Archive for Change Management
Lawyer Productivity: Why Are Software Programmers Way More Productive than Attorneys?
Posted by: | Comments
I had a fascinating conversation with my web site developer last year. He mentioned that, on average, one programmer could do the same amount of work today as six programmers could do in the late 1990s. That’s a massive productivity improvement: 600%! Some people even recommend that, when building an online company, you should focus on mostly hiring programmers, because this continuing productivity improvement means each person you hire will give you an ever continuing productivity increase during their tenure with you.
I asked my developer why this is possible, and he responded that the constant breakthroughs in computer science, new programming languages, the availability of open source software, and constant communication within the field on novel ways to solve challenges, all combine together to improve the ability of programmers to do more work in a timely manner.
This discussion triggered a Passover memory from about eight years ago. I attended a friend’s Seder and sat next to an elderly gentlemen in his eighties who promptly engaged me in a conversation about the legal world. He practiced law for over fifty years, and regaled me with stories of legal life back in the 1950s. Apparently, a talented, experienced secretary was invaluable, as they did most of the contract drafting. Additionally, he told me transactional attorneys faced a limit on the length of contracts and the number of revisions, as massive editing simply took too long via a typewriter too satisfy the business needs of a client. He said that these constrictions actually are quite positive, as they forced attorneys to hone in on the key expectational concerns of their clients in a deal, and there was little incentive to add a great deal of belt and suspenders language or to argue endlessly over limitation of liability/indemnity provisions (which, let’s face it, are usually of little concern to clients and are often unnecessary in their most extreme, aggressive forms which trigger tiring, lengthy negotiations).
Contrast that context with today’s situation, where we routinely go ten or twenty versions deep into contract drafts, prepare voluminous documents that our clients rarely read, and argue strenuously over provisions that provide little risk protection. Despite all the tremendous tools at our hands over the years, such as overnight mail, faxes, email, word processing, and cloud computing, I have the strong feeling that we are less, not more, productive today. The quality of our work is constantly driven downwards by the weak link in any negotiating chain. For instance, in negotiating an original equipment manufacturer supply agreement, there might be an attorney on each side, a customer procurement manager, a customer operations manager, a salesperson, a finance expert on each side, and an information technology expert on each side. Any one of these people, and each individual’s boss, can grind negotiations to a halt with unreasonable negotiating positions, poorly drafted language, massive spelling and formatting errors, document corruption, loss of version control, and unclear email communications. That’s eighteen possible weak links in the chain! And, one might argue, that the two attorneys are sometimes the two weakest links.
This weak link issue doesn’t really exist as much in the programming context, as the programmer is engaged directly with the client on building an outstanding product, not constantly compromising the quality of that product due to an adversary on the other side who has little incentive to achieve high quality (e.g., a crystal clear contract with little ambiguity that sets up the parties in a satisfying, mutually beneficial business relationship) and instead desires to seek one sided concessions (e.g., a contract that insulates one party from any liability while leaving the other party wide open). Having handled many software development contracts myself, when I have seen programming efforts fail, the common cause is too many people involved in the project who demand short term, one sided efforts that result in overly complex code which is unable to function properly or be completed on time. Essentially, programming projects founder on the shoals of an overly legalistic, adverse project management style.
Ultimately, I don’t believe lawyers will ever change and improve their productivity without a sea change in the financial incentives that drive unproductive behavior. I always engage my developer on a per project flat fee basis with a hard deadline. We work together up front to design and lock down a specification before we agree on the fee and the deadline. As a result, his financial incentive is to do great work (so I give him future projects) with tremendous productivity (so he hits the deadline and makes a good return on investment for his time). We’ll need financial incentives in the legal world that drive a similarly positive state of affairs before we will see a massive increase in legal productivity.
Law Practice Should Be Tribal
Posted by: | Comments
Debra Baker raises a provocative point over at Law Transitions. She notes:
“Organizations shouldn’t work in teams, they should work in tribes. In a tribe, there is a chief and a circle of senior elders . . . The chief’s job is to help make the elders successful in doing their jobs. In this way, the chief will be more successful than a captain trying to lead a group of functional equivalents. This paradigm shift from team to tribe got me thinking about law firms. Partnerships often struggle with organizational dynamics and decision making because of the flat hierarchical structure.”
This is a terrific point. I’ve always thought the flat hierarchy of the legal world is a major challenge to increasing productivity. This is especially the case in thinking about cycle time in transactional law. Clients would love to see deals close quickly, but lawyers spend enormous amounts of time negotiating contracts. Much of this is due to a slow contracting process that has numerous end points, with each individual lawyer on each side’s attorney team capable of grinding negotiations to a halt. A tribe, with a chief who has authority and accountability to constantly move forward within the contracting process, would be a much more effective model for driving a negotiation to conclusion and quickly concluding a high quality agreement. And this is just as true in the corporate legal environment as it is in the law firm arena.
