Lawyering – Mark Gould…

Reading for empathy

9 February 2017 Mark GouldLeave a comment

I consider myself lucky to know people (online and offline) who read widely. I know that we might not see eye to eye on what we read, or on all sorts of other issues, but we do agree that there is something important about books and the ideas they contain.

In Design Observer recently, Ken Gordon described how he found new meaning in Philip Roth’s novel, The Plot Against America.

…buried in The Plot is a surprise. I didn’t realize until this go-around, but the novel contains, among many other virtues, a superb illustration of how empathy informs good design. That’s right: Philip Roth, designer manqué!

In addition to the normal modes of scenic description, common to many novelists, Gordon describes how one of Roth’s characters solves a problem for another just as a designer would. That vignette is enough for Gordon to consider the book worthy of inclusion on the syllabus of an introductory design course. But he makes a more important point at the end of his article.

As an undergraduate law student, I was encouraged to read novels with legal themes, such as Dickens’s Bleak House or Harper Lee’s To Kill a Mockingbird. There is certainly merit in that, just as a design student might learn from the subtle way Roth deals with a design problem in The Plot Against America. Gordon’s broader point is that the practice of reading novels gives broader benefits than that.

The Plot is a novel of grand design, and I’d love to see more designers read this, and other such books, as a way of educating themselves in empathy. Submersing ourselves in great works of literature is a wonderful way to train us to be more human.

So I say to you, designers, students, aspiring humanists: If you’re serious about understanding people, feeling for people, and using that to inform your design, you’d do well to read superlative works of fiction. The Plot is a fantastic example, but it’s one of many, many volumes you should be extracting from the shelves.

Other forms of fiction may be equally powerful. I am reminded of Roger Ebert’s perspective, in the biographical film, Life Itself:

…the movies are like a machine that generates empathy. It lets you understand a little bit more about different hopes, aspirations, dreams and fears. It helps us to identify with the people who are sharing this journey with us.

In an age when legal practice is being improved by intelligent applications of technology, empathy is an increasingly important aspect of what it means to be a valued practitioner. Clients are people, so lawyers should read widely, for similar reasons as designers and other humanists. (Whether or not design is brought into the business itself.)

Lawyers moving into business services: good or bad?

1 February 2016 Mark GouldLeave a comment

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?

The 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.)

Thoughts on Randi Zuckerberg’s 10 trends…

21 October 2015 Mark GouldLeave a comment

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).

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

The ‘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

The 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

The 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

Randi’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

Curiously, 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

Some 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

In 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

The 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

The 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

I 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.

Hoverboards and jetpacks: the future will be something else

23 July 201523 July 2015 Mark Gould1 Comment

In less than 90 days, it will be 21 October 2015. That’s the date to which Marty McFly travels in Back to the Future Part II. His journey through time from the 1980s led him to a future filled with gadgets like hoverboards, flying cars, and self-tying shoe laces. Unless we experience three months of frantic development, I suspect we won’t see any of those in October.

That’s the problem with trying to predict the future — our current preconceptions often blind us by narrowing our vision. Jetpacks might have seemed like a great idea when we were young in the jet age, but they actually make no sense. Madeleine Ashby puts it bluntly:

“We were promised jetpacks!” they whine. Yeah, dude, but what you got was Agent Orange. Imagine a Segway that could kill you and set your house on fire. That’s what a jetpack is.

Jetpacks solve exactly one problem: rapid transit. And you know what would help with that? Better transit. Better telepresence. Better work-life balance. Are jetpacks an innovative solution to the problem of transit? Nope.

I have a fear that a lot of the current pontificating about the future of legal practice is in the hoverboard and jetpack category. Many commentators present a future in which technology is injected into lawyers’ work. One way to show how this might fall short is to look at the process of document creation — a core legal activity.

Documents have always been at the heart of legal work. As soon as someone reneged on an oral promise, it became clear that shrouding a transaction or relationship in writing would make it easier to prove and enforce. At this stage, the documents are short and written by hand by the lawyer in person or by someone scribing the lawyer’s words.
As lawyers became more exalted, it was more likely that they would dictate to a secretary. Sometimes the lawyer or the secretary would collect commonly used clauses and paragraphs as an aide-memoire and to speed up the drafting process.
Technology first arrived in the form of typewriters, which allowed secretaries to create documents more easily than writing by hand.
Later on, the process of conveying the lawyer’s words onto paper was improved by the use of dictating machines. With these, the lawyer could store up words for typists to convert into documents. The document creation process could thereby be shifted in time and space.
Typewriters gave way to word-processors, which saved more time by making error-correction and document reproduction much easier.
Dedicated word-processing systems were supplanted by standard software and PCs that were inexpensive and easy to use so that lawyers could use them without the assistance of a secretary.
Lawyers were assisted further in the production of their own documents by the ease of copying previous documents and by the creation of template documents and clauses for general use.
The dictation process has now been digitised, so that lawyers who prefer not to type can still have documents created for them. These systems might just improve the traditional dictation process or they may use speech recognition to allow documents to be created directly.
Increasingly, the document creation process is being automated — reducing the need for typing and similarly error-prone human intervention.

At the end of this broad-brush account it should be clear that a huge amount has changed. Technology now allows hugely complicated suites of documents to be created and managed with ease and accuracy compared to the quill-pen on vellum of the past. But equally, very little has changed. Clients still see their transactions or relationships converted by lawyers into documents. Apart from changes in technology and practice, a 19th century lawyer would recognise the work of a 21st century lawyer.

Through this lens, technology has changed the way lawyers work, but it hasn’t actually changed the way they serve clients.

Clients don’t see the world through documents. Documents are secondary to their real needs. More significantly (barring future litigation), the role of lawyers often ends when the document is done. For clients, that is just the beginning. Lawyers (especially those in private practice) rarely see the life that documents lead. For, as my former colleague Melanie Hatton pointed out some time ago, contracts are alive.

