Measuring performance and setting priorities

Today is a leap day, a quadrennial adjustment of the calendar on which tradition dictates that women may ask men to marry them. (Of course, this is just a convention — nothing in reality prevents either gender from popping the question.) In that spirit, I want to take a look at a convention in law firms that could do with being upset — recording time.

The sun is setting, tide incomingThis isn’t simply a plea to move away from time-based billing: that topic has been done to death by other commentators. In any case, I think clients are increasingly resistant to the idea to the extent that it has almost become the charging model of last resort rather than the starting point. No, I am more concerned about a figure that looms large in the daily life of almost every private practice lawyer: the annual chargeable hours target.

Even firms that have adopted alternative ways of billing clients still cling to timesheets. Their lawyers are expected to account for every six minutes of every day. (Even holidays — many time recording systems need to be told that a lawyer is not working.) Many of the same firms set annual targets for their lawyers — they must record a certain number of hours per year. I understand why this is important. Even when the link between time spent and the price of legal services is broken, firms still need to know what their input costs are in order to know whether the work is profitable.

I think the cost of this knowledge is too great. Although they are potentially useful to firms, these targets have a pernicious effect on lawyers’ behaviour, law firm culture, and client service.

Behaviour and culture

Although the point of recording time is to give the firm an idea of how much effort is being expended on client work (and other activities, so long as non-chargeable time is recorded too), many firms also use targets to inform other things, such as eligibility for bonus payments, suitability for promotion, and so on. As a result, lawyers prioritise meeting their annual targets above all else. Any work that cannot be attributed to a client file is therefore given a lower priority. Unless the firm explicitly elevates the priority of non-client work, perhaps by allowing work on specific internal projects to be counted towards the lawyer’s annual target, lawyers will naturally be reluctant to contribute to activities such as knowledge management.

Law firm culture is, in part, an accumulation of the way people commonly behave. As such, habitual prioritisation of chargeable work in preference to certain types of non-chargeable activities will naturally cause those activities to be considered less worthy. The personal financial preferences of time-recording lawyers become cultural norms. Worse than that, however, the act of recording time has come to signify importance within many firms. That is where the fee-earner/non-fee earner distinction arises. Firms that claim to deprecate the use of the term ‘non-fee earner’ will only succeed in changing their culture by removing fee-earners from the stage. If nobody records time, the most obvious distinction between lawyers and business services professionals is eradicated.

A fruit-based digression: customer focus

In my last blog post, I linked to and quoted from a fascinating piece by Horace Dediu on the way Apple appears to measure performance, and how that affects (and is affected by) the priorities the company sets. Dediu points to a difference between the way most businesses measure performance and the way Apple appear to do it. He argues that the norm is to depend heavily on easy to measure financial data:

These “financial” measures of success are considered prudent and optimized for return on equity (also known as the maximization of shareholder returns).

Unfortunately, Dediu argues, financial metrics prioritise some forms of information over others, to the extent that the wrong decisions might be taken in consequence:

The mass phenomenon of measuring the wrong thing because it’s the easiest to measure is called “financialization”. Financialization is the process by which finance and finances (rather than creation) determine company, individual and society’s priorities. It comes about from an abundance of data that leads to fixation on what is observable to the detriment of awareness of hazards or obstacles or alternatives. This phenomenon is more likely when the speed of change increases and decision cycles shorten.

By contrast with companies wedded to the need to maximise shareholder returns, Dediu notes that Apple puts the customer, rather than the company, at the centre of its decision-making processes. In doing so, it aims to make the best product it can for customers. The challenge is to assess how successful it is in doing that.

The idea that the purpose of the firm is to create and maintain customers is not new but it is relatively rarely practiced. The reason is that the data is harder to obtain. The data that comes from sales is crisp and concrete. The data about customers is muddy and soft. In a world where spreadsheets are used as weapons, the crisper the data, the better the ammunition.

Optimizing around customer acquisition rather than equity returns leads to a new set of metrics. What would these metrics look like for Apple?

The company publicly offers three separate sets of quantity of customers and quality of customers.

In terms of quantity we have:

  1. Number of iTunes accounts
  2. Number of iCloud accounts
  3. Number of active devices

In terms of quality of customers we have:

  1. Average selling prices for devices (as a proxy for willingness to pay)
  2. Customer satisfaction (as a proxy for loyalty)
  3. Services and accessory revenues (post-sales and recurring value)

Dediu then shows graphically what Apple’s performance over the last ten years looks like against those metrics. (Generally good.)

Client focus for law firms

There is no reason why law firms should not also consider themselves as client-focused. In fact, there is a good case for arguing that they should be more client-focused than a company manufacturing quasi-commodity technology products and services. Law firms’ dependence on basic financial metrics suggests, however, that they struggle to measure how well they perform from a client perspective.

