Category: Law Firms

Breaking silos for client service: the internal view

Mark GouldLeave a comment

Unbundling legal services has become the norm. Less than a decade ago, virtually no firm would even have known what this might mean, but now even the Law Society has recognised in its recent report, The Future of Legal Services, that this is a real choice for firms and clients.

An AdvanceLaw survey of GCs from 88 major companies, found that almost 75 per cent would be willing to move legal work away from the Magic Circle or Top 50 firms assuming a 30 per cent difference in overall cost. Fifty-seven per cent also noted that they find lawyers at the top firms less responsive than those of their second tier colleagues.

Rather than purchasing the full service option, by 2020 an increasing number of in-house lawyers are more likely to have taken work back in-house or opted for unbundled services, where they buy expert advice and assistance at key stages but deal with the actual running of their own cases. And by 2020 we are likely to see general public buyers also starting down this path.

WoodpileIt is interesting that the Law Society presents this as being driven by client demand, as if firms have played no part in the disaggregation process. In fact, whilst this is clearly in the client interest, some firms have played a leading role in thinking more imaginatively about the way in which they provide legal services.

A number of new roles have grown up to support unbundled legal services — legal project managers, matter coordinators, and so on. As such, unbundling is part of a set of practices aimed at improving legal work (including process mapping, greater use of technology , and so on). As Graham Laing puts it, unbundling makes legal services customisable to client needs, which is potentially a very powerful outcome.

Customisation of legal services is about integrating the client into the firm’s value chain. Firms are being required to reconnect with their clients and to compete effectively by recognising market drivers and investing in a deep understanding of client needs and desires. It’s about grasping what clients really want. Listening to them more. Understanding them better. Gathering valuable client information to attain reliable data on market demands will result in services with better market suitability. Merely satisfying what clients ask for is no longer enough for survival in a legal market environment of intense competition.

This is clearly something that clients want, as shown by these two tweets by Brett Farrell, a former lawyer, now responsible for buying legal services:

https://twitter.com/BrettPFarrell/status/701993783827656704

https://twitter.com/BrettPFarrell/status/702974448064856065

[Update: Sadly, Brett has retired from Twitter, so these tweets are no longer available.]

Brett’s view is not unusual, neither in its content nor in its tangible frustration at the current state of law firm client-centricity. Many firms appear to be moving (slowly) in the right direction. But the picture is much less pretty when one looks at how firms organise themselves internally. Real change needs to take place there, and few firms realise it.

Whilst most good firms are actively working on meeting client desires by rethinking the way their lawyers work with each other, with client lawyers and commercial people, with other firms, and with alternative legal providers, there is much less imagination about the way they expect their own business services professionals to operate. If unbundling is right for lawyers, should it not also be considered for internal services? What might that look like?

Although some firms have started to think more imaginatively about how they organise their business services professionals, most still approach recruitment and resourcing questions in a very traditional manner. Looking at the jobs listed on recruitment sites, for example, it is clear that firms still expect sales and marketing professionals to be part of a business development function, technology experts to be in IT roles, and resourcing specialists to be deployed in HR.

Arranging business services like this ignores the possibility that a more effective arrangement might be possible, where the starting point is not “how do we group similar people together?” but “what things need to be done, who should do them, and how should they be managed?” Thinking about deploying expertise in this way might help firms to serve clients better, amongst other benefits.

So, for example, there may be a set of responsibilities that go along with ensuring that the business can work effectively — infrastructural tasks. This would include the provision of core IT services, facilities management, core accounting and financial services, and some procurement and contract management responsibilities. Depending on the volume of work in each of these areas, some of these could be outsourced. Even if they are still done in-house, it is most likely that they can be managed to a specification, which suggests that they might reasonably be grouped together as a single management responsibility. in doing this, the firm might see benefits, such as a common approach to resilience and business continuity, that would be more difficult to achieve if they are separated.

Another approach might work at the other extreme — activities that are intimately associated with the provision of legal services to clients. Here silos can result in competition for resources between different areas, whereas a coordinated approach might allow more transparency about costs and benefits. Take client care as an example. The various people in a firm who come into contact with clients all have a part to play in providing a good (and consistent) client experience. However, few firms would consider managing their front-of-house reception teams (who are often internally managed in a facilities group or outsourced) alongside client relationship managers (more commonly found in business development teams). But those two groups have a lot that they could share with each other to improve the overall performance of the firm. Client management itself is often seen as a role for lawyers as well as expert managers. But not all lawyers take well to the demands of client management, and the client experience suffers as a consequence. Sadly, few expert client managers understand exactly what it is that lawyers do for clients, and this can also affect the client experience. Why not rethink client care completely — perhaps develop an account management capability (including people of all types) akin to the model used in advertising agencies?

