Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The Story of a Lean Law Firm: Escaping the Overhead Swamp, Surviving Disruption Falls and Navigating the Ethical Quagmire of Technology

677 views

Published on

The webinar will address the challenges of high overhead, legal industry disruption and ethical compliance in a time of dizzying technological change.

Attendees will learn:

the fundamentals of lean practice,

practical ways to reduce the cost of doing business,

how to develop new business models and

how to ensure the confidentiality of client information in the Internet Age.

We’ll discuss revenue, operations and behavioral changes so that you’re well-positioned to compete in today’s changing marketplace.

You don’t have to be a tech expert.

Lean is a way of thinking.

Lean is a way of operating.

Lean is the future.

A lean practice puts you in the position where you’re not captive to your overhead.

LeanLaw, an Idaho-based legal software and services company is conducting a 90-minute webinar, in process to be approved by the Idaho State Bar for 1.5 hours of CLE Ethics credits.

Published in: Law
  • Be the first to comment

The Story of a Lean Law Firm: Escaping the Overhead Swamp, Surviving Disruption Falls and Navigating the Ethical Quagmire of Technology

  1. 1. The Story of a Lean Law Firm: Escaping the Overhead Swamp, Surviving Disruption Falls and Navigating the Ethical Quagmire of Technology. Contact: gary.allen@leanlaw.co Phone: 208.388.1257 Visit: LeanLaw.co Helping Lawyers Create Lean Practices
  2. 2. Meet Your Presenters: JONATHON FISHMAN FOUNDER / CHIEF SERVICE OFFICER GARY ALLEN FOUNDER / CEO - ATTORNEY • 25+ year practicing attorney. • Idaho native. • Passionate about better software and efficiency for attorneys. • 25 years of tech experience. • 15 years of small business technical consulting. • Passionate about creating trusted relationships with clients.
  3. 3. LeanLaw Helps Solos & Small Firms Be Efficient About Us
  4. 4. Logistics • Polls • Questions • CLE Credits
  5. 5. Today’s Agenda • Meet a small law firm • Challenges – Overhead – Disruption – Poor perception – Ethics & technology • How lean practice can help the firm • Questions
  6. 6. 4 ADMINS $160,000 43.7% Overhead $/Atty/Year % of Revenue 5 ATTORNEYS Chapter 1: Meet I. Love DeLaw Associates
  7. 7. Not satisfied with: DeLaw Lawyers Feel Stuck • Economics • IT Security • Quality of Life • Professional Satisfaction • Time • Happiness
  8. 8. Chapter 2: Stuck in the Overhead Swamp
  9. 9. The Overhead Swamp
  10. 10. Chapter 3: Headed for Disruption Falls
  11. 11. A Perfect Storm of Economic Forces Market response: • Corporate counsel pressured to reduce legal budgets by 30-50% • Standardization and commoditization • Do-it-yourself (Google / Legal Zoom)
  12. 12. Falling Demand 1 Georgetown Law, Center for Study of the Legal Profession, 2014 Report on the State of the Legal Market. Demand for legal services has fallen for past 5 years1 0% -5% 2005-8 CAGR 2009 2010 2011 2012 2013 Y/Y % change +5%
  13. 13. Massive Technology Disruption • Automated document assembly • Relentless connectivity • Electronic legal marketplace • E-learning • Online legal guidance • Legal open-sourcing • Closed legal communities • Workflow and project management • Embedded legal knowledge • Online dispute resolution • Intelligent legal search • Big data • AI-based problem solving Disruptive Legal Technologies • Document review • Legal research • Project management • Litigation support • (Electronic) disclosure • Strategy • Tactics • Negotiation • Advocacy Litigation, Decomposed • In-sourcing • De-lawyering • Relocating • Off-shoring • Outsourcing • Subcontracting • Co-sourcing • Near-shoring • Leasing • Home-sourcing • Open-sourcing • Crowd-sourcing • Computerizing • Solo-sourcing • No-sourcing Working Differently • Due diligence • Legal research • Transaction management • Template selection • Negotiation • Bespoke drafting • Document management • Legal advice • Risk assessment Transactions, Decomposed Susskind, Richard (2013-01-10). Tomorrow's Lawyers: An Introduction to Your Future. Oxford University Press, USA. Kindle Edition.
  14. 14. Traditional Small Firms Are Endangered Species “As for much smaller firms with very few partners, aside from those which also offer a genuinely specialist or personal service that some market is prepared to pay for, I find it hard to imagine how these legal businesses will survive in the long run.” Richard Susskind, Tomorrow’s Lawyers
  15. 15. Chapter 4: The Big Picture
  16. 16. “Justice for All” in Trouble • “Courts available for rich only” • Legal aid budgets falling 7 out 10 Cannot Afford Lawyer • Perceived as greedy and delivering bad service • Just 1 in 5 people rank lawyers as “high/very high” for ethics and honesty (GALLUP 2013) • Only lobbyists and Congress members poll worse Lawyers Held In Ill Repute
  17. 17. Chapter 5: The Ethical Quagmire of Technology
  18. 18. UNKNOWABLE THREATS COMING FROM EVERYWHERE • Big, sophisticated companies • Hacked regularly • New threats all the time WHY A QUAGMIRE?
