Thoughts on ways to improve the management of professional services firms

Friday, February 25, 2011

Clients are their own worst enemies

In December in The importance of a discipline of professional practice I said:

Bluntly, we professionals are letting down our clients. Worse, we are sometimes doing it through our narrow definition of what constitutes professionalism.

I have no truck with approaches that guarantee clients higher costs and worse results, even accepting that clients are their own worst enemy!

While I did not follow up on that remark in the way I said would because of other pressures, the same pressures that forced me to merge my two professional blogs, the issues have been much on my mind.

At the moment I am working on a web based project for Sydney law firm Dilanchian Lawyers & Consultants. I normally don't mention specific clients, but in this case I know that Noric won't mind because we share common concerns.

I won't go into the details of the project. However, it does focus on ways of assisting lawyers and others concerned with law to improve performance. Not performance measured by billable hours, but performance in the actual delivery of, or management of, legal services.  

As part of the project I have returned to the mapping of the service delivery process. I am focusing on legal services. However, the processes involved are common across all professional services. By service delivery processes I am not talking matter management, although I recently saw some rather good workflow software here that makes matter management much easier. My focus is broader.

I have written before about the importance of the diagnostic (Role of the Diagnostic in Professional Services - medicine vs law, Professional services - the importance of the diagnostic). My focus here was on the professional. However, we also need to focus on the client.

Simply put, my argument is that we need to educate clients in the approach that they should follow in seeking professional advice.

Let me illustrate with an example that all lawyers and many other professionals will understand. A client needs a contract or agreement to do x. The client comes to the lawyer and says draw up a contract. This is where the diagnostic comes in because it helps the lawyer better define client needs. Often, the lawyer will find or feel that there are some underlying problems.

Before going on, remember that a contract is no more than the legal wrapping around something that the client wants to do.   

Now what the gun slingers do, they used to be called cowboys in the computer industry, is to give the client just what they asked for regardless of any underlying issues and then move on to the next billing. Others ask questions and try to identify problems.

A difficulty now arises.

Say the case involves an intellectual property matter. Definition of the IP involved is usually central to such matters. This may seem self-evident, but you would be surprised at just how often the IP is ill or even wrongly defined. Then there are the questions of the relationships between the parties - these involve multiple flows (money, management, IP creation) - as well as the various protection and reporting clauses. Again, you would be surprised at just how often these are ill-defined.

The lawyer faces a choice. How much effort should be put into assisting the client to identify and solve what are, after all, commercial or business issues? 

We live in a just in time world, a world of see problem, fix problem in which scrappy emails or even SMS instructions have come to replace proper instructions. This adds to costs. We also live in a world where the thinning out of management, something that I have written about, means that in-house knowledge is less than it used to be. This means that people have become more reliant on external sources of advice.

To the gun slinger lawyer, all this is an opportunity.

If the client has cash and is prepared to pay, then you follow through. Give the client the contract, but ask passive information questions. This process can be strung out. If the client has no money, just give them what they ask and move on. After all, you know that further legal fees will come should things fall over. The more conscientious lawyer will try to help, but also knows that the time costs involved may never be recovered.

All this is not an academic argument. Real money is involved. I have seen cases where large legal sums were paid that were not only unnecessary, but could actually have been seen to be unnecessary early on. 

This is not an attack on lawyers as a profession. Rather, it is an argument that says that performance improvement in the delivery of legal services is a two way street.

Lawyers can improve their performance through things such as better diagnostics. But we also need to educate clients as well.       

Wednesday, February 23, 2011

Boeing, outsourcing & Ayn Rand

A brief follow up to Problems with outsourcing. There I mentioned Ben Sandiland's blog as a good source on Boeing's outsourcing problems. The 787 runs out of time and lies extends Ben's reporting.

In an apparently unconnected post on my personal blog, Ayn Rand, selfishness and reciprocity, I looked at one element of the philosophy of Ayn Rand. The link is the way in which disconnects between a short term focus on both personal rewards and key performance indicators can distort behaviour.

