Tag Archives: #NiloferMerchant

21st Century law practice: multi-jurisdictional and cross-border practice

Simply put, there is no way to hold back multi-jurisdictional and cross-border law practice, and that is reshaping traditional structures and the economics of law practice. cross-border

When there are many small local markets, there can be a ‘best’ provider in each, and these local heroes frequently can all earn a good income. If these markets merge into a single global market, top performers have an opportunity to win more customers, while the next-best performers face harsher competition from all directions. Brynjolfsson & McAfee, The Second Machine Age

Geographical boundaries, even political and jurisdictional ones, have less and less grip on law practice every day. This is thanks to:

a)      the digitization of more and more information, goods, and services,

b)      the vast improvements in telecommunications and, to a lesser extent, transportation, and

c)      the increased importance of networks and standards.

(Brynjolfsson & McAfee, again, but not them alone.)

These are not changes that can be held back for long by local rules, especially as business has crossed borders in a fever, and because federal and uniform laws have cleared away field after field of what once were domains of state law.

Law firms – no, legal services organizations – of the future will be shaped by these changes forevermore. They already have been.

The only real question is how to take advantage of these changes? The opportunities available to small and mid-size firms are unique to them – different from those open to large firms, and not the same for all small and mid-size firms. This requires knowing who you are and identifying your opportunities. And, focus. Not following, not copying.

On organizing law firms around professional values

pellicansCompetence, autonomy and connectedness.

These factors were recently correlated with a sense of well-being and life satisfaction among lawyers. They far exceed money, status or prestige.

In plain terms, lawyers who feel a sense of competence, a sense of autonomy and a sense of connection with others are the contented ones. These factors, the study also found, are less often experienced in large law firms than they are in public service jobs. But note well: the satisfaction achieved in public service is not said to come from the greater nobility of the work, or from reflection on a life well spent. Rather, it’s because public service lawyers are more likely than big firm lawyers to experience a sense of personal competence and autonomy and meaningful connections with others.

Surely, achieving those modest conditions are within the grasp of virtually anyone with a law license – big firm or small, private or public. It’s not about the job; it’s a matter of how the practice environment is structured.

In fact, it might be argued that law practice, certainly “classical law practice,” is the natural home of competence, autonomy and connectedness. Those factors align remarkably closely with the traditional culture of the legal profession. And, now-days the emerging culture of all knowledge work, not just legal work, (think Google) seems to be aspiring to the same principles.

Traditional legal ethics. The heart of legal ethics has always been in the lawyer’s duties of competence, independence and loyalty. It’s not much of a stretch to see competence-autonomy-connectedness as equivalent to those ancient ethical precepts. This is where lawyers began.

Maybe in some ways, large, leveraged and departmentalized law firms have moved away from this core. Large organizations inevitably limit autonomy and may dilute personal connections with clients and colleagues, and they concentrate individuals on narrower and narrower circles of competence. Even so, few law firms, large or small, do not claim competence (they call it excellence), some form of autonomy, and professional connections (collegiality) among the foundations of their culture.

birds-group-photography-cropKnowledge workers.  Even as lawyers may have moved away some from this original core, organizations of knowledge workers are moving rapidly toward cultures that prize flat or non-hierarchical structures,  a sense of community and, of course, excellence.

My best guess is that business organizations of the future will look more and more like what law practice might have looked like in the 19th Century. (OK. Please allow a bit of latitude here, but you get the point.)

Technology. Technology is abetting this. The thrust of 21st Century technology is to “commoditize” knowledge, to equalize the capabilities of small organizations with larger ones, and to create new capabilities for networking and for social connections – in every instance promoting individual competence, autonomy and community.

Millennials. Is it a cause or is it an effect? In 2013, Millennials made up a third of the population of the United States. They constitute a majority of the work force.  And, they are often characterized by attributes that line up with these same factors. Legal employers are commonly admonished to provide work cultures that meet Millennials’ expectations of professional development and recognition of individual achievements, while anticipating their independence from institutions coupled nonetheless with a desire to work as part of a community or team broader than themselves.

So, it’s simple enough. The pillars of professional satisfaction are competence, autonomy, and connectedness. Traditionally, these values have been at the exact center of the professional lives of American lawyers. And now American business culture generally is creating new forms of organizations founded on these same things.

