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The Secret to Addressing Your Clients’ Real Problem

13 Nov

readmindby Melissa LaFlair, Principal, LaFlair Legal and Project Management Services

Once a problem is identified – and I mean the real problem, not the symptoms – identifying the relevant solution usually is fairly straightforward. Unfortunately, when it comes to running the business part of their practice and managing client expectations (rather than solving legal questions), at best many lawyers unwittingly fall somewhere in the middle of the spectrum between addressing the symptoms and addressing the underlying problem.

This is readily seen in the context of lawyers’ responses to the ever increasing RFPs from clients. Many lawyers and firms view preparing RFP responses as something their administrative or management team should address with little or no lawyer involvement. While I am quite confident that many talented professionals fill these administrative and managerial roles, most times these professionals do not have relationships with the client and need the lawyer(s) actively involved in the response process to provide the context needed to identify the real problem triggering the RFP.

In hope of helping those administrative and managerial professionals who struggle to get their lawyers interested and actively engaged in reviewing and responding to RFPs (or any client relationship efforts for that matter) and those lawyers who mindlessly respond to RFPs,  I am sharing some examples of what this spectrum looks like and the impact on results.

The worst symptom-approach example I know of concerns a firm that assumed that a long-standing client’s RFP was a formality that need not be taken seriously – after all, the firm was the clear incumbent. The firm invested little deep thought in preparing its response; in the end, the firm’s submission missed the mark and lost the very large (as in lots of zeros) repeating client business to another firm. I heard about this one after the fact.

Conversely, the best real-problem-approach example I have witnessed was a firm that took an unexpected RFP from a key client (regarding services the firm had been providing for the past ten years) seriously, despite being undisputed experts in their area of practice and the client’s go-to provider. The result? The firm earned a spot on the client’s final list of approved vendors moving forward. That two other firms were added to that list confirmed that the RFP process was real, with no guaranteed outcome. Full disclosure – I know because I helped the incumbent firm prepare its RFP response.

Whether a symptom- or underlying-problem-approach was taken, in each example an initial question and answer about the RFP likely went something like this:

“Interesting, we just received an unexpected RFP from our client. Has the client issued an RFP before?”

“No, this is the first time and this is odd. We were introduced to them ten years ago by a mutual contact they trust, we are specialized in their main area of need, and they have been really happy with our services so far.”

My guess is many firms (including the unsuccessful firm in the first example) stop asking themselves any more questions as long as everything looks pretty straightforward and they have many precedents to pull from in answering the RFP’s questions. From what I have heard and seen, many of these automatic RFP responses do not end well for incumbent firms.

Those interested in maximizing their probability of success will dig further to understand the motivation and context behind the RFP. Using the second example described above, additional questioning might go something like this:

“Why would the 10 year client issue an RFP at this time?”

“I don’t know. They aren’t able to discuss the RFP, but I think it’s because our main client contact now has a new boss.”

“Why can’t they discuss the RFP?”

“Because they are a government-related entity and want to be sure there is no bias or unfair advantage at play when selecting vendors.”

“Why would the new boss trigger an RFP request?”

“I’m not sure, but it may be because the new boss wants to confirm that the law department is complying with the organization’s requirement that vendors be reasonably priced and selected by way of an open bidding process.”

“Why would their relationship with your firm be a concern?”

“Well, we started working with them 10 years ago from a word-of-mouth introduction. The requirement was introduced 2 years ago and, at that time, we were already regarded as a well-established, cost-effective supplier in a specialized area where there are no other real competitors – so no RFP was issued.”

“Why did the client introduce the requirement?”

“I would think it’s because a few similar governmental organizations have been found to be working with vendors who hadn’t been selected by a bidding process and were charging higher than market rates. So, they needed to demonstrate that they were prudently spending the public’s money.”

As you can see, asking “why” five times (a classic approach to identifying root causes to issues, symptoms, and problems) and considering the answers revealed that the main client contact needed to issue an RFP to:

  1. comply with organizational requirements in place for 2 years,
  2. establish that the main client contact’s historic decision to retain the firm was (and remains) wise (thereby looking good to the new boss and not looking foolish for having neglected the RFP requirement for two years), and
  3. demonstrate that the public’s money is being spent prudently.

Keeping this context in mind, the firm answered each of the many RFP questions in a way that demonstrated their understanding and responsiveness to the organization’s needs and sensitivities, expertise in the field and how that expertise specifically benefitted the client in the past and would continue to do so in the future, and overall cost-effectiveness. While not expressly asked, the firm also identified the main types of work that the client relies on the firm for, areas where retainer and fixed fees may be appropriate (providing cash flow certainty for the firm and cost certainty for the client), and alternative fee approaches for more specialized work (again to provide the client with more budgeting certainty).

Notably, while the firm was not able to ask their client for background, self-posed questions needed to identify the client’s underlying problem helped the firm piece together the most likely reasons behind the RFP. The firm could answer its own questions based on general information from the firm’s existing relationship and public knowledge to craft a relevant, meaningful, and competitive response.

Even with imperfect information, trying to understand why a client has put out an RFP (or included questions on topics like budgeting and project management capabilities) goes a long way to helping you identify and address your client’s real, underlying issue. And that is what client service is all about. So if you are not already, I strongly encourage you to ask these sorts of questions and have these internal discussions. Your clients (and your bottom line) will thank you for it.


Lawyers: Jump Out of the Pot!

22 Jul

frogBy Melissa LaFlair, Principal, LaFlair Legal and Project Management Services

Fact: the legal profession is operating in a mature market undergoing significant change.

Fact: many lawyers think the change doesn’t apply to them (after all, while their colleagues and peers might not, they have great client relationships and provide unique services) or that clients don’t understand what is involved and are just seeking to pay less for something worth far more.

I wish these lawyers could see what I regularly see and hear what I regularly hear. Clients, under ever increasing pressure to provide integrated, practical legal input while reducing costs, express frustration due to the lack of data, innovation and partnership offered by their lawyers. The result is that many relationships either limp along on life support or are suddenly terminated after years of a lawyer being the go-to provider.

