Return to site

The State of Law: Connecting the Dots

by Larry Bridgesmith, JD | CEO of Legal Alignment

As abstract thinkers, we lawyers are always connecting the dots. In the star field above can you see Leo the Lion?

Does this help?

How about this?

Sometimes even the best abstract thinkers who specialize in connecting the dots can use a little help seeing the image others are describing. Especially when the haze of "noise" in the atmosphere is at its peak, seeing the patterns can be difficult.

I'm no astronomer, but this week some dots began to come together for me. Stars in different quadrants of the legal universe began to take a shape that is becoming recognizable.

I posted recently about the astounding mea culpa published by the American Bar Association which admitted that lawyers' penchant for elitism, fee increases with no corresponding increase in value and our resistance to technology and efficiency had caused a significant loss in credibility with the public and clients in particular. Accordingly, the ABA Futures Commission committed to a course of action intended to rectify this professional error and arrogance.

As a former member of the State Bar of Michigan (and forever Michigander) I am proud to point out that the Michigan bar a month earlier than the ABA played a courageous card of professional confession and repentance in the form of a Future of Law report which concludes that the "future is now". A summary of their conclusions and commitments can be found here. The full report can be found here.

Both of these professional associations which exist to protect and preserve the profession have accepted the fact that this same profession has failed the public we are sworn to serve. More than 80% of the people and businesses who need legal assistance can neither afford it nor trust seeking it out.

At the same time, the legal services pie continues to shrink leaving lawyers fighting for a larger piece of an ever smaller pie. Underemployment in law is increasing and unemployment in law is rampant.

At the Clio Conference this past week, a new Legal Trend Report feature was announced which captures anonymized data from its "tens of thousands" of lawyers using their practice management software. The startling news that comes from Clio's actual users is that only 2.4 hours of each 8 hour day is getting billed and only 1.4 hours of that day is being collected!

Can we even get our heads around that? As a practitioner, I used a 10-8-6 ratio to measure my daily productivity. I figured (without data to support it) that it would take a 10 hour day to bill 8 hours and expect 6 hours of collected revenue. That 60% factor was considered a success! Clio's data calls that into question in a significant way.

Let's be generous. Assume 50% of the average lawyer's day is revenue producing time spent on behalf of clients which can be billed. The numbers are still staggering. 50% x 87% (the rate of billable time spent which gets billed) x 82% (the amount of time billed that gets collected) Really?!!? 36% of the average lawyer's day produces revenue (and often at discounted rates). That is a 64% waste factor. How astounding is that?!

Of course, the natural tendency is to respond, "Oh, but I'm way above average." We all know that in any group (including lawyers) 95% believe they are above average on any given metric. The math just doesn't work. Show me the data.

To further accentuate the rate the pie is shrinking, recent reports declare that legal departments have pulled over $4 billion dollars in legal work from outside law firms in the first half of 2016 and more than $12 billion over the last two years to be performed in house. Even the BigLaw pie is shrinking.

What can be done to reverse these trends? How can we better serve and seize the economic opportunity of serving a market that is 80% unserved? How can we regain the corporate client trust and help make the BigLaw pie grow again. Why aren't we salivating over that opportunity and rushing to find a way to do so?

That is how the picture began to come clear. We cannot continue to serve our clients with this shrinking pie business model. We must "reinvent" the manner in which we deliver legal services.

As with most things in the age of the Internet of Things, we ask "What would Google do?"

We now know.

Mary O'Connell, Head of Legal Operations at Google and one of the founders of the Corporate Legal Operations Coalition (CLOC), opened the hood and gave us a look at the Google legal engine. In an interview with Mike Walsh in preparation for ILTACON, Mary provided 5 keys to unlock our future as legal professionals, in house and outside law alike.

#1. Scaling up requires an operations team.

Of course, we would expect Google to have an operations team (whatever that is). Most firms don't have 1000 legal professionals around the globe that require close scheduling, collaborative communications and task management to achieve efficient outcomes. The larger the organization, the greater the cost of inefficiency and the greater the degree of operational management required.

