The Hard Way
Sandra is in a panic. She’s been asked to prepare a first draft of the purchase agreement for the acquisition by her firm’s client of a smaller private company. Jill’s been out of law school only two years and has never worked on this kind of matter. What’s worse, it’s late afternoon on Friday and she has to produce the draft by Monday. She is not aware of any system at the firm containing an organized collection of her practice group’s work product, nor of any in-depth training materials. The document management system allows searching only in the document library used by her office, but searchable document names are inconsistent and often unhelpful. She doesn’t even know which lawyers in the firm’s other offices practice in the acquisition area.
Sandra quickly begins e-mailing pretty much all the other junior associates asking for precedents, hoping some haven’t yet left for the day. The more senior lawyer who gave her the assignment mentioned two possible example agreements, but he is out of town and has limited availability to provide guidance. After collecting additional examples from a few associates, Sandra is ready to start. She has no guidance, though, about which provisions to take from which agreement. The examples involve a variety of combinations of industry, transaction structure, applicable state law and bargaining power. None matches her situation exactly. It’s going to be a long weekend. Sandra worries she won’t be able to turn in a good draft by Monday, and wonders whether she’ll be able to salvage any of her weekend plans.
The Better Way
Jamal, also a second-year associate, has been given the same assignment at his firm, but remains calm, even though he also has not yet worked on this type of matter. He accesses the firm’s document management system, searching across all offices for documents containing “purchase agreement” in their title and filtering by governing law, industry and transaction type. He e‑mails the lawyers listed as authors to obtain background on the negotiations and confirm he has final versions.
Next he consults a checklist for private company acquisitions on his practice group’s intranet, and a related checklist describing the anatomy of an acquisition agreement. The intranet also links him to a document maintained by a subscription-based online service. The document explains specific types of provisions found in acquisition agreements. Finally, Jamal finds a recording of his practice group’s training session on acquisition agreements.
Still, Jamal is not happy to be working on the weekend. He has plans for Sunday.
What’s Going on Here?
Sandra’s firm has not taken the time to organize its institutional learning in ways its lawyers can quickly access. There is no formal system at all. The informal system is also lacking – lawyers don’t know each other well across offices; the document management system is compartmentalized; and there’s no training program.
Jamal’s practice group has made good progress in its knowledge strategy initiative. There is a formal document naming convention used by his practice group, allowing effective searches of “acquisition agreement.” Key matter profile data is collected and implemented as search filters in the document management system, allowing filtering by industry, matter type, governing law and other attributes that go into what constitutes a “similar” matter. His practice group has developed some checklists and other aids for more junior lawyers, and has deemed it worthwhile to pay the hefty subscription fees for an online service that produces additional checklists and practice aids, a tool the firm has learned many of its clients also use. The practice group also has a formal training program. All these resources are readily available on the group’s intranet.
The Hard Way Ends Hard
Sandra works all weekend, canceling all her plans. She is miserable, working hard but unsure of many of the drafting choices she makes. On Monday, she delivers a draft to the senior associate. He tells her the draft requires major reworking. Ultimately, the partner ends up writing off a lot of Sandra’s time.
The Better Way Ends Better
Jamal is able to finish his draft in one long Saturday. He annotates his draft to explain his reasons for selecting provisions from each example document. He enjoys his Sunday. On Monday, the senior associate is pleased with the result. The draft is a solid starting point for more detailed customization. The partner fully bills all of Jamal’s time to the client.
Why Do This?
Certainly Jamal’s life is better by virtue of his practice group’s efforts. But the firm is better off as well. Its knowledge strategy approach allowed him to produce higher-quality work in less time. Greater efficiency reduces the firm’s write-offs and write-downs, improving realization rates and the bottom line. Financial modeling shows profits can improve in the 15 percent range when those saved hours can be spent performing new work.
Looked at another way, the firm’s approach allowed a lower-cost lawyer to produce work equivalent to that of a more senior lawyer. As a result, the firm’s fees are lower, making it more competitive. The more senior lawyers are also free to take on additional work, increasing the firm’s overall revenues. Profits are higher, too, because the firm does not have to hire more lawyers or pay much in extra expenses to earn those revenues. Financial modeling shows that shifting work downstream in this fashion can improve profits in the range of 5 percent, while at the same time reducing client fees.
Jamal’s firm realizes these benefits are due to actually changing the way its lawyers work, not bolting on a technology solution. The firm also understands these changes must be pushed by firm and practice group leadership, which is what distinguishes knowledge strategy from mere knowledge management.
How to Do This
Getting lawyers to change the way they work and to collaborate better can be difficult. It is do-able, though, if the right mix of motivational strategies is applied. As noted, a key ingredient is involvement by firm and practice group leadership. Another element is to address the special personality traits most lawyers have, such as skepticism, autonomy, low resilience (reluctance to change), low sociability and sense of urgency. Like other successful firms, Jamal’s firm has figured out lawyer motivators that work.
Do You Want to Learn More?
This article has been brought to you by the new Knowledge Strategy Group of the Law Practice Division. The group has more offerings planned.
Future articles here will elaborate on topics touched on above. They will discuss not only specific practical initiatives a firm can undertake to improve its efficiency through knowledge strategy, but also how to overcome lawyer resistance to change.
To learn more about how knowledge strategy can improve your client service and the economics of your practice, please join our group’s upcoming free 30-minute webinar, How to Compete with IBM Watson JD: Future-proof your practice by improving efficiency now – Part 1, to be broadcast on January 28, 2016 at noon, Eastern time. Read the program description and register here. This program presents the business case for knowledge strategy at firms of all sizes.
This webinar is the first in the monthly Practice Smarter series sponsored by the new Knowledge Strategy Group. These 30-minute webinars focus on how to apply knowledge strategy to practice more efficiently and deliver better client value, while improving financial results. They feature practical takeaways for individual lawyers, law firms and practice groups. The webinars are open to ABA members and non-members alike.
About the Author
Jack Bostelman is chair of the Knowledge Strategy Interest Group of the Law Practice Division and is president of KM/JD Consulting LLC, a law practice management consulting firm. He can be reached at 415.738.8230 or email@example.com.
(Feature Image Credit: ShutterStock)