Periodically I’m asked whether the legal industry could steal a page from the playbook of other industries that it might resemble, either for inspiration and innovation, or for cautionary, clarifying lessons.
If the question relates to what economists call "industrial structure," my favorite candidate for an analogue is financial services. Particularly in the UK, once the Clementi Commission reforms kick in (which, in 25 words or less, permit non-lawyers to own and invest in law firms, as well as permitting firms to go public and employ non-lawyers in senior roles [think investment bankers, management consultants,, accountants, realtors, etc.]), then I think the legal industry could evolve towards a model that looks like this:
- A few global powerhouses a la Citicorp, UBS, Morgan Stanley, Goldman Sachs;
- A host of mid-market firms: Wachovia, SunTrust, AG Edwards [Note: I view this tranche of the industry as inherently unstable and subject to implicit failure in the form of takeovers];
- Some catering exclusively to the very high end: Bessemer Trust, US Trust;
- The commodity players: Charles Schwab, Vanguard; H&R Block; and
- The true boutiques: Two guys in Greenwich with a hedge fund.
On the other hand, when I think about the more "business school" managerial, operational, and even cultural and anthropological realities of how lawyers practice in firms, I find some useful analogies in medicine. Medicine, like law, has the high priesthood of expensively trained, long-apprenticeship uber-practitioners, the legions of assistants, the need to stay current with the latest developments, and the fundamentally autonomous, allergic-to-data, approach of the doctors.
Which brings us to today’s lesson from Harvard Business School’s Working Knowledge. Titled "How Hospitals Adopt New Technology," see if this doesn’t ring true to you if applied to lawyers: The piece considered adoption of:
"competing treatment methods for coronary artery disease and discovered a tough battleground brewing for a new technology called PTCA, or percutaneous transluminal coronary angioplasty. Not only was PTCA going up against an established and effective procedure known as coronary-artery bypass grafting (CABG), but also against the surgeons and other interests in hospitals invested in the older procedure."
And the findings? In a nutshell, the more powerful and influential were cardiac surgeons, the less frequently PTCA was used.
Even in hospitals with politically-weaker surgeons, less able to act as gatekeepers, adoption rates of PTCA were slows because it "disrupted existing work routines and patterns of professional interactions."
Why did the HBS professors choose a hospital setting to examine the social and cultural aspects of technology adoption? Because:
- They are full of highly trained professionals working in teams; and
- Physicians are typically not employed by the hospitals where they work.
Although the second characteristic does not map with one-to-one correspondence to law firms, in your heart you feel the same. Partners are certainly not "employees" of their firms in a technical, legal sense, but neither do they see themselves as employees psychologically, or were they to draw a free-association organization chart of the firm, nor if they have a tasty book of business.
What, then, do we learn?
For me, one of the more fascinating aspects is how learning to adopt the new technique depends less on the 800-pound gorillas than on the entire team. Our professors put it this way: "
Most people think that the skills of the individual surgeon are the most important driver of success, but we found that what really mattered was how the entire surgical team was managed and how it prepared for the adoption."
If you’re not thinking "practice group management" at this point, you should be.
Moreover, the more that teams approached adoption of a new technique in terms of the concrete repercussions it had for the role of each team member, and for overall "organizational learning," the more successful it was. By contrast, if the new technique was viewed as merely a technical change, adoption lagged or failed.
Lastly, adoption accelerated if the team operated in a zone of "psychological safety," where underlings were encouraged to speak up and the leaders gave the team permission to discuss matters openly and, as I’ve put it elsewhere, "think out loud."
And the bottom line? The key challenge for managers is to deploy their understanding of the social context of the firm to "prevent turf battles from hindering adoption" and give the new technique a chance to improve productivity and achieve state of the art results..
In medicine, of course, this can be a matter of life or death. Although we often act as if our matters and decisions were similarly fraught, of course they aren’t.
But sub-optimal techniques, indulged over a long enough time frame, can be the death of your firm.
