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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).
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Dave Swider
Both this and the follow up article were interesting and entertaining to read. While the ability to use basic tools to perform true "lawyering" are important, we have seen tremendous inefficiencies in the processes firms use to perform document review. Given that document review can easily constitute the largest component of a client's bill, that may be a good place to assess firms' efficiencies and technological abilities.
We sometimes work with firms that try to apply the "tried and true" paper document review methodologies to electronic documents, generally providing dismal results in terms of cost and efficiency. We also work with firms that have a documented review workflow, defined QC checks, statistical sampling and other modern process management tools. Those firms almost always get through their review in a shorter amount of time at lower cost and with little pain, particularly at production.
Given that document review can be highly structured, just like any other "manufacturing" process, it would be interesting to see the results of an audit on that aspect of legal practice. Efficiencies during this phase will pay off handsomely for both firms and corporate clients. Firms that understand this will, I suspect, be better positioned to retain their clients.
Thanks again for a wonderful read.
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Ted Brooks
Wow, what a concept! I guess that's one way of screening who will be working on your case. I just wrote a brief piece in response to two similar articles, related to young lawyers and their familiarity (or lack thereof) with technology.
http://trial-technology.blogspot.com/2013/01/master-of-your-domain.html
Looking forward to part 2.
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V. Sheri Towne - the Practical Paralegal LLC
First - Great concept which would benefit clients of smaller firms as well! Frankly, the first thing that ought to happen with #1 and #3 is to delegate the drafting task to a seasoned paralegal. The audit would test the paralegal as described and then test the associate/partner on the ability to efficiently add value to the resultant draft work product (e.g. using "track changes" to make modifications directly to the document rather than handwritten changes to a printed version). Appropriate personnel using appropriate technology leads to the best cost savings. Word processing creates the skeleton, paralegals flesh out the draft factual and substantive details, lawyers provide their legal expertise to make sure the final product meets tactical, strategic objectives based on their legal and subject matter expertise.
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