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    Legal Innovation: Ideas that Spark Change

    Most observers agree that the legal profession and marketplace is experiencing rapid change, with more to come. To survive and thrive, law firms must find ways to innovate with the purpose to improve an outcome. Read what drives firms to innovate and how some Wisconsin lawyers and judges are doing just that. Then, nominate a Wisconsin Legal Innovator so we can tell their stories, too.

    Dianne Molvig

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    legal innovationThe time comes, in any field of endeavor, when the participants reach a crossroads and must ask themselves: Do we proactively make changes in light of what’s happening around us? Or do we simply let change happen to us?

    The legal profession has arrived at that sort of critical juncture, many observers believe, due to the fact that the marketplace for legal services is changing. “And it will change in a more accelerated fashion over the next five to 10 years,” says Jordan Furlong, an Ottawa, Canada attorney and principal at Edge International, senior consultant at Stem Legal, and publisher of the blog, Law21.

    Law firms seeking to survive and thrive in the new marketplace must find ways to innovate, Furlong says. But he emphasizes that innovation itself is not the goal. Rather, an innovation is a state of mind, an approach, or a tactic that helps to reach an objective.

    Jordan Furlong

    Law firms seeking to survive and thrive in the new marketplace must find ways to innovate, but innovation itself is not the goal. Innovation is a state of mind, an approach, or a tactic that helps to reach an objective. – Jordan Furlong, Stem Legal Web Enterprises, Ottawa, Canada

    “What you want at the end of the day is improvement,” he says. “There’s innovation/improvement from the perspective of running a law practice and making it better. And there’s innovation/improvement from the perspective of the client, in terms of making legal services more accessible, more affordable, and I think fundamentally more effective.”

    Driving Forces

    Furlong cites three key changes in today’s legal marketplace that are driving the need for innovation in the legal profession:

    • Clients have more information than they have had before. Rather than relying on traditional legal services, they turn to other resources to get their legal needs met.

    • Lawyers face more competition. If you’re a corporate lawyer, you’re dealing with competition from providers of electronic discovery, predictive coding analytics, outsourced attorneys, and so on. Attorneys serving small businesses and mainstream consumers are up against the likes of LegalZoom, WeVorce, and Rocket Lawyer, to name a few.

    • Regulation of the legal marketplace is beginning to change. The Washington State Supreme Court now allows legal technicians, who are not attorneys, to provide some legal services. California and New York are considering similar measures. “In England,” Furlong points out, “you already have a full-scale revolution, with laws on the books saying you don’t have to be a lawyer to own a law firm.” There are now more than 200 legal services entities in Britain, known as “alternative business services,” owned wholly or in part by nonlawyers.

    Lawyers no longer can assume that their bar associations and state regulators will protect their turf as strongly as in decades past. The unauthorized practice of law will be a dead issue within 10 years, Furlong believes. Bars and regulators, with limited resources and lots on their plates, won’t be able to fight against the vast array of emerging nontraditional legal services.

    Joshua Kubicki

    To bring innovation into your practice, first, define your pain. Once you know what your pain is, you can start to do something about it. – Joshua Kubicki, legal business model consultant, Legal Transformation Institute

    “So the first question is,” Furlong says, “is it practical to go after these entities? The second question is, is it fair? A growing number of studies show that anywhere from 75 to 90 percent of the market is not being served by lawyers. So we have to ask ourselves, if lawyers cannot or will not serve this vast segment of the marketplace, is it right that we won’t let anybody else do so either? That’s unsustainable on principle, and I think it’s unsustainable practically.”

    Still, change is never easy, Furlong acknowledges, especially for a profession that by nature is risk-averse. In discussions about innovation in the legal profession, lawyers often raise the question: What if this goes wrong?

    “My response is of course it could go wrong,” Furlong says. “But it might go right. The only way you’ll know is if you try it and apply your best efforts and maintain your best principles in the process.”

    Iteration versus Innovation

    To understand what innovation is, it’s helpful to look at what it is not, suggests Joshua Kubicki, founder of the Legal Transformation Institute, which designs, invests in, and launches new business models for the legal market.

    He contrasts innovation to iteration, which he describes as “taking your current business model and tweaking it.” For instance, the iPhone 5 is not an innovation; it’s an iteration of the iPhone 4. Likewise, a piece of law office technology, such as a practice management system, is an iteration, in Kubicki’s view.

    “If you’re the lead partner in a firm, then investing in that kind of technology may seem to be innovative,” he explains. “It feels like a huge seismic shift in the way you conduct your business. But looking at it from a market standpoint, it’s iterative.”

