Everyone aspires to progress upward through discrete levels of achievement
  • Points and awards are given
  • Work processes are structured to keep performers engaged and focused on producing the highest level of performance.

What You Want is What You Get

Theoretically, gamification incentives can be engineered either to spark greater  individual initiative or to foster better collaboration among disparate team roles and functions. In either case, the idea is to drive a powerful sense of engagement into tasks that performers find inherently tedious or repetitive.

Ray Bayley, CEO of Novus Law, a global legal services firm that boasts “measurably faster, more accurate and less expensive” ways of handling document-related discovery, contract management and corporate governance functions, is a self-professed metrics freak. The former head of North American business process outsourcing (BPO) for PricewaterhouseCoopers, Ray is high on the motivational value of gamification.

We have long used analysis of metrics to improve work processes, but the challenge in dealing with complex work that requires a high degree of focus is to keep our performers’ heads in the game. Using gamification practices, we are moving beyond ‘Total Quality Management’ to ‘Total Engagement.’

“To do this,” says Bayley, “we are now focusing more on the human aspect, repurposing process metrics so our performers can use them to assess and measure their own progress – to see how they are doing and how they stack up against their prior performance. We can do this both individually and collectively, asking ‘How are we doing both as a group and as members of the team?’”

Can Law Firms Do It?

As a firm built around metrics and the efficient, accurate handling of high volume and increasingly sophisticated tasks, Novus Law obviously represents an ideal platform for gamification.  But can law firms, accustomed to seeing all matters and all lawyers as unique, motivate project task teams to collaborate better by turning to gamification?

“Some firms really get it,” says Bayley, speaking of law firm responses to escalating client demands for cost control and efficiency. “Some have no problem partnering with us – with our enormous emphasis on efficient processes and measurable quality management. But for most firms it’s still a stretch to be metrics-driven.  They just aren’t ready to rethink how to keep their lawyers consistently engaged, and they aren’t yet ready to retool.”

Yet as Frank Strong suggests, despite all the concerns of the doubters and scoffers, the whole legal landscape would appear to be a fertile ground for gamification techniques, particularly where different types of service providers collaborate to optimize value rather than compete for the same business.

For example, the article “Who’s Eating Law Firms’ Lunch?”, describes how Deanna Johnston, General Counsel of Fireman’s Fund, required her outside firms to collaborate with Novus Law in handling various litigation tasks. This hybrid service delivery approach has saved Fireman’s Fund between 15% and 30% per case on outside counsel fees, and Ms. Johnston is, of course, very pleased.

On the Other Hand

Not everyone thinks gamification is such a hot idea. In a recent column entitled “The ‘Gamification’ of the Office Approaches“ Wall Street Journal columnist Farhad Manjoo acknowledges gamification’s momentum: “If you work the information business; if you sell, market, create, track or are involved in any other endeavor that can be quantified, gamification is coming for you.”

But, he adds, “I, for one, am dreading it.” Manjoo questions whether the translation of every work action into winning or losing “as part of a system engineered to keep you addicted” won’t result in performers who are “crushed by metrics, constantly watched over, and infantilized by your boss’s attempt to turn you into an automaton.”

Skeptics like Manjoo are worried about what they see as manipulative tactics to  turn the unmotivated aspects of performers’ jobs into a more highly motivated competition. Manjoo notes that “what we can’t tell is whether these measures are worth the psychic cost.  What worries me is the potential for stifling creativity and flexibility in the workplace, and the growing sensation of being watched, and measured, in everything we do.”

As the legal profession as a whole becomes increasingly metrics-driven, the successor generation of lawyers and other types of legal service providers all will grow up in an environment where various forms of points and scorecards are the norm, from “competency-based performance evaluation” to partnership decisions made exclusively on the basis of quantitative measures.

Even Manjoo senses that the tipping point is upon us: “I’m not asking you these questions as if your opinion matters. In fact, it does not. All evidence suggests that your work one day will operate like a videogame to be conquered, rather than a craft to be perfected.”

So is gamification a passing fad or a performance enhancement technique destined to be an integral part of the legal profession’s “New Normal?” Stay tuned for late-breaking developments, but you’d better be prepared to play along.


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