Practice Engineering for 21st Century Legal Services Firms (Part 1)

Topics: Client Relations, Data Analytics, Efficiency, Law Firms, Legal Innovation, Legal Managed Services, Practice Engineering

ALSPs

This first of three posts on the (now) essential law-degree-not-required professional roles in legal services— knowledge, pricing, process & projects, practice support, legal ops—sets the business and operational context. The second post will examine what legal services organizations deliver, and how they do it. The final post will consider technology and recommend a new, unifying role, the practice engineer.

 

The Traditional System

When Paul Cravath designed the first Big Law firm early in the 20th century, lawyers did all the work, quietly in their offices, occasionally in the library, over dinner, and through long nights at their desks. The rest of the firm was a very small “support staff” — people (mostly male, like the lawyers) to type documents, send out bills and deliver papers.

Although an organizational innovation at the time, the Cravath System of recruiting, training and promotion was applied to a production process not very much different from the shop of a medieval craftsman, the master goldsmith at his bench shaping and polishing one ring at a time, assisted by a few journeymen and apprentices stoking fires and hammering base metals.

It was a simple system. Today, legal services are not so simple.

Structure & Regulation

Before turning to the complexities and how to master them, we must acknowledge that, yes, there is an elephant in the room.

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She is large and important, but we’re just going to give her a pat, note her presence and then ignore her.

Rational operating models are constrained by business structure (partnership with income 100% taxable in year received, no tax-protected investment), by hourly billing (attenuated incentives to efficiency), by partner compensation formulas based on revenue and hours worked rather than profitability and margin, by practice rules that freeze the profession in a 19th century jacket, and so on.

Much has been written about these questions — one recent example is the report of the ABA Commission on the Future of Legal Services— but they are for another day because, I believe, the principles proposed here are applicable whatever the business structures.

Legal Services as System

Our context is not only the Uberization of law. Rather, it includes also what Richard Susskind in his 2008 book The End of Lawyers? labelled the “bespoke” end of the lawyering spectrum.

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Bespoke lawyering today is not medieval goldsmithing. Some would say that modern law firms are factories. I do not (again, in today’s context). But I do say they are systems — complex, fast-moving, integrated, alight 24 hours a day. In the words of the International Council on Systems Engineering: “A system is a construct or collection of different elements that together produce results not obtainable by the elements alone.”

Therefore, understanding and improving the delivery of legal services, for clients at all economic levels from legal aid to Fortune 10, must be driven by systems thinking, by the thinking of systems engineers. As usual, there is an acronym — SIMILAR:

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Notice especially the R for Re-evaluate. This is not math… well, there’s some math, as Dan Katz likes to say. It is not easy. It is intensely creative.

So, what is our system, what does it do? Abstracting a bit, the legal services system delivers three things of value — in this order of increasing value and decreasing risk of displacement by alternative providers and software:

  • Information
  • Execution
  • Advice

Not a surprise to any reader of this blog, in the delivery of the most bespoke legal services, the silkiest Savile Row suits, there is quite a lot of the quotidian. Suits need buttons. Contracts need signature pages. Pleadings need assertions of jurisdiction.

That is, looking at Susskind’s spectrum differently, every bespoke matter includes elements of each of the other points along the line. It is the systems engineer’s job to assemble those elements into the service that the client needs (and wants).

Indeed, systems engineering extends beyond the matter to every aspect of how clients engage with and are served by providers, just as your experience of an Apple product includes even the box, with its carefully calibrated soft friction as you lift the top.

To be continued …