Firms’ persistent emphasis on time recording may be the most significant factor working against proper client focus. In prioritising measurement of the time taken to perform tasks, rather than finding a way to assess their importance for clients, firms choose to elevate quantity over quality. Even when a firm has a good system for assessing client satisfaction, it is rare for that information to be integrated into decisions about individual lawyers’ progression or bonus. (And I suspect good systems for assessing client satisfaction are vanishingly rare in themselves.)

The leap-year challenge for law firms, then, is to consider what good qualitative measures of client service they might have or be able to generate, and to work out how those metrics could be used to supplant the outdated conventional measures of firm performance. In doing so, they should find improvements in lawyers’ openness to involvement in important practice support and development activities, in the firm’s culture, and in the quality and creativity of service provided to clients. I can’t promise that those improvements will lead to Apple-scale profitability, but other examples across the corporate world suggest that better performance flows more often from a customer focus than from a shareholder focus. In addition, firms would no longer need to invest in time-recording technology and the panoply of enforcement tools and processes that flow from them.


Change, technology and people

A long time ago, I argued that social technologies make most difference when they start by meeting real needs that people have. I still think that is true, and I am beginning to wonder if the same is true for other types of technology too. A few things over the past week have brought some threads together for me.

Gibson Mill at Hardcastle CragsJoanna Goodman wrote a very good overview of the state of legal IT and innovation in the Law Society Gazette. Embedded in the middle of the article was this short statement:

Firms are focusing on innovation because legal IT is getting a lot of attention at the moment and they are looking for opportunities to use technology as a differentiator.

I am not so sure that technology alone can be a differentiator, except for a short time, especially as firms generally have to buy in systems and expertise (which is therefore likely to be available to everyone else on the same terms). When firms mix technology with something unique that they have (the knowledge of their people, for example) then there is a possibility of differentiation. I posted a couple of tweets suggesting my reservations (within the scope of 140 characters.

There followed a very interesting discussion about the need to consider technology and cultural issues in innovation, sparked also by a couple of observations by Charles Christian. (The whole thing can be seen on Storify.) In the end, I was persuaded by Joanna’s argument that technology is too important (and moving at too fast a pace) to be left to one side while firms deal with people and cultural issues.

Today, two excellent blog posts have made me return to the question of the balance between people and technology.

Julian Summerhayes, writing about “the broken law firm”, suggests that firms have never been particularly good at considering people issues:

As someone who’s worked in the business a long time, I’ve witnessed countless changes. Mostly these have been technologically driven. But what I’ve not witnessed is any attention being paid to the soft stuff. At this stage I’m reminded of what Tom Peters has been banging on about for about 40 years: Hard is Soft. Soft is Hard. In other words, focusing on the numbers is easy. The other 101 soft stuff is the really, really hard part of running a law firm (or any business).

Julian is not just concerned about innovation, but his point is particularly valid in that context. How many firms focus on improving processes or on taking advantage of the latest technology in the belief that these are hard options, when the really meaningful work consists in nurturing people (employees and clients)?

Anne Marie McEwan comes at the question from a slightly different, but no less interesting, angle. She has been developing a new approach to workplace learning that she has called Tiny Triumphs, and has written a long post on LinkedIn describing why it is important. (The post was first published last week, but Anne Marie substantially updated it today.)

Tiny Triumphs has a deceptively simple structure:

Eight themes and associated topics are explored across three phases:

  • Diagnose workplace context (what’s happening)?
  • Select, scope and plan a small workplace project – do it!
  • What happened? What next?

What sets Anne Marie’s work apart from other approaches to developing skills is the fact that she puts people and their social interactions at the heart of work, and this principle then drives the learning experience:

…business processes are socially-generated through people, their relationships and inter-actions. These dynamic social processes are emergent (they emerge from what people do together) and they are complex – the people who generate them are diverse, connected, inter-dependent and adaptive.

I prefer self-organising to adaptive. People are not robots. Despite prescribed rules and sanctions for deviating from them, people decide the extent to which they will comply. They self-organise, acting alone (influencing / coercing others) and together in ways that may or may not be in line with what’s expected of them. It is therefore important to have some knowledge of topics like power, cultures (national, organisational, professional, demographic), collaboration, conflict, and how taking personal responsibility and organisational values-in-action encourage humane behaviour.

Anne Marie takes a similar approach to understanding customer-facing workflows — meeting (often undefined) customer expectations through the “outcome of relationships among people, their capabilities and how they interact” — and to workforce needs:

…work is changing. Operational roles are expanding and becoming more socially, technically and organisationally complex. What sort of pressures, for example, might fast-paced, collaborative, relationship-focused demands create for people? What might the issues be where knowledge is new, perhaps abstract and emerges from cross-boundary, cross-cultural conversations.

