A law firm leader thinks about originality and efficiency
“We like to say our work is so high-end that every deal is unique, but only 20% of what I do on a given deal is original,” admits a thought leader in the mergers & acquisitions group of an AmLaw 100 firm. She's speaking to Keith Mayfield, chairman of her firm. Keith is interviewing some of his colleagues for ideas about how to make their practices more efficient. He's pursuing the initiative at the practice group level, recognizing that efficiency solutions will generally vary based on the nature of the work.
Keith is surprised by his partner's answer. She operates in a very high-value part of the firm's practice, because of both her stature within the profession and the nature of her work.
“The other 80% of the work on the matter isn't something that could be automated, but most of it I've seen before and don't have to think much about. I may have to try hard to remember and adapt to the current situation, but it's not original. I'm called upon to take one piece from matter X and another piece from matter Y, and so on. If I had the time, I could probably make a really complicated flowchart, but that's time I don't have. Besides, how would the lawyer following the flowchart know when they've entered uncharted waters?” she concludes.
Keith, a former commercial litigator, thinks about his own practice. He used to think all his cases were unique. Now he realizes that what his partner has described about M&A work also applies to the work he used to do. Nothing was cookie-cutter, but 80% of the work involved rearranging pieces of work he'd done before, sometimes in a complicated way but not in a truly original way.
A few days later, Keith is talking about efficiency with the head of one of the firm's few high volume, commodity practices. “We've been focused on efficiency for years,” says the group head. “We use lots of templates, keep them up to date, push work down to the lowest-priced lawyer who can handle it and manage our matters pretty tightly,” he continues. “Because of all that, we have decent profitability, even though we bill using fixed fees. For the 20% of our matters that don't fit that mold, we bill by the hour and produce customized work product. Those matters are also profitable and can be done by the handful of lawyers in our group with the most experience, so we want to keep that work.”
Why are these practice areas the same?
Later, as Keith ponders what he's heard from his partners in these two very different practices, he realizes they were saying the same thing. Only a minority of their work requires creativity and custom solutions. For experienced-based work, such as M&A and commercial litigation, creativity is required for only 20% of the work on a given matter, but that creativity need occurs in 100% of the matters. For commodity work, when creativity is required it applies to 100% of the matter, but occurs for only 20% of the matters.
In both cases, overall the team is expending original effort only 20% of the time. The team can be more efficient if it can find ways to avoid reinventing the wheel for the 80% of its work that involves recycling prior knowledge and experience. The commodity-based practice has found a clear path to achieving that goal. The experienced-based practices have not. If these practices could improve efficiency, the benefits would go straight to the bottom line, because almost every matter now involves write-downs or write-offs. Redeploying the saved lawyer time on new fee-paying matters will produce more profits with no additional cost.
How can an experienced-based practice become more efficient?
Method 1 – Engineer the perfect solution (but don't expect it to work)
One very logical – though idealistic – approach to making an experienced-based practice more efficient would be to map out all the possible steps for a matter, provide clear guidance and precedents for completing the steps and create detailed lawyer training. That would enable lawyers at all levels to operate more efficiently and enable more junior (and less expensive) lawyers to take on more of the repeatable work. The following steps might accomplish this:
- Prepare that complicated process roadmap. As Keith's M&A partner noted, it should be possible to prepare a lengthy roadmap detailing all the steps of the transaction or dispute. This, of course, requires persuading high-end talent to spend considerable time preparing the roadmap and then vetting it within the group. That's a very tall order.
- Prepare checklists and collect example documents for all the steps in the road map. It is not conceptually difficult to prepare the checklists and find the examples, but, as with creating the roadmap, it requires fairly senior lawyers. Client work will generally take priority and they will not get to it.
- Train the lawyers in the group on the new tools. After the roadmap and checklists are prepared, and precedents collected, all the lawyers in the group need to be trained on the group's new approach and how to use the new resources. Lawyers resist change. They also seek to avoid going to training. Edicts from group leaders tend to be counterproductive.
- Run matters a new way. At the start of each matter, the partner in charge takes the time to identify how this particular matter fits on the master roadmap, and shares that with the team, so they can select the appropriate new tools. The partner in charge also identifies those areas that are truly new and not covered by the roadmap or the tools, so that partner and other senior lawyers can focus their energies on the truly novel aspects of the matter. For this step to work, every partner running a matter must get with the program. This runs contrary to the naturally skeptical and autonomous nature of lawyers, especially partners.
- Learn from after-action reviews. At the end of each matter, the team conducts an after-action review, part of which is devoted to identifying areas of the matter that should be added to the roadmap, either because they had been overlooked when the roadmap was prepared or, although truly new, can be expected to recur. The session would also address any other needed adjustments to the master roadmap or resources based on the learning in the matter.
