Change Management

Coloring Between the Lines: No Way to Resolve Crisis

May 25, 2013 By Larry Bridgesmith Leave a Comment

A most disturbing survey has been released by Altman Weil The fifth annual Law Firms in Transition report received responses from 238 Chairs or Managing Partners of law firms of 50 or more lawyers. A representative sampling of 30% of the leaders of each of the major legal industry segments by firm size participated. This milestone report is neither statistically insignificant nor comforting. According to these law firm leaders:

They are concerned that the demand for legal work is flat or shrinking in many practices

They feel real pricing pressure from clients.

They recognize the competitive forces of commoditization and the emergence of lower-priced, non-traditional service providers.

They are coming to grips with the idea that aggressive growth in lawyer headcount may no longer make sense.

They believe that the pace of change is increasing

Beginning at the end, only 12.9% of these firm leaders are highly confident their firm is prepared for the business disruptions coming their way in the near term. That represents a 50% decline from 2012. Only 5.3% believed their partners were highly aware of these challenges and 2.2% highly receptive to change. These leaders reported significant increased resistance to changing law firm processes to meet the very real market demands facing their firms. Adjusting to meet these demanding market requirements is getting harder, not easier. . . across all firms of all sizes. Cost cutting has reached its limits. Limiting firm ownership to prop up partner compensation is nearing an end. No significant change to pricing strategies has been achieved in these firms. Raising rates to improve revenue is not an option. Two thirds of all alternative fee agreements (AFA’s) are driven by clients, not the firms. Only 16% of AFA’s are more profitable than similar matters billed hourly. Growth of lawyer headcount as a means of financial success is no longer a viable option.

What are the strategies for success or survival? Despite acknowledging the permanence of the “new normal” market conditions, these firm leaders are relying on the strategies of the “old normal” (Pre-Great Recession law firm growth model) to lead their firms into these enormously challenging times: more revenue, more new business, more law firm headcount and increased profitability (from where this profitability will come is unclear). Working the old strategies harder will only bring more decline faster.

Delivering value to clients, increasing efficiencies of legal service delivery, systemic change in firm operations and educating partners on the need for massive innovation in the law firm business model are far down the list of preferred strategic responses. Navel gazing may be satisfying in the short term, but in times of crisis, outward looking tactics are necessary.

A recent “Twitter Fest” illustrates the power of outward thinking. This week a flurry of Tweets revolved around the need to develop a new list of core competencies for lawyers. Rather than the “old normal” of binary thinking (it’s either this or that), what if as an industry we developed a catalog of essential skills lawyers need for success and survival in the “new normal” of collaborative client focused leadership and problem solving? What if our law schools provided training in these core competencies for law students and legal practitioners? What if technology and professionalism became friends rather than enemies? What if these “both/ands” of innovation + technology + entrepreneurship became our mantra? (Thanks @reinventlaw!) It’s time to color outside the lines. Dancing harder at the old tunes isn’t helping us in this crisis. That strategy will only deepen the crisis.

This week’s Twitter commentators began to list a great catalog essential core competencies. Of course, we all recognize the need for writing skills. Law school teaches that skill well. What about, legal process engineering, legal project management, matter scoping, planning, pricing, execution, and the components of profitability? If P&L essentials were taught in my law school, I slept through the course. Many more skills and needed competencies can be articulated and developed for lawyers and law firm leaders.

One thing is clear: if we don’t stop worshiping the status quo, there will be no growth, only decline.

Recent studies in the neuroscience of human brain development reveals that new experiences grow new brain cells and contribute to the individual’s longevity and mental health:

Prof. Ulman Lindenberger, Director of the Center for Lifespan Psychology at the Max Planck Institute for Human Development (MPIB) in Berlin. states, “Our findings show that development itself contributes to differences in adult behaviour. This is what many have assumed, but now there is direct neurobiological evidence in support of this claim. Our results suggest that experience influences the ageing of the human mind.“

It’s time to color outside the lines.

To learn more about our legal project management solutions, for an online Product Demonstration of Lean4Legal PM®, or if you wish to Discuss How Legal Project Management Applications Can Assist in your work environment, please call us at 615.585.7563 or submit your information via the Contact Us form.

Filed Under: Alternate Fees, Change Management, Hourly rates, Human capital, Innovation, Leadership, Legal Education, Legal Project Management, LPO's

Annual Physical: The Patient’s On Life Support!

May 3, 2013 By Larry Bridgesmith Leave a Comment

Each year at this time several annual or quarterly reports on the state of the legal industry are released. Of course, no snapshot in time can reveal the complete picture. However, trends over time shape a compelling story of the health of the industry.

This year the reports are cumulatively unpleasant. The patient is not simply ill, it is on life support.