The issues that Julian and Anne Marie raise brought be back to the technology vs culture discussion I had last week. I am still persuaded that the future for law firms must involve advances in technology. (Those who hold out will become as rare as modern hand-weavers, compared to the successors of the 18th-century developments in weaving technologies.)

But, law is still an inherently people-centred business. As such, technological development needs to proceed with people in mind. When innovation is led by technology, and by people who promote technology without considering its impact on people, it is less likely to succeed than if change is driven by and depends on the interests of real clients, employees and others inside and outside the firm.

The upside of partnership

I have been known to suggest that law firms might benefit from a shift away from the partnership model. I am broadly sympathetic to Bruce MacEwen’s critique of this form of ownership in an environment of change. In particular, the collegiate nature of partnership can make it hard for law firm leaders to assert unambiguous authority, as Laura Empson’s research has shown. However, there are some recent indications that the legal partnership still has much to offer.

Facade or whole?

Notwithstanding the doom-laden prognostications from a variety of directions (including an assertion that 75% of the current UK 200 law firms could disappear in the next five years), legal partnerships appear to be very resilient. Surprisingly few large firms failed during the financial crisis. There have been failures and those added to mergers and other closures have contributed to a reduction in the number of law firms overall. According to the Law Society’s figures, there has been a fall in the number of firms every year for the last four years — going from a peak of 10,413 in 2010 down to 9,542 in 2014. At the same time, the number of solicitors employed in those firms has gone from 86,748 to 90,306 (the majority of that increase occured in the last year reported).

More evidence of the resilience of traditional law firms came at the end of last week in a report published by Jomati Consultants: Re-engineering Legal Services: How traditional law firms are finally learning to embrace alternative working practices. (I don’t have a copy of the report itself, so I am relying on vicarious accounts of it from Legal Futures and Legal IT Insider.) Jomati identify three areas where firms are changing to meet the market:

  • the rise of the law firm-operated low cost centres,
  • gradual acceptance of client-facing legal project management and process improvement
  • engagement of contract lawyers in addition to law firms’ permanent fee earners.

Jomati reports that firms are taking these steps in response to client demand and to reflect shifts in the market as a whole. They also suggest that many firms are attacking these changes in a piecemeal fashion, partly because of resistance amongst partners.

This second point goes to the heart of the difference between partnership and a more corporate structure. Someone once described a university to me as being staffed with “people who think they are self-employed, and act accordingly.” Much the same is true of partnerships. Partners sometimes resent, and therefore resist, firmwide initiatives that they think undermine their own practices — especially when they also think their clients’ interests are at stake. In many situations, partners’ closer proximity to their clients will mean that their assessment of what is needed might be more realistic than a firmwide approach mandated from central management. More importantly in this context, partners with their clients’ interests at heart might take action to improve the way they work with clients in advance of the firm. Where some partners resist, others will want to be pioneers; partnership allows that possibility.

Recent history is littered with major corporations whose failure came quickly when the market moved on without them — common current examples include Kodak and Nokia. The reasons for those collapses are hard to disentangle, but they often include a failure to recognise and react to environmental changes. The monolithic nature of large corporations makes it hard for anyone other than a small group of leaders and senior managers to take the steps required to change the company’s direction. (Those at a lower level who see the future coming are usually best advised to leave altogether.) By contrast, partnership spreads power more widely. Even a fairly junior partner may have sufficient autonomy to change the way they and their junior colleagues work with their clients — introducing process improvements or changing resourcing models. If they are successful, the whole firm will be able to see and copy. That is the kind of change that Jomati reports seeing across the sector.

It is probably not a coincidence that two of the most significant law firm collapses after 2008 — Dewey & LeBoeuf and Halliwells — were brought about, at least in part, by actions taken by central management. They were probably, therefore more akin to corporate failures. Closer adherence to traditional partnership principles might have helped those firms weather the economic storm better than they did.

Partnership is not necessarily the only way to manage a law firm. It may not even be the best. But it has shown a degree of resilience that corporate structures may lack. On the other hand, the firmer direction that can come with a steeper corporate hierarchy can allow faster and more lasting change across the business. (Will that change always be positive?)

Why things stay the same

A common refrain amongst those interested in improving the way legal services are provided is that there is too much similarity in the market. Few law firms differentiate themselves fundamentally from the rest, and there are only a handful of different business models available to select from. The assumption that novel business models will improve competition for the benefit of clients surfaced again in a policy paper published by HM Treasury at the end of last week, “A better deal: boosting competition to bring down bills for families and firms”:

2.10 According to a recent survey by YouGov, 62 per cent of adults have used a law firm or solicitor at some point in their lifetime and the cost of legal services is now considered the most important factor when searching for a legal representative.7 The government wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. Alternative business models are around 15 percentage points more likely to introduce new legal services than other types of regulated solicitors’ firms.8

The policy paper has been analysed in more detail by Nick Holborne on the Legal Futures site and by Dr Steven Vaughan at the University of Birmingham, so I just want to raise an eyebrow at the idea that new business models will deliver what the government seeks.

