YOU’RE DOING IT WRONG!

by Brian Rogers on November 27, 2012

in Law Business

One of my favorite memes from the interwebs is “You’re doing it wrong.” To quote the Urban Dictionary, it’s “what you would say to someone who is failing it miserably,” for example, a soccer player standing on his head (no hands!), a pickup driving down a boat ramp into the water head first, President Bush holding the phone upside down, carpooling, parenting, sunscreen, football, cycling, … well, you get the point.

I’ve had some interesting interwebs conversations about the law business, including one on my blog that included this comment from Ken Adams: “As I read the closing two paragraphs of your post, the final words of The Count of Monte Cristo came to mind: ‘Wait and hope.’ Not a particularly promising sentiment when it comes to law practice!” Here are the last two paragraphs he was talking about:

I think crowd-sourced contracts have potential for similar magic. The fact that no one seems to have found the formula yet doesn’t mean that it won’t happen. The fact that freely-available contract forms generally reflect suboptimal drafting is no argument that crowd-sourced contracting can’t produce quality documents any more than the fact that EDGARized contracts reflect suboptimal drafting means that corporate law firms can’t produce quality documents.

Is it a pie-in-the-sky notion that busy lawyers will spend time working for free to contribute to crowd-sourced contracts? I really don’t think so. Just look at all the energy that’s being expended writing blogs, publishing articles, and preparing for speaking engagements, all for free. We would do it, if only someone could create the right _____ to make it a worthwhile project. Surely, someone out there can fill in the blank.

I’ll grant that there’s no guarantee that the crowd will ever make significant contributions to law practice, but I can’t help but think that the legal services industry is doing it wrong. Here are some reasons why:

  • Most small businesses and individuals can’t afford legal representation, so they go without.
  • Most legal work is performed slowly and inefficiently by high-cost providers.
  • Although lawyers do complex projects, we don’t use project management techniques.
  • Much legal work is performed by lawyers who don’t know the area of law at issue very well.
  • Although technology exists to automate legal document drafting, it’s barely used.
  • Although lawyers now use ctrl x, we’re still cutting and pasting contract clauses.
  • The same mistakes are made over and over (e.g., Zappos terms and conditions).
  • There’s a huge market for legal services, so there’s plenty of money to fund R&D, yet there’s little being done.
  • It’s difficult to quickly find answers to legal questions due to the lack of quality resources.

Why aren’t we drafting ever better contracts, more quickly, and at a lower cost? Why aren’t our methods improving over time? Why isn’t legal knowledge more accessible, both to lawyers and to non-lawyers?

It’s as if we’re still walking behind a team and plow on our two acres while most other industries are using tractors and combines. With the tremendous demand for legal services, the size of the market, and the potential for technological progress, why aren’t we doing it better? We must be doing it wrong.

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{ 6 comments… read them below or add one }

Ken Adams November 27, 2012 at 9:43 am

Brian: Thank you for this cri de coeur. I apologize for turning up, yet again, to offer a comment, but this post ties into comments that you and Bradley Clark added to my post regarding Quora (http://www.koncision.com/quora-as-a-source-of-misinformation/). I’ll be repeating myself, but this stuff bears repeating.

Sure, we’re doing it wrong. But how do we do it right? One thing’s for sure: you won’t get anything remotely worthwhile from the crowd. What works OK for Wikipedia won’t work in the contracts ecosystem: there’s too much complexity, and the stakes are too high. Being enthusiastic and willing to contribute your time for free isn’t enough; you also need expertise. And even if experts are willing to contribute, their voice will be lost in the crowd.

So far, nothing has appeared that comes remotely close to proving me wrong. Some firms have contributed crappy templates to Docracy? That has nothing to do with the crowd collaborating to produce optimal contracts.

But you and Bradley aren’t really looking to the crowd. Instead, you’ve referred to “a critical mass of heavy hitters,” and Bradley has in mind “a diverse group of selected contract aficionados.” The only way to ensure who is contributing to a given initiative is if you have a measure of centralized control. Anyone who rejects centralized control is less interested in optimal contracts than in conducting an experiment in utopianism.

