Category Archives: Clients

2014-07-02 19.40.40

What if technology isn’t the answer?

Most of the current thinking about the future of law firms (and other legal activities) turns on the use of technology. Richard Susskind has been in the vanguard, and the accuracy of his predictions has drawn law firms and technology suppliers alike to the same conclusions — improvements in the practice of law and client service in the future will depend heavily on technology.

I agree. Any firm that isn’t making technology investments is drastically reducing its chances of survival.

Old and new techBut that only means that enhancing legal practice with technology has become the norm — table stakes. Clients and potential recruits will increasingly shun those firms without effective technology. (And by ‘technology’ I mean not just IT systems, but also the improved practices and processes that come from a more structured approach to legal practice. Technology is as much a mindset as it is a collection of algorithms and data.)

If technology investment is unavoidable, everyone will end up in the same place once the fuss has died down. Apart from minor adjustments in position between firms (differences in the rate of adoption, for example), the rising tide of technology will lift everyone to practically the same degree. The tools, systems and attitudes of technology have to be imported into traditional law firms, therefore they are available to everyone without preference. (The status of technology within the firm is a relevant issue here, but I want to leave that for another time.) If one firm sees something that another firm has, in many cases it is not difficult to acquire it.

That situation is great for suppliers (especially those, like HighQ, that have a product which becomes the default tool for a particular purpose) and for clients (who can start to rely on firms to improve their service through the use of technology), but it may be a problem for firms. If everything you can have is also available to everyone else, how can you stand out from the crowd?

A few firms will have the first-mover advantage, but this is probably minimal (given the stickiness of clients) and brief (given that few developments are truly bespoke).

In order to find something that truly differentiates them, firms need to ignore the commonplace of technology. By assuming that there is no technology solution, they become freer to consider possibilities that might be truly novel and useful to clients.

It is commonly suggested that there is no real difference between firms. It may appear that way from the outside, but every firm is unique. It has a unique collection of individuals within it. It has a unique collection of clients (each of whom is also unique). It has a unique history, and a unique place in the present. But very few firms make good use of their uniqueness (which is why they appear so similar to observers).

Every firm has the capability to stand out by making good use of the knowledge that is uniquely contained within it.

Everyone in the firm has a partial and unique insight into:

  • The firm itself;
  • The people within the firm;
  • Their relationships with each other, and outwith the firm;
  • The firm’s market;
  • Clients and their behaviour;
  • Clients’ markets;
  • Working practices (in all sorts of businesses);
  • The law;
  • Technology and other pervasive changes in the world;
  • And so on…

Gathering these insights from across the firm can only help the leadership team see new possibilities for action that is uniquely fitted to the firm.

This has to be done carefully. Some popular methods (such as brainstorming, amongst others) may be less effective than they appear to be because of factors such as:

By using techniques to foster openness, dissent and diversity, coupled with simple constraints and support for emergent ideas, firms can start to make sense of their unique position in the world and then act accordingly.

If your firm is interested in finding its own way, or at least in knowing more about what might be possible, you know the drill: get in touch.

2015-05-12 11.07.09-3

Writing with respect

Recently, I have been helping a firm improve some of its marketing collateral. They had a really great message for their clients and potential clients, but it was hard to see because there was an expected way of doing things. When we moved beyond that template, we could produce something that actually expressed the firm’s value (and values) more coherently. Looking back, I think the key was making sure that the writing was done with respect.

Respect for time

Major junction (A7/A1), Edinburgh Lawyers read and write for a living. For most of them, a ten-page marketing document is short and sweet, especially when it is on a topic that interests them. More often than not, clients don’t have the same interest. If the message can be conveyed in two pages, it should be. If the document can be structured differently so that the important material comes first, it should. (And you need to be really clear about the meaning of ‘importance’. That has to be judged from the perspective of the reader.)

Imagine your readers have only two minutes or less to decide whether they care about your firm. What do you want them to learn in that short time? Your answer to that question may mean that you have to push the things you find interesting to the back of the document. If so, you must.

Respect for language

I am ambivalent about jargon. On the one hand, it can act as a useful shorthand between peers. On the other, it can act as a barrier to good communication. The linguist Geoffrey Pullum calls it ‘nerdview’:

It is a simple problem that afflicts us all: people with any kind of technical knowledge of a domain tend to get hopelessly (and unwittingly) stuck in a frame of reference that relates to their view of the issue, and their trade’s technical parlance, not that of the ordinary humans with whom they so signally fail to engage.

So lawyers should avoid using a legal frame of reference in their non-legal writing. (I’ll leave clarity in legal writing for another time.) But this could be an opportunity to demonstrate a connection with your audience’s knowledge. If you can comfortably and genuinely use their technical parlance, you should.

This has to be natural. Only use the technical terms if your lawyers use them in their daily work. Many do. If that comfort comes across in the document, readers will get it. Any discomfort will push your material into the uncanny valley.

Respect for your people

Law firms like to put lawyer profiles on their websites. Most of them shouldn’t bother, because their standard template removes all the humanity by reducing people to their contact details and a lifeless account of career history and recent work. Sadly, this approach often finds its way into marketing material as well.

In my experience, asking people about themselves produces very different results. Let that come across to your readers. What does that partner see as the high point of their work in this sector? How did that associate get to grips with the  tricky issues in that recent transaction?