Long term shrinking revenues, “profitability” driven primarily by cost cutting, pervasive fee discounting, a personnel talent drain and market pricing confusion all lead to a troubling diagnosis that the legal services industry has fundamentally changed its economic foundation. In contrast, little preventive health is being practiced. The absence of initiatives to generate profitability through efficiencies, managing projects with shared resources like a process (legal project management), understanding and serving client objectives, and major structural revisions to the partnership model allow the illness to spread unhindered. Without major surgical procedures, and soon, the patient cannot survive in its current state of disease.

Where’s the data? Try these diagnostics.

Despite this life threatening condition, the legal academy is not performing CPR. Innovation in the law schools is glacial in response to this crisis. Standing by and watching the patient arrest without calling Code Blue is tantamount to malpractice. There are small pockets of law school innovation like Dan Katz and Renee Knake at Michigan State University College of Law, the newly inaugurated legal technology initiative at Suffolk University Law School and University of Miami School of Law’s Law Without Walls program. However, legal education as a system seemingly does not realize or care about the condition of the patient which it birthed.

One year later, only 56% of 2012 law school graduates are employed in positions which can be said to be genuinely legal in character. Last year’s 45,000 law school graduates are being succeeded by this year’s 45,000 law school graduates trained almost exactly like my law school colleagues who graduated 35 years ago this week. Experiencing only 56% success in placing graduating law students in legal jobs should inform the law schools that something is radically wrong and must be changed . . . now, not 2020. However, business as usual suggests that next year the law school mills will churn out 45,000 more graduates with roughly a 50% chance of landing a legal job for which they have “trained”. The data visualized is even more startling as posted by Aaron Kirschenfeld.

On May 1, Above the Law (ATL), the daily rag for all things legal, released a new ranking tool to compete with the annual U.S. News and World Report and other law school lists by which most law schools are judged by aspiring law students (and alumni givers). The index uses outcomes based metrics to rank law schools in terms of what matters most in the new normal: success in placing students in legal positions, alumni ranking, cost (as a proxy for student debt load), and the quality of legal jobs obtained by graduates.

A close analysis of the two rankings reveals the metrics do not precisely line up. Appearance does not match performance in every respect. As law schools face declining admissions, the ATL metrics will become far more important than the sheen on the brass plate bearing the law school name.

Hildrebrandt’s Quarterly Peer Monitor Index also was released on May 1. It reports:

The THOMSON REUTERS PEER MONITOR ECONOMIC INDEX (PMI) fell 6 points to 50 in the first quarter. This marks the fifth decline in the past seven quarters – further indication that the market for legal services continues to be flat at best. Demand dropped 3.4%. Worked rates were up 3.1%. Expense growth declined but not enough to offset the fall in demand.

What’s the doctor’s diagnosis?

As we enter 2013, the legal market continues in the fifth year of an unprecedented economic downturn that began in the third quarter of 2008. At this point, it is becoming increasingly apparent that the market for legal services in the United States and throughout the world has changed in fundamental ways and that, even as we work our way out of the economic doldrums, the practice of law going forward is likely to be starkly different than in the pre-2008 period.

Each year the AmLaw 100 law firm rankings report is eagerly anticipated to see who’s No. 1. This year the power of Tymetrix’ Big Data analytics was applied to the glowing data report of increased profits per partner (PPP) to reveal a much darker truth. The patient is cannibalizing itself. The remarkable growth in PPP as reported in the AmLaw 100 rankings is attributable to law firms “relieving” young associates of employment and de-equitizing partners. To prop up PPP for public bragging rights, firms are gutting their capacity to get the shrinking pool of work done at less cost, increasing the price of services to clients and sharing the spoils among the survivors without investing in reserves (people and capital) for the future. This is suicidal. See AmLawDaily 5/3/2013 Life cannot be sustained if the patient merely eats what it kills without replenishing reserves. Bloomberg Law calls it a BigLaw Crash Landing.

Surely, someone is doing something to solve this crisis. Indeed, law firms proudly announce their innovative alternative fee agreement creativity. A seemingly limitless number of AFA models are cited as proof that law firms are aggressively solving the problem of client demand for cost controls. However, the reality is that most of the AFA types are merely masks for discounting rates. This shell game neither predicts price, nor protects firm profits. It is equivalent to throwing a dart in the dark. Be careful where you are standing.

What is the diagnosis?

The American Lawyer Magazine recently released its first annual survey of law firms and corporate legal departments use and understanding of alternative fee agreements. Paul Friedmann on reading the survey of AFA respondents found significant confusion about what an AFA is defined to be. Apparently, apples and oranges are hard to find. Another commentator, Jean O’Grady, makes a similar observation amazed at the large number of fee arrangements that are called AFA’s. Basically, any non-standard hourly billing arrangement qualifies as an AFA (that would include hourly discounts and conceivably write-offs of time billed). O’Grady observes:

A careful reading of the report shows that the real drivers of the AFA movement are not the GC’s but the corporate executives and often the procurement departments who have been charged with rationalizing and reducing legal spending using the same tools they use for the procurement of office equipment.