The reality is that the senior lawyers on whom this approach depends will not take the time to do all this work, which will be very substantial at first even though it could pay serious dividends down the road. They and the other lawyers in the group will also resist changing the way they work – both by questioning how effective the changes will be and by claiming they are too busy to take the time.
Method 2 – Expend 20% of the effort and reap 80% of the benefit
Another approach, which takes into account the realities of the way lawyers work, involves an entirely different set of steps. The goal is to improve efficiency for the 80% non-original work of the group and to accomplish this improvement in the short term. This approach will actually succeed because it takes into account lawyer work behavior:
- Hold a brainstorming meeting. Call the practice group together, or use a regular group meeting, to brainstorm about ideas for improving efficiency and collaboration. This not only generates ideas but creates an atmosphere of inclusion that fosters that essential buy-in by the lawyers in the group.
Bring in an outsider. Ideally, engage an outside consultant who will be accepted by the group (such as a former practitioner) to facilitate the brainstorming meeting. It would also be possible for a partner with the right skills to run the meeting. Hiring a consultant has these benefits, though:
- Keeps the initiative moving forward,
- Signals to the group that management is serious about the effort, which also facilitates buy-in and follow-through by the lawyers in the group, and
- Brings the consultant's seasoned suggestions into the mix.
- Organize a steering group. To ease the burden on the practice group leader, organize a steering group of two or three partners (including the group leader) to oversee the actual effort.
Turn the ideas into real projects. Collect the ideas from the brainstorming meeting (which in some cases will be statements of problems not proposals for solutions) and turn the ideas into actionable projects, listing the basic steps for accomplishing each project. The right consultant can also assist the steering committee in this step by suggesting actionable projects and detailed steps for completion, such as
- substantive checklists (instead of standard forms),
- process checklists for specific tasks,
- more robust junior and senior lawyer training programs,
- increasing the frequency and substantive content of practice group meetings,
- establishing a knowledge base of precedents,
- collecting basic data about the group's matter experience so that similar matters can be identified for purposes of finding relevant precedents, benchmarking fee estimates, staffing matters and preparing pitch materials, and
- improving the group's intranet as a delivery mechanism for the foregoing tools, for links to group-specific subscriptions and other external resources and for news about current developments.
- Prioritize the projects. Prioritize the projects based on a subjective assessment of their relative value and ease of implementation. High value projects that are easy or moderately hard receive the highest priority. Next are medium value projects that are easy or moderately hard. High value but difficult project should be included next. Low value, difficult projects should be avoided. This prioritization step is also the responsibility of the steering committee.
- Assign the projects broadly within the group. Spread the work on the high priority projects around to partner-associate teams in a very visible and fair way, so that all members of the group can see what is being done. Hold a meeting of the group to confirm they agree with the projects and to receive commitments from all about their assignments. Agree on reasonable but aggressive completion deadlines.
- Meet periodically as a group to report progress and discuss issues. Establish a meeting frequency for all lawyers working on projects that balances avoiding being intrusive against accountability. Monthly meetings may be a reasonable compromise. The steering committee should follow up with any lawyer teams that are struggling, and then provide additional pressure or reassign where appropriate.
- Publicize successful completions and success stories within the group. Publicizing completion of projects within the group will help maintain momentum. Success stories about how a particular project helped make the client happier, the matter completed more quickly or the fee lower (or all of these) should also be widely publicized.
Taking this pragmatic approach will bear fruit in the short term. This approach can also cause continued improvement to become part of the culture of the group in the medium and long term. It requires some work, though a lot less than the idealistic approach. It also can actually get done, because it takes into account the personalities of lawyers – skeptical, autonomous, urgent (i.e., client work comes first) and change resistant – by incorporating strategies to address those hurdles.
For further details about Method 2, see my prior 3-part blog: How to improve law firm efficiency? Pt. 1 – Ask the lawyers what's needed, Pt. 2 – Ask the lawyers about priorities, but don’t ask them to help and Pt. 3 - Make a plan that minimizes dependence on lawyers.
In experienced-based practices, such as M&A and commercial litigation, nothing is cookie-cutter, but the majority of the work involves rearranging pieces of work done before, sometimes in a complicated way but not in a truly original way. By taking a pragmatic approach to enhancing efficiency and collaboration within the practice group that embraces piecemeal improvements, substantial progress can be made at a fraction of the effort required to overhaul the whole practice. Also, a culture of continued improvement can be cultivated for the long-term.
[Photo credits: © Can Stock Photo Inc. / bbbar, michaeldb & fgnopporn]