As a follow-up on my earlier post about new and innovative law firm models coming out of the UK, this past week I was able to catch up with Alex Hamilton, formerly of Latham & Watkins, now a founder and principal at Radiant.law.
Alex and a handful of colleagues from several leading law firms and in-house legal teams have banded together to launch a boutique called radiant.law that specialises in outsourcing, technology and commercial work.
The endeavor has created a reasonably large splash in the London legal scene due to the unique nature of the firm which is predicated on fixed pricing, senior-level staffing, and the expansive use of an offshore legal process outsourcing vendor to deliver much of the necessary legal support services.
Alex offered some behind-the-scenes insight into radiant.law as well as some interesting projections for the rapidly changing legal market in London. As far as Radiant’s view for its role in the market, Alex explained, “We’re not interested in changing the legal market, but believe the legal market will become more diverse. Clients simply need more choice for how they purchase their legal services. Throughout our work at our respective firms before coming to Radiant we always thought there had to be smarter ways of doing this."
At Fronterion, we’ve often speculated on whether law firms will end up acting more like LPOs or if LPOs will begin to embrace more law firm-like characteristics. In a strong shift towards the former, Alex outlined a number of strategies that Radiant picked up from their selected LPO provider, Pangea3. “For example, we’re adopting the Pangea3 approach of building playbooks for the more repeatable work. These play books outline the preferred and fall back positions on common issues that are used by Pangea3 staff. Using this more process-driven approach, alongside better checklists for all lawyers working on the matter, allow us to deliver a more consistent and better value product to clients,” Alex said.
On the decision to make LPO a prominent part of Radiant and the significance of LPOs’ unique approach to deliver high-quality work, Alex noted that, “What jumped out of me almost immediately when we started working with our LPO was the quality, structure and process, the entrepreneurial and innovative attitude and how they kept refining their processes.”
“At Radiant we’re all outsourcing lawyers so we know how the outsourcing market has evolved in other industry sectors. Essentially, firms who first went offshore for labor arbitrage are now going to India to get the expertise of process-driven service delivery. We’re really starting to see this in the legal process outsourcing sector. The rigor of the LPO’s approach is very important to delivering better quality products to clients.”
On the role that legal outsourcing will play in their day-to-day work at Radiant, Alex noted, “The primary role of the LPO for larger deals will be keeping all of the transactional documents in good shape – particularly overnight. This not only improves quality, but the deal velocity. We can also offer better value fixed price support for the smaller day-to-day contracts where we can use Pangea3 to do initial reviews and mark-ups under our supervision. Going forward, we’re going to keep looking for ways to increase how we work together with our legal outsourcing vendor.”
On client interfacing: “We take full responsibility for the work product at Radiant so we’re always checking everything. We are also the people who the client deals with and we will be in the negotiations.”
Critics are skeptical about the ability of the Radiant’s exclusively senior-level team to scale up their time to make the practice viable, particularly without the help of junior-level assistants. Certainly much of Radiant’s success is predicated on its ability to leverage lower-level tasks with their LPO provider. Alex noted, “We hope to remain nimble and very open to adjusting our model to what works, but for the time being, I really think that we’re on to something.”
One small step for a boutique technology firm, one giant step for what law firms may look like in the future.
Showing posts with label Client Value. Show all posts
Showing posts with label Client Value. Show all posts
Wednesday, January 26, 2011
Saturday, September 4, 2010
Ante Up: Law firms and the “Fortunate Few”
One of the concerns of law firms that we see at Fronterion involving the integration of legal process outsourcing vendors into their practice is the real or perceived disruption of partner-track associates. The work which first and second year law firm associates previously “cut their teeth on” (read document review) is slowly diminishing with the increased use of outside legal vendors based domestically in the US and UK, as well as abroad.
The comments in several recent publications highlight the growing focus, and also acceptance, of the changing nature of the legal profession with the use of outside legal vendors to perform “routine, repetitious work.”