Master Contracts & Maximize Profits – Contact Us Now
requests(at)whichdraft(dot)com (973) 457-1186
Does Law School Prepare You to Practice? Part 2
Posted by: | Comments
Jordan Furlong of Law21 has kicked off an intriguing discussion in the LinkedIn Legal Innovation Group about my recent post: Does Law School Prepare You to Practice? Thanks, Jordan, for using the post as a jumping off point for this discussion.
Denis Campbell joins in the discussion and, I think, quite effectively represents the anti-practice teaching argument:
“This opens an important debate about the purpose of schooling. An MBA does not prepare one to lead a corporation. An MS in Accounting does not a skilled auditor or tax advisor make. An MA does not prepare a writer to win a Pulitzer Prize. What higher education is supposed to do is teach one how to think and rationalise one’s way through problems.”
Matthew Homann responds:
“In my view, the only people who don’t realize law schools are trade schools are the Professors and Deans. Law schools don’t teach students to do 1/10th of the kind of things people expect every lawyer to be able to do. . . . I think law schools can do a decent job of preparing students for litigation — which would be great if any actually got to try cases.”
Personally, I wouldn’t have any objection to Denis Campbell’s point above if students were given a choice as to which educational model they preferred. Sadly, the ABA only accredits law schools that follow the model of teaching one to “think like a lawyer,” while wholly rejecting other schools, such as online educators, that offer a different approach (for examples, see here, here and here).
In the United States, if the ABA and state bar associations did not create an artificially biased marketplace in favor of one educational model over all others by only accrediting “think like a lawyer” law schools, and the Denis Campbell Law School, for instance, could openly compete with the Matthew Homann School of Law, then it would be up to advocates of the “think like a lawyer” approach to prove that students want that method of teaching . . . or they would go under. Right now, students are forced by the ABA accreditation process and the state bar associations to only attend law schools that, for the most part, do not apply the “think like a lawyer” approach to transactional work. If accreditation weren’t so difficult (e.g., requiring millions to be spent on a paper based library when most lawyers do 99% of their research electronically), you would see a wide variety of law schools popping up, and, out of that competition, I think you would find schools that marry theoretical teaching with the practice arena to be the most prestigious and popular.
Additionally, I would invite you to consider that it may not be the most on point comparison to argue that because an MBA does not prepare you immediately to be the chief executive officer of a large corporation, law schools should not teach practice skills. Instead, it might be better to ask: does an MBA immediately allow you to run a departmental team within a corporation? And, after studying finance, accounting, marketing, sales, and human resources in detail, I believe the answer is “yes.” An accounting degree may not make you a skilled auditor, but it will allow you to effectively evaluate income statements, complete tax returns, and understand and maintain the finances of a company to work effectively in a junior position right away. Also, MFA programs in writing do little else but teach students to write. Many talented students have graduated from the famous University of Iowa writing program with a completed novel and a publishing deal.
Law students are not asking for law schools to prepare them to sit first chair in an antitrust trial upon graduation, or ready to draft and negotiate a one hundred million dollar outsourcing transaction. They would, however, like to be able to draft a straightforward confidentiality agreement, handle simple goods or services deals, and understand basic negotiation techniques. Better yet, all of these practice skills can be easily taught along with cutting edge legal scholarship focusing on theory. As noted in the previous post here:
“What I find most interesting about this yawning divide between academia and practice, is that, for the life of me, I can’t understand why this needs to be the case. If you are a professor focused on the empirical legal studies movement, why can’t you teach actual practice skills in the context of your research? If you write about discourse analysis, why can’t you analyze a contract negotiation? If you are an economics and the law scholar, why can’t you instruct students on the economic administration of law firms and explore the nature of perverse incentives?”
I’m surprised to find the issue so controversial. Perhaps there is tremendous concern about change, particularly so for law professors with little to no practice experience. I remember my torts class, the very first class I had in law school. Our professor had a law degree and doctoral degree in philosophy, and was quite fascinating to talk to about postmodernism and legal philosophy. I felt quite enriched to have a professor injecting these kinds of theories into tort law, and in no way would want to excise that theoretical approach. At the same time, my fellow students were continually frustrated that he could not explain how a case could be initiated and would play out. Upon hearing these concerns, the professor reacted with equal frustration, stating that such questions were not particularly important in his mind.
There has to be a better approach, a third way, and the marriage of theory and practice offers that path. Ultimately, it need not be a zero sum game: we can have both.
