The New Normal

‘Knee-Jerk Reaction’ to Prof’s New Co. Underscores Fear of Change in Legal Marketplace

Posted Dec 6, 2010 7:05 PM CST
By Patrick J. Lamb

Patrick Lamb

Editor’s note: The New Normal is an ongoing discussion between Paul Lippe, the CEO of Legal OnRamp, and Patrick Lamb, founding member of Valorem Law Group. Paul and Pat spend a lot of time thinking, writing and speaking about the changes occurring in the delivery of legal services. We hope you will join their discussions.

During the bowels of the Depression, Franklin Roosevelt, in his first inaugural, said of the Depression, “the only thing we have to fear is fear itself.” In BigLaw world, Roosevelt’s statement appears to have given way to a far broader fear, at least if Steven Harper’s blog post “Lies, Damn Lies, and Statistics” is any reflection. Harper is a former partner at Kirkland & Ellis, and his aptly-named Belly of the Beast blog generally reflects BigLaw thinking on various topics.

Harper’s “Damned Lies” post takes aim at Lawyer Metrics, a company formed by Bill Henderson and others, that offers law firms “a competitive advantage through the use of proven, evidence-based methods for identifying, selecting and developing world-class lawyers.” Harper’s thesis is that the internal political forces at work in large law firms won’t be revealed in that accumulation and analysis of data, and so Lawyer Metrics’ accumulation and analysis of data will be misleading. Harper concludes by suggesting that the most important things that happened to him in life were fortuitous and therefore not subject to prediction based on statistical analysis.

I wondered as I read Harper’s piece whether he had ever played blackjack. There are all sorts of “rules” that have developed over time about when to hold and when to take a card. Are they 100 percent? Of course not—nothing ever is. But understanding the statistics of the game and what the rules are certainly helps people make more informed decisions.

BigLaw suffers from (or at least it used to, before jobs became so scarce) 20 percent turnover per year. The ACC Value Challenge is based in part on the fact that the cost of this turnover (paid for by clients) was materially damaging law firms and their clients. The problem was both systemic—the model for most firms was based on the pyramid structure, which necessitates turnover—and a result of bad hiring practices.

For some firms, there has been some adjustment to the model, and others are at least thinking about it. If the days of up-or-out are not over, they are at least decreasing. More firms are now willing to consider permanent “middle management.” Gee, it almost sounds like they are operating the firms more like real businesses. In that same line of thinking, what do real businesses do when hiring professional staff? Oh yeah, they use metrics.

Harper’s knee-jerk reaction against moving the profession into line with the business world reflects a persistent “law firms are different” mentality which is, as Harper’s former managing partner Fred Bartlit has said, “reminiscent of what the owners of the best buggy whip makers were saying when General Motors was first founded.”

Aric Press’ point in the article Harper referenced was not to be critical of Lawyer Metrics’ work—he seemed completely agnostic on that point—but instead was to reflect the inevitability of accelerating change. Press continued (after Harper left off): “You can resist or adapt, and I am wagering on the wisdom of the latter course.”

Of course, the need to adapt doesn’t exist for people who have essentially retired from practice.

I also thought Harper’s comment that Bill Henderson had bypassed BigLaw in favor of academia was a cheap criticism. Professor Henderson has earned a well-deserved reputation for his informed views on the business of law, and his decision not to follow the same path Steve Harper did is beside any point Harper was making. But it also ignores the important role Henderson’s colleagues in Lawyer Metrics play. I’ve met two of the principals, Anthony Kearns and Caren Ulrich Stacy—both of whom have BigLaw experience, I might add—and the combined intellect and wisdom of the group should inspire people to take an open-minded look at their efforts.

What to make of all of this? Perhaps nothing more than the fact that there will be knee-jerk opposition to change. But this also serves as a reminder of Paul Lippe’s reminder that while lawyers view change in the constitutional model (today we vote and adopt change, just like the Constitutional Convention), it is in today’s world, nothing more than a series of decisions by individuals to adapt or change prior behaviors.

When enough make a different decision, the changing circumstances become visible, but then the die is cast. There may be those like Steven Harper who prefer not to welcome the world of testing and metrics to lawyer hiring and development, and if they dominate the market, companies like Lawyer Metrics will fail. But if there are firms that decide they need to change and become more their clients operationally, companies like Lawyer Metrics will succeed.

The marketplace of ideas—what a concept!

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.

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