    That said, Kubicki emphasizes he’s not devaluing iteration; it plays an important role. Innovation differs in that it “represents a significant addition to or pivot from a current, existing business model,” he says.

    The impetus for innovation stems from “friction in the marketplace,” he says, such as law firms losing clients because they can’t compete on price. That sort of friction motivates firms to get serious about changing what they’re doing.

    One major innovation he sees today is that some law firms, of all sizes, are assessing what it costs them to deliver their services. They’re breaking down services at the task level to affix a cost to what the paralegals, associates, and partners do on a case.

    “That’s not what they’ll bill,” Kubicki says. “But they’re asking, what does it cost for that person to do that task? Once they isolate those costs, they can remove inefficiencies and be extremely competitive” in the legal market.

    Opportunities, Not Threats

    Attorneys also can benefit from innovation by taking advantage of what new legal startups have to offer, rather than viewing them as threats. For instance, sites such as LexSpot, which handles immigration filings, and Fair Document, which focuses on wills and estates, can generate client leads for attorneys.

    These and other companies do a lot of the preparatory work, “so lawyers can focus on just being lawyers,” Kubicki says. “The advantage is that lawyers in small- to medium-sized firms can expand their network and be more productive.” Similarly, entities such as wireLawyer enable lawyers to trade referrals for business.

    What’s a good starting point to bring innovation into your practice? First, define your pain, Kubicki says. Are you losing clients? Is a certain type of client business fading away? What’s your realization rate on your billing? Are you having trouble bringing in new clients? Once you know what your pain is, you can start to do something about it.

    “This isn’t about change for change’s sake because it’s cool and sexy,” Kubicki says. “That’s meaningless. It’s about finding ways to solve a business problem.”

    The State Bar of Wisconsin is spearheading an exploration of legal innovations in the state. Through “That’s a Fine Idea! Legal Innovation Wisconsin,” the State Bar is looking to showcase innovation already underway. In the following short stories, you’ll learn about the efforts of a few Wisconsin attorneys to do it differently, better.

    Standing Out

    When Zeshan Usman moved from Florida and set up a solo law office in Madison about seven years ago, he embarked on a marketing frenzy. He created a website, used search engine optimization to assure his site would get high visibility on a search results page, wrote and posted a free e-book on bankruptcy, and more.

    Zeshan Usman

    I try to roll up my sleeves and give excellent client service. I show people the benefits of having a live, local lawyer – someone they can meet and look in the eye. – Zeshan Usman, solo practitioner, Madison

    “In my first three years of practice, I was marketing like crazy, doing everything I could online,” says Usman, who has a debt relief (including but not limited to bankruptcy) and personal injury practice.

    But the results fell short of expectations. Business wasn’t streaming in, so Usman stepped back to reevaluate. He realized he was banking too much on online outreach. To truly compete against LegalZoom and the other players in the marketplace, he decided to focus on building a reputation for accessibility and personal connection.

    “I try to roll up my sleeves and give excellent client service,” Usman says. “I show people the benefits of having a live, local lawyer – someone they can meet and look in the eye.”

    Thus, he goes out of his way to be responsive to clients, who can contact him by phone, mobile, email, text message, or walk-in. “They can call me anytime, 24/7,” Usman says. “Sometimes clients call me on Sunday mornings. I don’t mind. Maybe it’s just a two-minute call, but if I can resolve whatever is bothering them, they can get on with the rest of their day.”

    One practice Usman does not follow is to try to compete with the lowest price. He finds that’s often not the client’s primary concern. A recent experience with one prospective client is typical. She asked Usman if he could match a price she got elsewhere that was 25 percent less than his. “I said, I really can’t,” he recalls, “because I spend more time with my clients.” A few days later, she was back to hire him.

    <iframe src="//www.youtube.com/embed/VMVEEEcU3sg?rel=0&autohide=1" width="325" height="250" frameborder="0" allowfullscreen></iframe>

    Do you know a legal innovator? Someone who finds new, creative solutions to problems? Are you one? Nominate them today! Visit ThatsaFineIdea.com.

    Since Usman adopted his new tactics, he no longer worries when Google’s algorithm changes every few months, which “used to give me a heart attack,” he says, “if my website dropped a couple spots” in search results. And while at first his free bankruptcy e-book was an anomaly, “now everybody is doing it,” he says.

    Rather, Usman’s main focus today is on building his practice by being ultra-responsive to clients. “I’m not here to be in business for five years and cash out,” he says. “I want to be in business for the next 30 years.”

    Filling a Void

    Nearly 70 percent of divorcing couples in Wisconsin hire no attorneys to help them through the process. Some can’t afford it, but even among those who could, many do not see the value of hiring lawyers, observes Milwaukee attorney Susan Hansen.