There are examples of templates being prepared by groups with centralized control. For example, the ABA Section of Business Law produces a range of model documents. But they use traditional contract language, with all the shortcomings that implies; they’re prone to recycling the conventional wisdom; they’re static, in that they come in print or as Word documents; and you have to pay for them.

A different approach is that used by the National Venture Capital Association. It convened a group of BigLaw lawyers to produce a model set of VC documents. Those lawyers were willing to contribute their services for free, so as to curry favor with the potential clients who are members of the NVCA. The NVCA documents share the same shortcomings as the ABA model documents, but they seem a bit less idiosyncratic. And they’re free, which helps to explain why they’re widely used.

I suspect that using the NVCA approach—having trade groups promulgate model documents—is the most promising approach. But I would add two further ingredients. First, have a specialist compile the language. (Yes, someone like me.) And second, use document assembly, which is vastly more efficient that static templates and vastly more user-friendly than a wiki.

Of course, adding those two elements would mean that someone has to pay something. But since when has having to pay for something automatically been grounds for rejecting it? For example, if a group of M&A clients were to decided that it wanted to commoditize mid-market M&A drafting, for a modest fee I could, with the help of an editorial board, produce state-of-the-art templates in a few months. The savings in legal fees would outstrip the cost in no time at all. And the cost could be shared in creative ways.

But the real obstacle isn’t cost. It’s inertia. It’s a reluctance to surrender autonomy. It’s a reluctance to cease being the keeper of voodoo legal mysteries. It’s a reluctance to stop preening and posturing.

I’m not sure that I’ll be able to overcome those obstacles, but a guy’s got to keep trying!

Ken

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Bradley B. Clark November 27, 2012 at 11:27 pm

Ken: I noticed on Legal Futures today that a non-lawyer in the UK obtained a conveyancing license and has, it appears, successfully commoditized that area of practice. I believe your concept of commoditizing mid-market mergers and acquisitions is exactly the type of solution the market is demanding. The successful player will be the one that brings to market a diverse set of transactional forms that are assembled through a document assembly program based on inputs from the client and a knowledgeable attorney.

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Brian Rogers November 27, 2012 at 10:52 am

Ken: I’m not sure I disagree with you about the crowd, except that I do think that there’s potential in the crowd even if experience has been disappointing. Plus, I use the term crowd in a broad sense to encompass informal participation generally, including experts, which I’m sure is broader than its most common use.

My concerns go way beyond document preparation, though. In my view, the whole system of providing legal services is sub-optimal. It’s slower, less effective, and of lower quality than it needs to be. Work often doesn’t get to the best person to handle it, and even if the best person were to do the work, the methods used are usually archaic. You could argue that legal work is complicated or that you can’t apply techniques like Six Sigma to services, but I don’t buy it. It is possible to provide legal services better, faster, and less expensively than is currently the case. The disconnect between potential and reality is what bothers me. And it’s frustrating to see other industries make progress, while we lumber along.

Document assembly is a no-brainer. It’s so powerful and so effective that I can’t imagine significant progress that doesn’t include that sort of technological solution. Determining what keeps the law business from widespread adoption of document assembly would go a long way toward finding a solution to sub-optimal performance of the industry as a whole.

While I lament what I view to be the sub-optimal performance of the legal services industry, I do think that corporate clients are generally satisfied. Sure, they’d like their bills to be reduced somewhat, but they’re happy with the services they’re being provided. They need high-level expertise, and there are plenty of firms around that provide it.

But there are a vast number of businesses and individuals that are not served by firms at all, and there is a tremendous amount of legal work that large corporations are declining to have done. If it must be that way, then I guess, c’est la vie. But I don’t think things have to be this way.

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Ken Adams November 27, 2012 at 11:50 am

Brian: I currently derive great benefit from the crowd, in that comments posted on my blog have had a significant effect on what I write about and the conclusions I ultimately draw. So I vote for Specialist + Crowd.

By the way, I was too narrow in stating the obstacles to progress. Also relevant are the law-firm structural issues I discussed in the following article: http://www.koncision.com/wp-content/uploads/2011/05/Adams-NYLJ-4.1.11-The-Directors-Cut.pdf.