Another approach might be to use dynamic teams for specific types of work or projects. A firm wanting to improve the way its technology supports clients, for example, might draw together a specialised group of people — lawyers, technologists, client relationship managers, information and knowledge professionals and financial experts, and others drawn from inside and outside the firm — to dedicate their time to developing a product or service that meets client needs. At the moment, firms tend to go a little way towards this model, but they often make it hard for the project team by expecting some or all of them to carry on with other work. When lawyers keep their chargeable targets, and the IT developers are expected to maintain systems, and the marketing folk have events that need support, all at the same time as being involved in a project, the urgency of the ‘day job’ tends to detract from the importance of the project. Managing the group separately and giving it targets to be met as a group should improve the likelihood that something good can be produced in the shortest time. The cost to the firm is that some less important tasks are not done. That is a choice of priorities that the firm needs to make with its eyes open.

Firms that have adopted a clear sector focus, or that have a set of key clients, might also consider aligning business services professionals with the legal teams working most closely with those sectors and clients. Some firms already do this to some degree, with pricing specialists, relationship managers, and business analysts for example, but there may be scope to broaden the idea to include others. This kind of approach also introduces a form of matrix management that firms don’t always get right. An accountant managed within the firm’s finance team who also has a role on pricing for a sector team might find themselves torn between two sets of management instructions. My experience is that in most firms the client or sector team rarely has a formal management responsibility for business services professionals. If the client experience is supposed to be at the heart of what the firm does, should those teams not be entitled to exercise stronger management control?

Putting the client at the heart of the firm does not mean automatic acquiescence to client demands. The customer is not always right. What this approach does is to allow professionals of all kinds (not just lawyers) the opportunity to participate in improving the way clients are supported. Each specialist will have their own perspective on this, but the current siloed model, with direct client contact reserved to lawyers and a few others, generally inhibits any real understanding of how things might be arranged differently and better. An unbundled, client-focused model can provide firms and their people with a more rewarding working experience.

Unbundling internal services also has consequences for the firm’s senior managers (directors and ‘heads of’ business services groups). In the silo model, each of these people has a clear set of responsibilities, and a fairly fixed group of people to manage. Sometimes roles at this level can become ossified, and sometimes the strategic focus that they should have is overwhelmed by the daily grind of operational management. An unbundled model would allow a firm to think more dynamically about line management, so that senior people can dedicate more time to strategic issues. Equally, unbundling some traditional silos might lead a firm to realise that not all the roles at this level are necessary. But a silo that exists only because it serves the interests of the person at its head is probably one whose work is least connected to the interests of the firm’s clients or its other employees.

I can’t promise that Brett Farrell’s plea for law firms to provide a better client experience will come quickly, but I am fairly sure that if it is to come at all it needs to involve more than just the lawyers. Traditional business services structures are much less likely to help generate the right experience than a more imaginative approach that draws on all the relevant talents that the firm holds.

Measuring performance and setting priorities

Mark Gould4 Comments

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

Mark Gould1 Comment

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

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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?)

Lawyers moving into business services: good or bad?

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Practising lawyers sometimes find themselves moving into operational roles in other areas of their firms. This tends to occur most in areas of business services (especially knowledge management, but also business development, risk, HR and learning, or procurement) where legal skills are relevant or where no particular expertise is needed. (IT, finance and facilities tend not to attract lawyers, except in management roles.) This flow raises two separate questions for me: are lawyers right for these roles; and should the firm be looking externally, rather than moving people within its walls?

Dalí's easel, Castell de PúbolThe Lawyer’s website today features the story of Linda Zell: a litigation lawyer at Olswang who became the firm’s head of corporate responsibility (CR). Her progress into that role is a really good example of how moves like this come about. Her introduction to CR came from a need to add a paragraph to a client pitch document, and then grew over time to a real interest, then a drive to see it promoted properly within the firm. After a time juggling CR and lawyering, she is now responsible full-time for leading Olswang’s CR strategy. One of the firm’s partners is quoted, “we asked her to write a paragraph on CR and she set up a whole department instead.”

This kind of transition is not unusual — in fact, I did something similar when I moved into a lead knowledge role. Firms need to be aware that good and bad things can flow from such a move.