    Susan Hansen and Gregory Hildebrand

    The Milwaukee Mediation Center aims to be an umbrella for individual, independent practitioners in various disciplines. But it’s not a matter of one single lawyer trying to do everything. – Susan Hansen with law partner Gregory Hildebrand, Milwaukee Mediation Center

    The legal system witnesses the fallout from that situation every day. Many of those divorcing parties make decisions without understanding the current and future implications for their children and finances. “Those are the cases that come back into court post-judgment,” Hansen says, “because either they need to clean things up or, worse, they’re back in high conflict.”

    Hansen and her law partner, Gregory Hildebrand, are creating an innovative solution, called the Milwaukee Mediation Center. Both attorneys have long been active in collaborative divorce, a process in which the lawyers for the parties agree to assist their clients to resolve conflicts, without using adversarial strategies. If the case does end up in litigation, those same lawyers do not participate.

    The Milwaukee Mediation Center, set up as a freestanding business separate from Hansen & Hildebrand S.C., is due to open in September. The center will be as much about education as it is about mediation, Hansen says.

    “It will be a place where couples can come together,” she explains, “to consult with a lawyer mediator to get core information about the legal process and their range of process options, from pro se, to mediation, to the collaborative process, to traditional negotiation and litigation.”

    A vital part of the plan is an interdisciplinary component. The lawyer mediator will bring in specialists’ expertise, as needed, in mental health, financial planning, and child psychology to help the couple make sound, workable decisions.

    Thus, the Milwaukee Mediation Center aims to be an umbrella for individual, independent practitioners in various disciplines. “The lawyer mediator is to some extent a choreographer,” Hansen explains, “who manages the mediation process. But it’s not a matter of one single lawyer trying to do everything.”

    John Storck and Bob Barrington

     

    Now, all file transfers between the Dodge County DA’s office and circuit court are electronic, with Dodge County serving as the pilot county for criminal e-filing in Wisconsin. – Chief Judge John Storck and Bob Barrington, Dodge County DA’s office, Juneau


    Photo: Troye Fox Photography

    The approach throughout is to be a neutral educational resource. “We want to give couples information,” Hansen says, “so they can make better choices for themselves and their families as a whole.”

    ‘Where’s the #!*# File?’

    Several years ago, when Steven Bauer was the Dodge County district attorney (he’s now a circuit court judge), he determined that from the time a case came into his office until the end of a trial, the case file got handed off from one person in the office to another 45 times. That meant when someone needed the file, he or she wasted a lot of time searching for it.

    When Bauer hired Bob Barrington as the office’s managing attorney, he asked him to devise a solution. Barrington did so by eliminating paper files altogether. “Law is my second career,” he says. “I’d taken a couple of systems from paper to paperless in my previous life” as a small-business owner.

    Initially, Barrington checked around and learned that a couple of other district attorney’s offices in the state had investigated going paperless – and discovered a $100,000 price tag to do so.

    He hit on another option. Why not use PROTECT, the record management system the state already provided to every district attorney’s office, in a new way? “Nobody had thought about PROTECT as a stand-alone product,” Barrington says. “It was always a supplement, a document-generating system.”

    Barrington has made it into an electronic filing system. That means no more frustration and precious time lost looking for paper files. Plus, more than one person in the office can work on the same file at the same time.

    Law enforcement personnel also benefit. In the paper-file days, after the district attorney drafted a criminal complaint, someone from law enforcement had to come to the office to read and sign it in person.

    Gary King

    Evidence-based decision making targets the right people with the right response, thus reducing recidivism among offenders and making the best use of limited criminal justice resources. – Gary King, Eau Claire County District Attorney

    “That meant an officer in Watertown had to get in a squad car and drive to Juneau,” Barrington says. “By the time the person got here, read the thing, got back in the car, and drove back to Watertown, it was two hours of somebody’s time. Now we just handle it all electronically.”

    The system caught CCAP’s interest, and as of this year, all file transfers between the Dodge County district attorney’s office and the circuit court are electronic. Dodge County Chief Judge John Storck was instrumental in involving CCAP to make Dodge County in January the pilot county for criminal e-filing for Wisconsin. The DA’s office is working closely with the local courts to identify and find viable solutions to issues that inevitably arise from this kind of major change.

    Several district attorney offices in other counties also have shown interest in using PROTECT to go paperless. Still, skeptics frequently ask what would happen if the system crashed. Barrington notes that the entire system is backed up daily, with the backup stored in a secure, underground vault in another building.

