Does the Legal Market Suffer the Same Over-Consumption as Health Care?
I have previously compared the health and legal professions, focusing on the evidenced-based approach in medicine and the appalling lack of anything like it in legal. Informed by the current national health care debate, I see another lesson for lawyers and law firm managers: find ways to limit over-consumption.
Though over-consumption of health care is virtually off the table, it’s a huge problem. Why not have that extra test to eliminate a 1 in 10,000 risk – after all, someone else is paying? Why not consume a lot if no one even bothers to tell you the price in advance? I suspect over consumption by both clients and lawyers is a big problem.
Clients probably spend way too much on legal services though general counsels likely would disagree. I’ve discussed this in posts about whether cost control is really a GC priority. I suspect legal is like health care – the US spends much more than other countries for the same results.
Similarly, law firms likely over-consume support services. Law firms are to lawyers as insurers are to patients: a third party payer. Firms pay to support lawyers but lawyers determine how much service they consume – without knowing the price. Lawyers don’t even get the moral equivalent of an insurer’s “Explanation of Medical Benefits”. How many lawyers secretly or sub-consciously think “Why not have someone available to help me, I might need support between 10pm and 4am.” Or “Why not demand that a secretary sit outside my office 10 hours a day – my phone might ring and I can’t afford to have my calls answered by a central system.” Lawyers don’t pay the cost, so why not be safe rather than sorry?
Try this thought experiment: Give each lawyer a budget equivalent to the current support cost. Let the lawyer go up to 20% over but, at least for partners, make them pay 25% of any additional cost beyond that. Conversely, if at the end of the year, money is left from that pot, let the lawyer keep 50%. Would service consumption go up or down and is that good or bad? You tell me.
Update 22 Aug 2009 After writing above, I found similar idea by law department management consultant Rees Morrison in his post What if a law department gave each attorney an allowance to pay for support?, which suggests the possibility of creating a market for secretarial support services, where what an inhouse lawyer doesn’t spend stays with the lawyer.
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