The upsides

On the positive side, when a firm’s lawyer moves into a new business services role, the firm gets the benefit of someone who knows how the firm and its lawyers work. They therefore have an edge over outsiders who might take a while to get under the skin of the business. This may be particularly valuable in roles like KM or CR, where a significant part of the job involves careful influencing and persuading, so that understanding people is at a premium.

Another benefit is that the lawyer who moves into such new roles is likely (as I think may be the case with Ms Zell) to be especially driven to succeed. When a firm is taking a new direction, this zeal can be very useful.

Most firms consider it important to support their people develop their careers. This might easily be done within existing career tracks. Lawyers may move smoothly from trainee to partner, whilst business services professionals might advance from entry-level roles through management to leading a function. It is much harder, and therefore more laudable, for a firm to show its commitment to career development when someone makes an unusual move such as from lawyering into business services.

The drawbacks

The areas where lawyers tend not to take roles, such as Finance and IT, often depend heavily on technical expertise that lawyers do not have. This is becoming true of some other areas (such as HR and marketing), which have previously been destinations for lawyers moving out of practice. In newer areas, such as CR and KM, firms still have a choice to appoint people with experience and expertise in the field in preference to their own lawyers.

Appointing an expert from outside might allow the firm to be more confident that they were getting the benefit of the most up to date thinking in the area, which could mean that the function could mature much more quickly than if it were led by an internal lawyer. In some situations, the firm’s partners may be more respectful of acknowledged expertise as opposed to a more familiar, but untested, internal appointment.

External appointees might also their own networks of people in similar roles who could swell the ranks of the team quickly if that is what the firm needs. It may take some time for ex-lawyers to be able to develop their new teams around themselves.

Getting the good without the bad

Fortunately, there are ways to get the benefits of internal appointments without the downsides. (Or at least minimising any negative impact.)

One critical step would be to get external validation of the firm’s choice to create the new role in the first place. It may be too easy to give in to the pressure of a lawyer to create a new business services function for them to lead. Most disciplines have a community of consultants who can advise on the adviseability of embarking on this new activity. They might also help to define the purpose of the function, and help the firm to develop a role profile for the ideal leader. If the internal candidate matches this role profile, then the firm would know it was on the right track.

The new appointee might also benefit from external support, and good firms should budget to pay for this. No matter how enthusiastic someone is, starting up a new support function is a hard task. Almost inevitably, in this scenario, the new appointee is the person in the firm who knows most about the job. Without an internal mentor or coach, they may not get the right kind of constructive support and flounder quickly. If they are able to draw on expertise from outside, the firm will get some of the benefits of making an external appointment.

On the whole, then, I think firms should continue to help their lawyers move into different areas of the firm, but they need to be aware of the possible risks and manage them sensibly.

(In case it needs saying, I have provided support of the kind described for knowledge roles. Please get in touch if you are new to a knowledge role, or if your firm is thinking of creating or extending its knowledge function.)

Process won’t save you from mistakes

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One of the benefits of Twitter for me is that I get great pointers for new things to read from the people I follow. One such came a couple of weeks ago from Simon Bostock. He drew my attention to “Bedford and the Normalization of Deviance” — an analysis by Ron Rapp of a recent National Transportation Safety Board (NTSB) crash report. In Rapp’s words:

…after fifteen years in the flying business, the NTSB’s recently-released report on the 2014 Gulfstream IV crash in Bedford, Massachusetts is one of the most disturbing I’ve ever laid eyes on.

If you’re not familiar with the accident, it’s quite simple to explain: the highly experienced crew of a Gulfstream IV-SP attempted to takeoff with the gust lock (often referred to as a “control lock”) engaged. The aircraft exited the end of the runway and broke apart when it encountered a steep culvert. The ensuing fire killed all aboard.

…in this case, the NTSB report details a long series of actions and habitual behaviors which are so far beyond the pale that they defy the standard description of “pilot error”.

As we know from Atul Gawande’s work and elsewhere, pilots are supposed to work methodically from checklists. In larger aircraft, there will be more than one pilot so that each can check the other. In this incident, neither of those safeguards prevented a complete failure to attend to instrument warnings or follow instructions to avoid the crash.