    “Are the odds greater that the system will crash and that we’ll also lose all the backup kept off-site,” he asks, “or that the courthouse will burn down? With paper files you have one file. That’s it.”

    The Right Response

    From the moment an offender catches the attention of law enforcement officers until the day when he or she gets released on probation or supervision, several players in the criminal justice system must make judgment calls on the right thing to do. Arrest or warn? Prosecute or divert? Release on bail or place in custody? And so on.

    In the last couple of years, Milwaukee and Eau Claire counties have instituted major changes at various points along the decision-making process, using a concept known as “evidence-based decision making” (EBDM).

    Jeff Kremers

     

    Evidence-based decision making has resulted in a sea change in bail-setting decisions as well as savings in jail costs. – Jeff Kremers, Milwaukee County Circuit Court Judge


    Photo: ©Nienhuis

    The idea is to make decisions based not only on the facts of a particular case, but also on the individual offender involved. Assessment tools help to make the best decisions for that particular person. Decision-makers rely on both professional judgment and research based on large-scale analysis of similar cases.

    “This effort stems from implementing practices that have been researched over the better part of two decades for the National Institute of Corrections,” says Gary King, Eau Claire County district attorney.

    The National Institute of Corrections, part of the U.S. Department of Justice, awarded technical assistance grants in 2010 to seven jurisdictions nationwide to create EBDM sites. Of those, Eau Claire and Milwaukee counties were chosen among the three sites (along with Mesa County, Colo.) to complete the EBDM process.

    In EBDM, the desired end-result is to target the right people with the right response, King explains, thus reducing recidivism among offenders and, in an era of ever-tightening budgets, making the best use of limited criminal justice resources.

    “We want to demonstrate to taxpayers that we’re doing everything we can to best utilize our resources,” King says. To date, the benefits seen in Eau Claire County have “been much, much more than anyone expected,” he adds. A data analyst hired last summer is beginning to pull together the numbers to show results.

    Milwaukee County also has reaped benefits, says circuit court judge Jeff Kremers. For instance, EBDM has resulted in “a sea change,” he says, in bail-setting decisions, as well as savings in jail costs.

    Dianne Molvig is a frequent contributor to area and national publications.

    “The goal is to hold the right people in jail,” he says. “That is, holding the people who scare us, not those who make us mad. The guy who steals candy bars from Walgreen’s irritates us because we have to keep processing him through the system. But he doesn’t scare us.”

    As police, prosecutors, judges, and others in the criminal justice system decide on the best course of action for any individual offender, a certain amount of risk is inherent, Kremers points out. Nothing can eliminate risk, but EBDM can help manage it.

    “We want to be sure we’re managing the risks based on what research evidence tells us, coupled with our own professional judgment,” Kremers says, “and with our eye on what’s best in the interest of public safety. That trumps everything else.”

    Showcasing Innovation in Wisconsin: Tell Us Your Story

    The short stories told above illustrate the efforts of just a few lawyers and judges who are putting novel ideas to work to solve specific problems. The State Bar wants to showcase many more such efforts through its “That’s a Fine Idea! Legal Innovation Wisconsin” initiative. Through these stories, the State Bar seeks to facilitate a future where lawyers thrive in an evolving and competitive marketplace.

    Ever find yourself thinking, “That’s a fine idea, I wish I’d thought of it”? Help the State Bar tell the story of legal innovation in Wisconsin. For more information on this effort, please see the accompanying sidebar, “Nominate a Wisconsin Legal Innovator.”



    Barriers to Innovation: What’s Holding You Back?

    By Thomas J. Watson

    “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” – Bill Gates1

    In providing legal services to clients in the future, the Baker Tilly report “Legal Innovation 2013: New Developments in an Old Profession” says the key drivers for lawyers will be the increasing sophistication, demands, and expectations of clients, forcing lawyers to change or get left behind, and pricing pressures that force lawyers to change the way they charge for their services. But what holds back lawyers and the legal profession in general from making changes, from innovating?

    Training and Tradition

    According to the Baker Tilly report, part of the problem for lawyers is they work in an old profession and have been trained to do things in ways that have been successful in the past. They are generally reluctant to change because these methods have worked. Why change what has worked? They are lulled into inaction because the way they practice law has been successful.

    Thomas J. Watsoncom Tom.Watson wilmic Thomas J. Watson, Marquette 2002, is senior vice president and director of communications at Wisconsin Lawyers Mutual Insurance Co., Madison, and a member of the State Bar Communications Committee, which is spearheading the “That’s a Fine Idea! Legal Innovation Wisconsin” initiative.

