Managing Legal
The Point
The conventional law firm — to maximize revenue — bills client companies hundreds per hour for the work of recent law graduates who are not yet capable of doing legal work unsupervised. (See here, here, and here.)
Accordingly, conventional business law firms — despite showcasing “innovation” specialists — actually resist cost-efficient, fast, and accurate process solutions and their enabling technologies to do routine, recurring, and lower-skill legal work. (See here and here.)
In commenting last week on EY’s incipient split (subscription) into distinct audit and consulting arms, Denton’s chair Joe Andrew offered three revealing observations (subscription) about deficiencies endemic to conventional law firms:
(1) Law firms as a category lag significantly in process-based solutions for client companies’ routine, recurring, and lower-skill legal tasks,
(2) This deficiency causes law firms to assign such routine, recurring, and lower-skill tasks to “young lawyers” as labor-intensive, “soul-crushing” work, and
(3) Law firms will not adopt needed process solutions on their own; only competitive pressure from outside the legal profession will bring this about (Mr. Andrew believes that it will come from the Big Four).
This Matters to Your Business
In three-plus decades as a practicing attorney, and in managing law firms’ work as a corporate executive, I have never witnessed a law firm leader admit such things. Here’s what Mr. Andrew said:
“What the Big Four do well is improving processes — making better decisions about processing — and investing in solutions …
“They [the Big Four] are going to say to young associates, ‘Those law firms are not making investments in technology or artificial intelligence. We are — which makes us a better place to work. You can use your creativity and intelligence. Whereas, at a law firm, you’re going to be buried in a big research project …
“The process-oriented work of law is often perceived by young lawyers as soul-crushing …”
Looking ahead, Mr. Andrew predicted that the Big Four’s legal services contribution, with their accustomed process efficiencies, will change the legal profession “more than law firms ever will“.
Because …
Mr. Andrew’s purpose was to explain why he believes the Big Four will have a recruiting advantage over law firms in future competition for talent. But, more significantly, the chair of the world’s largest law firm acknowledged a major deficiency in the way law firms slow-walk adoption of tech-enabled processes, and then charge hundreds per hour for young lawyers’ performance of simple tasks instead.
The vast majority of law firm leaders, and of corporate law departments who hire them, calmly maintain — poker-faced — that none of the above three points is accurate. Except for Joe Andrew, with his forthright admissions last week, they insist that:
(1) Law firms’ now-ubiquitous “innovation” specialists equip them with the process solutions they need for fast, cost-efficient, and accurate performance of corporate clients’ recurring, routine, lower-skill legal tasks,
(2) Associates bill corporate clients hundreds per hour only for work sufficiently demanding that it requires a law degree and licensure to do it competently, and
(3) Law firms don’t need competition from the Big Four, alternative legal services providers, or anyone else to induce any needed process solutions.
Mr. Andrew, in his candor, has given the game away on conventional law firms’ collective failure to replace recent law grads’ grunt work with cost-efficient, fast, and accurate process solutions and enabling technologies.
C-suite executives and business owners should use their purchasing power to gain from their law firms the cost-efficiency, speed, and accuracy of tech-enabled process solutions, and to remove the waste of excessive hourly fees paid for young lawyers’ grunt work.