Working Virtually
Trends: The Death of the Office (as we know it) in Contract Magazine (May 2010, targets professional designers and architects), offers a concise overview of the trends and impacts of professionals being able to work from any locations. “Virtual work enables mobility within and outside the office ‘box.’.. the rise of computer networks means that computers are no longer just facilitating individual virtual work, they are facilitating virtual collaboration… enabling people to meaningfully connect across geographies and time zones in ways that actually enhance individual and group productivity.”
The short article is worth reading and then considering why BigLaw seems immune to these trends. I often wonder what law firms would be like if the burden of proof were on the advocates of the status quo.
New Contract Drafting Service
Ken Adams of Adams Drafting has partnered with ”Business Integrity, developer of ContractExpress document-assembly software, to develop Koncision Contract Automation, an online subscription-based service that will make available to lawyers document-assembly templates for business contracts.” Ken is the leading thinker about drafting clear contracts; Business Integreiy is a leading document assembly developer. The results should be interesting and very useful.
Read Ken’s Koncision Contract Automation blog post for details. In a post about features, he notes he will use KIIAC software “to help make sense of the precedent contracts that we’ll be reviewing.” Richard Susskind discusses standardizing law practice in his book, The End of Lawyers?. This is a concrete step in that direction.
Lessons from ILTA: The Digital v. The Analog
I was at the Aria Resort in Vegas last week for the annual International Legal Technology Association conference. I live blogged a couple of sessions and you can find many other blogs and Tweets about it. My focus here is the venue itself and the lessons I learned about digital versus analog.
I had looked forward to the Aria’s high tech rooms - you can see a video of the touch screen control. Pleasant anticipation turned to frustration as I used the room. Monica Bay, editor of Law Technology News, describes the problem at her blog the Commonscold: Fiat Lux. In sum, give us back regular old light switches.
Several lessons come to mind: Just because you can automate something, doesn’t mean you should. If you are a touch typist, think about switching from a QWERTY keyboard to a different lay-out. Now you have an idea of the adjustment required. Sometimes it pays to stick with the installed base; maybe light switches are as outmoded as QWERTY but we all know how they work. We need to think carefully about the choosing between electronic and mechanical and between digital and analog. Just because you can convert doesn’t mean you should.
Thoughts on the iPad
I had a personal mission at ILTA - talk to my friends (fanatics?) who have iPads to see if I should get one. After several conversations, I decided I am not ready for one. I create a lot of content at a keyboard using Excel, PowerPoint, OneNote, and MS Word - this requires the full-powered apps and a normal size keyboard. My iPad-using friends consume content more than they create it. Yes, I know screen typing works; indeed, one friend reports typing almost as fast on the virtual keyboard as on a real keyboard. But she mainly types to take notes and does not need a fat app. I realized that even if I got an iPad, I’d bring my PC with me for almost all travel. I suppose you could say this is sticking with the mechanical / analog over the electronic / digital. Hold the hate mail and leave a constructive comment if you disagree with where I come out.
]]>Sharing Information Internally and Externally with Legal OnRamp
Two winners this year created systems with Legal OnRamp [click here for my posts on Legal OnRamp].
FMC Technologies: Reinventing the RFP describes how FMC General Counsel Jeffrey Carr simplified the RFP process to select new counsel. The law department
“discarded a 56-page RFP it previously had used and instead invited law firms to fill out a one-page, yes/no questionnaire posted on Legal OnRamp, a social networking site aimed at in-house lawyers and their collaborators, along with one page of FMC’s engagement terms and a description of its pay-for-performance system—in all, three pages.” [FMC also used Twitter to select the finalists.]
Cisco: Making Connections explains how Cisco lawyers use OnRamp Exchange (ORX) by Legal OnRamp to “share information and correspond with each other… [and] pool resources and learn from one another.” Information shared includes sample documents, contract clauses, and substantive legal discussions within the law department.