Pont du Gard

Law firms: inevitable isomorphs?

Earlier this week, prompted by a blog post on a completely different topic, I read an article from the American Sociological Review of 1983: “The Iron Cage Revisited: Instutional Isomorphism and Collective Rationality in Organizational Fields” by Paul J. DiMaggio and Walter W. Powell. I suspect that this is a well-known piece in the right circles, but I had never seen it before. As the authors state, they set out to answer the question why there is so little variation between organisations in the same field.

Once disparate organizations in the same line of business are structured into an actual field (as we shall argue, by competition, the state, or the professions), powerful forces emerge that lead them to become more similar to one another.

This similarity is termed ‘institutional isomorphism’. As one reads further into the article, it becomes clear that law firms and other providers of legal services are under the same pressure to conform to a particular model, which thereby limits the variation between them. DiMaggio and Powell point to three types of pressure acting on organisations in the same field:

  • Coercive isomorphism — resulting from both formal and informal pressures exerted on organisations by other organisations on which they are dependent and by cultural expectations in the society within which they function.
  • Mimetic processes — in conditions of uncertainty, organisations may model themselves on other organisations.
  • Normative pressures — these arise from professionalisation, especially when (a) there is a common cognitive base derived from universities and professional training institutions and (b) strong professional networks arise, spanning organisations.

It seems clear to me that these three components exist in the business of law. DiMaggio and Powell’s work appears to explain why differentiation in the sector is minimal, and why changes in form tend to spread across the sector fairly rapidly. It may even suggest that new entrants will be only temporarily distinct from their more traditional competitors.

Whither competition?

The government’s policy paper seems to suggest that deficiencies in competition are causing the public to be poorly-served, particularly in areas such as probate, conveyancing and litigation. Conveyancing is singled out for particular criticism:

2.20 The government wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient. The government will therefore publish a call for evidence in the New Year on home buying, exploring options to deliver better value and make the experience of buying a home more consumer-friendly.

As a former competition lawyer, it is a little surprising to hear legal services mentioned as an example of poor competitiveness. Competition law is concerned broadly with agreements between entities that might reduce or eliminate competition, and with situations where markets are (or might become) dominated by one participant. My instinctive view is that neither of these situations prevails at the moment.

In political terms, however, I understand that competitiveness has a different complexion. Even in this more general sense, though, I am far from convinced that traditional legal services providers are the right target.

The policy paper follows an Autumn Statement in which the Chancellor announced restrictions on small claims in cases of personal injury and on damages for whiplash injuries. These changes make it harder for firms specialising in this kind of work to be confident about future income levels (as shown by a sharp drop in the share price of Slater & Gordon — one of the largest such firms). It is difficult to imagine that such fiscal uncertainty will tempt many new providers into that market. Instead, it is possible that the pace of consolidation will increase. This is one situation in which size may be a safeguard against changes in the market. Without close examination of the market, my hunch is that PI work is one area in which legal services comes closest to being dominated by a small number of very large firms. Consolidation will only worsen the competitive position.

Turning to conveyancing, it is interesting that the Treasury’s view is that the problem is a lack of innovation and low levels of transparency and efficiency in the legal process. It is a long time since I bought a house, and I was never a real estate expert, but my impression is that the last 25 years has seen a significant change in conveyancing services. The cost of conveyancing fell significantly when it ceased to be the exclusive preserve of solicitors in England & Wales. Domestic conveyancing services were also in the vanguard of developing legal technology. It is still the case that conveyancing systems tend to be much more sophisticated than those in other areas of legal practice where the volume of work is lower and there is less price sensitivity.

The hidden player

Returning to the DiMaggio and Powell paper, it is interesting to note one of their hypotheses about the factors determining the extent of isomorphism in any given field:

The greater the extent to which the organizations in a field transact with agencies of the state, the greater the extent of isomorphism in the field as a whole.

All legal services providers engage with the state in some way, even if it is only to apply or comply with laws or regulations. Litigation and conveyancing, however, require a deeper engagement with state agencies. Litigators are accustomed to working with the courts and their rules, whilst land transactions will often involve agencies such as the Land Registry, HMRC, local authorities and so on. The behaviour of any or all of these bodies will have an impact on the way related legal services are provided to the public.

A policy paper, such as the current one, which examines only the private actors in a process without considering the way state agencies might affect quality of service must be a flawed one.

