I recently spoke with Ian Nelson of the Practical Law Company (PLC) about the role of professional support lawyers (PSL) in large US law firms. 

Regular readers know that PSLs play a leading role in knowledge management (KM). They generate precedents, research new law, and, in effect, help standardize law practice. PSLs are relatively rare in the US compared to the UK. With clients demanding more value from outside counsel, Ian and I wonder why more US firms do not employ PSLs.

And for those that do employ PSLs, or plan to, we wonder if US firms will structure the roles appropriately to ensure maximum value, in part by using the services of PLC. Let me explain why I wonder about this and advocate that firms consider a role for PLC. One reason I decided a few years ago to take my day job with legal outsourcing provider Integreon is that I believe in the shared services model. After two decades in or serving large law firms and law departments, I saw tremendous duplication on non-core, non-competitive work. A shared services model such as PLC’s is a great way to solve the problem.

I recently suggested that law practice will likely diverge into “law factory” on one extreme and “bet the farm firms”. Evidence for this idea continues to grow. Aric Press, in The Am Law 200: A Chasm with Consequences (1 June 2011), observes that the “best billing work goes disproportionately to the most profitable firms.” The top two dozen firms have a growing lock on high-margin work; the rest face growing price pressure. Press concludes that

“what’s striking about the behavior of many law firms over the past two years is that they managed their way to profitability by shedding colleagues who did not have enough work, not by examining how the work itself is done.”

Amen. Eight years ago, in companion posts When Clients Come Knocking and Consistency in Service Delivery I suggested that lawyers need to analyze how they practice (the process of doing the work) and then develop best practices that standardize any repeated elements. So I am glad to see that idea broadcast by someone with a bigger megaphone and delivered by a company like PLC that actually offers a way to improve how work is done and to help standardize elements of practice.

If firms were to examine carefully and rationally how they work, most would conclude that PSLs help reduce cost by standardizing and streamlining routine elements of law practice. The history of PSLs in the UK legal market supports this: Over the last decade, the UK PSL teams have become much more efficient, in part because PLC provides the core service of PSLs as a shared, outsourced service, freeing up PSLs to focus on firm-specific projects. Aside from lowering total market cost, this also tends to standardize elements of law practice by providing a single source for practices and information common across firms.

I asked Ian if he thinks that PLC could, in some way, evolve into something of a standards organization. By way of analogy, I mentioned the private, for-profit Arcom, which calls itself the “The Leader in Specification” for architects. Arcom’s specification libraries allow architects to “avoid hours spent researching changing products, technology, and reference standards.” Hmm, shouldn’t lawyers have the same?

Ian agreed that PLC could, in fact, help the US legal market establish and maintain standards across firms. In essence, that is part of what they do. Their services such as “What’s Market,” how-to practice notes, checklists and standard forms and clauses, are meant to level the playing field to ensure a consistent and high-level of knowledge across the ranks. Ian did acknowledge however, that many firms are reluctant to embrace the “standards” label but the market pressure likely will force the “artisanal mindset” to change.

Irrespective of labels, we did agree that both law factories and bet-the-farm firms would benefit by more consistent and lower-cost approaches to handling repeatable elements of law practice.

Now back to the US market. After Ian and I spoke, he penned a post at 3 Geeks, BigLaw’s Acceptance of Practice Support Lawyers: Ready for Primetime in which he suggests that some of the lawyers working at Orrick’s Wheeling, WV facility and at WilmerHale’s Dayton, OH facility are, in essence, serving as PSLs. My understanding is that lawyers at both are more akin to staff attorneys focused on document review. I do agree, however, that the combination of low-cost location and non-partner-track lawyers does provide a new and interesting basis to hire PSLs or their equivalents.

To tie this all up, let’s focus on legal economics. If general counsels and large law firms widely adopted alternative fee arrangements (AFA) that capped fees, this whole discussion might be moot. In that scenario, GCs could focus on price and outcomes and not have to worry about process. As more work moves to an AFA-basis, firms will have to examine how the work itself is done: they will need to minimize time spent on matters to protect and grow profits. Wasting time on repeatable, wheel reinventing matters simply makes no economic sense. Consequently, GCs who seek value ought at least consider checklists that indicate their outside counsel are working efficiently. High on this list would be appropriate use of PSLs and services like PLC.