The New Normal
How Do You Know That You’re the Best?
Posted Aug 29, 2012 7:59 AM CST
By Paul Lippe
Having spent most of my career outside law firms, I am familiar with the modern language of quality, variously referred to as Six Sigma, Lean, Lean Six Sigma or formerly Total Quality Management.
None of these systems are perfect, and, like any specialized language (including, mayhaps, law?) can sound jargon-y to an outsider.
But overall I’ve found these approaches are useful in forcing a higher degree of rigor. So it’s no surprise that Lean Six Sigma is starting to make some headway in law, with firms like Seyfarth Shaw in the lead.
One of the basic precepts of these quality approaches is to challenge assumptions, often expressed as asking "how do you know?" three times.
For example, if you were Christopher Columbus proposing to sail west to the Indies in 1492, and your opponents said that was impossible because the earth is flat, you might ask three times:
“How do you know the earth is flat?”
And you’d pretty quickly find that the flat-earthers' assertions were not rooted in any ground truth.
On the other hand, they might ask Columbus: “How do you know the Indies would be the first place you’d reach?” Columbus might fall short on that one.
So then you’d have to make a decision based on incomplete information and make sure the person advocating the decision took responsibility for the outcome.
In law, we make lots of assertions, many of which don’t pass the “how do you know?” test. (When we make those assertions on behalf of clients, we rely on a neutral fact-finder or the push and pull of negotiation to sort them out.)
This summer’s U.S. Supreme Court Obamacare decision illustrates how we can often be wrong, since “everybody knew”
• The case would be decided on commerce clause grounds.
• Justice Kennedy would be the swing vote.
• The two lawyers, Donald Verrilli, the current solicitor general, and Paul Clement, the former solicitor general, were among the pre-eminent Supreme Court advocates in the country.
As it happens, Chief Justice John G. Roberts Jr. decided the case on taxation clause basis on grounds that were not the focus of either Verrilli’s or Clement’s arguments.
Does that tell us that they are bad lawyers? Of course not. It just suggests that the truths that most of us assumed were wrong, including the importance of the effectiveness of the advocates. How did we know the commerce clause would be decisive? We didn’t. Would it have affected this Justice Roberts’ “switch in time” if a less effective advocate had argued for the law? Seems unlikely.
In an entirely different corner of law, I had the opportunity recently to talk with two top mergers & acquisitions lawyers. When asked how good their respective firms’ M&A due diligence processes were, both assured me they were the “absolute best.” When I asked each of them how they communicated due diligence results to their clients, one told me that his firm prepared detailed reports; the other said that his firm delivered no reports because they could be used against the client. So, both able lawyers, but how do they know which approach is better when they can’t both be right?
When I pushed them further and asked “how did they know” whether the content of the due diligence analysis (whether or not delivered) was correct, I didn’t get much rigor. In a world where even the most sophisticated advocates got it wrong about the commerce clause, their assertions were simply: “These are the top lawyers; of course their analyses of whether there is a change of control termination clause is correct.”
But now you’re creeping into true “how do you know?” country. Because unlike the prediction of which way the court will rule, or a judgment on whether it’s riskier to prepare a report, you actually can know about the change of control clause (simply by having multiple people review the same clause, and where there’s a disagreement, either escalating it or noting it) through some formal methods. So if the law firms are reviewing 500 contracts which have an average of 40 items of note, that’s 20,000 items. The partners I talked to would claim that they got all 20,000 right. That’s absurd. And it’s even more absurd that they don’t know it’s absurd. Do they get 1 out of 20,000 wrong? 10? 100? 1,000? Is there any evidence that one firm is better than another, or better than a legal process outsourcer?
As New Normal ideas pop up in law, whether it’s third-party investment in law firms or less-expensive law schools, we have a tendency to just argue that any change is either “impossible” or “risky”. These kinds of arguments come across to nonlawyers as simply inertia and self-interest wrapped up in a principle and some fear. The skeptics may not be wrong, but they have failed to prove their fears.
By contrast, I had the opportunity to give the keynote two weeks ago the to the Canadian Corporate Counsel Association as part of a broader Canadian Bar Association meeting that kicked off a CBA initiative on the future of law. “If we don’t invent the future, others will,” CBA 1st Vice-President, and Air Canada in-house counsel Fred Headon said in closing.
How does Fred know? I guess we’ll find out.
Paul Lippe is the CEO of the Legal OnRamp, a Silicon Valley-based initiative founded in cooperation with Cisco Systems to improve legal quality and efficiency through collaboration, automation and process re-engineering.