So what would it take to create an efficient law firm, so that you can present it as such when you next go calling on a would-be client? It’s not enough to merely be highly specialized or well thought-of, or even uniquely, creatively competitive, when compared to other law firms. You must also be viewed as efficient. This is especially the case when you’re dealing with clients whose budgets are well in the millions.
In all likelihood, such client will have learned the lessons of strategic sourcing and other efficiency programs. In a nutshell: you must provide better fee certainty and more definite timelines. There are, of course, a few other things that such clients require from their lawyers.
It was this very list of the “few other things” that had a major real estate lawyer all agog, recently, while pitching his business to an in-house attorney at a Fortune 500 company. That attorney, Jason Anderman (pictured here), represented an employer who regularly spent tens of millions of dollars a year on outside law firms. (“We built massive…warehouses, acquired and sold large tracts of land and entered into many complex commercial leases.”)
But before Anderman was about to recommend that his client spend some of that ten million on the erstwhile real estate attorney’s firm, he had a proviso or two. “It would be terrific if you could offer me flat fees….I would also like to know how you can reduce your bill, compared to your competitors, because you are so efficient…” Anderman wanted, also, to be assured that the lawyer’s firm was using process improvement or knowledge management systems—such as Six Sigma and Lean–specifically aimed at streamlining their processes.
Finally, Anderman admitted that his employer was on “e-mail overload”. The administrators were finding project management cumbersome. Could the real estate lawyer’s firm do something about that? “For instance, do you have an extranet system that can manage all of our legal documents, [that can also] track versions and show me metrics on your [turnaround times]?” It was understandable when the lawyer, feeling a bit overwhelmed, merely asked if there was anything else he could do to win the client’s business.
Why don’t many law firms have such efficiency tactics in high-gear when they go calling on would-be clients?
“Lawyers traditionally take an artisanal approach to their craft,” explains Anderman, “seeing themselves as keepers of unique secrets that are grudgingly shared during the long apprentice-like associate development period.” Understandably, change is hard. Yet, in the business world, Change Management is a normal part of day-to-day functions…if one wants one’s company to advance, that is.
This is not to take away the individual ability and improvisational skills of our most gifted attorneys. But a melding of the two diverse arenas—efficiency and creativity—would do wonders. In the world of medicine, to give an example, studies have shown that surgeons greatly reduce errors and deaths when they follow a comprehensive checklist prior to and during surgery.
Anderson believes lawyers need to shift their thought paradigm. They must first grasp the wide world of legal issues, learning how to categorize them, and then understand how to deal with ensuing issues which each category might trigger. “We…do not integrate the capture of our institutional knowledge into our daily tasks,” Anderson admonishes. And process improvement doesn’t offer an immediate return on revenue, so it’s delegated to a back office.
Although they wouldn’t be a panacea, Anderson touts professional procurement managers as a possible partial solution. These officers can be found in almost every area of corporate expenditure–outside of legal services. General counsel is resistant to hire these managers because they are believed—and rightly so—to lack the knowledge necessary to judge the quality of legal services…or even the nature of a law firm, in which parts of a firm can effectively operate as a separate entity.
Still they should be considered, as should incentives that drive efficiency. Anderman also encourages attorneys to remember that prestige doesn’t necessarily equal the best legal results…that measurement benchmarks of quality vs. cost should be arrived at, and stuck to, systematically. “We rely way too much on past relationships,” he cautions. To read more, go here: http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202480447352