We management consultants are meant to be practical people. Yet the biggest problem and I have found, and the cause of some of my biggest professional failures, lie in the disconnect between apparently practical solutions and underlying values, processes and assumptions.

In general, it's pretty easy as an outsider to identify ways in which a firm can improve performance. Sometimes its impossible to get that across when the client's world view is diametrically opposed to what has to be done.

I still haven't worked out how to solve that one!  

Monday, February 21, 2011

Sir Roger Douglas to leave politics

My thanks to Catallaxy Files for drawing my attention to this post by Eric Crampton, Farewell Sir Roger,  on the decision by New Zealand's Sir Roger Douglas to leave politics. 

Sir Roger was a key figure in major changes that took place in public administration that extended well beyond New Zealand. I wrote two earlier posts that first set a context and then talk specifically about some of his work:  

Saturday, February 19, 2011

Problems with outsourcing

A post on Management Perspectives, Problems with maintenance, I spoke of the problems that could arise through through deferral of maintenance in order to meet immediate targets. I suggested that this had become something of a pattern.

The post was triggered by problems experienced by the Australian Navy. Now an article in the Australian, 'Cancerous' morale risks our navy fleet, fleshes out a related element. Reading this and related material, the argument goes that in out sourcing key maintenance functions, the Navy has lost in-house engineering capability to the point that it now threatens the very capacity to properly manage the maintenance function.

The problems Boeing faces with the 787 Dreamliner have been well documented and especially on Ben Sandiland's blog Plane Talking. Something of the same issues seem to have arisen here. Boeing outsourced to the point that it lost effective control of the whole project.

New airliners are always a complex, bet your business, project. Success depends upon strong internal management and engineering competence. Boeing appears to have got the balance wrong.         

Friday, February 18, 2011

UK's Clifford Chance to open in Australia

In February 2010 I reported on plans by Allen & Overy to open in Australia - Allen & Overy to open in Australia, More on Allen & Overy in Australia.

The British law firm Clifford Chance has 3,200 lawyers working across 20 countries. According to a story in yesterday's Australian Financial Review - it's behind the pay wall -  Clifford Chance will merge with Sydney's Chang, Pistill & Simmons and and Perth's Cochrane Lisherman Carson Luscombe from 1 May.

The official press release states:    

"The importance of Asia to the global economy and to our major clients has already resulted in substantial growth for our market-leading Asia operations," said Peter Charlton, Clifford Chance's Head of Asia. "Any credible growth strategy for the Asian legal market can no longer ignore the importance of the Australian market to the region, both as a destination for, and a source of, investment. I'm pleased that in CP&S and CLCL we have found such a good solution for our clients, and I'm looking forward to welcoming the partners and staff of both firms to Clifford Chance."

In December, Lawyer's Weekly carried an interview with Ian Cochrane. This has nothing directly to do with the merger. I just found it interesting.   

Thursday, February 17, 2011

Management Perspectives merges with Managing the Professional Services Firm

After a far bit of thought and soul-searching, I have decided to merge Management Perspectives with this blog.

Originally, the two blogs were intended to serve very different purposes. However, I found that limits on my professional time meant that neither blog was getting proper attention. You can see that from the posts or lack thereof.

The merger means that this blog will carry a broader range of material without, hopefully, losing its original focus.

Wednesday, February 02, 2011

24/7 and the professional

Just because I haven't been posting here because of other pressures doesn't mean that I have forgotten this blog, nor the connected interests. I think about them all the time.

The title of We need a management revolution is pretty self-explanatory. In part of the post I talk about the problems a 24/7 world creates for we professionals.

I don't have a proper answer, just frustrations. I have dealt with elements in my discussions on the need for a discipline of professional practice, one that crosses the professional silos. Yet it's hard.

How do you deal with a just in time clients who asks for an instant response when they haven't thought the issues out?