Practice Engineering for 21st Century Legal Services Firms (Part 2)

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

tech tools

The first post in this series on the (now) essential law-degree-not-required professional roles in legal services— knowledge, pricing, process & projects, practice support, legal ops — set the business and operational context. This post examines 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 Production Process

In our new systems world, we have a complex production process, with many professionals, many inputs, many outputs and many questions. For example:

  • Hiring — What is the profile of skills and temperament needed for this foreseen future in this legal services provider?
  • Professional development — When clients say (for lack of more specific remedies to their ailments) that “we don’t pay for first-years!” how does a law firm advance the talents of its associates? How does it create the next generation of partners? How does a corporation’s law department recruit experienced lawyers if firms are not training them?
  • Business development — What matters does the firm want? Now? Next year? Can the firm do these well and with competitive distinction?
  • Pricing & profitability — How do clients measure value? How does the firm estimate costs, negotiate other-than-hourly fees and manage margins?
  • Knowledge management — Should this be a joint enterprise of a legal service provider and its client? Is KM evolving from the stewardship of information to the delivery of just-in-time resources? Is knowledge a thing or a graph process? How is knowledge shared — within firms and between firms and clients — in a world of information governance and intrusive security?
  • Practice methods — Whether or not a legal services provider learns to sing the Six Sigma Song and the Lean Lullaby, it will be redesigning processes to maximize value and reduce waste. After all, who wants Defects, Overproduction, Waiting, Non-Utilized Talent, Transportation, Inventory, Motion or Extra-Processing (DOWNTIME)?

Alongside these narrowly focused, but critical, questions, are two broad questions for the legal services provider:

  1.      Who does what parts of the work?
  2.      What role does technology play in the delivery of service?

All of these questions are, as Ted Nelson wrote, “deeply intertwingled,” precisely because the answers to each affect all the others.

Vertical Integration

The legal services ecosystem has long since ceased to be a monoculture, in which the only actors are lawyers. Our industry is still a long way behind medicine, which learned years ago that care is most effectively delivered by a team of professionals, including not just M.D. Chiefs of Department but also Licensed Practical Nurses, Emergency Medical Technicians and a dozen other professionals.

Legal secretaries became paralegals — trained, certified, skilled, but not members of the bar. One state has created Limited License Legal Technicians. (Is there a job title more likely to deflate the confidence of both client and practitioner?) And in the de facto de-regulated market for legal services to big business, there is a broad range of “alternative providers” in evolving categories — temporary staffing agencies, document review services, legal process outsourcers, legal managed services companies and tech-enabled legal services — together, what Beaton Capital has called New Law.

engineering

In the 1920s, Ford Motor Company was very deeply vertically integrated: it owned coal mines to fire the steel mills to make the parts that became the cars. Today, Ford’s supply chain engineers, having re-read The Nature of the Firm, oversee a no less integrated but no longer vertical collection of providers all across the world. It is neither necessary nor optimal for one organization to do it all.

Likewise, the buyers of corporate legal services today manage a varied supply chain, hiring providers of many kinds and optimizing the cost/quality equation task by task. They have embraced systems thinking, and are learning to bring together the full range of people, processes and tools to create a smoothly integrated service delivery model.

This is the domain of legal operations (“legal ops”) professionals, on the rise of late but not brand new (Sally King pioneered the role with Ben Heineman at General Electric). Their responsibilities, reach and influence continue to grow, and they have organized to share knowledge and advance change:

  • The in-house bar association, the Association of Corporate Counsel (ACC), launched its Legal Operations Section in 2014 and in June will hold its third annual conference in Chicago.
  • Legal ops leaders from Silicon Valley launched the Corporate Legal Operations Consortium (CLOC) last year, which in May will hold its second annual institute in Las Vegas.

Indeed, law firms themselves have taken modest steps toward re-thinking verticality. A few have created “second label” services, housing lower cost, more process-savvy teams in a separate entity. Some have built offshore (or at least off-coast) centers that provide not only back-office operations but also process-managed, lower cost legal services. Some have made advance arrangements with alternative providers to field joint teams that offer clients full service at lower cost.

To be continued …