I know from working with consumers of legal services that while they are indeed often seeking to pay less in the aggregate for legal services, they are also often willing to maintain or even increase spend on certain must-have elements of services and are quite pleased to see changes in the nature and type of services received (from scope to product to process). As a result, change doesn’t need to be a zero sum game for providers.

Those clients who truly do want the exact same product for less are sending a clear message that they no longer see the work as unique or worth what they are asked to spend.  In that situation, lawyers have two choices; they can:

  • stick to what they know, continue as they always have, and eventually operate at a loss or lose the client’s business, or
  • figure out how to help their clients address the same issue (not necessarily with the same product) for less.

I also know from working with firms that many are frustrated by the lack of attention, input and appreciation they receive from their clients. Examples abound of firms receiving detailed RFP requests with no ability to ask questions or receive context regarding the underlying business objectives. In many instances, firms work hard to suggest complex alternative fee arrangement options, only to have clients select something from off the menu – a fixed reduction in hourly rates. More often than not these situations arise when clients don’t have the data or time required to provide the necessary context or assess whether the suggested alternative fee arrangements are reasonable.

While clients do bear some responsibility for addressing the current state of affairs, at the end of the day the lawyers are the service providers and the onus is on them to come up with viable solutions. Even with cooperative clients, no silver bullet will completely address a rapidly, ever-evolving operating reality. Given the complexity of forces and interests at play, I have yet to see a firm-client relationship that is above improvement or lends itself to a quick fix. You would think these attributes would make finding a solution right up most lawyers’ alleys. After all, what lawyer doesn’t love a nice juicy problem to solve? Puzzling then that many avoid this problem like the plague. While many reasons for this aversion exist, two particular qualities hinder many lawyers’ ability to successfully take the action needed to thrive in the long term.

The first is the pursuit of perfection. Not only does a quest for the perfect legal answer fly in the face of what most clients seek, but it can also kill relationships. I have seen lawyers steadfastly cling to their historical approach of producing their ideal legal product only to lose their book of business to lawyers willing to innovate and take new approaches to clients’ needs. The journey to innovative approaches is rife with missteps, dead ends, mistakes and imperfections. Recognizing that no one right answer is out there in this time of change, and that trial and error are part of the iterative development and change process, is required for lawyers to adapt and adopt an approach that works for everyone.

The second is the perception that lawyers need not be hasty in figuring out how to proceed – after all, plenty of time remains before they will (if ever) face a burning bridge. So, many observe from afar the myriad of existing technologies that can help lawyers adapt to the new market. They consider and often reject Legal Project Management (LPM) principles, processes, tools and techniques that support identifying and making the change necessary to adapt to the new market realities. They are apparently waiting for technology that is simple, intuitive, inexpensive and helpful enough to make adoption a no-brainer. They are waiting for a simple template that can be presented in a one hour LPM workshop, adopted the instant they leave the session, and allow them to address all their clients’ needs without changing their approach to practice. They wait until everyone else has accepted and adopted a new approach. As they wait, they fail to realize that they are the frog in the pot of boiling water. Sadly, it may well only be at full-boil when those lawyers realize the water is too hot because the bridge is burning.

Some level of data gathering, analysis, strategic thinking, decision making, hard work, risk-taking and failures are inevitable for lawyers to make the adjustments necessary to successfully continue to delight their clients, while living a life that doesn’t involve routinely toiling behind their desks until the wee hours of the morning for a sliver of an ever shrinking pie.   My money is on the lawyers, firms and organizations that are taking the temperature of the water and figuring out how to use technologies, LPM principles, tools and techniques to help them insulate themselves and – ultimately – jump out of the pot.

Change, Lawyers and LPM

1 Apr

changeBy Melissa LaFlair, Principal, LaFlair Legal and Project Management Services

Change is a tricky thing for most. It seems to be particularly difficult for those in the legal industry. My theory is that the profession is so steeped in precedent and tradition (always looking back) that lawyers need to fundamentally rewire to look forward and figure out how to thrive in a new environment where the days of “hours worked equals pay received” are quickly fading.

In an effort to address clients’ rapidly growing demands for certainty and value, there is currently a flurry of activity as lawyers in both firms and organizations rush to adopt project management principles. But, what is project management for lawyers really?

At its most basic, legal project management involves understanding what the client needs, looking at the process of how lawyers create and deliver what is needed, and then identifying ways to improve the process to better support providing certainty and value. Certainty should be relatively easy to establish, at least regarding time and cost, once the need and desired scope/product has been determined. Surprisingly, most firms and organizations have the relevant time and cost information squirreled away in various nooks and crannies, but not centralized or in a readily accessible data format. This makes it tricky to determine time and cost parameters for their legal products or needs.

Gathering this data, even on the most general level, is in and of itself a valuable exercise for lawyers in firms and organizations alike. The tools, principles and technology available to support gathering the data are numerous and varied, from the basic to the highly complex. At the end of the day, though, some work is required on the part of the lawyers to group their product types and, ideally, provide a general outline of their process.

Interestingly, whether they realize it or not, all lawyers have some sort of processes to get from the initial client question to their final legal product. Some of these processes are more efficient than others. Sadly many lawyers are unintentionally inefficient as the billable hour neither promotes nor encourages efficiency (such that many have never thought about their practice from an efficiency perspective).

Unlike certainty, value is more subjective. So, madly creating processes and introducing technologies to establish certainty without understanding and identifying what value means to your clients and what your strategy for achieving certainty is, likely will not be the best use of your resources. For example, determining whether your clients value low-cost certainty, outcome certainty, or fixed-cost certainty and whether the answer is product-dependent will directly affect the approach you take to planning, process mapping and implementing appropriate change, as well as developing and introducing associated technologies in your firm or organization.

