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.       

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