However, this is where small law and solos tend to check out. "How can that possibly apply to my solo practice with two paralegals and two administrative assistants?"

It was just such a law practice that asked for legal project management assistance because it almost went belly up because of inefficiencies and poor project management. After a few months of working to create a legal project management competent work environment, a bankrupt law practice returned to profitability (in steadily increasing proportions). This was in an almost exclusively fixed fee practice.

The legal operations team may only be one attorney, one paralegal and an operations methodology that can help turn loss into gain. Supporting legal project management technology can help, but is not required if a simple mental shift from valuing waste to valuing efficiency becomes the operational norm.

Trend reversed.

#2. The best way to disrupt the legal industry is through standardization.

As much as legal professionals want to believe we are each a special star in the universe (and we are), much of what we do can be standardized. Failing to understand that each legal engagement can be more efficiently (and profitably) managed by resorting to our legacy knowledge, formats and processes, is insuring obsolescence in this digital age.

Again, solos can benefit as much if not more than BigLaw by understanding the power of standardizing their processes and letting technology do it better, faster and cheaper. What does your client intake process look like. Can standardization and the many technology solutions that exist help you?

Even the most complex legal matter can benefit from standardization. As a legal project manager I have had the good fortune to work with complex litigation specialists who spent a modest amount of time to standardize their approach to complex case management. On a phone call they can now speak with a client, scope out a litigation engagement, assign resources and deliver a budget they are confident will be one the client is prepared and willing to pay for (because of its value) while the firm maintains a reasonable margin of profit. These don't have to be fixed fee arrangements, but often are. A legal project manager is transformed into a rainmaker.

Trend reversed.

#3. Machine learning can be used to automate internal legal enquiries.

We are not talking Buck Rodgers anymore. AI is here and has gone to law school.

Of course, most e-discovery is done by machine learning unless lawyers think they can do it better (a false premise if ever there was one). AI is being applied to contract management (see Eris Industries among others). AI is available for contract review (See jEugene among others), legal research (see Ross Intelligence among others), corporate risk management (see Intraspexion among others), practice management (See KIM Technologies among others) and many other elements of the legal practice.

Not being aware or failing to incorporate these time saving and quality enhancement technologies into your legal practice can amount to malpractice. It is not safe to proclaim, "I don't do tech". Lawyers have been the sanctioned for such technophobia.

Trend reversed.

#4. Dashboards are a powerful tool to manage external providers.

Even if you don't have Google's access to world changing system engineers and developers, the legal tech world is learning the power of platforms and dashboards to display the data lawyers need to see. Transparency and real time access to information that drives the legal process is no longer a luxury.

A lawyer who has provided a client a budget or project a price, may not understand they have created an expectation that the project will not exceed the projections. The client does. A client who then receives a "45 day surprise" in the form of billings that exceed their expectations may not look for another lawyer during that engagement, but they probably will the next time.

The need to know that a project might go off the rails and exceed the agreed upon scope is far greater than coming up with an excuse after the fact. Dashborads and platforms that share essential data across platforms are essential in today's exponential digital world.

Trend reversed.

#5. Google wants their partners to automate, too.

Ah, there's the rub.

I tried to imagine my response if Mary called me up (as if that would happen) and asked if I would like to do some of Google's legal work. After I picked up my phone from the floor and rehinged my jaw, I would stumble to find the words and tone of voice that sounded cool, calm and collected.

When she followed that up with, "And we need you to do it the Google way," all I would say is "Sure, put me in coach."

And that's the point at which the picture in the sky became clearer for me.

Getting a bigger piece of the shrinking BigLaw pie AND serving the 80% who can't afford or who distrust lawyers, requires us to do law "the Google way": better, faster, cheaper and more profitably through the methodologies and technologies increasingly available in the Digital Age.

The stars are aligned. Can you see the light?

 

If so, we can reverse the trends.

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OKSubscriptions powered by Strikingly