Commentary: In one of my earliest blog posts (2003), I wrote “I have thought for some time now that if law firm Extranets do succeed, they will sow the seeds of their own destruction” linking to my presentation The Future of Technology in Law Practice. I’ve always thought that in-house counsel who work with multiple outside counsel would not want to use multiple systems and would end up owning a system that law firms would need to feed. Legal OnRamp increasingly looks like it will be that platform.
I also note that Cisco, which is a tech company, chose to buy versus build its intranet / wiki. The Legal OnRamp ORX product seems well suited for that purpose.
Appropriate Staffing
DuPont: Paralegal Aid describes how DuPont “created the DuPont Paralegal Utilization Model as part of the DuPont Legal Model” to expand the use of paralegals, who now work across multiple practice areas.
Commentary: That’s music to my ears and consistent with the ideas I set forth in my 2008 blog post, The Right Resources to Solve Legal Problems, which argues that GCs must consciously decide how best to staff matters. It’s clear that much work that lawyers do can be delegated to skilled but lower-cost resources such as paralegals or legal process outsourcers (LPO).
Matter Intake and Management
Healthnow New York: On Track describes Healthnow’s building an “interactive Legal Request Tracking Database, which went live in January 2009.” It sounds like a matter intake and management system with e-mail alerts to clients and lawyers.
Commentary: I applaud any law department that systematizes how it operates but am surprised that the legal market and a legal publication considers a system like this innovative. At one time, I might have described such systems as ante to stay in the game. Today, I thought you’d need such a system to even walk into the casino much less stay at a table. I am also curious what drove Healthnow to build rather than buy commercial off the shelf software.
]]>Agenda: what can law firms outsource, outsourcing issues and risks, outsourcing alternatives, and “safe outsourcing”.
WHAT LAW FIRMS CAN OUTSOURCE: Chart shows penetration curve of outsourcing across IT, banks, law firms, and law departments. IT started in 1990s, banks around 2000, law firms around 2004, corporate law departments a bit later. Segment outsourcing into “Legal Support” and “Middle Office”. Latter includes all the support services for lawyers and law firms; former helps lawyers directly in their practice. Document review is probably the most prominent example of an outsourced legal support service. Increasingly, Stanton says market is seeing more and more outsourcing of contract support services such as review; also legal research, due diligence.
Middle Office services inclcude document services, library/KM, business development support, CRM DB management, finance and accounting, procurement management, IT services, and HR administration. Hayes says law firms are particularly interested in library outsourcing because many feel they do not have adequate scale to offer internally. Law firms face cost / profit pressure that is forcing them to look at middle office outsourcing. “Law firms need to run as businesses - this is a new idea.” Middle office outsourcing allows lawyers to focus on practice rather than running firm.
Outsourcing Examples:
1. CRM database management: systems development, user support, report and analyze, data cleansing. Stanton emphasizes the importance of good CRM to law firm business development. In many law firms, ownership of CRM is not always clearly defined. The opportunity with outsourcing is to fix this problem. This is easier than cajoling multiple lawyers and staff to work on CRM.
2. IT Services: consulting and planning, governance, programs and projects, held desk, training.
3. Document Review in litigation: sample work flow diagram. Not clear that law firms, when they do doc review internally, how quality and process is defined and assured. With credible outsourcer, process is better defined with clear QC metrics. Law firm partners assume that associates do good job on doc review but TREC and other studies show that without a lot training, process control, and metrics, associate doc review is “horrible.” More rigor is required for doc review and outsourcing can achieve this. With a more controlled and documented process, productions are more defensible. Need to approach doc review in more business-like manner.
OUTSOURCING ISSUES AND RISKS. Lawyers have long delegated work to more junior lawyers and to staff. Lawyers ability to supervise is not that different based on location. As distance grows, however, supervision needs to be more formalized and tracked. Delegation outside the firm is not that different than delegation inside - it just needs a more formal process and rigor.
Issues include defining support lawyers need, appropriate supervision, which functions are strategically core, and whether the support model should be inhouse v outsourced, central or de-centralized, and onsite or offsite.
