DEDICATION

To Valeria, my wife, lifelong companion, confidant and l loyal friend. For

the past 42 years, you have been my motivation, encouraging and
supporting me in all moments through the happy and the difficult times. A
reference in my life!
Thank you, Lé!
ACNOWLEDGEMENTS

“I am very pleased that José Paulo Graciotti has written a second edition of
this book. He is one of our most astute commentators on the management of
law firms – drawing on many years of relevant experience, his observations
are practical, actionable, and wise.”
PROFESSOR RICHARD SUSSKIND OBE
Author of Tomorrow’s Lawyers.

“The business of law has never been so challenging. Clients are seeking
excellent commercial advice, delivered innovatively and cost effectively.
Law firms are under price pressure like never before. Understanding your
business is now every bit as important as understanding that of our clients
and understanding the law. This second edition of Graciotti’s book is the
perfect guide to those wanting not just survive but thrive in this new
world.”
STEPHEN ALLEN Global Head of Legal Operations,
Innovation Lead - HOGAN LOVELLS.

There are few people who know and understand the dynamics and inner
workings of the legal industry better than José Graciotti. José navigates the
aspects of people, process, and technology in a way that allows legal
leaders to see the potential of their practice and unlock the business
strategies that increase profits and improve the client experience and service
delivery. Truly an artist in his work with an infectious enthusiasm and wit.
MARRIOTT MURDOCK
NetDocuments Regional Director – Latin America
Strategic Governance for Law Firms is a must read for current and aspiring
law firm leaders and attorneys. “José Paulo’s” overview and explanation of
the changing dynamics of the legal industry and its impact on law firms
provides critical insight into what law firms need to do to address those
changes.
MARK SMOLIK
General Counsel Chief Compliance Officer DHL
Supply Chain Americas

With close to three decades in the legal industry, including executive

positions in two of Brazil’s leading law firms, José brings a unique
perspective. His new book, Strategic Governance for Law Firms, covers the
history of the legal market, challenges facing law firms, and a clear path to
success for lawyers focusing on data analytics, information governance,
leadership, technology, and future trends. As an industry leader, José
conceived and produced a very successful conference, bringing together
dozens of law firm partners, and senior in-house counsel. I was honored to
be a part of 1ª International Information Governance Conference for the
Legal Market, which was among the most professional and comprehensive
conferences of its type I have seen.
PATRICK DIDOMENICO Chief Knowledge Officer,
Ogletree, Deakins, Nash, Smoak & Stewart, P.C – New York, USA.
Author of the book: Knowledge Management for Lawers – ABA, 2015.
FOREWORD
How do we manage law firms in this new business environment, where the
clients expect more and more, for less, from their lawyers? How do we
adapt ourselves to the changes to automation and the digital area? Client
expectations regarding the speed, objectivity and quality of the services
provided by their lawyers -internally and externally- has radically changed
in recent years. There is a growing demand for more modern models of
legal management, both for law firms and for company departments, with
more focus on the customer and on the business. No longer is there
tolerance for vague, inconclusive and unfounded opinions on concrete facts.
There is also no room for lawyers who distant themselves from the realities
encountered in a firm, who think in the abstract and are not willing to take
responsibility for the consequences of the recommendations made to the
client.
Clients now demand an engaged service from professionals who are able to
position themselves as true partners in the organization. The business
lawyer became a leading player in business, providing legal solutions and
generating results. In this new role, business law needed to embrace the
new, adopting more management models and incorporating automation and
industrial indicators to manage efficiency and quality in their daily lives.
In order to break paradigms in a traditional area such as the legal sector , it
is essential to rely on the vision of someone who really knows the
complexity of this scenario: José Paulo Graciotti, with decades of
experience as a professional administrator of law firms, combines the
qualities of an entrepreneur with his vast experience in the legal sector. He
became a foremost expert of the market’s demands for legal services and,
above all, how to best serve them. In this book, Graciotti approaches the
topic from the management of customer expectations to the use of
technology, confronting the gaze of the manager, the service provider and
the user. Moreover, Graciotti is at the heart of the transformational
challenge: he evaluates the psychology of the legal professional and the
difficulties of adapting their traditional role to new trends.
This book provides deep insights and essential challenges to managers of
law firms, militants in business law and corporate managers on the
adaptation of law firms to their new strategic role, always from the
sagacious point of view of one of the most renowned managers of the
market. It is indispensable read for lawyers, office managers, legal business
managers and entrepreneurs of all sectors.
Alexandre S. D’Ambrosio*
Executive Vice President of Legal and Corporate Affairs of Banco
Santander (Brasil) S/A, with 20 years of experience as business legal
manager and 11 years [of experience] as partner and associate of U.S law
firms.
PREFACE
The reflections compiled in this book by José Paulo is the result of his
profound experience in terms of organization, strategic planning and
governance of law firms, initially as a managing partner, and later as an
independent consultant . The reports, analysis and recommendations gain a
very special meaning, since the author is an engineer and does not practice
as a lawyer, which, as the book illustrates, allows him to develop an
external and quite lucid view of the evolution of the organizational models
and the misfortunes that surround the legal profession, with an emphasis on
the main challenges, the alternative solutions and the future trends.
The text has no academic pretensions. On the contrary, it favors
colloquial language and makes use of metaphors, which makes the reading
pleasant and facilitates the comprehension of the messages that the author
intends to convey. Particularly illustrative is the comparison between the
random motion of the particles immersed in a fluid that is submitted to
heating (Brownian motion) and the stresses that are inherent to a society of
lawyers whose partners share technical affinities, professional
complementation, personal aspirations and ethical values. When partners
are submitted to pressure, those attributes generate friction and resulting
impact, fostering the tendency of breakup.
The reader will clearly see that the legal services market is being
transformed quickly and profoundly. It is no longer the contracted law firm
who dictates the conditions for the rendering of services, but instead, the
contracting client, mainly with the regard to the fee arrangement to be
adopted. The most significant factor inducer aspect of this change in
paradigm is the intense competition, resulting from the increase in the
number of qualified, specialized and well structured offices. At the same
time, the pressure exerted by corporate clients has increased, due to the
decrease in the costs of legal services, in addition to the demand for higher
commitment, responsiveness and ethical behavior by the lawyer. The need
for the comprehension and adaptation to the new scenario has become a
decisive factor for the survival of professional organizations in the legal
area.
 In this context, the main concern for law firms should fall on the
continuous search for efficiency, productivity and competitiveness. To this
end, it is essential to bring together professionals with qualities that
transcend the mere domain of the legal knowledge. The successful lawyer
today is one that also has behavioral competence, such as entrepreneurial
capacity, strategic vision, ability to build relationships, function in a team
work environment and people management. The ethical dimension of
professional performance is another factor that tends to serve as a
differentiating criterion between law firms which have already reached a
high level of rendering quality services, with coherent and competitive
prices.
In this same line of thought, the book focuses attention on the key role
of leadership and talent management in the scope of law firms. The
challenge here is how to set performance evaluation and result sharing
parameters that favor the collaborative environment and sustainability in the
long run, while also motivating the professionals to give their best for the
success of their organization.
Finally, what also has to be highlighted is the author’s reflection on the
importance of information governance and the impact of the technological
developments in the daily practice of law. In this respect, new technology
does not disregard the lawyer’s performance in the entrepreneurial world,
but it will serve the purpose of a support tool for the increase in
productivity of the rendering of legal services. Hence, the qualified
professional will be released from performing repetitive tasks, that add little
value, so as to focus on coming up with solutions to problems that are
complex or strategic in nature.
For those who have already noticed and experienced the changes that are
underway in the legal sector, reading this book by José Paulo will help to
formulate and suggest alternatives for to adopt and implement. Those who
are not aware of this scenario, this book provides the opportunity to meet
this new reality and to think again about their own professional
perspectives. It is never too late to change direction and redefine objectives.
Mário Engler Pinto Junior*
 *Professor of Law at FGV, SP, and Coordinator of the Professional
Master’s Degree.
CONTENT
DEDICATION
………………………………………………………………………………
………3
ACKNOWLEDGEMENTS
..…………………………………………………………………...4
FOREWORD
………………………………………………………………………………
………6
PREFACE
………………………………………………………………………………
…………..8