So – as law firms find themselves being reshaped by technology, by non-lawyer service providers, by the expanding role of legal departments, and by limited-service law firms, a key to recruiting and retaining talent will be to create future firms in which professionals can build their careers around competence (professional development centered in meaningful experience), autonomy (participation in a non-hierarchical business organization) and connectedness (collegiality, shared values, and close connections to clients).

Achieving this in law firms that handle larger, complex matters is harder than it looks, but it is imminently doable.

We Are Not Running Railroads or Fighting Land Wars

Efficient organization

One of my favorite themes is that 20th Century law firms erred by taking 19th Century business organizations as models for organizing law firms. Rob Austin and Lee Devin’s Artful Making, What Managers Need to Know about How Artists Work (FT Prentice Hall 2003) brought this home for me some time ago. Recently, an article published by CNN/Money, What entrepreneurs can learn from artists  makes parallel points.

I’m saying all these same points  apply to lawyers and to law firms as well as to entrepreneurs. We are more like them.

We are not running railroads, fighting land wars or making socks. Wait! Wait! I know, I know. Neither are today’s transportation companies or armies or hosiery manufacturers any more. We are all knowledge workers now. And, to give them credit, the military were among the first to see this.

Another of my favorites, Nilofer Merchant is making parallel points also, talking about where we all are headed in the future — in 11 Rules for Creating Value in the #Social Era (Harvard Business Review Press 2012).

And, in case I am not being clear: these insights have implications for how law firms are organized and managed.

Three Meditations Relevant to Lawyers and Law Firms on the Significance of Mistakes and Failures

1. ACQUISITION OF INDIVIDUAL SKILLS

From: The Genius in All of Us, David Shenk

“[T]he notion of deliberate practice went far beyond the simple idea of hard work. It conveyed a method of continual skill improvement. ‘Deliberate practice is a very special form of activity that differs from mere experience and mindless drill,’ explains Ericsson. ‘Unlike playful engagement with peers, deliberate practice is not inherently enjoyable. It … does not involve a mere execution or repetition of already attained skills but repeated attempts to reach beyond one’s current level which is associated with frequent failures.’ …

In other words, it is practice that doesn’t take no for an answer; practice that perseveres; the type of practice where the individual keeps raising the bar of what he or she considers success. …

[This type of practice] requires a constant self-critique, a pathological restlessness, a passion to aim consistently just beyond one’s capability so that daily disappointment and failure is actually desired, and a never-ending resolve to dust oneself off and try again and again and again. …

The physiology of this process also requires extraordinary amounts of elapsed time — not just hours and hours of deliberate practice each day, Ericsson found, but also thousands of hours over the course of many years. Interestingly, a number of separate studies have turned up the same common number, concluding that truly outstanding skill in any domain is rarely achieved in less than ten thousand hours of practice over ten years’ time (which comes to an average of three hours per day). From sublime pianists to unusually profound physicists, researchers have been very hard-pressed to find any examples of truly extraordinary performers in any field who reached the top of their game before that ten-thousand-hour mark.”

Author: David Shenk
Title: The Genius in All of Us
Publisher: Anchor
Date: Copyright 2010 by David Shenk
Pages: 53-57

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2.  SUCCESSFUL ORGANIZATIONS IN THE #SOCIAL ERA

From 11 Rules for Creating Value in the #Social Era, Nilofer Merchant

“[Rule 7.]  Mistakes can build trust. Reach and connection in the Social Era start to be understood as a relationship similar to falling in love, following an arc of romance, struggle, commitment, and co-creation. These are not easily controlled by one party over the other but are a process of coming together. And the relationship gains strength from trying new things and the resulting failures, for it is in the process of making mistakes – and the ensuing forgiveness – that resilience develops. Any vulnerability we feel along the way actually begets trust in the marketplace. And though they are difficult to forge, such robust relationships are more likely to endure the inevitable ups and downs of the market.

[Rule 8.]   Learn. Unlearn. (Repeat.) Rather than viewing change as an aberration, we understand it as a natural part of the organization’s development. Adaptability is central to how organizations and people thrive in the Social Era. In psychological language, the key to adaptability and personal growth is resilience. In biology, the equivalent term for adaptive skills is plasticity. In financial language, the term we might have used in the industrial era was liquidity, because it could measure how an organization was able to withstand the unexpected. In the Social Era, the term to uwse is flexibility. Our goal is to learn our way into the future.”

