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April 2006

My Shingle Posts on Law Firm Outsourcing

Thank you to Carolyn Elefant at the blog for posting on legal outsourcing (ie the virtual worker model).  She provides great links to  a recent Law Practice Today roundtable discussion on whether it makes sense for law firms to outsource.  and another article by Ed Poll on choosing a virtual assistant.

Here are some great money quotes:

  • There is more going on that meets the eye. Business process outsourcing companies like Office Tiger are now targeting the legal market as the next candidate for outsourcing;
  • As for my opinion, I think the biggest impact on law firms that "outsourcing" hype will cause is increasing the rate at which clients question the fees their attorneys are charging them;
  • With outsourcing, you typically spend more time specifying requirements and monitoring performance.
  • There is a compelling logic to this approach and there has been some push from clients as hourly rates for inexperienced lawyers have soared. The recent round of salary increases for starting associates will only cause more interest in this approach.
  • Not only can outsourcing free people to do higher level work - in some instances it might help you get higher level work. People are generally both happier in their work and more productive when they are using their best skills.

Billing Labels Are Meaningless

There’s been a lot of debate in the blogosphere over the last couple of weeks concerning the hourly billing system and alternatives to that system. Some people say the hourly billing system is the best way to make sure clients get value those people that reject the concept that the hourly billing system is bad. Others note that flat fee and hybrid fee systems work better.

The people who say the hourly billing system is an appropriate system to value legal services are, more often than not, simply afraid of change. It makes no sense to say that the hourly billing system is an appropriate way to value legal services. I could work for ten hours straight and provide literally no value in a case. I can read through depositions for days and never do a single thing with the deposition transcripts or the information contained therein. I could put little yellow sticky notes all over the depositions and at the end of the day have provided no value to the client or the client’s goals.

The problem with the hourly billing system is it simply tracks hours without any sense of whether an hour was valuable to the client. Why in the world would a client want to pay for an hour of time that didn’t move the ball forward?

People who say that lawyer’s time is valuable again miss the point. The value of one hour of lawyer time may or may not have any value. It all depends on what the lawyer did and why the lawyer did it. For those of us who have been practicing long enough, we know the hourly billing system is absurd because it has no checks or balances. The people who are defending the hourly billing system take a completely ego-centric approach to billing. Their logic goes something like this: "I am a lawyer and I am important. If I spend an hour of time doing anything for a client, then it must be valuable because I am important and therefore my time is important. I could of used that hour on behalf of another client and therefore have denied the other client my valuable time."

I have realized that working within client budgets forces the lawyer to provide value for each hour spent. I can’t waste my hours like a drunken sailor drinking rum on the docks. I have to accomplish client goals within a defined period of time. If I don’t focus and strategize appropriately, I won’t move the ball for the client.

But the one thing that this budgeted system fails to emphasize enough is the value of the hour spent and the difficulty of the task. I am beginning to think that we not only need incentives to be efficient and deliver meaningful work product to the client, but that some days we do really hard things for the client and other days we do easy things. Should one hour equal one hour no matter what the task? Doesn’t an hour of lawyer time spent developing the winning strategy count more than reading 150 interrogatory requests sent by the opposing party to get a general feel for what questions are being asked? And if a lawyer uncovers a strategy which will accomplish the client’s goals within budget, shouldn’t that time be valued at a hire rate?

We have something called the "travel rate" which we have designed into our billing system. When I’m traveling somewhere on behalf of a client in the car, I bill at 30% of my normal hourly rate. I did this because I felt it was essentially unfair to bill a client for me to sit behind the steering wheel of a car trying to get where I need to go for the client. I may be doing a little behind the scenes thinking, but essentially my task (driving) isn’t worth the same amount as when I’m standing before the Judge arguing on behalf of my client.

And isn’t my time worth more if my strategy accomplished a benchmark during a motion and hearing for a client? Shouldn’t I also have a stake in the outcome of the matter? If I accomplish the defined project task documented in our extranet, there should be a reward for that. If I miscalculated or failed to accomplish the benchmark, then my time wasn’t as valuable to the client as I had promised.

I’d be interested in anyone else’s thoughts concerning a billing system which provides incentives for both efficiency and defined and accomplished goals.

I Am Starting To Dislike Amicus Attorney

I have really started to develop an attitude about Amicus Attorney, our case management system. It’s not that it doesn’t do the things it’s supposed to do. It’s not that we haven’t relied on it extensively over the last many years. It’s just that it’s not web based. We use Amicus Attorney for client matter management, contacts, calendaring and tasks. It hit me the other day that our base camp extranet does at least 85% of what Amicus Attorney does. Currently, we are entering calendaring dates and contacts into both Amicus Attorney and our Extranet. The one critical thing that Amicus Attorney still does and our Extranet does not is export time into our billing system. Our Extranet captures time and spits it out into an excel spreadsheet. Someday soon accounting software will more easily link up with web based applications and Amicus Attorney will be toast.

Yes, I know they’ve got the new web interface in Amicus 10. But I’m not buying the proposition that Amicus Attorney will be able to keep up with the pure web based developers in the space. Proprietary client based software is too hard to maintain and requires too many resources to deploy client side to ever devote enough attention to the web development side.

What do you think?

A Suggestion for the Suggested Billing System

We have strengthened the final paragraph of our cover letter which goes out with bills to say "We are always interested in understanding our value proposition from the client’s point of view. The enclosed bill is a suggested payment amount. If you believe the bill should either higher or lower, or have any questions about the bill or the value provided, we encourage you to contact us. We are always happy to discuss our billing and make sure our clients are only paying for value provided."