Isomorphism amongst legal service providers will probably persist. Where changes are successfully introduced by new entrants into the market, it is likely that they will be rapidly copied by traditional firms. Even in this homogeneous market, the number and variety of participants means that there is almost certainly no risk of market dominance. If competitiveness is considered more broadly, the public sector plays a significant part in those areas where service failure has been identified. It seems facile, therefore, to assert that the answer to all our problems is more variation in business model.

Stop being an artist

Embarked coinsBuried in a commentary on the success of Facebook, Bob Lefsetz writes a nugget of golden truth:

You never double-down on a loser. That’s what the techies have over the musicians. When musicians do something with little traction they keep imploring us to pay attention. If no one pays attention to the work of the techie, he changes it. Because no amount of marketing can sell that which the public does not want. You start with the marketing, and then word of mouth sustains you. If you’ve got no word of mouth, change.

Whether intentionally or not, Lefsetz has put his finger on a critical distinction between art and commerce. One of the hallmarks of an artist (whether a writer, musician, painter, sculptor or potter) is that they are driven to create their works without regard to the audience. In doing so, they run the risk of poverty. But they might also change the world.

By contrast, commerce depends on acceptance by someone else. Without that return, there is no point in the work.

That is not to say that artists cannot be commercial, nor that commerce is inimical to creativity. Sometimes both can align, and great things can result.

Commercial creativity requires a receptive audience. If you find yourself grumbling that your knowledge initiatives are falling on stony ground or that nobody comes to your training sessions or that your fancy new technology isn’t being used, you need to change your approach rather than doubling your persuasive efforts.

If you think everything’s fine, it may be time to change

Over the past few years, change managers have relied heavily on the idea of the ‘burning platform’ to help them awaken organisations to the need for change. Perhaps the most famous example was the company-wide memo sent by the then CEO of Nokia, Stephen Elop.

It is a logical approach. When things are going badly, there is little point in continuing as normal. However, such forced change is also high risk. This is clear from the original context of the phrase, which goes back to the Piper Alpha disaster in 1988.

One hundred and sixty-six crew members and two rescuers lost their lives in what was (and still is) the worst catastrophe in the fifty-year history of North Sea oil exportation. One of the sixty-three crew members who survived was Andy Mochan, a superintendent on the rig.

From the hospital, he told of being awakened by the explosion and alarms. Badly injured, he escaped from his quarters to the platform edge. Beneath him, oil had surfaced and ignited. Twisted steel and other debris littered the surface of the water. Because of the water’s temperature, he knew that he could live a maximum of only twenty minutes if not rescued. Despite all that, Andy jumped fifteen stories from the platform to the water.

When asked why he took that potentially fatal leap, he did not hesitate. He said, “It was either jump or fry.” He chose possible death over certain death. Andy jumped because he felt he had no choice—the price of staying on the platform was too high.

In a true burning platform situation, change (jumping from the platform) is high-risk, but probably less risky than not changing. Nokia is now a very different company than it was in 2011, but it is still moderately healthy.

Sometimes, however, the burning platform idea is used to engineer acceptance of change when the risks of not changing are actually not especially high. In those situations, people often see through the claims of those seeking change and so they ignore the change initiative and carry on as normal. They need a different kind of persuasion.

That is not to say that change is impossible (or unnecessary) when everything appears to be going well. Two items I came across today indicate that change might be necessary and easier in good times.

The first is a TED talk by Tony Fadell, who developed the iPod and the Nest thermostat. He starts by observing that habituation (getting used to the way things are) is a natural and often necessary human attribute. He then highlights three ways good designers (who are just a particular kind of change agent) learn to work around habituation.

The key points from Fadell’s talk are that it is necessary to take a different perspective on things (looking at the larger context and the detail) and that naive questions and observations can trigger insights that are lost to the habituated.

Law firms often talk about understanding their clients, but they rarely actually see their work from the client perspective. Likewise, trainees, new employees and other professionals within the firm can ask naive questions about the way work is done. If those questions are explored rather than batted away, novel insights might follow.

The other item is a LinkedIn post by Anne Marie McEwan. She reflects on accounts of the recent history of RIM, the BlackBerry manufacturer. Unlike Nokia, RIM has responded to the growth of Apple and Android smartphones by concentrating on improving and developing their existing products. (Nokia shifted its focus to other areas of the market.) This strategy hasn’t served RIM well. For Anne Marie, amongst the reasons for this is the difficulty of making change in times of stress.

Business as usual is constant pressure as normal but there are degrees. It can be difficult for people to take on new ideas and ways of working when they are under unbearable pressure, although I have worked with people where things were already so dreadful that they were eager to try anything.

I’ve found that the best time to instigate change is when things are not going badly. The most receptive businesses are those performing well but they know that they will need to adapt to maintain their position; they can see external threats and opportunities coming over the hill.