Amazing! General Counsel are not driving the use of AFA’s. Their in-house corporate clients are.

Further, O’Grady observes that Legal Project Management is critical to the success of AFA’s:

The most significant take away is that right now many firms are treating AFAs as a loss leader with the expectation that it will bring in more work from the (outside) counsel. But if firms don’t have the discipline and the tools for managing their own efficiencies it is likely doomed to failure. So the real question is whether firms will invest in the development of real LPM specialists who have sufficient authority to establish best practices which become the firm’s standard procedures.

When law firms and corporate legal departments learn what their institutional clients learned long ago, surgery can be performed, rehabilitation can occur and health can be restored. Moving from a business model which profits from waste (billable hours benefiting a shrinking number of “haves”) to one profiting from efficiency and sharing with a broader constituency, the necessary “fundamental changes” in the industry will be addressed.

Legal Project Management is such a tool and one which pays back time to the user, price predictability to the client and profitability to the firm. These are not mutually exclusive benefits. Lawyers using LPM today can attest to this new normal.

How can a patient be this ill and do nothing to regain its health? Does the patient want to get well?

Sounds like dangerous self-destructive psychotic behavior. But, hey, I’m no doctor.

Perhaps we should simply move our offices to a location from which a jump from the window will not result in injury.

To learn more about our solutions, for an online Product Demonstration of Lean4Legal PM®, or if you wish to Discuss How Legal Project Management Applications Can Assist in your work environment, please call us at 615.585.7563 or submit your information via the Contact Us form.

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Filed Under: Alternate Fees, Change Management, Hourly rates, Human capital, Innovation, labor shortage, Leadership, Legal Education, Legal Project Management, LPO's

Richard Susskind On Radical Changes in Law

May 2, 2013 By Larry Bridgesmith Leave a Comment

For over 20 years Richard Susskind has studied, written and taught people interested in the legal services industry how trends are changing its character, scope and scale. His latest book, Tomorrow’s Lawyers: An Introduction to Your Future, paints a very different picture about the future of the “new normal” (some are calling it the current state).

He was recently interviewed by Bloomberg Law’s Lee Pacchia, and the essence of his views on the nature of the radical changes facing lawyers are excellently captured the ten minute video below. If you would rather see and hear Prof. Susskind than read his work (not recommended), click and enjoy.

Richard Susskind: With Radical Changes, Law Firms Can Beat Recession

Filed Under: Alternate Fees, Change Management, Hourly rates, Human capital, Innovation, labor shortage, Leadership, Legal Education, Legal Project Management, LPO's

Tranparency and Collaboration: Secrecy and Silos No Longer Work

April 20, 2013 By Larry Bridgesmith Leave a Comment

As tragedy and chaos were transformed into celebrations in the streets, the world’s eyes have been focused on Boston for the last five days. The unthinkable horror of bombs detonated at the Boston Marathon finish line on Monday afternoon concluded on Friday evening with Bostonians gathering at hospitals, fire and police stations and other public places cheering at each public service vehicle as it passed. Each press conference throughout the week brought another and larger group of public officials to the microphone bank to thank their own staff and the work the coordinated task forces had done to help bring a city’s nightmare to an end.

Did you notice how these five days represented a new normal?

The old normal would have been marked by recrimination, accusation and secrecy as federal, state and local competitive law enforcement and public service organizations each tried to out perform the other and keep their own silos of information and functionality to themselves. What a remarkable contrast over these last five days as numerous press conferences were conducted, sometimes as frequently as within an hour of each other.

Soon the press conferences became more frequent and at each one new faces representing additional agencies involved in the investigation were featured. The FBI, the ATF, additional local, state and federal law enforcement and public safety agencies joined the ad hoc task force focused on bringing peace and safety back to Boston and the watching world. There was no play book for this convergence of problem solvers. There had been no simulated exercises to iron out the wrinkles of interagency collaboration.

And where would the public find itself? Locked out and uninformed or misinformed so that the specialists could do their job unhindered by the unwashed and uninitiated.

Not this time! Multiple times a day, the public was informed and asked for assistance. As tens of thousands of visitors left the city on Tuesday, investigators from many agencies coordinated conversations with the departing guests at airports, train and bus stations. Looking for any photographic evidence captured in cell phones or cameras that might provide a hint.

An unprecedented level of cooperation by the public, police and government brought a crisis to a close in unprecedented ways in an unheard of period of time. When the FBI posted the pictures of the suspects on its website, the website crashed as millions of “helpers” provided tips, identification and assistance. Within an hour, the authorities knew who they were looking for and where to find them. The suspects who had been “outed” lost their hiding place and in desperation “made a run for it.” More mayhem and carnage led to death and capture, and finally to public jubilation in which we all participated.