  19. 19. COMPLIANCE DETERMINED AFTER SOMETHING BAD HAS HAPPENED • This is true both if you use technology, e.g. your DropBox account is hacked • Or if you do not, e.g. you fail to check your e-mail and miss an important message WHY A QUAGMIRE?
  20. 20. • Rule 1.1 – Competency • Rule 1.6 – Confidentiality • Rule 5.3 – Supervision of Nonlawyers Outside the Firm CHANGES TO MODEL AND STATE RULES REGARDING TECHNOLOGY
  21. 21. A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. Comment ... Maintaining Competence [6] To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject. …keep abreastof changesin the law and its practice, includingthe benefitsand risks associated with relevant technology, RULE 1.1 - COMPETENCE
  22. 22. (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client. Comment ... Acting Competently to Preserve Confidentiality [16] …The unauthorized access to, or the inadvertent or unauthorized disclosure of, confidential information does not constitute a violation of paragraph (c) if the lawyer has made reasonable efforts to prevent the access or disclosure. Factors to be considered in determining the reasonableness of the lawyer’s efforts include, but are not limited to, the sensitivity of the information, the likelihood of disclosure if additional safeguards are notemployed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use). . . . The unauthorized access to, or the inadvertent or unauthorized disclosureof, confidentialinformation does not constitutea violation of paragraph (c) if the lawyer has made reasonableefforts to prevent the access or disclosure. …sensitivityof the information the likelihood of disclosureif additional safeguardsare not employed …the cost of employingadditionalsafeguards …the difficultyof implementingthe safeguards RULE 1.6 - CONFIDENTIALITY
  23. 23. RULE 1.6 - CONFIDENTIALITY (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client. Comment ... Acting Competently to Preserve Confidentiality [16] …A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to forgo security measures that would otherwise be required by this Rule. …A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to forgo security measures that would otherwisebe requiredby this Rule. RULE 1.6 - CONFIDENTIALITY
  24. 24. RULE 1.6 - CONFIDENTIALITY [17] When transmitting a communication that includes information relating to the representation of a client, the lawyer must take reasonable precautions to prevent the information from coming into the hands of unintended recipients. This duty, however, does not require that the lawyer use special security measures if the method of communication affords a reasonable expectation of privacy. Special circumstances, however, may warrant special precautions. Factors to be considered in determining the reasonableness of the lawyer’s expectation of confidentiality include the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement. A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to the use of a means of communication that would otherwise be prohibited by this Rule. Whether a lawyer may be required to take additional steps in order to comply with other law, such as state and federal laws that govern data privacy, is beyond the scope of these Rules. Whether a lawyer may be requiredto take additional steps in order to comply with other law, such as state and federal laws that govern data privacy, is beyond the scope of these Rules. RULE 1.6 - CONFIDENTIALITY
  25. 25. RULE 1.6 – STATE AND FEDERAL RULES THAT GOVERN DATA PRIVACY 1. Health Care • HIPAA 45 CFR Part 160, Part 164 (Subparts A & E) • Administrative Safeguards. • Physical Safeguards. • Technical Safeguards. 2. Banking/Consumer Finance • Fair Credit Reporting Act, 15 USC 1681 et seq. • Gramm-Leach-Bliley - 15 USC 6802. • FTC 16 CFR Part 313. • SEC 17 CFR Part 248. 3. California Online Privacy Act of 2003 • Cal. Bus. & Prof. Code §§ 22575-22579. 4. Massachusetts 940 CMR 27 5. Canada • PIPEDA S.C. 2000, c. 5 • British Columbia – FOIPA RSBC 1996, Ch.165 6. European Union • Data Protection Directive 95/46/EC 7. Insurance • Best practices required for cyber coverage
  26. 26. SUPERVISION OF NON-LAWYERS OUTSIDE THE FIRM - RULE 5.3 Nonlawyers Outside the Firm When using such services outside the firm, a lawyer must make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer’s professional obligations. The extent of this obligation will depend upon the circumstances, including the education, experience and reputation of the nonlawyer; the nature of the services involved; the terms of any arrangements concerning the protection of client information; and the legal and ethical environments of the jurisdictions in which the services will be performed, particularly with regard to confidentiality. See also Rules 1.1 (competence), 1.2 (allocation of authority), 1.4 (communication with client), 1.6 (confidentiality), 5.4(a) (professional independence of the lawyer), and 5.5(a) (unauthorized practice of law). . . . reasonableefforts . . . . . . the education,experienceand reputationof the nonlawyer . . . the nature of the services involved . . . the terms of any arrangements concerningthe protection of client information. . . the legal and ethical environmentsof the jurisdictions in which the services will be performed, particularly with regard to confidentiality.
