A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

Replacing the Annual Appraisal Agony

Tuesday, August 30, 2016

By Ron Baker, Founder, VeraSage Institute 

Appraisal is not the system that drives pay, careers, and status; it is an incidental effect of those dynamic systems. Appraisal is primarily the paper-shuffling that sanctifies decisions already made.  ––Tom Coens and Mary Jenkins, Abolishing Performance Appraisals

Human capital determines the performance capacity of any organisation. Today’s knowledge workers, unlike the factory workers of the Industrial Revolution, own the means of production. Ultimately, knowledge workers are volunteers, since whether they return to work is completely based on their volition.

Consequently, it is difficult to understand the continued reliance on the “annual agony”—the performance-appraisal apparatus. According to Tom Coens and Mary Jenkins, in their seminal book Abolishing Performance Appraisals, over 50 years of academic studies reveal scant empirical evidence of the effectiveness of performance appraisals at actually improving performance.

Despite these facts, firms cling to it an uninformed belief that there is no suitable replacement. Where did this ritual come from?

The Origins of Performance Appraisals

The modern antecedent of the appraisal process was explained by Peter Drucker in his book, The Effective Executive:

“Appraisals, as they are now being used in the great majority of organisations, were designed by the clinical and abnormal psychologists for their own purposes. He is legitimately concerned with what is wrong, rather than with what is right with the patient. The clinical psychologist or the abnormal psychologist, therefore, very properly looks upon appraisals as a process of diagnosing the weaknesses of a man.”

The appraisal tends to focus on weaknesses, not strengths—what psychologists call the “presenting problem.” But good leaders—like good coaches—design performance processes and tasks around a person’s strengths, and ignore—or make irrelevant—their weaknesses.

Deleterious Effects of Performance Appraisals

Performance appraisals have become, to borrow a term from the medical profession, an iatrogenic illness—that is, a disease caused by the doctor. An estimated ten percent of all hospital patients suffer from this type of disease. We need to apply the Hippocratic principle of primum non nocere (“first, do no harm”) to the performance appraisal process.

The following are some of the more serious negative effects of the performance appraisal (PA):

  • PAs are counterproductive to “driving out fear,” the one emotion that Dr. Edwards Deming believed needed to be eliminated to improve human performance;
  • PAs focus on the weaknesses of the worker rather than his or her strengths;
  • Learning is overshadowed by the evaluation and judgment inherent in the PA;
  • Even if PAs convey both strengths and weaknesses, it is human nature for negative feedback to drown out positive feedback;
  • Effective feedback should occur as needed, not on an arbitrary date on a calendar;
  • PAs are a symbol of a paternalistic boss-subordinate relationship based on command and control rather than the knowledge worker being responsible for his or her own development;
  • PAs impose a one-size-fits-all approach that impedes relevant, authentic feedback to different individuals;
  • Too much “noise” surrounds the PA process: discipline or termination, pay raises, bonuses, promotions, and the like, lessening the focus on performance improvement;
  • Ranking people against each other does not help them do a better job. Ranking people, also, by definition, creates “bottom performers,” regardless of the absolute value of their work;
  • PAs devote far too much scarce leadership attention to underperforming employees rather than top performers;
  • PAs are extremely costly to administer relative to their meagre benefits;
  • PAs provide no effective method for holding people accountable for future results, since they focus on the past;
  • Any self-acknowledged weakness by a team member can be used against them, deterring learning and self-development;
  • PAs confuse delivering effective feedback with filling out bureaucratic forms and check-the-box administrative activities that have no connection to strategic purpose or value creation;
  • PAs reinforce a requirement for human-resources departments to keep KGB-like dossiers on team members;
  • PAs create a false impression that a scientific and objective process is being applied to measure individual performance. Yet all PAs, in the final analysis, are subjective and based on judgment;
  • PAs obscure the fact that a firm is an interdependent system, and what matters is the performance of the whole, which is not merely the sum of its components;
  • PAs provide the illusion of protection from lawsuits and allegations of wrongful termination, when in fact they rarely offer that protection—and often backfire in litigation.
  • According to author Daniel Pink in “Think Tank: Fix the workplace, not the workers” (November 6, 2010), “Performance reviews are rarely authentic conversations. More often, they are the West’s form of kabuki theatre—highly stylized rituals in which people recite predictable lines in a formulaic way and hope the experience ends very quickly.”

Replacing the Performance Appraisal

It is time to move to a model where courage is valued over caution, and command and control is replaced with connect and cultivate. Ultimately, it is the intensity of interactions with intelligent people, along with great ideas, that attracts and develops talent—not the efficiency of a firm’s administrative processes.

Three strategic resources replace the performance appraisal system:

  • Key Predictive Indicators for Knowledge Workers
  •  The Manager’s Letter
  • After-Action Reviews

Key Predictive Indicators for Knowledge Workers

A critical distinction is being made between a key performance indicator and a key predictive indicator. The former is merely a measurement—such as the number of patents filed, or new clients—but lacks a falsifiable theory. The latter, by contrast, is a measurement, or judgment, guided by a theory, which can be tested and refined, in order to explain, prescribe, or predict. It is the search for cause and effect.

Knowledge work is not defined by quantity, but quality; not by its costs, but results. The traditional tools of measurement need to be replaced by judgment. And there is a difference between a measurement and a judgment: a measurement requires only a scale; a judgment requires wisdom.

So many firm leaders worry that if they get rid of objective measures, they will introduce subjective bias into the decision-making process. So what? To get rid of bias we would have to give up emotions and discernment, which is too high a price to pay. Neurologist Antonio Damasio has studied brain-damaged patients, demonstrating that without emotion it is impossible to make decisions.

Admittedly, the following KPIs raise rather than answer questions, but at least they raise the right questions. Better to be approximately relevant rather than precisely irrelevant. Enlightened organisations allow their team members to decide which of the following KPIs are most important to track and develop.

Client Feedback

What are the customers saying—good and bad—about the team member? Would you trade some efficiency for a team member who was absolutely loved by your customers? How does the firm solicit feedback from its customers on team-member performance?

Effective Listening and Communication Skills

It is easier to teach reading and writing, which are solitary undertakings, than to teach listening and speaking, which always involve human interactions. But how do you measure listening and communication skills?

Risk Taking, Innovation, and Creativity

How often do employees take risks or innovate new ways of doing things for customers or the company? Do they engage in creative thinking in approaching their work?

Knowledge Elicitation

Aristotle said, “Teaching is the highest form of understanding.” Knowledge elicitation is the process of assisting others to generate their own knowledge. Note that this encompasses more than simply learning new things; it involves educating others so that they are able to generate their own knowledge.

One of the most effective techniques for knowledge workers to learn any subject—especially at a very deep level—is to teach it. How often do the team members facilitate a “lunch and learn” about an article or book they have read or seminar they have attended? How good are they at educating their customers and colleagues?

Continuous Learning

What do team members know this year that they did not know last year that makes them more valuable? This is more than simply logging hours in educational courses; it would actually require an attempt to judge what they learned. How many books have they read this year? More important, what did they learn from them?

One of the objections we hear to investing more in people’s education is “they will leave, and possibly become an even stronger competitor.” This is no doubt true, although a company faces the risk of their leaving anyway. But what if you do not invest in their education and they stay?

Effective Delegator

Peter Drucker believed that up to one-quarter of the demands on an executive’s time could be consigned to the wastebasket without anyone noticing. Does your organisation encourage its knowledge workers to become effective delegators?

Pride, Passion, Attitude, and Commitment

If you thought some of these other KPIs were hard to measure, how would you measure pride? Although not a substitute for actual talent, pride in one’s work, customers, colleagues, employer, and values are critical to operate with passion and commitment.