I have seen some firms try this approach in combination with a standard template, especially when they what to show the more human side of their lawyers. This can make people uncomfortable: perhaps they don’t want to tell the world what they do at the weekends. Leave the template behind and ask open questions. Let the lawyers write their own account. Interview them and let their story come through.

Above all, respect for the reader

Marketing teams often struggle to get the attention of their lawyers. That is one reason why they resort to standardised documents and templates — they save time and effort. The result is often sterile, and lawyers know that. That’s why they don’t play along.

On the other hand, lawyers often spend a lot of their own time and effort making sure their clients get what they need. This isn’t just because that’s where the money is. Many (if not most) lawyers actually get a kick out of helping clients. If they see marketing as having the same aim, they are more likely to take part whole-heartedly.

Being more respectful may produce greater variety in your marketing materials. That is a virtue, not a weakness. The firm’s character can shine through, and your readers can decide much more easily whether it’s a character they like. Don’t be bland, because clients don’t want to find out too late that they have instructed a lawyer who doesn’t fit their needs.

If this interests you, and you’d like to have a longer conversation, please get in touch.

Curving right

Make it easier for clients by standing for something

Last week, the people of the United Kingdom made their quinquennial choice. The outcome was a majority Conservative government for the first time since 1997.

Curving rightFor some people (probably fewer than in previous generations), politics are easy — they cleave to the same party loyally from election to election. Parties have nothing to gain from courting these voters. The rest, whose choices are undecided until late in the day, need to be persuaded. This, as Dave Trott points out, is a marketing problem.

The point about marketing is, it’s not about what you want to say.

It’s about what your market (people) needs to hear.

What they need to hear are two things:

1) Clear and Simple

2) What makes you different

Bad marketing people don’t understand this.

Dave is discussing Ed Miliband’s promises set in stone. He shows that each of the six promises is neither clear nor simple, and none of them marked out the Labour Party as different from the competition.

What you are left with is a message “Carved In Stone” that tries to say everything to everyone.

It avoids differentiation in case it offends anyone.

It isn’t marketing, it’s just a list: a mind dump.

Thinking that a gimmick, like carving something in stone, is more important than what you carve in stone.

Many commercial organisations fail Dave Trott’s marketing tests too. Law firms may not be the worst offenders, but the legal sector as a whole has always struggled with differentiation. (We can leave clarity and simplicity for another day.)

The week since the election has been filled with navel-gazing. All the parties, apart from the Conservatives (who won much more convincingly than the pollsters predicted), the SNP (which won every seat in Scotland, bar three), and the Greens (who won many more votes than anticipated), are trying to work out what went wrong. For most of them, I think the answer is simple: either the electorate couldn’t tell what you stood for, or they could and they didn’t like it.

Much the same is true in commerce. Potential clients and customers need to know what they are buying. If you can’t tell them why your service fits their needs better than the other firms, they won’t buy it. You can’t even rely on existing clients remaining loyal. If another firm comes along that can say more clearly why what they do is better, your clients will jump ship.

Differentiation requires you to stand for something distinctive that clients are willing to pay for. You need to risk offending some people (by being too expensive or too cheap or too Lean or too bespoke…) in order for the clients that fit you to know that they fit. You might end up with a market share as small as the Greens, but at least you can be confident about its stability.

2013-10-20 17.38.31

Being a client

Bruce MacEwen has been interviewing law firms in an attempt to find one that can advise his church on a real estate issue in New York City. His experience hasn’t been good, as his account of the process shows all too clearly. Any lawyer should find it painful to read, but I wonder if the firms involved will see where they are going wrong.

The walls of Duffs Castle undermined

To help them, Bruce concludes with a set of asymmetries that he sees in the market for legal services:

  • One asymmetry is that of consequences. If the client chooses a firm that delivers a wonderful result, everyone wins; but if the chosen firm delivers a disappointing or even deleterious outcome for the client, the firm gets paid. Pretty much in full.
  • The other asymmetry is one of disclosure and, to be pointed about it, candor: The client needs to tell the firm as much as honestly possible about the engagement and what the client knows, while the firm’s instinct and practice is to guard information, hedge predictions, and avoid definitive statements.

In addition, he notes that there is no real risk sharing — firms don’t have the same commitment as clients do; no account is taken of this. And there is no correlation between fees and value to the client.

Bruce concludes with a suggestion for lawyers:

If you wonder why clients are pushing back on fees and what that objectionable word “value” really means, all I can say is: You should try this for yourself some time.

This is something I have advocated for some time, but I am actually far from confident that lawyers learn much from being clients (of other firms or of other professionals). I think there are too many escape clauses, so that only the most self-aware will actually see a need to change their own behaviour. (And of course that group is more likely to be reflecting on their performance in any case.) Here are two for starters:

  • Being a critical client and seeing poor service might actually lead you to think that your own performance is good by comparison. “That lawyer is terrible; I’m glad I don’t do that kind of thing.”
  • If the firms in Bruce’s account recognise themselves, I suspect that they will have plenty of excuses for the answers they gave to his questions. “It’s really more complicated than he thinks. If he knew, he’d understand that we couldn’t have quoted a better price for the job.”