The best Projects and Contracts Managers which I’ve worked with keep their contracts close at hand and use them as a daily weapon against their suppliers to ensure deliveries are made on time, service levels are met, software performs as it should and (you’ll be surprised how much this next one is overlooked) invoices are accurate, so that we’re not charged a penny too much for the privilege.

And, as the project which it manages evolves, so the contract should evolve too. A contract is a living thing. And indeed, the Project or Contracts Manager managing that project is best served by keeping up to speed with this evolution.

Melanie tells a great story to illustrate her point. The ‘hat saga’ is best read in the original, but the key point is that when a particular contract was made some elements were left for future agreement. That isn’t uncommon. Nor, sadly, is it uncommon for the later agreement to be poorly remembered and possibly not even documented at all. The document was pointless in the face of the relationship’s commercial evolution.

Good technology could change the way transactions and relationships are managed by looking beyond the document into the reality of commercial practice and contractual evolution. (I know that contract management tools exist, but my sense is that they aren’t always successful.)

Two items from beyond the legal sector provide further illustration of the principle of looking beyond the hoverboard and jetpack.

For some years, journalists covering consumer technology have argued that Apple should make a television. Obviously, Apple has not made a television to compete with Sony and Samsung in the living room. M.G. Siegler of Google Ventures has spotted why that is:

a whole generation is now growing up used to watching television content on their phones and/or tablets. Or, at the very least, their laptops. For all intents and purposes, these are televisions. And guess what? Apple already makes them!

In essence, Apple (with other companies) has changed the way moving pictures are consumed. They don’t need to make a television to match the old way of viewing.

…just imagine what a mistake it would have been to build an actual television. Whatever that is.

Benedict Evans recently took a long hard look at the evolution of Microsoft Office and similar productivity software.

[T]oday, in a thousand companies, a thousand execs will pull data from internal systems into Excel, make charts, put the charts into PowerPoint, write some bullets and email the PowerPoint to a dozen other people. What kills that task is not better or cheaper (or worse and free) spreadsheet or presentation software, but a completely different way to address the same underlying need – a different mechanism.

Evans traces the design of this kind of monolithic software back to the kind of office environment presented in Billy Wilder’s film, The Apartment, in which Jack Lemmon played CC Baxter, a junior executive. Evans proposes a different focus — on needs and verbs.

Do you need a large or small screen, do you need a keyboard, a mouse or just touch, and do you need a complex multi-window OS (Windows, Mac OS) or a simpler model based on full-screen use (Windows 8 et al, iOS, Android)? If you have to make an Excel file, paste charts into PowerPoint and write bullets or a memo then yes, keyboards, mice and windowing make things much easier. But if you have to flag a few key changes on a dashboard and tag them for review by three colleagues, you might not. The business task being achieved might be the same. Again – you need a keyboard to do x, but is x actually your job, or it it just the tool you use today to do your job?

What this points, to, I think, is that productivity breaks down into a set of verbs. In CC Baxter’s office you see each of those verbs made into a physical object. Over time, those verbs get combined, broken apart, linked, created and removed as the tools change, the organization is changed by the tools and of course the underlying business itself changes. You don’t actually send email or make a spreadsheet – you analyze, delegate, report, confer, decide, track and so on. Or, perhaps, ‘what’s going on, what are we doing and what should we be doing?’ Each set of tools fixes that into a different pattern, but one should not look at that pattern and assume that that’s the way things must be done – that that’s what ‘real work’ looks like.

A thread through all of this is communication… Communication changes from a typed memo hand-carried to your desk in a manila internal mail envelope, to a carefully-laid-out presentation laboriously crafted in PowerPoint (maybe emailed, maybe presented on screen, maybe printed), to threads in Slack, a chat app with third-party service and data integrations. The real, underlying task is to communicate around the problem “how are sales of widgets going, why, and what should we do about it?”, and that might not have changed at all, though you might have gone from a week to a day to a minute to get the answer.

Distilling that further, there is information and the creation and analysis of it, and then there is communication – the connective tissue of the organisation. Right now, both of these generally mean the creation and the passing around or talking through of document files. But there’s nothing eternal about that model.

Evans is talking about generic business processes, but these are just as applicable to legal work. When they document clients’ transactions and relationships, lawyers manage, create and analyse information and then use the document as a medium of communication. There is nothing eternal about the document-centric model of legal work.

What could come in its place? Anything that matches more closely the way clients want to work. Just as moving pictures now fit in people’s pockets rather than being restricted to large public or household screens, so relationships and transactions could be more comfortably managed in a myriad of ways better than in a rigid document that is likely to end up unread in a filing cabinet.

There will be technology in the future. But it will be more useful than hoverboards, jetpacks, flying cars and turbo-charged legal documents.

Improving practice: insights for lawyers from Atul Gawande’s Reith lectures

22 December 2014 Mark GouldLeave a comment

As expected, Atul Gawande’s third and fourth Reith lectures were worthy of attention by lawyers despite notionally being about the practice of medicine. It is a truism that there are many commonalities between different professions, but Gawande’s insights provide some practical pointers for professionals themselves.

Lecture 3: The Problem of Hubris

(Audio | Transcript)

Gawande’s third lecture centred on the ways in which medical professionals deal with terminal care. This is an area where technology (better drugs and other treatments) plays a significant part, the lecture was more interested in the way doctors interact with their patients. Concerned by his experiences in managing care for waging patients, Gawande had spent some time talking to people about their experiences of terminal care — as patients, relatives, and doctors. These are some things he learned.

And so when I asked folks as I interviewed them, I’d say “So what would be on the checklist you would give me to use in my next office visit when I come to a critical decision point with a patient about whether we should do an operation or not or other kinds of considerations?” And one of the items that people said I ought to have on my list is that in that conversation I should be talking less than 50 per cent of the time while we’re in that room. And so I paid attention to what I was doing in those conversations and to my horror I found I was talking 90 per cent of the time. I had lots of facts and figures and pros and cons and risks and benefits, so now what do you want to do? And I’d see this bewildered person across from me.

