Tag Archive: billing

Professional Competence requires Technology Proficiency

Visiting ALM LegalTech conference today was eye popping in both its simplicity and complexity.

First, the simple:  D. Casey Flaherty, corporate counsel at Kia Motors America, suggests that law firms don’t need more software. They need to use their existing software more efficiently and effectively. What a concept. Reminds me of the scientists’ suggesting that humans use only 10% or less of our mental capacity.

The difference between the two concepts is that inefficient use of existing technology increases the legal spend for clients. And only Corporate America can do what Mr. Flaherty did:  subject his outside counsel to economic consequences when they are guilty. He recently reduced a law firm’s billing to Kia Motors by 40 hours because he detected they didn’t know how to use Word to print to a .pdf file and eliminate the scanning process which would have reduced associates time on his matters by the 40 hours. Multiply this scenario many times and you are talking about hundreds of thousands of dollars in lawyer billing. More on that in a later post.

Next, the complex: Owen Byrd of Lex Machina discussed the concept of Moneyball for Lawyers. He says that “Moneyball” applies data (any collection of facts) to analytics in order to understand trends and patterns that emerge from that data. This supplements legal research and reasoning with predictive analytics. This approach can help predict a party’s behavior, likely outcome of a lawsuit and the results from a specific legal strategy or argument. The concept, emanating from Stanford studies, can be viewed merely as a new research tool. If so, it’s rather expensive. It can also be viewed as a marketing tool by helping you refine your pitches for new legal work to prospective clients. In this case, the cost is insignificant when you attain one or more new clients. This is the future of the legal profession. Currently, Lex Machina and its approach can be utilized only by the larger organizations with big money at stake. But, the handwriting is on the wall.

Most important, these two divergent approaches to technology demonstrate the need to be proficient with current technology in order to satisfy rule 1.1 (definition of competence) and to run scared about the future if you fail to pay attention to the changes coming in the future. The bottom line is to serve clients well. Your awareness and proficiency with technology addresses that goal…and may provide a competitive advantage to some.


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Lawyers for sale

In today’s Wall Street Journal, the writer suggests that high priced lawyers are for sale, that is, that clients are pushing back and demanding lower fees irrespective of the stated hourly rates of their lawyers. The reporter’s perspective is skewed only to the larger law firms, “Big Law.”  Small firm and sole practitioners have always walked this tight rope between client acceptance and lawyers’ fees, but this doesn’t make news.

The battle between lawyer as vendor and client as purchaser has always existed. The “battle”  or adversarial conflict just never received so much publicity as it does now … And yes, some clients have become bolder as a result of the recent Depression (aka Great Recession).

Also, however, some lawyers will raise their purported rates knowing the financial officer of the corporate client will demand a discount. This way, the law firm receives the engagement, the General Counsel gets served and can protect the rights of the company, and the finance officer can assert he/she saved money for the company. A nice game.

A lawyer who was interviewed for the article suggests the real issue for all concerned: The client must believe he/she/it is receiving value for the fee paid. In other words, it’s the total cost of the legal service, not the rate per hour, that is significant. With more clients and attorneys beginning to speak this language, the real issue is coming into focus.

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