For firms in particular, making the effort to adjust to really serve your client’s needs often means being willing to take a short term hit in the pocket book (this does not mean the hit will actually materialize; but, you do need to acknowledge and be prepared for the possibility) as you identify and implement meaningful change that will delight your clients in the medium and long term. Surprising as it may sound to those in firm settings, clients want the lawyers they work with to be around for the long term as switching lawyers generally is a pain.

And there is the rub, financially. Firms in particular are not particularly well set up for implementing change that takes longer than a year to absorb financially because, among other reasons:

  • most lawyers include expected bonuses as part of their personal annual budgeting;
  • most firms annually disperse the bulk of the firm’s earnings;
  • most lawyers operate as individual profit centres with little incentive to take actions that benefit their group, department or firm as a whole, in the short or long term; and
  • most successful lawyers have highly portable books of business (surprisingly few clients were adversely affected by recent firm failures).

Yet the change involved with retooling to deliver certainty and value generally takes a number of years to master. In this context, it is no wonder the needed change is so slow and difficult in firm settings. I do not envy managing partners’ roles during these interesting times.

That being said, change is inevitable and client demand is growing exponentially. So lawyers, if you are in a firm setting, support your managing partners and your firms and get thinking about what you personally can do about your process for delivering advice to your clients and what specifically your clients value. Do not be fooled into thinking you can rely on past success – financial pressures are everywhere and jumping ship during these interesting times only delays the inevitable.

If you are a lawyer working in an organization, think not about the immediate budget pressures but about what your organization truly needs and values so that you can work productively with your firms to get legal services that support both you and your organization’s success.

Working together to address the new realities, firms and organizations have everything to gain.

2013 KM White Paper Released

19 Jul


Post by David Hobbie, Goodwin Procter and Blogmaster, ILTA KM Blog

The 2013 KM White Paper “Knowledge Management:  Intelligent Business At Its Best” has been released! Organized by Mary Panetta of ILTA’s KM Peer Group Steering Committee, this annual publication has an in-depth look at a wide variety of traditional and cutting-edge knowledge management topics.

I was particularly impressed by the scope of topics in this issue. The articles collectively demonstrate KM’s centrality in addressing new legal business issues such as pricing, legal project management, and big data, as well as the vitality of new approaches to traditional knowledge management concerns such as precedents management, document automation, and portals.

In “KM Professionals: A Natural Fit for LPM,” Lisa Gianakos of Pillsbury Winthrop Shaw & Pitman LLP, shares the results of some surveys of Legal Project Management initiatives and knowledge management professional in (mostly large) law firms. She found that the majority of the firms who responded to the survey (75%) had either formal or informal LPM programs, about the same amount as had KM programs. Where respondents had LPM and KM programs, KM was involved in LPM 59% of the time. Along with other analysis of LPM in law firms, she also shares many (anonymized) comments about how LPM programs got started and how KM interfaces with, supports, and sometimes manages LPM programs.

In “The Pricing Professional’s KM Toolkit,” Chris Emerson and Amy Wu of Bryan Cave LLP argue that professionals who are responsible for pricing and budgeting must understand a firm’s KM assets in order to excel at their work. (I have been making the same argument from the other side, that KM professionals have a tremendous amount to contribute to pricing and budgeting efforts.) The authors cover key KM resources, most notably matter experience databases, and how they can be leveraged specifically for pricing work. They also reveal another impressive Bryan Cave innovation, custom software which essentially uses a trainable probability-based software engine to greatly speed up the time required to analyze historical time entries and how they might fit into a phase-task coding framework, in similar fashion to predictive-coding eDiscovery software.

In “Big Data, Predictive Analytics and Social Consumerization: Big Hype or Big Opportunity,” KM Distinguished Peer Eric Hunter of Bradford & Barthel and Spherical Models argues that the legal industry needs to take a lesson from the social consumer companies’ use of predictive data analytics. He sees opportunities for improvements in data management, staffing, pricing, and client service. For instance, his firm uses data analytics to assess attorney performance for specific personal injury defense clients, taking into account factors such as the level of injury, doctor involved, and the like. They hope to move towards outcome prediction, both in terms of settlement payouts and litigation costs.

In “Another Look at Precedent Management“, Boston-area colleague Marybeth Corbett looks at precedent systems and Wilmer Hale’s efforts to incorporate some cutting-edge document drafting and assembly tools into its practice. I agree with you Marybeth that effective precedent systems are nothing to be ashamed of these days! She includes a useful set of key questions to ask about a precedent management blueprint.

In “Document Factories: Building Document Automation Tools,” Anthony Kikuta of Wilson Sonsini Goodrich & Rosati LLP lays out criteria for selecting document assembly or automation in great detail. He addresses the range of features available in packages such as Contract Express, and spells out how to get the most out of your document assembly tools.

In “KM Standards In Practice,” KM PG Steering Committee member Andrew Baker and Dustin Robinson, of Seyfarth Shaw LLP, relay their experience with the document analytics tool “KM Standards,” summarizing it as a powerful but imperfect tool, the “Swiss Army Knife With A Slippery Handle” of precedent work. (Another firm’s experience with this technology was recently addressed in an ILTA webinar covered here.)  They see a very broad range of potential uses, but have focused on three; creating clause/precedent collections, client-specific content management, and benchmarking. They share valuable lessons about how to work with this tool to increase client value.

In “Using Design To Improve KM,” KM practitioners Andrea Alliston and April Brousseau of Stikeman Elliott and Tangledom consultant (and known design expert) Kate Simpson tell about out a “lawyer-centric design process” that in their “CLE Manager” case study significantly improved software development. They argue that the goal of the design process should be to convey to the IT designers a rich understanding of end user needs and tasks so that “at last we [speak] the same language.” KM practitioners are uniquely situated to be able to convey that understanding. Helpful charts contrast traditional software development with a design-centric approach.

In “Experience Matters at Dechert,” Kelly Breslin and Julie Ketover cover their firm’s development and incipient rollout of “DechertEXP,” an experience management system. They’ve effectively laid out the importance of tying together the many sources of information, collected at different points in the matter life-cycle, for complete experience coverage. A sidebar with “Top 10 Takeaways” has some succinct and doubtless hard-earned lessons.