High-Satisfaction Day

I am indebted to John Heymann, CEO, and his Team at NewLevel Group, a consulting firm located in Napa, California, for this KPI. An HSD is one of those days that convinces you, beyond doubt, why you do what you do. It could mean landing a new customer, achieving a breakthrough on an existing project, or receiving a heartfelt thank-you from a customer. Sound touchy-feely? John admits that it is. But he also says that the number of HSDs logged into the firm’s calendar is a leading indicator—and a barometer—of his firm’s morale, culture, and profitability.

We can’t measure a doctor’s beside manner—it has to be experienced. Efficiency metrics cannot count all the energy, enthusiasm, and commitment that employees decide not to contribute.

The Manager’s Letter

Another practical suggestion to hold people accountable for their future contribution is what Peter Drucker called the manager’s letter, as explained in John Flaherty’s book, Peter Drucker: Shaping the Managerial Mind:

[Setting objectives] is so important that some of the most effective managers I know go one step further. They have each of their subordinates write a “manager’s letter” twice a year. In this letter to his superior, each manager first defines the objectives of his superior’s job and of his own job as he sees them. He then sets down the performance standards that he believes are being applied to him. Next, he lists the things he must do himself to attain these goals––and the things within his own unit he considers the major obstacles. He lists the things his superior and the company do that help him and the things that hamper him. Finally, he outlines what he proposes to do during the next year to reach his goals. If his superior accepts this statement, the “manager’s letter” becomes the charter under which the manager operates.

Procter & Gamble utilizes what it calls the Work and Development Plan, in lieu of performance appraisals, which lays out the work to be achieved in the upcoming year, how it links to the business plan, the measures and timing for success, and expected results.

What makes the manager’s letter so valuable is its focus on opportunities, results, output, and value, rather than problems, inputs, costs, and activities. Performance appraisals can only report on the past, revealing problems, never opportunities.

After-Action Reviews (AARs)

The U.S. Army’s use of AARs began in 1973, not as a knowledge-management tool but as a method to restore the values, integrity, and accountability that had diminished during the Vietnam War.

Reflection without action is passive, but action without reflection is thoughtlessness. Combine experience with reflection, and learning that lasts is the result. What percent of your firm’s time is devoted to improving the work, not just doing the work?

The objective is not just to correct things, but to correct thinking, as the Army has learned that flawed assumptions are the largest factor in flawed execution.

But perfectionist cultures, however, resist this type of candid introspection, as they tend to be intolerant of errors, and they associate mistakes with career risk, not continuous learning. The medical world has an appropriate axiom for mistakes made: forgive and remember. AARs should not be used for promotions, salary increases, or performance appraisals.

Confronting People with Their Freedom

You can’t keep on doing things the old way and still get the benefits of the new way.  ––Thomas Sowell

Because knowledge workers are volunteers, we could learn a lot from the not-for-profit sector. They know how to leverage people’s gifts, whereas performance appraisals are more concerned with people’s weaknesses.

Management thinker Charles Handy has spent his career arguing that organisations are living communities of individuals, not machines. He offers a splendid metaphor in his autobiography, Myself and Other More Important Matters, which I believe is applicable to knowledge workers and the performance appraisal process: the theater.

“There’s no talk of “human resources,” everyone is listed on the playbill, and managers are for things (stage, lighting, etc.), not people. The talent is directed, not managed, by someone who departs after the project commences. The audience feedback is immediate, not one year after the performance.”

Author and consultant Peter Block says, “The real task of leadership is to confront people with their freedom.” Performance appraisals inhibit autonomy and responsibility; they are the buggy whip of the knowledge era—an example of yesterday holding tomorrow hostage. Do we have the courage to replace such an ineffective process?

Performance appraisals are, after all, an iatrogenic illness, which means: physician, heal thyself.

Editor's Note

ALPMA Summit

Ron Baker is the inspirational and challenging Master of Ceremonies for the 2016 ALPMA Summit ‘A Blueprint for Change’ held from 7 – 9 September at Etihad Stadium in Melbourne, together with ALPMA Life Member and CEO of Coleman Greig Lawyers, Warrick McLean. Ron is also chairing a panel session on ‘Reinventing Performance Management’ which also features Jane Lewis, HR Director at Allens and Stephanie Beard, HR Manager, Harwood Andrews Lawyers, and helping delegates pull together the key take-aways from Summit in the final session “Creating Your Blueprint for Change”.

About our Guest blogger

Ron BakerRonald J. Baker started his CPA career in 1984 with KPMG’s Private Business Advisory Services in San Francisco. Today, he is the founder of VeraSage Institute—the leading think tank dedicated to educating professionals internationally—and a radio talk-show host on the www.VoiceAmerica.com show: The Soul of Enterprise: Business in the Knowledge Economy.

As a frequent speaker, writer, and educator, his work takes him around the world. He has been an instructor with the California CPA Education Foundation since 1995 and has authored fifteen courses for them, including: You Are What You Charge For: Success in Today’s Emerging Experience Economy (with Daniel Morris); Alternatives to the Federal Income Tax; Trashing the Timesheet: A Declaration of Independence; Everyday Economics; Everyday Ethics: Doing Well by Doing Good; and The Best Business Books You Should Read.

Legal Innovation for Small Firms and Legal Teams

Tuesday, August 23, 2016

By Therese Linton, Managing Director & Principal Consultant, The BASALT Group 

Why do Law Firms and Legal Teams need to change and innovate?

Law firms and legal teams are facing challenges due to innovations, restructuring and changing client expectations that started after the global financial crisis and have gained momentum. In response, some firms are adopting innovative practices including Lean Six Sigma and Legal Project Management but these have yet to be fully integrated into an overall approach. In my work with lawyers and practice managers, I am regularly asked to explain the difference between Project Management, Portfolio Management and Process Management. These frameworks and tools are used by many organisations to achieve their strategic outcomes, improve profitability and to simply ‘stay in business’. Law firms are at a point where they will need to ‘change or die’ and research has shown that this is incredibly difficult for any human being in any circumstances – as bought to life by Alan Deutschman in his article for Fast Company in January 2005.

How new are these innovative practices really?

So exactly what are these innovative practices and how can law firms and legal teams use them to ensure the long term viability of their practices and maintain relevance to clients? Well they aren’t exactly ‘new’ as successful organisations have been using various methodologies, frameworks and tools for project management, portfolio management and process management to improve their returns and increase client satisfaction since the 1970’s. Indeed the concepts are best when they are tailored to the specific needs and nuances of law firms and legal teams. To this end, I have leveraged my experience in project, portfolio and process management to adapt the traditional frameworks and select the tools and techniques that will work the best in legal practice.

How do we decide which frameworks are best for us?

Put simply, you need to choose the right tool for the job or challenge that is being faced and these simple definitions help to identify the most appropriate practices to adopt and apply.

  • Legal Project Management: focusses on how to utilise legal project management techniques to improve management of individual legal matters. These frameworks and tools are in great demand from clients and senior executives who are familiar with the generic application of these techniques within their own organisations. These work best when there are teams of lawyers and other professionals working together to achieve major project based outcomes.
  • Legal Portfolio Management: focusses on how to apply legal portfolio management techniques to achieve efficient and effective allocation of resources and juggling of priorities across a suite of legal projects and matters. These are required in situations where individual lawyers are allocated to many matters at once and typically work solo on the matters. Benefits are obtained through more effective expectation management and allocation of resources to the highest priority matters.
  • Legal Process Management: focusses on how to standardise and improve the efficiency of legal processes by drawing on techniques from the field of Lean Six Sigma. These concepts are fundamentally different to project management and seek to improve the efficiency and reduce the defects contained within any process. This could be a practice management process such as invoicing or a legal process such as contract preparation. The effective application of process improvement tools and techniques allows firms and legal teams to achieve more with less and to improve client and stakeholder satisfaction.

