This article draws on the themes of a 3Kites seminar delivered in September 2013.
Even though we appear to be coming out of the recession, business is not going to go back to how it was for law firms pre-2008. Clients are going to carry on scrutinising the value law firms are delivering and asking them to demonstrate that they are operating efficiently.
It is striking that some areas of legal practice have to operate very efficiently and leanly – especially volume practices where each matter has to be delivered to a fixed fee and the margins are very tight. Such practices have had to look very closely at the steps necessary to deliver the work and automate these where possible, as well as delegating other steps to paralegals wherever possible. Yet sometimes within the same firm there are other practice areas where each matter is approached with a blank sheet of paper, without any pre-ordained plan or structure.
We have often wondered how the latter practice areas can learn from the former, in order to bolster their resilience to the challenges of the marketplace. And this must be worthy of attention when you consider what the benefits might be:
Higher realisation rates
Better client service
Increased workloads from satisfied clients
It is well recognised that there are some matter types in legal practice which cannot practically be reduced to a defined process. These are our niche areas. There may be too many variables and complexities in the issues affecting the work. Nevertheless there may be aspects of such work which can be ‘processised’. For example, you would expect to have some standard form documents as a starting point for parts of even the most complex areas of work. In other parts of such work you would expect to have, or might benefit greatly from having, checklists 1 .
It is these niche matter types which are hardest for the lawyer to control and
manage, partly because they tend to be larger than high volume files and also because they may be inherently more complex, with more opportunities for the work to go down an unplanned course. Nevertheless, law firms pitch for such work on the basis that they have done similar things before, so their past experience should enable them to foresee to some extent how the matter will proceed and the likely variables.
A number of firms have offered their lawyers case management tools to help with matter management in niche areas, but this has rarely achieved very much. The tool may provide the process for matter opening, but after that it often doesn’t provide anything which is of use to the lawyer in delivering the niche work 2 . So the lawyers in those areas rarely go back to the system once their matter is opened.
Other initiatives going on in law firms to help lawyers manage their matters in niche areas include:
Process mapping and improvement, and
Offering project management tools/training
And in either case, this may include a focus on better estimating/financial modelling for matters. Fundamental to this is the ability to break down work types into phases/workstreams and to enable lawyers to record and monitor time by reference to these phases. this will not only provide the template to enable better estimation of the costs of new matters, but also, over time, produce statistical information about the actual costs of delivering particular work types which can be used to refine the estimating process and to identify and address factors which contribute to the work going over budget.
This is all good in theory. The difficulty is in trying to bring about any real and lasting change in the way the lawyers deliver their work every day. The danger is that you spend a lot of time and effort mapping processes and then put the map into a bottom drawer, never to see the light of day again, because it doesn’t link to anything in the context of the actual delivery of the work. Or you may roll out project management training across the firm, offering tools and templates for people to use, but find that 90% of this training is quickly forgotten when the lawyers get back to the melee of their daily work.
There is also a risk that you meet resistance from the lawyers to any attempt to codify or processise what they do. Great delicacy is needed in ensuring that you are able to address inefficiencies without undervaluing the lawyers’ skills.
The task can seem overwhelming and in our experience the only way to attack it is bit by bit. So: Ideally go first to an area where you’re welcome. Is there an influential partner who ‘gets it’ in terms of the need to make the delivery of legal services more efficient?
Then go where the financial/competitive pressure is being felt most acutely. Financial reports will identify areas where a lot of time is being written off and realisation rates are low. Ideally the firm’s top level management will be pushing you in that direction. It really helps to have their endorsement.
Once you have some measurable quick wins under your belt in terms of greater profitability and/or client satisfaction, it will be much easier to convince others that they need your help.
The most important thing is to embed any changes in working practices into business as usual. For example, if you are expecting lawyers to manage their matters to a budget you need to give them easy access to the relevant financial information to enable them to do this. Or if you have concluded that greater use of checklists or other know how will enable the work to be delegated down to a lower level, you need to make that material readily available, ideally somewhere they are going to be working day to day. You need to train, reinforce, embed and keep reinforcing or the old habits will come back.
So, for example lawyers managing niche work types could be presented with a dashboard along the following lines:
1. Basic matter information
2. Financial summary
3. Actions/links to business processes
4. Links to phase-related know how
5. Start a time clock on this phase
6. Links to documents in the DMS, filed by phase
7. Clear graphical representation of financial information
8. Matter blog to enable the person managing the matter to communication with the team and record key pieces of information
Aside from the blog, which some law firms may find a step too far at the moment, it is intended that all the information on the dashboard should be generated automatically. Similar dashboard views could be provided to pull together information about portfolios of matters for specific clients. A word of caution. In order to bring about change in the way that lawyers work it is necessary to be credible. Don’t cry wolf. The sky is not falling in but law firms do need to think about how efficiently they are operating. Particularly in the light of the genuine competitive threat both from other firms who are addressing these issues seriously and from ABSs who do not have the baggage of the partnership model and the billable hour, and who have a much easier time in delivering legal services efficiently.
Melanie Farquharson, 3Kites Consulting, January 2015
3Kites Consulting is a limited company registered in England and Wales. Registered number: 5644909. Registered office: Chancery House, 30 St John’s Road, Woking, Surrey, GU21 7SA. www.3kites.com
1 If you have not yet become a convert to the value of checklists, we suggest reading The Checklist Manifesto by Atul Gawande.
2 Even if the matter contacts have been uploaded into the system, in niche areas there are fewer standard letters and communications, so being able to utilise that matter-specific contact information is of less value.
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