I recently delivered a webinar to a group of associates at one of my law firm clients, as part of the firm’s internal CPD and training program. Among the advice I gave the associates was a recommendation to start looking for opportunities to streamline their work, increase their efficiency, and reduce their own “cost of doing business,” in order to make themselves and their practice groups more competitive and effective.
This led one associate to send along a follow-up inquiry, which I’ll paraphrase thus: “Is this my responsibility? What role should I realistically be expected to play in finding enhanced efficiencies in my practice? Do I wait to be directed by the partners, or by the IT staff?” These are good questions, with an important subtext: “Come on. You seriously expect me to make my practice more efficient, billing fewer hours, without the direct approval of the partner who controls my career?” Here’s my reply:
My advice about efficiencies is primarily addressed to associates in your role as future law firm owners. Whether that’s as partners with your current firm or in a different capacity (maybe running your own sole practice someday), you need to look for efficiencies and process improvements to begin reducing your own cost footprint, in order to maximize the profit derived from your revenue.
Now, if you’re running a business on a cost-plus pricing model (i.e., you multiply rate x hours, trying to maximize both in every situation, and bill the result), then efficiency is the enemy of revenue and therefore of profitability, and you should try to avoid it. This would be a sensible strategy if the year were 1993. But since it’s not, I don’t recommend it. By the time you become an experienced law firm owner (regardless of the firm), you’ll be confronted with a market that rejects cost-plus pricing for all but the most specialized, demanding, high-stakes work (and with respect, the odds simply do not favour the idea that such work will constitute the bulk of your practice).
So I believe you should start, today, even as associates, thinking about and looking for ways in which you can reduce the cost-generating friction of inefficient work practices. If you can produce a flowchart or checklist that will allow you (and your colleagues) to carry out routine and repetitive matters more rapidly (and, by the way, likely at higher quality), you should do so. If you can identify free legal research resources (such as CanLII) rather than paying Lexis or Westlaw to look up cases, you should do so. If you can build and contribute to even a modest knowledge management database so that wheels don’t need to be reinvented every day, you should do so.
Fundamentally, associates should develop the habit of asking themselves, before embarking on any measure to carry out a legal task: “What if this were my money being spent? Would I consider it wisely and justifiably spent? Would I be asking about alternatives?” Thinking like a client is an invaluable skill to develop, and the best way to start honing it is to think about the client, all the time.
Now, this all comes with a giant caveat, and that is: you’re not yet the owners of a law firm. You’re employees, and your bosses are the owners who decide how work is done and how it’s priced. Associates can’t independently give themselves the authority to decide how the law firm’s work should be carried out. That’s the law firm’s call, not yours.
Nonetheless, I also believe that you owe it to your employers, to your clients, and to yourselves to investigate efficiencies and process improvements at ground level that could reduce costs and/or improve quality – and having investigated and identified such steps, to bring them to the attention either of your immediate reporting partner or the firm’s managing partner.
That’s a formidable challenge for any associate, especially in this environment. So in order to relieve you of the burden of deciding when and where to report – as well as the intimidation factor of potentially bringing efficiencies to the attention of a partner who has no interest in them – I think the managing partner should require you to identify such steps and bring them to his or her attention on a quarterly basis. This places the responsibility for potentially disruptive discussions with the MP, not with highly vulnerable associates.
The firm must also do two other things:
- It should take into account the process improvements identified by associates in assessing their productivity and contribution to the firm’s value. If these improvements reduce their billable hours, and therefore their compensation, that obviously would be a perverse result.
- It should provide the associates with complete protection from any political consequences that might flow from introducing potentially disruptive changes to the firm’s workflow practices. Ideally, in fact, associates should be directly rewarded for helping to bring about such enhancements.
The upside of adopting this practice is that you learn, as associates, to start identifying improvements in how you do your work, enhancing your own ability someday to be a profitable law firm owner, without potentially incurring the wrath of traditional partners, because the option of not looking for and reporting such improvements has been taken out of your hands.
Everyone would benefit from this strategy. The associates improve their productivity, build their confidence, increase their profitability, and become easier to retain. The firm, if it implements these innovations, can lower its prices in a tough marketplace while remaining profitable, make its prices more predictable in a market whose demands for fixed prices become louder every day, and differentiate itself from its competitors. Clients get lower prices, more predictable prices, or higher quality, and maybe even all three.
And all of this starts with one simple proposition: associates should be empowered to increase the efficiency, effectiveness, and productivity of the firm. In most of the firms I’ve seen, it’s the new lawyers who are most enthusiastic about working differently and better; older partners tend to be more concerned with holding on to what they’ve got with both hands. Which of these two groups has the firm’s best long-term interests in mind? Which should be encouraged to act and be supported when they do?
You bet I expect associates to assert themselves, and to seek and receive the firm’s support in doing so, when it comes to improving efficiency and effectiveness. Neither the associates nor the firm will have much of a future in this new legal market unless they do.
Jordan Furlong is a lawyer and a strategic consultant and analyst who forecasts the impact of the changing legal market on lawyers, law firms and legal organizations. Based in Ottawa, Jordan is a partner with the global consulting firm Edge International. Contact Jordan at jordan@edge-international.com, or by phone at 613-729-7171, or visit his blog at www.Law21.ca.