Lastly, in “Creating an International Client-Facing Knowledge Website,” Jellienke Stamhuis of Ius Laboris and Richard Lister of Lewis Silkin LLP in England cover their successful efforts to launch Ius Laboris’ international client-facing KM portal addressing human resources (HR) issues. I was especially impressed with how far they advanced from where they started and by the personalization feature whereby counsel can select an HR issue and choose several countries, and receive a comparison of the laws on that issue in those countries.

Ark Conference Followup–How Legal KM Supports Budgeting and Pricing Work

12 Nov

Post By David Hobbie, Litigation Knowledge Manager at Goodwin Procter

In preparation for the panel I spoke on in late October at the Ark Conference (ably live-blogged by Mary Abraham), moderator Joshua Fireman developed but did not get a chance to ask me a question that I have been wrestling with for several years now.

“How can KM help with budgeting, pricing, and alternative fee arrangements?”

Legal KM doesn’t have to own pricing in order to add tremendous value to the pricing and fee arrangement (“AFA”) work at your firm.  Legal KM can be a valued counselor, consultant, and partner with the people doing pricing and budgeting work.  The exact role does not matter, but the extent of your contribution does matter, to the perception of KM as a strategically focused department in your organization and possibly to your own career. It’s important for the profession that step up, not just because it will be good for us personally and collectively, but also because such efforts are or should be a priority for the industry, and there is great demand for assistance in this area at law firms (and law departments for that matter).

The legal KM community can bring to bear our skills in managing information, including matter information; our database and search, and taxonomy skills; our ability to comfortably talk to lawyers about the business and practice of law; change management skills; and also a substantive understanding of the underlying work.

We can put these skills to good use within the firm by focusing them on information and processes that are really important for budgeting.  I believe that this is an area of significant and perhaps even crucial opportunity for legal knowledge management.

Specific KM-Related Tasks

My experience suggests that there are a number of other areas where knowledge management departments and staff can assist and support pricing and budgeting work.  Examples of specific tasks or developments within this include:

  • Budget database development, structure, and integration with existing firm systems (such as portals).
  • Budget collection (KM professionals are quite familiar with attempts to get lawyers to contribute to a centralized firm database, and also in many cases understand more automated or established processes for such collection).
  • Collecting, organizing, presenting, and sharing matter information related to budgeting, such as deal size & complexity, opposing counsel, forum, and disposition.

As I mentioned at the conference, your firm may already be collecting matter experience information for marketing or substantive KM purposes that is potentially or actually already useful for pricing analysis. At my firm we have had a KM program that has spent significant effort over the last five years (at least) collecting, organizing, and developing systems to leverage firm matter experience, some of which (such as litigation disposition information) has already proved its worth when leveraged for pricing and budgeting needs.

  • Identify which information is critical to budgeting in addition to that required for other matter management and collect that too. Are there external factors beyond the firm’s control (but capable of inclusion in budget scope?) Do we need to know how many times the securities plaintiff firm amended the complaint to understand the cost of the motion to dismiss? Are there internal factors that drive cost that can be controlled by the firm?
  • Develop your firm’s code sets that timekeepers use to bucket time into major areas of effort (unless you decide to stick with the ABA’s code set). These are commonly known as “phase-task codes.” This work leverages KM professionals’ taxonomy skills and their experience with fighting lawyers’ ingrained tendency to create many small useless buckets.
  • Aid communication, training, and awareness efforts of budgeting/pricing teams.
  • Assist with selection and development around budgeting software.
  • Assist with quantitative display of visual information (leveraging portal / internet skills).

I hope that breaking down and highlighting some of the opportunities for legal KM to add value will encourage those of you who have remained on the sidelines to date.

Recap; ILTA Conference KM Sessions and Session Resources

4 Oct

Post by Chris Boyd, KM Steering Committee VP

I hope many of you made it to the ILTA’s recent “AC2DC” conference in Washington, D.C. and were able to attend some of the KM track sessions.  For anyone who wasn’t able to make it, or who was there and wants to revisit some of the sessions, ILTA has posted audio recordings from the sessions along with downloadable presentations and handouts.  The KM recordings and materials are listed below (unfortunately we cannot provide direct links); please note that they are for ILTA members and that you’ll need to log into ILTA’s website to access them.  Special thanks to Patrick DiDomenico, the conference liaison on the ILTA KM peer group steering committee, who was a key player in making these sessions happen.

  1. Beyond Extranets! What Clients Really Want.  Meredith Williams of Baker Donelson and Scott Rechtschaffen of Littler Mendelson presented their innovative client-facing KM resources, and Lynn Simpson of DuPont discussed what her company’s legal department would like to see in law firm KM.  The panel also provided a handout titled “Some Ideas On What Clients Want From KM At Law Firms”.
  2. Social Networking in the Enterprise.  David Hobbie of Goodwin Procter explained how to prepare a business case for social networking in the enterprise.  Ann Hemming of Thomas Eggar described her firm’s use of Yammer, and Scott Reid of the U.S. Judge Advocate General’s Corps presented the MilBook and JagConnect resources.  The JAG Corps later won ILTA’s Law Department of the Year award in part based on Col. Reid’s work in this area.  David also posted his slides on “Building a Business Case for Enterprise Social Networks”.
  3. Using Your DMS for Knowledge Management.  April Brousseau of Stikeman Elliott, consultant Rick Krzyminski, Chris Boyd of Wilson Sonsini Goodrich & Rosati, and Eric Hunter of Bradford & Barthel explained how their firms used document management systems to support KM resources. The panel also provided a handout with a matrix on ways to use a DMS for KM.
  4. New Benefits and Unexpected Pitfalls of Enterprise Search.  Phil Bryce of White & Case, John Gillies of Cassels Brock, and Sarah Stephens of Sutherland Asbill & Brennan presented their firms’ enterprise search implementations, along with lessons learned and next steps.  The slides from White & Case, Cassells Brock, and Sutherland Asbill & Brennan provide good visuals to accompany the recording.
  5. Data Warehouses, Dashboards and Data Integration: Delivering Actionable Business Intelligence.  Gina Lynch and Tracy Elmblad of Bingham McCutchen and Steve Lewis of Fried Frank demonstrated their firm’s intranets, focusing particularly on the dashboard-like features in them.  Gina, Tracy and Steve also described the design and rollout processes they used to revamp their intranets.
  6. AFAs + LPM + BPI = Opportunities for KM.  Michael Williams of eSentio, Rob Lipstein of Crowell & Moring, and Andrew Baker of Seyfarth Shaw discussed clients’ increasing interest in alternative fee arrangements (AFAs) and how firms are using KM to support legal project management (LPM) and business process improvement (BPI) to deliver effectively and efficiently on AFA matters.