General outsourcing risks include loss of control or knowledge. In dealing with any vendor relationship, firms need to make sure provider is financially stable. Operationally, firms have to make careful transition plans if they outsource.
Additional considerations: location, shared v dedicated delivery, vendor selection, service level agreements (SLA), metrics and reporting, ramp-up time, business continuity, and regulatory compliance. Many firms are not accustomed to SLAs, so moving to outsourcing means that a firm has to develop these - this can add to ramp-up time.
OUTSOURCING ALTERNATIVES:
Start with a reality check. Outsourcers are measured against a theoretic standard rather than in comparison to how law firms actually perform today. Many firms don’t measure performance - other than financial - so have not basis of comparison. For example, many firms don’t have a measure of how often errors occur. Are costs reasonable now? With outsourcing? Where does management focus: on keeping trains on time or or strategy. What is sacred cow and how does that fit with professional management, whether outsourcing or upgrading internal firm services? You have to answer these questions before you can consider outsourcing.
Third Party v Captive. Examples of firms doing 3rd party and captives. About same number of each. Pros and cons of captive versus outsourced versus “build, operate, transfer” model.
Additional Issues with Alternatives: outsourcing does not equal offshore. Internal expectations versus formal provider SLA. Investment capabilities. Economies of scale and repitition. Ability to scale up or down.
SAFE OUTSOURCING:
Contracting is key. Need a master service agreement (MSA) with service level agreements (SLA). Need reporting to monitor delivery and compliance with SLAs.
Firms also have to consider insurance - what is the coverage, does the firm need a rider, and what are the risk management issues?
Protecting client information. To answer this, firms must assess whether their existing systems are robust.
What are the security measures, encryption, access controls, policies, etc.
Governance - set up a strong governance model
Will law firms embrace or resist outsourcing? Market will decide but seems like pressures will lead to more embracing and less resisting.
]]>Jason Jennings is a popular business speaker and writer. Jennings interviewed 15 ILTA members asking about the person, the firm, and what challenges the person and firm face. The results of the interviews:
- Getting everyone on the same page
- Changing nature of practices
- Relevance - are law firms like newspapers?
- Price pressure (down)
- Faster turn around times
- Embracing change
Jennings wanted to focus on five things that other companies do to gain strategic unity. Jennings has, in past, studied the fastest companies in the world. Speed has to do with fast thinking, fast acting organizations. Also the most productive companies. Then wrote “think big, act small” about companies that organically grew profit and revenue consistently. Then identified CEOs who created most value. From this research, he has distilled elements of strategic unity.
Found that some of the most successful companies are: Ikea, Smucker’s Jam, Staples, Koch Industries (largest privately held company), Nucorp Stell. From studying companies like this, Jennings has found five principles.
SHARE A COMMON NOBLE PURPOSE. It needs to be big and bold. Inclusive. Attitude more important than aptitude. The thrill of competition and winning is more important than making money. Shared noble purpose provides direction, drives momentum, and builds culture. “The right culture is the ultimate competitive advantage.” (RF note: compare to Peter Senge’s, The Learning Organization, who argues that the only competitive advantage is the ability to learn faster.)
LETTING GO. Most organization cannot let go of yesterday’s breadwinners. Gives example of GM failing to let go of Oldsmobile. They also cannot let go of ego. Example is Jack Welch ego getting in way of writing off original $100mil in Montgomery Ward and instead, trying to save with another $2bil over 10 years. Most organizations cannot let go of conventional wisdom. At most, this means you achieve conventional results. When you work hard to let go, you are better able to deal with change, innovation happens.
EVERYONE KNOWS THE STRATEGY. Tells story of companies that share widely, like Smucker, which gives all employees, shareholders, and partners. Contrasts that to companies that want you to sign NDA before they share strategy. Secret strategies don’t work. Workers don’t become emotionally connected to work when strategy is secret. Corners get cut and illegal things happen when strategy is secret.
EVERYONE THINKS AND ACTS LIKE AN OWNER.