In reality, many lawyers are clients at various times in their careers. Firms often get other firms to advise them on major transactions — someone has act as the client in that relationship. As individuals, lawyers instruct other lawyers for personal transactions, and they may also instruct financial advisors, accountants, architects, and other professionals. With that wealth of experience being a client, how can they still deliver the kind of service that Bruce describes?

I want people to reflect on and learn from the widest range of experiences, including things that other people do and things that happen in other areas of work and life. However, I have to recognise that some people are impervious to that kind of reflection. They need much more direct feedback, of a kind that I hope Bruce gave privately to the firms he interviewed. If someone does a bad job, they may need to know why it was bad, and how it could have been better.

That said, the rest of us should learn from Bruce’s public feedback.

2015-02-12 13.51.24-1

The reality of client ‘loyalty’

In my last post, I said I would come back to the question of client loyalty. It isn’t possible to state definitively what keeps clients with firms — each situation will be governed by a unique combination of events and actions. However, experience suggests that, amongst those elements, one or more of three key factors is likely to be at issue. Knowing and dealing with those will help firms (and their new competitors) understand and address their strengths and weaknesses within the future market. In the end, they may conclude that what looks like loyalty is no more than inertia. It is essential not to be complacent about that — inertia is rarely permanent.

2015-02-12 13.51.24-1

These observations are primarily relevant where firms have long standing relationships with clients with the expectation of a pipeline of work. Similar factors may be at play where the relationship is more intermittent or ad hoc, but I know much less about those.

The three factors that play a part in sustaining relationships between clients and their firms (whether a single firm or a panel) are the following:

  • Minimal relationship management
  • The 9x problem
  • Genuine trust

Relationship management

In recent years, some law firms have invested significantly in actively managing client relationships. On the other side of the fence, some of the largest clients have begun to extend existing vendor relationship management programmes to their legal advisors. This is atypical — for most businesses, the relationship with lawyers is much less important than that with other suppliers. Law firms value the client relationship much more, which is why they are right to invest in it.

A few months ago, I spoke to a former colleague who now runs a significant in-house legal function to see if he might need any help with knowledge issues in his team (or in liaison with his panel firms). I got a friendly, but firm, rebuff. As he saw it, his biggest problem wasn’t one that I could fix — he just didn’t have enough time to do everything the job demanded.

I think this is a common situation for GCs and in-house lawyers generally. I once started to sketch out on a mind map all the things that a GC might have to do, manage, or understand. The result is below (click for a bigger version).

IMG_3729.JPGI only have a partial understanding of the burdens of an in-house lawyer, so I have probably mssed many more things that concern them. This exercise was also done in the context of thinking about content published by firms for clients, so there is a bit of an imbalance. Notwithstanding these caveats, I think it is clear that GCs have very little time for active management of their external lawyers, except when a formal review of advisors is scheduled.

As a result of pressure on time and the low priority for legal supplier management, it shouldn’t be surprising that many clients are loyal to their law firms for no better reason than a disinclination to invest in change. Businesses without in-house legal support probably have even more inertia.

The 9x problem

Even if a client commits time and effort to reviewing existing relationships with advisors, there is no guarantee that they will value new providers properly. The Harvard academic John T. Gourville has studied the psychological reasons why new products or services don’t succeed as quickly as they might. Building on, amongst others, Daniel Kahneman’s and Amos Tversky’s prospect theory, Gourville suggested a rough rule of thumb for expressing the scale of the persuasion problem that new entrants have.

At the heart of this conundrum are two facts.

  1. People who use a particular product or service (consumers) will tend to overvalue it, by comparison with new alternatives
  2. People who produce a new product or service (developers) will tend to overvalue its benefits, by comparison with existing equivalents.

Gourville applied numerical factors to these propositions:

Consumers overvalue losses by a factor of roughly three.


Developers overvalue the new benefits of their innovation by a factor of three.

With this outcome:

The result is a mismatch of nine to one, or 9x, between what innovators think consumers desire and what consumers really want.

This is presented diagrammatically:


The 9x effect explains why innovative entrants into any market often fail to achieve the success they expect (at least initially). Incumbent firms with a traditional offering will benefit from their clients’ nervousness about novelty. The psychological factors are also relevant, but to a lesser extent, when a like-for-like exchange is proposed — any incumbent has an advantage even against an equivalent competitor.

The trust factor

When all else is equal, an firm with a particularly good relationship with the client (or, at least, those who are responsible for instructing lawyers) will have another advantage — the relationship itself.

One of the clichés of professional services is the notion of the ‘trusted advisor’. It is even the title of a classic book on the topic. One of the authors, Charles H. Green, now runs a consultancy focussing purely on developing trustworthy professionals. At the heart of The Trusted Advisor is a measure of trustworthiness based on four elements:

  • credibility
  • reliability
  • intimacy
  • self-orientation

These elements match the common academic division between cognitive and affective trust:

Cognitive trust is a customer’s confidence or willingness to rely on a service provider’s competence and reliability. It arises from an accumulated knowledge that allows one to make predictions, with some level of confidence, regarding the likelihood that a focal partner will live up to his/her obligations.

Affective trust is the confidence one places in a partner on the basis of feelings generated by the level of care and concern the partner demonstrates. It is characterized by feelings of security and perceived strength of the relationship.

(These definitions are taken from “Cognitive and affective trust in service relationships” by Devon Johnson and Kent Grayson.)