So the best time for change is probably before the platform is at risk of catching fire. Spotting the threats and opportunities is best done with the benefit of a design approach — noticing when everyone else hasn’t that the things you have got used to are actually bad. That’s what Apple did with the iPod and iPhone.

In the legal sector, I suspect that the predominant view is still that almost everything is fine. Certainly, the comments on a report about consolidation in the High Street bear this out. Clients (whether individuals or businesses) may have a very different view. Two posts by Bruce MacEwen detailing his experience as a client (“The Client Seat” and “The Client Seat (2)”) suggest that from that perspective things very definitely are not fine. Here are some key quotes (from Bruce and other members of the group interviewing potential advisers):

The engagement letter from Firm C (a firm you all know) has all the charm of a utility bill. Let me emphasize that they entirely skipped over the step of responding to the reasonable questions posed by the committee and went straight to an engagement letter. An oversight in the haste and press of business? Hard to believe. Presumptuous? You bet.

This letter unfortunately confirms what many think of lawyers and law firms (which I happen to believe is untrue) as heartless and rapacious (aren’t we all tired of lawyer jokes?). It would hardly rise to the level of “over investment” to reference the issues and address the recipients in more personal terms.

After many years of working with contractors, both as an IT executive and then in supply chain, I firmly believe that when vendors do not respond to an RFP as requested, it says that they will do what they want to do, not what the client wants. I have seen this pattern repeatedly – we went for the firm with the better name or more likable people only to be sorry once we were under contract. Vendor selection is like dating – if they do not treat you with respect now, it is not going to get any better when you’re hitched.

You might imagine law firms responding to RFPs would think their overriding goal should be to make it easy for the client to select their firm. If this sample of three is any indication, they seem to be operating under some alternative assumption, although it baffles me what that might be. Each in their own way made it harder for us to pick them.

If you are a lawyer, can you be sure that your clients aren’t this critical of your work? If you are, how is that? Maybe they have just become habituated, and once an alternative provider comes along with a better way of doing things they’ll transfer their allegiance. That’s what happened to Nokia and RIM. Those companies are still dealing with the aftermath.

Don’t wait for your platform to smoulder. Learn to see what needs changing while it is still possible to test things out.

Who should be responsible for happiness?

I spent last week in a remote Scottish location, which meant that I could catch up on some podcasts that had backed up on my phone. As I listened to a few in succession, some interesting juxtapositions were thrown up. One in particular got me thinking about the balance of power and responsibility between individuals and organisations.

Strathossian ruinI would guess that everyone knows someone who is unhappy in their work, even if they aren’t themselves. There may be many reasons for this, but the prevailing trend seems to be that the unhappy owe it to themselves to find a way to change things so that they can become happier. (Or to manage their own unhappiness.) An old friend of mine, perhaps worn down from years listening to HR complaints, was robust in her assertion that people should leave if they didn’t enjoy working at the firm: “we don’t put bars on the windows.”

So, as I listened to the Thinking Allowed discussion of happiness and wellness, I was particularly struck by comments about the way that this individualistic approach has allowed organisations and even society at large to transfer responsibility for making things better to individuals. This is often dressed up as ‘agency’, even when people may actually have very little power to make real change, short of changing jobs.

A little later, on their excellent Shift podcast, Euan Semple and Megan Murray had an entertaining conversation about navel gazing as a key business skill. Jack Vinson blogged a key point:

The thing that struck me hard enough to do a quick blog post is the idea that some people get wrapped around the axel of self-improvement without thinking why.  On the opposite end are people who have no interest in self-improvement (but who are happy to point out situations in which they are unhappy).

I have always liked the idea that if I am upset about something / someone, it is because something inside me is out of kilter.  It is not the other person / situation is necessarily wrong, but my take on it has me upset.  In other words, it is my responsibility to figure out why that business meeting made me so angry, and then DO SOMETHING DIFFERENT.

I don’t disagree with Jack’s view that one should always consider whether there is something one could change about oneself. However, I am concerned that when organisations assume that people should always take responsibility, they are more likely to allow poor situations to persist.

People make decisions about difficult working situations for so many reasons that each may well be unique. They may stay because they have built up valuable support networks amongst colleagues and have no wish to let them down. They may have external commitments that make it hard to move. They may feel no such constraints. They may be natural disruptors so they drive change wherever they are. If the organisation has no interest in understanding people and the reasons why they are happy or unhappy, it has no way of knowing whether there are fundamental problems that need to be addressed at the organisational level. (This can produce stagnation, but may also allow unfettered change initiatives to flourish.)

It is time for the pendulum to swing back. By all means encourage people to take some responsibility for making the changes they need. But organisations also need to take more responsibility for being aware that people are unhappy and why this might be, and for making sensible changes to improve overall happiness.