Author: Nilofer Merchant
Title: 11 Rules for Creating Value in the #Social Era
Date: Copyright 2012 by Nilofer Merchant
Locations: 120-129

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3. SUCCESSFUL LAW FIRMS 

From Growth is Dead: Part 6, Adam Smith, Esq. …an inquiry into the economics of law firms

“Not punishing failure leads to stronger long-term growth.

Other industries, and companies, learn through failure. We bury our failures.

But this fault – and make no mistake, it’s a categorical fault – is in our nature as lawyers.

We cannot willingly enter into situations where failure comes with the territory. We can’t weather the criticism, can’t risk the second-guessing, don’t have the emotional fortitude or resilience to explain why what we did was a thoughtfully calculated risk and one we’d do again.

I submit that our rigid intolerance for failure is so extreme and ultimately perverse that it disables us from being capable of sound decisionmaking.

Going forward will require a different mindset.”

Author: Bruce MacEwen
Title: Growth is Dead: Part 6, Adam Smith, Esq. … an inquiry into the economics of law firms
Date: October 14, 2012
Location: www.adamsmithesq.com/2012/10/growth-is-deal-part-6/

“The Competitive Advantages of Scale Have Been Commoditized.”

The more of Nilofer Merchant I read, the less need I see for me. One after the other, she’s making all my points in her new book, #SocialEra, and on her blog. All I have to add is to say, “yeah, and it applies to law firms, too.”

Her post on the blog last week, Our Obsession with Scale is Failing Us , which expands on a tenet of her book, is virtually a pillar of my 21st-Century-law-firm creed.

Listen to this (from Merchant):

 In the industrial era and even the early web era, size was central to scale. People first began to organize together inside centralized organizations to do things “at scale” because the cost of coordinating work otherwise was just too much, and too hard. Over time, the ability to scale and “reach” an ever larger number of customers caused organizations to keep growing and growing until they became “too big to fail.”

The new reality is this: The ability to scale is no longer a direct function of size.

The Social Era — in which information efficiency is taken for granted, and people can easily self-organize without having to belong to a singular organization — dramatically decreases the cost of communication (e.g., finding people and collaborating with them), changing one of the fundamental reasons that centralized scale once created strength. The competitive advantages of scale have been commoditized.

We’re at an inflection point where work and value creation can reach “scale” without having to be done by a large, single firm. We can see today that Social is more than tools, information-enabled efficiency, products, services, or processes. It is not that we have more ways to be social. It is that the cumulative difference of all these ways of being social allows for an entirely new way to scale — through and with connected individuals. The improvement in what is possible creates new economic effects that add up to a new way of doing business. Organizations that get this are changing the way they create, deliver, and capture value — in essence, creating entirely new business models.

The competitive advantages of scale have been commoditized. Wish I’d said that.

I’d add: “in law firms.”

It’s going to be some time before we have all the applications and processes and skills we need. At least, among and within  law firms that’s true. We need some “social skills” that we don’t have now.

I learned two things about that last week.

First, a new breed of companies is emerging in the law world, that will advance this process. I’m talking about firms that vet and select law firms for clients.  And, I’m not talking about those cheesy operations that charge lawyers a fee to get interviews with corporate counsel at resort hotels. Instead, what’s emerging are companies that do  interviews and other due diligence themselves to find firms to suit the needs of clients and their general counsel. These are forerunners of companies that, one day, will find “entirely new ways to scale” for legal projects.

Second, lawyers will  need a new range of skills for collaborating effectively  “through and with connected individuals.” Bill Ross and Adam Crowson (and your humble servant) spoke to this at the Geneva Group International conference in Raleigh this past weekend. Bill recounted his experiences assembling working groups among public and private interests to save endangered woodpeckers. Adam spoke about the continued importance of personal contacts to build trust and confidence among collaborating professionals, notwithstanding the technology.

Yes, doctor Merchant, we can get to scale without size but, for lawyers, operating without the structures and boundaries that have kept us in control before now, requires new skills. Social skills.  And there are both an art and a science to those that are yet unknown — among lawyers anyway.