Most law firms now claim to understand their clients. Ultimately, such claims can only be assessed by reference to the clients’ level of trust. Lawyers (or any other professional) who work hard on knowing everything about their clients’ businesses, markets, and customers may succeed in being seen as credible and reliable — cognitive trust. Only those who show that they genuinely care about those things and provide security in the relationship will enjoy sufficient  intimacy and diminished self-orientation to justify affective trust.

The distinction between the two types of trust matters most in times of stress. When the relationship is tested (when mistakes are made, for example) it is unlikely to survive if only cognitive trust is present. This is because cognitive trust depends only on what is known or presumed to be known of the other party’s credibility and reliability. If those are demonstrably reduced, trust will disappear and the relationship will founder.

By contrast, a relationship rooted in affective trust can withstand failures in performance. Being good at the job is necessary but not sufficient as a foundation for affective trust to develop. Once affective trust is present, mistakes are more likely to be forgiven — at least until the point that confidence in the other party evaporates.

Newton’s first law of motion

An object that is at rest will stay at rest unless an external force acts upon it.

An object that is in motion will not change its velocity unless an external force acts upon it.

The three factors described here may explain why law firms might be confident about the loyalty of their clients. That confidence is misplaced unless nothing changes at all. In reality, many things may happen to overcome inertial loyalty.

Incumbent firms should, first of all, be wary of the assumption that any or all of these factors are present. Only those who engender affective trust in their clients, whose services are not three times overrated by those clients, and whose clients are disinclined to spend any effort reviewing the relationship may rest easy. Anyone who doubts the nature of their clients’ trust, who is nervous about the perceived quality of the service provided, or whose clients regularly examine the relationship closely should be very worried.

I suspect most firms are in the latter category. Whether they are worried enough is another matter.

Very few lawyers can be sure that the trust the client has in them is rooted in confidence and intimacy. It is much more likely to be based on an expectation of service quality that can be spoilt too easily. Even where there is affective trust, it is likely to be a bond between individuals. If either the lawyer or the client move, the relationship is likely to move with them. The firm cannot rely on it.

More significantly, any of these factors are irrelevant when the relationship is controlled by others. One such situation arises when the client’s procurement team manages and reviews appointments. That team is likely to be immune to the 9x problem, unbothered by trust issues, and ready to review relationships on a frequent and/or regular basis.

Client loyalty is by no means an immovable object, and the forces acting on firm/client relationships are almost unstoppable. The only same assumption is that inertia will be overcome. The only possibility of surprise is when and why it might happen.

Firms can reduce the element of surprise by actively working on improvements for clients, to match client need with the firm’s own capabilities (this doesn’t mean aping new entrants, since they will always have a head start). The situational awareness required to assess need and capability should in turn make it less likely that firms would fall short on any of the three factors described here.

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

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.


Strategy step 0: understanding where you are

One of the areas where knowledge is undervalued in law firms (and probably in other organisations as well) is the creation of strategic plans. This has always seemed odd to me, but I suspect that the pressure to respond to changing markets in the same way as other firms is a very strong one. (Especially as it sometimes appears that there is little differentiation between firms — something that I believe less and less the more firms I see at work.)

Map of the Siege of Toulon, led by Napoleon Bonaparte

Why is knowledge important for strategy? A number of reasons. I found these particularly well explained by William Duggan in his book Strategic Intuition. He described Napoleon Bonaparte’s success (the first in his military career) in the siege of Toulon as resulting from a combination of factors: tools and resources, knowledge of previous actions, openness to different solutions; and insight.

In 1793, the port of Toulon was held by the British navy in the name of the French royalist forces. Napoleon was an artillery captain in the revolutionary army. He formulated a plan to put pressure on the British forces by attacking forts on either side of the harbour. The first attempt at executing the plan failed due to the poor leadership of the general in charge. A later, better coordinated, attempt was successful. The British withdrew their forces in fear of being cut off from the rest of the navy.

The tools and resources Napoleon used were available to all — light cannon and contour maps. What he brought was an understanding of historic battles — the sieges of Boston and Yorktown in the American Revolutionary War, and the siege of Orléans in 1429. At both Boston and Yorktown, British forces on land were threatened with being cut off from their navies at sea and gave up the fight or surrendered. At Orléans, Joan of Arc’s forces routed the English army by attacking smaller forts rather than the large well-defended town itself. Napoleon’s insight was to see that rather than attacking Toulon (the obvious target, but a recipe only for a prolonged siege of attrition), his forces could use the high ground (discovered with contour maps, and accessible to light cannon) to take two key forts protecting the harbour. This strategy combined elements of all three historic actions in a way that was unique to the situation at Toulon.

Duggan is interested in the intuitive leap that Napoleon makes — he calls it strategic intuition. Successful strategic intuition depends on drawing together previously uncombined elements. Duggan recommends a similar approach to business strategy. In reality, what I see of many strategic efforts appears to depend more heavily on mere intuition — gut feel — without a real understanding of key factors affecting the organisation.

Firms often focus very closely on their own capacity and capability — what can we do now, and what could we do in the future — without thinking deeply about territory and logistics — external forces that need to be understood or managed. Ultimately, of course, Napoleon’s failure to consider logistics properly led to his greatest strategic failure — the march on Moscow in 1812. The  most fundamental failure, though, is not getting to grips with the territory.