They also said you know if you are going to talk less than 50 per cent of the time, the key thing is you have to be able to ask questions. And there are certain questions that I saw people ask that were really great at eliciting what people’s real understanding and their priorities were. The first question was to ask, “What is your understanding of where you are with your condition or your illness at this time?” Another is, “What are your fears and worries for the future?” “What are your goals if time is short?” “What outcomes would be unacceptable to you?” And with that, they’ve told you their priorities and what they care about and then that tells you both where the bright lines are that you do not cross and what you might actually be aiming for.

Now not everyone can answer such questions and their answers can change over time, so you have to ask it, you know, as things go along.

Drawing some wider conclusions, the following seem to me to be critical points.

Listen more — talk less than 50% of the time
Ask some key questions. For doctors these are:
- What is your understanding of your current situation and its likely outcome?
- What are your fears and worries about the future?
- What outcomes would be unacceptable to you?

The need to listen more to patients or clients comes up repeatedly. It is interesting that Gawande actually actually tested himself and found himself wanting. Perhaps more professionals should do the same.

I find the key questions more interesting. It is clear from Gawande’s responses to the audience following the lecture that the first and last of the questions are the most significant. Eliciting what people really think about their (possibly irretrievable) situation, and what they would find unacceptable feel like truly important factors in deciding on the right treatment or advice. As Gawande puts it, the answers help doctors finding people’s priorities and bright lines. It is also important that the responses might change over time, so the questions need to be repeated as things progress.

One of the points drawn out by Gawande is that better personal care, in which patients have more autonomy about what happens to them, can actually result in better outcomes (in terms of survival time) than practitioner-led treatments involving surgery or drugs. After the lecture, there was a question from Pat Kane’s about the role of technology in prolonging life. Gawande’s response recognised the important part played by new treatments in extending lifespans, but also pointed out that what happens towards the end of life is crucial, by reference to a study of patients with incurable lung cancer:

Half of the patients got usual oncology care and the other half got usual oncology care plus saw a palliative care physician who would discuss with them what their priorities and goals might be for the end of life. Now the group who had that discussion ended up choosing to stop chemotherapy sooner. They were much less likely to go onto the fourth round of chemotherapy, in fact had one third less chemotherapy costs. They had one third fewer days in the hospital. They were much less likely to die in the hospital or in the intensive care unit. They started hospice earlier. They had less suffering at the end of life. And the kicker was they lived 25 per cent longer. If this were a drug, it would be a multi-billion dollar drug and we wouldn’t be asking oh could we afford it, how is this going to be possible? But you know in truth it isn’t even a matter of affording. These are basic skills around having conversations that enabled a win-win situation.

I think there is a deeper issue, in that the motivation to focus on technology in medical care (and possibly in other professions too) is a set of assumptions about ‘value’ which may not be the right ones. In medical terms, prolonging life may be an obvious choice if we think about humanity as a whole. But if we ask individuals who are actually mortally ill, their choices may well be different (as Gawande’s lecture makes clear). There is a similar issue in law. Legal technology is often rooted in a set of assumptions about efficient legal practice which are almost undeniable from the perspective of legal business. From a client perspective, those assumptions may not deliver the best outcome. Instead, an apparently more inefficient client-led process (with less technology) might be better for the client and produce different savings for the firm.

Lecture 4: The Idea of Wellbeing

(Audio | Transcript)

Gawande’s final lecture differed from the others slightly in that it didn’t have a single narrative at its heart. It depended more on an account of research into childbirth care and the way professional conduct themselves during childbirth.

In one health centre, staff may not wash hands because they don’t know it’s important; in another, because they don’t have sinks or running water in the delivery rooms; and in another, because they simply have not made it their habit and no one cares.

That last phrase I think is the critical one: if no one cares when someone takes the trouble to do things right, nothing changes. And the overwhelming message to the people who work at the frontlines of care around the world is that no one notices excellence and no one cares. That is the biggest source of burnout and discouragement for health care workers everywhere.

For me, this was the most important point made in any of the lectures. It is one thing to ask people to care — in almost all cases they will aim to do that. (In my experience this is as true of lawyers as it is of medical professionals.) However, that intention to care is often undermined by a wider failure to value excellence and caring, rather than some other factor (often management metrics). If people who are inclined to care about doing a good job are not supported in doing so, they will tend to stop caring as much over time.

A member of the audience made a point about this. “If nobody cares about delivering a good burger king hamburger, that would seem normal; but when it comes to medicine, you wonder why nobody cares.” Gawande developed his analysis in response:

I think this is really important because I think that feeling of being at the very frontline is that nurse responsible for you know a thousand deliveries in a year and that no one cares if you’re doing a great job or you’re doing a poor job; that you’re only going to get your hand slapped if you have some trouble along the way – you shouldn’t ask questions, etcetera. That is common. Overcoming it is what we’re finding can happen by bringing someone from the outside who says let’s look and see do you want to be washing your hands better, do you believe in what’s on this checklist, how can we begin to achieve making it work? And the fascinating thing is that the process of having the nurse speak to the sweeper to say can you bring a basin of water and soap every time you clean that room, it was creating communications and interlinking, it was creating a system that had literally not been there before.

Organisations of all types work very hard at reducing the risks of bad outcomes. Sadly, this work often finds expression in the kind of hand-slaps that Gawande mentions. Rarely does it result in recognition for a caring job well done. Sometimes that is because it is often harder to see caring happen. Sometimes it is more serious — the organisation has forgotten to value the good things about the way their people take responsibility for caring. Hospitals, clinics, law firms — all can suffer from the same failings.

Care: the future of practice?

These two lectures are a really good expression of the way that patient care needs to develop: better listening and question-asking by physicians and other health professionals; combined with institutional recognition of caring by all those participating in care.

