4 Excuses Law Firms Use to Avoid Innovating (that are Total BS) pt. I

Part I of II (Read Part II here).

Being partner of a law firm is hard work. It took hard work to get here, and it takes even MORE hard work now that you’re here. You have tough decisions to make, including whether or not your firm will invest its limited resources in certain tools or technology to help you do your job. Doing your job probably involves rejecting a whole lot more proposed purchases than you accept – that’s the nature of the game. Not every improvement that comes along is right for every firm.

Declining to install new equipment can sometimes be justified by simple numbers (a solo practitioner who handles traffic tickets has no need for a $50,000 video conferencing center). Other times, a particular software may end up not being a good fit (cloud-based matter-management is declined after none improved efficiency when tested). Rational thought and reasonable investigation led to decisions that a new tool or technology was just not in the firm’s best interest.

But what happens when you no longer seem to have the time or energy for the investigation you should really be doing? Is it wrong to be satisfied with the systems you already have in place? You’re an attorney, after all, not a corporate CEO. When someone comes to you now with a new idea, you don’t usually give it much thought. Suddenly, you realize that the reasons you’ve been giving for shooting down suggestions may not be the real reason you’re not interested. Well, it’s your firm, right? How bad can it be?

Bad. Be careful, or you may find that you’re just making excuses…

… that are TOTAL B.S.!

1) Cost/Benefit Ratio

What you say: “The cost of adopting this new (technology/equipment/software) outweighs the potential benefit to the firm.”

What you’re thinking: “Purchasing this new (technology/equipment/software) would reduce the paychecks of the equity partners in exchange for a potential benefit in the future, and we would like that money now.”

Alternate: “I haven’t taken the time to research the potential of the new (technology/equipment/software) except to find out how much it costs.”

Why it’s B.S.: One of the most pervasive, yet least discussed reasons for why many firms refuse to adopt innovative tools or technology involves what one author described as the Under-Investment Problem. Law firm partners, when given the option between investing firm cash in tools and technology that will pay off in the future, decline to so invest, preferring higher income for themselves. Such a decision, while completely legal and proper, sacrifices the firm’s future. Such decisions are made even worse now, since many of the innovative tools and technology available have both dropped considerably in price and offer a speedy return on investment.

Businesses that fail to innovate and invest in their own future success, whether due to under-investment of firm capital or ignorance of the options for upgrading, will not survive in a more competitive market. Worse, firms that consistently favor higher paychecks for equity partners over re-investment in the firm will create a gap between partners and associates that engenders animosity, reduces trust, and encourages associates to look for work elsewhere. (One group of lawyers indicated that failure to value people by indicating they are “fungible” or interchangeable is the #1 reason why associates leave law firms.)

You should probably take a step back if you find this happening at your firm. First, determine if your firm has developed a culture where investment in the firm takes a back seat to the partner’s draw. Once your associates rise to partner, are they going to expect the same to continue – large paychecks for partners while the firm is otherwise neglected? How long before your firm either requires a massive and costly upgrade to bring everything into the 21st century, before inadequate technology dries up the revenue that paid those big partnership draws in the first place?

2) If it ain’t broke…

What you say: “Our current system works fine for our cases.”

What you’re thinking: “This is the system that I’m used to. Most of it was taught to me by a senior attorney when I was an associate. The remainder are fixes that I’ve made over time. They were good changes, they work, and nobody has sufficient experience to challenge me.”

Why it’s B.S.: There is no such thing as a perfect system, impervious to the march of time, the development of new technology, or even just a random good idea from the FedEx guy.  Every system can be improved. While not all changes are going to be a good fit, rejecting suggested improvements without learning about their benefits and costs is evidence of poor management. Just as open discussion of new options can encourage creative cooperation, rigid refusal to change existing systems can stifle input and foment distrust.

As you’ve developed your system over time, there’s no doubt that you’ve put a lot of energy into making sure that it works for your cases. You saw things that needed to be tweaked along the way, and you made the fix. The only downside to making something truly yours through years of practice and experience is that you may find that you take any criticism of your system as criticism of you. Once you start defending your office processes as though they were your own children, you need to take a step back and breathe. Remember, your system wasn’t handed down on stone tablets, and remember that the people who suggest changes to your process have the same interests in mind that you do: a system that works. (That list I mentioned earlier – the #3 reason associates leave a law firm: eroded faith in management due to concentration of authority, failure to allow input into deliberations, all firm decisions simply announced to firm.)

When a partner refuses to allow any modifications or updates to the existing systems, particularly by associates, the partner can seem to be ignoring not just opportunities for improvement, but may also imply that the associate’s input isn’t valued. It’s worth noting that two of the five ways that FindLaw lists for small firms to treat their employees right are to show appreciation for good work and to treat them as equals. Acknowledging their contributions and encouraging them to offer suggestions to improve efficiency can go a LONG way!

Continued in Part II

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