Finding the right tech tools for your firm

Aaron Mutnick

Aaron Mutnick is an active member of the Association of Corporate Counsel - St. Louis Chapter and has a LL.M. in litigation management from Baylor University School of Law.

The year was 2010, or thereabouts, and our firm was ready to go “paperless.” The exact time doesn’t matter because it was around that time² the effects of the global financial crisis of 2008 had yielded several CLEs and articles on how to run a more efficient practice. Going paperless, or at least having less paper, was the next step that even small and midsize firms knew they had to take.

Our firm decided to do more than just invest in a good scanner, so we investigated “matter management platforms.” We read reviews, watched demonstrations, talked with fellow practitioners, and eventually landed on one of the more well-known, name-brand systems. It could track time, send out invoices, keep our calendars, integrate with email, manage documents, and even load document templates. We spent days setting it up and watching tutorials. But it didn’t work ­­— at least not for our practice. After a few months, the system was scrapped and the partners wanted a refund.

We ended up scaling down and going with a home-grown paperless solution where we stored all new documents electronically, scanned them as they came in, and used a uniform naming convention. It was fine.

So why did the more robust technological solution fail? Were we, like the infamous unfrozen caveman lawyer³ from “Saturday Night Live,” frightened and confused by the technology of the modern world? This article will show the most likely reasons that solution didn’t work for us, and why we are probably not alone in experiencing a failed implementation. They include:

• the “billable-hour mindset,” psychological biases, and personality traits common to lawyers who resist technology, and
• the fact that we didn’t have a proper framework for identifying “problems” and their technological solutions.

This article will also provide a historical context for how technology resistance has been blunted by market forces demanding a more business-like approach to the practice of law. It will conclude with a common-sense framework for how to overcome these hindrances and identify technology so easy even a Paleolithic⁴ lawyer can do it.

Why Lawyers Resist Adopting Technology

Today, most firms either rely on the billable hour as their predominant pricing model or use it as the standard by which to measure other fee options.⁵ But it hasn’t always been that way. The billable hour became the dominant method of pricing legal work in the late 1950s.⁶ Legal innovator Patrick Lamb cites economic stress on private lawyers during this time as the catalyst for this change and believes the American Bar Association “launched the billable hour revolution” with one sentence in 1958:

“Time being the lawyer’s sole expendable asset, the economic worth of his ability, training and experience is determined by the use made of the hours available for the practice of his profession.”⁷

With more than 60 years of market dominance, the billable hour is, as legal scholar Richard Susskind observed, “not simply a way of pricing and billing legal work; it is a mindset and a way of life.”⁸

Stephen Rispoli expounds on Susskind’s assertion and has identified the following psychological biases that he opines keep the billable hour as the leading billing method, and which this author believes equally explain lawyers’ resistance to technology:⁹

• Ambiguity aversion. As Rispoli explains, “[u]npredictability, both in terms of complexity of the matter and time spent, will naturally make lawyers entering into a fee arrangement concerned about revenue matching the time spent on the case.”¹⁰ This aversion equally applies to adopting new technology, especially when the unknown is being compared to something known or familiar.¹¹
   
• Self-serving or confirmation bias. Lawyers entrenched in a familiar technology or work style, or who believe the billable hour is the best pricing practice, will likely look for evidence to support those practices.¹²  For example, lawyers may cite their numerous ethical obligations as a justification for extensive hourly work, where they leave no stone unturned and paper their files with memos to each other and their clients. Likewise, if lawyers are comfortable with a technology it is less likely that they will identify problems with that technology or look for improved technologies.
   
• Status quo bias. If familiar technology and the billable hour are the status quo, then the disadvantages of any change, like implementing a matter management platform or adopting an alternative fee agreement (AFA) will “loom larger than the advantages of the AFA and consequently persuade the lawyer to stick with the billable hour. Thus, the [technology and] AFA must be significantly more profitable to be worth the change.”¹³
   
• Hedonic adaption. The idea that “positive and negative life events … have little long-term effect…[suggests] lawyers have just adjusted to [the negative effects of inefficient technology and the billable hour].”¹⁴

The billable hour and aversion to technology may also persist because the biases Rispoli identified are supported by six personality traits common to lawyers that are outside the norms of the general population:¹⁵

