“New Legal Tech Audit will scare lawyers into embracing technology.”

Financial Post

I read with interest that the “Suffolk-Flaherty Legal Tech Audit” went live last week.  This skills test or “audit” was created by Suffolk University Law School in partnership with Kia’s in-house counsel Casey Flaherty. The stated purpose of the audit is to assess “how well timekeepers and staff use basic law practice technology, such as word processing and spreadsheets, to complete commonly encountered legal tasks.”  The premise behind the test is that lawyers, as a group, are deficient in their use of technology and that this skills gap is directly leading to higher legal bills.

The GoalI don’t think anyone can disagree with the goal of making lawyers more efficient and lowering the costs of legal services.  While unstated, it seems from the tests  shown or described on the LTA website, that the project is primarily aimed at lowering the legal fees of large corporations.  For example, the tested skills include being able to use the auto numbering and cross referencing features of Microsoft Word when working on a 100+ page office lease, finalizing a redlined investors’ rights agreement, using a spreadsheet to investigate whether dividend payments were made equally to all investors, and preparing an e-filing attaching both the investor rights agreement and spreadsheet.

Without a doubt, these are great skills for a corporate lawyer working on the documentation for these types of transactions to have. I’m concerned, however, that given the immense access to justice challenges we are facing as a profession, whether we shouldn’t be thinking about a much broader set of 21st Century legal skills for a much wider audience of lawyers.  It may be that the founders of the LTA see this initial test as just a first step that will eventually grow to address a  broader range of skills and audience.  If so, I am on board with what they are seeking to accomplish, namely pushing the profession from every possible angle to increase access to and lower the cost of legal services.

Methods of Accomplishing the Goal –  As I ruminated on the LTA in the waning days of August, a number of thoughts came to mind with respect to other types of tests or “audits” that could be conducted of legal service providers that might drive efficiency gains in a bigger, and perhaps broader way:

The “What” of Legal Services — I have previously blogged about the “artisan nature” of the legal profession and my belief that our lack of widely adopted standard legal forms or clauses has led to higher legal fees, increased legal disputes and made it more difficult for the average consumer to understand or even compare various offers involving legal terms.   In my experience, legal drafters are overwhelmingly custom tailors making handcrafted suits for each and every client.

From a jaded perspective, you might see the LTA as being similar to testing all of the tailors in a given shop on their skills in using electric scissors and computerized sewing machines.  Good skills in these areas might indeed help lower the cost of producing a custom suit.  However, might greater efficiencies and lower costs be obtained by the tailor shop also having a wide-ranging, pre-existing inventory of pre-cut pattern pieces from which its tailors could draw upon when making a custom suit?

If so, maybe a second or perhaps better test for law firms and lawyers is whether they have sets of pre-existing standard forms and clauses from which they operate when drafting contracts and pleadings. If not, they are most likely similar to an inefficient custom tailor shop, even if all of the “tailors” have great individual cutting and sewing skills.

The “Who” of Legal Services — I have also blogged about the “who” of delivering legal services and the role it can play in lowering legal costs.  While making sure a $750 an hour lawyer knows the ins and outs of Word and Excel might help lower legal fees, the first question in my mind is why is a senior lawyer is undertaking these basic tasks in the first place?

A senior lawyer with a “blackbelt” in Word and Excel will undoubtedly spend less time creating or revising a document than a similar lawyer without those skills, but wouldn’t the overall legal fees be far less by having a $300 per hour associate (even with just a “brown belt” or “blue belt” in Word and Excel) handle these tasks?  If so, maybe a better or additional test would be around how a given law firm or lawyer would staff a particular set of hypothetical projects. The process of smartly determining “who” does “what” can be as important as the skills of the actual workers.

The “Pricing Model” for Legal Services — If you want to insure the lowest possible total cost when building a new house, you typically don’t accomplish this by asking each potential contractor to go through a series of skills tests using nail guns, power saws, laser levels and the like.  Rather, everyone knows you will save much more by getting potential builders to submit their best, fixed fee bids.

Fixed bids by their vary nature drive efficiency — the more efficient the service provider is, the more that provider ends up making on an hourly basis.  It’s one of the main reasons very few nails are driven by hand on construction sites these days. The same clearly holds true on legal projects as well.  If a lawyer or law firm knows they are getting paid a fixed sum for a particular task, they have every incentive to use all appropriate tools to accomplish that task as efficiently and quickly as possible.

Many younger lawyers may not know that for many years thirty-four states and hundreds of local bar associations had fee schedules that applied to certain legal tasks. These schedules were all voluntary, but they served the purpose of giving the public some idea of what a host of legal documents should cost, opened up some transparency into legal fees and served as a guideline for comparing your particular lawyer’s fees to the published schedule.

Fee schedules were, however, struck down in 1973 by the U.S. Supreme Court in the case of Goldfarb v. Virginia State Bar as illegal price fixing under the Sherman Act.  This decision played a large role in creating the hourly billing culture of today’s lawyers and law firms.   Absent changes in the law or in how fee schedules are created and published such that they pass antitrust scrutiny,  it seems that the best step to help move the profession towards more fixed fee work might be sites like Expertbids and BidYourCase.

I know these sites have stirred up a lot of controversy, but in my mind this approach should definitely be a topic put onto the “discussion table” when it comes to possible reforms. In my experience, fixed fees are all about getting lawyers and law firms comfortable with a new pricing model and how it will work with their practice.

I saw this in spades with the Attenex e-discovery software.  As more and more firms got comfortable with the tool and working in an entirely new way, a huge percentage of those firms quickly moved away from hourly billing to a “per-page” or “per-MB” fee. In the end, this technology enabled a new business model that was a “win/win” for both the law firms and their clients.

The Use of “Other Technologies — It is hopefully obvious that there are a host of other technologies that lawyers and their law firms should be using and familiar with in addition to Word and Excel.  Many of these technologies have the potential to have a far greater impact on legal fees and access issues than possessing deep skills in Word or Excel.

For example, does the law firm in question have a document management system that operates with little if any lawyer input time but captures all of the firm’s work product and then makes that readily accessible from any location? Maybe a test of the efficacy of such a system could be whether a lawyer in that firm can retrieve in under a minute all of the conservation easements (or any other unique legal document) the firm has ever drafted.

In my experience, we have all spent way too much time on a “I know I did that type of deal before” project, only to spend inordinate amounts of time looking for it, or if it can’t be located, recreating it.  And this all takes place after already having spent a large amount of time tagging and filing the document into some system in the hope that we could quickly find it again. Improving how we store and retrieve our work product would go a long ways towards improving our overall efficiency.

A second simple, example of other technologies that are underutilized are tools that automatically OCR image only PDFs, such that they become searchable files.  In our work at MetaJure, we have learned that the average law firm typically has around 20% of their work product stored as image only PDFs that, but for their titles, are completely invisible within the law firm. Tools exist that automatically find these files, convert their images to text and make the documents searchable within their contents.  Why these tools are adopted on a broader scale continues to amaze me.

As a profession, we clearly have a lot of work do in adopting technology and improving the technology skills of our lawyers.  I would be remiss, however, in not mentioning that both U.S. adults and students rank middle of the pack at best when it comes to technology skills in general.  While testing current lawyers on technology skills will undoubtedly help, we should also consider addressing the problem further back in our K-JD educational pipeline.

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