My earlier posts in the legal ecosystem series were aimed at helping law firms get to groups with what is happening around them — helping them ask (and work towards answering) the right questions. Richard Susskind’s work has a similar aim — especially his characterisation of legal services transitioning from bespoke to standardised to systematised to packaged to commoditised.

I recently came across a more thorough way of mapping activities to help organisations understand how the land lies before making their strategic choices. The value chain mapping model was created by Simon Wardley, whilst working in the technology sector. Most of his examples arise out of this sector, but there is no reason why the mapping technique should not work elsewhere. He explains it well in this video of a conference presentation.

There is also a site that brings together many of Wardley’s writings on maps, including guidance on how to create maps for your own organisation.

I am still getting to grips with how the mapping might best be used for law firms, but the basic concept is fairly easily understood. It comprises three main activities.

The first thing is to describe the value chain, starting with user needs (client needs in law firm terms) and then identifying every subsequent need. Wardley uses a cup of tea value chain as an easily-understood example. (The diagrams that follow are taken from and link back to Simon Wardley’s blog.)

NeedThis simple diagram shows how a person’s need for a cup of tea depends on a chain of other needs, some more readily acquired than others.

However, even a complex set of such diagrams, describing a host of business needs, is incomplete because it is fixed at a moment in time. In reality, things change. Making a cup of tea in a domestic kitchen now is a much easier task than it might have been 200 years ago because of the reliable ubiquity of electricity, piped fresh water, supermarkets selling vast arrays of different types of tea and so on. Without those things, making tea was a more labour-intensive process.

So what Wardley does is to align each of those needs against an axis marking the typical evolution of products or services (similar to Susskind’s model): from genesis to custom-built to product to commodity to ubiquity.

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The different components of the value chain can then be placed at the right (current) point of their evolution. That then allows the organisation to look at how each of those components may develop and plan accordingly.

Screen Shot 2014-09-07 at 10.08.36The end result may look a bit like this map which describes a major infrastructure project. The location of each of the components allows the project owner to decide how best to acquire or develop that component. The most evolved can be bought off the shelf, and those that are novel can be developed internally.

This kind of unbundling or componentisation is something that a number of law firms are doing for client work, although rarely to this level of abstraction. I am still reflecting on how well it might adapt to other aspects of a firm’s activities (I have a lingering uncertainty about the placement of risk factors and regulated activities, for example), but my current thinking is that this would be a very powerful tool to help firms with the very first step of developing any aspect of their strategies — working out the lie of the land.

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Triangulating knowledge: value and purpose

In an earlier post, I mentioned Nick Milton’s useful model for positioning KM. However, I did note that I had reservations as to his assessment of where law firms might sit in the model. This post expands on that thought.

As a reminder, Nick suggests that the primary focus of an organisation should dictate the type of knowledge management that is used — process-based, product-based or customer-based. His view was that law firms would tend towards being product-based, as this diagram indicates.

Locating KM — diagram by Nick Milton

I think this is a really useful way of thinking about knowledge activities at a range of levels. It might apply across the whole organisation, or within specific parts. The key then, is to start with a basic understanding of what the relevant people should be achieving and then match the knowledge activities to achieve the desired outcome.

I have slightly revised the triangle in my diagram below.

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For me, the points of the triangle are characterised by three questions. What do we do, how do we do it, and why do we do it? These questions may contain a number of additional questions too — knowing why something is done will encompass a need to know for whom it is being done, for example. At each extreme, there will be a very different focus. A law firm that is most interested in providing legal solutions (which I think is the example that Nick Milton has in mind) will need to be completely on top of all the changes in the law that affect the creation of those solutions (know-what). On the other hand, a firm that is looking hard at improving the way advice is provided will need to concentrate on know-how — ‘how we do things here’. Firms with a strong client focus will be interested in developing deep understanding of the businesses and people they work with — the legal solution will be presented more as a business solution tailored for that client.

Many law firms struggle with anything other than managing legal knowledge (know-what). I think this is a real challenge for the sector as a whole. Unlike many other professionals, lawyers need to work with a constantly changing stream of legal change — new cases, statutes, regulations, court and administrative practices and so on. New law doesn’t just change the range of possible solutions that could be offered, but it can also render previously good advice dangerously bad. Naturally, all law firms take their obligations to stay up to date with the law very seriously. But this is costly. Maintaining access to all the relevant sources of information about and commentary on the law is a significant financial burden. In addition, individuals (whether practising lawyers themselves or the firm’s Professional Support Lawyers) need to take time to understand the impact of legal change on their own work. It is not surprising, therefore, that many firms exhaust their KM efforts at this point — keeping on top of the law is all they can manage.

Knowledge management delivers real value to organisations when it enables people to draw on the knowledge of those around them so that they can improve their own work. By contrast, facilitating the flow of information and analysis from outside the organisation can only prevent failure. Because all similar organisations have access to the same external material, and the same imperative to make use of it, being good at understanding this material cannot be a differentiating factor (apart from improving speed to market). This means that if legal KM continues to focus on legal knowledge alone, it will become increasingly irrelevant to firms that want to improve their market position. The real differentiators are in the other points of the triangle.