William Michael Treanor, newly appointed dean of the Georgetown University Law Center, made several interesting comments on the topic of recent law graduate career opportunities in the Washington Post’s Capital Business.
As reported by the ABA Journal, Treanor said, “Grads who opt for law firm jobs are likely to see the nature of their work change as clients refuse to pay associates for routine, repetitious work... As a result, ‘we'll see more outsourcing and contract employment. So associates will be doing more work that is truly lawyerly work.’”
We’ve seen Georgetown take some very positive, pro-active stances as the legal profession changes, for which we applaud them.
In a related article featured in AM Law Daily, Steven Harper echoes Treanor’s remarks regarding the advancement of the “fortunate few”, those law firm associates who will work on more substantive legal matters as a result of legal outsourcing.
“Instead of the mind-numbing tasks that are the bane of so many young lawyers' lives, associates will find themselves doing work that more closely resembles what they thought being a lawyer meant when they first decided to attend law school.”
More succinctly stated in my book, a senior litigation partner at a large UK-based law firm said this about routine tasks increasingly delegated to outside legal vendors, “Our attorneys didn’t go to law school for that.”
The caveat for this potential advancement for associates to perform more interesting and engaging projects is that law firms may require fewer associates to work through their large, document-heavy matters. Reading between the lines, it looks like law students, with the help of law schools, will have to be more entrepreneurial and seek to develop niche skill sets to make themselves more valuable in the changing legal profession.
The comments in several recent publications highlight the growing focus, and also acceptance, of the changing nature of the legal profession with the use of outside legal vendors to perform “routine, repetitious work.”
William Michael Treanor, newly appointed dean of the Georgetown University Law Center, made several interesting comments on the topic of recent law graduate career opportunities in the Washington Post’s Capital Business.
As reported by the ABA Journal, Treanor said, “Grads who opt for law firm jobs are likely to see the nature of their work change as clients refuse to pay associates for routine, repetitious work... As a result, ‘we'll see more outsourcing and contract employment. So associates will be doing more work that is truly lawyerly work.’”
We’ve seen Georgetown take some very positive, pro-active stances as the legal profession changes, for which we applaud them.
In a related article featured in AM Law Daily, Steven Harper echoes Treanor’s remarks regarding the advancement of the “fortunate few”, those law firm associates who will work on more substantive legal matters as a result of legal outsourcing.
“Instead of the mind-numbing tasks that are the bane of so many young lawyers' lives, associates will find themselves doing work that more closely resembles what they thought being a lawyer meant when they first decided to attend law school.”
More succinctly stated in my book, a senior litigation partner at a large UK-based law firm said this about routine tasks increasingly delegated to outside legal vendors, “Our attorneys didn’t go to law school for that.”
The caveat for this potential advancement for associates to perform more interesting and engaging projects is that law firms may require fewer associates to work through their large, document-heavy matters. Reading between the lines, it looks like law students, with the help of law schools, will have to be more entrepreneurial and seek to develop niche skill sets to make themselves more valuable in the changing legal profession.
Monday, November 2, 2009
Quantity vs. Quality
Some of the detractors of outsourced and offshore legal services invariably cite quality concerns as a top issue (along with security and reliability). What is often overlooked is that the same issues of managing quality are also quite apparent in the large-scale document review operations performed domestically, as well. The challenges of onshore quality management were outlined in a recent article appearing in the ABA Journal.
The true tipping point for the offshore legal services industry will be when offshore vendors can definitively demonstrate that they are producing superior quality to comparable onshore operations.
With appropriately structured outsourced legal services and discovery engagements, superior quality is attainable as a result of the following:
• A superior talent pool (composed of better educated and more motivated personnel)
• Cost advantages (gained when offshore vendors devote resources more economically toward managing and training staff)
• Process structuring (developed when vendors leverage their service delivery knowledge of outsourced business services to legal services)
These factors can lead to quality, but often do not do justice to demonstrate quality. Perhaps the best way to compare offshore work quality is to try it out first-hand. There are a number of ways to test drive prospective offshore vendors. The most infamous demonstration being the Milbank’s blind survey which resulted with the outsourcing vendor coming out on top on all criterion as compared to the existing internal legal support department.
