Earlier this year MinuteBox team members (MB) had the pleasure of sitting down with Karen Dunn Skinner and David Skinner, the two principals of Gimbal Canada. Gimbal is an industry-leading consulting firm, advising leading law firms throughout Canada and the United States.
MB: How did you both find yourselves in the legal consulting field? And working with Fireman & Company?
Karen: Our goal has always been to help lawyers continuously improve their practice, their business, and their bottom line. After spending years practicing law for large international law firms, in-house, and also as sole practitioners, we came to the conclusion that there had to be a better way to practice law and deliver value to clients.
David: We were attracted to Lean’s focus on value and waste, especially its approach to identifying, evaluating, and then redesigning processes to eliminate, or at least reduce, waste. We saw the potential of Lean to transform the legal service delivery model. Since then, we’ve worked across North America applying Lean, mapping, and process improvement methodologies to improve all aspects of the model. Because we’ve both been lawyers for decades, we’re able to combine our knowledge of Lean and with our understanding of the legal profession. We apply Lean thinking to both the practice of law and the management of law firms and in-house legal departments. We help lawyers in firms and in-house teams do more with less.
Karen: We connected with the consultants at Fireman & Company and created the Performance, Profitability, and Innovation Group to help clients integrate a range of innovative solutions. As a group, we are able to offer deep expertise in pricing, process improvement, legal project management, knowledge management, staffing, legal technology, and data analysis. We improve service delivery by increasing efficiency and productivity, maximizing profits for law firms, and helping in-house legal departments better balance budgets, headcount, and workload.
MB: Has the legal industry embraced Lean and Six Sigma? Are they warming up to the idea?
David: Warming up? Yes. Embraced? No, but that has nothing to do with Lean’s methodologies or the tools. There is tremendous resistance in the legal industry to even the most basic of change. Not only are lawyers conservative by nature, but the partnership structure creates a huge amount of inertia. It can be hard for those interested in doing things differently to garner the necessary support for their innovations. Altman Weil’s 2017 Law Firms in Transition report revealed a disconnect between what leaders of some of the largest law firms know they should be doing and what they are actually doing: 94% of survey respondents said a focus on improved practice efficiency will be a permanent trend going forward, but only 49% said they have significantly changed their approach to the efficiency of legal service delivery.
MB: What is the biggest challenge(s) facing law firms today?
David: The biggest challenge facing law firms is that demand is flat or declining in most practice areas. The only way to get more business in this climate is to take it away from others. To do that, you’ve got to distinguish yourself from your competition by becoming some combination of better, faster, and/or cheaper. Improving productivity, quality, and profitability all ties back into efficiency and the value proposition for clients.
Technology can be another big challenge. Getting everyone in a firm to accept, adopt, and then regularly use technology to its full potential is a lot harder than you would think. Some lawyers even resist using Outlook and other calendaring systems. We know of others who still use WordPerfect.
Karen: Lawyers are also facing growing pressure from clients to be much more efficient; clients are demanding better quality service in less time and at less cost. In some cases, lawyers are under pressure to provide more interactive services, whether that’s more self-service through client-facing portals or more accurate data delivered in real time as to the progress and cost of their matters.
Then there’s competition from both traditional and non-traditional service providers. Historically, the more routine, commoditized legal work wasn’t seen as a priority for many of the big firms. They focused instead on more “bespoke” services for larger clients. It’s becoming increasingly clear to many that if you can get the process right, there’s a whole lot of money to be made, even on a fixed fee basis, from this commoditized work. Think of things like drafting commercial leases, litigating loan defaults, minute book storage and maintenance and filing trademark applications. The pressure is on for firms to recapture profitable portfolios of work they previously passed over.
David: And the category of non-traditional service providers who are competing against law firms continues to expand. Pressure is coming from accounting and auditing firms, legal process outsourcers, e-discovery and document review companies, and also organizations that provide alternatives to traditional legal staffing models.
MB: What kind(s) of law firms will succeed given the changing industry?
David: The firms most likely to succeed are those that have the most efficient methods of delivering real value to their clients at a fair and reasonable price. Such firms will have adopted an integrated approach to innovation. Rather than focusing on single initiatives, these firms will combine different change elements with other strategies in a comprehensive series of initiatives that they will actually execute and implement in a coherent fashion. Successful law firms will likely be characterized by an optimized use of existing technology and other tools delivering, among other things, cloud-based document, knowledge, and file management across mobile platforms that integrate with other relevant practice technologies to enhance collaboration.
MB: What role are clients playing to encourage their law firms to innovate? Should they be doing more?