The same can be applied to legal practice. Clients get a better service if they are listened to properly. That listening process requires a good understanding of the client’s own perception of the situation as well as what they are not prepared to accept or risk. Lawyers and those working alongside them need to care about doing things well (which most of them tend to do anyway) and — crucially — the firm needs to see and value the fact that people are doing good things.

People in the legal ecosystem

15 July 201410 March 2015 Mark Gould3 Comments

This is the third part in my exploration of the legal environment. I have done a general overview and looked at the role of clients. Now I want to turn to people — the people who work in the law in one way or another. What impact do changes in the legal ecosystem have on them, and how might they affect it in turn? This is a slightly broader overview than the clients post, for reasons that I hope will become clear.

Any legal business depends on people. As I have argued previously, the law is a human system that depends on humans for its operation and interpretation. That is as true for traditional law firms as it is for their new forms of competition. (Those new businesses that offer technology solutions will have some human involvement somewhere — it is just outweighed by technology.)

The way people work in the law is changing. There are two major strands to this change — uncertainty in legal careers and diversification of roles within firms. We are partway through the first change, and the second is fairly novel but may be more far-reaching.

Lawyering now and in the future

Until a decade or so ago, the obvious choice for someone who wanted to embark on a career providing legal services (in England and Wales, at least) was to become a trainee solicitor (other options include going to the Bar or becoming a Legal Executive, but fewer of those opportunities were available). In 2002/03, 5,650 training contracts were available. (This and other statistics here are compiled by the Law Society annually, unless otherwise stated.) By 2012/13, this number stood at 5,302. There had been a slight rise during the decade, but there was a sharp drop in 2011/12 (for comparison, 3,681 training contracts were available in 1992/93). Over the same period, the number of solicitors with practising certificates had risen from 92,752 in 2003 to 127,676 in 2013 — a 38% increase. So the profession is growing, but not necessarily renewing itself at the same rate.

Where are solicitors employed? The majority are in private practice, but there is a long term trend of growth in the in-house sector: until 2003, about 15% were in-house, but this had grown to 21% by 2013. However, training principally takes place in private practice: in 2002/03, almost 95% of all training contracts were offered by law firms. I don’t have access to the most recent statistics, but in 2008/09 law firms provided 93.5% of training contracts. Of those contracts, about one-third are provided by firms with 81 or more partners (32.9% in 2002/03 and 34.9% in 2008/09).

Alongside solicitors, legal work is done by barristers (of whom there were 15,387 in 2010 — nearly 3,000 employed in law firms or in-house), legal executives (around 20,000 members of the Chartered Institute of Legal Executives) and paralegals (about 200,000 according to estimates by the National Association of Licensed Paralegals). As one moves away from the traditional legal professions, it is harder to find authoritative figures — the Legal Standard Board in its 2014 Annual Report only claims to cover a regulated community of 163,110 (including solicitors, barristers and legal executives, but not paralegals), whilst the Institute of Paralegals appears to provide no data at all on its membership numbers.

Overall, the picture for aspiring lawyers is less rosy than it might have been in the past. Opportunities to become solicitors or barristers appear to be stagnant. At the same time, some firms appear to be using paralegals without considering how the role might develop. This is illustrated starkly by a statement extracted from the Legal Education and Training Review report by Alex Aldridge:

There is an amusing quote in the Legal Education and Training Review (LETR) report from a ‘legal employer’:

“I want technicians who are prepared to do the something 100 times over and over again and are happy to be really good at that for 50 years.”

Unfortunately for big-earning law firm partners, the world doesn’t work like that. Life can’t stand still: everyone needs new challenges, promotions, more money — a sense that their careers are developing. That is the problem now facing law firms which have taken advantage of the growing surplus of cheap paralegal labour that has been churned out by the law schools over the last few years.

Aldridge is concerned that this is a problem for law firms, but I think it is a greater problem for paralegals. Some firms will work hard to develop proper career structures and help their people acquire relevant qualifications, but many will not. Until there is a change in the market, I doubt that firms will be driven to do the right thing even by disgruntled paralegals. (It has to be noted that their representative bodies are trying to force the issue, but the more recalcitrant firms will ignore them as they have always done.)

Making the law work for clients (without lawyers)

There has long been a divide in law firms between lawyers and so-called non-lawyers. (The term ‘non-lawyer’ was deprecated even before the Managing Partner Forum launched its Unsung Heroes campaign in 2004. A quick web search will also show that professionals of all types use ‘non-‘ as a marker for those who don’t have their expertise — lawyers are not unique in that.) This divide means that lawyers have usually been responsible for all aspects of client work — managing the relationship and providing the legal service. On top of that, lawyers are privileged by most regulatory regimes by being the only permissible owners of the firm — in only a few jurisdictions are non-lawyers allowed to become partners (or to wield equivalent de jure power).

It is illuminating to see how things work in other professional services firms. Advertising agencies, for example, have long divided work between account managers (handing the client relationship, but not actually creating advertising) and so-called ‘creatives’ (who write the advertisements and create the artwork, but rarely deal directly with clients). Despite having distinct roles, neither is privileged over the other — partners in an agency will be drawn from both sides of the divide. Over time, other important roles have developed (such as media buyers and account planning) because there was a clear need for those functions.

But just because there are different roles contributing to client success (whether in advertising or legal terms), we need to be sure we know how all the bits fit together. Dave Trott puts this well in this presentation to a group of young planners (0’0″ to 1’30” in the video).

This is apparently “What Creatives Want From Planners.” That’s really quite simple. What creatives want is simplicity, clarity and inspiration. What they don’t want is complexity, confusion and prescriptive thinking. What they normally get is the latter — complexity and confusion — and they don’t get simplicity, clarity and inspiration.

