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The day of minimis is here

19 October 15

The Word of Gold: more for less? It's yesterday's challenge

by Stephen Gold

Law firm pricing is a hot topic just now, and this is welcome – not least to the consulting community. But there is a problem. Often, an iron law is disregarded. Before price comes the process. Firms introduce “innovative” pricing models without looking first at how they produce and then wonder why their line is bottom in more ways than one. “AFA” in their world stands less for “Alternative Fee Agreement”, than “A Failed Attempt”.

“Before price comes the process” applies to businesses of every kind. Look, for example, at how the big supermarkets have responded to the discounters: sweating to match them on price, they are still lumbered with their expensive traditional structures, while their leaner rivals steam on, offering terrific prices, but a basic environment and service levels which amount to precious Lidl.

Though the picture is changing, many lawyers still find it demeaning to have their work described as a process, even if most of it contains a profusion of standard elements. Vast amounts of administrative grunt underpin the core advice, which may have been given many times in similar situations.

Every job is a process, and it is in no way demeaning to acknowledge this. Move away from legal services for a moment and consider, say, a great orchestra. As its music soars into the auditorium, it may seem to capture the very essence of freedom, but it will never get off the ground without a tightly disciplined, collaborative process between the musicians, the conductor, and all the backroom people without whom there would be no performance. Only when there is rigour, leadership, method, technique and refinement is the highest form of self-expression possible.

See it as “less for less”

Since Richard Susskind coined the phrase “the more for less challenge” to describe the pressure on law firms to deliver more work for lower prices, it has become axiomatic to say this is the biggest problem facing the profession. But lately, a new phrase has entered the debate, “less for less” – a catchy way of stating an old truth, that the best response to pressure on price is to make the process more effective: reduce effort, time and cost, give the client a better experience and reap the rewards of more business and higher profits. Since the biggest cost by far is human beings, the spotlight has fallen pitilessly on how to have as much work as possible done by more junior people, without sacrificing quality. This focus is precisely why attempts at process improvement are so often frustrated, not by people at the top, but by the middle tiers, who know a threat when they see one.

It is easy to say that you can’t make an omelette without breaking eggs, when one is speaking from the perspective of the chef, not the egg. But as Tim Corcoran, an impressive US consultant I heard recently put it, a cultural shift is needed, whereby firms view continuous process improvement as a commercial good, not a necessary evil. If you have owned, say, a Galaxy smartphone for a couple of years and go to replace it, you will be able to choose from a range that has sharper screens, more features, greater computing power and enhanced reliability. Is Samsung going bust because of the expense of creating these improvements? Apparently not.

My own firm, which delivered a range of process and technology-driven services to institutions, had almost 450 people, only 22 of whom were lawyers. But it is notable that some of the most impressive work in this area is being done not by firms who specialise in commoditisation, but whose raison d’être is corporate work at the top end of the value chain, and who have faced the economics head-on. Take Ashurst, a global corporate powerhouse, which has recruited 210 “legal analysts” in Glasgow to provide skilled support services to its offices round the world. Across the Pond, Chicago’s Seyfarth Shaw’s division of technology specialists and project managers, SeyfarthLean, has delivered not just great operational benefits, but a brand which distinguishes it in the market as a firm walking the walk on innovation, not just talking about it. Indeed, SeyfarthLean has transformed from a support function to a profit centre, with its consultancy services in high demand.

I cannot emphasise too strongly that this is a world open to all. Whether you work on the high street or in a high tower, the opportunity is clear, as is the risk of not grasping it.

Though Vincent Van Gogh lamented “I have put my heart and soul into my work, and have lost my mind in the process”, achieving less for less is a topic to which firms of every size and sector need to lend two attentive ears.

Stephen Gold was the founder and senior partner of Golds, a multi-award-winning law firm which grew from a sole practice to become a UK leader in its sectors. He is now a consultant, non-exec and trusted adviser to leading firms nationwide and internationally. email: stephen@stephengold.co.uk; tel: 0044 7968 484232; web: www.stephengold.co.uk; twitter: @thewordofgold

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