Many other sessions, of course, addressed enterprise search, social networking, and other KM topics; the well-received sessions listed here were those organized by the KM peer group.

We’ve already started to plan for next year’s conference, so if there are specific KM topics you’d like to see addressed, please contact me or one of the other members of the KM peer group steering committee.  We’d love to hear from you!

Ark Conference on Knowledge Management In The Legal Profession

2 Oct

Post By David Hobbie, ILTA KM Blogmaster

Win a full pass at Ark Group’s 8th Annual Knowledge Management in the Legal Profession conference – Courtesy of Ark Group and ILTA’s KM Steering Committee.

The formal conference theme is worth quoting:

As the legal profession bends and begins to adapt to the needs of a new economy, many law firms find themselves in transition—recalibrating for innovation in an effort to ensure that the firm is not merely a survivor, but a leader.

More than ever before, clients are focused on how legal work is going to be done. Law firms need the tools and processes that drive true efficiency in service delivery and this is not a one-dimensional problem as it includes pricing, planning, matter management and reporting—as well as execution of the work itself. For KM to remain a vital function for firms (as it should) it will need to be focused on solving the core challenges facing firms today—versus the litany of needs described by the past.

Ark Group’s 8th annual Knowledge Management in the Legal Profession conference will challenge the entrenched orthodoxies—dissecting the standard practices and processes that law firms assume they must do (because this is the way they have always done it)—confronted by rationalized business processes (i.e. the ones that every other industry has adopted).

The challenge ahead of us isn’t as much about making the case for KM leadership as it is about finding the right skills to pioneer new initiatives. Some KM practitioners may have these skill sets—and some may not. Regardless, law firm leaders must start rethinking the “just in case” model of precedent and research collection—and find ways to marshal their resources to provide the necessary infrastructure to make course corrections, change business processes, and improve decision-making frameworks enabling law firms to deliver unparalleled breakthroughs in agility and efficiency.

This year’s conference (taking place this October 24-25 in NY) is premised on a business background of increased client attention on how legal work gets done.

Speakers include keynoter  Toby Brown (of Three Geeks) on The Economics of Law and the Future of KM,  ILTA KM Steering Committee members Scott Rechtschaffen, Patrick DiDomenico, Chris Boyd, Andrew Baker, and the author, along with KM luminaries such as Risa Schwartz, Jeff Rovner, Oz Benamram, Tom Baldwin, and Mary Abraham.

To enter a raffle for a free pass, simply submit your name to – Make sure to put “ILTA’s KM Blog/Conference Pass” in the subject line.

The winner will be chosen at random on Friday Oct 5th and their name will be posted here.

Challenges For Law Firm KM: The Billable Hour Model?

17 Feb
Post By ILTA Steering Committee Member Chris Boyd

In recent decades, the prevailing revenue model for large law firms has been the billable hour.  Many people think this model hinders law firm KM programs in two ways: first, because under it the connection between KM-driven efficiencies and profit is less clear, and second, because time spent by attorneys on KM is not billable and thus usually not recognized or rewarded. This observation is of course not new; Ron Friedmann, John Gillies, Ted Tjaden, and others have discussed the challenges to KM posed by the billable hour model.  So while KM done well is absolutely the right thing to do — because it increases the value provided to clients, hopefully leading to increased client satisfaction and client retention, and it also improves the practice of law for a firm’s attorneys – it may nonetheless suffer from underinvestment.

One long-standing explanation for the perceived lack of monetary returns to a firm from KM is that lawyers who charge by the hour want to make each task last as long as possible, so as to pad the bill and collect more money.  Anything that cuts the time per task, such as well-done KM, thus reduces revenue and won’t be valued. While this view may have some cynical appeal, my experience has been markedly different.  Lawyers generally want to get their work done well and quickly, to please clients and move on to the next assignment. Any attorney who frequently works late and yearns for a more balanced life has a strong reason to work efficiently.  And any partner who regularly writes time off prebills has an equally strong incentive to see that service is delivered efficiently, to cut down on write-offs and increase realization.

Even in the absence of this cynical view, however, the billable hour model does still handicap KM as a potential firm investment, because it is difficult to prove that KM delivers bottom-line returns under such a model.  Increased efficiency and value to clients?  Sure.  Better work-life balance?  Sometimes.  But clear, quantifiable, profitability increases driven by either increased revenues or decreased costs?  Not so much.  In fact, showing true KM-driven ROI has for years been an elusive quest for law firm KM leaders because under the billable hour model, it is very difficult to show a directly profitability increase by implementing KM.  Without that hard numerical business case, KM will usually get short shrift when it comes time to allocate precious headcount and program budget dollars.

But change a matter’s billing structure from hours-based to a fixed fee, and suddenly the benefits of KM resources become more visible in the firm’s bottom line.  Delivering the same (or better) results with fewer hours both delights clients and increases a firm’s profit margin on the matter, and may increase the firm’s overall profit margin as well, depending on how the “saved” hours are allocated.  For firms that measure per-matter profitability, KM-driven time savings on fixed-fee deals or cases can be quite compelling.

