Saturday 18 June, 2011

The Coming Debate Over Defining "Quality"

qual-i-ty: L qualitas 1a: peculiar and essential character [...] 2a: degree of excellence, caliber ... 2b: degree of conformance to a standard (as of product or workmanship)... 4a: special or distinguishing attribute, characteristic.

--Webster's Third New International Dictionary, ©1909-1971

What is "quality" in legal services and professional representation of a client?

Had you asked me that a few years ago, I would have cocked my head and looked at you sideways. We all know what it means; we went to name-brand law schools which trained us all to be future Supreme Court clerks, and we learned at the knee of Professor Kingsley and Christopher Columbus Langdell.

But let me pose a thought experiment which is, for better or worse, less and less a "thought" and less and less an "experiment," and more and more a reality on the ground.

Clients on Quality Firms on Quality
Often "good enough" is good enough We need to run down every conceivable contingency no matter how remote-and extinguish it with a string cite
80/20 rule 99.99%
Financial metrics, cost-benefit, ROI Professional ethics and intellectual tradition
Business judgment The traditions of excellence in our firm

Does this sound familiar?

By now, we've all been educated to a fare-thee-well on the coming brave new world of alternative fees, Value Challenges, and the "worthlessness" of junior associates. And we've attended the conferences and seminars sponsored by obliging vendors standing ready, at our service, to help us cope with this new reality.

McKinsey, which advises that the purchasing function should have a key seat at the table in strategic affairs discussions-and not a peripheral or subservient role-divides quality into three segments:

  • Good enough: Sufficient for almost all purposes almost all the time.
  • Excellent: Occasionally needed when germane to reputation, marketplace perception, or positioning.
  • Superb: Very rarely required, perhaps only when genuine organizational threats are in play.

That's the view from corporate America.

We would, of course, invert this listing:

  • Superb: Why you come to our firm, what we do, and who I am. (Don't for a second underestimate that third element; it's why you get up in the morning and how you hold your head high.)
  • Excellent: When we try to execute a representation with some degree of sensitivity to costs, based on a longstanding relationship.
  • Good enough: Who do you think we are? You've come to the wrong place.

What happens when these two worldviews collide?

At first, we may go through the five stages of grief, per Kubler-Ross:

  • denial
  • anger
  • bargaining
  • depression
  • acceptance

Let's pretend we get all the way to acceptance, however. After all, the client is always right. (Right?)

As faithful readers know, I majored in economics in college and went through the courses in the MBA program at NYU's Stern School of Business, so I have a reasonable degree of sympathy to the clients' view of "quality." I might add that, as a Scot, I profoundly appreciate the parsimonious dimension to their attitude.

Here's my worry:

  • You and your firm agree to a client's request/demand that a certain matter is only worth "good enough."
  • You give it good enough-plus 10%, let's say, just because you can't help yourself.
  • Case closed.
  • Tick....tick....tick
  • Sometime later, things go seriously south with the matter formerly deemed closed.

Is good enough good enough any more?

And who's to blame-your firm or the client-for the fact that merely sufficient legal advice has come back to bite?

Actually, you might not want to let your malpractice carrier think about this too long.




What, then, is to be done?

We all know there are no guarantees in life, but I also believe that consenting adults can reach free market solutions-premised on full disclosure-that help people anticipate what the rewards are if things go right and where the responsibilities lie if things go wrong.

So, for starters:

  • Be ready for, and open to, "good enough" engagements.
  • But think about them especially hard--ironically, harder than you might think about bet-the-ranch engagements.
  • Have extended, open-ended, probing conversations with your client opening their eyes to the full implications of "good enough."

And finally, don't underestimate your own firm's market power. That's what clients are trying to start to exercise. They're not the only party at the table.


Update:  Steven Levy, a loyal reader, writes:

I think this is a question that people are just starting to address.

Any business decision contains risk, and good decision-makers build risk premiums into the overall cost analysis. Why is it not reasonable to sign a work agreement in the legal arena recognizing and accepting risk? We do it everywhere else. For example, my home insurance excludes earthquake damage. (I live in an earthquake zone, and so I choose to purchase separate earthquake coverage.) Both the insurer and I recognize the limits of the coverage.

Agreements to engage legal services are negotiations between two highly competent and knowledgeable parties. Why can't they include a definition of 'good enough' that makes clear the quid pro quo of less money/less depth?

You can read more of Steven's thoughts, including his elaboration on the earthquake/risk analogy, at his "Lexician" site.