What benefits can be expected?

There are many direct and indirect benefits that flow from the adoption of the above innovative practices. Here are some specific examples –

  • Legal Project Management (small firm of 20) – shortly after I ran a serious of LPM knowledge workshops and one on one coaching sessions for a small firm specialising in aviation matters, they were inundated by an unexpected increase in the number of matters and transactions. The Managing Partner observed that the solicitors who had adopted the LPM tools and techniques were much less stressed and much noticeably more productive than the solicitors who had not incorporated the new practices.
  • Legal Portfolio Management (mid-tier firm – workers compensation practice) – a workers compensation practice was able to improve resource planning and deliver more effectively against client driven deadlines by implementing an extremely simple Portfolio Resource Planning Tool, combined with forward visibility of major mandated milestones. This highlighted areas of congestion where matters needed to be reassigned in order to maintain client delivery and also provided visibility of areas where legal staff were significantly under utilised. Corrective action was taken to significantly improve overall utilisation and reduce stress due to overloading.
  • Legal Process Improvement – major firms such a Seyfarth Shaw and Dupont Legal have embedded Lean Six Sigma and process improvement techniques which have yielded large efficiency gains and significantly improve client satisfaction. Research in the area of process improvement has found that process efficiency can be improved by a minimum of 30% by addressing the root cause of quality defects and simple process redesign. A good example of this in action is Seyfarth Shaw, a US firm that has created SeyfarthLean,  a proprietry, value driven service model, which combines the core principals of Lean Six Sigma process improvement with creates tangible results, including:

    • More consistent, high-quality legal services
    • Increased efficiency
    • Improved communication and collaboration
    • Right-sized staffing approaches
    • Committed, transparent pricing
    • Reduction in overall cost of services

As you can see there is a lot to be gained from implementing these tools and methodologies to optimise your firm's legal processes, and I would encourage you to get started now! 

Editor's Note

ALPMA Summit
Want to learn more about how to apply these tools to optimise legal processes at your firm?  Therese Linton is leading a half-day Pre-Summit Masterclass Workshop ‘Legal Innovation for Small Firm Teams' on Wednesday 7 September in Melbourne that is designed to introduce you to best practices that can be applied within your small firm or legal team to achieve innovation, improve productivity and increase engagement with clients. You do not have to be attending the 2016 ALPMA Summit to attend to this workshop. The workshop costs $395 for ALPMA members or $495 for eligible non-members. Places for these workshops are strictly limited so register now!

About our Guest Blogger 

Therese Linton Therese Linton is Australia’s leading expert in legal project management with both practical and academic credentials spanning over 25 years of project management practice. For the last five years she has been working with groups of lawyers from diverse backgrounds ranging from major commercial firms through to boutique firms and in-house counsel to design learning programs and develop legal project management competencies.

Therese is a renowned and awarded Lecturer and Unit of Study Coordinator for Sydney University’s prestigious Masters of Project Management. She is also a Lecturer for the College of Law’s Masters of In-house Practice and regularly delivers practical workshops for the Law Society of NSW in legal project management.

Therese's qualifications and certifications include a Bachelor of Commerce (IT) Merit, UNSW; Executive Masters Program, Harvard Business School; Advanced Diploma of Project Management; Cert IV Training and Assessment; Six Sigma Black Belt; Certified Practicing Project Director (CPPD) AIPM

Get past the AI hype and into the AI help

Tuesday, August 16, 2016

By Fabian Horton, Director, Connect Law

It’s a real thing; but how much of it is real?

Everyone is talking about Artificial Intelligence (AI) again.  But is it really that big a deal? 

Well… yes.  And the fact is that AI is only going to get bigger and bigger - there is no doubt about that.  How fast that will happen though is anyone’s guess; though I’m thinking that it isn’t going to be like the last time we had an AI bubble. 

A report from Tractica, estimates that the market for Enterprise Artificial Intelligence systems will increase to $11.1 billion by 2024. That’s a lot of AI.

Get past the hype

The hype surrounding buzzwords such as ‘AI’, 'Deep Learning’ and ‘algorithm’ can illicit feelings of excitement or fear depending on how you envisage the future. 

Do you see an AI future utopia or dystopia?  Or, as I saw on one meme, will the AI future be with Ironman or the Terminator? 

For lawyers the question is more about; "will AI replace me?"

If you ask me, I would say that, for now, it’s not likely.  In fact, if history is anything to go by, AI will just make it possible for lawyers to do more work! 

Now I hear you say; "what about the law graduates that do all the work that AI will take over, like discovery?".  

Well, those law graduates will probably go onto train the computers so that the lawyers can do more work.  But whatever the future holds, we need to get past the hype and media hyperbole if we are to make intelligence decisions about our profession’s future.

So what are we talking about anyway?

As the old joke goes, ask five lawyers a question and you will get eight answers.  The same thing goes for asking the question "what is AI?".   Ask five software engineers what AI is and you will probably get an algorithm explaining it. Technically correct but practically useless. You can of course just use the ever faithful Google search or Wikipedia

For me and the work that I do in legal technologies, I like the Deloitte definition:

“AI is the theory and development of computer systems able to perform tasks that normally require human intelligence.” 

In essence, AI is a broad field of technologies that can easily take on magical properties for the uninitiated. But when you break it down, you see that AI is just a suite of good science.  These technologies include; machine learning, natural language processing, speech recognition, and computer vision. And all of these technologies allow machines to do some pretty amazing stuff.

What are the real life applications?

With so much going on in the field of AI, both theoretically and practically, it is easy to get distracted. Here are a few examples of how AI is working with lawyers:

The here and now:

  • Virtual assistants: This is the tech you find in Apple’s Siri and Google Now. You should be using it now as this technology can help you run your practice. 

  • Technology Assisted Review (TAR): This is the technology used in e-discovery. Once the domain of big-litigation only, the price of e-discover is getting such that even smaller cases can take advantage of it.

  • Expert systems: Not really AI but a close cousin. These are rule based systems that assist in making legal decisions in both rudimentary and complex legal areas. There are a number of commercial providers out there already doing some great work.

What’s around the corner:

  • Advanced document analytics: AI is making headway into the realm of document review and analysis. The technology uses statistical and machine learning techniques, and natural language processing to help lawyers with large review tasks; particularly useful in large contract matters. The commercial companies that are producing this technology will be pricing their services competitively so practices should be alive to the potential cost savings.

Where to from here?

Ok, so you don’t have the big dollars to invest in the latest version of ROSS and you may not have the people power to set-up and run your own AI testing lab. So what can you do? 

Here are my suggestions of a few things that all firms (big or small) can do to take advantage of and prepare for the future:

1. Start thinking like a machine

That means get your firm's processes in order. Have operation procedure manuals for everything.  These will form the basis of running a machine assisted practice.  Get an expert in to help your lawyers understand the processes that they use every day. You will be surprised at how many assumptions and leaps of logic lawyers make.  And the more experienced the lawyer, the more they make. That’s why it’s called experience.

2. Understand your legal domains

Artificial Intelligence works best in a specific domain. Get your practice areas tight by ensuring that you have dedicated people who understand the intricacies of what they do. The days of the generalist are long gone.

3. Start thinking creatively

AI and other technologies are going to help lawyers in ways that we haven’t even thought of yet. So get your thinking caps on. You don’t have to be a computer programmer to come up with a great idea for a legal technology. You know the law. Now start solving problems. The technology is here to help.

