Posted Apr 24, 2012 1:30 PM CDT
By Paul Lippe
When we first started this series, there were many lawyers who thought the New Normal was overdue, others who thought it had already happened, and perhaps still a majority who thought law was just in a short-term blip and that we would “return to (the Old) Normal.”
Now, several years in, I think there is widespread agreement that things are changing in law, and even general agreement on the contours of that change. One way to understand what’s happening in the legal market is to look outside law at other industries. One of our pharmaceutical industry customers just sent me a great article from Harvard Business Review on health care reform by HBS professors Robert Kaplan and Michael Porter. Let me share some key quotes:
“The proper goal for any health care delivery system is to improve the value delivered to patients. Value in health care is measured in terms of the patient outcomes achieved per dollar expended.”
“Since providers misunderstand their costs, they are unable to link cost to process improvements or outcomes, preventing them from making systemic and sustainable cost reductions. Instead, providers (and payors) turn to simplistic actions …”
“Poor measurement of cost and outcomes also means that effective and efficient providers go unrewarded, while inefficient ones have little incentive to improve.”
Just substitute the legal industry for the medical industry in any of these quotes, and we have a good discussion of the background for the New Normal. (I’ll discuss in my next piece why it feels funny for lawyers to speak in such value- and customer-oriented terms as Kaplan does.)
The other reference I really like is a recent IBM Survey of CEOs (PDF), in which the CEOs said their biggest challenge was the growth of complexity in a global environment. So a task for lawyers is actually to help make things simpler.
Here’s my summary of the New Normal. Of course, in the real world, lines are not so bright, and most things in the “New Normal” are not especially new. But I think this is still useful, and any firm or legal department might want to use it as a checklist.
|Old Normal||New Normal|
|Information location||File cabinet.||“Cloud.”|
|Most important tool||“My” brain + pen.||Connected brains + Web-based collaboration.|
|First instinct||Make things more complex.||Make things more simple.|
|Center of gravity||Law firm library.||General counsel’s office.|
|How often is law relevant to clients?||Occasionally.||Systematically.|
|Geography||National.||Global and online.|
|Orientation||Every matter is unique—to think otherwise is to devalue, “commoditize” the profession.||Every matter is similar to other matters—start with similarity, and refine with unique elements— “reinventing the wheel” leads to mistakes, excess costs and clients avoiding lawyers.|
|Approach to negotiation, conflict||Win-lose.||Win-win.|
|Cost||Expensive.||Reasonable, consistent with other services.|
|Effort||Maximum—any less is unethical.||Appropriate—focus on outcomes, not inputs.|
|Most common metric||Hours.||Outcomes assessment.|
|Organizational norm||Hierarchy.||Distributed authority based on accountability.|
|Most common phrase||“Avoid risk.”||“Achieve opportunity.”|
|Most common billing method||Billable hours.||Billable hours—but with more performance kickers.|
|No. 1 source of law firm profits||E-discovery work in jumbly investigations.||Success-based bonuses.|
|Meeting place||Law firm conference room.||Cyberspace.|
|Law firm strategic objective||Maximize this year’s profit per partner.||Maximize cash flow in 3-5 years.|
|Key young lawyer skill||Legal research.||Project management.|
|Where work goes if it doesn’t go to law firm||Legal department headed by former firm partner.||Legal department headed by executive who worked in firm only briefly, and legal process outsourcer.|
|Iconic figures|| Christopher Langdell, Nick Katzenbach and Thomas Barr||Richard Susskind, Mark Chandler and Fred Bartlit|
|Second most highly paid person in legal department||Head of litigation.||Head of legal operations.|
|“Unit of production”||Individual expert.||Team.|
|Rare and high compliment||“Ethical.”||“Operationally excellent.”|
One thing that would probably be helpful to all of us would be to come up with a name we consistently use for the change. Obviously, we like “New Normal Law”, but it could also be “Law 2.0,” “Aligned Law,” “Utility Law,” Collaborative Law,” “Silicon Valley Law,” “Post-Dewey Law,” “Systems Law” or perhaps something better. All of these terms are problematic in some way, but the basic trend is clear, and the shape is widely agreed upon.
As discussed in the previous column “Dewey or Don’t We: Abnormal or New Normal?” Dewey’s troubles arise not from some random mistakes, but from building a firm entirely on Old Normal principles in a New Normal world. Adapting is the sensible thing to do.
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.