No TrackBacks

TrackBack URL: http://www.adamsmithesq.com/cgi-bin/mt5.01/mt-tb.cgi/2859

Leave a comment

Monthly Archives

 
Select a month from the dropdown
 

Recent Entries

     "Wait and [Never] See"
Last week I wrote about innovation and how the early adopters can gain sustainable competitive advantage.  This week is something of a follow-on, albeit one…
     Memorial Day 2011
     Be Innovative? Who, Me?
Jim Surowiecki, writing his regular column in The New Yorker, "The Financial Page," wrote last week about innovation and why it seems to take hold…
     God is in the Details
Alex Novarese, Editor in Chief of LegalWeek, has a smart column this week called "Rugged Individualism--a year of firm-specific achievement in the US." Here are…
     Limits, Still
Normally I don't refer to events stemming from my own experience in commenting on our industry-indeed, this is something of a first in the 8-year…
     Who's Signing Your Paycheck?
A loyal and exceptionally thoughtful reader, and reasonably regular correspondent (also with a strong academic background in economics), writes: Bruce: I enjoyed your 9 February think…
     Adam Smith, Esq. Launches A New Company: JD Match
Today Adam Smith, Esq. takes great pleasure in announcing the launch of a new company dedicated to rationalizing and bringing a measure of order, efficiency,…
     Fifth in Our Series on Strategy: What it Takes to Be Tier 2
Recently, I wrote about what I called the Tier 1/Tier 2/Tier 3 challenge for BigLaw. Briefly, the Tiers are: 1: What everyone aspires to. Think…
     Fourth in Our Series on Strategy: Tier 1, Tier 2, Tier 3?
Toby Brown and Ron Friedmann (both friends) have a thoughtful and well-reasoned point/counter-point going over at "3 Geeks and a Law Blog," which they invited…
     We're Not The Newspaper Industry
When Slate writes about it, it's entered the mainstream. In this case, that would be the "whopping" 11.5% year over year drop in the number…
     Seminar on Value-Billing Fee Arrangements/New York/March 24
I'd like to bring to your attention an all-day seminar happening here in midtown New York on Thursday, March 24th, sponsored by the Ark Group…
     The "Adam Smith" Award for Innovation in Legal Service Delivery
A couple of weeks ago I learned that the legal department of Kraft Foods issued its "Adam Smith" award, for innovation in the delivery…
     Reminder: Brief Survey on Law Firm Leadership
Don't forget to the take the Law Firm Leadership Survey co-sponsored by Adam Smith, Esq., and Vault.com, Inc., the leading online career intelligence site.The survey…
     Third in Our Series on Strategy: Bad Strategy
As a management consultant to law firms, perhaps the most consistently infuriating phenomenon I encounter (all the time and everywhere, I'm deeply sorry to…
     Joe Flom, 1923-2011
We've all heard the sad news that Joe Flom died Wednesday at age 87.  (WSJ, The American Lawyer, The New York Times, DealBook) Over 20…
     A Modest Proposal for Alternative Fees
There's been so much talk recently about "alternative fee arrangements" (AFAs) that, frankly, we're exhausted. But before we give up on the subject entirely…
     Survey on Law Firm Leadership: An Adam Smith, Esq./Vault.com, Inc. Collaboration
With delight I can announce that Adam Smith, Esq. is embarking on a collaborative effort with Vault.com, Inc, the leading career intelligence site for those…
     What's the Half-Life of a Lateral Partner in London?
A-ha! That, at least, was my reaction when reading the research report published this week in The Lawyer.  Here are the top-line results, and then…
     New Client Minimums? Meet DLA
Tim Bratton, the general counsel of the Financial Times, has an interesting perspective on DLA Piper's recently announced plan to revamp its client base.…
     Winners Take All? Yes, No: Debate Among Yourselves
I suppose that when it's in The Wall Street Journal, it's true. Well, it's certainly true that attention must be paid. Which brings us…
     Show Me the Money (And the Love)
Here on Adam Smith, Esq., we've never devoted a lot of ink to work/life balance issues or, for that matter, to lawyers' happiness with…
     Kaizen Comes to The City
A few days ago I had a chance to catch up with my friend Alex Hamilton, now at radiant.law.  (I knew Alex in his previous…
     Second in Our Series on Strategy: Strategic Planning 101
Booz & Co.'s Strategy + Business published something of a primer called "Successful Strategic Planning" last month, and it's worth a quick review for the distilled--if…
     First in a Series on Strategy in the New Normal
"With all respect, I think that's the wrong question. There's always new stuff out there, and most of it's not very good. Rather than…
     We Are Not Alone
This is a tale of how this is not your father's recession. About a year ago I read Reinhart and Rogoff's This Time is…