• Skepticism. Lawyers tend to be skeptical, even cynical, and judgmental. On a scale of 0 to 100, lawyers score a 90 compared with the general public score of 50.¹⁶ While this trait may be valuable when looking for inconsistencies during cross-examination of a witness, this trait makes lawyers less likely to accept alternatives to the billable hour and new technology. It makes them more likely to lead with questioning and doubting rather than engaging in creative dialogue.¹⁷
   
• Urgency. Lawyers score roughly 20% higher on this trait than the general public.¹⁸ They tend to have a sense of urgency, which often causes them to spend time performing billable tasks right away rather than spending time up front analyzing what tasks are necessary and in the best interest of their client.¹⁹ This also suggests lawyers may be less willing to take time to identify problems and their technological solution because of how it will interrupt otherwise urgent work.
   
• Sociability. Lawyers score low in interacting with other people, with an average score of 12.8 compared to the average of 50 for the general public. If you take out the rainmakers in firms, the average score is 7.²⁰ So, lawyers tend to spend more time isolated in their work — which they can bill — rather than collaborating with other firm stakeholders and clients on ways to deliver value in or outside of the billable hour method and with improved technology — work which they cannot bill.²¹
   
• Resilience. Lawyers on average score 30 compared to the general public’s 50.²² Lawyers tend to score low in this area “despite the outward confidence and even boldness that characterizes most lawyers ... they are more sensitive under the surface ... [which] suggests a self-protective quality.” Therefore, changing decades’ worth of practices and habits emanating from the same work processes and the billable hour can be seen not just as an unwelcome change in practice but an attack on the lawyers’ judgments. The internal dialogue may sound something like this: “I’m paid to solve problems and am ethically bound to act in the best interest of my client. If there really was a better way to do this, I would have figured it out already.”
   
• Abstract Reasoning. Lawyers score high with this trait, and while it may help lawyers see the problems of the billable hour and inefficient processes, they will also be able to reason away the problems with the obvious benefits – the billable hour and their current processes are predictable and profitable.²³
   
• Autonomy. Lawyers generally score in the 89th percentile in this trait. “[I]n other words it is common for lawyers to resist being managed, to bridle at being told what to do, and to prize independence.”²⁴ While this trait can yield high profits under billable hour formats, especially when lawyers are left alone in a “keep-what-you-kill” structure, it also makes lawyers less likely to work on a team and collaborate with clients to find methods to improve their processes and embrace alternative billing.²⁵

In spite of these biases and personality traits, the 2008 global financial crisis forced lawyers to acknowledge the obvious: a time-based method of pricing legal work incentivizes inefficiency,²⁶ duplicates effort,²⁷ and discourages case planning or management.²⁸ As Lambreth & Rueff bluntly observe, “[f]ew other industries would thrive if they measured productivity by the time their workers spent without regard to what those workers created.”²⁹ Likewise, few other industries would thrive if they were not using the most efficient, sophisticated tools available on the market. Consider our firm before it went paperless. Our paper “files” in physical filing cabinets naturally required timekeepers to spend more time searching for relevant documents when compared to electronically stored information on a searchable platform. And more time meant more money.

Nonetheless, the Billable Hour Persisted

It’s clear the 2008 global financial crisis triggered how clients, and in-house law departments in particular, purchased legal services as they began to demand “more for less.”³⁰ While that demand translated into many firms going paperless, it also created some of the earliest legal industry specific technologies, like e-discovery document review platforms. If ever there was a way to cut down on needless, process-driven tasks, it was through utilizing e-discovery tools. Sure, there were thousands of billable hours lost to the efficiencies of document review platforms, but lawyers could reason the efficiencies gained were worth it; after all, clients were generating more documents to review so there were still plenty of billable hour opportunities. Yet, even though the global financial crisis disrupted the legal market and new technologies ushered in greater efficiency, lawyers saw these developments as something to “endure and manage,”³¹ rather than something to embrace and expand. After all, their “firms [could] still make a lot of money”³² with their familiar pricing model and technology. So, of course, the billable hour and the relatively moderate adoption of technology persisted.

