It is, in some ways, a challenging time to be an attorney, especially if your clients are corporations. Companies are scrutinizing legal bills and putting downward pressure on legal department budgets. Law firms are having to find evermore inventive ways to add value in order to retain business.
For firms, the solution lies in greater efficiency. Efficiency has thus become something of a buzzword in the legal profession—although in fairness, it is the vehicle that took humans from subsistence farming to modern abundance, so it’s earned some credibility. The key to making law firms more efficient is figuring out how to provide clients with more value with the same amount of effort.
Some local firms are finding that one helpful way to do this is to sit down face-to-face with clients and ask them what it is, exactly, that they value. Consistently, the answer seems to be that they value attorneys who, besides being experts in the law, also understand the business side of their business and how their companies tick—and that this is something that they aren’t always getting enough of.
“I did client feedback interviews for the law firm, and I kept hearing about increasing efficiency over and over again,” said Kristen Leis, chief marketing and business development officer for Parker Poe. “I kept hearing from our clients that they most value lawyers who think like business people.”
Typically, business executives do not enjoy getting an out-of-the-blue call from their attorneys. But Leis said the firm embarked on a very beneficial project last year when it invited a large group of clients to its headquarters to join some of its attorneys for a two-day course on project management. The theme, naturally, was finding ways to improve efficiency—both at the firm and in the clients’ own businesses.
Poyner Spruill did something similar earlier this year. Many of the invitees from client companies worked in departments other the general counsel’s office, and attorneys and staff at the firm said the workshop gave them a new window into their work.
“I think it was a great opportunity for our lawyers to see how it works over there inside the factory or the office or the skilled nursing facility,” said Dan Cahill, the firm’s managing partner. “It really helped us. You need to know your clients.”
Might have a problem you’d understand
Both firms followed a course offered by The Lean Legal Sigma Institute, which provides consulting and certifications. In business circles, “Lean” is associated with a theory of project management first developed by Toyota and increasingly being extrapolated to non-manufacturing businesses. The focus is on systematizing processes and doing things the same way each time. In the context of a law firm, that might be the client intake process, for example. The idea is to eliminate waste in order to perform those processes more efficiently.
Law firms have often been painfully slow adopters of best business practices. Decades after their creations, widely adopted business concepts like Lean and “Six Sigma” are only now finally gaining a foothold in the legal profession, Leis said.
“Law firms are notorious for being inefficient, and it’s not on purpose. It’s because when you think about how the majority of law firms have made money since the beginning of time, it is by billing as much time as humanly possible on a matter, because lawyers get paid by the hour,” Leis said. “Now law firms recognize that that’s an antiquated way of doing business, and that it’s not what’s in the best interest for our clients, but we don’t know how to do business in any other way.”
The billable hour model is currently being assaulted on many fronts, from investors seeking to provide litigation finance to alternative legal service providers. But while it may be almost perfectly tailored to punish efficiency, the model will likely still be with us for a long time—it’s just too hard to accurately predict how much a legal matter will end up costing.
If you just call me
As a result, firms are having to swim against the current and find ways to improve efficiency even within a billable hour structure. Brandi Hobbs, Poyner Spruill’s director of client service and strategy, says that by proactively soliciting feedback from clients to learn what’s working well—and what’s not—firms can perhaps learn how to effectively bottle their best practices in order to provide them more consistently.
“We can’t just bill by the hour forever,” Hobbs said. “But as we start to approach more and more of our work from a process perspective, being able to identify key steps in the process and systematize those processes, I do think it creates an advantage for existing clients because they’ll be able to get similar work done in the same fashion in the future and the potential to package up some of what we’ve done and make it available for lower costs.”
Conversations with clients can help firms better allocate resources, separating the work that can be routinized and done more cost-effectively by associates, or even paralegals, from the work that really does require the most seasoned attorneys.
The fear for attorneys, in some cases, is that such open lines of communication may expose attorneys as not being as efficient as they could be. But Cahill said that his firm’s conversations with clients had yielded invaluable insights.
“In the 21st century, efficiency is not something nice to do—you have to be efficient,” Cahill said. “There’s a shrinking demand for legal services, and in-house legal budgets are smaller … so efficiency goes back to knowing your client.”
Follow David Donovan on Twitter @NCLWDonovan