1 - MARKET EVOLUTION AND PEOPLE CHANGE

…..…………………….…15
Short history of the last 30 years
……..……………………………….…….15
Recession is HERE! Now What ?
……………………….…………………….16
Services - Price / Quality / Response Time Equation …………..…….20
Changes in Behavior
…..…………………………………………..……………….21
Who defines / Determines the price ? ………………..……….21
Value, Price and Quality Perception.………………….………..23
Consumerization. Clients or Consumers?.....................…31
Whenever we try to “multitask”, we lose Focus!
…………………….34
Changes. How to Face Them? Disruption or Evolution?.............37
Professional Help in
Management..…………………….………………….40

2 – THE CURRENT MODEL

……….…………………………………………………….43
 Indifference to Productivity and Efficiency
…….……………………….43
Margins and Remunerations
………………………….……………………….45
Time Based Model
……………………………………….………………………….46
Budgeting and Pricing Proposals
……..………….………………………….47
Inward Management and Protected Market…………….…..…………
50

3 – CHALLENGES TO THE MODEL

…………………………………………………..53
I – EXTERNAL CHALLENGES
………………….………………………………..53
Competitiveness
…………….…………………………….………………….53
Disloyalty
………………………..……………………………………………….55
Pressure to offer competitive prices and Predictability ..….55
ALSP – Alternative Legal Services Providers
………..…………….56
Alignment of Objectives
……………………………..……………………59
Legal Directors, Contracting and Internalization……….….60
II – INTERNAL CHALLENGES
……………………..…………………………..61
Definition of the Corporate Culture
……..……….………………..61
Organization Structure and Decision Process …………………..64
Changing Habits
……………….…………..……………………………..….68
Institucionalization, Depersonalization and Collaboration .70
Learning Organization, Experimentation and Error ……..….71
Lawyer´s Psychology …..……………………..…………………..……..73
Partner´s Mobility ……….…..………..…………………………..……...75
 4 – THE NEW MODEL
…………………………………………………………………….77
Law Firms need to reinvent themselves
..………………………………..77
New Lawyer´s profile
…………………………..………………………………….82
Economy I and Economy II
……………………………………………………….85
Professional Management - The challenge between Practicing
The Law and Manage the Business
…………………………………………..86
MASLOW in The Legal Market
………………………………………………….89
Productivity, Efficiency and Productivity ….………………………………
92
SGIT2WxQ. The Transforming Formula
………………………………….…95
Easter, Pesach and Innovation
………….…………………………….……….98
Attraction, motivation and Talent retention ………………………..…101
Legal Marketing - Law Firms need Updating ……………………..……103
The Fluid Company
……………………………………………………………….…107

5 – NUMERIC GOVERNANCE – ANALYTICS

………….…………………………….109
Without data you´re just another person with an opinion! ……..…..109
BI Cycle, Objectives an Data Analytics
……….………………………….......112
Creation, Sanitization and homogenization of registers ……….……..114
Life Cycle of Matters (or Cases)
……………….…………………………………118
Timesheet, Oh! Timesheet
…………….…………………………………………..120
 Cost Appropriation – Accountability
…………………….………………….…125
How to Create a Full Quality Strategic-Operational Dashboard ….128
Examples
……..……………………………………………………………………….
…….135
UTBMS Codes
……………………………………………………………………….…….14
8

6 – INFORMATION GOVERNANCE
…………………………………………….…151
Information Governance Structure
………………………………………..151
Elements Involved in KM
……………………………………………………….152
The History of DMS. How the First DMS Appeared ……….……….153
Difficulties in Searching for Information ……………………..…………156
KM – Cross-Subject Process
………………………………………………….159
KM - An ongoing Process of Refinement
.……..………………………162
Investment Capability for Information Search Technology …...163
KM in 3 words: Collect, Connect and Collaborate …..…………..…
170
KM e Business Intelligence .........................................................172
Strategy and KM
……………………………………………………………..……174
Cyber Security and KM
………………………………………..……………….179
KM: Evolution of Objectives
………………………………………………..…180
The New KM Structure
…………………………………………………………..181
KM Management – New Trends
…………………………………………….185
 7 – TALENTS GOVERNANCE and LEADERSHIP
………………………….…..189
Commitment or Engagement
………………………….……………….…….189
The Challenges in Governance of Law Firms
……………..……….….191
New Generations
…………………………………………………………………..195
Leadership in Law Firms
……………………………………………..…….….198
Lawyer´s Evaluation: still very few KPI´S used
…………………….…201
Lawyer´s Career Plan – The Freeway Metaphor ………….…………205
Career Plan for Lawyers and Partners
…………………………..…...…208

8 - PARTNERSHIP GOVERNANCE
…………………………………………….……213
Partners and The Atomic Structure
…………………..….……..………….215
The Law Firms and the Brownian movement …………….…………..218
Partners Compensation in Law Firms
The Several Solutions to the Equation
…………..………….……………221
Partners Compensation and Interaction with The Institution ...225
Compensation Structure – Structural Models ….……………….…..228
The Most Attractive Model is The Worst in Long Term ….……...232
The Human Hand Metaphor
……………….…………………….…………..237
Incentives and Desincentives
………….……………………………….……240

9 – TECHNOLOGY & INNOVATION

…………………………………..……….…243
Lawyers an Technology
…………………………………………………………243
Innovation is NOT Only Technology ………………………………………
248
The Next Successful Law Firm
………….……………………………….….251
Collaboration Tools
……………………………………………………….……..256
Efficiency, Productivity and Technology on Lega Services ……..257
Artificial Intelligence & Human Intelligence ………………………….264
Demystifying “AI” for The Legal Area …….…………..………….……
267
The Real Technology Revolution in Law
………………………………..272
Legal Business Management in The Algorithms Age …………….274
Technology, AI and Management …………………………………………
277
The New Trends in the Legal Business
………..…………………….…280
10 – TRENDS
……………………………………………………………………….……..2
85
Law Firms Must invest Heavily in Intellectual Capital, KM and
Technology
…………………..……………………………………………………285
5 hints to The New Law Firms
…………………………………………...289
Law Firms in The Future
………………………………………………….…291

BIBLIOGRAPHY
…………………………………………………………….…………….302
 CHAPTER 1
MARKET EVOLUTION AND PEOPLE
CHANGE

“It is not the strongest of the species that survives, nor the most
intelligent, but the one most responsive to change”
Charles Darwin, 1809

SHORT HISTORY OF THE LAST 30 YEARS

The start to my career in the legal field happened in a totally unplanned
way! At the end of the 80's, with a 10-year professional experience as a
construction manager (I have a degree in Civil Engineering), and having
actively participated in the implementation of the "micro-informatics"
system of the Information Technology Master Plan, that had recently been
implemented at Gomes de Almeida Fernandes (currently/now Gafisa), I
became interested in management and so, decided to study this subject by
enrolling in a specialization course at FGV. Having lost my job at the
company (which had provided me with an excellent professional
formation/development and with several good friends), I was unemployed
and in a serious quandary as to the future of my career: do I go back to
being a construction engineer, or embrace the new challenge of
management and informatics ( as IT was called at the time)?
At that t point/stage (1987), I met by chance, a newly promoted partner at
the Law firm Demarest and Almeida (as it was called at the time), who
introduced me to the legal environment; iInitially as a service provider,
eventually/gradually progressing to the position of office administrator
(with a partner status). In 2002, with the same partner, we decided to set up
our own office and founded KLA, with me in the same position as office
administrator (again with a partner status), where I continued to work until
the end of 2015.
My quest to pursue new , and the continuous search for challenges made
me vacate/resign/give up the comfortable position of partner to start my
consulting business, and fulfill my dreams , including writing this book.
What I want to share with you is not the story of my professional life, but
rather the experience I have lived in recent years in the legal field and
transfer some of the knowledge I acquired so as to try and help [you]
overcome the challenges this line of business [is subject to] presents.