Most creatives don’t like planners. I don’t like planners. I also don’t like creatives or account men. I don’t like anyone who limits themselves to their department. Anyone who thinks the job is just to do what their department is.

So I don’t like planners who think their job is just planning. They’re useless to me and they get in the way.

What I love is people who are bigger than their job. I love ad-people.

I love people who want to understand the whole job of what we do. And people who want to contribute to the whole of what we do — not just learn some useless planning language, talk useless planning language and impress each other with their planning language. That’s just planners talking to planners about planning, and it’s not advertising.

It is interesting to contrast this notion of people being bigger than their job with the idea that one person should do a multitude of jobs (the normal law firm model). The motivation for both is the same — a desire to be sure that good work is being done for clients. The outcome is very different. Jacks-of-all-trades are known not to do as good a job as specialists who understand other jobs and can evaluate them but don’t do them. Most important — clients know the difference. And because they know the difference, they can act on it — to the point of moving their business to a firm that suits their needs better.

That is one reason why a number of law firms and new legal businesses have developed new roles, many of which break down the barrier between support and delivery.

Law firm finance professionals have become pricing experts — advising lawyers on better ways of charging for their work. They can only do this if they understand the client’s perspective as well as the work being done (as well as the obvious finance issues).
Business development people have become more prominent in managing client relationships. Some of them will work as closely as the firm’s lawyers with an in-house legal team — helping them resolve issues that are as important to them as legal problems.
The way legal work is done is being rethought — using process mapping more intelligently and developing project management techniques. This may draw on a firm’s internal project management capability and its knowledge team,
Firms are starting to think of themselves as more than providers of legal advice. They are using internal expertise in HR, Risk and other areas to offer consultancy services to clients.

These and other initiatives are breaking down the expectation that only lawyers can be responsible for so called ‘client facing’ or ‘fee-earning’ work.

How do firms decide what to do? The first thing must be to take account of what clients are asking for (both directly and implicitly). But there is another factor — what skills and capabilities does the firm have at its disposal? To some extent, the direction a legal business takes will depend on the things it can already do and the things it can easily buy. As a result, good people who don’t fit the existing mould (like traditional lawyers) will be at a premium. They are the ones who are likely to be best able to help steer the most dynamic businesses in new directions.

What does the future hold?

It will take time for firms to settle on the mix of roles and activities that suits them and their clients best. Over that time, some will also move to different business models. For some, opening up internal roles to the outside will lead to appointing some of their best specialists of all types to the partnership. Some may choose to move away from partnership altogether. For firms that take on (and develop) significant numbers of non-traditional lawyers, there is a choice to be made about the remaining lawyers — should there be fewer of them? how should they specialise? what does a development programme look like?

For a long time, law firms all looked pretty similar. That homogeneity made it hard for clients to differentiate between firms. As a result, clients tended to focus on individual lawyers — they decided who to instruct based on historic personal relationships. That will still continue, but trust is more likely to become a hygiene factor. As clients become more sophisticated and law firms develop in different directions, it will become easier to latch onto the the things that a firm does that fit what the client business needs when choosing lawyers.

But what does it mean for people who want to provide legal advice to clients? Law businesses are moving away from providing legal solutions to solving business (and personal) problems. Doing that successfully will demand a wider array of different roles and approaches than firms currently have. But the uncertainty about how those will evolve — which will be successful and which will fail — will be borne primarily by people. Those individuals who find a niche that fits them and the environment will be successful. But there will be others who won’t find a comfortable fit.

As Dave Trott says later in the video (at 12’11”) “Form follows function. First we define the function, then we work out the form. And we’ll know if the form is good by how well it delivers the function.” (He then goes on: “We’re solving business problems, we’re not solving advertising problems. Advertising is solving business problems.” We have more in common than many lawyers would like.)

At the moment, the functions of different legal businesses are still being redefined. Until they are more settled, there are plenty of opportunities to test different forms. Different ways of working. New opportunities for people who want to play their part in solving our kind of business problems.

Clients in the legal ecosystem

4 July 201412 January 2015 Mark Gould1 Comment

This is the second part in my exploration of the legal environment. The first part provided a general overview, and this moves on to look at how clients affect the operation of the ecosystem. For now, I am concentrating on business clients, rather than individuals.

Historically, legal advice has tended to be a distress purchase, and this persists to some extent. The model is well stated by Jeremy Hopkins:

The vast amount of the buying market … have a legal problem, to which they need an effective solution at the right price.

Over time, as the affairs of businesses and wealthy individuals became more complicated, lawyers became trusted advisors. For some, this might mean such proximity to power that they would be asked for advice on non-legal issues. By the 19th century, if not before, the role of general counsel (GC) was starting to become more common. (This article [PDF download], by Sarah Helene Duggin provides a useful and referenced potted history of these developments in the United States.)

It is interesting to observe how in-house lawyers have grown in significance, and especially to look at the factors that have affected that development. Early GCs tended to be senior lawyers whose close relationship with one client resulted in co-evolution together. These GCs were characterised by deep experience of legal practice, together with insight into the business they served comparable to the other members of the board and senior management. Their work would typically be advisory, and law firms would be instructed to take on the more mundane activities.

One obvious (and cynical) reason for using external firms is to take advantage of their professional indemnity insurance. More significantly, the cost of running a legal team — especially ensuring that lawyers are well trained and up to date on the law — was not within the means of most companies until legal information became more readily available piecemeal via online systems. In addition, in a time when there was little regulation of transactions or financial activities, the need for detailed legal advice was so much less important that an internal legal team was simply not necessary.

By the end of the 20th century, it looked like things had stabilised into a fairly clear picture. Most businesses of a significant size had some form of internal legal capability — whether a GC alone, a Head of Legal with a small team of generalist lawyers, or a large multi-skilled group of lawyers rivalling many law firms in terms of size and expertise. The larger in-house teams were able to support trainee solicitors, so that it was possible for a lawyer to spend their entire career outside private practice.