It is no longer an option to practice law like we have before. Every industry is entering a new phase. To make it in the new legal world, technology must be part of your plan. So get past the hype, put your practice in order, check out the technologies, and start creating!  If you have a problem with any of these issues, then get some help. There are legal technologists everywhere just dying to talk to new people about their passion!

Editor's Note

ALPMA Summit

Interested in hearing more about the latest in legal technology? Fabian Horton is a speaker at the 2016 ALPMA Summit 'A Blueprint for Change', which will be held at Etihad Stadium, Melbourne from 7 - 9 September.  His presentation,  "Algorithms, AI and Apps, The Rise of the Robot Lawyer", will explain how technology can not only enhance your service offerings, but transform the way you interact with your clients and the law.

About our Guest Blogger

Fabian Horton
Fabian Horton is a lecturer at the College of Law, Melbourne, and a solicitor with extensive experience in legal technologies, online legal applications and social media. He operates his own private virtual firm and is currently undertaking his PhD researching how technology affects the law. 

Fabian is the foundation chairperson of the Technology and the Law Committee of the Law Institute of Victoria.

Dodgy dealings are big business

Tuesday, August 09, 2016

By Moses Samaha, General Manager, Commercial & Property Solutions, Veda

Suspicious business practices have been a hot topic in the media recently. The infamous Panama Papers – a leak of more than 11.5 million files from offshore law firm, Mossack Fonseca – recently revealed how businesses and individuals can hide their dealings, avoid tax and even get around their obligations under legislation such as the Anti-Money Laundering / Counter Terrorism Financing (AML/CTF) Act.

In the case of the Panama Papers, Mossack Fonseca dealt with intermediaries for companies and organisations, which helped obscure the real owners of the money and assets being administered by Mossack Fonseca. While many of the accounts detailed in the Panama Papers are legitimate and legal, keeping ultimate beneficial owners obscured helps individuals and organisations indulging in illegal behaviour to go unnoticed.

Because of this, all the companies named in the Panama Papers leak – even those that have done nothing wrong – are now facing a hit to their reputations. The same is true for many of the businesses these companies are linked to, which are dealing with reputational damage by association.

On a local level, this event is a timely reminder for businesses of the importance of maintaining ongoing customer due diligence and understanding the beneficial ownership structure of any company they have a relationship with.

Who are you really dealing with?

Clearly, knowing who you are doing business with, managing the risk of fraud and ensuring you are meeting all AML/CTF obligations is of paramount importance. Ongoing customer due diligence is a necessity for businesses wanting to keep themselves safe – but, unfortunately, it’s one that some companies’ risk and compliance teams neglect.

The importance of regular checks can be lost as businesses focus on onboarding new customers faster, improving the customer experience and managing internal workloads.

Further complicating the issue is the fact that AML/CTF legislation is not strictly prescriptive on how frequently to undertake ongoing due diligence. The lack of guidelines on when to perform checks may contribute to the practice falling by the wayside.

What’s the worst that could happen?

For businesses that allow their ongoing due diligence to slip, the threat is two-fold.

Without a thorough understanding of a company’s structure and the individuals involved in the business, bad behaviour can go unnoticed until a scandal, like the Panama Papers, makes it public. By that time, it’s too late – businesses involved with companies named and shamed for dubious practices will inevitably come off looking worse for wear.

On an even more serious note, allowing ongoing customer due diligence to lapse creates loopholes for companies and individuals with criminal intent to slip through, hiding among institutions that are taking part in legitimate offshore activity.

The key to saving your business from reputational risk

It’s tricky to know if a business you’re working with is putting you at risk until after an incident occurs. But there are things you can do to protect yourself from getting involved with high-risk entities.

Thorough customer due diligence is the best thing you can do to ensure you’re not fooled by untrustworthy businesses. Upfront checks are a vital step in ensuring customers and business owners are and do what they seem.

But don’t think you can ‘set and forget’. Due diligence shouldn’t be a one-time exercise. Make sure you have regular ongoing customer due diligence processes in place to keep your information up to date.

Editor's Note

Want to learn more about how to protect your firm from reputational damage? Moses will be presenting "Tips to Avoid being the next 'Panama Papers' Event” at 5.45 pm on Wednesday 7 September, at the opening of the 2016 ALPMA Summit Trade Exhibition at Etihad Stadium , Melbourne. You can also attend other complimentary Partner Connection sessions to hear the compelling insights from our Principal & Gold Summit Partners. This is a great opportunity to also meet more than 50 market-leading legal industry vendors, conveniently gathered under one roof at the largest legal management trade show in the Southern Hemisphere. The public opening commences at 3.00pm – and you do not have to be registered to attend Summit to come along. If you would like to attend the public opening get a free pass.

About our Guest Blogger

Moses SamahaMoses Samaha has almost 20 years’ industry experience working across consumer and business market segments holding executive positions in product development/marketing, strategy and sales.
Moses has worked closely with the commercial credit industry for the past five years as head of Commercial Risk. During this time he revamped many of Veda’s services that are used today by customers and extended Veda’s capabilities into supplier risk with the successful acquisitions of Kingsway and Corporate Scorecard. More recently Moses took on the role to head the Commercial and Property Solutions business at Veda. This division is responsible for managing Veda’s cross company property storage and the relationship with key government relationships such as ASIC and AFSA.
Prior to joining Veda, Moses was part of the Executive Management Team heading up a number of functions in Telstra’s Innovation, Product and Marketing group.

The How-to and Science of Optimism

Tuesday, August 02, 2016

By Dr Bob Murray, Principal, Fortinberry Murray

Gosh the world is a terrible place! Law firms are losing money, partners are in danger of being laid off, and digitisation, offshoring and in-housing are decimating the ranks of support staff. And on top of all that the world is over-populated, inequality is rampant, the natural world is ravaged and jobs are getting scarcer. Populist strong men (or women) and ideologues are either running countries or running for the top jobs. I could go on—it can get worse. No wonder the rates of pessimism and depression are on the increase.

Being pessimistic has even become fashionable. It wins votes, people can relate to it. But the extent of it in today’s environment is damaging. Pessimism about people’s individual and social future is behind many, if not most, of the terrorist attacks and the failure of some pretty big law firms. It also contributes to the rising stress levels and the pandemic of mood disorders in the workplace generally and in law firms in particular.

The problem is, of course, that effective strategic planning, BD and a whole range of other things in the business of law depend on a healthy and realistic optimism for optimal success.

But it’s possible to create an optimistic team, an optimistic firm, as well as an optimistic family, even while recognising that the larger picture of the world as a whole is not that cheerful. It’s that kind of limited, but very useful, optimism that I want to outline here.

The science of optimism

Let me start with a bit of science—I am, after all, a scientist (both a behavioural neurogeneticist and a clinical psychologist if you must know). 

Human beings are born optimistic. Young children are generally incredibly optimistic. Like self-esteem, life satisfaction and other individual attributes, optimism is in our genes. However life experience teaches us to taper this optimism with a degree of realism, or even pessimism. Also not everybody is born with the same genetic balance: some of us are naturally more optimistic or pessimistic than others. The profession of law seems both to attract and engender pessimists. But the general rule still applies—even lawyers were born optimistic.

One of the other things that we now know about optimism is that it is both contextual and catching. In fact pessimism and optimism are both highly contagious. If you surround yourself with optimistic (or pessimistic) people you will almost inevitably catch their mood. Some researchers say that since you choose the people you surround yourself with, perhaps your level of optimism or pessimism is also a matter of choice.  However if you are in a pessimistic profession, that choice might not always be possible.

We have also found out over the last few years that stress, particularly workplace stress, is an optimism killer. Yet, according to research conducted five years ago by the futurist think-tank the Hudson Institute in the US, workstress was projected to increase by 200 percent between then and 2020.