Fast-forward a decade later to 2018, and there were new, diverse technologies that went beyond e-discovery and began to commoditize legal services. As the Altman Weil survey authors from that year stated when reflecting on the challenges presented by the global financial crisis:

“we think law firms face a different kind of threat … broader and more nuanced, arising primarily from the sweeping force of technology evolution over the last two decades that has resulted in the commoditization and commercialization of more and more legal services.”³³ (emphasis added).

The survey doesn’t mince words — technology is a threat. Perhaps that’s because some of the efficiency yielding, commoditization technologies include analytical tools that claim they can predict legal outcomes³⁴ through artificial intelligence. But the more a technology seeks to replace the judgment and discretion of lawyers, the more the Paleolithic lawyer will, and maybe should, fight against it. So, the tools and technology that lawyers will adopt in the near term will likely be those that enhance, rather than replace, a lawyer’s decision-making, judgment, and creativity.

A Framework for Matching the Right Technology with the Right Problem

If you scan through the advertisements in legal publications, you’ll see a variety of technologies marketed to lawyers. One strategy for deciding what technology to consider is to identify the workflow processes that will face the least path of resistance to the billable hour, those biases, and personality traits discussed above. Susskind believes technology that makes administrative or process-based work more efficient, — i.e., work that requires more process than judgment, and more procedure than strategy or creativity — will bring the most immediate change to the legal market.³⁵ In other words, if lawyers can be freed from spending their time on administrative tasks by adopting technologies that reduce or commoditize those tasks, they can use that time (and possibly charge an even higher rate) to perform complex judgment-based decisions or build their businesses.³⁶

Susskind posits that efficiency-based technologies will be applied to tasks that can be routinized and undertaken more efficiently, whether by lower-cost timekeepers or through computerization.³⁷ For example, he believes, the growing number of companies in these spaces confirms document review, due diligence work, basic contract drafting, and rudimentary legal research are areas ripe for adopting efficiency-driven technologies.³⁸

According to Susskind, efficiencies in these subject areas will lead to the commoditization, decomposition, and multi-sourcing of legal work, which he describes as occurring on a continuum where legal work moves from being bespoke to standardized to systematized.³⁹  For example, a contract — even for a simple, routine transaction — may have been traditionally drafted from scratch by a senior partner. Then, with the advent of data storage and word processing programs, templates could be saved and then copied, pasted, and edited. Perhaps an associate or even a paralegal could do most of the manual work. Today, technologies don’t eliminate the need for human review, but they eliminate steps by virtue of allowing firms to create specific templates where a non-lawyer can input information from an intake form that is auto-filled into the contract and merely sent to the attorney for review.

To see what technologies, either purchased or home-grown, can eliminate steps and waste, lawyers are now utilizing the business-based, problem-solving framework of Lean and Six Sigma.⁴⁰ Combined, Lean Six Sigma provides a five-step framework that, when applied in a legal process improvement context, “helps determine the best way to carry out a work process to achieve efficiency, excellent quality of work and service, high probability of successful outcomes, and predictability.”⁴¹

The five steps to the Lean Six Sigma framework, known as DMAIC, are:⁴²

• Define the problem and why it needs to be solved. This should be client-driven with the clients defining the “problem” or what they “value” and are willing to pay for. 


• Measure the current performance of the process. This can be achieved by creating a process map, or, to use a more familiar legal term, a flowchart. By visually depicting the tasks and sub-tasks, and timing how long each may take, lawyers can identify waste, inefficiencies, duplicative work, and areas to reduce variation.


• Analyze the opportunities to reduce waste or variations. Performing a root-cause analysis⁴³ in this step will help identify decision-points or trigger events where, if a change in workflow is made, a value-added impact can occur. Some solutions may be as simple as building templates for client intake or contract creation, or even using a uniform naming convention for documents and emails to make them more searchable or subject to email rules.


• Improve the process by piloting, implementing, and validating process changes. Perhaps this is the most difficult step because it’s here that a lack of buy-in from key stakeholders will stall the process improvements. For example, if lawyers hear clients’ desire for more value, they may decide a matter management is the solution. If they delegate the implementation to associates or administrative professionals and don’t spend the time to learn the new system or validate its merits, the improvement will die.