STEWARDS. Great leaders see themselves as stewards of the organization. Stewardship means service over short-term self interest, abandoning power over others, preserving natural human resources (meaning do right by your employees). Stewards share information, are accessible, keeps their hands dirty (by spending time with clients), stand for something, get rid of superficial distinctions, make it better, are coaches and mentors, and are called to serve.
]]>law.com: New Hiring System Keeps Contract Attorneys Away From Law Firms http://bit.ly/bdMRUd || Staffing agencies > doc review co’s ?
RT @ChristianUncut Intelliteach wins 1st major UK #legal IT deal with Eversheds/MS Office outsourced service desk proj http://bit.ly/9pfpVy
Ian Dinwiddie new President of Hildebrandt Baker Robbins. Press release. ex Dir Fin + Biz Services Allen & Overy || new direction too?
RT @VMaryAbraham post: The End of Your #KM Job? http://bit.ly/cAPfG6 || Agreed. Legal KM morphing to practice support consulting
@ChristianUncut Re getting fax (from tech vendor no less), I notice in US, BigLaw still puts fax # on card. When will it go way of Telex?
RT @jfehrman: Spies’ Use of Steganography Just the Beginning http://tinyurl.com/2vcyh7s | When shd EDD collection consider stego search?
@Legal_Week Freshfields to offer job sharing and home working in new flexi scheme http://bit.ly/bSEzq1 || working virtually at last. maybe.
RT @GregBufithis: JD Supra is Now Linked Up to LinkedIn http://sn.im/zgjeu > world’s largest legal content distribution network
Is Adding a Second Tier for Law Firm Associates a Good Thing?, The Recorder http://bit.ly/9Dxxi1 || Great idea but requires real management
Private equity to target legal process outsourcing Law Soc Gaz http://bit.ly/cOnz33 || Might PE try to build next gen firm from scratch?
PLC white paper: Practical Considerations for Alternative Fee Arrangements http://bit.ly/9V8Ojm || Good AFA discussion, cites @gnawledge
A New Approach to Law Firm Regulation AmLaw http://bit.ly/cidDa3 || Argues for unitary US national oversight via @jordan_law21
The Lawyer: Eversheds staff bag £1K as firm achieves profit target http://bit.ly/adcWiy || have any US firms done this?
Hildebrandt Q2 PMI down. Lawyer headcount & overhead expenses down; collected rates flat. http://bit.ly/9ntj15 || Any upturn in sight?
Just found out about another AmLaw 100 firm pursuing legal project management (#LPM). When will market tip? #in
RT @paulceaston: Cowen Group Survey: Legal Project Management Has Increased in Importance - http://ow.ly/2lRzU ( #lpm #project-management )
UK survey: 38% GC v 14% CEOs say GC make significant commercial contribution to company. Corp Counsel http://bit.ly/atdblm || Mind the gap
Breaker 19. Was citizens band (CB) radio the first social media? Spontaneous groups, at a distance and ephemeral #in
Of 60 people in Morgan Lewis e-Data practice, 35 are not lawyers. law.com http://bit.ly/bisRRm || any other firms with comparable heft?
Eversheds to offshore more support work, 100 jobs at risk The Lawyer http://bit.ly/chrnCV || finance and HR to Accenture in India
Hildebrandt Baker Robbins Interviews Leonardo Inghilleri: Building Loyalty Through Client Service http://bit.ly/a0jtiR | law firms must read
RT @Legal_Week Not so demanding - clients not pushing legal forward http://tinyurl.com/29mvdkp || GCs whine, don’t act. Where are the CFOs?
RT @IntegreonEDD ABA Continues Examining Legal Outsourcing Ethics http://bit.ly/cfBxJP Integreon Blog (by Mark Ross) || eager to see outcome
]]>Bob Ambrogi’s Crowdsourcing the Law (Law Technology News, 1 Aug 2010) describes some interesting new web services - OpenRegs and Spindle Law - that got me thinking about online legal services.
