This morning, I read Growth is Dead: Part 11-Granting Your Wish, the latest installment of Bruce MacEwan's thoughtful and provocative series on the future of law. In it, Bruce posits models for the future of law at both ends of the spectrum. As for the middle, he isn’t so sure.
Assuming Bruce is right, the highest-end firms will survive provided they successfully adopt the Wachtell model (which I assume, for these purposes, is the winner). It won’t be easy, and a lot of them will fail to make the structural changes necessary to make it work. As for the more routine, commoditized legal services at the other end of the spectrum, we only have to look at the explosion of LPOs and other low-cost, high volume providers to see what's coming.
Where, then, does that leave the rest?
I don’t think there will be one right model for the middle, but I believe what the rest must do to survive is pretty obvious. Even so, thriving in the crowded middle kingdom will require drastic changes in attitude, culture and approach that may be just as disruptive as adopting the Wachtell model. Firms will have to look carefully at why, how and what they do. They’ll have to engage in meaningful introspection but, most importantly, they’ll have to accept the inevitability of change and then actually do something about it.
This is what it’s going to take to thrive in the middle kingdom:
Accept that client satisfaction is the dominant factor that determines a firm’s fate and drives profitability and success.
Cut costs, reduce turn-around times and free up human, technological and financial resources for other value-adding legal services. Success will lie in finding efficiencies that can be passed on to clients as reduced fees and improved, client-oriented service. Through efficiency, firms can remain profitable and still satisfy client demand for faster, better-priced legal services.
Really understand clients. As we have said elsewhere, lawyers need to invest time, on their own dime, to develop a profound understanding of each client’s business. Knowing the industry is simply not good enough. To properly serve the interests of their clients, lawyers in the middle kingdom must know what keeps their clients awake at night and why.
Rethink billing practices. Firms will have to change how they bill and what they bill for. Successful firms will charge only for added value and not the rest. Yes, that means no longer recovering overhead expenses from clients, or using internal services (like copies) as profit centers, or charging clients for training juniors. Internal efficiency is critical to staying profitable in this environment.
See value from the client’s point of view. Changing billing models can only happen if lawyers accept that value can only be determined from the client’s perspective. They’ll have to abandon the illusion that lawyers alone know what their services are worth. Successful firms will understand that satisfied clients will reward them for value, and value them for service.
So, while I can’t predict one unified model for the middle-ground firm of the future, whatever it is, I believe it must incorporate these sorts of changes.
One firm I know is already looking ahead and making serious, innovative decisions about it’s own future--and it’s doing so based on an extensive analysis of its clients’ actual needs. Hunoval Law Firm, with offices in North and South Carolina, Virginia and West Virginia, has been using Lean Six Sigma in various parts of the firm for a while now. Just today, founding partner Matt Hunoval announced a partnership with UNC Charlotte’s Center for Lean Logistics and Engineered Systems to train all of its lawyers and staff in Lean Six Sigma.
Matt recognized the potential--for his firm and its clients--that comes from increasing internal efficiency. The firm actively seeks out the root causes and associated costs of waste, and works to error proof legal and business processes to benefit the firm and its clients. Matt’s goal: develop a culture of efficiency and improvement throughout the firm, and certify everyone (lawyers, administrators and support staff) to the level of Lean Six Sigma Green Belt by mid-2014.
Hunoval is using Lean Six Sigma, something we obviously believe in at Gimbal. But regardless of how you get there, efficiency is the key to improving client satisfaction, to doing more with less. It’s the only way to thrive in the middle kingdom.
What do you think?
Here's the text of Hunoval's press release announcing their partnership with UNC Charlotte:
UNC Charlotte Partners with Local Law Firm for Lean Six Sigma Training
Incorporating Lean Six Sigma management methodology is relatively unknown in the legal space, but technology-driven Hunoval Law Firm, PLLC, is raising the bar.
After partnering with the University of North Carolina at Charlotte (UNCC) Center for Lean Logistics and Engineered Systems, Hunoval Law now offers Lean Six Sigma training to employees and has already incorporated its strategy into key business processes.
“The driver here is client results,” says firm founder, Matt Hunoval. “A firm like ours has a very different focus than a large general practice firm doing multi-billion dollar M&A deals or high-dollar mass tort claims. Such work, by its very nature, is highly customized and non-repetitive. On the other hand, a lot of what we do is highly process-oriented, where you are dealing with the same basic set of form documents with minor transaction-specific variations—the perfect environment for process-focused Six Sigma analytics.”
Six Sigma, Lean and other data-driven, quantitative management tools were first used in manufacturing, and then adopted by large financial institutions after being championed by Jack Welch at General Electric.
“This is the language spoken by our larger institutional clients, and so I’ve made a commitment for it to be the language of my law firm,” he says. “This is not a passing fad, not a management flavor of the week. Six Sigma is in the firm’s DNA.”
Hunoval hired Kevin Divine as the new Director of Six Sigma to help guide the firm as employees learn the new process. Divine completed his Six Sigma black belt training at GE during the Jack Welch years, later utilizing it in process-improvement efforts at financial giants such as Bank of America and Wells Fargo.
“For the most part, law services have been performed the same way for hundreds of years. It’s a paper mill,” says Divine. “We wanted to start looking at what causes rework, defects, errors and inefficiencies so we can create a more reliable and repeatable process.”
Training occurs at the UNCC campus in a five-week program customized specifically for the practice. It’s designed to provide a Lean Six Sigma certification so employees will be skilled in quickly identifying defects, redundancies and eliminating waste—translating into faster processes done with fewer errors for the firm’s clients.
The center has collaborated with companies in manufacturing as well as the service sector to teach Lean Six Sigma, but this is the first time it has partnered with a law firm.
“Through proper training and cultural change, we believe that law firms such as Hunoval can create a dynamic continuous improvement culture, where the employees will be part of the solution, identifying and solving system-related issues as they arise. Lean Six Sigma will give them the proper methodology and toolset,” says Dr. Ertunga Ozelkan, Director of Systems Engineering and Engineering Management at UNCC and Associate Director at the UNCC Center for Lean Logistics and Engineered Systems.
Ozelkan and Dr. Gary Teng serve as co-Principal Investigators for the training process and work together to create tailored Lean Six Sigma programs that address specific needs of a company or industry. Education covers a wide breadth of Lean Six Sigma education - from the very basic overview levels to the most advanced theoretical mathematical levels.
By using real-life examples from the law firm, the training demonstrates how Six Sigma process analysis works to create less room for error and better efficiency throughout the workday.
And clients are taking note.
“Right or wrong, many of the firm’s larger clients tend to think of lawyers as Don Quixote figures, nobly tilting at windmills but somehow not quite getting it. We’re changing that perception,” says Hunoval.
With the addition of Lean Six Sigma to the law firm’s business processes, the company is excited to deliver a streamlined operation for clients for whom more time and more errors equal more money—and, conversely, savings in time and reductions in errors directly translate into where it matters most. The client’s bottom line.
“We’re creating a process that you don’t have to worry about going haywire,” says Divine. “You can be sure that the product from yesterday is as good as the product you have today.”
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