Managing Legal
Last year the Wall Street Journal recounted how — eight years earlier — the Mayo Clinic’s heart surgeons had asked for two more operating rooms to meet skyrocketing demand.
“No” – replied the Mayo Clinic’s CEO — himself a physician.
Not only did he say “No” — CEO Dr. John Noseworthy then asked heart surgeons at what is probably the number one-rated hospital system in the world to redesign every aspect of their work.
For at least 20% in cost cuts.
Clinic-wide, Mayo has reported $900 million in savings over the past five years from such re-engineering projects.
And eight years after that request the Mayo Clinic’s heart surgeons got half of what they’d asked for — just one additional operating room.
Eight years later.
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Meanwhile, over in the business legal sector, aggregate spending never goes down (here and here).
That’s aggregate spending. There are of course exemplary exceptions (here, here, and here). But they are exceptions.
So despite much talk about labor-saving and accuracy-enhancing technology, the business legal sector slow-walks actual adoption (here). And there’s a lot more talk than action in process improvement and project management disciplines long since adopted everywhere else — outside legal — in the business enterprise (here and here).
Two weeks ago I received this message from a consultant to corporate legal departments: “As you prepare next year’s [legal] budget, think beyond ‘last year plus five percent’.”
All of which makes me wonder: Why can heart surgeons of the Mayo Clinic adopt robust cost and management standards but we business lawyers can’t?
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I wonder …
Maybe what we business lawyers do is more life-and-death than the work of the Mayo Clinic’s heart surgeons.
Or maybe what we business lawyers do is more complex.
Or maybe (I hear this a lot from my brother and sister lawyers) our tasks are too unpredictable as to staffing and timing — and therefore as to cost — and heart surgery follows a sure-fire path to a preset outcome.
Or … maybe not.
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In looking at an over-priced and poorly managed legal sector — wondering how best to control costs, assign the right talent to specific tasks, and design work flows — it makes sense to look at the best performers in other service sectors.
And especially high-consequence service sectors like medicine — where the cost of failure can be catastrophic.
In Management Lessons from Mayo Clinic: Inside One of the World’s Most Admired Service Organizations, Dr.s Leonard L. Berry and Kent D. Seltman state: “Many services share some common dynamics with healthcare services”.
Let’s consider a few that they listed:
- ” The core benefit from the service is intangible, it comes from a performance, and customers incur an expense rather than acquire tangible assets.”
- “The performance is labor- and skill-intensive, contributing to considerable variability from one service provider to the next.”
- “Customer demand for the service is unevenly distributed and is sometimes urgent.”
- “Customer needs and preferences are diverse, thus requiring the organization to have a portfolio of skills and other resources available.”
Sounds a lot like the business legal sector to me.
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The heart surgeons described above achieved what the business enterprise should expect from its lawyers: Reduced costs and improved operating efficiencies — while maintaining the highest professional standards.
This required physicians to differentiate between fat and muscle in their budget and processes. Accountants by themselves, acting without clinical insight, could not have done it — not without jeopardizing medical quality.
But it required more: Leadership motivated to use their professional skills in the best financial interests of those they serve — not just to make excuses for the status quo.
Such leadership is scarce in the business legal sector. It’s rare in law firms. It’s rare among in-house counsel. The exceptions stand out (here and here).
Business owners and executives need to enlist the help of an attorney committed to more efficient budgets and better management of legal work — while maintaining the highest standards of liability prevention.
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Yes, it’s hard to believe that what corporate lawyers do is more important or more demanding than heart surgery. But, as with the Mayo Clinic’s CEO — a business person within the company will have to take the lead — because most lawyers have shown that they won’t.
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In Part 2 and Part 3 I take up two management lessons from the Mayo Clinic.