OpenRegs.com, according to the website, “is an easy-to-navigate regulatory portal. Every day, federal agencies issue dozens of rules that affect you, your business, and your family. We make it easy to keep track of proposed and final regulations and to submit comments to the agencies.” In the old days, clients used to pay DC-based law firms to deliver this type of information.
Spindle Law is “is a new kind of legal research and writing system”. It presents a taxonomy of law through which a user can drill down to find authority for points of law. It is a ’social media’ or ‘crowd sourcing’ approach. Ambrogi writes
“Spindle Law resembles a treatise, in that it assembles rules of law together with the authorities to back up those rules. Structurally, it organizes the law into a tree, with each branch leading to ever-narrowing branches. Thus, the broad branch “courts” leads to narrower branches for “evidence” and “civil procedure,” and each of those branches leads to increasingly narrower branches.”
I can see how Spindle Law’s graphic approach, coupled with community contributions, could lead to a valuable legal research tool. While not an immediate threat to law firms, a system like this could evolve to be an important resource for in-house counsel. Why pay even associate rates if a quick consultation of Spindle Law were to yield a reasonably reliable answer?
With all the talk about law firms providing value, I don’t see much evidence of law firms finding ways to deliver their collective know-how to clients. In fact, many large law firms barely have functioning knowledge management resources for their own lawyers, much less ways of delivering know-how outside the firm.
It seems to me that law firms could kill two birds with one stone. They could, by marshaling their deep know in practices in which they specialize, develop resources / systems that both support their own lawyers (especially for alternative fee arrangements) and that they could deliver to clients as ‘added value.’ Both OpenRegs and Spindle Law should serve as inspiration for forward thinking firms that want to add value.
The last 18 months in the legal market look very different than the last two decades: firms are actually differentiating their offerings. So perhaps we will see innovative online legal services that deliver firm know-how directly to clients.
]]>Cataphora recently released Digital Mirror, which “is designed to help you understand your behavior and those of others in your digital ecosystem.” This software is released in connection with Cataphora CEO Elizabeth Charnock’s new book about the Digital You.
The company explains it has applied its “software and expertise to uncover evidence in major litigation and investigations” along with “patented data analysis technologies” to create this software, which “allows you to see a reflection of your digital universe and your role within it.” For now, the free download works only on your own Outlook files; future versions will do more. I’ve installed and run the software here. I share here my experience and comments.
Installation
The download is free (here). Installation ran smoothly. The first step is indexing your Outlook messages. Doing so is easy; the software automatically found all of my PST files. As warned, however, the indexing takes time. Mine took about 2 hours and I was able to use my PC during indexing.
Digital Mirror indexed 70,000+ items for me. I have PST e-mail archives that go back to 2003, so that’s a lot of years of e-mail. Nonetheless, the count seemed high since X1 indexed only 58,000. The Digital Mirror FAQs explain that it indexes events (appointments) and contacts. Adding those in, the count I would expect is fairly close to what was indexed. Once the indexing was completed, I could not find a way to see which PSTs were indexed nor how many items.
The Stories: What Digital Mirror Tells You
The Digital Mirror software opens with a dashboard displaying several tools to learn about the digital you. I discuss a few in detail:
Quality Time. “The Quality Time visualization gives you some insight into who you devote your valuable time to. Digital Mirror’s analysis draws on Outlook information about meetings you attend, along with how many emails you write – especially long ones that typically require more time and care to compose.” The website provides a top level explanation of how these results are derived. For example, the software uses semantic analysis to determine if e-mail messages are about meetings and gives these more weight than just e-mail.
The results are presented as a pie chart showing the “Top 5″ people. The pie chart changes every month and a time line at the top lets you look at one month or “play” the time line as an animation, which lets you can see how your Top 5 evolve month by month.
Playing the time line was a trip down memory lane for me. The pie slices showed names of people with whom I met or corresponded. I saw few surprises but was reminded both of big work projects and some periods of intense e-mail conversation with friends or family.
I think this is a good and simple display, easily understood. I look forward to a future version that shows more people and adds feature. For example, it would be nice to be able to control the speed of the animation or to show two pie charts at once from any two arbitrary months.