Rapp suggests that the aggregation of errors in the face of clear instructions and warnings is an example of the normalisation of deviance. This is a term coined by an American sociologist, Diane Vaughan, in a study of the culture of NASA that contributed to the Space Shuttle Challenger disaster. She summarised the concept in a later interview:

Social normalization of deviance means that people within the organization become so much accustomed to a deviant behaviour that they don’t consider as deviant, despite the fact that they far exceed their own rules for elementary safety. But it is a complex process with some kind of organizational acceptance. The people outside see the situation as deviant whereas the people inside get accustomed to it and do not. The more they do it, the more they get accustomed.

Vaughan’s work has been developed by others. I first came across the concept in a radio programme in 2010, in which Scott Snook was quoted:

Each uneventful day that passes reinforces a steadily growing false sense of confidence that everything is all right — that I, we, my group must be OK because the way we did things today resulted in no adverse consequences. 

When I tracked down this quote to its source, in Chapter 6 of Snook’s book, Friendly Fire: The Accidental Shootdown of U.S. Black Hawks over Northern Iraq (an account of an incident in Iraq in 1994), I discovered that there was more useful detail, which is directly relevant to the growing use of checklists and processes in law firms and elsewhere.

Practical drift between stability and instability

A useful summary of Snooks’s insight can be found in Industrial Safety and Hygiene News, by reference to the diagram linked below.

ISHN0811-c2-graph-615px

Snooks’s model describes behaviour in four quadrants bounded by the degree of ‘situational coupling’ and ‘logics of action.’

Situational coupling is described as loose or tight, depending on the extent to which parts of the organisation are free to operate autonomously. The more interdependence there is between different parts of the organisation, the tighter the situational coupling.

Logics of action are described as rule-based or task-based, depending on the primary driver of actions in a particular context. Rule-based actions are driven by checklists, policies, or other pre-determined norms. Task-based actions are more likely to be responsive to the immediate scenario or on local or personal habits — doing whatever is necessary to get the job done.

Snooks’s view is that two of these quadrants are mismatched and therefore unstable — that is, rule-based logics of action are unstable in loosely-coupled situations, and task-based logics are unstable in tightly-coupled situations. The ‘practical drift’ described by the circle of arrows in the centre of the diagram suggests how organisations move through the sequence from stable to unstable quadrants.

Law firm process and normalisation of deviance

How might this apply to the way law firms adopt (or improve) working processes?

The starting point would be a desire to define the nature and content of the policies or processes to be applied across the firm — these might cover working practices, compliance requirements or client-care standards, for example. These norms are set in the ‘design’ quadrant — where there is a common view that the firm needs to work together to achieve a particular goal (therefore tightly-coupled and naturally rule-based).

Once the rules are set, they become the basis for action, even when parts of the firm are working separately from other parts. This is the second quadrant, described as ‘engineered’ because actions are forced to be rule-based rather than driven by the context. Whilst the rules are new, they tend to be followed despite the mismatched nature of the situation. As such, the firm need have no cause for concern (apart from some teams reporting that the situation feels unnatural).

However, because of the mismatch, work in a loosely coupled situation will eventually default to task-based behaviours. This means that in the third quadrant (‘applied’ in the diagram), people will work in a way that feels more natural. They may ignore the wider organisational rules because they ‘don’t feel right’ or because a better outcome (personally or for clients) can be achieved by responding to more concrete or immediate needs.

This is where normalisation of deviance arises. All those involved know what the rules are, but they (tacitly or otherwise) agree to act according to a different set of standards. For the most part this is not a problem. As Snooks puts it, loosely coupled systems are both resilient and fragile. They can last a long time — until an external, possibly random, factor breaks them. This is where the original quotation resurfaces:

Each uneventful day that passes in a loosely coupled world reinforces a steadily growing false sense of confidence that everything is all right — that I, we, my group must be OK because the way we did things today resulted in no adverse consequences.

The emphasised phrase (omitted when I first heard the quotation) makes things much clearer.

Failure (the fourth quadrant) occurs when the system is pushed into a tightly coupled situation. This may happen when work that usually progresses autonomously is forced to take account of actions elsewhere within the firm or even externally. Where there is interdependence, task-based norms no longer work, because the newly introduced elements cannot be aware of the traditional behaviours (whether deviant or otherwise) of the loosely coupled team. In the worst-case (such as that described by Snooks in 1994 Iraq), previously loosely coupled teams have to assume that everyone else is following the rules, and behave accordingly, with fatal or disastrous effect.

Avoidance mechanisms

I think many, if not most, firms could identify situations falling into the failure quadrant. These errors may be minor, but they always have a cost — the persistence of a particular type of mistake-making inevitably suggests deeper problems to clients or insurers. How can they be avoided?