Are there parallels that the events in Boston this week bring to instruct the new normal in legal services? Absolutely! The sooner we acknowledge and adapt to these lessons, the sooner the legal services industry can join the new normal rapidly being embraced by the rest of the world.

What are the lessons?

Transparency: There are no secrets. Let’s quit pretending there are. Acts committed in public are captured by the eyes of countless witnesses, many of them digital, mobile and empowered by social media. Whether crimes of carnage or client disregard, videos, emails, and digital imagery have captured it and the secrets will be discovered.
The collective power of the people: Hierarchy and Power no longer can maintain a hold on the ability and willingness of people armed with technology to blow the whistle on those who would do us harm. Whether lawyers scheming to “churn baby, churn” or terrorists intent on carnage, someone, somewhere, somehow will turn them in. The pervasiveness of the digital record makes it highly likely that the crime will be reported with amazing accuracy. The people offended by crimes of self-interest will disclose the digital record. Count on it!
Technology: Without the amazing capability of technology to process vast amounts of information, provide facial recognition and analyze huge quantities of data, humans would have taken weeks, months or years to sift through all the evidence generated in the hours that led to the suspects’ desperate break for freedom. Law enforcement officials allowed the technology to process the data so the professionals could practice law enforcement. Soon lawyers will cease trying to do both so they can dedicate themselves to the one they do best.
Collaboration: Former competitors have learned how to cooperate and share the victory. On Friday night as the saga came to a close, no less than ten separate agency heads from several local law enforcement agencies, public transit, state and federal officials all stepped to the microphone to take their fair share of credit, commend their staff and fellow agencies and thank the public for their role in bringing the horrific event to an end in an amazingly short span of time.

Welcome to the new normal If law enforcement can do it, law firms, legal departments, clients and interdisciplinary resources (formerly competitors for a shrinking slice of pie) can join forces and start making the pie bigger again.

If Boston Harbor was the site of the first revolution seeking freedom from the tyranny of taxation without representation, the Boston Marathon stands as a symbol for the breakthrough of human innovation, technology and collaboration which will mark our entrance into a new normal for human achievement over the tyranny of destructive self-interest.

We can all join in the celebration. Lawyers are welcome too.

Filed Under: Change Management, Human capital, Innovation, Leadership

Collaboration: No Longer a Four Letter Word

April 16, 2013 By Larry Bridgesmith Leave a Comment

In the highly competitive legal industry, few words receive as much derision and dismissive disregard as “collaboration”. It is, after all, about winning isn’t it? Winning means there must be a loser and it won’t be me. That makes you my competitor and we will lock in battle in the noble tradition of warriors and may the best person win! Right?

Not necessarily. A palpable shift is taking place on a global scale that suggests that in times of shrinking resources, the only sustainable strategy is one that maximizes mutual benefit for the sake of the whole. Competition is not dead, it simply holds less value when the group depends on all its members to advance.

At the Reinvent Law conference Silicon Valley, there was a prominence of the concept of collaboration as a means of providing greater access to justice and higher value legal service to clients at less cost and with greater quality and on time delivery.

Again at the Georgetown Law conference last week on the “shrinking pyramid” facing the legal services industry, a major focus of the event was the value of collaboration as reported by Ron Friedman’s live post from the event.

What’s happening? Are lawyers turning into the “kumbaya” crowd? What happened to the shark lawyer? Where did the “take no prisoners” brand of litigation go? Isn’t it our job as lawyers to “leave no stone unturned”?

Perhaps it’s time to let the client decide.

I will never forget the moment as a young partner when a potential client approached our firm to take over the defense of a wrongful discharge litigation. Five years earlier, the company had received a demand letter on behalf of a former employee alleging an illegal termination and asking for $50,000 to settle the claim. After taking the letter to the company’s then current employment counsel, the employer was told that paying any amount of money would be “highway robbery”. “Don’t settle, fight!” they were told. Five years and $1 million in attorneys fees later, the company asked my law firm to help stop the bleeding. After a change in counsel, and a settlement of the claim for $100,000, the question persists, “Who was in charge of the defense?”

The world of ADR (Alternative Dispute Resolution) in which I have practiced for 20 years understands the value of early intervention in disputes that could lead to destructive litigation. Being able to strategically decide when to fight, how to fight and when and how to discuss resolutions that are more likely to occur than trial, client interests would be far better served. Strategic problem solvers know when it’s time to make an enemy and when it’s time to make a friend.

The ADR community of problem solvers (mediators, facilitators, arbitrators, trainers etc.) are first in line to assist the large corporate community in minimizing the cost of increasing complexity, scope and the international dimensions of the disputes facing the global corporate client. (See: Fulbright & Jaworski’s Ninth Annual Report on Litigation Trends)

A task force has been established by the American Bar Association Dispute Resolution Section’s International Committee to address the web based opportunities and resources available for complex international disputes. By collaborating, competitors in the ADR space are learning that there is more to achieve together than in silos fending off the next great idea spawned by someone else. After presenting the concepts of web based problem solving at the most recent ABA DR Section meeting in Chicago, the proposal will also be presented at the annual ABA conference in San Francisco in August.

