Proctor & Gamble and The Design Thinking Law Firm
By: Karen Francis-McWhite (@accidentalhippy)
Perhaps the most significant take-away from my understanding of Proctor and Gamble’s (P&G) transformation into a design thinking business is how effectively the company transformed a culture of distinct work silos into a culture of collaboration, co-creation and partnership. Category teams and their leadership were embedded with designers and challenged to develop work processes across categories. Strategy emphasized collaboration and effective discussion rather than bulletproofing pitches to supervisors in a winner-takes-all model of strategy development.
So why did I read about this in a law school class?
The prevailing law school model prepares us for careers in law firms that are better known for chewing up associates in a hyper-competitive drive towards the increasingly elusive golden ring of equity partnership. Despite the need for collegiality and some sort of focus for the sake of firm coherence, practice areas still often function as independent silos of work, with individual attorneys competing to develop the most lucrative books of business and maximize their annual bonuses. Law firm leadership, in turn, governs the firm with a keen eye on their end-of-year pay-outs.
Yet, the P&G multi-year commitment to organizational transformation can be repurposed for an innovative law firm with leadership willing to invest in the cultural transformation and reassure associates that their contributions to that process of transformation will be valued and rewarded.
Traditional law firms share many of P&G’s pre-design thinking features. They are typically promote-from-within organizations. Customers-clients are questioning the valuation of law firm services, largely because the customer-clients see little innovation in the kind of services offered or the means by which they are offered. This has contributed to the development of a competitive climate in which competitors offering unbundled or quality DIY services are edging into law firm businesses in a manner akin to when P&G’s competitors developed private label products to rival P&G’s products.
Without running afoul of professional rules regarding client confidentiality and the rules pertaining to law firms and associations, an innovative law firm seeking to embrace the P&G model would do well to build on collegiality within the firm. While the end-game would focus on maximizing client benefit, the best way to get there is to start with transforming the firm culture. Associate training could include better clarity about the multifaceted dimensions of matter management and the resources within the firm that are available across practice areas. Firm practice areas should come to a fuller understanding of themselves as co-creators of a coherent service for their customer-clients. But they should also develop an appreciation for designing their work processes for each other because service design should thrive both within the organization and for the customer-clients.
P&G demonstrated this by starting in the category groups that already had some predisposition towards design thinking. From there, they were able to develop a larger organizational “curriculum” called Design Works AND transformed the strategy sessions of category leaders to focus more on collaborative learning and discussion. Accompanying these internal transformations, P&G cultivated external partnerships to insure that the internal efforts were informed by general best practices and not just internal priorities.
Certainly, law firms must take care not to violate professional rules regarding multidisciplinary practices (e.g. ABA Model Rule 5.5) and client confidentiality, but a careful use of analytics that strip identifying client features from details pertinent to matter management could well be shared with external partners as a law firm seeks to innovate.
A law firm that can transform the collegial culture of the firm into a more collaborative space, and that leverages outside expertise will be well on its way to achieving a P&G model. Like P&G, that law firm should expect improvement in law firm morale, greater cost savings and a better articulated value proposition for its customer-clients.
Innovation Drive in Law
By: Ryan Gomez
What does innovation even look like in the legal industry? Barring some drastic change in the practice of law, the tangible product that lawyers create (e.g. pleadings, discovery, motions, etc.) is not likely to change in the foreseeable future. If we look at instances of “innovation” in the legal industry—e-discovery and document review, legal project management, legal analytics, real-time client updates—most of the innovations seem focused on the processes affecting the practice of law, or how the client interacts with the firm. To be sure, most of these innovations are already old news by the time a law firm starts using them.
There are two positives in the fact that legal innovations are process or client focused and old news: (1) lawyers are already familiar with processes and clients; and (2) lawyers need not invent something completely new. This is not to say that lawyers are so intimately familiar with the processes affecting the practice of law that they can break the entire process down in complete detail, nor that lawyers are at all empathetic with clients, nor that nothing new can be created in the legal industry. However, it does suggest that the majority of lawyers have the capacity to bring innovative ideas to the practice of law, or even that clients themselves can prove innovative.
Spurring innovation does not have to dramatically affect a law firm’s current business model or even change the day-to-day work of attorneys. In fact, the less you change the status quo of the law firm while searching for innovative ideas, is likely the best way to get other attorneys, and particularly partners, on board in searching for innovative solutions. As I see it, there are two ways to pursue innovation at a relatively low-cost, but with a potentially large upside: crowd sourcing and CLE.
Personally, I’ve always been fascinated by crowd sourcing. When you crowd source ideas from a population that does not have intimate knowledge of the subject matter, you get ideas that are unconstrained by perceived realities. There are several ways law firms could potentially garner mass quantities of consumer ideas: law firms could post surveys or questionnaires on Amazon’s Mechanical Turk, or it could create a simple game where users work within constraints in order to achieve an optimal output, or it could offer large financial incentives for solutions to targeted problems. Of course, there are downsides to crowd sourcing ideas in this manner. Many times the number of bad ideas will greatly outweigh the good ideas and it can be difficult and time consuming to parse through all the information received, but the upside is that you potentially receive information and ideas never considered by other attorneys.
As previously stated, attorneys themselves have the capacity to bring innovative ideas to the practice of law themselves. The largest barrier here is that attorneys generally lack foundational knowledge in industry changes that potentially affect the practice of law. This gap in knowledge is one thing that this class, Design Thinking for Legal Services, and ReInvent Law attempts to change. For example, Design Thinking for Legal Services provides foundational knowledge on the service industry and the approach taken in modern service-oriented businesses. While service design is not directly related to the law, the parallels are obvious enough.