Social You-niverse measures “closeness” to contacts. “Closeness is measured using a wide variety of factors, including how you greet each other when writing emails (Dear Professor Einstein versus Hey Al! for example), as well as analysis of emotive tones used in emails between you. ” The display is solar system with you in the center and contacts orbiting you at very distances. It too uses a time line, which you can play as an animation.
I found a a fair bit of overlap here with “Quality Time”. It’s hard for me to tell the difference between “quality” and “closeness”.
Who? What? When?. This shows a grid of “hot topics” and who participated in the conversation. Hot topics are determined by linguistic analysis that includes how often you reply, e-mail length, “Whether you tend to store messages about the topic” (though if not stored, the software would not know about the topic so, hmmm?), and “Whether the topic is associated with a ‘good’ group of correspondents.” In this display, you can click on column heads, row stubs, and the cells themselves for additional information. Having more “drill down” features like this will be crucial for commercial grade software.
This is potentially the most interesting analysis but I found it very limited. Digital Mirror selected five topics across several years. (Interestingly, the analysis here only begins in 2007 - the others begin in 2003.) Five topics over 3+ years just does not tell me very much. And one of those topics “Google Alerts” is a red herring. I do forward a lot of Google Alerts but that is for their content and links. This shows the challenge of computer-based linguistic analysis.
Other Features. Digital Mirror also includes displays for
- Blow Off Scoreboard
- Pecking Order
- Buck Passing
- Loud Talking
- Temperature Gauge
- Stressful Topics
I found these less useful / interesting in the current version though they all seemed accurate as far as I could tell. I can see, however, where this type of analysis could be interesting. Note that in some displays, a mouse click in a matrix brings up a menu to advance or go back a topic.
Comments on the Visual Display
I find the analysis and some of the measures very interesting but the visual display could use some work. Backgrounds are too busy / distracting for my taste and both the dashboard and data display icons are, in my opinion, corny. The real work here, however, is the analysis and I suspect cleaning up and making the displays more business-like would not be a big task.
Implications
This is the first product I know of (or at least remember!) to bring semantic analysis to the desktop. Of course desktop search makes full-text indexing readily available. But Cataphora goes much further in using linguistics to derive meaning from all the words - and the metadata - stored on our hard drives.
For purely personal use, I suspect Digital Miror will remain more in the category of fun than genuinely useful. For e-discovery and investigators, however, I can see how the underlying technology could be very helpful. If I wanted to get a quick and easy sense of what someone worked on and who they corresponded with, I think the approach (if not all the actual displays) here would be very useful. Of course, this is not surprising since Cataphora had its start with e-mail analysis (see, e.g., my 2004 blog post, Using Visualization to Manage Legal Organizations, which mentions Cataphora.)
We see more and more articles about our digital footprint and how hard it is to eradicate. Today, it is hard to get a clear picture of what all the data say. Digital Mirror represents a very good first step in being able to understand the data. Being able to expand this approach to cover social media and websites, as well as the desktop, would be interesting indeed.
]]>Reading What’s Really Going On in Today’s Legal Departments? a survey of GC in the August issue of Inside Counsel, the results sound very similar to what I read a few years ago: complaints about law firms but little evidence of buyers exercising their power. Cathleen Flahardy, editor-in-chief, notes in From the Editor “We were surprised that the economy didn’t have the impact we expected—GCs overall are still satisfied with their firms.”
Let’s see why the surprise: Over 90% of respondents report economics are increasing pressured to reduce outside counsel spend. So far, that seems to be the new program. Almost 70% are happy with their outside counsel relationships. Reading that, I would guess that firms are performing the way GC want. But keep reading.
Additional questions reveal that 50% of GC don’t think law firms recognize corporate budget constraints; 65% say law firms don’t actively seek ways to reduce cost; under 40% of firms are open to alternative fee arrangements; and 60% report their firms don’t understand their businesses. There’s more: only 65% of GC require firms to submit budgets; of these, 46% of firms adhere to budgets. That means that only 30% of law firms have matter budgets that they meet.