The good news revealed by science is that with a few rather simple changes we can enormously reduce the level of workplace stress.

How can you increase optimism in your team?

Okay, so what can a law-leader do now to increase the level of optimism in his or her team or his or her firm?

There are five necessities for the successful creation of an optimistic team or firm and they can be conveniently remembered by the acronym PACTS. My partner, Dr Alicia Fortinberry, and I came up with these as a result of our research into optimism and the resulting programs for the public we ran at the University of South Florida. We published our findings in our book Creating Optimism (McGraw-Hill, 2005). Since then we have successfully helped many firms and corporations create optimistic forward- looking teams

Not surprisingly PACTS holds true for families as well. They are the basis on which all well-adjusted children are brought up.

PACTS stands for:

  • Purpose: To be optimistic we need to feel that our work has a socially meaningful purpose. If we’re just in it for the money we may just get more pessimistic.
  • Autonomy: We need to feel that we have a measure of control over our working conditions.
  • Collegiality: We need to feel that we are part of a small mutually supportive group.
  • Trust: If we don’t trust those we work for and with only pessimism is possible.
  • Strengths: A culture of effective praise and looking for what people do well is essential to an optimistic team or firm.ix

A leader who is able to get all of these right will create a team, or firm, which will outshine and outcompete all the others. 

Editor's Note 

Interested in learning more on how to build optimism at your firm?  Dr Bob Murray is a keynote speaker at the 2016 ALPMA Summit 'A Blueprint for Change' which will be held at Etihad Stadium, Melbourne from September 7 - 9.  His fun-filled and lively presentation "Building Optimistic Teams and Firms" will guide you through the steps that will lead to optimism and resilience in individuals, teams and firms. 

Early bird registration closes at midnight tonight so register now to secure great savings on your 2016 ALPMA Summit registration!

About our Guest Blogger

Dr Bob MurrayDr Bob Murray is an internationally recognised corporate consultant with over 20 years’ experience. He has worked for a wide variety of major and mid-sized Australian professional service firms and Global 500 corporations. Clients include premier Australian and overseas law firms such as Allens Linklaters, Ashurst, Herbert Smith Freehills, K & L Gates and other top tier companies such as KPMG, Macquarie Bank, PwC, Ford, Caterpillar, McDonald’s, PepsiCo, BHP Billiton, Wesfarmers and Stockland.

He is also a noted scientist in the field of behavioural neurogenetics, having won the prestigious 2012 American Science Achievement Award for his work on personality and motivation. He is regularly interviewed on TV and radio and is quoted in such newspapers and magazines as The Sydney Morning Herald, the Wall Street Journal, Entrepreneur, The Australian and Time Magazine (which ran a feature article about him and his work).

As well as the above he has worked for Hill Samuel Bank in the UK in the area of mergers and corporate restructuring for which he was made a Fellow of the British Institute of Management.

Bob has an MBA as well as a PhD in clinical psychology. He coaches CEOs and corporate and firm leaders in Australia, China, the US and Britain. As an ex-actor, he is an entertaining and inspiring speaker as well as being deeply knowledgeable in his field.  He was voted 'Best Speaker' at the 2015 ALPMA Summit.

Digital transformation and the provision of legal services: what legal practice managers need to know and do

Tuesday, July 26, 2016

By Benjamin Balk, General Manager of Product and Marketing, SAI Global 

Digital transformation is changing the way that businesses can operate across a range of industries, and the legal industry is no exception. We would all agree that digital transformation is a current hot topic, both locally and globally, but do you know that digital transformation as a concept is still misunderstood by many?

What exactly is “digital transformation”?

Let us start with a simple question, a definition. What is “digital transformation”? At its most basic level, or at its very core, digital transformation is the use of technology to radically improve the performance of an organisation, and this includes its people.

Businesses, including us in the practice and business of law, often think of digital transformation as a formal effort to revamp our vision, models and investments in order to achieve our organisational goals and objectives, and importantly, stay competitive in the modern digital economy and evolving legal landscape.

Digital transformation in the professional services industry

In the professional services space, digital transformation is very much about realigning technology and business models to more effectively engage with our clients and more efficiently deliver our services to them. As legal practitioners, we would look at every touch point in the client experience lifecycle as well as the matter/transaction lifecycle to identify how we could inject technology to, basically, do things faster and better. Faster means more time efficient, which often translates to more cost effective, and better means (in addition to faster) more accurate by taking less risks and making less mistakes.

The real challenge

But that is easier said than done. The challenge with digital transformation is not about digital. Digital is typically the more logical, technical and easier part of the equation. The challenge is the part that involves transformation. Investment in technology is not a difficult concept to grasp, and many law firms now have one or more resident legal technology experts and a dedicated legal technology budget; but the real test is how exactly can law firms of all shapes and sizes realign business models in practice. You see, this is where digital transformation as a concept is misunderstood; a mere shift in investment in technology is not the same as digital transformation. Don’t fall into the common trap of thinking you are changing, when in reality, you are only investing in technology. The investment, whether in time or money or both, does not equate to digital transformation.

Here is a real life example. After surveying the fee earners to find out what they like, and after much research into the different solutions provided by different vendors, Big Firm Alpha (not its real name!) introduced a state-of-the-art, complete digital document management system. Everyone received training to use this new DMS. Disappointedly, while some fee earners seemed to have adapted well to the new DMS, many continued to complain “why fix something that wasn’t broken”, referring to the old system that had been in use without much incident for years.

This isn’t unfamiliar, is it? We have all heard of or even experienced the less than satisfactory or the rather unsuccessful implementation of practice management software or knowledge management systems. Why did they fall short of expectations?

The answer is this – the implementer of the new technology only advocated changing the process, and did not invest in transitioning the mindsets of people and building a culture that fosters transformation (or more precisely, digital transformation). Change management to take advantage of any technological or business process change is paramount to getting a strong return on investment. Projects should not be about the technical investment only, they should take into account the change management investment required to achieve the returns sought.

The relationship between digital transformation and business processes

We all know that digital transformation has opened up new opportunities for law firms to innovate and streamline business process. Let us break this down a little and work out how exactly this could be done.

A business process essentially is a collection of linked tasks that delivers a service or a product to a user or customer. For example, to deliver our legal services to our clients, the tasks that we have to undertake in the process may include legal research, document production, tracking billable time and record management. A more specific example is the document production process in conveyancing. Imagine this – a technological tool that could, among other things, automatically and accurately generate contracts, transfer forms, mortgage discharge documents, revenue office forms and the letters involved in the settlement process. Wouldn’t that be a dream for a busy conveyancing practice?

If there is nothing to compare to, traditional, manual business processes while it may not be great, they may just be fine (in terms of sufficiency) for a short while. However, when compared to automated processes, it becomes crystal clear that a reliance on manual processes could be costly, in terms of time, human resources and risk.

Risk in business processes

Let us turn our minds to risk for a moment. The relationship between business processes and risks is a tight one. Risk is an unavoidable business phenomenon. Some risks are inherent in business processes, for example, the risk of fraud, and the risk of source data errors. Other examples of risk in business processes include operational risks, technology risk, financial risk, compliance risk, legal risk, information security risk, and health and safety risk. Indeed, business processes of a law firm could be the place where risk materialises.

