Legal Mosaic Essays on Legal Delivery

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<strong>Legal</strong> <strong>Mosaic</strong>: <strong>Essays</strong> on <strong>Legal</strong> Delivery What’s a Quality Law Firm? Lawyers are not going out of business. And certainly the handful of brand differentiated firms are not, either. But the business of law is casting a harsh light on the utility and necessity of the traditional law firm structure. After all, clients hire lawyers, not law firms. Justice Potter Stewart’s celebrated “I know it when I see it” obscenity test also applies to law firm quality. No one can quite say what it is, but most attorneys and clients claim to know it when they see it. This is a very subjective standard in a metric driven world. Law Firm Quality Measures: Hearsay and Brand How can you tell a “quality” law firm? Simple answer: hearsay. And brand. It’s remarkable that a huge global industry like legal service is so devoid of quality metrics. And it’s ironic that lawyers and clients substitute assumption for evidence when it comes to judging law firm quality. Other businesses and professions, of course, have long utilized quality metrics. Take baseball. It has had performance metrics from its opening pitch. In the past few decades, a second generation of baseball metrics has come into play, measuring the impact of performance on outcome. The baseline performance metrics remain, but the focus is now on how that influences outcome. Call this the Palsgraf metric: but for a player’s contribution, would a different result have obtained? Why do law firm metrics fail to reach first base? And how is law firm quality evaluated apart from brand and hearsay? 48
<strong>Legal</strong> <strong>Mosaic</strong>: <strong>Essays</strong> on <strong>Legal</strong> Delivery It depends because, to be technical, it’s squishy. Reputation, subjective lists (reminiscent of that famous line from Casablanca: “round up the usual suspects”), law schools attended, and financial success are common determinants. To the extent metrics are relied upon, they calibrate firm financial performance, not quality. The self-regulated legal industry measures success from the attorney- not client- perspective. Hmm. Ken Grady, a former Fortune 500 company General Counsel and thoughtful commentator, has noted the legal industry tends “to do quality by proxy.” He cites law school and firm brands as proxies for quality, arguing that instead of metrics, lawyers make assumptions that are generally tied to brand. He’s right. And there’s rich irony in lawyers substituting assumptions for evidence. PPP is a Financial Metric, Not a Measure of Quality Profit-per-partner (PPP) has long been the holy grail of legal metrics. Its importance extends well beyond the equity partner compensation it measures. PPP enables law firms to retain equity partners (now synonymous with rainmakers), lure laterals, and burnish the firm brand. Clients also seem to view high PPP as a positive, although there is scant data linking PPP to client satisfaction or firm quality. PPP measures a firm’s profit maximization. It is not a gauge of expertise, results, knowledge of clients’ business, efficiency, transparency, or value to clients. True, clients “vote with their feet,” but the decision to switch firms is often based upon cost factors rather than quality- or a combination of the two. While technology and expertise exist to fashion firm “quality scorecards,” most legal software tracks legal spend, not results or client satisfaction. Size also matters in the quality discussion. It is tied to billing rates; large firms typically charge higher rates than smaller ones. And there 49
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