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Ask most lawyers which trait best defines their work, and they will answer “quality.” But ask most Fortune 500 chief executive officers who delivers the highest-quality goods and services, and few will answer “our law firm.” Obviously, there’s a disconnect, and I believe that it stems from the fact that lawyers today define quality differently than sophisticated businesspeople. During the past 20 years, we’ve seen dramatic improvements in quality at American businesses. Whether called Six Sigma, Total Quality Management or Lean, these approaches involve systematic customer input, definition and improvement of processes, use of technology and measurement. Executives at most companies see quality as the ability to deal with high volumes and high complexity, and their goal is ongoing, systematic improvement of products and services as reflected in customer satisfaction, increased revenues and reduced costs. Most large law firms see quality as the ability to deal with rare and complex situations, such as big transactions or large-scale litigation. They still measure quality in their own terms � the absence of typos, proper Shepardizing conformance to filing deadlines, the raising of esoteric issues. Most clients regard these as only marginally important. Some lawyers say that their quality is so good that it can’t be measured, and any attempt to manage costs puts quality at risk. For clients, that makes no sense, since other suppliers of goods and services consistently provide measurable quality improvements and cost reductions. Law firms should begin to understand their clients’ sophisticated view of quality and manage their work accordingly. Here are some ways in which lawyers can better align their work with the client’s definition of quality: Define processes in detail. Most businesses today are run according to a small set of “core processes.” These identify all of the steps in an organization’s key business activities. By breaking down all the steps in a process, companies hope to find sources of problems and improve efficiency. For example, the “lead-to-collect” process details all of the steps from initiating a contact with a new customer to collecting the cash from the sale. This can be done for legal work, and, in fact, defining steps in a process makes efficiencies apparent. In a recent M&A deal that I was involved in, we were able to quickly see that creating the proxy statement involved much of the information that went into the stock purchase agreement and associated schedules. By structuring the documents so that we could automatically make changes in multiple places, we reduced both the amount of work and the potential for error. Reinvigorate the partnership between in-house and outside lawyers. The trend in business has been for corporations to develop tighter partnerships with their suppliers, sharing more information. But in law, the opposite is true. The role of both in-house and outside lawyers has become increasingly specialized and fragmented. Such fragmentation allows outside counsel for Enron or WorldCom to say with a clear conscience that they have no responsibility for their client’s woes. Too many legal departments follow a purchasing model. They see their role as negotiating discounts and generally keeping firms at arm’s length. This model reduces the information available to law firms and limits their ability to understand potential issues, ultimately resulting in lower quality and higher costs. I prefer a model in which the job of the in-house law department is to integrate the company’s processes with the law firm’s core expertise � the sort of deep knowledge of law and intuitive problem-solving ability that all good lawyers have. This is where lawyers can deliver the most value. Define quality on a process-specific basis. If I am a defendant in a death penalty case, quality means avoiding execution, and any action that provides a marginally better chance of winning, regardless of cost, improves quality. If I am managing 10,000 sales contracts for my company, my definition of quality is simplifying the lives of my customers, salespeople and auditors. Predictability and speed are more important than giving my company a marginally better chance of success in a hypothetical litigation. Key to this is identifying the players in each process � typically the client’s customer, operating personnel, legal personnel and outside law firm, as well as any outside decision maker, such as a court, regulatory agency or auditor. In the drafting of a commercial contract, for instance, the client’s customer is the user of the contract; the client’s operating personnel is in charge of managing it; and the outside auditor must confirm the accounting treatment of it. Lawyers typically approach drafting a contract as if a court were the key end decision maker. But in today’s business environment many more companies have encountered issues in contract interpretation from auditors than from courts. To get at the definition of quality for a specific matter, a lawyer should ask some basic questions: Is the work likely to be judged by a legal or nonlegal decision maker? Is the work primarily about pursuing opportunity or minimizing risk? What is the time frame that matters most? Where are the principal sources of risk? Once a lawyer knows the answers to those questions, he can come to a shared understanding with the client about the definition of quality for a particular matter. Most lawyers would say that they implicitly go through these steps or already know the answers, but from my 17 years as a client, I can tell you that genuine shared understanding on these issues is rare. Use technology thoughtfully. There is no “killer app” for law. But lawyers can use technology to enhance quality and lower cost. Some of the uses are prosaic: structuring work flow, demonstrating conformity with processes (“Who made what decision when, and with what information?”), and managing databases (“Where is our contract with General Welding?”). In a world in which nearly everyone in the enterprise is a client, technology can simplify communications and give employees power. Technology can also be used to collect basic information about legal work processes � data about how long matters take, how many of them are being juggled and what the relative productivity of individual lawyers is. Continually measure and make improvements. When lawyers give advice, clients hunger for quantitative information. “If I don’t agree to this indemnification provision,” they may ask, “how much more likely are we to lose this case and how much more are the damages likely to be?” Clients react poorly to specific proposals for changes by lawyers that add cost and complexity but are only supported by general concerns. Lawyers should be able to talk about how long an activity will take, what the probability of different outcomes may be and how often a particular choice has led to a particular outcome. Move to predictable pricing, including retainer-style arrangements. Accounting for your life in six-minute increments can’t help but lead to six-minute thinking. Improving quality requires more of a strategic and systems orientation. By more deeply aligning themselves with their clients, law firms should share responsibility for budgeting and costs. This will reduce barriers to clients’ sharing information, which is critical to success. More fundamentally, thinking through costs up front will lead to more thoughtful planning and strategic thinking. There are strikingly few products or services that are priced like law. I know a general counsel who says the following: “If a law firm pitches work saying they are the best in the world because they have the most experience, and then tells me they have no idea how much it is going to cost, I have a hard time taking them seriously.” True expertise includes understanding the steps in a legal process and then being able to predict and manage costs. These ideas may seem radical. But in fact, they will simply take law firms back to their roots � a retainer-style practice with strong alignment between clients and firms and high professional satisfaction. Today, firms risk losing their professional origins while not yet fully defining themselves as businesses. Defining quality more like the clients they serve will help firms re-establish their professional identity and secure their future as businesses. Paul Lippe is the founder and CEO of Quality Legal Automated Systems, a startup that has licensed software from Cisco Systems Inc. for law department automation. He also is a former general counsel of Synopsys Inc., a Mountain View maker of electronic design automation software. He currently is of counsel at Reed Smith in San Francisco..

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