“Doing more with less” will necessitate a more collaborative approach among professionals of many disciplines working together in an efficient, seamless, transparent and real time fashion that provides improved price predictability for the client and profitability for the legal services provider.

This is not a vision which is unachievable. As Richard Susskind observed in Tomorrow’s Lawyers, “The solutions exist, they are just not evenly distributed.” Using the power of innovation, technology and entrepreneurship, the new normal is here.

The CERN supercollider project spanning the border between France and Switzerland is managed collaboratively among 10,000 cooperating professionals from 100 countries through technology. Each professional, engineer and organization with which they are affiliated has independent and sometimes competitive needs and interests compared with others working in the project. There is no boss. Instead a culture of collaboration empowered by technology tools allows the thinkable to be achieved.

Why can’t lawyers trained as problem solvers do better for themselves and their clients using similar tools?

The answer: They can.

Do they want to?

Filed Under: Alternate Fees, Change Management, General, Hourly rates, Human capital, Innovation, Leadership, Legal Education, Legal Project Management, LPO's

The Academy Steps Up: Laws Schools are Starting to Change

April 12, 2013 By Larry Bridgesmith Leave a Comment

Much has been written in this space and numerous others about the failure of the legal academy to acknowledge the arrival of the “new normal” and the need to radically re-engineer legal education.

Many cry, “Too irrelevant. Too expensive. Too elite and too unconcerned about the purported beneficiaries of legal education: law graduates and the market they serve.”

There are a few bright spots out there. Fordham’s Silvia Hodges is an example of a forward thinking adjunct law professor bringing the reality of legal service pricing to the students and graduates of that fine institution.

The University of Miami Law School’s Law without Walls is an example of an innovative initiative designed to break down the silo’s between law students, entrepreneurs and the world of business into which most lawyers will choose to bring their legal training.

Followers of this site know that Dan Katz and Renee Knake are doing phenomenal work through the Michigan State University Law School and the Reinvent Law initiative they co-founded.

However, these are no longer voices in the wilderness. The changes evoked by declining legal job opportunities and the precipitous drop in law school applications are forcing the legal academies to rethink their value proposition and engage in re-engineering their identity and offerings.

However, law schools at the peak of the pile will always have a long list of quality students wanting admission into their hallowed halls. The likelihood of change in the top law schools is much less than in those schools now scrambling to create a survival strategy.

One delightful exception is Vanderbilt University’s School of Law, at which I am privileged to serve as an adjunct professor. Dean Chris Guthrie and Assoc. Dean Lisa Bressman are academic leaders of a different stripe. They are concerned about the market they serve (law students and potential students) and the state of the legal profession’s need for quality lawyers equipped to deal with the “new normal”.

Few law school deans of whom I am aware would host the meeting I was privileged to attend yesterday. Deans Guthrie and Bressman invited Dan Katz, J.B. Ruhl, Marc Jenkins, John Murdock and me to explore how Vanderbilt can be even more responsive and relevant to the rapidly changing legal landscape and the role the legal academy must play. J.B. is a specialist in complex adaptive theory and the law. Marc is a litigator and specialist in information management law, including e-discovery. John is a business lawyer with a deep penchant for improving the process of legal service delivery.

What a rush! My mind was swimming for hours to follow and hasn’t stopped yet.

Deans Guthrie and Bressman’s desire to provide a core curriculum including experiential education in the critical skills needed by Tomorrow’s Lawyers who are today’s law students is amazing. They are committed to provide the training and the education to current law students and the practicing lawyer who desire to navigate the perilous shoals of the changing legal business model. With equal concern for Big Law, solo, public interest and government lawyers, their focus on how to equip lawyers to be the sentinels for the protection of the public and the success of its institutions is unparalleled in my experience.

For two and one half hours we explored without constraint what the potential revisions to core curriculum might include. Without jettisoning the canon of the law (primarily first year and portions of second year traditional legal education) we considered complex system theory, innovation, technology, quantitative skill sets and entrepreneurialism as critical components of the education lawyers deserve and need more than ever. We examined the role process improvement, project management and business fundamentals must play in the curriculum for tomorrow’s lawyers. We recognized that law schools are training lawyers for jobs that don’t exist today and therefore must equip them with the skills to be flexible, adaptive and resourceful.

When it was published earlier this year, Richard Susskind’s Tomorrow’s Lawyers provided me the first ray of long absent hope in the future of the legal profession.