Karen: Clients are driving the pressure to innovate. They want better value with greater certainty as to the cost. They are less inclined than ever to accept the inefficiency and waste that is common in law. They are simply holding lawyers to the very same standards that their own customers and clients demand of them. They’re not always happy with the pace of change, either. Thompson Hine recently released the results of a survey that showed a really clear “innovation gap” between what firms said they were doing and what clients perceived them to be doing.
MB: The recent Thomson Reuters/Georgetown Law report painted an image of an industry with flat demand and decreasing future returns. Is that an accurate description of law today?
David: We think so. That report’s findings are based on data, which we aren’t in a position to challenge, and it mirrors what we see in the firms we work with.
MB: Similar reports published by the same bodies have been released annually for years with nearly identical messages. Are we becoming inured to the message that change is required?
Karen: Maybe so, but that doesn’t lessen the need for nor the urgency of continuing to deliver the message. That Thompson Hine survey is very clear: clients want change. Eventually, the industry will have to change. Citi Private Bank and Hildbrandt Consulting’s 2017 Client Advisory puts it well, “In a market where clients want the most efficient delivery of legal services, the market will reward law firms who focus on operational efficiency in its broadest sense — not just managing expenses, but transforming the way they run their firms and deliver legal services.”
MB: Are law firms actually reticent to adopt new technology? If so, why? If not, why does it seem like they are?
David: We have a colleague who always says, the best technology is the technology you actually use. If it doesn’t immediately make their work easier, with minimal effort on their part, lawyers are not going to use it, no matter what the ultimate benefit might be.
Karen: Firms aren’t reticent to buy new technology. Instead, they tend to look to technology to provide them with a silver bullet that will solve their problems. But technology is NOT a silver bullet. Technology doesn’t solve problems. Rather it’s the combination of smart and creative people using technology that solves problems. Adoption issues are usually related to (a) not really understanding the problems they’re trying to solve; (b) buying the next shiny butterfly without understanding how the lawyers will use it or interact with it (and without knowing if it will really solve their problems); and (c) not putting enough effort and time into training.
MB: What are some of the non-technological issues facing law firms today?
David: Clients aren’t buying time. They are paying for your knowledge and experience, and your ability to deliver what they need. That most lawyers bill by the hour creates a significant disconnect in the value proposition when viewed from the clients’ perspective.
As well, a tremendous amount of what we do as lawyers involves processes. If you don’t see the process in what you do, then you don’t really understand in detail what you (and those who produce work for you) do. Once you recognize the processes involved in your practice, it is easier to isolate and analyze each step to develop a comprehensive understanding of the costs and bottlenecks. With this information, you can determine what solutions (technological and otherwise) your law firm should consider adopting.
MB: How will the role of lawyers change given the rapid advances in legal technology?
Karen: Hopefully for the better. If technology can take over a lot of the lower-value tasks, then lawyers can concentrate on adding value where it’s actually needed. In an article by D. Casey Flaherty about contracts, he argues that standardization and automation are necessary, but first we have to really understand the meaning of the documents we’re standardizing. We have to examine the boilerplate content, parse those standard clauses, and focus our legal knowledge on making sure our contracts are delivering exactly what we say they are (and what our clients need). That’s the critical role for lawyers. Only then can the new documents be standardized and automated.
MB: What advice would you give to the new generation of lawyers, many of whom have been trained the same way as the previous generations?
David: Look at what you do from your client’s perspective. Most law firms are designed by lawyers for lawyers. They’re not designed for clients. Think about how you buy something major, like a car or a holiday. You shop around for options, research, consider the value you’re getting and then compare prices. And you know the price of all those options or elements up front. Now think about how you sell your legal services. In all likelihood, all you’re going to tell your client is how much you charge per hour. And often, you can’t even tell them how many of those expensive hours it’s going to take to get their result. That’s not “doing business from the client’s perspective.”
Also, look to develop business skills. Learn basic accounting, marketing, finance, change management, and design thinking. Engage in a conversation with your clients about their business (not just their legal problems). Educate yourself beyond the law in things that matter to your clients.
MB: As legal consultants, have you come across any interesting law firms or law firm initiatives?
Karen: We don’t like to play favourites…but one of the most interesting things I’ve seen lately is a shift in compensation models. It’s hard to get people to spend time on innovation or change when that time eats into their billables. We’re finally starting to see firms rewarding people for participating in projects and for successful completion of improvement initiatives. The reward may be financial compensation for participation, or credits for innovation hours. Firms are getting creative and it’s great to see.
Thank you both so much for taking the time to speak with us. Can’t wait to connect with the Gimbal team again soon.