  27. 27. Ethics of Technology and Marketing • Rule 7.1 - False or Misleading Communications • Rule 7.2 – Advertising – Permitted – Copy retained for 2 years – Lead generation services OK with limits • Rule 7.3 – Solicitation of Clients – In person, phone or “real-time” electronic prohibited
  28. 28. ETHICS & TECHNOLOGY Additional Resources ABA Tech Section: http://www.americanbar.org/groups/departments_offices/legal_te chnology_resources.html Opinions on cloud computing: http://www.americanbar.org/groups/ departments_offices/legal_technology_resources/ resources/charts_fyis/cloud-ethics-chart.html#OR
  29. 29. Chapter 6: How can Lean Practice help DeLaw?
  30. 30. Lean Practice = Less Overhead, Greater Adaptability & Ethical Compliance Good Business Practices • Safe, secure data/communications • Systems “automate” compliance • Reduced compliance costs Security/Compliance •More productive •More responsive •Lower overhead •More profitable
  31. 31. Lean Practice: The Concept Lean Legal Practice = Metrics Behavior Change + Technology
  32. 32. Lean Practice: Benefit to you. FOCUS ON PRACTICING LAW · Time Efficiencies · Cost Savings · Data Security · Peace of Mind
  33. 33. Chapter 7: The Path to Lean Practice
  34. 34. The Cloud Is Safe And Here Is Why 1. 2. 3. 4. Cloud companies have a culture of security. Cloud companies will always out perform your IT best practices. · Better server architecture. · Better security and IT best practices. · More know-how. · They have a built in incentive not to mess this up and always get better. The cloud architecture is built to be secure, with less user control and management and data transferred via secure APIs. Newer authentication and infrastructure models.
  35. 35. Let’s Look at Physical Storage THE CLOUD IS THE SAFEST PLACE TO STORE YOUR DATA!
  36. 36. Here’s What Cloud Storage Looks Like THE CLOUD IS THE SAFEST PLACE TO STORE YOUR DATA!
  37. 37. Make it a Team Effort • Lean Practice is a derivative of your firm’s culture. • Lean Practice works when all staff members buy into the concept. • Challenge your team. Lean Practice is a two-way conversation. • Include all stakeholders in the process. Don’t “hand down” solutions.
  38. 38. Accept Doing Some of the Work Old Thinking Today’s Thinking
  39. 39. Get Core Workflows Technology: Choose Industry Standards • Email • Document Management • Time Keeping / Billing • Calendar / Contact Management • Document Creation
  40. 40. Considerations For Tool Selection • Try to stay within your preferred technical ecosystem (Microsoft, Apple, Google). • Distinguish between "must haves” vs. “want to haves”. • Ensure core tools work well together. Open environments are always more flexible than closed or “portal” environments.
  41. 41. Where to Start: Remember it’s a Marathon not a Sprint 1. Pick a workflow: e.g., timekeeping & billing. 2. Develop a baseline metric e.g., such as hours per week. 3. Set a goal: Reduce “hours per week” from A to B over X number of weeks. 4. Using behavior change and technology: develop a new process. 5. Seek trusted advisor: determine the best course of change.
  42. 42. Examples of Lean Workflows
  43. 43. Should Law Firms Worry About Cybersecurity? 1. 2. 3. 4. Not too big, not too small. · Large enough to have nice assets, but small enough to not have dedicated security? Someone may be motivated. · Law firms are the weak link in the chain when compared to their corporate clients. Maybe it is a sweep play. · The hacker may have written a scanning threat looking for entities with vulnerabilities. Maybe it is just dumb luck. · Bad things happen to good people.
  44. 44. 1. 2. 3. 4. Make this a board room discussion. · It’s as important as your financials, insurance or compliance. Get mobile right. · As the question, what data is on your staff’s mobile and personal computers and what control do you have? Create an incident response plan. · Lost phone, security breech, employee fraud. No matter what it is, have a game plan. Check your insurance; consider cybersecurity insurance. Cybersecurity Best Practices – Your Firm
  45. 45. Cybersecurity - Mobile Management Professional Consumer
  46. 46. Chapter 8: DeLaw Gets Lean!
  47. 47. LOW OVERHEAD 21st century workflows Integrated software stack Low-cost, on-demand cloud platform Synchronized, secure mobile
  48. 48. LOW OVERHEAD $$ $$$ $$ IT Insurance G&A 5 ATTORNEYS >1 ADMIN Small $25k – 50k 10-20% Firm Size $/Atty/Year % of Revenue
  49. 49. COMPETITIVE Looking at new business models • Fixed fees • Outsourced lit support & transactional due diligence • Customized Rocket Lawyer
  50. 50. REPUTABLE • Lower costs empower lower fees • More people can afford legal services • Time for better service • Happier clients
  51. 51. COMPLIANT Lean Practice = Ethical Compliance
  52. 52. And DeLaw lived happily ever after…
  53. 53. Epilogue: Your Questions?
  54. 54. LEANLAW.CO Contact: gary.allen@leanlaw.co Phone: 208.388.1257 Visit: LeanLaw.co Helping Lawyers Create Lean Practices facebook.com/LeanLaw-386123364893463 linkedin.com/company/leanlaw twitter.com/leanlawco

×