Let us look at one task in the business process of delivering a legal service we just referred to – legal research. In particular, let us look at conducting searches. From conducting due diligence on transactions of any size, to providing a legal opinion just prior to settlement of a multimillion dollar financing, lawyers need to regularly access commercial information available on the PPS Register, the ASIC registers, AFSA’s records and the various land titles offices’ records. Searches are then carefully reviewed so as to confirm any disclosures made, uncover connections, and expose weaknesses. Proper and swift analysis of the search results informs proper and timely legal, commercial and strategic advice. Don’t forget the contrary is also true – incomplete information gathering leads to deficient analysis, which then leads to poor professional advice. This spells risk in all possible ways. A smaller risk would be the loss of time and money so as to re-do the searches and re-draft the documents. Of bigger consequence is that the firm could be sued, and the firm’s brand and reputation could be on the line. Further, the client would be dissatisfied, and any competitor would be handed an advantage – completely for free!

Digital transformation has offered firms the opportunity to finding new ways to reduce business process risk. By way of example, there is now legal technology that accurately analyses multiple sets of commercial information from public sources and automatically creates one single easy to understand report. Technology such as this, especially if it is one that enables visual mapping of the often complex web of interactions and interconnections, and that can be accessed anywhere due to being cloud-based, are revolutionary – but only if people use it!

Top tip – people is the key

Whether you have long recognised or only just realised that the real challenge in digital transformation is the part that involves transformation, my top tip for the successful use of technology to fundamentally improve the performance of our legal practices is nevertheless relevant – focus on people. This includes everyone, from the managing partner to the graduate lawyer, and do not forget those who are not in the traditional “fee earner” roles, such as knowledge managers, precedents specialists and professional support lawyers.

This is what history has shown – businesses, including law firms, that had focused primarily on technologies without investing in transforming their people’s mindset and actions to ensure their impact do not enjoy the benefits to their fullest extent. This is indeed in line with the observations I have over the years, and no doubt, yours too.

Easy steps that legal practice manages can take

The essence of digital transformation comes down to people. It is how people’s behaviours differ from that of those before them that genuinely matters. To change people’s behaviours for digital transformation success, legal practice managers can focus on communicating these two messages:

  • We are all humans. Humans make mistakes, this is so, even if we are very skilled and experienced in what we are trained to do. Human error is a very real risk. It is a threat with the potential to lead to serious consequences.
  • Process digitisation, such as in the form of automation, enables law firms to deploy people to more strategic and high-value tasks. This means, for example, lawyers are happier as they are doing less repetitive tasks and less paper pushing; they are less likely to be in a position to make mistakes; instead, they can use and develop their talent on “real legal work”. This also means management is happier as the workforce is happier, the firm is more competitive and profitable, and importantly, they are well placed to provide exceptional legal services to clients.

You may not realise it, but just by taking steps to deliver and reinforce these two messages is part of a digital strategy, regardless of whether or not you have one clearly articulated and documented. (If no, you could start now!) As we design or redesign our business processes – this can be from manual to part-automated to fully automated, or from no integration to part-integration to full integration – these messages help create a positive culture that fosters change and to drive digital transformation.

Now that we have a sound understanding of the true meaning of digital transformation, let us work on transforming people’s mindsets and actions, leverage the advanced technological solutions that are now very accessible, and thereby transform our legal practices for the better.

Editor's Note

Interested in learning more facilitating digital transformation at your firm? Benjamin will be presenting on “Balancing the Opportunity and Risks Posed by Digital Transformation to Help Your Firm Better Manage Risk” at 5.20pm on Wednesday 7 September, at the opening of the 2016 ALPMA Summit Trade Exhibition at Etihad Stadium , Melbourne. You can also attend other complimentary Partner Connection sessions to hear the compelling insights from our Principal & Gold Summit Partners. This is a great opportunity to also meet more than 50 market-leading legal industry vendors, conveniently gathered under one roof at the largest legal management trade show in the Southern Hemisphere. The public opening commences at 3.00pm – and you do not have to be registered to attend Summit to come along. If you would like to attend the public opening get a free pass

ALPMA also offers great early bird savings on attending the 2016 ALPMA Summit – but hurry, as these savings end at midnight on Tuesday 2 August. Register now!

About our Guest Blogger

Benjamin Balk

As General Manager, Product and Marketing, Benjamin Balk oversees the product and information solutions strategy for SAI Global Property Solutions, which includes the information product offerings currently being rolled out to conveyancers and solicitors in preparation for electronic settlements. A seasoned executive, Benjamin has held strategy, marketing, sales and product management roles in a number of information services companies including Experian, the Veda Group and CITEC Confirm. These roles have stood him in good stead in his current position, enabling him to contribute his global product management and data experience to the development and improvement of the SAI Global Property Solutions product range. Constantly looking for innovative solutions to solve problems, Benjamin’s mission is to help conveyancers and solicitors and the banking and finance sector to improve industry engagement and efficiency for the benefit of all those involved in Property Transactions.

The prioritisation crisis in BigLaw business model firms

Tuesday, July 19, 2016

By Dr George Beaton, Partner, beaton 

In some ways I wish I had read Zone to Win: Organizing to Compete in an Age of Disruption, Geoffrey Moore’s most recent book (2015) while researching the content for my new book Remaking Law Firms: Why & How, co-authored with Dr Imme Kaschner.

On the other hand, it’s pleasing to have come to much the same conclusions as Moore about the urgency in resolving the prioritisation crisis, in our case the crisis faced by BigLaw business model firms. Chapter One of Moore’s book is titled 'A Crisis in Prioritization'. His first paragraph is masterful in succinctly capturing the essence the crisis, which applies as much to BigLaw firms, as it does to all businesses.

“What makes a modern business different? Simply put, speed plus disruption. Wave after wave of next generation technology is continually transforming the landscape of business, both inside the tech sector, where new offers are germinated, and everywhere else outside it (emphasis added), where they are largely consumed.

“This results in two imperatives for any established enterprise (in other words 99.9% of law firms built on the BigLaw business model – click here for an explanation of the BigLaw business model and its implications). In markets where you want to be the disruptor, where you want to play offense, you must catch the next wave. At the same time, in those markets where your current franchise is the incumbent and myself under disruptive attack, you have to play defense in order to prevent the next wave from catching you.”

Which way should BigLaw firms be looking to resolve the prioritisation crisis?

In the first instance, for the vast majority of firms, the answer is to play defence, that is avoid being swamped in the tsunami of change. I say this because incumbent law firms are risk-averse partnerships with no balance sheets, at least to speak of. This means the first priority is to survive in ways that assure their continued capacity to serve clients profitably.

My colleagues and I, as well as a growing number of others, Bruce MacEwen for example, have documented the reasons the environment of BigLaw is now an irreversible buyers’ market – see this post for an explanation. As little as a decade ago, all forces affecting the ability of law firms to extract superior profits for their work were benign, i.e. it was a sellers’ market. Now the there is hyper-competition, substitutes are growing in number, types and influence, clients’ have the power in setting prices, and lawyers willing to work in the tournament for partnership are becoming fewer and fewer.

Job #1: Remake your firm

We interviewed 40 people around the world in researching our forthcoming book. One of these is Stuart Fuller, Global Managing Partner of King & Wood Mallesons. Stuart used a memorable metaphor in explaining the challenge of preventing the next wave from catching you. Here’s an extract of what he said: “We are rebuilding it (the business model of King & Wood Mallesons) as we speak. I like to use an aero plane analogy; it’s like rebuilding a 787 mid-flight as we continue to fly the plane and that creates challenges”.

So it’s not just the media, advertising, travel, hospitality, retail, automotive and transport industries that are being disrupted by Netflix, Google, Airbnb, Amazon, Uber and Tesla. It’s law too with Axiom, IBM’s Watson, Riverview Law, and Neota Logic – to name just a few of the 100s of substitutes for law firms and lawyers.

