Becoming a different legal business

Andrew Chamberlain, head of client delivery

You may have read (The Lawyer 18 June) that at Addleshaw Goddard, we’ve recently mapped all our key legal processes. So, why have we done this?

My journey started about 5 years ago. As an employment lawyer of many years standing, I’d seen the fee pressure increasing, and the gradual commoditisation of a lot of what I did.

I was also one of the firm’s relationship partners for a large key client, well known for its sophisticated panel arrangements. Clear pressure was coming from this direction – the need of more and better for less.

We’d reached the stage when we could no longer just flex the hourly rate. The more I thought about it, the more I thought that the legal market business model was fundamentally flawed : the model was broken. And when I look back over the years, the fractures have become more and more evident :

– Clients don’t want to pay for inefficiencies, and why should they ? So many aspects of law firm delivery have needed to change.

– Clients want pricing which provided certainty and transparency, and which relate to the value they see in each activity.

– Clients want their law firm to be open, collaborative and more innovative.

– Clients are interested in the proposition from new market entrants.

And then the financial crisis of 2008 came along…..

Our response

We realised that we needed to respond to the market and client pressures in a broad and different way.

The legal market is traditionally conservative, and driven by short term returns. It is a market which has never undergone the continuous transformation which just about every sector of the economy has had to go through. It is a market which has typically significantly under-invested in technology – so much so that the big technology providers have largely not bothered to target the market with sector specific solutions. It’s a market which has been allowed to grow largely by law firms putting up their prices every year. And it’s a market which is suffering significant over-capacity.

We saw that these pressures weren’t going away. We also recognised the obvious need for re-engineering as an opportunity; a chance to re-engineer our service delivery model.

Our response – the detail

Our first step was to test the concept of a centralised more cost efficient legal resource focused on carrying out the process work which is evident in just about all legal work, but which didn’t need to be undertaken by qualified lawyers.

In November 2010, we started our Transaction Services Team (TST) with 5 paralegals. Initially we targeted what I call ‘stand alone process’, process work that is easily identifiable and severable from a particular piece of work. The classic example is document review work, typically e-disclosure or due diligence. We didn’t actively target work for TST, or compel the firm to use it; rather we just made the firm aware that the team was there. So, we were delighted that work flowed so quickly and consistently into the team – by June 2011, the team had grown to more than 50.

At that stage, we started to put the necessary process and structure round the team – adding process efficiency to the cheaper human resource. In the next 12 months, the work undertaken by the team grew by about 30%, but with the same numbers of people. We also started to get direct instructions from clients – again not the result of direct marketing, but word of mouth. It was clear to us that this was also a service which would also be attractive to clients for direct access.

The team is now more than 75, and we’ve recently invested in the appointment of an industry specialist, Andy Loach, to take the team to the next level.

Our response – the next steps

So, the TST concept was successfully proven. What next?

It was clear to me that there was even more work that we could do more efficiently, whether it be by involving TST, standardising parts of a transaction or case, or introducing more and better technology. To do this, we needed to understand what work we do, and how we do it.

This meant mapping our processes. But how would we do that? How would we get the buy-in of the partners?

To accelerate the programme we recruited an expert in this field. Richard Copley has 30 years’ experience in process and systems analysis, and in managing change programmes. He joined us in April 2012, and almost immediately we saw the impact of having an expert. He brought a discipline and experience to our work. In June last year, we set ourselves the target of having mapped all our key processes (all 46 of them) by the end of the year. Given that this would touch the whole firm, and involve a lot of people, that seemed an ambitious target. It was also clear that we would need invest time explaining what we were doing or why we were doing it.

‘What I do is not a process’ said one. ‘What I do is like brain surgery’ said another. ‘So, you don’t think brain surgeons have a process?’, responded Richard Copley.

Gradually, through workshops involving partners and fee earners, people responded. Many commented how strange it was that lawyers had never sat down and looked at how they carried out their work, agreed the best way to do it, and identified efficiencies.

People also began to understand that this was more than about just efficiency : it was about quality assurance, greater consistency, better risk management, better use of know how, and better use of our talent. It was also about building a mind-set of continuous improvement.

We mapped all our processes by Christmas and we are now rolling them out across the business. They will all be at the heart of our service delivery by the end of August.

We’re now talking to a number of clients about mapping processes together – building efficiencies and certainty for both the client and us.

I recently held a ‘mapping workshop’ for a client (who’d have thought?). As I explained what we had done and the principles, it was great to see the interest, even excitement in what we were doing. One of the clients kindly summarised what he saw as the benefits for clients:

– certainty of cost and delivery

– improved margin for us, some of which we’d hopefully pass on to the client

– an opportunity to map processes together, thereby strengthening relationships and helping the client’s efficiency drive

– a new line of work – consultancy for clients who want to go through a similar exercise

I thought that neatly summarised what we also saw as the benefits.

But it doesn’t end there. Beyond core legal services, the maps will also start to inform our decisions about our operating model, and it’s clear they will embed continuous improvement into our business and how we best organise ourselves around the key elements of our business, making us better able to adapt to the changes that we see coming in the delivery of services by law firms. We’ve already identified a number of improvements we can make across the business, and it’s prompted a number of new projects : new products, a development of our alternative resourcing options, development of new knowledge models.

It’s been a fascinating journey to date, but there’s so much more to do. What’s clear to me is that the UK legal market will look very different in 5 years’ time : we’ll see a market transformed and beginning to deliver value and true client service consistently and efficiently in ways not seen before.