What do you think?
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
What Michael Jackson’s Billie Jean Says About Software Spending: The Chair Is Not My Son
Posted by: | Comments
I’ve always thought that Michael Jackson, belting out the chorus of Billie Jean, sounds like he’s saying, “The chair is not my son.” Of course, he’s actually saying, “The kid is not my son.” The same kind of confusion – misinterpreting words – applies in most big organizations, particularly when it comes to runaway IT spending, and is driven by different internal political agendas that lead to a waste of money.
I’m a big proponent of using out of the box thinking to reduce IT budgets, which are an incredible boondoggle at most sizable companies, including law firms. In fact, Greg Lambert from 3 Geeks and a Law Blog has an intriguing post up on encouraging open source software use in law firms right now. But pursuing budget saving alternatives is not as easy as it may seem.
There’s a fundamental internal political obstacle to surmount in encouraging companies (including law firms) to use open source software and other lower cost opportunities. I remember attending a worldwide meeting once for an organization that employed me, and after a presentation by our senior technology expert, he asked for questions. I asked whether we could radically reduce our IT budget by going to lower powered computers exploiting browser based software and open source applications. He brushed off the question. A number of our IT experts came up to me afterward and explained that, while they would love to pursue this approach, the IT department’s power base depends on the size of its budget, so IT leaders will oppose an approach that reduces the budget and thereby reduces this power. Since then, I’ve paid a close eye to the organizational dynamics that can create perverse incentives which prevent efficiency gains.
What I failed to understand when I asked the question, is that when I said, “Let’s reduce the budget and save the company money,” the IT executive heard me say, “Let’s reduce your power base, stall your career, and let non-IT experts waste your resources.” For that reason, he wasn’t interested in a good opportunity.
Instead, he was too focused on telling everyone that the chair was not my son.
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
How Procurement Can Engage Legal Expense
Posted by: | Comments
Justin Fogarty has an intriguing post up at Supply Excellence entitled, “Category vs Procurement Experience: Which matters more?“
I think that using procurement managers without any prior experience in legal services is one of the biggest obstacles to procurement penetrating legal spend. In my experience, procurement departments routinely make the mistake of using a strategic sourcing manager without a strong understanding of the legal field. Legal services are a unique animal, and there are a number of vital issues to keep in mind:
(1) Nature of the Law Firm Beast. You must dispense with the normal approach of treating a law firm as one company, as a law firm is not much more than a group of diverse people, each with a book of business, and the lawyers and staff that support each book. As a result, law firm wide statistics and quality management are often unhelpful and do not drive across the board quality improvement and spend reductions.
(2) No Year Over Year Savings. You cannot set a target of year over year reductions in legal spend. The law department often has no idea, for any given year, what may materialize. A sudden class action lawsuit could be filed, a major construction vendor may walk off the job, or a sexual harassment lawsuit could result. Insisting that the law department spend less money than the previous year without taking this into account alienates the lawyers who are already reticent to support any kind of spend management. The better approach is to compare apples to apples, and try to get year over year reductions in purchasing the same kind of legal service that was previously acquired, as well as looking into whether a particular legal service is needed in the first place.
(3) Legal Background. I’m not saying that the strategic sourcing manager needs a law degree and practice experience at a top Manhattan law firm by any means, but it’s a good idea to get someone who was at least a contract manager or assisted with litigation management in the past, so they can have the ability to properly interface with the naturally resistant legal department and make the most effective decisions to drive cost savings. In particular, I think paralegals would excel as legal category managers.
You can see our free legal documents and free legal forms for procurement agreements here.
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
How to Implement Negotiation Planning
Posted by: | CommentsTiffany Kemp from Devant, Ltd. and I held an IACCM teleconference on May 19, 2009 about change management problems when implementing negotiation planning. Tiffany’s writeup is here. You can hear the entire call here.
We concluded that there are at least 4 key issues faced when trying to implement a global negotiation planning process in an organization:
(1) Gradient: People tend to fall along a gradient, with 1 pole reflecting the idea that everything is new (the “fly by the seat of your pants” approach), vs. the other pole where people tend to think that there is hardly anything new under the sun (the “knowledge management” approach). Most people are closer to the “everything is new” pole. This makes implementing a defined process and ensuring compliance quite challenging.
(2) Sales: A very good idea to get people to embrace a negotiating process is to make a business case as to how it would improve sales.
(3) Meme: Another good idea to advance implementation would be to come up with a unique cultural artifact that people can gravitate towards.