Yesterday, my hope was kindled into flame as the responsibilities for equipping the new normal lawyers are being assumed by highly qualified and accomplished academics who understand their role in the delivery of relevant instruction at the J.D. level and beyond into the world of the practicing lawyer.

Hang on. The ride is just getting fun.

Filed Under: Change Management, Human capital, Innovation, Leadership, Legal Education, Legal Project Management

Culture Change: We Cannot Know What We Do Not Know

April 1, 2013 By Larry Bridgesmith Leave a Comment

In my “day job” I have been a practicing labor and employment lawyer for almost 35 years. In that time I have seen an enormous amont of change in workplaces of all descriptions. Most of it involuntary. Economic influences precipitate reductions in force and people lose their jobs. Technology innovations can eliminate entire careers. A once valuable skill set is automated and a comfortable living is lost to memory. New skills must be learned or irrelevancy (and unemployment) set in.

That pattern has happened repeatedly over the span of my 35 years representing management in labor and employment matters. Lithography gave way to digitized printing. Pattern making was replaced by computerized metal cutting technologies far more precise and far more efficient than human manual processes could replicate. Comfortable careers became extinct virtually overnight. (E-discovery anyone?)

Higher education today understands that it is responsible for training students to acquire skills for jobs that don’t exist today. Law schools are beginning to understand the same thing. These are hopeful signs that all change doesn’t have to be forced on us.

The most effective culture change is voluntary. However, although voluntary culture change is the most difficult, it is the most attractive. Who do you know would rather be told what to do than to choose what to do?

What prevents us from accepting culture change rather than having it forced upon us? A most powerful truth: We don’t know what we don’t know. Why would highly intelligent and accomplished professionals be blind to the opportunities presented by changing their outdated thinking? Confirmatory bias is the culprit that imprisons us in our death spirals. We only know to do what we know to do. When threatened with new realities we tend to simply “do it harder and faster”.

If you wish to dig deeper into the human capacity to overcome the paralysis of confirmatory bias read Decisive: How to Make Better Choices in Life and Work, anohter pivotal work by Chip and Dan Heath. In their newest book, the Heath brothers (also authors of Switch and Made to Stick) tackle the trap of confirmatory bias and provide instruction in opening our minds to reality we have yet to experience in order to make better decisions about our future.

The “new normal” in legal services is approaching with such speed that many will “choose” to become irrelevant over choosing to change. It doesn’t have to be that way.

In my life’s work of helping motivate organizational change in many industries (health care, education, religion, and others) it is clear that confirmatory bias does not have to be the death knell for great people doing great things. Over 20 years ago, Peter Senge published The Fifth Discipline: The Art and Practice of the Learning Organization. In this ground breaking work, Senge (an MIT organizational development specialist) described the blinding effect of the “ladder of inference” which is the psycho-physiological basis for confirmatory bias. (Physicians, like lawyers, can become very adept at confirmatory bias and the ineffectiveness that results. See, How Doctors Think by Dr. Jerome Groopman.)

With the incredible efficiency of subconscious thought processing, we continue to choose to see what we have first chosen to see and build our belief system on only what we have experienced. This illogical pattern of behaving in unhelpful ways will only change when we become intentionally willing to examine data we have never noticed before. This journey is not impossible. It is simply unlikely unless we are willing to be mindful in examining the data we have become expert in ignoring.

Why would we ever do that? “We only change when the pain of change is more attractive than the pain of staying the same.”

In the current state of law’s “new normal” the pain of staying the same is unbearable. (If you think otherwise, review the litany of insanity captured by Legal Technology News contributor and KIA Motors corporate counsel Casey Flaherty in his recent post.)

The time has come to flip the switch and examine the potential for change over the death spiral of staying the same.

Voluntary change is far more empowering, sustainable and professionally satisfying than clinging to a normal that has lost its ability to shape the future.

The choice is ours to make.

Filed Under: Change Management, Human capital, Innovation, Leadership

The Greedy Pig Gets Et’: Hyperbole Reveals More Than a Grain of Truth

March 26, 2013 By Larry Bridgesmith Leave a Comment

A former law partner of mine was Harvard law educated, and Alabama born. He used the best of each education to make his home spun aphorisms stick in your brain. When confronted with today’s disclosures about the DLA Piper billing debacle reported by the New York Times, I can hear him now. With the soft drawl of a South Alabama preacher, he would say, “Ya know, the greedy pig gets et’.” The obvious import of his point is the that largest pig in the lot is the one most likely to be butchered for bacon.

And so it seems the exploits of a few will inform the dialog about the need for a radical reinvention of the law for many years to come.

We will leave the outcome of the DLA Piper billing dispute to the courts. However, accounts like this have been too common for too long. What practicing lawyer can honestly say she hasn’t heard a partner tell an associate, “It’s not time to settle that case. The file needs to be worked some more.”? As the NY Times article observes, “The billable hour creates perverse incentives.” When lawyers are paid for their input rather than their output, excesses should be expected.