Ken

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Brian Rogers November 27, 2012 at 6:49 pm

Ken: I agree with your article on all points and enjoyed revisiting it. To the advice at the end, I’d echo Chris Lemen’s advice to keep track of good precedent clauses, and I’d also encourage young attorneys to make a habit of reading cases and treatises. Lawyers’ knowledge of most areas of the law peaks on the day they take the bar, which is fine; but you don’t want to know less in your area of “expertise” five years into practice than you knew before you became a lawyer. This is especially a risk for transactional lawyers who often don’t have to read cases as a primary job task and whose continuing education in the law is a haphazard form of osmosis.

(Also, conceptually, wouldn’t you climb down the decision tree rather than up?)

Our discussion (and our previous discussions) has been in the back of my mind all day. The most valuable thing I do for clients is talk to them: I help them think through their legal and business issues to come to actionable decisions. I’m not sure there’s a way to speed that up or do it more efficiently. I once heard an investment banker remark that you can’t schmooze efficiently, and I think that’s largely true here, also. Where that sort of representation is needed, it’s probably always going to be customized and expensive.

But there are plenty of things I do–and all transactional lawyers do–that could be done better. Drafting contract language is one. Determining the content of the law with respect to a discrete issue at hand is another. Running deals and keeping track of all the moving parts is another. Making sure that documents are signed correctly and the correct version is signed is another. All that stuff could be done faster, better, and less expensively with better tools and processes. As a poor country lawyer, I’m hoping someone will create and sell the necessary tools. As someone who ponders these things, I’m trying to visualize what those tools would look like and how the delivery of legal services can be improved.

Brian

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Bradley B. Clark November 27, 2012 at 11:13 pm

I’m with you Brian. I too am constantly trying to visualize what the tools would look like and how the delivery of legal services can be improved. I believe there is a place for lean six-sigma for service, legal project management, knowledge management and value pricing in our profession. My comment on Ken’s post was directed more at specific contract clauses rather than specific contracts.

I agree with you too Ken with respect to the fact that any worthy crowd solution must have a specialist component to it. Docracy is the closest thing on the market right now to a specialist + crowd solution. One of the big issues with Docracy, as I see it, is that there is not a reliable methodology (as far as I can tell) for determining which confidentiality agreement is the “best.” Another big issue I see with Docracy is the danger of using a form for a transaction in Texas that was written by a New York lawyer based on New York law not knowing how the law regarding confidentiality agreements differs between the two states. Obviously, this is where the advice of a Texas lawyer is important but it begs the question: are individuals in Texas who rely on forms obtained from Docracy seeking the advice of a Texas lawyer on the appropriateness of the Docracy form? And not just in Texas but given the circumstances the startup is in which necessitates the use of the form.

Is the solution a litany of forms from a litany of lawyers ranked by the unreliable metric of popularity? I don’t think so and I believe we all agree on that point. If the business world believes that it is the solution than I will make the oh-so-bold prediction that commercial litigation will be fertile ground for years to come.

I believe cost is the cause of this problem. Many companies simply cannot afford to pay a lawyer $300 an hour not knowing the actual number of hours it will take to complete the project. I would never turn my vehicle over to a mechanic who charged by the hour and agree to pay him $300 an hour to fix a leak in my engine without him estimating for me what my cost will be. Imagine picking your vehicle up only to get a bill that charged you for the 3 minute phone call you made to the shop to check on the status of the vehicle or the mechanic conducting research on the differences between certain brands of gaskets in order to decide which gasket is the best solution to the cause of your engine leak. We expect our mechanic to know what his cost is or fixing the vehicle. We expect our mechanic to know the best part necessary for fixing the vehicle. We expect our mechanic will not bill us for every bolt he had to remove to get to the bad gasket and then for reinstalling each bolt. In other words, we expect our mechanic will solve our problem quickly and at a reasonable cost. Whether he does so efficiently and at a profit is his business. We are paying for a solution and a reasonable turn-around time. Perhaps then, part of the solution lies in the business model of the delivery of professional services. In other words, if we change the way we charge for our services (i.e., the solutions we provide) then clients will not be so willing to resort to that litany of risky forms.

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