In the last two blog posts, I looked at the limits on improving productivity compared to growth, and suggested that real changes in yield come with improved working practices and products or services that do not depend on contemporaneous fee-earner input. Coincidentally, yesterday I saw a very good explanation of the issue (defined as ‘the problem of constant cost’) in a guest post by Michael Mills of Neota Logic on the Beaton Capital blog.
…quantity in legal services is not necessarily a good thing. We have the diseconomies of scale—internal coordination costs, quality variation—but not enough of the economies, other than branding and cross-selling (when it works).
In short, law practice missed the industrial revolution. We didn’t build power looms, and we certainly didn’t build Jaquard looms, programmed by holes in paper cards (the model for the 80-column, cropped-corner punch cards of computing’s adolescence).
Forget about billable hours, alternative fees, and ABS’s. The problem is constant cost.
Neota Logic’s systems are good examples of the kind of thing I described in my last post — a combination of knowledge and technology increasing law firm productivity. This and systems like it are an inevitable future for firms. The problem, I think, is not in creating these new ways of working, but in ensuring that when they are developed that they flow into the firm as well as possible. How, in other words, does the innovative become the norm?
As technology teams have faced this problem for longer, it is not surprising that a model has been created to describe how an IT function might be structured to allow it to deliver new things while continuing to support existing products and services. Gartner has invented ‘bi-modal IT’:
the practice of managing two separate, coherent modes of IT delivery, one focused on stability and the other on agility. Mode 1 is traditional and sequential, emphasizing safety and accuracy. Mode 2 is exploratory and nonlinear, emphasizing agility and speed.
But these are two complete opposites, and the gap between them is cavernous. Unsurprisingly, things can fall into the cavern and never escape. Simon Wardley (whom we have met before) is scathing about Gartner’s idea:
I couldn’t stop howling with laughter. It’s basically 2004 dressed up as 2014 and it is guaranteed to get you into a mess.
Wardley’s alternative is a system with three parts rather than two.
When it comes to organising then each component not only needs different aptitudes (e.g. engineering + design) but also different attitudes (i.e. engineering in genesis is not the same as engineering in industrialised). To solve this, you end up implementing a “trimodal” (three party) structure such as pioneers, settlers and town planners which is governed by a process of theft.
The three roles are summarised neatly in this diagram (taken from Wardley’s blog under the Creative Commons Attribution-Share Alike 3.0 License).
The bi-modal model advocated by Gartner only considers the two extremes — pioneers and town planners. Filling the gap with a specified role or function helps to prevent the work of the pioneers being rejected by town planners for being undeveloped. As Wardley puts it:
The problem with bimodal (e.g. pioneers and town planners) is it lacks the middle component (the settlers) which performs an essential function in ensuring that work is taken from the pioneers and turned into mature products before the town planners can turn this into industrialised commodities or utility services. Without this middle component then yes you cover the two extremes (e.g. agile vs six sigma) but new things built never progress or evolve. You have nothing managing the ‘flow’ from one extreme to another.
(In an update to his original post, Wardley adds that a similar model was identified by Robert Cringely in his history of Silicon Valley, Accidental Empires. Cringely’s model used different archetypes — commandos, infantry and police. The relevant passage is in Chapter 12 of the book, published online by Cringely in 2013.)
Whichever terminology is used, the idea is the same.
The first wave of change is the responsibility of highly expert groups who work hard and fast to create products and services that might meet particular needs. Some of these might fail, but the speed of work is such that there is always something new to work on. In established businesses, this might be a dedicated research and development function, or it might be an activity open to all (as at Google, for example, where there was an expectation that everyone could spend 20% of their time on their own ideas).
When complete, the successful experiments might have proved their worth, but that doesn’t make them ready for widespread adoption. There will inevitably be some rough edges to smooth off, and some issues that could not have been foreseen until the idea needs to be scaled up for general use. That process of perfecting a new product or service is the responsibility of the middle group (the settlers or infantry). Some ideas may fail at this stage too — an idea that works in a lab may hit obstacles when it encounters real life and work.
Once a product or service has been proved worthy of inclusion as part of the core business, it still needs to be maintained and developed. That is the responsibility of the third group — the town planners or police. As their archetypes suggest, this group needs to ensure such things as stability, good governance, predictability and reliability. But their work is not immune from disruption — as Simon Wardley’s diagram shows (click to embiggen):
Wardley’s model was designed with technology development in mind, and with the benefit of his extensive experience running successful technology companies. However, I think it is also a valuable template for development more generally in law firms (and probably elsewhere).
As an example, knowledge teams in law firms are now an established concept. They commonly work in similar ways when dealing with established aspects of legal practice. The fact that there is a lively market in Professional Support Lawyers between firms, and that many firms have created career pathways for those teams, suggests that this is a ‘town planner’ type of function. But that was not always the case. The first PSLs were experimental. They created their own roles: trying different ways of working, some of which were successful and some weren’t (the pioneer phase). As firms became more familiar with the concept, they jumped on the bandwagon, perfecting the role in different practice groups and in different types of firm (the settler phase).
The same process can be seen at play in the way firms are adopting concepts like process-mapping and project management. Here, though, the pioneer phase can be massively foreshortened since these are concepts that have been tried and tested in different sectors before finding their way into the law.
Policing and town planning need to change when the context changes. Established knowledge functions need to pay attention to new ideas thrown up by pioneers. That message is at the heart of a recent call by David Griffiths for knowledge and HR functions to start disrupting themselves. When they do, they should consider how the three stages of development might be adapted to their situation.
Firms that cannot identify their pioneers need to consider where new ideas are going to come from. (Without those new ideas, the market will move on without them.) If they can point to a group of pioneers, but they expect ideas from that group to become part of ‘business as usual’ without additional work, they risk failure and frustration with the whole process. The latter situation is probably as bad as having no new ideas in the first place.
As usual, if you are keen to work out how these archetypes of development might work in your firm, we should talk.