From the perspective of law firms, in-house lawyers were one source of work, together with executives and others at all levels of business. Sadly, I don’t have any data (if someone else does, please let me know in the comments below), but my sense is that until the early 2000s, relationships between law firms and their commercial clients involved the in-house team less than half the time. For many firms, therefore, the natural place to invest in those relationships was anywhere but the in-house team. At this stage businesses tended not to appoint panels of law firms for their work, and this also meant that the natural focus for lawyers was on those who were directly responsible for instructing lawyers.

The last 15 years or so have seen major changes. Commentators tend to focus on the years after the banking crisis of 2008, but other factors prior to this had a part to play. One that has already been referred to is the way the information landscape has shifted. Until PLC (now Practical Law) was founded, law firms still had the upper hand in terms of access to legal current awareness and standard documentation. Businesses might have had access to databases like Lexis and to law libraries (either their own or those of local law societies), but those rarely gave much more than the primary materials: analysis of legal change was missing. PLC changed that — putting their law firm and corporate customers on a level playing field. The ready availability of other forms of technology (even basic tools like word-processing, email and law firm extranets) also eroded the distinction between in-house and private practice.

In-house lawyers who were better equipped to compete with external lawyers could start to raise their profile within their businesses. In particular, they were increasingly responsible for controlling the flow of work to law firms. It then became more common to appoint panels of law firms to whom instructions could be give, as a way of managing the flow. Initially panels were sometimes quite large, but there has been tendency more recently to reduce numbers of firms on each panel. (Barclays being the most recent example.) One consequence of better management of law firms has been greater visibility of legal spend within the business. Once the cost of lawyers became a significant line on the balance sheet, it was only a matter of time before Finance Directors started to look carefully at how the money was spent. This is the beginning of costs pressure on law firms — budget control within businesses.

Now, as the Financial Times reports [subscription required], in-house lawyers aren’t just instructing firms freely as they might have done before. They are managing their budgets carefully and turning to a variety of other providers.

Nearly two-thirds of general counsel at some of the world’s biggest businesses have already used so-called contract lawyers rather than their traditional law firms, according to a poll of 185 in-house lawyers around the world with a collective legal budget of £3.5bn. The figure rose to 74 per cent among respondents who said they were likely to use contract lawyers over the next five years.

This clearly has an impact on law firms — it means most will have to adapt to this new environment or die away, unless they are in a niche that can continue to support them. (This is a basic evolutionary principle.)

But how should firms react? The problem for many firms is that they have tried to guess what clients need and invested heavily in a limited range of responses, which can be loosely defined as disaggregation. That may still work for some, but some initial evidence in The Lawyer suggests that clients are not overwhelmingly impressed.

Respondents were asked overall how satisfied are they with the level of innovation shown by their primary legal services providers in relation to the delivery of legal services? Just 7.1 per cent said they were very satisfied.

The Lawyer’s research found that the primary factor when buying legal services for the majority of in-house lawyers was quality.

What isn’t clear from the report is whether firms have yet to change at all, or whether they have started to change but in ways that clients don’t like. What is clear is that clients are still not confident that they are getting what they need.

The challenge for firms is more stark now than it has been in the past, but otherwise things are no different — it is virtually impossible to predict the future from current or past behaviour. In 1890, who would have suspected that 80 years later businesses would commonly have teams of internal lawyers? In 1970, who would have predicted that those teams would be competing effectively with external lawyers by the turn of the century? In 2000, who predicted that in-house teams would have the upper hand and be turning away from law firms entirely? I am not sure that even Richard Susskind saw that development coming.

What happened over that long history was that firms and clients evolved together into new relationships and business models. That is what will happen in the future too, except that the term ‘law firm’ will have to expand to include many new types of business, some of which may depend much less heavily on lawyers than firms do now. As the new legal landscape develops, clients will also continue to change in ways that are unpredictable as responses to those changes. Only by keeping an eye on what is happening, and regularly testing new ideas will firms be able to have any confidence in surviving.

There is a future for some forms of legal business, and there will continue to be some kind of exchange of value for legal services — they won’t become a purely internal function. As legal businesses change the way they work, it is possible that they will start to be able to meet currently latent demand for their services. But what might this mean for lawyers? The next post in the series will explore that.

Lawyers, roles and identity

23 June 201429 April 2015 Mark Gould4 Comments

While I was tweeting from Reinvent Law London last Friday, Chris Atherton laid down a challenge:

https://twitter.com/jetpack/status/480010258690375680

This is an attempt to rise to the challenge.

Most of last week was spent on a Cognitive Edge course on Cynefin and sense-making. Despite having done a similar accreditation course in 2010, there was a lot to process. I am still doing so, and a few blog posts may emerge as a result. However, a couple of concepts are relevant here.

My memories of The West Wing are sketchy, but one aspect of it does stick in my mind. Apart from the necessary confusions that drive the plot forward, each character has a clearly defined role within the White House. Most importantly, although he is by some measures the most important person, President Bartlett doesn’t get to decide everything. In particular, crisis situations see him take leadership from one or other of his staff members (depending on their particular expertise).

This model fits the notion of a crew (as distinct from a team) [update: this quote is taken from a glossary entry that seems to have vanished from the Cognitive Edge website]:

One of the radical alternatives I and others are working on here is the concept of crews as a way of ritualizing, and formalizing cross silo activity.

A crew works because its members take up roles for which they are trained, and where their expectations of the other roles in the crew is also trained and to a large extent ritualised. This means that people can assemble into a crew without the common forming, norming, storming & performing cycle.

A crew has cognitive capacity beyond the sum of its members, members occupy their roles for limited time periods, with people swapping between roles to allow for continuity. In addition crews can delegate power in context outside of the normal hierarchies.