How, then, can CKOs use fixed fees and other AFAs to overcome the billable barrier to increased investment in KM capabilities?  One way is to work with firm management, practice group leaders or even individual partners to develop packaged service offerings with fixed fees that appeal to clients and lend themselves to KM-driven efficiencies such as precedent databases, automated documents, and expertise locators.  CKOs can support such packaged services by making sure their KM teams deliver the resources, processes, and training to enable efficient service delivery.  CKOs can also work with marketing and finance departments to develop client-facing materials promoting the benefits to clients of the service offerings and measure the resulting uptake by clients along with the associated revenues and profits.

Another way is to design and deploy tools that partners or the finance department can use to estimate one-off fixed fees based on matter parameters.  The underlying algorithms will likely rely on past matter fee data and associated variables from KM matter tracking systems.  And done well, these tools will help partners quote competitive yet achievable fees, and thus increase the number of such fees the firm quotes.  Growing usage of fixed fees will in turn create demand for the KM resources required to deliver efficiently on the promised fee.
The second way that the billable hour revenue model can hinder firms’ KM efforts is that while client-facing attorneys absolutely need to participate in KM initiatives, they can be reluctant to do so because the time spent will be non-billable and thus not count towards billable hour totals that are so frequently used by firms to assess performance and allocate bonuses and other compensation.  Attorneys rightfully spend most of their time on work for which they will receive credit and for which the business will obtain revenue.
To address this challenge, many larger firms have hired full-time professional support lawyers or subscribed to services such as Practical Law Company.  While doing so can provide excellent results, for firms not willing or able to make this level of investment, there are other ways to address this challenge:

  1. Make KM time equivalent to billable hours, perhaps capped at some reasonable annual total given that firm leaders are unlikely to approve unlimited amounts of KM time that doesn’t bring in revenue.  Our firm has done this, and our experience is that the capped credit does motivate associates to spend time on KM projects.  KM leaders do need to check time recorded to KM matter numbers to make sure the work is legitimately KM, and not mis-coded client or administrative work, but that’s a small price to pay for the benefits that the capped credit brings.
  1. Clearly and tangibly reward associate work on KM projects, through performance review plaudits, public recognition, or other methods. This may work where firm or practice group leadership visibly champions KM but may not be able or willing to make KM time fully or partially billable.
  1. Sidestep the reluctance of billable attorneys to participate in KM projects by pursuing a “windmill” strategy to power KM projects via existing firm processes.  Ron Friedmann and I wrote about this for the June 2006 ILTA KM whitepaper, and the ideas set forth in the article continue to work..

Other suggestions?  Feel free to contribute in the Comments.

Session Report–Innovative Member of the Year Contest

23 Aug

Post by David Hobbie, ILTA KM PG

These are my notes from the session where the speakers are seeking to win the “Innovative Member of the Year” Award. People present voted for the award, which will be presented on Thursday night at the ILTA Awards Dinner.

Bryan Cave

John Alber is presenting not on a particular innovation but on creating a process for creating innovation, “Creating an Innovation Factory.”  His session showed the innovation approach suggested by both of this week’s keynotes in action, moving structurally and profitably to change the way the law firm does its work.

Bryan Cave has set up three groups in a formal structure for creating innovation.

As addressed in the keynotes, innovation is at the core of the best companies in the world.  Lawyers are not known for innovation.  But there are opportunities to innovate in the legal sector.  Law firms are not structured to take advantage of innovation.  IT in many organizations is the source of innovation.  In law firms the focus on “utter reliability” of systems for capturing and storing the key legal knowledge work product detracts from their ability to innovate.

Law departments focus most of their innovation in reducing legal spend on fees to preferred counsel.

Bryan Cave has created three groups for innovating in particular areas relating to client legal spend, Client Technology Group, Accelerated Review Team, and the Practice Economics Group.

CTI was set up as a sanctioned “skunk works,” a sanctioned R & D laboratory within the firm, with web developers, business analysts, and content specialists.  It is independent of IT with a very different, change-focused mission (not reliability focused).  It is has had many successes such as online legal service delivery, social media knowledge platforms, and workflow management.

Accelerated Review Team created in 2010 to establish leading-edge streamlined review workflow problems, mainly in eDiscovery but also in review-intensive transactional work.

The third team is Practice Economics Group, set up to provide a new set of tools and techniques to help attorneys manage legal spend.  It’s already created tools to price engagements, track and manage engagements, reporting tools for commodity litigation, and give managers insight into the operations.  They provide support for AFAs and pricing.

There are 75 people in these three groups.  They are involved throughout the firm, very widely accepted, and support the highest dollar engagements.

Projects include:

  • Complex system to aid engagement teams of hundreds of lawyers on financial sector mortgage foreclosure crisis
  • Budgeting and dashboard app to develop detailed
  • Mobile pricing apps
  • Per-gigabyte pricing model, for lawyers work on document review
  • Claims management for client
  • Client-level & available dashboards for budget and project tracking
  • WIP and receivables monitoring system, aging etc.
  • Workflow management system for managing broker-dealing litigation, allowing it to be pushed down to more junior lawyers
  • AFA modeling tools

A client was pricing consumer financial litigation at half of what previous cost was going to be.  They developed a comprehensive management suite.  Intake captures essential data about jurisdiction, plaintiff’s lawyers, causes of action.  A management tab for every phase of litigation including risk-weighted assessment.  Tools facilitate production of work product.  A tool looks at a particular matter and helps attorneys identify that particular issues are active in that case, leading to a document assembly that generates a brief in support of motion to dismiss.  It was developed collaboratively with the case team, and the accelerated review team.  They looked for the best arguments among 80 different issues, and condensed into best practices, linked to a document assembly package.

Bryan Cave made a structural rather than an rhetorical commitment to innovation.

Margin on these innovations is estimated and projected to be in excess of $10 million.  John suggests that this innovation is leading Bryan Cave to where law firms will be needing to go.

Prioritization is based on “clients come first” and “look for the revenue stream.”

Fish and Richardson

My Social Media In Law Firms panelist Beau Mersereau is presenting on “OutLaw,” Fish and Richardson’s application that brings all the firm information attorneys need into Outlook.  He was assisted by another gentleman whose name I did not catch.