Luckily, law firms don’t need to affect a complete overhaul of legal education to obtain lawyers with interdisciplinary knowledge. Lawyers are already required to complete a certain number of continuing legal education hours each year in most states. Rather than conducting an overview of changes in a certain legal segment, which is something all lawyers should be familiar with anyway, law firms can use CLE to educate attorneys in changes of other industries or practices, and provide ideas on how it could affect the legal industry. From there, law firms would need only to make it known that it is open to changes and create an environment where attorneys feel free to express new ideas.
By educating attorneys on emerging practices and trends in other industries, and hypothesizing how those changes could be brought into the legal industry, attorneys will naturally formulate their own ideas, likely different from what may have been suggested. Attorneys are already intimately familiar with extending laws, policy, and ideas; I see no reason why they wouldn’t naturally extrapolate after being presented with CLE of this sort. The advantage that this avenue has over crowd sourcing is that attorneys likely have some idea of what will and will not work within the legal industry. Thus, the number of good, or at least workable, ideas will outweigh the bad ideas. Plus, the added cost to law firms will likely be negligible, since most firms already pay for CLE.
Innovations in the legal industry, at least historically, are not new inventions or radical revisions in how the law is practiced. The law itself isn’t exactly amenable to large scale or dramatic changes. This is not necessarily a bad thing, and law firms can actually use this to their advantage in obtaining innovative ideas relatively inexpensively. While actually implementing the idea might have a significant cost, at least the law firm knows what is to be accomplished by the time they are considering implementation
Innovation Through Benchmarking
By: Mazen S. Berri
An innovative business model within a law firm can be done by benchmarking; but not any traditional benchmarking strategy. Lawyers within a firm are too focused on other deadlines and goals that must be met. Therefore, a law firm should develop a team strictly focused on the innovative process; by doing so, each group can stay loyal to their goals that must be met.
If a firm develops an incentive plan rewarding attorneys that create an innovative model, their attention and focus would be elsewhere. So, the first step would be to implement an innovative team. The main focus for that team is to understand customer needs; in this step empathy can play a large role. As Stumpf and Chadwick explained regarding a business design, it is important to understand the consumers expectations when they are provided with a certain service. Roger Martin says “ There is no pressure on a designer to modify design to meet the market.” I have interpreted this to mean several things, and correlated it well with a benchmarking strategy.
An innovative team must determine and keep to date what others are doing well; but not to implement it themselves, rather, to make it more innovative. Think of it as “innovating the innovation”. Like McDonalds, the McCafe idea was implemented in order to compete with Starbucks. But how will you compete if your innovation is not better than the competitions? In order to competitively benchmark, the innovation team must individually unpack the business competency, performance factors, realization rates, and the profits gained or lost, to provide an overall improved practice. Each one of these factors must be individually unpacked and cleaned up to make that particular process more efficient.
Why should a client switch from company “X” to company “Y” if their process is identical? That is why benchmarking to find the newest innovation and building off of that process before implementing it is what will set an innovative business model over the top.
Lean for Legal
By: Katrina Brundage (@KBrun13)
In the early 1900s, Henry Ford revolutionized manufacturing with the introduction of assembly line production of the Model-T. Ford’s innovative technology and business model made owning a car possible for the average American. Yet Ford’s business model fell into trouble as customers began demanding more value, particularly in the form of new design options. Other auto manufacturers, such as GM, capitalized on Ford’s struggle to adapt to the ever changing market.
Following World War II, Japanese industrialists began studying Ford’s production model and incorporating the model into Toyota’s business model. These Japanese industrialists realized something Ford and a lot of other manufacturers were missing: Empathy. Empathy and interdependence are deeply embedded in Japanese culture, so it was natural for Toyota to incorporate these values in its business. By applying empathy to Toyota’s business model both internally and externally, the new Toyota Production System excelled. Toyota built an organization that identifies consumer value propositions, seeks to eliminate waste from the value stream, and includes everyone in the organization is involved in process improvement and creating value for customers.
So what does auto manufacturing have to do with law? The core business values identified and championed by Toyota have been incorporated into a rapidly spreading business model known as “lean manufacturing” or “lean thinking.” Lean thinking is just as applicable to service industries such as law as it is to manufacturers. Lean thinking involves five key concepts for developing a continuous improvement business process: (1) identifying customer value; (2) identifying the value stream (i.e. the set of actions necessary to create a product) for each product; (3) eliminate waste and establish flow in value stream; (4) allow customers to pull products, rather than pushing them; and (5) strive for perfection.
Legal services, whether basic transactional issues or complex disputes, follow a process. Such a process includes obtaining information from the client, identifying and evaluating legal issues, determining potential modes of action, and so on. In most law firms, this process is not clearly defined, bounced around between partners and associates, and, most importantly, not customer-centric. In order to improve this process, law firms need to focus on identifying value propositions and creating positive experiences for both customers and employees. Law firms should be a place where every employee matters and is committed to bringing value to the end consumer. By actively training and engaging law firm employees—partners, associates, and support staff alike—in lean thinking tools, the organization can work together to innovate and improve consumer value in legal services. Additionally, lean thinking processes can free up attorneys at the firm to engage in meaningful work to provide value, rather than wasteful and boring work.
In the U.S., firms like SeyfarthLean are leading the application of lean principles in the legal industry. I expect many other legal organizations will follow. Creating this kind of an organization requires a culture shift away from the rigid Ford-style law firm model to a more flexible Toyota-style model willing to adapt to changing legal markets. This new model requires empathy and collaboration, but with the right leadership, tools, and strategic vision, a lean legal organization will innovate and continuously improve the provision of legal services.
For more information about Lean Thinking, check out: the Lean Enterprise Institute (www.lean.org) or Lean Thinking by James P. Womack and Daniel T. Jones.