The standard response to persistent errors is to provide additional training and to highlight the importance of the rule-based systems even for loosely coupled situations. As I have pointed out before, this approach is rarely successful. On further reflection, I think a better response needs to be developed with the errant team.

Snooks’s description of practical drift suggests that the problem isn’t simply disobedience to organisational rules — it is that a rules-based logic does not match the needs of a loosely coupled situation. I suspect persistent errors in law firms occur more often in teams that work autonomously, and which are therefore more comfortable using task-based logic to structure their work. As such, then the answer must lie in one of two options.

The first is probably most attractive to firms with an interest in controlling the work people do. This would be to force interdependence between teams across the organisation. If the organisation becomes tightly coupled by default, adherence to common rules would be more natural. There may be additional benefits in such a refocusing of work, and they could make it more palatable, but otherwise it may be a struggle within the normal partnership model.

The second option is to open up a discussion about the way loosely coupled teams work, especially in difficult situations. This might include making work more visible, or clarifying the shared task-based logic used by different teams, so that the wrong assumptions aren’t made. Discussions of this type are likely to be very sensitive (particularly if they are positioned as a response to error-making), and so they probably shouldn’t be undertaken by the firm’s management. Impartial external, but informed, facilitation would be more fruitful. (Of course, if your firm is interested, I can do that.)

Even if no action is needed, being aware of practical drift should help firms understand better why and where their process improvements might succeed (and, more importantly, what might make them fail).

The unknown future of technology

Mark Gould1 Comment

Last week saw the fortieth anniversary of the first commercial passenger-carrying Concorde flight, as highlighted in this tweet by Aviation Week:

Concorde was probably the most well-known product of Harold Wilson’s government’s high-profile science and technology policy during the 1960s. (Strictly speaking, the joint Franco-British project started under the preceding Conservative governments, but much of the work was done under Labour.) That policy was announced in a speech in 1963, whose concluding passages included the following fateful words:

The Britain that is going to be forged in the white heat of this [scientific] revolution will be no place for restrictive practices or for outdated methods on either side of industry. We shall need a totally new attitude to the problems of apprenticeship, of training and re-training for skill.

“The white heat of technology” became a watchword for the Labour governments of 1964-1970. Looking back, it might also be seen as a kind of curse. Some of the highest-profile advances of this era had little lasting impact, or were undone in later years by the kind of outmoded methods and practices that Wilson said should be rejected.

Concorde was one of those disappointments. The development and production of a supersonic aircraft was an incredible achievement, but it was only purchased by the national carriers of France and Britain. Other airlines conducted evaluations, and some went as far as placing orders. All the orders were cancelled over time. Concorde remained in service with British Airways and Air France until late 2003 when it was withdrawn by both airlines, due to low passenger numbers and rising maintenance costs.

Concorde’s purpose was purely to carry passengers faster than other aircraft. This purpose was shared on the sea by another 1960s technology: the hovercraft. Just as Concorde cut the time for Atlantic air crossings, the SR.N4 hovercraft operated by Seaspeed, Hoverlloyd and (after their merger) Hoverspeed allowed passengers to cross the English Channel in a fraction of the time taken by traditional ferries.

In the end, though, not enough people wanted to pay the premium to save on their travel time. The hovercraft service between England and France ran for just over thirty years — from 1968 until 2000. The cost of fuel ultimately made the service uneconomic — especially once cross-Channel duty-free sales were outlawed (like many forms of transport, traditional retail opportunities had subsidised the core service).

The real problem for the hovercraft and for Concorde was that they prioritised the wrong thing. Whilst their progenitors (including the British government, which subsidised both projects either directly or through its management of the transport operators) concentrated on speed, travel became a volume business. As foreign travel became more common, it would be more important for operators to have craft that could service as many passengers as possible. Since the high-speed options tended to have limited capacity, they were much less attractive.

As a result, Concorde was much less successful than the Boeing 747. The latter plane was developed at about the same time, but was far more capacious and flexible in operation. Concorde could only carry a maximum of 120 passengers, whilst the smallest 747 variant carried 480 people. The 747 was also capable of longer flights. Unsurprisingly, the Boeing remains in production (albeit in updated form).

On sea, a similar pattern emerged. Whilst hovercraft services operated, the traditional ferries stayed in service. Although slower, the ferries carried 3-4 times as many passengers and cars.  It wasn’t until the Channel Tunnel opened in late 1994 with a high-speed high-volume service that the sea-borne craft of all types were properly threatened.