• Control the process to ensure sustained improvements. It’s not just creating standardized processes or forms that is crucial, but also looking for tools that allow for continual improvement. This means lawyers should periodically check in with their clients to see if the “problem” has been solved or if the “value” has been delivered. Then, they can ask the client to identify new “problems” and “value” they would like to see.

A Final Word of Advice to the Paleolithic Lawyers

If you understand blockchain, robotic process automation, and artificial intelligence, then this note was not for you. If you don’t understand those things, then don’t be lured by the light of those buzzwords and their associated products. At the same time, don’t convince yourself conducting a Zoom deposition, mediation, or trial means you have fully evolved. A technology necessitated by a global pandemic is not evidence of your technological prowess.

Instead, start by acknowledging that clients are expecting lawyers to have familiarity with the clients’ issues:

“indeed, one of the reasons clients select one lawyer over another, or firm over another, is precisely that they believe that lawyer or firm has undertaken similar work previously. Most clients would be horrified to think, especially if they are being billed on an hourly basis, that each new piece of work they pass to law firms is set about with a fresh sheet of paper and embarked upon from scratch. On the contrary, the client expects a degree of standardization.”⁴⁴

Next, visit with the people who perform repetitive, administrative tasks that support, or are in the direct workflow of, billable or value-added time. Let them define their pain points. Then, walk with them through the DMAIC framework to see if there’s a technological tool that diminishes that pain. It could be something as simple as larger dual-monitors and a wireless mouse – after all, there’s no need to reinvent the wheel.

Endnotes

1 Aaron Mutnick is an active member of the Association of Corporate Counsel - St. Louis Chapter and has a LL.M. in litigation management from Baylor University School of Law.

2 See e.g. Thomas Baird, Paperless and Loving It: Technology and the Small Firm, 68 Tex. B.J. 591 (2005); Dusti Harvey and Feliz Angelica Rael, The Paperless Law Office, 1 Ann.2008 AAJ-CLE 965; Tom Overbey, The Paperless Law Office, 46 Ark. Law., 10 (2011).

3 In Season 17 of “Saturday Night Live” we were introduced to an unfrozen caveman lawyer. The following closing argument he makes fairly satirizes how lawyers may feel about technology: “Ladies and gentlemen of the jury, I’m just a caveman. I fell in some ice and later got thawed out by some of your scientists. Your world frightens and confuses me. Sometimes the honking horns of your traffic make me want to get out of my BMW and run off into the hills, or wherever. Sometimes when I get a message on my fax machine, I wonder: ‘Did little demons get inside and type it?’ I don’t know. My primitive mind can’t grasp these concepts. But there is one thing I do know – when a man like my client slips and falls on a sidewalk in front of a public library, then he is entitled to no less than two million dollars in compensatory damages, and two million dollars in punitive damages. Thank you.”

4 The reference to a caveman in the title and initial paragraph was only meant as a nod to popular culture’s use of caveman to convey the simplicity of products or technology, e.g. the GEICO caveman and the “Saturday Night Live” character. From here forward, the term Paleolithic will be used as it is gender neutral.

5 Stephen Rispoli, The Walking Dead: Psychological Biases that Keep the Billable Hour Alive, 43 J. Legal Prof. 187, 187 (2019) (“Rispoli”) citing Paul Bonner & Deborah McMurray, Alternative Fee Arrangements That Work for Clients and Lawyers,  A.B.A. L. PRAC. DIV., 30 (2014) https://www.americanbar.org/publications/law_practice_magazine/2014/may-june/alternative-fee-arrangements-that-work-for-clients-and-lawyers.html - now https://dashboard.mazsystems.com/webreader/31891?page=32

6 Rispoli at 190.

7 Patrick Lamb, Alternative Fee Arrangements: Value Fees and the Changing Legal Market (Chapter 1, Section 2, Paragraphs 2-4) (Ark Group, 2013). (“In 1958 …the private lawyer’s payroll expense had increased 52 per cent over the prior seven years ... and other operating expenses had increased 65 per cent over the same period. His income had only increased 45 per cent compared to income growth of 83 per cent for dentist and 157 per cent for doctors”).