Crews are commonly seen in crisis situations, but confusion can arise when there is inadequate preparation for the arrangement. Another TV drama provides an example here. In the most recent series of Wallander, the eponymous police inspector accidentally leaves his gun in a bar. On his return from suspension for this breach, his team is told that he will remain in charge of investigations but his colleague Martinsson will be responsible for team admin and HR issues. Inevitably this produces some tensions as the two work their way around these directives (apparently without discussing them openly).

An effective crew often demands that people take orders from people who are notionally below them in the hierarchy. This is helped when we look to identities rather than individuals. Identities can be seen as context-sensitive parts one plays as an individual. As Dave Snowden puts it:

Within a family I may have many roles such as father, cook, picker up of cat sick, humane disposer of spiders, fault bearer (just keep adding them) which I or others perform at different times. The family has a coherence that is more that the aggregate of its parts or its roles. An identity does not have rigid boundaries, nor is it susceptible of precise definition. When does one’s daughter’s boy friend become a part of the family? A cousin twice removed may be an intimate of one family and an unknown relative in another.

A crew, then, depends on people recognising that their identity (the part they are playing now) is more important than their role in the organisation. That is what allows a nurse in an operating theatre to require a surgeon to count all the swabs that have been used, to make sure there are none left in the patient.

So where is the law firm link?

One angle is that for too long, the traditional law firm partner role has encompassed too many identities at the expense of using non-legal expertise effectively. Bruce MacEwen wrote a couple of compelling articles which make the case much better than I could.

Another angle is provided by a conversation I had with Jeremy Hopkins of Riverview Law last Friday. It was fascinating to learn about what Riverview do, and the part that Jeremy (not a lawyer, as if it matters) plays in their work for clients. Whilst law firms have conditioned themselves to think that the lawyer has to be at the heart of the client relationship, Jeremy described work that he has managed for clients where few, if any, Riverview lawyers were involved. The point is that clients get exactly what they need, provided by people who came together as a crew to do just what they are best at, efficiently and without having to worry about soothing the ego of an overstretched law firm partner. I am sure this model will work well for Riverview and its clients.

So, law firms, what’s next?

The limits of technology and law

10 June 2014 Mark Gould1 Comment

One of the first law lectures I attended, over 30 years ago, was given by Avrom Sherr. As we all settled ourselves, full of our importance as future lawyers, Avrom walked into the lecture theatre and lay on his back on the desk at the front of the hall. The hubbub subsided and there was a moment of uncertainty (embarrassment even) before he got to his feet to start the lecture.

The point of this act of theatre, we were informed, was as follows.

In previous centuries, medical students were taught from cadavers. As a consequence, everything they learned was pathology. More recently, medical science had caught up with the idea that most people were actually healthy and that there was probably more to be understood about the workings of healthy bodies than diseased and dead ones; certainly as much that would be useful to those charged with the care of the living.

Legal studies, Avrom argued, had a similar problem. By studying the pathology of the law (as found in centuries of case law), the real life of the law was lost. His impersonation of a cadaver was intended to remind us that although dissection of cases (like anatomy lessons) had a purpose in learning about law, we should not forget that the vast majority of legal actions (making contracts, administrative decision-making, etc) would never be even be the subject of litigation, let alone a reported case.

I was reminded of this experience, and the valuable lesson, by a short article in The Lawyer by Peter Kalis (chairman and global managing partner, K&L Gates), “Lawyers as robotic bores? It’s not the English way”. Mr Kalis will be writing a series of articles, and this one sets out his stall.

In future columns I’ll supply some thoughts on our evolving industry. In this inaugural venture, however, I wish to acknowledge my debt to the English legal tradition. In other words, I come in peace.

He singles out three legal academics whose work influenced him whilst at Oxford 40 years ago: HLA Hart, Sir Otto Kahn-Freund, and Mark Freedland.

Why do Professors Hart, Kahn-Freund and Freedland matter here? Their careers nicely illustrate that law is about ideas and the ability to express them, whether in service to clients or to scholarship.

In future columns you’ll see me challenge those who regard lawyers and their firms as anachronistic and those who would reduce us to automata and algorithms. It will be my way of saying thanks to Professors Hart, Kahn-Freund and Freedland, among so many others on your side of the pond.

That description of the purpose of law — “ideas and the ability to express them” — resonates with my experience as a raw undergraduate. After four years of study at Warwick, it was clearer than than ever to me that law doesn’t exist to give opportunities to judges and law reporters. As an academic discipline it can be a kind of applied social science — a combination of psychology, ethnology, economics, politics — that may help to describe how social and individual relationships might work out in the presence or absence of power. Unlike many of those other disciplines, law also has a practical life outside the academy. Its practitioners have the privilege of being able to help mediate in those relationships — supporting or opposing power as necessary.

Over the past few years, I have kept coming back to this point about relationships in my work and on this blog. I am more sure than ever that good law, sensitively practised, depends on an understanding of the people involved. That understanding requires the kind of insight into human relationships, desires and needs, power structures, that I suspect most people develop unconsciously.

Critically, though, technology struggles with this aspect of law as lived. It sometimes appears that the most vocal technology advocates forget this. As news this week about the Turing test shows, it is too easy to be blinded by overblown claims of what computers can do. The reality is usually much more limited. In this context, also, we need to know whether a piece of legal technology deals with a pathological legal problem or the real human issue that underlies the call to law. If it doesn’t look to the latter, then it will be of severely limited use. That is not to say it will be useless, just good for some things only.

Valuing KM: some hard figures

6 December 201018 March 2014 Mark Gould3 Comments

In general, I am not keen to get bogged down in debates about the financial value of knowledge management, or the RoI of particular activities. To an extent this is because I am not well-versed in financial management, and I suspect that those who are sometimes use their expertise as a black art in a way that constrains experimentation and innovation. Also, for knowledge-intensive businesses (like law firms) it should actually be difficult to argue against effective management of knowledge activities — they are a basic health requirement, not a luxury. However, a couple of recent blog posts (together with an old memory and a conference presentation) have brought the value question to the fore for me.