This stark retelling of the history of Concorde and the cross-Channel hovercraft would suggest that those investments were a complete waste — the only return was 30-40 years of high-speed travel for a small minority of travellers. But there were other benefits. The most obvious is that the Anglo-French cooperation in developing Concorde was the foundation for the Airbus consortium, which is now the main competitor to Boeing in the production of large passenger and cargo aircraft. Hovercraft technology is not dead — in a modified form, it persists in surface-effect ships such as Norway’s Skjold-class corvettes.

The outcome of these experiments could not have been foreseen. That they were not commercially successful is not a reason for suggesting that they were misconceived from the outset. Their failure arose from changes in the market (the behaviour of the travelling public and the global oil market) as well as governmental action (liberalisation of air and shipping services on both sides of the Atlantic and the Channel, together with closer European integration). I am certain that almost nobody could have predicted the result of this combination of factors, even if they had foreseen each alone. In the end, though, very few unsuccessful ventures produce absolutely nothing of value at all.

And that is where I draw a link with current technology developments in the law. As I have mentioned before, the technologies of the future are not necessarily the ones we predict in the present. That said, there is an incredible amount of technological change and experimentation in legal services at the moment. Some of those experiments will be as successful as the Boeing 747 — changing the way people use the law across the world. Some will be as exciting as the hovercraft for a while, but will ultimately be beached for reasons that are currently unforeseeable.

There are a few important things to bear in mind during this period of novelty.

Experimentation is necessary, which means that some things won’t work out quite as intended. Firms that stick to what they know might be lucky to survive, but they may still be overtaken by those that experiment and fail.

It is possible to try more than one experiment. Unlike other professional services firms, law firms struggle to diversify in the services that they offer — few stray beyond the law — but they can try different ways of working.

Don’t forget the people factor. At a technology level, Concorde and the large hovercraft were a success. They delivered exactly what was promised — fast, safe travel. But they didn’t serve people in the way they wanted. The market chose something different. Likewise, law firms’ may create technology-based services that are successful in their own terms, but fail to appeal to people for some reason. Projects that are driven by technologists (in the broadest sense of the term) are more likely to forget to consider how people (lawyers, clients, regulators, and others) might react.

What is going on elsewhere? This is crucial. The lessons learned from Concorde resonate beyond the companies and teams directly involved in that project. On the other hand, had those people paid closer attention to the development of the package holiday and the work being done in other areas of the aircraft industry, they might have decided to cut their losses much earlier than they did. Likewise, law firms need to be aware of how other firms’ experiments are progressing. Just as businesses need to avoid reinventing their own wheels, they should try not to repeat other people’s mistakes but build on their successes instead.

Why things stay the same

Mark Gould5 Comments

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.

Thoughts on Randi Zuckerberg’s 10 trends…

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Last week’s London Law Expo was drawn to a close by a rousing keynote address given by Randi Zuckerberg. I have never seen such a rousing speaker at a legal conference (even though she claimed to be jet-lagged).

Ten trends

After giving us a vivid account of her history (New York, Harvard, Ogilvy & Mather, Facebook…), with a few digs at her dropout brother,  Randi introduced us to ten trends that she considers will affect all aspects of life in the near future. These all have a link to technology, but they aren’t technology trends. She has done similar presentations at other events in the past, but it is good to see that older versions (which can easily be found on the web) are appreciably different. There is an simple account of the version I saw online at Urban Source in Australia.

The beauty of Randi’s list is that each member of the audience probably had their own reaction to the trends she identified. Here are some of my thoughts.

Trend 1: The age of the entreployee

2015-10-13 15.57.43The ‘entreployee’ is someone employed by an organisation that encourages its people to spend time coming up with ideas that might be interesting (just like an entrepreneur). Randi referred to Google’s 20% time and Facebook’s hackathons. She was under no illusion that the ideas coming out of these events would all be useful — she mentioned a Facebook engineer linking a mini-trampoline to an iPhone so that the phone could be unlocked by replicating a particular jump. That was probably the worst idea she had ever seen.

Interestingly, hackathons seem almost always to take place outside normal working hours and Google’s 20% time is now understood to be something like 120% time. But any sensible business (including law firms) should try to find out about the ideas that its people have to improve things. Some have ideas banks of some kind (online or otherwise), and I visited a Magic Circle firm this week that was in the midst of a ‘jam’ event along the lines of those developed by IBM. Events like this are ideal to surface insights that could be taken up by pioneer groups like the ones I described in my last post, and are becoming much more common.