Substitutes are not always competitors. Many are also complements for those firms that see the opportunity and grasp it. For example, read this article ‘An industrial revolution is coming to law‘ by Michael Mills. And this analysis I wrote last year ‘10 reasons BigLaw managing partners are not sleeping very well‘ setting out the opportunities and threats.

How much time do BigLaw firms have?

For globalising firms, Stuart Fuller suggested it was no more than five years in our interview, positing that there were only 15-20 firms likely to achieve leading global status and scale. 

For BigLaw firms taken as an industry, I think the answer is ‘It depends on what your expect to achieve before your firm is severely affected’. By ‘severely affected‘ I mean a halving or more of the profit per point of equity that the firm currently enjoys. The reasons for this assertion that profits are likely to halve in the majority of firms are set out in my September 2012 post ‘PPEP levels are doomed without re-invention‘ (note the year this was written!).

The realpolitik prioritisation crisis for BigLaw

This is how I see the realpolitik prioritisation crisis for BigLaw. Changing a firm’s business (aka operating) model is not hard in theory. Yes, it’s a massive task, but the real challenge is managing the investment required. As Moore puts it on page 25 “Not only is this going to be expensive to undertake, but also the ROI will come entitle out years, making a highly unattractive dent in the current years’ performance“.

There’s the rub for firms whose partners expect every feasible dollar of profit (and sometimes more) to be distributed every year. That means virtually every firm, with a handful of notable exceptions.

Some BigLaw firms are showing the way

It’s not that all BigLaw firms are sitting on their hands and waiting for the tsunami. Thankfully there are publicly acknowledged pathfinders such as Seyfarth Shaw, Allen & Overy and Gowlings WLG.  And there are perhaps less well-publicised examples of smaller firms, ranging from Inksters (Scotland) to Valorem (Chicago) to Hive Legal, McInnes Wilson and more in Australia.

The prioritisation crisis in BigLaw firms can be avoided. It takes an acute understanding of the environment, clarity of vision, leadership, and change management competence.

Editor's Note

Interested in learning more? Dr George Beaton is a keynote speaker at the 2016 ALPMA Summit, 'A Blueprint for Change' which will be held at Etihad Stadium, Melbourne from 7 - 9 September. His presentation, 'Why it's time to remake your firm's business model' will elaborate on this theme and provide compelling insight on how to tackle this challenge.

Register now for fantastic early bird savings!

About our Guest Blogger

George BeatonDr George Beaton is a partner in beaton.  George is a Senior Fellow, Melbourne Law School in the University of Melbourne. His book, “Remaking Law Firms:Why and How" was published by the American Bar Association in March 2016.

Dr George Beaton has guided clients through a wide variety of strategic decisions in his 25 years as an advisor and consultant. Today his practice is focused on corporate advisory, performance improvement and problem-solving assignments for Boards and CEOs of professional services firms.

He is widely regarded as a leading independent authority on professional services industries and their firms. His work covers Australia, Asia, USA, Canada, and UK. He has a particular interest in the imperative for professional services firms to remake their business models. His thought leadership is published regularly and he is a regular keynote speaker in Australia, UK, Canada, and USA. George tweets at @grbeaton_law and @NewLawNewRules.

Your website ability to attract new business bears no relation to how much you spend on it

Tuesday, July 12, 2016

By Jim Thompson, Director of Strategy, One Rabbit 

You don’t always get what you pay for…

Yes there is a minimum amount you need to pay to get a website of an acceptable commercial standard built and designed by people who know what they are doing but its ability to attract new business has no correlation to how much you pay for it.

Unfortunately, I imagine many of you have already learnt this the hard way and maybe more than once.

In my experience, the number one outcome from a new website for many professional service firms is that the firm and its owners feel proud and better about themselves.

There is usually congratulations to the team involved for a long and somewhat arduous process to finally get the thing live, and many even celebrate with some kind of launch event or at least an announcement to staff and clients.

Nothing wrong with feeling proud or better about yourself but that’s not why you built it is it – surely?

(Ask yourself right now why you did build it – it’s not always the easy question to answer that it should be...)

Typically the time and money you spent that you didn’t have to was on what the thing looks like while lining the pockets of some self-anointed “brand experts” and graphic designers who rely on emotional, subjective queues with not much more than fluff in their tool-kits.

Most firm’s sites are all about themselves and full of long debated curated brand messages that due to internal politics and opinions typically leave the site a battlefield of compromise and poorly differentiated when you scratch the nice shiny surface.

And therein lies the problem money can’t buy you happiness (although it does help) and likewise it can’t buy you different – although you can can buy “looking different”.

As a buyer of expertise I’m actually more interested in your LinkedIn profile than your brand and what your firm has to say about itself.

Spend as much as you want trying to look different but the only way to be different is to actually be different.

The following factors influence the ability for your site to attract and convert new business;
  • How clever you really are
  • How well you understand your target audience
  • How well you are positioned to meet their needs and solve their problems
  • Your ability to find and capture your audience
  • How well you can demonstrate your expertise without saying it
  • The quality and depth of the content you are prepared to give away
  • The quality and depth of your lead nurturing program.

These are the things that you should be investing in as this is what wins new clients in a digital age not what you look like or say about yourself.

Editor's Note

Interested in learning more? Jim Thompson is a speaker at the 2016 ALPMA Summit, 'A Blueprint for Change' which will be held at Etihad Stadium, Melbourne from 7 - 9 September. Jim's presentation, 'How to Transform and Position your Firm for the New Business in a Digital Age', will guide you through a proven strategic approach and process specifically designed to transform and position your firm.

Register now for fantastic early bird savings!

About our Guest Blogger

Jim Thompson
Jim Thompson is Director of Strategy at One Rabbit, a specialist firm that markets and positions professional services firms for new business in a digital age.

He help clients throughout Australia maximise the new business opportunities a well thought out and executed digital strategy can deliver. He specialises in counselling, advising, helping and educating Professional Services firms on how to best strategically position themselves in a fast changing digital age.

The future is paperless

Tuesday, July 05, 2016

By John Ahern, CEO, InfoTrack 

InfoTrack and Lawyers Weekly recently conducted a Transaction Technology survey of 742 legal professionals which revealed that over 20% believe that complacency could be threatening innovation in the legal market. Despite this fear, I believe that the industry is taking big steps to move itself into the future and now more than ever, legal players are embracing change and supporting innovation.

There is an undeniable shift occurring in the legal market and we are moving closer and closer to a truly digital future. There has been talk of electronic conveyancing for years, but it’s only recently that it has become a reality with new technology enabling practitioners to conduct a completely electronic transaction from start to finish.

On 9 June 2016, Claire Martin, a solicitor at Kreisson, conducted the first fully digital conveyance in the country when she sold her apartment in Dee Why without touching a single piece of paper. She had access to the money from the sale within 10 minutes. InfoTrack is proud to have played an integral part in this historic transaction.

Claire was able to conduct the following tasks electronically:

  • real estate agency agreement
  • contract preparation
  • execution of e-Contract by all parties
  • exchange
  • discharge of Mortgage
  • payment of stamp duty
  • ordering of s109 and
  • settlement

Gone are the days of piecing together contracts and amassing piles of paper that need to be scanned and emailed repeatedly.

Practitioners can now prepare, sign and exchange a contract from wherever they are – physical and geographical constraints are no longer an issue. Practitioners can save up to 30 minutes per contract and hours to days on the exchange process. It is simpler than ever and the profession is beginning to embrace this new way as they gain a better understanding of how it improves their workflow.

The benefits of going digital cannot be denied. It increases efficiency and accuracy – when you prepare a contract online, information is prepopulated saving time and avoiding data entry errors and there is only one master version of the contract that cannot be tampered with.