Fortuitously, last week also saw the launch of a new tool that gives organisations a better way of understanding what is really going on. Cognitive Edge’s cultureSCAN can be used to take a snapshot of the way people feel about their work, or it can be used repetitively to test the reception of organisational change (for example). As a Cognitive Edge network member, I can work with law firms (and others) work out how best to use cultureSCAN and the information it produces. Please get in touch if you are interested in knowing more.

A summary of cultureSCAN is provided on the Cognitive Edge site, and I have excerpted it below.

Culture is a crucial part of most organisations’ success or failure – yet, given its complexity, is also one of the most difficult things to influence. The organisational culture, people’s behaviour and the narratives they share when they meet are all interwoven – co-evolving together.   Looking to understand the overall system and see which levers to pull is a futile – and mistaken – pursuit.

Instead anyone tasked with changing a culture must work to understand the narratives – the stories and fragments of meaning – that are exchanged each day in the many interactions that happen at the coffee machine, in the corridor and in meetings. Change then becomes a matter of amplifying the narratives that lead in the desired direction, dampening the ones that draw people away – and looking for opportunities to improve and innovate along that path.

Cognitive Edge’s cultureSCAN is a unique opportunity – a pre-configured tool for online and smartphone users to gather organisational narratives and understand the culture as it stands.

cultureSCAN is a culture-specific set of signifiers allowing users to signify audio/text/pictures quickly and easily (audio and pictures available only on iOS and Android apps).  It uses SenseMaker® – the only software licensed to use Cognitive Edge’s patented signification methods – meaning that organisations have the objectivity and scalability of quantitative data, supported with the insight and richness of qualitative micro-narrative material.

So it is easy to see – and prove – where the organisation is today, as well as delving deeper to understand why – and where it can be taken tomorrow.

Understand the question or rush to solutions?

“Hey farmer, how do you get to Little Rock?”
“Listen stranger, you can’t get there from here.”

(Michelle Shocked, Arkansas Traveler)

There is a variant on this, which is a joke told in many cultures. A tourist stops to ask for directions back to the big city. The response: “Sorry sir, I wouldn’t start from here if I were you.” These apparently foolish answers may be more sensible than overconfident directions. A meaningful response demands more information that could be drawn out by additional questions. Does the traveller need to arrive quickly or via a scenic route? How much do they know of the area already, to help in providing sensible guidance? Do they really want to get to the city, or do they just need a bed for the night?

You can get anywhere from here...Many organisations (but especially law firms at the moment) are like the disorientated traveller. They know that they need to do something to deal with changes that are going on around them. Unfortunately, there are few wise fools answering their requests for help.

Instead, there is a cacophony of technology suppliers, consultants, service providers, all shouting the merits of their particular product or approach. This thing, they argue, will fix everything and work for anyone.

Depending on who is speaking, the panacea for law firms will be greater use of technology, artificial intelligence, paralegals, alternative business structures, process mapping, automation, outsourcing, diversification, boutique practice, better client relationships, big data, and so it goes on…


There are few simple answers. (I think there are none, but I may be wrong.) All of these ‘solution providers’ are starting from the wrong end of the problem. They have something to sell, so it doesn’t help them to discover more about their potential customers in case it turns out that their thing would be useless.

The better place to start is to work out in detail what the real challenges are. Those aren’t the macro-level pressures that we can all see — regulatory change, market aversion to traditional billing models, and the like. The real challenges are different for every firm. What does their market (and their clients’ markets) look like? What financial constraints do they have? What appetite for change is there? How strong is the leadership? Are there any geographical issues to consider? What about other cultural expectations? Does the firm’s demographic structure help or hinder? What do clients want, and are they getting it? These might not even be the right questions — other factors may be relevant.

The important thing is to draw out the right knowledge about the firm, and work from there. Often this body of knowledge will surprise the leadership — it may contradict what they have been indoctrinated to expect by their usual suppliers. The firm might also have an incomplete understanding of what their suppliers are offering, and so be unable to articulate a sensible request for help.

Armed with self-awareness the firm is in a better position to challenge suppliers to provide services or products that actually meet its needs, so asking the right questions (and getting sensible answers) in the first place is actually beneficial for all.

This also applies to the way firms serve clients, of course. The lawyer who just rattles off a quick contract to the client’s specification without inquiring more deeply into the motivation behind the instruction risks doing the client a disservice (especially when the client is ignorant of the range of possible options).

I don’t have answers. I am more interested in helping firms find their own way.

Will more training really fix that problem?

When things go wrong, it is common to see training proposed as the first (and often only) response. I can understand this — training courses come with an obvious KPI (number of people trained), they can often be cheap if provided internally, and they are readily procured from external suppliers if necessary. Most significantly, if the organisation provides training, the blame for errors (or just poor performance) can be placed more securely on the shoulders of the people doing the job.