We have always been proponents of basing alternative legal services delivery on other factors and not simply on cost advantages alone. If the quality is not satisfactory, there are no cost savings in the long run. Furthermore, by focusing only on the cost side of the equation, law firms and in-house counsel are leaving substantial value on the table such as improved services levels, quicker response times, more flexible business models and, most importantly, better quality.
The true tipping point for the offshore legal services industry will be when offshore vendors can definitively demonstrate that they are producing superior quality to comparable onshore operations.
With appropriately structured outsourced legal services and discovery engagements, superior quality is attainable as a result of the following:
• A superior talent pool (composed of better educated and more motivated personnel)
• Cost advantages (gained when offshore vendors devote resources more economically toward managing and training staff)
• Process structuring (developed when vendors leverage their service delivery knowledge of outsourced business services to legal services)
These factors can lead to quality, but often do not do justice to demonstrate quality. Perhaps the best way to compare offshore work quality is to try it out first-hand. There are a number of ways to test drive prospective offshore vendors. The most infamous demonstration being the Milbank’s blind survey which resulted with the outsourcing vendor coming out on top on all criterion as compared to the existing internal legal support department.
We have always been proponents of basing alternative legal services delivery on other factors and not simply on cost advantages alone. If the quality is not satisfactory, there are no cost savings in the long run. Furthermore, by focusing only on the cost side of the equation, law firms and in-house counsel are leaving substantial value on the table such as improved services levels, quicker response times, more flexible business models and, most importantly, better quality.
Wednesday, September 16, 2009
Opinion: Outsourcing the core
In an opinion piece featured in Managing Partner magazine entitled, Outsourcing the Core, Andrew Hedley discusses some of the dynamics and challenges facing legal professionals in the UK – particularly as they relate to outsourced legal services.
The points that I enjoyed most were his thoughts on the factors which impact market penetration for outsourcing legal services.
1. Technology: Technically speaking, it might be argued that a couple of factors have constrained development in the past for all but the most straightforward of work. These are shortcomings in communications technology, and a paucity of the advanced project-management skills needed to disaggregate a legal service, have the constituent parts handled independently, and then reconstitute the service at the point of delivery to provide a seamless client experience. Such technical and management challenges can now be overcome.
2. Perceptual: What remains is the emotional barrier of managing so much of the legal process at arms length within a profession in which many partners have been reticent to let work leave their own desks, let alone firm, country or continent. At an organisational level there are also issues of trust, confidence and client confidentiality that will need to be overcome. At what point will economic imperatives overcome these social and management impediments?
Too many times firms concentrate on overcoming the former challenge while in many ways disregarding the latter. Equal, and in some situations greater, emphasis should be placed on ensuring the internal buy-in and managing expectations for changes within the organization.
As Hedley concluded, “I believe these changes are inevitable. How far-reaching they will be, and over what timescale, are the key issues law firm leaders will need to consider when deciding on the best approach for their individual organisations.”
The points that I enjoyed most were his thoughts on the factors which impact market penetration for outsourcing legal services.
1. Technology: Technically speaking, it might be argued that a couple of factors have constrained development in the past for all but the most straightforward of work. These are shortcomings in communications technology, and a paucity of the advanced project-management skills needed to disaggregate a legal service, have the constituent parts handled independently, and then reconstitute the service at the point of delivery to provide a seamless client experience. Such technical and management challenges can now be overcome.
2. Perceptual: What remains is the emotional barrier of managing so much of the legal process at arms length within a profession in which many partners have been reticent to let work leave their own desks, let alone firm, country or continent. At an organisational level there are also issues of trust, confidence and client confidentiality that will need to be overcome. At what point will economic imperatives overcome these social and management impediments?