All this brings to mind the great piece of work by Nilofer Merchant, 11 Rules for Creating Value in the Social Era. Nilofer brilliantly compiles a new order of behavior driven by the all pervasive capacity of social media (including email!) to reveal the truth about people, their values and their behavior. Rule #9 is the power of social purpose. Her chapter begins: “There are the things that we do. There are the things that we care about. And then there is the story we tell about it. When those things are in full alignment for individuals, we say they have integrity.”

Pretty powerful isn’t it? Integrity is more than, “I’ve never been caught lying.” It’s far more than, “I only speak the truth.” Integrity is the alignment of what we say, what we believe and how we behave.

A law firm’s mission statement might proclaim, “Our clients are the first order of business,” or “We are a client centric law firm.” If there is integrity behind that claim, billing excesses will not occur.

More importantly, the firm’s business model will not be built on “perverse incentives”. A firm that truly intends to put the client first, will be rapidly moving to realize compensation and profitability from output, rather than input. An incentive to achieve financial success through efficiency rather than waste is the model of a true client centric law firm.

Let’s quit deceiving ourselves (and attempting to deceive our clients). As lawyers, our clients should be our first priority in terms of representation and in terms of compensation.

Otherwise, we might find ourselves served up as a rasher of bacon.

Filed Under: Change Management, Hourly rates, Innovation, Leadership

Perspective from Afar: Seeing with New Eyes

March 25, 2013 By Larry Bridgesmith Leave a Comment

As I “wing my way” back home to Nashville from a fortnight in the U.K. and Scotland, I am struck by how the future of law seems to come into clearer focus all the time. First, the legal system in the U.K. is probably at least five years, if not ten years, ahead of the U.S. legal system in its transformation to the new normal. On the heels of the 2009 global recession came the effective date of the 2007 Legal Services Act in the U.K. On January 1, 2012, alternative business structures (ABS) became a reality in the U.K. To date numerous entities have qualified as an ABS (with hundreds more in the queue) able to provide legal services to clients without being owned in whole or in part by licensed lawyers. As a result, large law firms are collapsing and new forms of legal services providers are taking shape and enjoying significant success.

As mentioned previously, while in London, I was fortunate to meet with the executives responsible for the rapid growth of Riverview Law. Adam Shutkever (COO) and Jeremy Hopkins (CDO) are at the forefront of radical change in the delivery of legal services. Adam was a practicing lawyer in the U.K. until he entered the investment banking industry. After many years of success in investment banking resulted in an obvious choice by Riverview Law to invite Adam back into managing the business of law.

Those years saw enormous change in the investment banking industry as technology radically altered the business model of delivering investment advice in real time and with great knowledge of the variables impacting the primary driver: return on investment. However, the business of law had not changed in the least in the same time frame. Adam and Jeremy have now brought the power of sound business practices and technology advances to the delivery of legal services. Riverview Law personnel are working almost around the clock responding to RFP’s from major corporate clients seeking representation in legal matters as varied as complex litigation and major corporate transactions. Andy Daws, their colleague on the U.S. side of the pond based in New York, is making sure the funnel is filled with opportunities for Riverview Law to meet the needs of corporate clients all on a fixed fee basis. The entire risk of cost overruns is born by Riverview Law, not the client. A client centric legal practice. What a concept!

Also, I was able to meet briefly with Oxford Law Prof. Richard Susskind who is traveling the world promoting his vision in Tomorrow’s Lawyers at the invitation of law schools, law firms and, importantly, the major global consulting firms. As he notes in his highly influential work, “The future of law is here, it is just not evenly distributed.” The unequal distribution is becoming even more so, as “innovation, technology and entrepreneurship” are being adopted by forward thinking providers of legal services which look little like the traditional partnership model. Prof. Susskind is both the prophet and the evangelist for the new normal and the frequent flyer points he is accumulating are monumental as legal service providers line up to learn how to embrace legal innovation.

From London, I spent a week in Scotland (the land of my ancestry) and learned of similar transformational initiatives afoot there. In Dundee, I was fortunate to work with Richard Coton, rector of Monifieth High School. Richard along with others of like mind have engineered education reform in Scotland through the Curriculum for Excellence which is leading an empowered approach to creating life long learners and citizens trained in collaboration rather than steeped in competitive death spirals. Scotland has given birth to a New Enlightenment. As the original Enlightenment found its roots in Scotland, so too a new wave of thinking and doing. Scottish innovation is sweeping not merely the country, but a world watching for a cultural revolution which will replace the tired ways of industrial thinking with a culture of collaborative and multi-disciplinary problem solving. Among others at the forefront of the collaboration movement taking root in Scotland I also had the pleasure of meeting Graham Leicaster of the International Futures Forum from St. Andrews and my friend and fellow mediator John Sturrock of Edinburgh.

