Peer to Peer Magazine

P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | S P R I N G 2 0 1 9 17 The traditional economic model of legal service delivery (cost-plus) is designed for scenarios when scope is difficult to pin down, since it places much of the risk of scope expansion on the party requesting the work, i.e. the client. However, as is oft-lamented, this commonly leads to unpredictable spending for the client. Also, as Michael Mills of Neota Logic has previously pointed out, profits under an hourly model have a direct, linear relationship with billing: work an hour, profit an hour, rinse-repeat; which puts attorneys on a stressful hamster wheel of "bill, bill, bill." While unpredictable and variable work will always require this model, there are many aspects of legal work that can seize the advantages of productization and unshackle earning from the billing hamster wheel. In exchange for front-loading most of the costs (and risk) of building the product(s), productization offers the potential for exponential profit margins. A single (largely up-front) investment cost is spread across all of the product's clients: the more you sell, the higher your margins. Also, products benefit clients by providing generally predictable (and lower) prices, as well as a degree of consistency and quality control. Not all aspects of legal work are well positioned to take advantage of these economics. For example, work that is highly variable from day-to-day or client-to-client can be difficult to productize. That still leaves plenty of legal work ripe for productization (as well as the potential to capture price- sensitive work that wasn't possible under an hourly model in the first place). However, because of the risk involved in this up-front investment, it is particularly important to be clear on the problem being solved, conservative when scoping a solution, and plan for the cost of sustainment. While there is plenty of guidance on development best practices generally, in the sections below, we will focus on issues of significance when designing and building legal products. Getting Started: Strate and Planning S E T T I N G E X P E C TAT I O N S Subject matter experts (SMEs), usually attorneys or other practice professionals, are crucial to deconstructing the substantive aspect of any solution. These professionals may have no experience with solution development, however, so set expectations that development may require significant up-front time investment as well as ongoing availability. Additionally, it's critical at the outset (and throughout development) to set expectations about commitments, logistics and costs around maintaining the product once it's released. This includes not only fixing possible technical bugs, but also performing regular SME reviews, keeping any content up-to-date with changing laws and responding to user requests for improvements. At Littler Mendelson we have a content updating pipeline in which Knowledge Management and the Research Services department monitor legal developments and update content that is impacted; new content is plugged into this pipeline and assigned to someone for updating. Lastly, it's important to remain flexible throughout development. It's easy to get attached to a specific tool or technolo without fully considering whether it's the right solution for the problem at hand (or even if you're solving the right problem). Consider an iterative approach to fleshing out these solutions by cultivating and maintaining a beginner's mindset, freeing yourself to question and test assumptions and move back and forth between development phases as necessary. This can be difficult because it requires trial and error, which costs resources up-front and sometimes involves shifting focus to new users, technologies or solutions altogether in order to solve the right problems. However, this cost is relatively minor compared to building an unusable product. Setting the expectation early that the process is fluid and can be messy can help foster an agile approach to solution building. U N D E R S TA N D A N D S E L E C T T H E R I G H T P R O B L E M When a stakeholder approaches with an innovative idea, the tendency is to jump right into solution building. However, while the idea is one expression of a need, it is often https://www.neotalogic.com/2014/10/26/whats-wrong-with-legal-services/ R E V E N U E A N D C O S T I N L E G A L S E R V I C E S Revenue and Cost in Other Businesses: The great engine of Microsoft is that the marginal cost of delivering another copy of Windows is close to zero. Not zero, there's lots of R&D for the next version. But the average unit cost declines as quantity rises, so quantity is a good thing. Economies of scale, as Henry Ford taught us.

• Cover