They already have high-definition videoconferencing and a lot of other custom applications.

They’ve found that attorneys live in Outlook.

Outlaw’s home page allows search of matters, documents, or contacts, view matters, worklist, and docket.

There is a tabbed view of those options.

He’s narrating a video, as the live demo would not work well.  I was impressed by how smoothly they handled the demo; they were very well prepared.

Internal and external contacts are searcheable.

Matter view shows user’s relationship to the matter (this is a good idea!) The worklist shows the matters worked on last 90 days (can be adjusted from 1-100 days).

Can do work such as time entry from a “power bar.”

In a document view, dragging them into a shortcut bar lets others access the document more quickly.  It’s a customizable Key Documents tab.  Anyone who works on the case can create their own tabs and documents.  It looks pretty easy to use, with drag-and-drop and right-clicks.

Outlaw also shows email drag and drop in a manner like FileSite, but it could also go into “Prolaw.”

It’s unique because it’s a unified interface within Outlook.  It’s captured a lot more time.

Seyfarth Shaw

“Transformation of Seyfarth Shaw LLP’s Project Management Office.”

Three women from Seyfarth presented.  I did not catch their names either.

Their PMO was founded in 2004, positioned outside IT, and had a diverse background in finance, IT, business operations, and telecommunications.  All are technically savvy and have an end-user perspective.

Projects focused on DMS, CRM, and employed traditional project management approaches.  They built relationships with “normal” IT.  They became known as the program that could “get things done.”

In 2008 they ran a first client-facing initiative in a compliance / employment matter.  The next transformation involved a camping trip (in a conference room).  They decided to change their internal-facing PMO to a client-facing PMO that would interact with lawyers to work with clients.  They decided to spend 70% of their time on the client-facing PMO.

No one else had a process they could emulate.

Their key word is “activate.”

INNOVATION; middle row of letters of Vision, Ingenuity, Brainstorm, Teamwork, Motivation, Creativity, Incentive, Inspiration, Development, Planning.

Firm has opened up a consulting branch that is delivering PMO services to existing clients and new clients, it’s been opening the door for provision to other services.  Seyfarth is trying for continuous improvement (kaizen), through process mapping and much more.  Clients are starting to participate in process mapping and fine-tuning.  Clients are asking Seyfarth to help them with process mapping.

Good communication is key to LPM.  They’ve had a more structured approach.  Project managers attend pitching.  They’ve doubled the size of the department.  77% of their time is devoted to client

They’ve received great feedback from the clients on their innovations.


For other’s comments on this very informative session please see the twitter stream for #award1.

To break the wall between reporting and participating, I will say that I voted for Bryan Cave.  All the presentations were excellent; John Alber, however, laid out in much greater detail the huge benefits to his firm’s legal business from his structural change of creating separate groups for legal technology and services innovation.

Report From ILTA Conference–Transformation Through Emerging Technologies

23 Aug

Post by David Hobbie, ILTA KM PG

The panel was comprised of:

  • Gerard Neiditsch, Exec. Director, Business Integration & Technology, Mallesons
  • Michael Mills, Neota Logic
  • Loretta Auer, CIO, Fish & Richardson
  • Sally Gonzalez, Senior Director, HBR Consulting

This enlightening session highlighted several thought leader’s forward-looking opinions on actual and potential transformations of legal work through emerging technologies.  They moved at breathtaking speed but touched on a number of areas of innovation that will or may impact the field.

Sally’s Introduction

What comes first? Technology change or organizational change?  When do you see external forces driving incorporation of technology change into the organization.

This is the wrong question.

Lawyers want to work at any place, any time, on any device, by 2020.  We keep getting there in baby steps.  Today we are in “hyper-information” mode.  We are in the cusp of hypermobility which will lead to hyper-communication.  We’ll need hyper users.

Virtual lawyering will require maturation in each of these areas.  What will the virtual lawyer look like?

We’re all dealing with lawyers.  Psychologists have run thousands of Hayes tests on lawyers.  Deviations from normal include high-end skepticism, leading to analysis paralysis, autonomy, and abstract reasoning.  They are low in sociability and resilience, meaning they are hyper-sensitive to criticism.  90% of people don’t share lawyers “sense of urgency.”

These personality traits are different from the general population.  Change efforts need to take into account these traits.

Michael Mills

These characteristics are matched with brains, skills, and speed, making lawyers interesting to work with.

Firms are drowning in data.  There’s more information available, it’s not delivered in useful ways.  Software for building data visualization is now reasonable and accessible.  Providing spreadsheets of data doesn’t provide the information lawyers need in a way they can use it to act.

“Basic” Visualization

He’s showing Actual vs. Forecast revenue by partner, with rows of partners.  Partners understand colors and spatial order.  Forward is better than backward, red is bad, yellow is less bad, green is good.  Another chart compares matter size by fee type and client industry.  Fixed / Hourly / Hybrid / Outcome-based; 0-$100K/ 100-200 K, etc., with colors showing industry.  You could also compare matters by client industry and region.

Radical Visualization

This new application provides visualize of legal rules, for instance, across jurisdictions.  Lawyers laid out the risks, qualifications, in a detailed memo; this can be reduced, for instance, to a “collateral directive” chart, showing no/ usually / uncertain / yes (with colors).  If you click on one of the sections, you drill down to the related substance.

Law is transformed from chunks of text to the same tools that client use to analyze other aspects of their business.  Visual interpretation of risk is much easier to digest.

Loretta Auer

Some providers of legal services to lower-income people are developing multi-media legal documents based on knowledge bases and rules.  The Maricopa County Arizona court system has set up kiosks that help citizens generate own legal documents for divorce, child support, landlord-tenant matters, and simple estates.  They’re expanding to 150.  These systems simplify law and make it more accessible.  It’s part of a large nationwide pro bono effort.  Law firms that participate in this effort are gaining an understanding

If it’s easy to find your reservation on JetBlue, it better be easy to find information from clients’ law firms.