8 Richard Susskind, Tomorrow’s Lawyers: An Introduction to Your Future 17 (Oxford, 2017).

9 Rispoli at 201-220.

10 Rispoli at 201.

11 See e.g. Craig R. Fox & Amos Tversky, Ambiguity Aversion and Comparative Ignorance,  110 The Quarterly J. of Economics. 585, 585-603 (1995), https://doi.org/10.2307/2946693 (The studies referenced here show that when comparing options that are both clear and vague ambiguity aversion is present, but when evaluating only one option in isolation, the aversion seems to disappear);  Jim Engle-Warnick, Javier Escobal, Sonia Laszlo, Ambiguity Aversion as a Predictor of Technology Choice: Experimental Evidence from Peru, 1 Serie Scientifique (2007) https://core.ac.uk/download/pdf/46923023.pdf (A study of subsistence farmers in Peru showed that the adoption of modern technology depended more on the farmers’ aversion to ambiguity than their aversion to risk).

12 See e.g., Rispoli at 208 citing Sean H. Williams, Sticky Expectations: Responses to Persistent Over-Optimism in Marriage, Employment Contracts, and Credit Card Use, 84 Notre Dame L. Rev. 733 (2009); Ward Farnsworth, The Legal Regulation of Self-Serving Bias, 37 U.C. Davis L.Rev. 567, 568 (2003).

13 Rispoli at citing Daniel Kahneman et al., Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, 5 J. Econ. Persp. 193, 194 (1991).

14 Rispoli at 217-218 citing Jonathan Masur, John Bronsteen, & Christopher Buccafusco, Hedonic Adaption of the Settlement of Civil Lawsuits, 108 Colum. L. Rev. 1516 (2008).

15 Susan Raridon Lambreth & David A. Rueff, Jr., Power of Legal Project Management, 208-219 (American Bar Association, 2014).

16 Lambreth & Rueff at 210.

17 See generally Lambreth & Rueff at 211.

18 Lambreth & Rueff at 211.

19 See generally Lambreth & Rueff at 212-213.

20 Lambreth & Rueff at 213.

21 See generally Lambreth & Rueff at 212-214.

22 Lambreth & Rueff at 216.

23 See generally Lambreth & Rueff at 215-217.

24 Lambreth & Rueff at 217-218.

25 See generally Lambreth & Rueff 218-219.

26 Lambreth & Rueff at 266; See generally A.B.A., ABA Commission on Billable Hours Reports, at 5-7 (Gary Hengstler ed., 2002).  

27 ABA Commission on Billable Hours at 5.

28 ABA Commission on Billable Hours at 5.          

29 Lambreth & Rueff at 27.

30 Lamb at (Executive Summary, Paragraph 2); Lambreth & Rueff at 5-6; and Susskind at 20.

31 Thomas S. Clay & Eric A. Seeger, 2018 Law Firms in Transition: An Altman Weil Flash Survey at ii (2018).

32 Id. at iv.

33 Id. at ii.

34 For example, Lex Machina advertises that it can “predict the behavior of courts, judges, lawyers and parties with Legal Analytics.” LexMachina, https://lexmachina.com/ (last visited Nov. 26, 2019).

35 Susskind at 21.

36 Rispoli at 195. As Rispoli notes, “all lawyers necessarily must devote some of their time at the office to non-billable matters, including personnel issues, continuing legal education and client development,” and “as a general rule, experts [have estimated] that approximately one third of all work time is non-billable.”

37 Susskind at 21.

38 Id. at 21.

39 Id. at 21-22.

40 When applying this principle in the process improvement framework, two common approaches are used: (1) process mapping – visually illustrating the steps performed to achieve a specific end result, and (2) root-cause analysis, a problem-solving framework that examines the highest level of a problem to identify its underlying causes. Once used, these tools’ efficacy may be assessed with objective metrics like reduced cycle time, or increased percentage of desired outcomes (e.g., realization rate). See Lambreth & Rueff at 232.

41 Lambreth & Rueff at 231. At its core, legal process improvement starts by analyzing the existing state of a task, identifying areas for increased efficiencies, and eliminating waste or rework to deliver desired business outcomes. The end result is the successful development of a replicable model.

42 Lambreth & Rueff at 234-240.

43 A root-cause analysis identifies the cause of a repetitive problem in a process, one technique that can be used to perform this analysis is an Ishikawa diagram. See Lambreth & Rueff at 232 n. 2.  

44 Susskind at 27-28.