THE RECESSION IS HERE! AND NOW?

Before starting the discussion about the global economic crisis, the
recession, or the market, it is worth reflecting on the recent history of
corporate Law firms, their model of organization and management.
For almost 30 years I have been doing/engaged in and have been dedicating
myself to the study of Law firm management, and can therefore with
certainty say that the modus operandi of the so-called full-service corporate
firms has remained the same since over this period of time. These type of
offices were created/set up in Brazil in the image and likeness of the
American model of the so-called " BigLaw", showing practically a standard
form of behavior, which is that they maintained and annually increased
their hourly rate tables in accordance with to the seniority of each Lawyer (
basically categorized in relation to time since graduation or post graduate
experience), prepared their fee arrangement proposals based on estimates
of the number of hours expected to be spent on a matter, then
invoiced/billed clients for all expenses incurred to carry out the work, with
little concern over productivity, efficiency or effectiveness ... until 2008,
when the global economic crisis arrived there!
The chart below, taken from the book "Growth is Dead: Now What? by
Bruce MacEwen of Adam Smith, Esq. ® New York 2013 shows the
evolution of billing and receipts/earnings [in the American market] of
American Law firms

Source: Adam Smith, Esq.

Another view of the consumer market’s evolution for legal services (again
in the US) is the following chart, taken from the 2019 Report on the State of
the LegaL Market edited by Thomson Reuters and Georgetown Law.
My experience of recent events in this market, showed a gap/lag of about
5 to 10 years between what happened in the USA and what was

happening here in Brazil. However, this gap/lag is rapidly decreasing, as a

result of Brazil's engagement in the process of globalization, the
[Intranet/internet?] and all the behavioral changes in society (as we will
see below). Presently, I estimate this gap to not be more than two years.
Here I am specifically referring to the changes in technology , management
and client behavior, and not to the economic crises, which have different
causes/origins, time lines and duration ( with some variation), but with
similar consequences.
Anyway, we must take advantage of this gap and learn from the experience
lived by the US firms in dealing with their struggles during the crisis by
making good use of what has been positive for those who have managed to
overcome it, obviously adapting [the strategy] to the Brazilian reality.
What then, should [Brazilian] firms do?
This is a question that can generate (and has already been generating)
several books on the subject, but I mention some points (which may seem
obvious) to be considered and adapted to the specific needs of each firm:
Strengthen relationships with clients. Always remember that
Law firms are service providers and the differentiating factor
should be service delivery.
Adopt innovation and a risk-taking attitude.
Create a systematic and professional pricing structure.
Offer to clients alternative forms of fee payment.
Invest in intellectual capital and study ways of remuneration
and retention of collaborators who enhance productivity.
Adopt the philosophy of managing knowledge in the
organization (this subject alone would merit a book).
Rethink the partners’ compensation structure (adjusting
expectations in relation to reality and other markets/sectors).
Think like a company and adopt a professional organization
management style .
Re-evaluate cost structure (not with the aim of simply cutting
costs, but of doing more with less).
Invest heavily in state-of-the-art technology, always focused on
efficiency, productivity and competitiveness.
SERVICES: PRICE/QUALITY/RESPONSE TIMES EQUATION

The various possible solutions that could satisfy the above equation (there
is more than one ) will actually position your firm in the market! The
solution can be "adopted" when the firm deliberately chooses a particular
pricing / response time / quality model equation aimed at a specific niche
area in market. This alternative generally means services at high
prices/charges/fees and high aggregate values, with a focus on sophisticated
markets (lower area of the diagram).
The other solution for this equation is usually not "adopted" but followed
involuntarily and without the proper awareness of its managers! [They are]
usually companies that have only one of the two variables (response time or
quality) and are positioned at the top of the diagram.
Each of the intersecting areas of the ellipses defines what kind of services
your company provides and especially/specifically, what the client`s
perception of your company is, and it is this perception that ultimately
defines the image it will have in the marketplace.
The aim is to reach a point ( through a lot of effort) where there is a
perfect combination between price / quality / response time, which is only
achieved when there is a highly-skilled/competent technical / intellectual
team, very well managed and motivated (which is done/under the guidance
of managers that are well-trained and who have a high level of emotional
intelligence), combined with/as well as active and attentive productivity
management and optimal utilization of all company resources.
Again, I caution that Legal Service Companies ("aka" Law Firms) should
be very attentive to how they will solve the above equation and position
themselves in the current and future market, which is becoming
increasingly competitive and with decreasing/narrowing margins.

CHANGES IN BEHAVIOR
1 – Who defines/determines the price?
I believe that the main change in the behavior of the current legal
market/sector will come from (and in future continue to be the case ) the
client who will be determining the price/cost of services, not the Law firm,
and that this shift will cause a radical change in the client-Lawyer
relationship and force Law firms to undergo profound internal re-
engineering in order to adapt to this new reality.
I list below some of the reasons that are forcing this change:
a. The global economic crisis that began in 2008, forced companies to
adapt and adjust their production costs in order to be able to
survive in [absolutely weak] a fragile market characterized by very
 weak demand, wherein everyone searches with much greater care
for the best cost-benefit ratio in relation to the products/services
they consume/use and essentially seek similar products and
services which are available at a lower cost. In this scenario,
companies have revised budgets aiming at cutting costs, and also
predictability; one of the traditional cost items that proved to be
less predictable has [always] been legal services, which operate
on a billing-by-the-hour basis.

b. About a decade ago, electronic billing systems (e-billing)

commonly used in the US market/legal sector, started being used
more commonly in our market, especially in firms that worked for
international companies. Through the use of these systems,
customers are able to clearly map/track/monitor their service
providers with their collection and efficiency characteristics, and
are thus able to generate comparative statistics between several
providers. Examples: Serenghetti, Counselink, Tymetrix and
others.

c. With the increasing introduction of internal compliance policies

and the adopting of ERP systems (SAP-style), contracting
companies are delegating the responsibility for contracting legal
services to the Procurement Departments (or their equivalent),
thereby gradually reducing the full autonomy of "general counsel"
in the definition/decision making about the Law firm to be used in
a particular case or subject/matter.

d. With the increasing utilization of systems that use artificial

intelligence and standardization, aiming at the attainment of
efficiency and production, "legal products" are becoming more
commoditized, making differentiation between offices more
difficult.

In this way, the legal market is gradually starting to reaching a point of the
other markets where the prices of the products/services are very closely
matched, effectively leaving the final definition of which firm to instruct
to the client and no more an “oligopolized” market sector as the way
matters stand at the moment.

The market is moving from“Seller Provider Pricing” to “Buyer /

Consumer Pricing”!