Trend 2: Think like a media company

2015-10-13 16.01.43The key here is capturing attention. Randi gave some great examples of consumer brands using events or subverting traditional media to get people to share their experiences across social media. Media success has never been purely a product of sales — readership is the metric that matters. One copy of a newspaper may be read by only one person, if it is good enough. If it is great, it will be read by many people.

This is more of an issue for consumer-facing law firms, but it shouldn’t be ignored by commercial firms. I am aware of just one that has created a genuine media brand for itself. The Rethink Law videos (UK/US) are another example of attention-grabbing media use, this time by a new-law business. These were shared widely across the legal world — students, law firms, clients. They were even emulated by others.

Trend 3: Reinventing retail

2015-10-13 16.06.54The focus here wasn’t so much on the retail experience as the matter of consideration (as contract lawyers might say). Using the streamline, “cash is not the only currency,” Randi had some intriguing examples of retailers allowing customers to exchange something other than money for their wares. That might be a hotel in Sydney offering a free stay to people with 10,000 Instagram followers, or a webshop where people pay with their talents (even talents as odd as sounding like a car horn).

Billing and pricing have been hot issues in law firms for at least the last decade. However, I would be surprised if many firms have allowed clients to pay their bills with their reputations. (And there may be regulatory or other reasons why such exchanges might be difficult.) But there may be other forms of ethical and interesting non-pecuniary compensation.

Trend 4: Start ’em early

2015-10-13 16.12.16Randi’s message here was to encourage children to learn to code as early as possible. I am not sure that everyone has to be a coding prodigy, but understanding the basics of computing has been important for some time. I was lucky enough to be exposed to BASIC programming using punch-cards to create simple programs and then moving on to the mainstays of late-70s/early-80s educational and personal computing. I am no technical wizard, but that experience has made me comfortable with technology in a way that I don’t see in those who missed out on it.

The practice of law, like every other area of work and life, depends on intelligent use of technology. But this is not common amongst lawyers. One GC, Casey Flaherty, was so disturbed by the lack of technical acuity amongst his external lawyers that he developed the Legal Tech Audit (now called the Service Delivery Review). His recent experience suggests that, even amongst current law students, technical ability still falls short.

Trend 5: The maker movement

2015-10-13 16.16.15Curiously, wide use of the internet created the conditions for traditional crafts to flourish alongside global retail behemoths. Etsy and similar platforms allow small artisanal producers to sell their products to the world.

It is now possible to run a legal business with little of the infrastructural paraphernalia associated with the traditional law firm model. Platforms like this one can be used to create a meaningful web presence at a low annual cost. Organisational email and internal collaboration can be bought on a per person basis. Secure client collaboration is also possible. Firms built on cloud-based platforms can add new lawyers quickly in comparison with others, and they inevitably concentrate on the important aspects of their business — leaving support and development of technology to experts in those fields.

The ‘maker culture’ crops up in other ways in the law. Rather than create a firm, people are building apps that give access to the law in a different way. The traditional firm is thus being squeezed from both directions.

Trend 6: Virtual reality

2015-10-13 16.20.44Some time ago, firms were looking at moving into virtual worlds, such as Second Life. Some years later, Second Life is looking a bit tired. Nonetheless, virtuality still holds a strong allure for some. The current poster-child for virtuality is Oculus Rift, which is currently intended primarily as a gaming device. Doubtless it is a short leap to a device for presenting objects to consumers in a better way than is currently possible on a normal website. I am sceptical that this will make a significant difference to the business of law.

Trend 7: Life logging

2015-10-13 16.24.39In a sense, lawyers were early on the life logging scene. After all, what else is time recording than a log of events during a lawyer’s working day. When life logging was in its infancy, significant amounts of work would be needed to create something like Nicholas Felton’s annual report “weaving numerous measurements into a tapestry of graphs, maps and statistics reflecting the year’s activities.” Now, the Apple Watch is just the latest and most sophisticated device that can monitor a wealth of personal information and aggregate it into meaningful (and actionable) insights. It is worth noting that Felton’s most recent annual report will be the last:

The world of personal data has changed considerably since the project began in 2005 and this edition attempts to capture its current state. While previous editions have relied on custom solutions to gather ethereal personal data, this edition is based entirely on commercially available applications and devices. Using an array of products and software, the author’s car, computer, location, environment, media consumption, sleep, activity and physiology were instrumented and logged.

