The term “legal mystique” refers to the shroud of secrecy that surrounds what lawyers actually do. Historically it has been very much in the interests of professions to cultivate an air of secrecy so that work that is performed retains its arcane and somewhat magical character. The secrecy serves to continue monopolies and heighten prestige, but it also precludes any detailed analysis of whether work has been executed efficiently or whether it is good value for money.
When I commenced working as an Articled Clerk in the 1970’s, firms proudly declaimed that they were part of a profession and not a business. By this they meant that they were not going to sully themselves with advertising or marketing or the types of practices in which more common trading entities engaged. “Honourable” firms always charged scale rates for conveyancing and litigation without ever discounting or ever pausing to reflect on the anti-competitive nature of price-rigging. Practitioners in each city and town knew which unscrupulous firms would provide quotes less than scale – often these were nascent firms trying to break the stranglehold of players which had been entrenched for up to a hundred years.
The truth is that while the legal game was described in that era as a profession, it was probably more of a club. Membership to the club was closely guarded and tended to be restricted mainly, but not exclusively, to white males who had a familial or school connection with the partners of existing firms. Potential new entrants served five years of Articles of Clerkship, during which they received little or no pay for undertaking a full-time job. While this was naked exploitation, it would have been considered ungrateful to express that sentiment. An Articled Clerk undertook a multitude of tasks, some of which were legal in nature but were totally divorced from any over-arching view of a client’s objectives, and the remainder were personal errands run on behalf of the partners.
The partners did not have any formal training plan in mind for the young clerks, but imagined that over five years the knowledge gained from tasks performed in parallel to studying law at night would somehow synthesise to produce a competent practitioner; after all it had worked for them! Partners were extremely busy people and junior staff were reluctant to ask them questions. Hence much of the practical training came from other Articled Clerks, who formed a sub-brotherhood whose shared victimhood was assuaged by alcohol.
Clients knew that “Solicitors”, as they were then called, were expensive, but regarded them as men-of-the -world counsellors dispensing wise counsel based on years of experience. But those clients who were business people would have been astonished to know how little time the partners spent on the internal processes and systems of their own legal business.
Many of the pillars supporting that cosy world came crashing down towards the end of the twentieth century. The crash was largely fuelled by changes to advertising and charging rules designed to promote competition. Already the profession had heard tales of ghastly practices in the USA, including television advertising and “no win, no fee” charging arrangements. It was therefore horrified when similar practices were allowed in Australia.
At the same time technology was having a dramatic impact, in particular facilitating the commoditisation of certain work and even outsourcing. To top it off the new generation of law students felt they should be treated as human beings, including being paid a decent wage.
Faced with such dramatic change, practitioners were faced with a stark choice – adapt to the times or wither on the vine. Luckily, as many of those pillars were crashing, another substantial column arose after practitioners adopted the practice of time costing around the 1980’s. The original concept of firms charging clients based on time spent on work for that client, in effect a user-pays system, was theoretically fair. It seemed reasonable that a difficult and demanding file, or a difficult and demanding client, should be charged more. It was paradoxical that at the same time legal practitioners became ruthlessly competitive, they were also united behind the banner of time costing – it was a mast to which the profession could cling collectively as storms tossed around the ship on which they sailed.
The last thirty years or so have represented the Golden Age of time costing, where the smug answer to any question on how much something would cost was “I charge $X per hour”. If really pressed, the lawyer might give an “estimate” but inevitably the client would receive an invoice for more than the estimate. That is not to suggest that lawyers were always being dishonest; the nub of the problem was that Law Schools did not teach Project Management skills and therefore the practitioner did not have the skills to prepare an estimate on a scientific basis, in the same way as perhaps an engineer would. And the balance of power had not yet reached a tipping point where clients could break the time costing trade union.
Alas, as any Buddhist knows, all realms constantly change. Over time clients have begun to resent strongly being charged for six minute increments recorded indifferently on a time sheet. Specifically, clients feel that there is a total disconnect between the charges and the actual value that is added. It is difficult to see how a system that rewards slow workers could operate in the best interests of the customer.
Sophisticated clients realise that law firms, generally, do not give sufficient attention to the process side of their work. From a lawyer’s perspective he or she wants to spend their day doing what they learned in Law School – “real” law. Everyone hates administration and supervisory stuff and will produce endless and varied excuses to avoid doing it. A common reaction when senior lawyers are shown a properly prepared Project Execution Plan for work is “I could do that”. But the issue is that they do not.
A client sees an engagement as a holistic experience. Even if a lawyer produces excellent work product, the client will have a sour taste in its mouth if it receives an invoice well in excess of the “estimate” without proper reporting during the life of the matter. Clients want certainty and hate surprises. They want to agree a proper scope of work showing what work will be done, who will do it, when and what it will cost, and then to receive periodic reports against that plan. The curse of the life of in-house counsel is to have to explain to management why budgets for outsourced legal work are constantly exceeded.
How are firms reacting to clients demanding improved efficiencies and transparency? The reaction of firms in the USA has been to incorporate basic project management principles into the planning and execution of work. This has been labelled “Legal Project Management”. There is no doubt that this is the direction the practice of law is heading in Australia (with perhaps some different emphases to the American version of LPM).
The introduction of project management principles augurs badly for the vestigial legal mystique. The introduction of Plain English drafting enabled clients to understand agreements without rushing back to seek an opinion. Similarly LPM, through the process of breaking down complex tasks into understandable components, will have the effect of unscrewing the cover which has traditionally masked the inner workings of firms.
The sociologist Max Weber referred to a process of “rationalization” where advances in science and technology drive behaviours away from traditions and towards reason. Clients may have considered invoices based on time costing as products of a modern form of sorcery, hence the drive now to subject legal work to the rigours of science and logic. This is the largely what LPM is all about – it is representative of the ways in which the legal profession must react to the demands of clients for greater efficiency, discipline and transparency. What the legal profession is experiencing right now is not evolution, but rather revolution driven by an unhappy market.
It is worth noting that specialisation has resulted in legal work becoming increasingly fragmented. The need for a coherent, logical narrative to be presented to clients is unlikely to reverse that trend; what is more likely to happen is that new species of specialists will emerge on the process side of legal work, particularly in project management and data analysis.
The next generation of lawyers will study project management as part of their law degree and will be quite sophisticated in the way they plan and manage work, and report to clients. To them the work practices during the Golden Age of time costing will be as foreign as smoking on aeroplanes.
*Peter Dighton is the principal of Law Strategies Pty Ltd., which is a legal and commercial project management consultancy with over 30 years’ experience on international resources projects (www.lawstrategies.com). Law Strategies also provides Legal Project Management training to law firms.
Written by P.F. Dighton