2 – Value, Price and Quality Perception

In this dramatic and radical change in the behavior of the consumer market
for legal services, in addition to what was discussed in the previous item,
other reflections on the intrinsic value of the services provided are worth
reflecting on. and I want to cite some points brought from other markets to
better exemplify my point of view.
I have selected some phrases/quotes that I consider quite indicative to
illustrate this topic/point/statement :

a – From the authors Ralf Leszinski and Michael V. Marn: "The real
essence of value revolves around the tradeoff between the customer benefits
from a product and the price he or she pays for it" and "Customers do not
buy only on/at? low price. They buy according to customer value, that is,
the difference between the benefits the company gives customers and the
price it charges. "
b – From Warren Buffet: “Price Is What You Pay, Value Is What You Get”
A few months ago, I went to a store to buy an iron and I was amazed at the
amount of brands and brands of this appliance and more shocked by the
small price difference among them. It was difficult to choose because the
differences were minimal and in the end I opted for the brand that offered
the best option of maintenance and warranty and also a good reputation-
quality.

Another point that I want to bring to this discussion is the image associated
with some global brands and I mention only two as an example: when we
think about safety in the automotive sector, soon the mind comes to the
Volvo brand, when we think of technology we remember brands like
Google, Apple, etc. and when we think of ino-vation / disruption (I hate that
word) soon comes Tesla, Airbnb, Uber, Netflix, etc.

There are two distinct factors to this. The first is a business philosophy
focused on the theme (quality, safety, innovation, etc.) and many millions of
dollars of R & D investments to become reference in some of them and the
other factor is to study hard and deep observe the market that is being
inserted, correctly predict their future behavior (having the insight) at the
right time and know how to correctly apply the idea and in a timely manner.
I add another point to the discussion, and I make an analogy with human
psychology (psychologists and psychiatrists please forgive me for the
intromission in your field of activity).
There are always three "I's" for each of us: the first is what I think I am, that
is, how I see myself; the second is the one that people think I am, that is,
how they see me and interpret me; and the third is the one that I really am.

With the valuation of services is the same thing, that is, there are three
values embedded in a service: the first is the one that the service provider
establishes for his/her work, determining a price; the second is the
customer's perception of what he/she considers to be the correct price of
that service and how much he/she is willing to pay; and the third is the
actual value, which represents the equilibrium point between the two
previous ones.

There are always three "I's" for each of us: the first is what I think I am, that
is, how I see myself; the second is the one that people think I am, that is,
how they see me and interpret me; and the third is the one that I really am.

With the valuation of services is the same thing, that is, there are three
values embedded in a service: the first is the one that the service provider
establishes for his work, determining a price; the second is the customer's
perception of what he considers to be the correct price of that service and
how much he is willing to pay; and the third is the actual value, which
represents the equilibrium point between the two previous ones.
Secondly, prices are still very changeable, even as a consequence of the
first point and also because this market is still tight and not transparent. The
consumer market has not yet been able to properly debug this variable, but
is rapidly learning from the electronic billing systems used primarily by
multinational companies.

Third: we have reached the critical point, that is, the quality of service. This
is still the point that needs to be more developed, because as a result of the
first two points, the legal market has only recently begun to behave as a
reasonably competitive market. In almost all ad-vocation office sites one of
the most valued points is the provision of personalized service and excellent
service, however most often it is a distortion of the image itself. Again the
consumer market begins to notice the differences and make their choices.

Fourth, innovation has become one of the main differentiators in this

market, but it is still very slowly reacting to consumer market expectations.
There is a strong tendency to associate innovation with technology,
Artificial Intelligence, etc. , but innovation is much greater than that.
Innovation basically means "doing in a different, new and amazing way for
the customer" and not simply improving what you already do! Change the
"appro-ach" from evolutionary to innovative.
All these factors together determine the quality perception of legal service
providers for their consumers. As Warren Buffet said, "Price is what you
pay and value is what you get"!

In order for the legal market to develop and become a mature market, many
initiatives, such as organization, efficiency, productivity, investments in R
& D, training and above all, that have the strategic vision to realize that the
consumer market is changing quickly. This market (the consumer) expects
all its partners and suppliers to be agile, modern companies that perfectly
understand their needs, are competitive and add value to their business.

Here, the perception of clients in relation to legal services provided by Law

firms merits a specific discussion. Currently, the mere production of high
quality legal documents is no longer a big differential factor among legal
service providers, as there are hundreds of Law firms in Brazil, with
excellent Lawyers practicing at each of them! The technical / legal quality
is seen by the client as a minimum mandatory condition and will use other
factors as differentiators among the tens or hundreds of options legal
service providers.
What will effectively differentiate the offices/firms is the [quality
level/standard of the service provided, that is, the responsiveness of its
professionals and the real understanding of the client's business. In addition,
there are purely psychological and subjective perceptions, which in addition
to the previous ones, can [make the big/be the big difference/be the
deciding factor!

There are two basic components in evaluating the quality of any product or
service, the rational and the subjective. Citing only as an example, in
automobiles, the first component refers to measurable and objective
characteristics, such as power, acceleration, exchange rate, etc. and the
subjective ones, which refer to the design, type of audience for which it is
intended, emotional appeal, etc. (the automotive industry to forgive me for
the extremely simplistic analysis).
In services things become a little more complicated, since the balance tends
more towards subjective evaluation, since there are few objective metrics
for service evaluation and in addition, each service can have its own metric
depending on the nature of it. What matters in the end is the customer or the
consumer satisfaction!

In legal services things become even more complicated, because it is an

intellectual service that depends heavily on human interpretation and its
success will also depend on extrinsic factors that are difficult to evaluate
and measure, such as the predictability of judicial decisions (so far!). This
specific theme will be discussed in another opportunity when we evaluate
the application of the new cognitive technologies in Law.
Returning to our main theme, the perception of quality in legal services
encompasses an enormous amount of subjective components and a single
objective component: effectiveness, that is, whether the lawyer (or the
office) satisfactorily solved the client's challenge.
More than ever, the market today wants modern, agile, competitively
priced, value-adding companies and customers (and always reminding them
that customers must be treated as consumers) see their service provider as a
company that has the above characteristics, every law firm should seek to
optimize the following subjective components:

Technical quality: apparently, the easiest component to evaluate is, in my

point of view, the most complicated one: to define and to compare
professionals. It may be inferred from academic training, postgraduate and
national and international specializations, previous experience in related
subjects, training time, publications on the subject, academic activities, etc.,
but only the "day to day" in the relationship and at work that this
characteristic is definitively and clearly shown to the client.

Attention: this component is also complex, because the semantics of the

word itself allows dozens of interpretations. In legal services, the service
has to do with being available to the client at the moment they need it
(without intermediaries as secretaries) and in 100% of the time. In this
regard, it is necessary to mention the tendency of the society itself that is
always connected online to everything and everyone, significantly altering
the perception of responsiveness of the service provider. Attendance also
has to do with timely accountability to the client of the status of their work
and provide relevant information on how the services are progressing in an
agile and easily understood and assimilated way.

Understanding the business and the challenge: increasingly, the lawyer must
become the client's partner, understanding the dynamics of his business,
characteristics and difficulties to be able to advise him better. Traditional
areas of Law, such as Labor, Tax, Civil, etc., should be considered as the
materials that will be used to solve the legal challenge of the client. Always
remembering that the client goes to the lawyer with a business problem and
this cannot turn into a legal problem. This potential short-sightedness could
seriously damage the objective component: the effectiveness of the service!

