Wednesday, 2 July 2008

Leading into the networked world in professional services / legal firms

This morning, I spoke at an event on the impact of the networked world in professional services (with a fairly heavy emphasis on legal firms) organised by Winmark’s network for firm managing partners, NetworkMP (as well as some representatives from their Marketing Director and IT Director networks.

The event was chaired by Phil Williams at Rocketseed.

We started with a presentation by Phil Walker, VP at Capgemini, who talked about he main trends impacting professional services. One of these is that everything and everyone is connected (although this only applies to developed economies – 60% of the world still needs to be linked in). Relationships within the connected world are increasingly important and need to be nurtured – this requires person-to-person interaction as well as via a computer. Capgemini have introduced ‘talk to me on Friday’ - in which people who are in the building are encouraged to talk to each other rather than sending each other an email – and which has led to other networking activities for example, coffee clubs.

Phil also noted that the move from product to service based economies means that professional services become more valued, but that people need to get good at service and selling, and that there is a need for continuous innovation. He explained that this provides opportunity for professional services firms at the top of ‘the pyramid’ (see explanation of the value triangle for HR on my HCM blog).

Speaking later, Professor Richard Susskind from Gresham College argued for a rather different future in which clients’ demand for more for less leads firms towards one of two strategies (which are also explained in his new book, ‘The end of lawyers?’).

The first is an efficiency strategy in which firms standardise, reuse and recycle what will have become commodity products in order to cut costs.

The second strategy is a multi-sourcing approach in which high value work is decomposed into different tasks that can be sourced in different ways using an assembly line approach. So rather than asking whether work should be done within the firm or outsourced, the question becomes one of which of a dozen different sources should be used for different packages of work – research, due diligence, documentation review etc. And all of these sources are available on the internet. The legal firm is then left with the work that is genuinely high value / bespoke.

Whereas the first strategy relies on hourly billing, the second lends itself to fixed fees.

An example is Cisco’s general counsel who has contracted out most of their $120m of work and of which 86% of this is at fixed cost. All their commercial litigation has been given to one firm at fixed cost. How can any firm take this on? Well, the firm have responded with their own requirement to attend certain meetings, see certain documents – to have oversight of the 4 or 5 things that will reduce the chance of litigation to Cisco. Cisco is delighted with that approach as finally they feel they have a firm which cares as much about reducing risk as they do (rather than wanting to charge as many hours as possible if charging by the hour).

The differences in Phil’s and Richard’s perspectives seemed to me to be bridged by the presentation made by Josh Bottomley, MD at Lexis Nexis UK.

Josh argued that each firm needs to build its distinctiveness by asking “Are we clear about which clients we want to serve and what makes us special?”

This distinctiveness then needs to be cascaded through five operating processes:

  • Recruitment and retention to access the very best people available to a firm. Use of Linkedin to support networking and connectivity is already mainstream and, supporting Phil Walker’s point, Josh explained that the differentiator is face-to-face communication and the soft skills required to be effective when looking people in the eye (see my HCM blog for a post on my emotional intelligence workshop – also delivered for NetworkMP).
  • Client development – using technology to deliver new services, deliver more quickly and price work, particularly if delivering for a fixed fee.
  • Research and knowledge – getting the right tacit and explicit information to the right people at the right time in the right format. Josh gave the example of Lexis Nexis’ new webinar service which they hadn’t seen as particularly attractive from a purely technical perspective but has really taken off.
  • Practice and productivity management. Use of case management approaches (pre-populated forms, taking automatic action etc) is already standard. Less so is measuring effectively (eg for market share and margin rather than growth of business and revenue).
  • Risk and compliance – and using this to strengthen the business rather than it being seen as a bureaucracy / something that will slow the business down.

To me, it is by building a distinctive proposition and cascading it through these sort of processes that firms will avoid the need to Richard’s efficiency strategy, albeit with a degree of multi sourcing.

And responding to Phil Williams’ question, Phil Walker argued that some clients are willing to pay for exclusivity (specialism, insight, genuine advice) rather than seek lower costs for ubiquity. An example is Bain’s commitment not to work for other organisations in same sector as one of its clients.

Each of the presenters referred to the need to use technology to support the various approaches that were discussed, and Richard in particular raised mass collaboration and social networking (wikipedia, facebook and their professional equivalents) as one of a number of disruptive technologies enabling and requiring major changes by firms.

Richard suggested managing partners needed to ask themselves: “If this way of collaborating was available to professionals how would that change my world?”

I'll provide the slides I used to describe what I see as the opportunities for web 2.0 tools in the networked world in my next post.


I hope the other speakers and delegates will add their own views and perspectives on the event.  Please either comment (click where it says 'x comments' below), or I'd be very happy for you to guest post (I can send you details on how to do this) - in the spirit of web 2.0 that I discussed today, this posting wouldn't be moderated, so you can be as enthusiastic or as critical as you would like!).


  1. Thanks for putting up your thoughts on yesterday's event - all the speakers were very thought provoking and I left with lots of ideas, and the realisation that online social networking has huge business potential. This post marks the start of my education (although I've had to have 2 goes at it having failed the first time)! I took the opportunity of a management meeting this morning to pass a few thoughts on and have already had a colleague tell me that as a result he has finally joined LinkedIn, having previously ignored several invitations
    to do so. Thanks again.


    Jackie Reiss
    Partnership Director
    Collyer Bristow LLP solicitors

  2. Thanks Jackie, I'm pleased you enjoyed the event (thank you again for hosting) and sorry you found it difficult to comment. The wordID thing is a real pain and I hate having to complete it when I comment on other blogs, but the spam is unbelievable otherwise.

    Hope this isn't a problem for anyone else, and that it doesn't put others off commenting. If you do have difficulty, do what Jackie has and email me instead (


  3. Joanna Goodman4 July 2008 at 00:38

    I also thought Wednesday's event was excellent. Thanks for an inspirational presentation, Jon and for the summary above. I have now revitalised my LinkedIn membership. I've also joined LinkedIn's Legal IT group in the hope of getting lots of exciting contributions to Legal Technology Journal! I hope we can speak again and I'd also be very interested to hear from any delegates about their firms' adventures into Web 2.0 or any other exciting developments in Legal IT.

    Joanna Goodman
    Legal Technology Journal

  4. Jon, thanks for a great presentation, I felt we covered a lot of ground in a short time. I have suggested to Winmark they follow up with a practical how to session to translate some of this insight into tactical, useable 'quick wins' focussing on tools available and more case studies; watch this space. I am reading a great book right now called 'True professionalism' by David H Maister which talks about how PS firms can improve their effectiveness and use web 2.0 technology to support this.

  5. Thanks Phil,

    I also recommend Maister's blog, although this is currently suspended.

    You'll also find links to hiw new book and podcasts there.


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