Too many times firms concentrate on overcoming the former challenge while in many ways disregarding the latter. Equal, and in some situations greater, emphasis should be placed on ensuring the internal buy-in and managing expectations for changes within the organization.
As Hedley concluded, “I believe these changes are inevitable. How far-reaching they will be, and over what timescale, are the key issues law firm leaders will need to consider when deciding on the best approach for their individual organisations.”
Monday, September 14, 2009
Conversation with Doug Hubbard
Quality is a big point of differentiation between outsourcing vendors. But how can law firms and corporate counsels determine that their prospective vendor can deliver on quality? Moreover, how can contracting firms manage quality of their outsourcing vendor even if the processes are not performed under their direct supervision.
The key for managing quality is measuring quality. To measure quality, it needs to be explicitly defined. More succinctly: Defining Quality => Measuring Quality => Managing Quality
This past week I had the pleasure of speaking with Doug Hubbard regarding his thoughts on measuring and defining quality. Doug is the author of the very insightful book, How to Measure Anything. Below are some of his thoughts from our conversation.
“When measuring quality, the most important thing is recognizing that quality is not ‘intangible’. Rather, quality is quite tangible and has observable consequences. If it didn’t have observable consequences, why would we care so much about it?”
Hubbard believes that lawyers should excel at defining quality: “At its core, the practice of law is defining legal issues. For example, it is the lawyers’ job to explicitly define each clause in a client contract,” he stated. “It’s all about avoiding ambiguity. The same principles and skills can be used to define quality.”
Defining quality invariably requires defining errors so they can be avoided. “To define quality requires defining what an error means and the appropriate scope of that error,” Hubbard explained. “Events defined as errors can’t be so rare that the error rate is consistently zero. This is misleading about the underlying risk of error. By measuring lower consequence-higher frequency errors, one can use these findings to make more accurate assessments of quality, as the low consequence errors are often indicative of high consequence-low frequency errors. For example, in space travel, if one were only to measure the loss of a crew member as an error, for the first Space Shuttle missions the risk of error would appear to be zero. But if one were to measure the number of high frequency-low consequence errors such as the number of times an O-ring burned through or when foam fell off the external tank, this error rate would be much more indicative of the actual risks.”
Following the same principles outlined by Hubbard, lawyers cannot define errors purely by high-consequence-low-frequency errors, such as avoiding a malpractice lawsuit or sidestepping a default judgment. These events occur infrequently and often do not directly correlate to quality. Rather, when creating a quality management system, legal professionals must use as a barometer high frequency-low consequence errors such as a typographical error or missed redaction.
*These above quotes and others also appear in our upcoming publication, Implementing a Successful Legal Outsourcing Engagement. More details on the book to follow.
The key for managing quality is measuring quality. To measure quality, it needs to be explicitly defined. More succinctly: Defining Quality => Measuring Quality => Managing Quality
This past week I had the pleasure of speaking with Doug Hubbard regarding his thoughts on measuring and defining quality. Doug is the author of the very insightful book, How to Measure Anything. Below are some of his thoughts from our conversation.
“When measuring quality, the most important thing is recognizing that quality is not ‘intangible’. Rather, quality is quite tangible and has observable consequences. If it didn’t have observable consequences, why would we care so much about it?”
Hubbard believes that lawyers should excel at defining quality: “At its core, the practice of law is defining legal issues. For example, it is the lawyers’ job to explicitly define each clause in a client contract,” he stated. “It’s all about avoiding ambiguity. The same principles and skills can be used to define quality.”
Defining quality invariably requires defining errors so they can be avoided. “To define quality requires defining what an error means and the appropriate scope of that error,” Hubbard explained. “Events defined as errors can’t be so rare that the error rate is consistently zero. This is misleading about the underlying risk of error. By measuring lower consequence-higher frequency errors, one can use these findings to make more accurate assessments of quality, as the low consequence errors are often indicative of high consequence-low frequency errors. For example, in space travel, if one were only to measure the loss of a crew member as an error, for the first Space Shuttle missions the risk of error would appear to be zero. But if one were to measure the number of high frequency-low consequence errors such as the number of times an O-ring burned through or when foam fell off the external tank, this error rate would be much more indicative of the actual risks.”