Negotiating capacity, argumentation and expression: the whole challenge, in

order to be solved, requires a great deal of negotiation (a petition or appeal,
nothing more than a standardized and proto-paste form of "negotiating"
arguments with justice ). The lawyer's ability to understand the challenge
(previous item), to seek theoretical and practical support, and to express
verbally or in writing his or her arguments and his / her opinion is one of
the most striking characteristics in his qualification.

Managerial capacity: The way in which the lawyer (or office) administers
his / her tasks, his / her team, his / her clients and their challenges is a
fundamental factor so that all jobs flow in a timely manner. The customer's
knowledge about the level of sophistication of business management is
currently a strong factor in increasing the perception of reliability in the
service provider.

Technological upgrading and customer parallelism: today, more than ever,

there are hundreds of technological facilities that streamline any work and
the adoption of these new technologies, as well as the effective
improvement in efficiency, dramatically improves customer perceptions
about as the "your lawyer" is prepared to provide a good service. In this
category are the video conferencing rooms, communication and
collaboration tools, electronic document management, process
management, statistical analysis and prediction, document assembly and
several others. In this matter, we must make a very important observation:
the perception of customer quality increases as the office becomes
technologically superior or superior to its customer!

Innovation: the constant search for new forms of work, new forms of
collection, new reports to provide information on progress and achievement
of goals and objectives, new forms of communication and relationships and
even internal organization are factors that contribute a lot to improve
customer perception of quality.
Positioning in the digital media: although clients will not contract attorneys
(or offices) simply because they are in social media, the truth is that with
the change in the behavior of society and the "consumerization" of services,
the non-presence in these vehicles can become a very big fault. Correct
exposure (respecting regulatory precepts) helps to improve customer
perception of your service provider.

Image: from the physical installations (which should be modern and not
luxurious), through the modern internal environment and that stimulates the
collaboration and interaction among the collaborators (who are ultimately
the propagators of the image for the market); by the posture of its partners
in the modern corporate language and not archaic legal; proximity to clients
and collaborators, and even the design and language used in all
dissemination materials (website, articles, interviews, blogs, etc.).
It was not by chance that I last mentioned the item image, but rather
because it will have no validity (or even negative) if it is not consistent with
all the others discussed above. The image has to be the portrait of reality,
that is, the mirror of all perceptions of the previous components!

All these points are aimed at drawing the attention of legal service
providers on how complex is the equation that subjectively and intuitively
each client tries to solve in their head when hiring or evaluating their
services.
I make one last observation: in an increasingly competitive market with
ever more tight margins, the search for improvement of all these
components is of fundamental importance for the maintenance of its
greatest asset that is its customer.
It is not enough to satisfy the customer, you have to enchant him!

3 – Consumerization: do the Law Offices have clients or consumers?

Let us begin by checking the definitions of the entries which are contained
in the Houaiss, the Portuguese dictionary:
Client: A person that entrusts the defense of his/her interests or rights to an
attorney, a prosecutor or a notary officer; a person who hires services or
buys goods by means of payment; a buyer, customer, a person that always
consults the same doctor, dentist, etc.
Consumer: that one who consumes; that one who buys goods, resources
or services for his/her own use, or for the use of his/her family: a buyer, a
customer, a client.
The first inference that we can make is that, although these terms are almost
synonyms, the definition of client suggests, in its interpretation, an existing
relationship between the supplier/provider and the consumer, a consumption
habit or some loyalty before/over the former, whereas the word consumer
suggests the simple act of timely consumption of a product or a service (an
analysis that is very well elaborated by Adelle Sommers in her article
“Client or Customer? You Decide”, written in 2007).
In addition to the aforementioned analysis/definition, I would like to add
another very important consideration, which has to do with two aspects that
are purely psychological: tolerance and accommodation.
The relaying of punctual consumption is much more impersonal (without
practically any engagement between the consumer and the supplier), with
much more freedom of choice among suppliers and also added/amplified by
practically no tolerance for failures or defects, no matter how small they
might be. As an example, I mention our individual characteristic of
choosing and buying a consumer good. Firstly, we analyze the
characteristics that we want, next we consider the choice of supplier (all
this made easier by the use of the internet and search engines) before
finally arriving at the pointe of making the choice; if done in person, we
choose the item that has no defect (such as a scratch, dirt, any mark
indicating prior use), and naturally disregard those item that may meet our
needs functionally, but that has had its esthetics compromised.
The supplier / client relationship is longer in duration, there is deeper
engagement between the parties, and there is less freedom of choice (it
presupposes the need to terminate the contract). In light of the two previous
characteristics, one ends up having a certain tolerance for small defects on
the part of the supplier and also the tendency toward accommodation by
both parties, and therein lies the danger!
It is exactly this inclination toward deeper tolerance and accommodation
by the client (compared to the timely consumption) that generates the
accommodation mindset on the part of the supplier, and as a consequence,
slow, and sometimes, imperceptible decrease in the quality of products, or
in the service delivery.
In the current market stage, it is fundamental for any company to start
treating their clients as consumers and leave this comfort zone!
Now, bringing this topic into the universe of Law firms, we face some
difficulties with the implementation of this concept and that of change.
- The fact is ( and I already mentioned this earlier ) that office leadership
refuses to admit/concede that their businesses are companies! The phrases:
“a Law firm is not a company” and “the profession has no trading
objective whatsoever” are absolutely outdated, and refer to a time when the
attorney-client relationship was much/completely different to that of the
current one.
- Moreover, the fact that Law firms are neither really used to competition,
nor to the volatility?/vagaries/unpredictability [of] in their client
relationships. The corporate legal services sector is reasonably small; it had
its growth in the 90’s, yet still has relatively few “players.”
The big evolution in this sector will occur when the current “players”
begin to change their posture/attitude/stance/view from that of Law firms
to companies that render legal services and treat the clients as consumers,
thereby running the risk of losing their status and being
engulfed/replaced/substituted/superseded by those that adopt this
change/make the transition!
WHENEVER WE TRY TO MULTITASK, WE LOSE FOCUS!

