Editor's note: This is part one of a two-part follow-up to "Tech Drive," which reported on Kia Motors America audits to assess the technology skills of its outside counsel.
I audit outside counsel's competence with technology. The audit is driven by fear fear of wasting company money on low value-added work. The audit tests my hypothesis that lawyers, as a group, are deficient in their use of technology and that a direct consequence of this incompetence is that clients, like my company, Kia Motors America, outlay outrageous sums for unnecessary busywork. Thus far, my audit has confirmed my hypothesis.
The audit currently consists of four mock assignments that a law firm associate must complete using standard software (e.g., Word, Excel, Acrobat). Done correctly i.e., utilizing some basic, built-in functions of those programs the first of these assignments should take less than 20 minutes. Done incorrectly i.e., not relying on the functions the assignment takes more than five hours to complete.
Not a single associate at any of the nine firms I have audited has come anywhere close to the 20-minute mark on the first assignment. That is, all of the associates approached the assignment in ways that would have required five to 15 times longer than necessary. At $200 to $400 per associate hour, such inefficiency suggests to me that, indeed, waste is a righteous concern.
Failing my audit has repercussions. Of the nine major firms I have audited, all nine have failed some more miserably than others. A few of these firms were auditioning for work and were not retained. Other firms, including longtime incumbents, agreed to rate reductions. One firm, for example, took an across-the-board 5 percent reduction that will be restored if they are able to pass a subsequent audit. Another firm agreed to a significant investment in associate training and has worked closely with me to upgrade a substantial number of their internal practices and processes. Finally, audit results influence my review of counsels' billing entries.
My audit is a prototype and, like its creator, not without patent shortcomings. That the audit delivers material benefits despite its flaws is a testament to both the robustness of the audit concept and the depth of the legal professions' technology problem.
THE AUDIT FRAMEWORK
Technology: The audit focuses more on competence than technology, but technology still matters. Particular points of emphasis include peripherals (e.g., a second screen) and mobility (e.g., mobile Wi-Fi). But the audit is primarily concerned with the proper use of core features of ubiquitous programs (Word, Excel, etc.).
People: People, not machines, are the common source of technology-related inefficiencies. As a group, lawyers suffer from a proficiency deficit, i.e., an inability to utilize the technology tools at their disposal. More pointedly, few lawyers are trained to use their principal software programs. Training is fundamental. Business software programs are not particularly intuitive. The requisite skills have to be learned. At a certain level of expertise, self-teaching becomes easier. But, self-taught or not, actual learning is essential. Lawyers, however, are neither trained nor tested; they are left to their own devices.
Process: As I see it, the failure to train lawyers to properly use what have long been basic tools of their profession is symptomatic of a much broader aversion to system building within large law firms. Weak ties and big egos stifle genuine organizational change. These challenges are positively correlated with size. An unfortunate consequence is that larger firms tend to promote their economy of scope without developing their economies of scale. They cross-sell their expertise; they create cross-functional teams. But large firms do too little to propagate best practices, institutionalize deep knowledge, or systematize their basic functions. The sole advantage to scale becomes the capacity to throw expensive bodies at a problem. It did not surprise me that of the nine firms I have audited thus far, the best performer was the only firm outside the Am Law 200. That small but prominent firm was markedly better than the two audited firms in the Am Law Top 10 (revenue).
THE AUDIT: NUTS AND BOLTS
The mechanics of the audit are simple. There are 4 mock assignments. The sacrificial lamb an associate selected by the firm is charged with preparing:
- Exhibit binders for arbitration.
- An opposition to a motion for summary judgment.
- Written discovery responses.
- A settlement agreement.
Each of the assignments is broken down into a series of tasks. For example, in preparing the exhibit binders for arbitration, the associate is given an Excel spreadsheet of deposition exhibits. See Figure 1.