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Why law firms need to get better at deciphering signals from the noise

The title of this post alludes to the best-selling book by Nate Silver, ‘The Signal and The Noise: The Art and Science of Prediction’.  A theme running throughout the book is that we are surrounded by so much background information, ‘the noise’, that we miss or misunderstand the true ‘signal’ conveyed.  Most interestingly, Nate Silver contends that this is not simply a case of information overload.  No, more often than not we filter and ‘fit’ the information so that it aligns to our view of the world.

All this got me thinking about the ‘noise’ often heard, but ignored or misinterpreted, in law firms.  Practically every law firm has experienced instances of the examples listed below (and the list is by no means exhaustive). If you are in a law firm, how often have you come across the following ‘noise’?

Some Noise

1. A practice group is well-known for winning new work regularly but the prices quoted to prospective clients, in good faith, often turn out to be unrealistic in operation.

2. When it is time to bill, writing-off significant amounts of time (or writing down the bill if an AFA matter) remains very common.

3. Your firm’s lawyers feel uncomfortable when clients ask – as they increasingly do – about the firm’s use of data analytics, workflow software and productivity tools in general.

4. You regularly see examples where your firm’s processes – both legal and administrative – are inefficient in operation.

5. Your firm does not proactively keep in touch with its wider client base – the overwhelming focus is on those clients with live matters running now.

6. Various initiatives have been tried in the past aimed at improving productivity and team-working, but the hoped for benefits never arrived.

This list could go on, but I hope that by now you get my drift.  This is the noise, which occurs so regularly its true significance (ie the signal conveyed within) is missed, ignored or misunderstood.

Sonic booms…

An obvious suggestion to make therefore is for everyone in law firms (especially the lawyers as they remain the key decision makers) to get better at listening to the noise.

In my last post I noted that some law firms have failed to win new work because of their relatively poor legal project management capability (seriously – this is what the prospective clients told them after their failed bids).  This kind of noise, losing high profile bids, is like a sonic boom: impossible to miss and, frankly, causing a degree of panic when it occurs.  Why wait for the sonic boom?  Usually, there is not too much that can be done about the immediate situation anyway – boom! – another opportunity gone.

…and noise a bit more subtle

If law firms got better at listening to the constant background noise made up of the ‘business as usual’ chatter, they would hear less often the sonic boom of missed opportunities.  Where and how to start?  The best way is to start logging events and/ or review your existing data (in your practice management and workflow systems for example).  Data trumps perception every time.  The reason is we deceive ourselves.  We filter events to fit our view of the world.  So why not start by collecting some basic statistics?  Some common examples to help get you thinking: How often do bills get written down?  Which practice areas are the write downs most prevalent?  How often do winning bids appear not so winning after all (because of the write downs)?

Listen to the noise properly first before trying to work out the signals.  I will cover some of the more likely signals inherent in the noise above in my next post.

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