As part of the present

discussion, I want to examine a paradox our society is experiencing in this
early part of the century and which impacts our lives and our companies.
As I belong to the “baby boomer” generation, I had, and still have, the
privilege to witnessed, and in some situations, actively participated in the
deep social, behavioral ,and recent, technological changes that manifested
over the last 50 years.
It is common knowledge how fast everything is happening in the world,
and a big part of this is due to technological progress. Until a short time
ago, we had specific times for each one of our daily tasks and there was a
clear distinction between our professional and personal life! I can clearly
remember that as a kid (in the 60’s), there were only a few television
channels, with a specific time when broadcasting commenced and a
specific time for it to close . That world no longer exists!
I do not want to appear as nostalgic, seeing that I am, and always have
been a fanatic for what the future holds, such as new technologies and the
novelties that come with it.! The fact is that everything has changed, and the
point I want to highlight with this rather sentimental statement is that,
nowadays, we are bombarded by two forces that are completely
antagonistic, and this situation puzzles us and forces us to be extremely
agile and adaptable:
The first being the pressure exerted in the quest for knowledge, efficiency,
productivity, professionalism and responsiveness in order for us to
distinguish ourselves from others and in so doing being able to reach/find a
place in the sun.
The second aspect is the pressure to be able to [catch up/keep track] with
the ‘tsunami’ of information’ that engulfs us daily and to be able to filter
out and absorb only those pieces of information which are in our interest
and which may benefit and enhance our standing in prominent
positions/prominence.
If, on the one side, the first aspect demands more and more ‘specificity and
focus’ so that we may produce something of quality, the second makes us
feel brutally perplexed, and in order to try to conciliate these two
pressures, we try to (or we think we can ) “multitask” like the current
computer processors which have several “cores”, with each dedicated to a
different task with the same level of attention.
There are several scientific studies that clinically prove that our brain,
despite being the best computer in the world, uses some tricks to deal with
this challenge, by executing the repetitive tasks that it already is
accustomed to do by engaging in a process of automation , however, the
focus of our attention is always turned toward the main task to which we
are dedicated. The graph below illustrates a study conducted and published
by the BBC on this subject!
Source: BBC
In my humble opinion, the only possible way for us to be able to live and
survive (professionally speaking) is to have a lot of discipline and to
control/manage the selective use of our attention span very well.
The correct choice of the best communication tools and information
absorption (e-mails, Whatsapp, Twitter, Facebook, Linkedin, Instagram,
etc); the correct time management with the prioritizing of our activities,
separating the urgent from the important, and the effective control of the
interruptions that knock on our door, will improve our level of attention on
the tasks that we are working on. Additionally, advance planning of our
obligations and commitments, and finally, the most important aspect, the
allocation of time that is only ours and dedicated to the THINKING, will
let us feel a little less stressed and make us more efficient!
CHANGES. HOW TO FACE THEM? DISRUPTION OR
EVOLUTION?
Much has been said and written about disruption (again, as I have said,
another semantic idiom to say - do the new and the different), but this is
nothing new! Or will you tell me that in 1937 did anyone think that making
a feature film in animal design, as Walt Disney did with Snow White and
the 7 dwarves, was predictable?
 What do you think of the
picture below, taken by me in Chiang Mai, Thailand? Without making any
criticism to the monks, much less to Buddhist philosophy, I understand that
this image portrays very well the changes that are taking place in the world
and the adaptations we all have to make in order to survive today and
especially in the future.

The World is changing very quickly and the question you do not want to
keep quiet about is: what are you doing or thinking of doing to adapt and
adapt your business?
In my point of view, what has been placed is the overvaluation of disruptive
thinking to the detriment of evolutionary thinking, how to submit the
former was the magic solution for all the challenges that are imposed on us
daily in our personal life, pro- professional and corporate.
Disruption means the interruption of the normal course of a process and
bringing it into the corporate world, has much more to do with the
entrepreneur's ability to intuitively predict future change, to anticipate it, to
propose something new to face it and gain a competitive edge over it. As
any change (especially the intuitive ones) involves risk, the adoption of
disruptive thinking has much to do with the affinity or aversion to the risk
of this same entrepreneur.

We have a natural tendency to pay attention only to the successes of

disruptive solutions, which are often very financially successful and in the
media, but we do not realize the dozens or hundreds of cases of disruptive
solutions that fail and are not remembered or even known.
On the other hand, evolutionary thinking represents the learning and
accumulated experiences through past observations and their use to improve
existing processes, making them more efficient and productive.
Another mistake we usually make is to imagine that disruptive and
inventive processes happen in a random way as if their creators woke up on
a certain day and had a brilliant idea coming from nowhere. Things do not
happen that way! Usually the inventions and novelties are due to the intense
work and tireless pursuit of a few very focused and insistent professionals
in a very evolutionary process!
Is one method better than the other? NO. We have to combine them in order
to get innovation!

The combination of the two thoughts allows the risk reduction of the
business, as we should always remember rule number 1 of management
which is: "do not put all the eggs in the same basket".
What do I mean by all of this and how does it fit into legal services? The
answer is: A lot of work and dedication; constant concern to optimize the
use of all its resources (doing more with less); investment in research and
development; constant attention to and rapid adaptation to the market,
maximum possible use of everything that technology has to offer and last
but not least: to have a very sharp predictive vision proposing innovative
solutions without fear of making a mistake !
So keep trying to improve every day, but try to think differently and
imagine new solutions to the same problems and make mistakes, it does not
matter. Seize with the mistakes and do not repeat them.
Adopt Knowledge Management philosophies, Risk analysis, Statistical
Jurymetrics and Prediction Systems, Turn your business into a data center,
Adopt alternative fee collection and compensation systems, Learn to live
with and motivate professionals of generations Y ("millennials") and Z
("2020"), Use all available technology and most importantly: surprise and
let your customer happy.
We will always remember that the consumer market in general (and the
consumer of legal services is no different from that) and agile, highly-
performing, competitively priced companies.
PROFESSIONAL HELP IN THE MANAGEMENT OF LAW FIRMS

I will make a metaphorical comparison

of the management of a Law firm with a chess game, (used to
conceptualize in my site: www.graciotti.com.br) where the moving of any
piece may (and sometimes really does) radically change the distribution of
forces and options of the future game movements on a chessboard. In
addition to the challenges that any company may have (competitiveness,
quality, marketing, support, etc), there are other factors which are inherent
to the characteristics of the business of the Law firms and mainly to the
Lawyer’s profession.
A Lawyer is a professional who presents a peculiar behavior, and it is
necessary to understand it in order to be able to analyze and understand the
way several firms are structured and managed.
The first psychological characteristic is the very low tolerance for failure.
Due to the nature of their profession, Lawyers cannot failure in their
arguments, documents or statements that they produce (whether pertaining
to the Law, doctrine or jurisprudence), nor run the risk that their arguments
may be refuted by opponents, not even considering the more ordinary
mistakes, yet much more serious issues such as the failure to meet
deadlines, non-collection of fees, which would have the proceeding struck
out by the courts with no further consideration given by the court as to the
merit of the issue before it.
Another factor to consider is the nature of the Lawyer’s educational
background with the inherent aversion, and dare I say, the ignorance that
the majority of Lawyers have in relation to the theories, techniques and the
entire know-how already developed and practiced in the world of the
entrepreneurial management.
One should not blame the legal professional who graduated from
schools/universities/institutions that emphasize the doctrine of technical-
theoretical improvement, but forgot to provide the minimum education
about the area of management . I am not criticizing Law
schools/universities, but merely wish to alert about the importance of
adopting a more eclectic approach to the education of legal professionals.
This was one of the biggest challenges I encountered with when I
graduated from Polytechnic School (which represented, and still
represents, a very important part of my technical and personal training),
furthermore, when I faced the real world, where other attributes expected
for the personal development of my career, in addition to those I had
learned at school regarding structures, calculation, foundations, etc.
The management of companies in the current highly competitive current
scenario, with constant change and now in the midst of the recession,
demands characteristics from their managers such as creativity, resilience
and innovation, which inevitably go though experimentation processes,
learning with/from failures (which should not be repeated), together with
constant corrections of the route to be followed.
This dynamic process head-on opposes the behavior taught to the Lawyer
through training and is used to follow in order to find solutions to their
challenges, which demands from a Lawyer training they did not acquire
in college/at university , with the added challenge to stay abreast and
current on the latest developments meaning yet more demand on their time,
which is a commodity they barely have to dedicate.
In this scenario, the importance of hiring becomes all the more important,
which will enhance, and complement the innate attributes [relative to] of
those Lawyers who started their own businesses, by providing the specific
knowledge of entrepreneurial management areas and also the experience
acquired in previous experiences, explained by using the metaphor of the
sailboat and the wind, instead of complaining about the lack of wind
(pessimistic), or even hoping the wind will blow again (optimistic), we
must be realistic and adjust the sails!
This adjustment will be different for each firm and it is the consultant’s task
to identify the limitations of each, or to help finding solutions to those
already identified by their managers. There are several issues to be
improved upon, of which I only mention the more critical ones, which in
my experience of over 28 years working with managing Lawyers, I have
observed: adopting the philosophy of the “knowledge management”,
systems for the extraction of statistics of internal information (Business
Intelligence is just one of them); creation of controls and appropriation of
costs per client/case/matter or area of performance; adopting of a short and
mid-term strategic plan, creating and following- up budgets and pricing of
services, adopting talent retention policies and professional motivation
strategies, furthermore, adopting of a career and remuneration plan for the
legal and back office team.
It is appropriate to refer to two aspects to be considered when choosing a
consulting firm: first, to ensure that it [effectively] has actual proven
practical experience of several years (in order to avoid purely non-tested
theoretical-academic consulting) and second, to ensure that it has specific
experience in the legal services sector involving niche market Law firms
that have very distinctive characteristics.
 CHAPTER 2
THE CURRENT MODEL