In order to get the best value from its knowledge activities, a firm needs to know with confidence exactly where its sweet spot is. This is not an easy task, and it is important in doing so to avoid entrained patterns of thought and behaviour. I intend to write more about this in a later blog post.

Once the sweet spot is known, then the right activities can be developed, to combine different components to produce interesting alternatives:

  • coupling know-what with know-how to enable
    • more efficient and consistent advice for all types of work and any client
    • a basis for clear pricing models
    • allocation of tasks to the right level
    • improvements in quality control
  • combining know-what and know-why to improve
    • bespoke advice to match client needs
    • strategic legal advice promoting client business goals
  • linking know-how and know-why to allow
    • collaboration involving a range of providers alongside the client to produce better value
    • reciprocal improvements in working practices between the firm, the client and other professionals

And there are probably many more possibilities — these are just off the top of my head. I am developing these ideas for use with clients. If your firm is interested, please get in touch. I will also be talking about these issues at the London Law Expo next month — come and say hello.

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Partnership and client service

There is an interesting article on the Lawyer website today. It draws on interviews with a number of senior lawyers about the past and future of legal practice. The whole thing is worth reading, but I want to comment here on some of the remarks about partnership as the organisational norm for law firms.

2014-07-25 20.16.21-2When asked “Is partnership the right model for a 21st century legal services provider?”, most (but not all) of the panel responded positively. It was clear that for them, the mode of ownership was causally linked to quality of client service.

Here are some examples.

Chris Saul, senior partner, Slaughter and May:

I do think that the partnership model is the right model for a 21st century legal services provider.

It brings with it the essential coincidence between ownership and management. That means that all of the owners (the partners) are driven to manage the business and the practice in a responsible, thoughtful, progressive and creative way. Once you divorce ownership from management, problems can arise.

I think that clients very much appreciate the partnership approach. They like the fact that each partner is an owner and is thus naturally motivated to provide the best possible service to the client but in a way that means the full resources of the firm are used in support of the service.

Tim Eyles, managing partner, Taylor Wessing:

I actually like the partnership model. It creates a sense of ownership. That in turn creates glue internally and externally; it engages a team spirit in delivering what’s still a very personal service. We should hesitate before dismissing the partnership model, given the nature of the services that we provide.

If it’s accepted that clients want their lawyers to be in effect their business partners and business advisers, the partnership model is flexible and it engages people, which is hard to replicate in a corporate structure where it’s more pyramidic.

John Schorah, managing partner, Weightmans:

[I]t would be misguided to think the partnership model has no role in the 21 century legal services provider. Partnership can be a really empowering tool and if every partner in a legal services provider did his or her job well, and that empowerment is a big part of that, you will have a really successful legal services provider.

Simon Davies, managing partner, Linklaters:

A hypothetical ‘blank sheet of paper/perfect model’ law firm today comes with no guarantee of long-term success tomorrow. Every operating model needs adapting sooner or later and that’s where the real challenge lies.

Such a law firm might do worse than to build an operation that keeps this need for flexibility front of mind and choose an organisational model that is equipped to respond quickly.

I firmly believe that lockstep firms have a real advantage when it comes to implementing lasting change, largely because of the shared ‘team’ objectives that are inherent to that model.

David Patient, managing partner elect, Travers Smith:

For the time being, yes, I think so, although I am sure we will see different types of legal services providers in the future. I am not convinced, however, that in the short term they will compete for the type of work we do at Travers Smith. A law firm partnership should be built on trust, respect and friendship – ours is, and it’s a key component of our culture and our ability to provide the highest quality service to clients.

Later in the article, the panel is very supportive of the work done by their business services people, which started me wondering why partnership is seen as necessary for lawyers to provide good client service, but (in most firms) not so for their colleagues in other areas. Richard Masters (head of client operations, Pinsent Masons) put it most clearly:

Top quality client service is at the heart of the law firm proposition. It’s not possible to deliver that without really top quality business support, be that IT, facilities or knowledge. Unless business services are respected and integrated as a key part of the overall service solution, they cannot provide the quality of support service that’s needed.

In his recent detailed analysis of the top-level firms in New York and London, Bruce MacEwen showed that those firms appeared to be converging on a partnership comprising about 20% of total lawyers. If that figure is replicated across the sector, it is inevitable that four of every five lawyers working with clients are not partners (although many of those will aspire to become partners, of course, and that may affect their outlook). In reality, the figure may be greater than this — the responsibilities of ownership and management may leave less time for partners to attend to client work than their non-partner colleagues. I’d be interested in knowing whether clients really get better service from the lawyers who don’t own the firm. And of course, virtually none of the business services professionals who contribute to client service will even be eligible for partnership.

I am also intrigued by the idea that ownership (or promise of ownership) generates a more client-focused culture. My experience of working with a range of marketing, IT, finance and other professionals has been that they can be client-focused as any partner. And I have seen partners put their perception of the firm’s interests ahead of those of their clients, to the firm’s ultimate detriment.

I think some of the comments above are actually very context-sensitive. Slaughter and May is not a typical law firm, and it is easy to imagine that its partnership motivates its lawyers to perform in a very different way from others. Just because a model works well in one place, we can’t expect it to translate well everywhere else — other factors will play a critical role.

Coincidentally, today I also read a post by Charles Green on the balance between individual and organisational responsibility for trust and integrity. He is clear that there needs to be personal responsibility as well as institutional support.

