Managing Legal
Yesterday a prestigious global law firm showcased the baffling combination of brilliant legal expertise and management dysfunction that drives business clients to distraction:
A “2018 Innovation Hours program, which recognizes up to 50 innovation hours toward billable-hour targets for fee earners”.
This announcement expressly recognized that the attorneys involved in this program — “fee earners” it called them — work for clients under “billable-hour targets” imposed on them by the law firm.
And announced — without irony — its use of “billable-hours targets” in aid of “innovation”.
…
That it’s common for law firms to impose hourly quotas on lawyers who do the firm’s work — on pain of career jeopardy if they don’t meet that expectation — isn’t news.
Such quotas are Exhibit A for the proposition that when the legal industry values a lawyer’s work by how long that lawyer takes to do his or her job — the legal industry has pitted the attorney’s interests against those of the client.
Did the attorneys working to an hourly quota really think that their client company’s needs required X hours to perform that task — rather than (say) half that time?
Or were individual lawyers motivated by their respective quotas?
Quotas imposed on them by their law firm?
…
Kudos to this law firm for candor about its quotas.
And kudos for its work on “innovation”. For instance, the announcement cited a pilot project that led to it: An app that, “simplifies the application of the patchwork of U.S. state laws to let companies focus on protecting data and preventing further harm [from, apparently, cyber attacks].”
Credit where due.
…
But this announcement — with its matter-of-fact embrace of “billable-hour targets for fee earners” is just a frank acceptance of the legal industry’s business model.
And it implies a corresponding acceptance of the legal industry’s definition of “productivity”: Hours billed to the client.
…
The legal industry’s definition of “productivity” clashes with the one I learned as a general manager: What value was produced with the time and other resources that the “producer” used?
As I’ve written elsewhere, Professor Bill Henderson describes most clearly why we need to get rid of the billable hour in order to incentivize sound management of lawyers’ work flows:
” … The real value of alternative fees [paying a lawyer on a basis alternative to hours-billed] is to incentivize a re-design of workflow that (i) increases quality, (ii) speeds up delivery, and (iii) decreases cost.”
…
My dad was the proverbial “rocket scientist”. Once — when he was working on the Apollo space program in the mid-1960s — he tried to convey to my siblings and me that successive technology developments over time are interdependent with one another:
“Kids — if it weren’t for Thomas Edison’s invention of the electric light bulb — we’d be watching television by candlelight.”
Yesterday I read about some of the smartest people in my profession — using one of the most backward “management” techniques imaginable — in aid of “innovation”.
And I thought about Dad.