Following the same principles outlined by Hubbard, lawyers cannot define errors purely by high-consequence-low-frequency errors, such as avoiding a malpractice lawsuit or sidestepping a default judgment. These events occur infrequently and often do not directly correlate to quality. Rather, when creating a quality management system, legal professionals must use as a barometer high frequency-low consequence errors such as a typographical error or missed redaction.
*These above quotes and others also appear in our upcoming publication, Implementing a Successful Legal Outsourcing Engagement. More details on the book to follow.
Friday, September 4, 2009
A Broken Business Model?
While I do not think that the law firm is fundamentally “broken” nor do I profess the end of lawyers, below are some interesting points from an article published in the National Law journal titled “A Broken Business Model," by Joel Henning.
There is a lot of talk about moving away from billable hours, but alternative fee arrangements are neither new nor making much headway. Greater use of contract lawyers, offshoring, fewer equity partners, a cutback in associate salaries and more differentiation in associate pay and promotions — are all being discussed and even modestly implemented. But all of this has been around for at least a decade, and none of it has so far done much to make clients happier either about their legal bills or the quality of the services they pay for.
The concluding statements of Henning’s article note that law firms need to be run from more of a business perspective.
I particularly enjoyed the article since it emphasizes that outsourcing or other cost saving measures are not the solution in and of themselves. Rather outsourced legal and legal support services are component of a multipronged approach so for legal firms to better serve their clients.
There is a lot of talk about moving away from billable hours, but alternative fee arrangements are neither new nor making much headway. Greater use of contract lawyers, offshoring, fewer equity partners, a cutback in associate salaries and more differentiation in associate pay and promotions — are all being discussed and even modestly implemented. But all of this has been around for at least a decade, and none of it has so far done much to make clients happier either about their legal bills or the quality of the services they pay for.
The concluding statements of Henning’s article note that law firms need to be run from more of a business perspective.
I particularly enjoyed the article since it emphasizes that outsourcing or other cost saving measures are not the solution in and of themselves. Rather outsourced legal and legal support services are component of a multipronged approach so for legal firms to better serve their clients.
Friday, July 24, 2009
No One Cares About My Office In Kuwait
This past week there was an interesting article in the ABA Journal - originally appearing in the Legal Intelligencer.
The article notes a trend of lawyers migrating from megafirms to mid-size firms that have more competitive fee structures and lower firm overhead.
According to the article, a departing lawyer was quoted saying, "My experience was it was difficult to engage local businesses with a higher rate structure. There were people down the street that could do the same thing I could at a cheaper rate."
"Somebody from Lansdale didn't necessarily care that I had an office in Kuwait."
Law firms need to better understand what is valuable to their clients - I misalignment of the firm and clients need is disservice to partners in their firm. The debate goes beyond whether firms should have offices in geographically disparate locations around the world.
The primary consideration being, that law firms need to ensure that they maintain low cost structures as to be competitive when working with clients. Otherwise, talent my jump ship... hopefully not the Kuwait.
The article notes a trend of lawyers migrating from megafirms to mid-size firms that have more competitive fee structures and lower firm overhead.
According to the article, a departing lawyer was quoted saying, "My experience was it was difficult to engage local businesses with a higher rate structure. There were people down the street that could do the same thing I could at a cheaper rate."
"Somebody from Lansdale didn't necessarily care that I had an office in Kuwait."
Law firms need to better understand what is valuable to their clients - I misalignment of the firm and clients need is disservice to partners in their firm. The debate goes beyond whether firms should have offices in geographically disparate locations around the world.
The primary consideration being, that law firms need to ensure that they maintain low cost structures as to be competitive when working with clients. Otherwise, talent my jump ship... hopefully not the Kuwait.
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