INDIFFERENCE TO PRODUCTIVITY AND EFFICIENCY

In this chapter, let us discuss a bit about the current way of getting back to
the management form of our full service law firms, obviously from my
point of view and that may not be considered correct by you.
As a matter of interest/curiosity, I once again reference the so-called “full-
service” management mode adopted by corporate Law firms . When I
started to work in these types of firms (in the 80’s), there was practically no
competition and there were essentially two “big” Law firms operating
within this management style that could afford the luxury of choosing their
clients and share them due to some conflict of interest.
Since then, things (the market and the world) have changed a lot, but the
“little outfit” continues to be the same!
This reminds me of the crisis experienced in the civil construction industry
the same 80’s, when most of the residential real estate ventures were
launched at “cost price” whereby construction companies were
remunerated by a percentage of the construction costs. In principle, this
made sense because it demonstrated clearly the exact remuneration the
construction company would receive in a period of economic uncertainty
when real estate financing was limited, with little or no real estate market
regulation and no consumer protection legislation.
The great failure of this model was the non-concern of these companies in
controlling their costs and trying to be more efficient and competitive, since
their remuneration did not depend on this. On the contrary, they increased
their remuneration the more they spent on their constructions, and in the
end they generated apartments that were more expensive than the value
promised in the sale and generally entre-gues with longer construction
periods, as a consequence of the re-negotiations intermediaries and
budgetary changes.

As it always happens, the market adjusts itself and some construction

companies, smartly enough, began to offer a new proposition for the sale of
apartments at a fixed price, with strict delivery deadlines, hence
undertaking several risks; the result: consumers simply migrated to this
model, consequently no longer buying their apartments at cost price. The
consequence was that most companies, which were used to simply add their
management fee to the budgets, realized that they could no longer follow
this practice with the result that the real estate market saw a group of
good construction companies disappear ( who offered good quality
construction ) but that could not adapt to the new circumstances.
We all know that legal practice is not the same as construction, and that the
degree of uncertainty, at the time of preparing a quotation for a project in
order to submit a proposal, is much higher in an engineering project ,
however, the willingness to accept, and the indifference to efficiency is
basically the same in both disciplines but only separated by three decades.
The ongoing recession forces all market “players” to reinvent themselves,
to be more creative in the charging modes, formulating pricing strategies
and to optimize the use of their scarce resources, and Law firms are not
immune to this process.
MARGINS AND REMUNERATIONS
A common aspect/feature/characteristic present in almost all corporate Law
firms that experienced the golden decade of the market opening and
privatization, is that they got used to high profit margins. When I use the
adjective “high”, I refer to the comparison in relation to the profit margins
earned by other markets (mainly if compared with the manufacturing
industry).
I obviously do not know the mode of the economic-financial organization
adopted by all Law firms, but given my experience, I can fairly accurately
give a cabalistic number of 33.33.33, in other words, one third for direct
costs, one third for fixed costs or indirect costs and tax costs, and the
remaining third for the gross margin.
This margin enabled, over the last thirty years, a very good return for Law
firm partners-owners , generating a certain “habit” for future expectations
with those extremely pleasing numbers in their remunerations. This aspect,
although not discussed in the previous chapter, could just as well be added
to all other future challenges in a time when partners will have to, adapt
themselves to more modest remunerations/returns/earnings due to the lower
margins that the market will, and is already is, imposing.
TIME BASED MODEL

A legal work has basically three factors that interfere in its composition, do
not add up and must be considered in the definition of the final value of the
work, as already commented in the previous item:
1. Measurable value of labor: the sum of costs represented by the hours
spent by all the professionals involved in its preparation plus the
institution's indirect and fixed costs (proportional to direct cost) and gross
margin.
2. Intrinsic or tacit value of the work: the subjective value re-presented by
the positive effect that will generate for the client due to the legal solution
found (example of the mechanic previously mentioned).
3. Relative labor value: represented by the average market (or custom)
practiced and charged for similar services and equivalent offices.
What has been observed throughout almost every corporate office that
exists is the almost total and only use of the first factor in all organization
calculations, whether in the execution of proposals, or in cost controls, team
sizing, and productivity.
Increasingly, the market will require offices to adapt to the way other
markets use to calculate their costs and sales prices, that is, to keep their
production costs to a minimum, to add their margins to reach a final value
of commercialization , always trying to be equal to or less than the
competition (for equivalent products, of course).

BUDGETING AND PRICING OF PROPOSALS

I do not want to to be emphatic or be the self-opitionated, but being a little
generalist, I would risk stating that most Law firms have followed almost
the same method of elaboration of a proposal to a work and fee
arrangement for a s requested job by the client.
The partner responsible for capturing this arrangement meets his senior
Lawyer, the team coordinator, and asks the usual question: “how long will
it take you to do that?” Depending on the complexity of the matter, the
question may be redirected to an individual Lawyer of lower seniority , or
even to the entire team to be engaged with each giving his/her time
estimate. The coordinator or the partner then adds an estimate of hours to be
spent by the trainees or paralegal professionals for the [necessary research
for due assessments of the doctrines, jurisprudences, etc. and also their own
hours to be spent on the final review of the work.
The final result is a proposal that reflects the hierarchically productive
structure within the Law firm, which in general shows an increase in the
number of hours as it cascades down the hierarchy; that is, the more hours
spent on the matter, the less experienced the Lawyer engaged will be (
seniority) with all these variables multiplied by their respective hourly
fees.
In the end, the partner adjusts the proposal to higher or to lower, based on
their previous experience and in their relationship with the client.
In my view, this method is not wrong, it is just incomplete!
One should remember that brainwork has an added value represented by
the solving of the problem/coming up with a solution to a problem
presented, and the number of hours spent in order to perform the task is just
one of the approaches to measure this value.
The other two methods are more subjective and very, very important.
The first refers to the own legal solution presented and its complexity and
that may result in a high or low added value to the client, that is, a
solution presented may result in higher earnings (or a smaller loss) in
millions to the client.
This fact reminds me of the anecdote of a person traveling alone on a local
road during the night, when their car suddenly breaks down. After walking
for a few miles in the dark, the person come across a small house, knocks
on the door to ask for help, and fortunately the person who opens it
happens to a professional mechanic. So, both make their way up to the
broken down car, and the mechanic spends a few minutes examining the
engine [under the hood]. After some time and some questions to the driver,
the mechanic takes a screwdriver out of his toolbox and tightens a screw
slightly, and asks the driver to start the car. To their great surprise, the
engine starts and runs again, and they are of course very happy! Asking the
mechanic the cost of the repair, he replies with an amount the car owner
considers very high and responds: So much money just to tighten a screw?
Immediately, the mechanic answers: No, this charge is for me having to
find which screw to tighten. The tightening itself is free!
The second method relates to the market value, that is, how much is the
competition charging for similar work (the case of the acquisition of the
electric iron mentioned in the previous chapter), and as is often the case,
the values arrived only by calculating the hours spent may end up being
totally disparate.
In my view, we should obviously trust the feelings and judgment of the
partners, but, as the firms grow their teams get bigger, their work more
complex, and it gets more and more difficult for the partner to have better
insight into the three factors mentioned in all the proposals that are being
generated. Added to this, is the fact that there can be several members
engaged, (generally from different departments/groups) generating several
estimates at the same time, without consistent policy in place.
For this issue to be addressed or [risk] minimized, several procedures
should be changed, the different views taken into consideration, so that all
those involved can together create the framework of data and information
needed in order for estimates to be more precise, as will be discussed in
more detail in Chapters 5 and 6, the chapters in which Analytics and
Knowledge Management are discussed.
These two elements combined will provide the answers to the following
questions that should be asked before the formulation of each estimate:
- Have there been any similar work/matters in the past?
- What was the amount proposed for each of these works/matters and the
estimated hourly charge out rates?
- What was the actual outcome, in terms of the hours spent for each type? /
[seniority] level of professional involved?
- What was the outcome in each of the previous cases/matters?
- Which team was involved in each of the work/matters?
- What documents have been generated and what were the production costs
of each?
- What was the total value of the “deals” involved?
- Who were our competitors at that time and what are their proposed
prices?
- What is the price practiced on the market today?
- If there is a negotiation, what is the margin for doing so and where is it
possible to move the proposal internally?
Depending on the quality of the data and information collected over time,
these questions may be answered with either greater or less accuracy.

