The Slow Motion Riot - The Change Agenda for Legal Departments and Law Firms
While change in the relationship between corporate clients and law firms over the next several years will be revolutionary in nature, it will be evolutionary in development. Folks will work on one or two things at a time, and each new piece of progress will become the foundation for the next three things. The result will be the realization that meaningful and beneficial change is implementable in a scalable and reasonable fashion, and that it can lead to sustainable profitability for firms and better results for clients. What we need to do short term is move to developing the flexible toolkit that allows us to better fashion “value” business models for each matter, each client and each firm. And, we need to actually take action: to move from agreement with principle to implementation of new practices.
Here are ten aspects to the change agenda that will drive the revolution, whether from the client or the firm.
1. Just the Facts: Data, metrics, targets and goals now need to drive lawyer services and will be used to measure the value of lawyer work product; it will no longer be the primary job of a lawyer to apply legal analysis – it will be to drive solutions to the client’s legal problems. Legal expertise will be assumed and quality work will be the floor, not what distinguishes one lawyer or one firm from another.
2. Up-front analysis and early case assessment: Defining value, setting expectations, and making cost and staffing decisions must happen before work begins on a matter; we will not throw work over the wall to our firms and then hope they get it right. In advance of any engagement, we need to make decisions about how firms will work on entire portfolios of work, and discuss how in-house counsel and firms can – working together – do the work better and more efficiently. We will leave the presumption that some kind of Vulcan mind meld we may have shared on a matter 6 years ago appropriately sets and communicates shared expectations for current matters to the next Star Trek reunion episode.
3. Focus on process planning and mapping: We must establish the firm / department Six Sigma plan: in this plan, legal services will be unbundled, broken up into parts and assessed for what can be done more efficiently and by whom. Those that do that work, and who do it over and over again, will get better and better at it and will continue to improve the process, and we will actually send the work to the providers who are most appropriately trained and compensated to achieve desired results.
4. Staffing: In this new landscape, staffing options and decisions will drive fee structures. This includes the use of non-lawyers, off-shoring, contract lawyers, flexible work options, focus on “horses for courses,” when to use partners vs. associates, re-training / business skill education that drives “non-legal” skill sets that drive value (such as financial and valuation skills, project management, knowledge management, etc. – see #9 below).
5. Performance and improvement criteria: Another critical aspect will be ongoing performance evaluation, accountability and analysis of outcomes at the conclusion of each matter in order to make the next project even better. Being a good lawyer who works really hard is not enough to distinguish you from hundreds of other good lawyers who can provide excellent legal services and bill lots of hours. Lawyer evaluation will be performance-oriented and skill-based.
6. Value-based billing: Fee arrangements will drive “value-based” billing: we will figure out what the work is worth before the billing begins so that we may go to a flexible toolkit of options and select the options that work best. There will not be any one presumed “default” method of billing such as the billable hour. The toolkit will allow firms to develop predictable cost/service provision structures and clients to develop predictable budgets by working collaboratively to value the work at the onset of every project.
7. Knowledge management I: In this case, for most legal work, we don’t need to reinvent the wheel. This goes for both firms and clients. Firms and departments will mine and re-use knowledge to empower lawyers to spend time on what’s different in any particular case, not waste time and talent reinventing what’s the same. Firms will be known for their success strategies based on a viselike grip on what’s been done before that’s worked or failed.
8. Knowledge management II: There will be an emphasis on predictability and accountability. How is it that a firm or client has provided some kind of legal service hundreds of times, but doesn’t know what it will cost to provide what is essentially the same service next time? The firm and client both will likely spend time in the coming years reinventing their management of the service models. They need data about what works, what it costs, etc., all drawn from metrics and data based on real experiences.
9. Lawyer need business skill sets: In order for lawyers to meet the threefold challenges of change behavior/management, the evolving value conversation with corporate management, and the newly presumed financial accountability, lawyers will become more focused on executive and business skills to complement their legal background.
10. Alignment: Realistic alignment of goals and executionwill be the hallmark of successful client and firm relationships, and not the “competitive” zero-sum mentality that has grown in recent years. Risk sharing and reward-sharing will be the goal of each relationship.
Before we know it, what may seem like a slow motion change will have created a revolution in legal services…