Some time ago, I attended a two-day workshop on knowledge management in law firms (probably the only formal KM training I have had). One of the principles that stuck with me was that KM value can be judged by how well it supports the core elements of law firm profitability. Memorably, this comes with an acronym: RULES.

Realization of billing rates;

Utilization of attorneys;

Leverage of lawyers;

Expense control; and

Speed of billings and collections.

KM can help improve all of these in one way or another, and it is always useful to take time to contemplate whether we are doing our best in each of these areas. As usual, it is also important to distinguish the knowledge component from other areas of management. KM is not about improvements in time recording, for example — that may be a joint effort between IT (building a system to automate timesheets), HR (designing processes to help partners recognise good practice and manage poor time-keepers), Finance (communicating the impact of good time-keeping, billing, etc), and BD (collating feedback from clients on good and bad practice). However, along with these functions, KM people will have a part to play — perhaps by unpacking what lawyers actually do when they work and exposing where the pinch-points are, or developing clear checklists and guidance to ensure that there are as few obstacles as possible to doing all the important elements of the job.

One of the interesting points in profitability is leverage. As Toby Brown makes clear in his 3 Geeks… post today, many partners fail to understand the financial importance of driving work down to the lowest effective level.

Yet most firms don’t get this. Primarily because comp systems reward a different behavior. They’re not designed to reward profits – they reward hours and revenue. This is the case since these compensation systems were designed under a different model. This was a cost-plus business model, where profit was built into prices (a.k.a. rates). So partners have not focused on the metric of profitability in this fashion.

Once partners understand this, then it becomes quite natural to shift work to its lowest cost, effective labor source. Ron Baker will likely appreciate this statement: Tasks should be performed at their cheapest, most effective, level of timekeeper. This behavior will lead to improved profitability for law firms. But more importantly, this same behavior will lead to lower costs of service for clients. On a simple, illustrative level this means partners should not be performing tasks associates or paralegals can perform sufficiently well. Doing so undermines profits and raises costs for clients.

That point about clients is important. One of the discredited arguments against law firm KM was to claim that “KM is about saving time, and we don’t need to do that because we charge our clients for our time and so saving it undermines our income stream.”

That was always a poor argument (and to be honest is a bit of a straw man), but now we know how much the economy has affected our clients and most firms, if not all, profess to understand their clients. However much lawyers try to empathise, many of them will miss the impact of overruns on legal fees. For me it was brought home by Tony Williams in the keynote I referred to in my last post. He pointed out that in addition to delivering commercial legal solutions for their companies, General Counsel will be under pressure from their Finance Directors to manage costs to a pre-determined budget. Any overrun on that budget will require a many-fold increase in turnover to cover the cost.

For example, take Tesco, which appears to have a net profit margin of about 4% at present. (I know nothing of that business, apart from being an occasional user of its retail services (usually under duress). All information replicated here is taken at face value from public sources.) In rough terms, this means for every £100,000 of revenue, Tesco spends £96,000, and only makes £4,000 profit. Any cost overrun eats directly into the profit (it can’t come from anywhere else), and so has to be matched with a significantly greater increase in sales. A law firm acting for Tesco that allows costs on a given transaction to increase by just £12,000 (maybe three associates taking a day and a half longer than they should have done on the job) will require the supermarket to make £300,000 more in sales just to maintain its margin. Which partner wants to tell their client that because of the firm’s shoddy KM, the client needs to find an additional £300,000 revenue? Maybe the RoI on KM needs to be measured by reference to a reduction in the number of difficult conversations partners have with clients?

The other point about valuing KM was made very forcefully by Nick Milton, developing a point made by Larry Prusak.

When I was at the KMRussia conference with Larry last week, he asked a question which made me really think hard, and its an interesting question for anyone concerned with KM metrics.

He asked “What percentage of a company’s non-capital spend, is spent on knowledge”?

Now I would be thinking in terms of 3% maybe – perhaps the training budget, or perhaps the budget spent on conferences, but Larry suggested that would be quite wrong.

His answer was – 60%

60% of an organisations non-capital spend, is spent on knowledge.

The 60% figure is difficult to pin down — it depends on what other non-capital costs a business has. (For a law firm, rent may be a higher cost than for many other businesses.) The basic equation is simple enough, though:

Take the company wages bill, take away what this bill would be if everyone was paid as a new graduate, and that’s the investment in knowledge. After all, if knowledge was not valuable, you could staff the company with smart young graduates at a fraction of the cost. The only reason you don’t, is because knowledge is valuable.

Nick’s post got me thinking. How much do law firms value knowledge and, more interestingly, what return do they get on it? That latter point was not part of Nick’s argument, but it is one that can be explored quite easily for a business (like a law firm) that charges directly for the use of its knowledge. Just as one can get a figure for the value of knowledge by totting up a notional wages bill as if everyone was a raw recruit, one can do the same for the return on this value by calculating notional fee income for these raw recruits and comparing that figure with the actual fee income.

I have postulated an imaginary law firm: with 1060 staff and partners, a total of 120 partners in three grades, 500 other qualified fee-earners (in four bands), plus 75 trainees. The 365 support staff are grouped into five bands. Unfortunately, it is not possible to embed Google spreadsheets here, but this link will go to the full set of data.

Using some rough data for salaries (I have given the partners a salary for the purposes of the calculation, even though they would usually see a share of profit), fee rates, and so on, I have arrived at the following figures.

Actual salary bill: £56,350,000
Actual revenue: £178,887,500
Notional salaries: £25,750,000
Notional revenue: £93,200,000

Please take a look at the figures in the spreadsheet and suggest amendments n the comments — I don’t claim that this is a perfect model. However, it does suggest that this firm pays its people a knowledge premium of £30,600,000 annually, in return for which it recoups additional income of £85,687,500. This looks like a pretty spectacular return on investment to me.