(4) Short Term vs. Long Term Efficiency: People naturally put off to tomorrow what they don’t want to focus on today, even if putting things off means more work in the long run. A major challenge in implementing a negotiation process is overcoming the omnipresent tendency to overvalue this short term efficiency (commonly stated as, “I don’t have time to plan.“).
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
What Swine Flu Hysteria Tells Us About Cognitive Contracting Errors
Posted by: | Comments
The tremendous fear and publicity right now about swine flu is out of proportion with the actual number of deaths (however sad these individual cases may be). Apparently, during the 1990s approximately 36,000 people died each year due to the flu in the United States. So the current number of deaths, which is in the low hundreds, pales in comparison. All of this hullabaloo makes me think about the nature of human cognition, and how it can lead us to not focus on the most important issues at hand (there is a great post on these issues here). To take a different approach in contracting, review our Q&A wizard and easy to understand legal explanations in our comprehensive sales agreement, comprehensive purchase agreement, and our other key contracts. In particular, we employ cognitive fallacies like “Contrast,” which makes us perceive an event as being more important or less important, not based on its merits, but based on contrasting the event with what we see occurring around it. Viewing reports about the horrific 1918 worldwide flu pandemic, for instance, triggers this Contrast problem.
Another problem is “Self Confirmation,” where we ignore data that does not support our fear, and only embrace data that does back our contentions. A good example would be the failure to think about the greater number of people who die from normal flu outbreaks instead of the swine flu.
Finally, we often engage in “Confirmity,” meaning that we go along with what everyone else is concerned about, following along with the mass hysteria as part of the chain reaction. Listening to nonstop reports about swine flu is certainly causing this confirmity error.
All 3 of these cognitive errors happen all the time when we contract. Let’s consider a few examples:
Contrast: We might not care about focusing on the riskiest contract terms, like the goods/services description, and instead focus on less risky terms, like limitation of liability, because in all of your past deals you focused on less risky terms each time.
Self Confirmation: In this vein, we might only think about what kinds of damages the other side might sue us for, so we again only hone in on limiting our liability, even though a dispute is much more likely to occur over whether or not the goods and services met expectations (which can be prevented through an excellent goods/services description in the contract).
Confirmity: Moreover, we might be focusing on the contract’s limitation of liability clause because we were trained to do so. We are simply following along with how more senior negotiators handle agreements, and, matching their approach, we fail to focus on other issues of greater importance.
Try looking for Contrast, Self Confirmation and Confirmity in your daily life.
Do you see it happening?
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
Alternative Rocking Lawyers: They Might Be Giants
Posted by: | CommentsOne of my fondest memories from Washington University (in St. Louis!) was jumping up and down in a throng of thousands of students while we belted out “Istanbul Not Constantinople” during an outdoor concert by the alternative rock band “They Might Be Giants” (I was sad to recently learn that they didn’t write this great song, but only covered it; it was written by Nat Simon and originally performed by The Four Lads). Here’s a telling lyric for lawyers:
“Why did Constantinople get the works? That’s nobody’s business but the Turks.”
Alternative rock bands like They Might Be Giants originally emerged because they didn’t fit into any of the genres established by the recording industry/radio axis of musical power, even though listeners yearned for something different. Alternative music also flowed from punk rock, which itself emerged out of a negative reaction to the dominance of disco and other overly sentimental musical styles. The music business, like any other, is subject to market forces. And if an entire industry is not catering to its customers’ desires, then a new, young Turk player will emerge to do so, subverting and reinventing the old Constantinoplesque industry along the way.
Triggered by this NY Times article, people in the legal world are currently wondering if law firms will end the billable hour model and move to flat fees and other alternative approaches (click here for a list of articles on this topic). Many partners at major law firms are extremely fearful that they are looking at significantly less profits if they switch to alternative fees. I actually think that partners do not have to accept a drop-off. They do, though, need to fundamentally restructure the way they do business to make the same or more money than they have with the traditional approach. And they are tremendously resistant to do so.
I used to be an in-house lawyer at a Fortune 500 company. On one occasion I had a real estate law firm pitch me. The partner asked, “What can we do to get your business?” I said, “I think a lot of the word processing and the back and forth on contract versions is a big waste of time. I’d love to see a firm that uses contract creation automation software, and has all of its typical contracts and likely negotiation positions loaded into the software for automatic drafting, using a regularly updated knowledge management system. I’d also love it if you had an extranet to store all contract versions so we can skip the old email trap of zapping countless drafts back and forth that leads to version control nightmares. And I’d like you to bill me a flat fee determined up front for each matter.”
He blinked hard, swallowed, and said, “What else can we do?”