Digital conveyancing also cuts down on costs and wasted resources, including the reams of paper that each transaction used to involve.

The conveyancing process becomes much easier for everyone involved as efficiency benefits are passed on to clients and real estate agents. Most importantly in an industry where every minute counts, electronic conveyancing literally gives practitioners back time.

In an increasingly competitive market, it is more important than ever to stay on the leading edge of technology if you want to stay in the game. Technology is fast becoming a huge differentiator in the legal and conveyancing industries and practitioners are taking note. In our Transaction Technology survey, 78% of respondents agreed that early adoption of new technology is better for business.

This is the biggest change to how we buy and sell property in our lifetime and the start of a new era that will see firms move more and more of their processes online. The numbers clearly demonstrate that the industry is ready to embrace a change and early adopters are already forging the way toward a truly paperless future.

Editor's Note

ALPMA and InfoTrack are collaborating in ground-breaking research to investigate how Australasian law firms are supporting innovation and change at their firms and the people, process and technology initiatives law firms are implementing in order to adapt to the changing environment.  

The research will provide firms with greater insight into exactly what Australasian firms are doing to drive innovation and to respond to the changing legal landscape - and help firms create a blueprint for change.

The research is now open for participation by all Australasian law firms until Sunday, 24 July, 2016.

About our Guest Blogger

John Ahern
John Ahern joined InfoTrack in 2015 as the Chief Technology Officer taking charge for establishing the company’s technical vision and leading on all aspects of InfoTrack’s technology development. John was appointed to the role of Chief Executive Officer in May of 2015 where he is now responsible for maintaining the extensive growth of InfoTrack in the Australian market.

John has over 20 years' experience in the Information Sector, having worked in a number of engineering, sales and executive positions. With a strong technical background, he has vast experience in designing and developing products and has delivered platforms from inception to production.

The firm of the future is in fact the firm of now

Tuesday, June 28, 2016

By Matthew Burgess, Director, View Legal

The evidence has been collected.

The submissions have been heard.

Judgment has been handed down - the incumbent law firm business model is broken.

The great lawyer bubble

One of the first people to starkly address the fundamental problems at the heart of the legal profession was Stephen Harper and his book 'The Lawyer Bubble'.

The book details why the legal profession, similar to most other professions, will struggle in the short term to reinvent core aspects of their business model, particularly in relation to time billing, in the short term.

While a myriad of reasons are provided, perhaps the most compelling is the fact that universities across the western world have become factories for producing professional service firm graduates, who specialise in the areas rewarded by time billing such as:

  • long hours;
  • rote learning;
  • technology adverse; and
  • engrained arrogance, particularly in relation to solutions that undermine the traditional personalised bespoke service offering (such as alternative business models, offshoring, outsourcing and automation).

Catalysts for change

Harper argues that any change to the 'BigLaw' business model from within the profession will require the university system to start rewarding students who are able to demonstrate more innovative attributes than those outlined above.

Just as importantly, the owners of the incumbent firms must themselves create a demand for this style of graduate.

Another leading thinker, Clayton Christensen (in The Innovator's Dilemma), predicts that the prospect of the incumbent firms having the vision to truly cannibalise their existing business model is at best remote.

Maister still matters

While much of Harper’s work was ground-breaking at the time, the framework for many of the answers to what law firms should be doing right now to re-engineer their businesses was provided a generation ago by another US consultant, David Maister.

Maister categorised the delivery of all professional services, including the law, into four broad categories, each of which has the prospect of being highly profitable.

The price is right

The price sensitivity goes from least to most through the following four components:

  • unique services (or as Maister describes them ‘brain surgery’);
  • experiential services (or as Maister describes them ‘physiotherapy’);
  • brand name services (or as Maister describes them ‘nursing’); and
  • commodity services (or as Maister describes them ‘chemist’).

Arguably, due to the internet, there are two further categories further down the value chain:

  • wholesale; and
  • online, with product produced only on demand.

Ultimately, the internet has increased the rate at which all technology disruption has historically taken place.

What the winners do

Winning firms understand that success ultimately depends on being:

  • differentiated or unique;
  • of demonstrable value; and
  • delivered in a way that is difficult to replicate.
Sustaining innovation is ultimately just as important as any disruptive one; the challenge is that both types require different visions, metrics and practices.

The disruptive business model requires funding, resource allocation and working environments that are significantly different from those of the traditional firm.

History doesn’t repeat; although it does rhyme

History shows the vast majority of traditional firms are unable to allocate resources away from the primary revenue source, because of their focus on short-term profitability and the need to avoid any perception that there is a 'cannibalising' of the core business model.

The key to a sustainable and successful business model is being self aware enough to know that unless they cannibalise their existing lines of revenue, competitors certainly will. Further, those competitors will have complete disregard for the ongoing profitability of the incumbent firms.

Primarily due to the embedded restraints of being a start up, innovative firms find ways to:

  • monetise ideas quickly;
  • minimise upfront cash expenses;
  • understand that a product in market is always better than a delay to launch in order to ensure the quality is better - in other words, if you are not embarrassed by version 1 of the solution, you have launched too late;
  • recycle and reuse what they have immediate access to; and
  • understand that everything can look like a failure during the 'middle part'.

What will the changes look like?

To give some insight to what we believe a ‘firm of the future now' looks like, 10 examples from our business are listed below – five that we have abandoned and five that we have embraced.

Five things abandoned

  • Timesheets – with timesheets, all we ever focused on was what was chargeable – without timesheets, we now focus on what is valuable.
  • No leave policies – leave policies are a hangover from the industrial age – it is time to move on.
  • No individual budgets – while we certainly have team goals, these are never broken down into individual monetary targets. Our targets are aligned around our performance in the eyes of customers. If we get those right, everything else flows (including money).
  • No performance reviews – again, a very poor hangover from the industrial age.
  • No diversity goals – seeking to mandate minimum percentages of certain genders, cultures, religious beliefs or sexuality disguise much bigger problems with the underlying business model.

Five features embraced

  • Guaranteed fixed pricing – the definition of a competent service provider is someone who can devise a scope of work and provide an upfront fixed price that they are willing to refund in full if the customer is not satisfied with the performance.
  • ROWE – if you do not know what this is, Google it or click here and join the movement.
  • Solution choreographed teams – we work with whomever and on whatever terms are best to achieve the client’s objectives.

  • AAR – again, if you do not know what it is, Google it or click here, and embed it into your business today.

  • Diversity of thought – when two people in business are constantly of the same opinion, one is irrelevant. Raise diversity in every sense of the word and arbitrary politically correct percentages become irrelevant.

Editor's Note

Interested in learning more? Matthew Burgess is a keynote speaker at the 2016 ALPMA Summit, 'A Blueprint for Change' which will be held at Etihad Stadium, Melbourne from 7 - 9 September.  Matthew's presentation will deconstruct why the 'Firm of the Future' concept is gaining such traction and provide an insiders account of how to create a true firm of the future someone who has twice in the last 5 years re-written the professional services firm rule book. 

Register now for fantastic early bird savings!

About our Guest Blogger

Matthew BurgessMatthew Burgess founded what is regarded as Australia’s first virtual law firm and more recently arguably Australia’s most innovative legal solutions platform (the law firm named View Legal).

Having been a partner and lawyer of one of Australia’s leading independent law firms for over 17 years, View was established in mid 2014 and has from this time been actively disrupting the traditional law firm model.

Matthew regularly consults to other professional service providers on business model innovation, with his business book ‘The Dream Enabler’ a key foundation to this offering.

  Subscribe to receive posts as email

Recent Posts



Australian Corporate Partners

Principal Summit Partner

Thought Leadership Awards Partner

Leading Your Firm Partners