I read with interest Bob Ambrogi’s recent post on the lack of change in the legal industry. Bob’s view is that while many of us talk and talk about the great changes in store for the legal profession that will move us forward, nothing seems to happen. It’s as if we are housed in a giant echo chamber.
My own view is that until the clients demand change, us outside lawyers ain’t gonna.
My own view is that until the clients demand a change, us outside lawyers ain’t gonna. For one thing many of us make too much money to change in any meaningful way on our own. For another thing, we don’t really know what clients want. And while we can suggest and offer innovation, at the end of the day the client has to accept it. I can’t tell you how many times in my career I offered to do a case on a flat fee. The response: thats really interesting. But no thanks. Finally, I can propose all sorts of innovation that would make lawyers more efficient but the reward for those who adopt the innovation: less revenue.
So when clients don’t demand change, it just doesn’t happen.
Why won’t clients demand it? I’ve written about this elephant in the room and why innovation isn’t happening on this several times and there are variety of reasons but it boils down to the fact that GC’s are lawyers to, trained and steeped in certain ways of doing things and don’t want to go to the time and trouble of changing.
Yesterday, while preparing for a client meeting to discuss potential changes and innovations, I got to thinking about what I would say if my client asked me what they could do to change outside lawyers and force them to be more innovative. What I would do if I were a general counsel.
5 things that that an in house counsel could do to move the needle.
Sitting outside on a golden fall afternoon in New York, I came up with 5 things that an in house counsel could do to conceivable move the needle. In no particular order, here they are:
1. Invest in and demand the use of data analytics. Most clients have tons of data about their lawyers and law firms that they don’t access and use in systematic ways. And there are many services like WestLaw Edge, Fastcase and LexMachina that harness public litigation data that provide information about not only judges but also lawyers themselves. Law firms themselves house lots of data but many aren’t using it. (Here’s a recent post on this subject). This data could provide insights about how skilled and innovative individual lawyers and firms really are. So, perhaps the first question to ask in any lawyer interview: do you use external and internal analytics and how? Firms that don’t, aren’t very innovative, period.
2. Focus on and use collaborative disaggregation. This is a subject of my recent post as well as that of others. It involves getting the right person to do the right job, eliminating waste. Instead of one firm handling a case soup to nuts, unbundle the tasks. Push commodity work in a case to alternative service or lower cost providers and save the higher priced lawyer work for tasks and work for which the lawyer is truly qualified and trained to do. It might make sense to hire an experienced lawyer like me to quarterback a mass tort case, for example, but not to have a single firm with multiple offices, associates and high overhead do all the work in the case at excess market rates.
3. Use alternative fees and/or effective budgets. Place some of the financial risk of being inefficient on the outside lawyers by using alternative, flat and incentive fees. Be strategic about how you use and ask for alternative fees. Too many outside lawyers treat bids for alternative fees like a case budgets and guesstimate the number of hours it will take. This usually means the bid is too high or too low, reducing enthusiasm for ever doing it again. Again, first question: did you use data to come up with the bid? If not, its not very robust.
On the client side, be fair. Recognize that you want to incentivize efficiencies. You do that by giving the lawyer a chance to make a reasonable profit on the matter if he or she is efficient and innovative. Don’t set the fee so low that there is no way for this to happen.
If your using a case budget instead of alternative fees, again make sure its based on real data. And then give back to the lawyer some of the savings if he or she comes in under budget. The carrot at the end of the stick is still a pretty effective way to get results.
4. Demand diversity. By diversity, I mean not only women and people of color but also diversity of talents and skills of team members. Why should a case team be made up of only white male lawyers? IT has a place at the table, financial people have a place at the table, business people have a place at the table. Get a decision and plan that harness the energies and talents of people other than lawyers. This holds true from the client side as well: have a business person involved in legal decisions and budgeting. Business people view risk and costs/benefits in a different and more realistic way.
Tell us what you want, demand we do it and hold us accountable when we don’t.
5. Require change and hold lawyers accountable. In my experience, too many clients pay lip service to the need for efficiencies but simply don’t demand or hold their lawyers accountable when they aren’t. When a lawyer demands that expensive tasks be done, for example, push back. Fall back on your business people to help quantify and assess what risks are tolerable and how likely they are. Then assess whether the expensive services impact that risk in a way that is proactively and valuable. Look at bills and refuse to pay when they are excessive or when guidelines aren’t followed. We won’t like it but we will accept it. And don’t rely on unknown and unseen 3rd party auditors to do the dirty work in secret. That only results in arbitrary cuts that don’t effect real change other than perhaps better worded time entries. Call us. Tell us why something is not acceptable. That is much more likely to effectuate a change in behavior. Tell us what you want, demand we do it and hold us accountable when we don’t. Yes that’s hard but no one ever said change is easy.
That’s it. Just 5 things. 5 things that would move the needle. But until clients push, I’m afraid we will continue to be stuck in Bob’s echo chamber, contemplating our collective navels.