His question revealed the tremendous resistance to change in the legal world, where firms are stubbornly committed to a business model that does not meet their clients’ desires for better efficiency and predictable charges. The irony is that if a firm emerges that would actually embrace an alternative approach, it would have a huge competitive advantage in the marketplace and, in the long run, would make more money by growing its business. At some point a full service law firm or outsourcing legal services company will step up and seize this competitive advantage (we’re already seeing up front flat fee alternatives from partners like Jay Shepherd of The Shepherd Law Group, a highly regarded Boston employment law firm).
The biggest problem this new player would face is that all of the most desirable clients, major American corporations, have internal legal departments that choose which firm to hire, and all of these departments are populated by lawyers who used to work for law firms following the traditional model. They’ve all been conditioned to believe that billable hours, unpredictable budgets, and lack of efficiency are par for the course, so they won’t be interested in hiring this new player. Who will then?
Procurement. Right now, almost everything a major company buys, from cardboard boxes to management consulting services, is handled by a strategic sourcing manager who limits the number of vendors and uses that leverage to negotiate improved quality and lower cost. These procurement managers are chomping at the bit to control legal services, but, so far, most law departments have fended them off by making the law seem too mystical to tame. These managers would be the new player’s target market. If the law department tries to fend off their desire to hire, then the company will have a showdown. The arbiter will be the Chief Financial Officer, who, as long as she complies with the law, is almost always more powerful than anyone in the legal department.
And Chief Financial Officers love savings. And Istanbul. Not Constantinople.
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
Breakthroughs, Contracts & Ubuntu: The Forces of Tradition vs. The Forces of Modernity
Posted by: | Comments 
The New York Times Technology Section has an article entitled “Mark Shuttleworth’s Five Lessons on Organizational Change.” For those of you who have never heard of Mr. Shuttlesworth, he’s the man behind Ubuntu, which is one of the most popular Linux operating systems in the world. As open source software such as Linux becomes more and more popular, applications like Ubuntu can overturn the traditional way of doing things. Ubuntu, for instance, has several huge advantages over Windows. For one thing, it’s free. It also can be altered to your heart’s content (assuming you have the programming chops to do so). As such, Ubuntu is becoming increasingly popular around the world, making inroads in both the for profit and not for profit worlds.
Why would contract people care? Well, given the uproar Ubuntu has caused in the IT world, one would think Mr. Shuttlesworth might have a pearl of wisdom for us about implementing change (a huge issue for people pushing for clearer language in the confusing contract world):
“To persuade people to make changes, you have to offer them compelling and dramatic improvements. If you are asking people to change the way they work, it isn’t enough for a product to be slightly cheaper or slightly faster or slightly newer. One needs to deliver a 50 percent saving in cost and improved reliability (or efficiency or functionality) to create space for one’s product in a crowded marketplace. You have to be 50 percent, 100 percent better. Not just ten percent.”
Basically, the argument breaks down to the idea that people just will understand that something dramatically better is worth obtaining, so if you offer a breakthrough product, then you can make a difference.
I wish I could say I shared such a similarly rosy view of the world. Unfortunately, I think Shuttlesworth’s faith in breakthroughs misses the incredible power of path dependence. Douglas North, from my alma mater, Washington University, won a Nobel Prize in economics for explaining how people will make highly inefficient decisions if they support a particular way of doing things (or path) that they are particularly attached to. This is not because the transaction costs are so high that people can’t afford to switch. It’s simply because people are uncomfortable with change. At my previous job, I created a new method for negotiating contracts that reduced the time to conclude a deal by more than 60% (on average), but none of the other lawyers wanted to adopt this method, mostly because they would have to change the way they do things.
Ken Adams, perhaps the best expert on contact drafting in the United States, touched on this very idea recently, referring to “The Forces of Tradition.” Adams discusses the frustrations of lawyers who try to provide clear, concise contract language and run into lawyers who absolutely refuse to accept this, instead insisting on the complex, mind numbing legalese that makes our work impenetrable. As Adams says, “it’s chaotic, and it feeds off confusion, expediency, inexperience, and timidity.”
Adams reminds me of the time I was working at a major law firm and all the associates were required to take an all-day seminar with a contract drafting expert (who charged the firm a hefty fee, I’m sure). At the end of the day, I revised a contract I was working on to match the expert’s suggestions. When I received my draft back from the partner on the deal, I noticed that he crossed out every change I made and replaced my concise provisions with lengthy, confusing language! While Adams thinks The Forces of Modernity will eventually win, I am not so sure. Regardless, it will take a very long time.
I do think, though, that there are pockets of opportunity for smaller firms and solos to push forward better contract language. And, of course, here at WhichDraft.com, we hope to play a useful role in this regard.
If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.
