Last Fall, I read an article about the General Counsel for Kia who creates tests for his external legal counsel. The tests have nothing to do with law and everything to do with process. In one test, external counsel should have taken 20 minutes to complete a mundane task using an excel spreadsheet. The average time taken by Kia’s nine outside law firms? Five hours. Simon Fodden also has a great piece on this, here.
There are many takeaways from this, but an important one is that its shows that lawyers are not always the most efficient personnel to undertake tasks in a law office – and of course reinforces that billing by the hour penalizes efficiency. Yet, many lawyers insist on doing far too much on a file, perhaps out of habit, perhaps out of confusion, or perhaps out of a need to make monthly hours targets.
To further my point, a law clerk friend of mine interviewed with a firm some time ago. She had a great deal of experience and could handle very significant files with little supervision. At her interview she was asked about her skills and what she did at her old firm. When she replied that she often drafted documents or handled certain matters, the interviewer's response was always the same, “At our firm, lawyers do that.” Clearly this was a firm that had not sorted out its talent mix. Or perhaps it was the fact that many of this firm’s files were eligible for Legal Aid and Legal Aid pays a higher hourly rate to lawyers than to clerks.
Both of these short stories reinforce in my mind that successful law firms of the 21st century will be those who focus on the simple concept,“the lower my costs, the more I keep,” and manage their firms for profit not revenue, as Stephen Mayson often says.
In other words, successful law firms of the 21st Century will be those who re-jig their staffing models to ensure that work is done by the lowest cost, yet appropriately skilled, provider – or the work is done by technology. In the case of my friend the law clerk, that firm could have benefited from using her to do the work that lawyers were currently doing – giving the firm's lawyers a more supervisory or “last pass” function on those files; similar to how a dental hygienist works with a dentist.
Of course Legal Aid is only enabling inefficiency by paying by the hour – but that is another story…..
And what is the proper response to the Kia tests? First, firms need to invest in better training for lawyers who choose to do "process" work, or pass that work to lower cost providers – either within or outside the firm.
With each passing year lawyers are faced with more situations that cry out for de-construction of files – forcing them to separate "process" from "lawyering"; and forcing them to acknowledge that the bulk of what needs to be done in a client file does not require a law school education.
The profession is beginning to evolve from being one populated by fully hands-on lawyers, to a profession of lawyer-managers or lawyer-consultants who add value by not only providing high-end legal thinking, but also by managing different talent pools to create the proper solution.