Finally, I was fortunate to meet Alan Boyter, HR and OD Executive Director of Lothian Health Services, Scotland’s largest employer (26,000 employees in health care services across 700 square miles. Lothian is addressing health reform initiatives through the enlightened leadership of Alan and his fellow executives at Lothian. There are simply not enough resources in health care to permit the old hierarchical competitive model of leadership.

Solving problems at the source of the health care crisis will not take place from the top down or in an autocratic fashion. Leadership must encourage and reward innovation, but it cannot compel it. Instead, culture change occurs organically through people empowered to explore innovation. Failure is allowed, even encouraged. “Fail fast, fail often and fail small” is the mantra of the innovative organization. Where there is no room for failure, there is no capacity to change the status quo.

How are all of these innovations related? “Doing more with less” is not merely the rallying cry of the legal sector, it is the DNA of an emerging cultural shift. When resources grow scarce, collaboration becomes essential, transparency and the pursuit of mutually beneficial solutions is mandatory. Establishing trust is the critical foundation of a new working relationship in education, in health care and in law.

Let’s get on with it.

Filed Under: Change Management, Human capital, Innovation, Leadership, Legal Project Management

Lawyers and Technology: Process vs. Practice

March 13, 2013 By Larry Bridgesmith Leave a Comment

It has been well over a decade since I have “enjoyed” any significant dental work. That’s a credit to my dentist of over 30 years who has done such great job of maintaining my dental health. However, this past week a tooth waiting to be crowned received its day in the sun. As I lay there with mouth agape, it gave me an opportunity to compare the professions of dentistry and law. (I know how unlikely that would be for dental-phobes, but my dentist is a master of “painless dentistry” and I didn’t have anything else to do at the moment.)

As tool after tool and implement after implement was deployed to the task of “crowning a molar”, it occurred how dentistry had changed over the time since I had a similar procedure done last. All sorts of computerized things were put in my mouth to make the practice of dentistry as a profession more efficient, more effective and (I hope) more profitable for the dentist while making the patient experience almost pleasant. (Okay, that’s a stretch, but it was definitely a major improvement over experiences I recall from the past.)

That’s what got me thinking. Were all these new gizmos making the dentist less a professional? Was the technology taking the place of the practice of dentistry? Of course not. From the perspective of the patient, the dentist was more professional because he was allowing technology to handle the process of dentistry, leaving the practice of dentistry to the professional.

I don’t know if the lights going off in my brain distracted him, but it was an epiphany for me. Could lawyers become more professional by treating the projects of law like a process and allowing the power of technology to free up the lawyer to practice more law, more excellently and with greater financial and personal reward?

As an labor and employment lawyer for over 30 years, almost every case I handled (from EEOC charges to class action litigation) consisted of processes I learned from others, developed myself or acquired from the lessons of failure. I could pride myself on the processes I developed to represent my clients as effectively as possible. However, what if I turned those processes over to technology which could perform them more efficiently, more expertly and with fewer process errors than I could do them myself?

Voila’. The difference between process and practice became real to me. Professionals practice, technology processes. Let each do what each does best.

At ERM Legal Solutions, our first customer had been doing project management in his complex litigation practice for over ten years. After using our technology solution, he told us that we had given him “half of his day back”. In other words, by allowing the technology of Lean4Legal PM® improve the process time it took to manage his litigation, he had more time to practice law (or develop clients, or manage his practice group, or go home). A 50% improvement in the available time a professional has to practice her profession is a very good thing.

Understanding the key difference between processes and practice will differentiate the successful lawyer in the new normal.

I had occasion earlier today to meet with Adam Shutkever of Riverview Law in his 1 Temple Avenue Chambers in London. Adam is the Chief Operations Officer for Riverview Law and they are modeling the “new normal” by providing legal services of even the most complex nature on a fully fixed fee basis. Corporations are moving significant amounts of work in the direction Riverview Law is leading through high quality teams (which can include any combination of barristers, solicitors & paralegals) doing first rate legal work in a methodical fashion through the power of process in support of practice. One is not the enemy of the other.

Adam is a lawyer who once practiced before becoming an investment banker. After a number of years not practicing law and successfully thriving as an investment banker, Adam returned to the practice of law to discover it had not changed in the least. Investment banking had changed radically through the technologies of process management. The legal profession was still “doing law” in the same way it had been done for decades, or even centuries. As lawyers, we forgot the difference between the process of law and the practice of law.

In the “new normal”, we can practice better, more often and more profitably by doing less “work” and turning the processes of the practice of law over to technology which can do it far better, far faster, far more effectively with far fewer errors. Remember how discovery in complex matters used to be “processed”? Now e-discovery has spawned a new industry and hundreds of e-discovery firms are doing profitably what lawyers used to do manually.

Lawyers unite! Let’s turn the processes of law over to technology so we can return to the practice of law.