CURIOUS MINDS: IU Law’s Bill Henderson on Decision-Making, Podcasts and Business Models

Topics: Client Relations, Curious Minds, Government, Law Firms, Legal Education, Legal Innovation, Process Management, Q&A Interviews

Curious Minds

In a new column, “Curious Minds” created and written by Rose Ors, we will tap into the minds of legal innovators, disrupters, and out-of-the-box thinkers to learn what influences and inspires their work. In our first piece, we speak to Bill Henderson, Professor and Stephen F. Burns Chair on the Legal Profession at Indiana University’s Maurer School of Law, about his influences, his favorite podcasts, and where he gets his ideas.

Rose Ors: Who are the people outside of the legal industry that have most influenced your work?

Bill Henderson: Warren Buffet’s and Charlie Munger’s ideas on investing and decision-making frameworks have been very influential to my thinking. Buffett’s philosophy is to focus on your strengths, learn as a daily exercise, and make decisions with the long view in mind. Munger believes in the interconnectedness of economics and behavioral psychology.

Another significant influence is Carl Braun, one of the pioneers of cost accounting. Braun was the founder of CF Braun Engineering Co., a company that designed and built oil refineries in the U.S. and abroad during the early- and mid-20th century. These were immensely complex projects whose financial success depended upon completing them on time, on budget, and with no compromise in quality. To achieve these goals, Braun created a system to track company time and resources devoted to these projects. His methodology has influenced the way I think about legal service delivery models like litigation.

In a fixed mindset, failure is to be avoided, while in a growth mindset failure is view as part of the learning process.

Rose Ors: What books and other writings have influenced your thinking?

Bill Henderson: Charlie Munger’s 1995 lecture at Harvard, “The Psychology of Misjudgment,” on the importance of behavioral psychology in decision-making is an important influence. In his address, he makes a number of important points, including how in solving complex problems the biggest risks are underinvesting in learning and reflection, and, bias and distortion in how we evaluate information.

Everett Roger’s Diffusion of Innovations is a seminal piece of work on how innovation diffuses — the tipping point idea. Many of my articles in Legal Evolution are based on his theory.

Also, Michael Lewis’ Moneyball and Liar’s Poker have taught me a great deal about decision-making, as well as about how to be a great storyteller. Then there is Carol Dweck’s book, Mindset: The New Psychology of Success, where the Stanford psychologist expounds on the difference between a growth mindset and a fixed mindset. According to Dweck, people with a fixed mindset prefer to engage in activities that validate their talents and those with a growth mindset are open to learning new things. In a fixed mindset, failure is to be avoided, while in a growth mindset failure is view as part of the learning process.

Rose Ors: Where do you go for new ideas?

Bill Henderson: I listen to a lot of podcasts. I purposefully choose podcasts that are outside my field of work. I also always read the book review section of the newspaper to get ideas of what books to read next.

Curious Minds

Prof. Bill Henderson

Rose Ors: What are some of the podcasts you listen to regularly?

Bill Henderson: I listen to NPR’s Fresh Air, This American Life and Marketplace. I also listen to WTF with Marc Maron, Start-Up, and the Ezra Klein Show. These podcasts never fail to give me new insights on everything from business to politics to psychology.

Rose Ors: What is an example of a podcast that has influenced you?

Bill Henderson: This American Life has hugely influenced me. For example, a podcast called NUMMI has been so instructive to me I use it in my Deliberative Leadership class at Indiana Law.

The podcast tells the story of a car factory owned by a joint-venture between Toyota and GM and its transformation from GM’s worst-performing factory into a world-class operation. GM had closed the plant and, when the joint-venture reopened it, it rehired close to 80% of its previous workers — mostly men over 50 years old who had been part of a tired, disengaged, and disenfranchised workforce.

When this same group returned from their training in Japan, their outlook and performance changed dramatically for the better. The story is a master class on organizational learning, change management, employee engagement, and company culture.

Rose Ors: What is a key big picture question that you ask yourself about the legal profession?

Bill Henderson: A key big picture question in search of an answer is: “What business models can the legal industry adopt that reward efficiency? Having the business models is essential.

Today, law firms are increasingly using technology solutions to reduce the cost of getting legal work done. However, the issue is not cost but productivity — specifically, how can we accomplish more legal work per unit of effort. The sole constraint on better-faster-cheaper is the paucity of business models that will reliably reward re-engineering of how we solve legal problems.

This issue is problematic for corporate clients who are trying to stay within their generally large legal budgets. But it’s crucial to the PeopleLaw sector. When people can’t afford a lawyer, they give up on using the legal system. That is very corrosive to our system of government.

This interview has been edited and condensed by Rose Ors.