But, often, people commit errors after having been trained. They perform poorly even when they demonstrably know and understand what they are supposed to do. More training cannot fix this problem. Something else is needed.

Enlightenment on Calton HillThis is not a new issue. Oddly, though, very few organisations seem to want to grapple with it. The default response, again and again, is to lay on a training course.

Some years ago, Harold Jarche provided clear guidance to those facing this situation. In a post dating from February 2005, he turns the issue on its head. Rather than concentrating on the manifestation of a problem (people performing poorly), he advises looking more closely at the system itself — what is the cause of poor performance. The post includes a really clear (and simple) flow chart to help diagnose the appropriate response. Tellingly, it concludes that “only a lack of skills and knowledge warrants training.”

Harold’s flow chart also contains the reasons why organisations fall back on training unnecessarily often — the alternatives require at least a small amount of change. Those include changes to the way jobs are done (tweaking processes or removing obstacles) or to performance regimes. Ultimately, there may be repercussions for the individual, but only once organisational changes have been tried and the results tested.

Harold expands on the need to address barriers to performance in a later blog post (together with a number of resources linked from it). Whenever I hear someone demanding training to fix a problem, my mind turns to Harold’s advice. As long as training is seen as a cure-all, the fundamental problems underlying poor performance are unlikely to be resolved.

Legal KM: what is your impact?

I finished my blog post on the need for unavoidable irritation with a promise to look at the purpose of knowledge management in law firms. On reflection, I think impact is a better word than purpose. What difference can KM make to the performance of a firm, and what will the firm’s experience be? In other words — how irritating can legal KMers be so that they generate most value?

Pothole and yellow linesAs a reminder, the goal is to be considered indispensable by the firm, whilst still promoting goals that might be uncomfortable to individual lawyers. This might sound unnecessarily aggressive, but it actually matches the kind of work that has been done over many years in many successful firms.

Consider, for example, the use of standard documents or precedents to assist lawyers’ drafting (or their modern equivalent, the automated document). Amongst other things, these approved ways of working will force lawyers into a single, consistent contractual format or style. For some, this undermines their right to decide how best to draft or to present the document. (I have lost count of the number of times I have had to listen to lawyers grumbling about their firm’s style rules.) On the other hand, clients appreciate consistency across a firm’s documents and the efficiencies that come from part-drafted or automated standards are undeniable.

In this example, we can see the essence of the value of legal KM: it creates value for the firm by seeing better ways of using knowledge, bringing them into being, and encouraging people to use them to work differently (since legal work is knowledge work). The irritant comes in that final stage — any change to the way people work is likely to create a bit of discomfort.

The most successful people in legal knowledge management are those who bring about the most valuable change. (This group includes, in my experience, Chief Knowledge Officers, Heads of KM, PSLs, Knowledge Officers, and a host of other titles at all levels.) In order to have that impact, they have a few characteristics in common.

  • Clarity of vision/purpose: they work out at an early stage what they stand for, and why the firm should value it.
  • Connectedness: they build relationships across the firm, so that they have a better understanding of the complete range of work done, not just the area they work in.
  • Communication skills: they can present their perspective well, whatever the audience.
  • Diplomacy: they know which battles to fight, and when to back down.

These common characteristics (together with others that are more role-specific, such as the twelve listed for knowledge leaders by Arthur Shelley) allow for the greatest impact. These people can generate more value for their firms by being sufficiently irritating — they create pearls.

By contrast, some KM folk have found it easier to make themselves indispensable by producing just what their teams ask for, without questioning the underlying assumptions. By doing so, the only change they create is a culture of dependence. This is similar to the situation described (in reference to a different context) in the following video.

Demands for knowledge ‘products’ are common in law firms. Just like the managers in the video, partners feel more comfortable when their KM teams are creating tangible items. Equally, producing those items usually feels easier than trying to change the way people work. There are equivalents in other areas of business services — finance teams are sometimes asked for spreadsheets they know to be worthless and BD teams may be expected to support unwinnable pitches. The best professionals in those areas will challenge the requests and explain why there are better things for them to do. Good KM folk should do the same.

Ultimately, the test for impact is the same for knowledge management as it is for other professionals within the firm. How much difference are you making to the firm?

For HR people, the answer to that question might lie in recruiting great people or in managing career changes for those who are doing less well. IT professionals could point to improvements in client service using new technology tools.

For KM professionals, the difference should be found in changing the way people work for the better. Activities such as updating precedents and producing briefings are unlikely to be as valuable to the firm as challenging the way legal work is done and actually changing the way clients get the benefit of the firm’s legal knowledge.

Even diplomatic challenging is irritating, but it is necessary to create the pearls firms need.