    People in general are by nature slow to change. Lawyers, especially, have been trained from law school on to follow precedent and tradition, to follow past decisions, use them as guideposts. That often works when anticipating where the law is going, but it doesn’t necessarily work when trying to determine where the future of the profession is going.

    In addition, clients’ sophistication and expectations are changing rapidly. Clients are not devoted to tradition. Many are no longer willing to settle for hourly billing without knowing the true value of services rendered. Many are no longer willing to settle for only one type of service. They want many different services from a lawyer.

    Lawyers are not prepared to change as fast as clients. Changing billing practices, the way services are delivered, and even the way one communicates with clients is something lawyers entrenched in their ways find difficult to accept. Many lawyers are holding onto the traditional methods of practice that have worked for decades. This fierce resistance to change is “an inherent attachment to the status quo and by the comfortable livelihoods that many lawyers make and see no need to disturb.”2

    Protectionism

    For years, lawyers have been keenly aware that other nonlegal practitioners were closing in on their turf. The age of licensed professionals providing services formerly and almost exclusively provided by lawyers is upon us. Realtors are handling real estate closings, accountants are providing tax advice, and clients are sometimes turning to independent paralegals rather than lawyers for assistance.

    These were matters previously referred to in the legal profession as the “unauthorized practice of law.” Now, however, many bar associations are suggesting that this is a losing battle, and that lawyers need to embrace these changes. They need to learn to better compete with other practitioners rather than fight them.

    Resistance to Technology

    Some things in life are for the young at heart. Technology may be one of them. Lawyers draped in tradition are sometimes finding it difficult to embrace rapidly moving technology, and as a result, are falling behind, unable to use these innovations in their practice.

    Whether because of an inability to fully understand all the technological changes and how they can lead to new, innovative ways to better serve clients, or a refusal to accept those technological changes, some lawyers are simply becoming less competitive in the legal marketplace.

    Law Firm Culture

    Law firm management consultant Jordan Furlong cites a cultural crisis in law firms as another barrier to innovation. He says people change their behaviors when encouraged to do so by someone who has earned their trust. He believes many law firms have become extremely low-trust workplaces.

    Furlong cites the following factors for this: partners who rarely, if ever, speak to each other and partners and associates who find themselves in direct competition with each other for business. He says this “cultural crisis” is fostered by lawyers at many firms under constant rising pressure to bill hours and justify their position at the firm, as well as increased lawyer mobility that discourages investing time and effort to build relationships within the firm.

    Minimizing Risk

    Lawyers are trained to not only resist change but also minimize risk. As a risk management speaker and author from a malpractice insurance company, I must admit, we spend a lot of time telling lawyers to assess their risk and minimize it. But trying to innovate often calls for some risk. That’s part of what innovation is all about, right?

    Jim Calloway, director of the Oklahoma Bar Association’s Management Assistance Program, recently wrote, in an article about lawyer innovation,3 that “lawyers often deal with the aftermath of things that have gone wrong.” He went on to say that lawyers “are trained to look for weaknesses and expose them.”

    Calloway quoted David Maister, a former Harvard Business School professor and expert on the management of professional service firms. Maister wrote, “In a room full of lawyers, any idea, no matter how brilliant, will be instantly attacked. Lawyers are expert loophole finders, trained to find counterexamples of or exceptions to any proposition. Accordingly, within a short time, most ideas, no matter who initiates them, will be destroyed, dismissed, or postponed for future examination.”4

    Conclusion

    Innovation requires change, and most people, including lawyers, are slow to change. Their professional lives have been ruled by tradition that has served them well in the past. They are resistant to a movement in which nonlegal practitioners are providing some of the services lawyers have traditionally provided. They are slow to embrace all that technology has to offer. And finally, the law firm culture prevents change and innovation to occur more rapidly.

    Fortunately, many new lawyers are providing the impetus for innovation, mainly because they have no choice. Law firm jobs are fewer, clients are demanding different kinds of services, and these new lawyers are competing with other nonlegal practitioners.

    As famous psychiatrist, R.D. Laing once said, “People don’t change until the pain of not changing is greater than the pain of changing.” When lawyers feel the pain personally, more innovation will follow.

    Endnotes

    1 Baker Tilly report, “Legal Innovation 2013: New Developments in an Old Profession,” download available at www.bakertilly.co.uk.

    2 Jordan Furlong, Law21 Blog, Aug. 20, 2013. Furlong is a partner with Edge International, a management consulting firm.

    3 Jim Calloway, Small Firm Lawyers and Innovation, 84 Okla. B.J. 29 (Nov. 2013).

    4 David Maister, Are Law Firms Manageable? (2006).

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