How Law Firms Can Cope with the New Client Pressure
Let’s face it, clients now exercise the buying power they’ve long held. So law firms must act. But how?
A session at the upcoming ILTA Conference called Making an Impossible Engagement Possible tackles the “how question.” And panelists John Alber, Rudy DeFelice and Ayelette Robinson want your help. They are “crowd sourcing” answers.
That means they want your input. The topic is therefor not only timely, but for all of us legal technology, social media, and collaboration enthusiasts (geeks?), self-referential.
The action is over at the 3 Geeks blog in Don’t Be Shy! Help Make the Impossible Possible. I’ve reproduced the problem statement below and my answer. But go to 3 Geeks to put in your answer (I’ve disabled comments on this post).
Your firm has had a long relationship with a major financial institution–Mega Mega Bank. As a consequence of the housing bubble bursting and the ensuing recession, the bank is dealing with a number of defaulted consumer and business loans. It’s facing hundreds or even thousands of lawsuits. Each suit is, on average, not a major matter, ranging from a few thousand to a few hundreds of thousands of dollars at risk. But collectively, they pose a significant expense to Mega Mega Bank. Rather than asking the law firms that serve it for price estimates to do the lawsuits, the bank has set a not-to-exceed price for each suit. That price is extraordinarily aggressive. It is a fraction of the average your firm has been charging for such suits to date, and you regard your teams working on the suits as already quite lean, leveraged and efficient. Your firm views the business with Mega Mega Bank as strategic and it has decided to do a portfolio of some hundreds of cases at the price proposed by the bank. The lawyers, project managers and technologists who will assist in handling these matters do not, at present, have any firm ideas how they will do the work to a high quality standard while, at the same time, controlling costs so as to make the engagements economically feasible. Your job is to work with others on the team to find a way, or many ways, to accomplish high quality work at a much lower cost than has previously been possible. The firm will invest as necessary to preserve the relationship–within reason. But time is of the essence. The longer the team does business the old way, the more money the firm will lose.
My Answer (written in about 15 minutes)
My “two cents”, which actually means about 15 minutes:
TALK TO THE CLIENT: Make sure you understand the client’s business objectives and risk tolerance. Learn who at the client knows what about these matters. Figure out whom you can consult on an ongoing basis, sources of information, escalation, metrics, and governance for the project.
STREAMLINE: Interview your lawyers and staff who have worked the matter to map the typical flow of cases already handled. If client has done the work, include them in discussion. Create the “as is” map. Then, in a team setting, review as is map for where steps can A. be eliminated or made more efficient and/or B. be delegated to a lower cost resource (see below). Make sure you come away from exercise with good process flows and checklists. And identify tasks for automation.
ANALYZE and STREAMLINE AGAIN: Immediately require all timekeepers to use accurate task codes for all work on these matters. After one month or 20 cases, whichever comes first, apply business intelligence / analytics software (including visualization techniques) to identify patterns. Use results to refine processes.
CENTRALIZE: To the extent the work has been spread out across the firm / offices, consolidate it one place with people focused on it full-time. Consider moving some or all of it to a lower cost location.
IDENTIFY LOWEST COST RESOURCES: Once process is streamlined and documented, identify the lowest cost resources. This could include paralegals, college grads, contract lawyers, offshore LPO, or onshore LPO.
AUTOMATE: Be careful not to automate a broken process. Shoshana Zuboff in Age of the Smart Machine used the term “informate”. After two months or 50 matters, identify where document assembly, expert systems, or other COTS or custom software we save labor.
THINK CREATIVELY: Would a smartphone or table app in hands of the client accelerate? Should you do a decision tree for each matter and have client review it? Can you develop statistical profiles of matters that help identify likely course and therefore appropriate level of investment?
- Alternative Legal Provider (36)
- Artificial Intelligence (AI) (50)
- Bar Regulation (13)
- Best Practices (39)
- Big Data and Data Science (8)
- Blockchain (10)
- Bloomberg Biz of Law Summit – Live (6)
- Business Intelligence (19)
- Contract Management (19)
- Do Less Law (37)
- eDiscovery and Litigation Support (165)
- Experience Management (7)
- Extranets (11)
- General (191)
- Innovation and Change Management (158)
- Interesting Technology (96)
- Knowledge Management (219)
- Law Department Management (14)
- Law Departments / Client Service (112)
- Law Factory v. Bet the Farm (27)
- Law Firm Service Delivery (106)
- Law Firm Staffing (25)
- Law Libraries (1)
- Legal market survey featured (5)
- Legal Process Improvement (21)
- Legal Project Management (26)
- Legal Secretaries – Their Future (17)
- Legal Tech Start-Ups (2)
- Litigation Finance (5)
- Low Cost Law Firm Centers (20)
- Management and Technology (178)
- Notices re this Blog (10)
- Online Legal Services (63)
- Outsourcing (135)
- Personal Productivity (39)
- ReInvent Law (10)
- Roundup (58)
- Structure of Legal Business (1)
- Supplier News (13)