As you know from previous posts, we provide tremendous detail with our billing. Since I dictate my time entries, I am able to include a lot more information about what was done, why it was done and what outcome I’m expecting by the activity. We also include a three to four page cover letter on the bill reminding clients about our billing policies, telling them what we did the previous month, whether we stayed in budget and what we are projecting by way of tasks and budgets for the upcoming month. The letters are not only valuable for clients, they ensure the firm is staying focused on the client’s goals and staying within budget. I hope clients call and ask about the amount billed and engage us in active discussion about goals and value. It is my belief that those discussions are the very foundation of a solid business relationship with your clients. If I can’t justify the value which we billed, then we probably shouldn’t have billed it in the first place. If our client isn’t convinced that they received value, we need to know that so we can communicate the proposition better on a moving forward basis.

Rolling Out Our Virtual Worker Program

We’ve started the process of defining and rolling out a virtual employee program for other law firms to use. We realize the power of the program internally and would love to make it available to other attorneys who might not otherwise be able to identify law clerk candidates and deploy an extranet system for managing them. We have identified advantages for the law clerk/student population, law firms and clients. I will be sharing more with you over the coming weeks highlighting the tremendous advantages which a virtual worker program offers to all the stakeholders in legal services.

Has Technology Got You By The Throat?

Sure technology can be a great thing. All those whirring fans, flashing lights and super techno-cool splash screens; who doesn’t like to impress their fellow lawyers and clients with all the back flips, aerial trapeze and glitz that their technology can offer? Does being a high-tech lawyer really mean having the most technology?

I consider myself a high-tech lawyer. But even I realize that technology is neither good nor evil. It is all on how you apply technology to your internal process and practice that counts. We have recently read about the constant distraction that technology can inflict on our professional and personal lives. There is no question that technology has as much potential to grab you by the throat and strangle you dead as it does to improve your life.

So how does one harness the awesome energy of technology without it back firing? This is an issue that I struggle with everyday in my practice. But at least I’m aware it is an issue. Too many attorneys blindly become a slave to their technology without ever stopping to ask whether or not it is truly improving their client service model or, even more importantly, improving their own life outside of work.

The point of this post isn’t to answer all the questions which it raises. The point of this post is to start you thinking about how technology is impacting your situation and to make sure that it does not grab you by the neck.

If I may, I might offer these suggestions:

  • Remember that technology allows you to work from anywhere. Often times, you are less productive sitting in your office at work than you might be at the coffee shop down the block or at home. Use technology to your advantage. Find a location where you feel comfortable, happy and content and get some real work done. If you’re not getting much done, either go home or find a new location.
  • Technology allows you to get 8 hours of work done in 4 hours, take 4 hours off.
  • Tell your clients that just because technology makes you more available to them that you won’t necessarily be able to respond to every email or phone call the same hour or even the same day. Teach them patience in spite of technology. If you’re getting the job done and not leaving their query unresolved for too long, they’ll understand. In short, you have to set boundaries for your children. You also have to set boundaries for your clients, especially in the technology age.
  • Leave a voice mail that you are not available and won’t be available for a period of time, whether that’s a day or a week. Be sure to leave a contact number for a staff member or another attorney who can help with any issue that may arise. Just because you can be available 24 by 7 doesn’t mean you should be.
  • Use technology to stay home in the morning and hang out with your kids while still getting a few critical things done and monitoring situation from afar. If technology is going to make your life better, you’ve better figure out how you define "better" and get there quick.
  • Block off periods of time where, even if your technology is plugged in, you are unplugged from your technology. You’ll need this time to focus on drafting, critical thought and strategy issues which are really the most pressing ones for your client.
  • Don’t look at your email every few minutes just to see if a new message has arrived.
  • Don’t answer every cell phone call just because your phone rings.

We are all familiar with the movies where computers eventually enslave mankind. You should reflect on this daily. It could happen to you.

Can You Categorize Your Dictation and Send It To Any Member Of Your Team or Client?

Some of the great things about digital dictation are the folder structure which can be created to help you categorize your dictation. We use Quickscribe for our digital dictation and it has worked wonderfully. We have file folders on our network for cases (which include correspondence, pleadings and all the traditionally typing which staff have to perform), extranet (which includes all of the dictation to add tasks, files and messages to the extranet system), people (where dictation which is directed at a particular person on the team is placed), time (where dictation of time entries goes). Digital dictation has many incredible benefits. The ability to dictate a single item and immediately route it to its proper category is extremely powerful. Recall that we have numerous people on our team who can, for instance, type pleadings and other case related dictation. The dictation goes into a particular folder. You can also categorize dictation by priority in terms of turn around time. Whoever is available to handle that dictation on a priority basis simply jumps in and does it.

We can not only route dictation to our network folders but, by email, directly to any team member. This beats leaving a voicemail in several regards. First, you don’t have to worry about the other person picking up the phone and wondering whether or not their taking notes about your instructions. Second, you don’t have to worry about whether or not the person who receives your voicemail is in the position to anything except listen to it (perhaps they’re driving in their care somewhere and don’t have a pen available). A person who gets your digital file by email can access it at their convenience. You know they’re sitting at their computer and they can re-listen to the message any time they need to.

Have you considered digital dictation?

Amicus Attorney and Wireless

I heard something interesting today from a consultant.  He was surprised that we were able to use Amicus Attorney Case Management System over a wireless network.  He says the bandwidth isn't there typically to support the use of Amicus in a wireless environment.  This might explain why we've had some problems over time with system crashes in Amicus.  This is a pretty severe strike against Amicus Attorney if in fact true given the fact that the whole world is going wireless.