Gerard Neiditsch

The background is Mallesons Connect (addressed in Caselines here).  Lawyers are accustomed to command and control system in which collaboration does not come naturally.  The new generation of clients and lawyers is expecting to operate in a network.  Our IT systems work from the top down.  We can pump out information from the top down but find it hard to aggregate and coalesce information coming in from the “bottom.”

Some of the lawyer’s children talk to them from time to time and share their experiences with social media (like FaceBook).  His lawyers reached out to him and said they wanted a way to reach out to people they work for.  He’s suggested social media and they seemed to get it.

“Springboard” will be rolled out in 2-3 months.  In one place it will bring in a prioritized view of what lawyers need to do, a view of social information.  The end goal is for every person at the firm to have a prioritized, aggregate, personalized dynamic view of information about work, client needs, and their social and information network.   Make the good important information float to the top.

Mallesons has a matrix organization with practice areas and (industry) sectors.  You can follow information that is tied to those structures.  Everything is dynamic.

His goal is to make information much more transparent.  Half of their pricing is fixed (informally or formally).  Transparency is absolutely more important.  Everyone on the team needs to see where you are.

He shows a dashboard that shows all the matters he’s working on, with schedule, popup window with detail on a matter; you can see others working on it including detail such as Invoiced / WIP / Total / Estimate / % Estimate.  People’s availability is shown dynamically, updated every 4 seconds.  They are focused on *very* dynamic information.  They need to hide static information because it’s not needed as much.  They are trying to highlight dynamic information.  SharePoint is unsuitable for such dynamic information (ask him for details).

They have developed a mobile app (sample shown was on an iPhone) with high acceptance among clients.  It allows clients to call, text, email, and show a lawyer’s colleagues.  It will also display project statistics and financials.  They have no time for training.  iOs native development is a challenge—Michael Mills is impressed that Mallesons has done it, and feels that it is worth the investment.  It has development tools that are as easy to use as Microsoft work.

Sally asks how they are driving acceptance.  Gerard replies that they are not expecting lawyers to go to training.  They are putting “liking” and “following” on their intranet.

Michael Mills on Mobile

He shows a chart laying out location of texting (place of worship, bed, during meeting); there are much higher percentages of texting among younger folk, not surprisingly.

A survey shows that users employ mobile phones/iPads 69% of the time to do work; the survey also shows that IT thinks users are only employing about 35% f the time.

The new iPad will likely be “the new iPad.”

Loretta on the Gestural Computing and the Post PC world

Pranav Mistry of the MIT Fluid Intefaces Group is working on “sixthsense.”  It’s a wearable gestural interface.  It projects a hologram.  Look at airplane ticket, it shows you that your flight is delayed.  With it you can use a blank sheet of paper as an iPad.  People don’t want computing, they want to get things done.

These are personal technologies.  Why would you go to an office where the technology is more primitive?

If bandwidth continues to improve, HD video will be much more prevalent.  GoTo Meeting is getting better; it’s not Cisco telepresence, but it’s a lot better than IM or phone.  Michael wonders if that will make us question what lawyers need all those offices for.

Loretta on Voice Recognition

We’ve had voice recognition tech but most people don’t use it.  We need to take it to a different level.

Dragon is the quickest way to start a search.  (Michael Mills is a convert.)  In a large law firm, where you can customize Dragon for a law firm, you can roll it out quickly.  There’s a lot of productivity value there.  Conceptualize the applications that would be meaningful to them.  Search for someone, drill down into financials, and so forth.

An audience member asked if there is a copy of each message kept on Dragon servers.  She said that fact kept them from rolling out Dragon to lawyers.

Lawyers in the UK appear to take dictation more seriously.  The return of voice recognition may happen; the skill of speaking in good sentences and paragraphs persuasively is a skill also useful in deal negotiations and in the courtroom.

Unified communications will greatly assist productivity.

Michael thinks that Microsoft Link is a good product—it gets a lot of things right.

Loretta on Avatar-Based Meeting Support

Go online and watch demos at IBM Virtual Unity Community where people are taking “Second Life” concept into workflow and collaboration.

The head of Microsoft’s research labs was saying that bandwidth will be a constraint for the next five years.  They are looking at system where body is an avatar but the head is “real” looking.  It looks odd but may become normal.

Loretta’s Social Media Work

iFish “I Create.  I Innovate.  Escape the Tank.  iFish.”  They are building an “Outlaw” application that will be highlighted in the next session.  

Sally on Managing Organizational and Individual Transformations

Will law firms “drive creativity out of the young folks”?  Younger lawyers tend to mirror the behavior of the senior partners.  There are senior partners who embrace these changes.  A transformational leader will pull along those who are ready.  You may not be able to make that leader, but you can find her.

Michael hypothesizes that we under-invest in leveraging partner’s capabilities.  Declare this the “year of the partner.”  Undertake every IT initiative just for the partners.

Virtual Lawyering

For firms, this means VMWare, virtualizing applications, and also mobility for lawyers.  Some examples of “invisible law firms.”  Axiom does substantive legal work on a disbursed basis, “Law firm on a diet.”  Clearspire does something similar, addressed on this blog a few months ago. VLP Law Group virtualized very high end work in a virtual way.  LawPivot participants are like a virtual law firm.  DirectLaw and Legalzoom are at the “small end.”  Legalzoom will raise money, clients will see this model.  Google invested in RocketLawyer.  These will impact the way we do business.  Consumerization of the way clients deal with lawyers will impact law firms.

In Fish & Richardson, different teams deal with substantive KM and also are changing how they want to work.  They are co-developing applications, self-service issues, and more.  They have a three-year window to ramp it up.  They have a sense of collaboration, and want to work with each other.  It’s a great place to be in IT when you are helping lawyers figure out better ways to do their jobs and live their lives.  Attorneys don’t have a lot of time to deal with this.

An excellent session, combining to an unusual degree some practical solutions that are happening now and some more theoretical changes that might occur someday.