Monday, July 10, 2006

Managing Lawyers is Like Herding Cats - Here's Why You Care!

David Maister, a well-known author of books for the professional services industry, wrote in his book on managing a professional services firm that "managing lawyers is like herding cats." He was describing how attorneys are often difficult to deal with, impossible to manage, and are terrible at working together for a common goal. We recently interviewed the former Executive Director of two large firms in Boston who told stories about attorneys whom all had their own forms, processes, and quirky ways of utilizing their support staffs. From an executive's perspective, he expressed great frustration with the inability to manage the efficiency of the organization when all of the attorneys were doing things "their way." This leads me to the obvious question from a customer's perspective, which is "Why do I care?" Well, in a normal business you wouldn't care because once you pay the price you are done! Your law firm, on the other hand, charges you for their time (unless you are our customer), which means you are paying for every bit of inefficiency in the system. Do you think they have an incentive to be efficient? Think for yourself: If they have processes that allow them to do your legal work better and faster what happens to their revenues? (yes, they go down because they bill less time). What about profits? Well, they make a fixed margin on every hour that they bill, so of course they make less money when they are efficient. You can probably also understand that lawyers don't like to be told what to do even if it is in the customer's best interest, right? Now imagine a meeting of the partners of a large firm with the Operations Director that goes something like this:

PARTNERS: Mr. Ops, what do you think we can do to make our customers less frustrated with our bills and service?

OPS Director: Well, if you adopt efficient processes as a partnership and all behave consistently to provide a positive customer experience then I'm sure we can make great things happen at this firm

PARTNERS: Wow, that sounds great. What do we need to do?

OPS Director: Well, each of you are doing things "your way" and you need to start utilizing resources consistently so we can make sure you are not overcharging the customers by billing them for your quirky work habits.

PARTNERS: Why would we do that? Customers don't know the difference anyways and they still pay the bills, and plus: How much more money can we make if we were 20% more efficient anyways?

OPS Director: I hate to say this, but if you all worked 20% more efficiently you would bill 20% less time, reducing your profits per partner by $200,000 per year. You will have to lay off 30 associates and 25 support staff leaving one floor of the building empty with no revenue generating associates to help pay the rent in this place, which will probably cost each partner another $50,000 per year Your customers will be ecstatic though, and will appreciate your integrity and be loyal to you for at least another couple of years.


Since Exemplar was built from the ground up with our customers in mind, we don't have to correct 100 years of operational inefficiency because of attorneys who insist on doing things "their way" at your expense. With a fixed price, we do not make our customers the victims of inefficiency. Our incentive is to provide a great product in an efficient manner.
So the next time you get a bill (and the simultaneous heart attack) from a law firm that is billing you by the hour you might just be hearing the echo of the Partners singing Sinatra's tune "I did it my way!" while toasting with a glass of Dom Perignon in the ivory tower of autonomy.

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