A proper view of trust and integrity in business would squarely locate accountability on individuals. The penalties for violating rules should be in the range of 3X the ill-gotten gains, not 1X or less. Auditors may or may not be considered accountable for integrity and trust, but they shouldn’t think they can address these issues solely through risk assessment, monitoring and communications – not unless they address whether or not managers are clearly accountable (cf the recent GM mess), and whether or not the sanctions imposed on them for misbehavior are absolutely clear (e.g. swift termination for ethics violations, period).

One of the problems with partnerships is that (depending on the terms of the partnership deed) it can often be hard to ensure that accountability for poor partner behaviour is as swift and public as Charles Green suggests it needs to be. The behaviour generated by a partnership culture is not necessarily all positive.

I can see why firms cleaving to the traditional partnership model need to justify that choice, but the tone of some of the views expressed in the Lawyer article concern me. They almost suggest that any client choosing to work with a firm that is not organised as a partnership will get a poorer service as a consequence. In reality, my suspicion is that service culture is independent of organisational choice. As more different types of professionals become involved in supporting clients, I hope those clients will judge the quality of that work on what actually happens, rather than the way the business is owned.

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Shifting the legal ecosystem

I will probably return to the theme of the legal ecosystem in the future, but this post provides an overview for now of where I think we stand, and what the future may hold — to the extent that prediction is possible in this complex system.

Change or extinction?

Servants' stairs at Calke AbbeyIn the metaphorical ecosystem of the law, firms are like organisms — needing food to survive as individuals, and reproduction to survive as a species If there is significant disruption in either of these, organisms become weak and eventually die out. This can happen in nature, for example, if there is a major external event, such as the K-Pg event, or if a predator becomes more numerous, as happened with many of the species hunted to extinction by homo sapiens.

Firms survive when they have a constant stream of people to work in them (supplementing or replacing others) and new clients (or at least new work from existing clients) to provide work for those people. Any significant movement by one or other of those groups to alternative forms of legal problem solving or to avoid the law altogether will lead to the traditional law firm model dying out. Even a slight shift could be enough to small numbers of  firms that don’t adjust to the new reality sufficiently quickly.

The currently prevailing narrative is that the traditional law firm model is moribund. The first problem with this is that there is actually significant diversity amongst firms that may appear identical from the outside — there actually isn’t a single business model even for traditional partnerships. Another problem with this narrative is that it assumes that firms have not already reacted (and continue to react) to their changing environment — many are in fact intensely aware of market pressure and are actively finding ways of dealing with it.

Putting those objections aside, however, is the environment changing enough to lead to the extinction of legal dinosaurs? In particular: are lawyers (and other staff) and clients behaving appreciably differently, and how are firms reacting to their changed behaviour?

Shift in which direction?

Probably the best description of the alternative models for legal services was provided back in May by Jordan Furlong, in a blog post entitled “An incomplete inventory of New Law”. Before looking at the inventory itself, it is worth repeating Jordan’s description of “NewLaw”:

any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed.

With this in mind, I want to consider the way that Jordan has categorised his inventory. The first distinction he makes is between new approaches to resourcing (“Aligning Human Talent with Legal Tasks”) on the one hand, and technology-enabled applications (“Applying Technology to the Performance of Legal Tasks”) on the other. I want to concentrate on the first set of these — mainly because the technology applications have a different potential to affect existing business models than do the resourcing approaches. (I am also more familiar with the resourcing approaches — as Jordan points out, those tend to be found outside the US, whilst technology development is more prevalent in the US.)

Jordan breaks down the resourcing approaches into three primary types:

  • New-Model Law Firms
  • Project/Flex/Dispersed Legal Talent Providers
  • Managed Legal Support Services

I want to group them slightly differently to help in thinking about their impact on law firms, their people and clients.

Looking at the businesses in Jordan’s inventory, I see the following groups:

  • Providers of a full spectrum of legal services, direct to clients
  • Providers of basic legal services, or personnel, direct to clients or law firms
  • Providers of legal expertise, direct to clients or to law firms

Full-spectrum legal services

Those businesses providing a wide range of legal services are closest to the traditional law firm model for those seeking legal careers — they are likely to have junior or unqualified personnel, who then gain experience so that they can take on more complex work within the same business. They can be distinguished from the traditional law firm model in one or more of the following ways:

  • Pricing — they may use a variety of pricing models, especially fixed-price or value billing, but not hourly rates
  • Ownership — rather than a partnership, they might be organised along more corporate lines (to the point of being listed publicly in some cases), or legal services may be provided alongside other professional services
  • Delivery — their provision of legal services across the board is based on a novel technology or process platform

By contrast, the traditional law firm is a partnership wherein client needs are satisfied in whatever way seems right at the time, and work is billed by the hour.

What kind of impact will the businesses in this first group have on the traditional firm?

Changes in ownership model will probably percolate into the wider legal market last — there are strong vested interests in partnerships that make it difficult (short of acquisition) to change the way firms organise themselves. However, some firms have become much more ‘corporate’ — relying heavily on professional management, for example — without ceasing to be partnerships. Ownership alone is also unlikely to be a significant factor affecting clients’ or employees’ choices, although the availability of legal and non-legal services together might be attractive for some clients.

