Unbundling legal services has become the norm. Less than a decade ago, virtually no firm would even have known what this might mean, but now even the Law Society has recognised in its recent report, The Future of Legal Services, that this is a real choice for firms and clients.
An AdvanceLaw survey of GCs from 88 major companies, found that almost 75 per cent would be willing to move legal work away from the Magic Circle or Top 50 firms assuming a 30 per cent difference in overall cost. Fifty-seven per cent also noted that they find lawyers at the top firms less responsive than those of their second tier colleagues.
Rather than purchasing the full service option, by 2020 an increasing number of in-house lawyers are more likely to have taken work back in-house or opted for unbundled services, where they buy expert advice and assistance at key stages but deal with the actual running of their own cases. And by 2020 we are likely to see general public buyers also starting down this path.
It is interesting that the Law Society presents this as being driven by client demand, as if firms have played no part in the disaggregation process. In fact, whilst this is clearly in the client interest, some firms have played a leading role in thinking more imaginatively about the way in which they provide legal services.
A number of new roles have grown up to support unbundled legal services — legal project managers, matter coordinators, and so on. As such, unbundling is part of a set of practices aimed at improving legal work (including process mapping, greater use of technology , and so on). As Graham Laing puts it, unbundling makes legal services customisable to client needs, which is potentially a very powerful outcome.
Customisation of legal services is about integrating the client into the firm’s value chain. Firms are being required to reconnect with their clients and to compete effectively by recognising market drivers and investing in a deep understanding of client needs and desires. It’s about grasping what clients really want. Listening to them more. Understanding them better. Gathering valuable client information to attain reliable data on market demands will result in services with better market suitability. Merely satisfying what clients ask for is no longer enough for survival in a legal market environment of intense competition.
This is clearly something that clients want, as shown by these two tweets by Brett Farrell, a former lawyer, now responsible for buying legal services:
Brett’s view is not unusual, neither in its content nor in its tangible frustration at the current state of law firm client-centricity. Many firms appear to be moving (slowly) in the right direction. But the picture is much less pretty when one looks at how firms organise themselves internally. Real change needs to take place there, and few firms realise it.
Whilst most good firms are actively working on meeting client desires by rethinking the way their lawyers work with each other, with client lawyers and commercial people, with other firms, and with alternative legal providers, there is much less imagination about the way they expect their own business services professionals to operate. If unbundling is right for lawyers, should it not also be considered for internal services? What might that look like?
Although some firms have started to think more imaginatively about how they organise their business services professionals, most still approach recruitment and resourcing questions in a very traditional manner. Looking at the jobs listed on recruitment sites, for example, it is clear that firms still expect sales and marketing professionals to be part of a business development function, technology experts to be in IT roles, and resourcing specialists to be deployed in HR.
Arranging business services like this ignores the possibility that a more effective arrangement might be possible, where the starting point is not “how do we group similar people together?” but “what things need to be done, who should do them, and how should they be managed?” Thinking about deploying expertise in this way might help firms to serve clients better, amongst other benefits.
So, for example, there may be a set of responsibilities that go along with ensuring that the business can work effectively — infrastructural tasks. This would include the provision of core IT services, facilities management, core accounting and financial services, and some procurement and contract management responsibilities. Depending on the volume of work in each of these areas, some of these could be outsourced. Even if they are still done in-house, it is most likely that they can be managed to a specification, which suggests that they might reasonably be grouped together as a single management responsibility. in doing this, the firm might see benefits, such as a common approach to resilience and business continuity, that would be more difficult to achieve if they are separated.
Another approach might work at the other extreme — activities that are intimately associated with the provision of legal services to clients. Here silos can result in competition for resources between different areas, whereas a coordinated approach might allow more transparency about costs and benefits. Take client care as an example. The various people in a firm who come into contact with clients all have a part to play in providing a good (and consistent) client experience. However, few firms would consider managing their front-of-house reception teams (who are often internally managed in a facilities group or outsourced) alongside client relationship managers (more commonly found in business development teams). But those two groups have a lot that they could share with each other to improve the overall performance of the firm. Client management itself is often seen as a role for lawyers as well as expert managers. But not all lawyers take well to the demands of client management, and the client experience suffers as a consequence. Sadly, few expert client managers understand exactly what it is that lawyers do for clients, and this can also affect the client experience. Why not rethink client care completely — perhaps develop an account management capability (including people of all types) akin to the model used in advertising agencies?
Another approach might be to use dynamic teams for specific types of work or projects. A firm wanting to improve the way its technology supports clients, for example, might draw together a specialised group of people — lawyers, technologists, client relationship managers, information and knowledge professionals and financial experts, and others drawn from inside and outside the firm — to dedicate their time to developing a product or service that meets client needs. At the moment, firms tend to go a little way towards this model, but they often make it hard for the project team by expecting some or all of them to carry on with other work. When lawyers keep their chargeable targets, and the IT developers are expected to maintain systems, and the marketing folk have events that need support, all at the same time as being involved in a project, the urgency of the ‘day job’ tends to detract from the importance of the project. Managing the group separately and giving it targets to be met as a group should improve the likelihood that something good can be produced in the shortest time. The cost to the firm is that some less important tasks are not done. That is a choice of priorities that the firm needs to make with its eyes open.
Firms that have adopted a clear sector focus, or that have a set of key clients, might also consider aligning business services professionals with the legal teams working most closely with those sectors and clients. Some firms already do this to some degree, with pricing specialists, relationship managers, and business analysts for example, but there may be scope to broaden the idea to include others. This kind of approach also introduces a form of matrix management that firms don’t always get right. An accountant managed within the firm’s finance team who also has a role on pricing for a sector team might find themselves torn between two sets of management instructions. My experience is that in most firms the client or sector team rarely has a formal management responsibility for business services professionals. If the client experience is supposed to be at the heart of what the firm does, should those teams not be entitled to exercise stronger management control?
Putting the client at the heart of the firm does not mean automatic acquiescence to client demands. The customer is not always right. What this approach does is to allow professionals of all kinds (not just lawyers) the opportunity to participate in improving the way clients are supported. Each specialist will have their own perspective on this, but the current siloed model, with direct client contact reserved to lawyers and a few others, generally inhibits any real understanding of how things might be arranged differently and better. An unbundled, client-focused model can provide firms and their people with a more rewarding working experience.
Unbundling internal services also has consequences for the firm’s senior managers (directors and ‘heads of’ business services groups). In the silo model, each of these people has a clear set of responsibilities, and a fairly fixed group of people to manage. Sometimes roles at this level can become ossified, and sometimes the strategic focus that they should have is overwhelmed by the daily grind of operational management. An unbundled model would allow a firm to think more dynamically about line management, so that senior people can dedicate more time to strategic issues. Equally, unbundling some traditional silos might lead a firm to realise that not all the roles at this level are necessary. But a silo that exists only because it serves the interests of the person at its head is probably one whose work is least connected to the interests of the firm’s clients or its other employees.
I can’t promise that Brett Farrell’s plea for law firms to provide a better client experience will come quickly, but I am fairly sure that if it is to come at all it needs to involve more than just the lawyers. Traditional business services structures are much less likely to help generate the right experience than a more imaginative approach that draws on all the relevant talents that the firm holds.