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- If Legal Services Value Stats Were Created, Standardized, Law Clients Could Play ‘Moneyball’
The New Normal
If Legal Services Value Stats Were Created, Standardized, Law Clients Could Play ‘Moneyball’
Posted Sep 29, 2011 10:30 AM CDT
By Patrick J. Lamb
Paul Lippe’s discussion of the new Brad Pitt movie, Moneyball, and how that movie sheds light on value followed a discussion on statistics I listened to on ESPN’s Mike & Mike in the Morning radio show. Of course, sports and statistics have always had a close relationship, what with ERAs, RBIs, saves, batting average and so forth. But statistics are going to a whole new level. The discussion I found so intriguing was about the Minnesota Vikings, now 0-3, being the first NFL team blow double-digit halftime leads in their first two games. It got worse for the Vikings since they had a 20-point halftime lead against the Lions only to lose the game. Interesting stuff, but what was more interesting was the insight the statistics provided into the failure of the Vikings to anticipate and respond to their opponents’ halftime adjustments, suggesting a coaching issue.
One more statistics item. Harvard University recently held a “delightfully geeky” conference called the New England Symposium on Statistics and Sports. In the SI.com blog The Point Forward Zach Lowe noted that representatives from the Oklahoma City Thunder, Dallas Mavericks, Boston Celtics and Houston Rockets were in attendance, since “those clubs have long been ahead of the curve in using advanced statistics to inform decisions across their organizations.” Lowe went on to note that he was surprised to see a representative of the Detroit Pistons’ new ownership team in attendance, noting that the person attending was Robert Wentworth, a leader at Platinum Equity, a private equity firm that is an investor in the team’s new ownership structure. I found these two comments by Wentworth to be very interesting:
"We’re a private equity firm. This is our first move into professional sports, both for the firm and for Tom Gores, and we approach this like any other investment that we make. We will really try to understand best practices and be forward-thinking as opposed to reactionary. Getting heavily into statistical analysis seems quite natural to us."
"The advanced stats just ought to be a part of your tool kit. It’s equally important to have really solid basketball people, and Joe Dumars has obviously been in this league for 25-plus years now. He has tremendous basketball intellect. But we’re just trying to make sure we use every tool in that took box, even if it means you just do a better job at finding that 8th, 9th or 10th guy."
It is clear that statistics in sports have moved from the province of the geeks to the front office—business offices as well. This made me wonder why there isn’t an Elias Sports Bureau for lawyers; why there aren’t stat geeks everywhere the way there are in sports.
It turns out that, to some extent, there are stat geeks, though there are somewhat disguised. FMC Technologies general counsel Jeff Carr keeps track of lots of statistics in his Alliance Counsel Engagement System—a values-based engagement method for outside legal services—including spend, spend versus budget, cycle time, performance relative to decision tree analysis and similar numbers. Other clients have statistics they care about as well. But interestingly, no common set of statistics has been developed, and this prevents firms from tracking these common stats and sharing them with clients and prospective clients. Actually, “prevents” is far too strong a word. It provides an excuse for firms to not track these stats.
Paul mentioned the Oct. 29 College of Law Practice Management Futures Conference (PDF) at which he and other luminaries are presenting. Perhaps one thing to include in the discussion is the development and standardization of value statistics. If some significant percentage of clients were to embrace these statistics, it would put pressure on firms to maintain those numbers. The COLPM session could become the first annual
New England Chicago Symposium on Statistics and Law.
In sports, statistical analysis is a means to an end: securing the best win-loss record and winning championships. In law, the challenge is whether statistics can be a useful means of determining value, which is, like beauty, frequently in the eye of the beholder. But the efforts to at least circle around some common understandings of value are nothing but positive developments, and defining the kinds of analyses and statistics that are pertinent to hiring and retention of lawyers will assist law firms and clients in focusing on the same indices of value.
Patrick Lamb is a founding member of Valorem Law Group, a litigation firm representing business interests. Valorem helps clients solve their business disputes and coping with pressures to reduce legal spend using nontraditional approaches, including use of nonhourly fee structures, coordination with LPOs or contract lawyers, joint-venturing with other firms and implementation of project management tools to handle lawsuits or portfolios of litigation.
Pat is the author of the the recently published book Alternative Fee Arrangements: Value Fees and the Changing Legal Market. He also blogs at In Search Of Perfect Client Service.