Lawyers are still mostly in the land of manual (slightly automated) timesheets. There are tools to monitor the things people do (emailing, telephoning, drafting, etc), but few of them match the power of personal technology devices. Even where it exists, few law firms have adopted this kind of technology, and fewer still present the results of the information gathered in a meaningful way for their fee-earners. Those that do are stealing a march on their competitors by having more information to use as a basis for understanding their position in the market as well as the performance of individuals and teams.

Trend 8: The new frontiers — education and healthcare

2015-10-13 16.27.57The internet has moved on considerably in these areas. People used to try and find out more about health issues (and self-diagnose). Now, treatment is possible using things like guided simulations and 3D printing. On the education front, real learning is now possible — taking people beyond mere information.

In the law, there is still a lot of work to be done on improving the availability of information. Free services like the Statute Law Database provide a useful service, but they need additional work (is this text still in force? is there anything else that might be relevant?) for people to be sure that they are reading the law as it applies to them. As that work progresses, the position of lawyers as gatekeepers to legal insight will decline. Just as some aspects of education and healthcare are being de-professionalised, so lawyers will need to rethink their position in the knowledge chain. As Jeremy Hopkins puts it, in a review of Richard and Daniel Susskind’s new book, The Future of the Professions:

Another area where I suspect we have not yet seen the full impact is what is described as “commons”, the free sharing of knowledge through open, online collaborative communities. One of the real benefits here is the ability to address latent demand, in enabling access to legal services for the many who can’t afford it. The challenge here is that there may be a considerable overlap between those who fall into this category and those who do not have the capability to make best use of “self-help” solutions or indeed to know they are in need of such help in the first place. The positive argument here is that some degree of access to justice is better than none at all.

Networked knowledge has changed the nature of education and healthcare. It is doing the same for the law too.

Trend 9: Gamification for motivation

2015-10-13 16.30.48The important word here is ‘motivation’. Gamification became popular a few years ago when people realised they could mirror the practice of ‘favouriting’ or ‘liking/unliking’ familiar in social media tools within business platforms. The thought was that people would ‘like’ an intranet page or internal blog post, but it wasn’t always clear what purpose that would serve.

In a sense, gamification has existed in workplaces for generations. The gold watch or carriage clock awarded for long service can be seen in the same light as achievement badges in gaming on or platforms like Foursquare. But people never stayed with an employer for 25 years or more just to get the clock. They stayed because there was some other motivation — they enjoyed the work or the people, or they just liked getting paid to do something they could do. Modern gamification contains a similar risk — people find their motivation in a variety of different places (possibly from a unique combination of factors for each person). Trying to second-guess where motivation might arise is a fool’s errand. It is better to make the work meaningful and the management sensitive to each individual’s needs and interests. Gamification risks de-motivation.

Gamification works when there is already a desire to do something, but a little more motivation is needed. When there is no interest in doing something, gamification is more likely to put people off. One of the examples Randi gave was an app that helps people keep up their training routine by persuading them that they are being chased by zombies. The key factor here is that the desire to exercise is already present. A zombie app won’t actually get someone off the couch in the first place if they are more interested in catching up with their soaps than in going for a run.

Trend 10: Unplug to refresh

2015-10-13 16.33.49I thought this was an important point to make. Randi highlighted the growing interest in deliberate disconnection. (Even to the extent that there are hotels and resorts that charge more for the peace that comes with an absence of connectivity.

Lawyering can take many forms. As lawyers have become able to connect and communicate with clients using tools that go beyond the telephone — email, SMS, collaboration platform, social media — they may have forgotten the power of meeting someone and talking face to face. Unplugged communication like this can refresh a client relationship in a way nothing else can. Likewise, if a difficult point has derailed a negotiation, it can often be understood better if the parties get in a room together without electronic devices. There is a reason why mediation is an increasingly important tool in a range of commercial and personal situations.

Finale

At the beginning of her keynote, Randi described how her ambitions to sing on Broadway had been thwarted when she couldn’t get onto the Music major at Harvard. Despite this setback, she got the opportunity to appear in a show last year. No doubt inspired by that success, Randi finished her talk by singing — probably a first at any legal conference. The organisers, Netlaw Media, were filming the conference, so visual evidence of the performance may be available in time. If so, I will update this post with a link.

Three steps to the future

Mark Gould1 Comment

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?

New embedded in old at the Royal Exchange Theatre, Manchester

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).

map

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):

trimodal

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.