How should a CEO or CFO interpret these results? I’m not sure, but I can see that they would conclude, among other things, that GC are among the most easily pleased people. They might also conclude that it’s time to put purchasing professionals fully in charge of outside counsel relationships.
]]>“Outsourcing is here to stay” writes MacEwen. He describes different flavors using a 2 x 2 grid: location on the x-axis with offshore or onshore ("foreign” or “domestic"); ownership on the y-axis with captive or 3rd-party ("owned” or “rented"). MacEwen notes that this model is “by no means exhaustive; it’s merely indicative and representative”. This is a good model for thinking about centralizing support services.
LPO will have a big impact: “Once clients begin to get accustomed to the notion of being able to unbundle, or unchunk, legal engagements - be they disputed matters or transactional ones - there’s potentially little end to it.” MacEwen argues that LPOs are likely to go upmarket, meaning they perform higher value work, which will threaten law firms - and also force them to innovate and move up the value chain.
Working for an LPO, my view is that there is a clear line between legal support and law practice. An LPO cannot practice law so I think there is a clear limit to how far “up the value chain” an LPO can go.
Turning the “LPO moving up the value chain” idea on its head may well be a more helpful way to think about the legal market. The very forces that enabled the birth of the LPO industry - globalization, technology, and shifts in buyer attitudes - continue to push legal work toward standardization and systemization (as Richard Susskind discusses in The End of Lawyers?). That means work once done only by associates can be performed by more efficient operating models offered by alternative sources such as LPOs, contract attorneys, virtual law firms, online legal resource providers, and still-to-be-invented providers.
So it is likely that repetitive tasks once the exclusive domain of partner-track associates will continue to be unbundled and move to more cost-effective approaches. Document review in litigation is the classic example. Even without LPOs, law firms’ ability to offer this service at associate billing rates is already threatened by corporate clients contracting directly with contract lawyer staffing agencies. An innovative law firm might even decide it makes sense to partner with an LPO to do the high volume, routine work.
Given this shift, MacEwen questions the fundamental premise of large firms, citing Ronald Coase’s Nobel Prize winning The Nature of the Firm. He suggests that LPO-enabled unbundling calls into the question the “why” of law firms: “Why create the management overhead, bureaucracy, and administrative friction entailed in any firm of scale? Why not just purchase whatever is needed, when it’s needed, on the open market?”
That is a good question indeed, but LPO is symptom, not cause. The cause is corporate client price sensitivity and quest for value. These have changed buyer (general counsel) behavior, which in turn has propelled growth of law firm alternatives. Smart large firms can still profit from their scale. For example, they can
MacEwen raises provocative questions that large firms need to consider carefully. I have never been persuaded that “big is better”. Big is only better if size really confers benefit and the organization actively takes advantage of its scale. Big firms that adopt sound strategies and execute effectively will continue to thrive. Those operating on auto-pilot may indeed lack a good answer to the question MacEwen / Coase asks.
[Note: above is a modified version of my Integreon blog post, LPO as a Driver of Law Firm Innovation]
]]>This conference is for law firm leaders, managing partners, executive directors, c-suite law firm officers, consultants, law school deans and anyone else who plays a leading role in the business of practicing law. Click here to download the PDF program. Topics include The Impact on the Legal Business of Capital Markets’ Growing Interdependence, A Sea-Change in London (re equity investments and alternative business structures for law firms), and a wrap up session Now What? led by American Lawyer editor Aric Press. Other speakers include Peter Zeughauser, Simon Chester, Steve Matthews, Tim Corcoran, Marc Lauritsen, and Patrick Lamb.
I’ve attended many College meetings and they are outstanding. Unlike most conferences, vendor sponsorships play no role in the program or speaker selection. A committee of College Fellows works hard to identify topics and speakers based on the issues most likely to affect law practice management in the coming years. We are limiting the conference to 150 attendees so that we can ensure high quality discussion.
I hope to see you there.
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