Ask Dr. Paola: Dealing with Ethical Issues When Creating Incentives for Lawyers

Topics: Client Relations, Data Analytics, Efficiency, Law Firm Profitability, Law Firms, Legal Innovation, Q&A Interviews, Women’s Leadership Blog Posts


The Legal Executive Institute blog is honored to be working with Dr. Paola Cecchi-Dimeglio, a behavioral economist and senior research fellow for Harvard Law School’s Center on the Legal Profession and the Harvard Kennedy School, on a monthly column. Each month, Dr. Cecchi-Dimeglio will be answering questions about how law firms and legal service firms can navigate a dramatically changing legal environment by using data analytics and behavioral science to create incentives for lawyers to change behavior. (You can follow her on twitter at @HLSPaola.)

On to this month’s question…

Ask Dr. Paola: Are there ethical issues to be considered when I’m creating incentives for my lawyers and attempting to influence their behavior in a positive way?

Dr. Cecchi-Dimeglio: This question is a big, big, big one — and this is a question that keeps coming up over and over. So, let me be very clear on one thing on that. The way of designing particular nudges to influence your lawyers is to be done with one ultimate principle in mind: Ethics should be the driver of anything you’re doing.

Indeed, what you’re doing by creating these nudges toward more positive behavior is that you incentivize people to choose one behavioral option over another — hopefully, the one you’ve determined would have the most positive outcome for the firm overall. In that process, you must make sure that ethically no one is harmed or has their freedom to choose curtailed in any way. What you are doing, in other words, is simply making the decision process more simple, so that people can choose more easily the behavior which best serves the long-term goals.

Let’s look at an example that might illustrate this better: a subscription plan to a magazine.

Let’s say this magazine has three subscription options: print only; online only; and a bundled price for both. Let’s also say that the magazine publisher prefers subscribers choose the bundled option since it allows the publisher to sell ads both online and in print. To that end, the publisher has made the bundle option the best bargain of the three.

Dr. Paola Cecchi-Dimeglio

Whichever of the three options subscribers to the magazine choose — even if they choose the bundled option the publisher prefers because of the pricing — it does not mean that you are changing how people will decide whether they will subscribe to the magazine or not.

The people will still choose whether to buy the magazine or not, based on their preferences and desire for the magazine, its cost, or some other factor — that initial decision is still theirs. What you have done is made it easier to choose among options, and hopefully guided them to the option that works best for you and also benefits them.

I use this broader example to show that behavioral scientific data can be applied everywhere and is not just relevant to corporate or legal enterprises.

Independent of the context, other behavioral scientists like myself, as well as economists, psychologists, and social scientists overall, are very, very, very outspoken about the importance of considering the ethical issues involved in designing any nudges towards changing behavior.

Most importantly, the individual’s freedom of choice must remain intact and cannot be compromised. Instead, what you want to do is change how the individual frames his or her overall picture of their choices — you would never coerce the individual or encourage him or her into behaving in way that is harmful to anyone. You must always respect and ensure that the individual’s freedom to choose is maintained and not threatened in any way.

What you want to do is change how the individual frames his or her overall picture of their choices — you would never coerce the individual or encourage him or her into behaving in way that is harmful to anyone.

Further, I think that creating these choices or nudges should not be managed punitively, but rather with the central idea to keep the choice of individuals as free as possible, even as you help them to make better decisions.

The notion of ethics is raised every time some company uses behavioral science in a way that is more favorable to the company than to the individuals involved. But I believe every company, when they are using behavioral science, should rely on the same principles as lawyers when they take an oath to serve justice. I believe that behavioral economists do the same, in the hopes of making everything that we are involved in as ethical as possible.

Overall, it’s not just about improving strategic decision-making by trying to limit our own and others biases. It’s about determining the best way to help yourself, your lawyers and your organization by orchestrating a decision-making process that will confront different biases and limit their impact.

So, when you do a nudge or when you are looking at the possibility of doing a nudge, you are always making an assessment about the ethics involved. Particularly if one option is more ethical than another. You will need to be able to explain that to yourself, but also to the management committee and the law firm with whom you are working.

That’s why it is so important to understand — as I’ve repeated many times — creating these nudges and incentives in order to change behavior within your organization must be done ethically, and specialists and experts should be involve in the process of designing, implementing and monitoring this process.