Businesses founded on distinctive pricing models may find their territory invaded most quickly by the traditional firm. It is important to remember that pricing models are not necessarily a unilateral choice — very few law firms will have not seen clients asking for capped fees, or fixed prices, and most of them will have found ways of meeting those requests. As clients become more confident in using alternative pricing models, law firms will move quickly to adopt them. In this scenario the billable hour will die a natural death.

Which leaves alternative delivery models. Most of those models provide real benefits to clients, by way of improved service quality, cost or speed of work. It is sometimes harder for lawyers to see good reasons for changing their own ways of working. Clients may be able to force their existing law firms to adopt new pricing models, but they are unlikely to be able to make them change their processes significantly — few clients have sufficient leverage with their firms to do that. As a consequence, clients that want their legal services provided differently will have to choose firms that have already changed.

The way law is done, then, is the new battleground for clients — firms and other legal services businesses that meet new client needs will (slowly, but surely) start to steal the market from the old and staid.

What about people working in law firms? The picture here is much less clear. Paul Gilbert has written of in-house lawyers being in thrall to their law firms:  “a form of legal services ‘Stockholm Syndrome’ that plays out between law firms and their hostage clients.” I think there is a similar effect within firms themselves. The promise of partnership (at some distant point in the future) leads many associates to put up with poor (almost oppressive) working practices in the hope that there will be ‘jam tomorrow’. Some enlightened individuals will fight within their firms for changes in the business. If they cannot make the firm change, it is easy to jump to another firm that will change — or to another business altogether. My uncertainty comes from not knowing how many of the enlightened there are. That is the talent pool for new legal businesses, but it might be quite small. If so, that will be a limiting factor for NewLaw.

Services at either end of the spectrum

The other two groupings (providers of basic legal services and of legal expertise) face some of the same issues as the full-spectrum businesses. However, they could also affect the legal ecosystem in their own ways.

At the basic end, we have businesses that specialise in providing low cost legal support, possibly at scale. They may work as stand-alone businesses using an outsourcing model, or as agencies for freelance workers. (Some firms have created a similar capability within their own organisation to achieve cost/efficiency savings.)

At the other end, we have businesses who provide high-end legal expertise on a consultancy basis (or as an agency for experience lawyers).

Both of these types of business can provide real value for their customers — whether they be law firms or in-house legal teams. The demand for legal services is not always consistent, so having a readily available flexible resource to deal with increases in demand when necessary is a real boon. However, their impact on the market for legal personnel is currently minimal. (Remember that there are nearly 130,000 solicitors in England and Wales.) There is probably also a natural limit to their growth because of the available talent. The businesses providing alternative resourcing of experienced lawyers depend on a flow of such lawyers from law firms and (less often) in-house teams. Those providing basic services have a larger pool to draw on (given that their personnel need not be qualified), but unless they offer some sort of career progression they will need to dip into that pool very frequently as their people move on.

If the alternative resourcing businesses are limited by the supply of personnel, client demand might exceed the service available, leading to frustration and a grudging reversion to the service provided by traditional law firms. One way for these alternative resourcing businesses to ensure that supply of talent can be maintained would be to build strong links with others. For example, if basic service providers suffer from high rates of churn amongst their people (resulting in high recruitment training costs and stagnation in service provision), they might benefit from finding ways of offering their better staff a route to qualify as lawyers (or into related professions). This could be done in association with their in-house clients that need junior lawyers and can’t afford to train them. Likewise, those businesses that depend on a flow of experienced lawyers could turn to the same in-house teams just as their lawyers start to become jaded from working just with one client.

Looking forward

In a previous post, I pointed out that over 90% of trainee solicitors were trained by law firms, and a third of those were in the larger firms. I don’t know, but I would guess that most of those trainees embarked on their careers aspiring to become a partner in the same firm. That was certainly the predominant view amongst my peers in the 1980s. In the event, many of them in fact moved to different firms to become partners. And some moved in-house. As long as those expectations remain, it is likely that the legal ecosystem will only change slightly at the periphery. Despite the existence of alternative career patterns, the cradle-to-grave traditional law firm will continue to be the aim for those embarking on a life in the law unless the alternatives can show themselves to be significantly more attractive. Remember Jordan Furlong’s definition of NewLaw only required the new business to be differentbetter is harder.

As things stand at the moment, then, I would be surprised if law firms died out altogether. There will be some movement towards new ways of delivering legal services. Some of those new ways will be adopted by firms themselves, as well as being offered by new businesses. The least flexible, most traditional firms will probably fail as their clients and people migrate to better places. Some clients will turn their backs on traditional firms altogether, for all sorts of reasons. Similarly, some people seeking a legal career will choose not to fall into the traditional rut. But I suspect many (possibly most) clients and people will stick to the model they know.

The fantastic thing is that there is a greater choice of legal services now than ever before — for clients and for people who want to work in the law. The real change in the legal ecosystem is that the traditional law firm has lost its dominance force. People and clients will be responsible for the shifts to come. We cannot predict the direction of those shifts without knowing how clients and people will reaction to change.

[The image at the top of this post was taken in the former servants’ quarters of Calke Abbey, near Derby. It seemed appropriate, given that Calke is such a good example of the way the stately home declined so quickly in the 20th century, even without worrying about the servant problem.]