INWARD MANAGEMENT and PROTECTED MARKET

Given all that has been discussed in this chapter, which is, little or no
competition, comfortable margins, a model based on “billing hours” and
little pressure on pricing, resulted in those Law firms developing
endogenous management styles.
Another significant aspect is that there is still a lot of protectionism present
in the Brazilian legal market, in terms of which big international Law firms
are officially hindered from being incorporated in Brazil. As has occurred
in other niche sectors of the Brazilian market ( for example, the
Information Technology Industry as well as the Automotive Industry over
the last decades), this practice, on the one hand allowed/facilitated
development at the start of its implementation in the local industry, while
on the other hand after some time the practice [protection] generated and
accommodated markets with no stimuli for development, exactly due to the
lack of competitiveness.
In my humble opinion, the fact that the international companies (big Law
firms) eventfully do become “owners” of local Law firms, does not
negatively impact the principle of foreign Lawyers not being able to advise
their clients on “Brazilian Law” (which I consider fair) for the following
two reasons:
First: foreign Lawyers are and will always be, supervised and regulated by
the Brazilian Bar Association, hence effectively acting as Brazilian
Lawyers and experts on our legal and judiciary system.
Second: Law firms are not equity companies and, their biggest asset
therefore are their professionals (Brazilian professionals), and the mere
existence of another management style in those companies do not at all
hurt/affect the national/Brazil`s sovereignty.
I sincerely hope that the governmental bodies and the Brazilian Bar
Association (OAB) will wake up to this idiosyncratic discrepancy in a fully
globalized world, of which we have been part of for quite some time.
This lack of expansion causes a side- effect, which is the very low degree
of transparency that exists into the information for the external assessment
of Law firms. In practice, the only indicator that a prospective client has
access to in order to assess a possible Law firm they may want to contract,
is the number of professionals the particular office has in its team, yet, in
some cases this number does not correspond to the reality.
I was the first professional manager, (non-partner) in the big corporate Law
firm sector (Demarest, in the late 80’s) and still today, this gap is barely
filled by professional managers, and only exists in big Law firms of late..
Moreover, t has also been a relatively recent development for bigger Law
firms to develop marketing, institutional relations departments, even as
far as implementing productivity and efficiency analysis is concerned.
All this needs to change! (more on this in the next chapters)
Considerations
This book is not intended to deliver criticism on the more traditional Law
firms in the market and their management models , , as they are, in my
point of view, absolute winners/achievers and pioneers in a market that
was practically non-existing 30 years ago They have succeeded to alert
every firm, large or small, new or traditional, to the fact that the world is
changing at incredible speed/incredible pace, and as is the case in any
other market/sector, adopting new trends in management and disruptive
technologies will determine who will survive and ultimately be the
winners in this absurdly/fiercly competitive market.
 CHAPTER 3
CHALLENGES TO THE MODEL

Source: author

I – EXTERNAL CHALLENGES
COMPETITIVENESS
In the late 80’s, when I got involved in this market, international access to
the Brazilian market remained was inaccessible, or rare (there was still the
Information Technology market reserve), and there were practically two
Brazilian firms that had organizational capacity that met international
standards with skilled teams that could deal with [the demands] of large
multinational companies.
The fifteen years that followed were characterized by the opening of the
Brazilian market, due to the arrival of big companies and investors and also
as a result of privatizations, which led to the exponential growth of the
legal market. Just as an example, several of the current market leaders in
big corporate Law firms did not even exist in the late 80’s.
In the 80’s, there was a “club of friends”, represented by the few corporate
Law firms that had a social relationship - in a sense almost romantic – that
effectively entailed sharing the [legal services] market between them. This
is not happening anymore as we entered the era of real competitiveness and
fierce disputes to gain clients (even though there isno market growth any
longer).
I remember and tell this short story to all those who I have been talking to
lately, that I saw on João Batista Pereira de Almeida (one of the founders
of Demarest) in his office in the very early days when I started working
there.
One day, I cannot remember exactly why I went there, but while I was
talking to him, his secretary entered his office and showed him a document
to be signed by him. When he asked her what it was all about, she
explained that it was a cession letter of a suit that the client had requested in
order to transfer his matter to another Lawyer. A very angry Dr. Batista,
asked the secretary to call the client, as he wanted to speak to him; I was
sitting there, just observing...
When the telephone call was completed, I heard Dr. Batista directing a
“sonorous reprimand” to the client saying that he was his Lawyer and that
he would not agree to the transfer of the suit to another Lawyer. The client
accepted it, without protest, and the piece of paper/letter was torn up right
there in front of me and with that everything had returned back to
normal/the way it was before, and I could finish my conversation with him.
Can you imagine a scene like that nowadays? Would any Law firm partner
dare to do that? And if, by chance, he had the guts, what the probable
reaction of the client would be?
The truth is that, nowadays, the legal market is starting to experience what
other markets (mainly manufacturing industry) have been experiencing for
a long time: real competitiveness!

DISLOYALTY
Another very important aspect to be considered, which closely linked to
the previous, is the so-called disloyalty of the clients. Increasingly, the
client who concentrates all their legal matters in the hands of just one firm
is, for several reasons, becoming a rare occurrence for many reasons:
- Considering the basic principle of management that says/suggests
one must not put all one’s eggs in the same basket;
- Because of /the fact that no Law firm can be excel in all practice
areas. (sometimes Law firm does not even offer a service in the
practice area the client needs).
- Moreover, sometimes the discrepant quality of client care that exists
between internal teams and partners
- For purely financial reasons etc.
- Nowadays, it is absolutely normal for a client to request a fee
proposal for a matter of theirs from several firms, to then
choose the one that offers the best quality/service/price ratio.
As an old partner of a traditional firm used to say: If you want loyalty, just
buy a dog!

PRESSURE TO OFFER COMPETITIVE PRICES AND

PREDICTABILITY
Also related to the increase in competitiveness, as further intensified by
the financial pressure that the contracting corporations are going through as
a result of the global crisis of 2008, and due to our ‘tupiniquim’ (popular
Brazilian expression to describe a something that happens only here – it´s a
name of one of the first indian tribes in Brazil in the past) economic crisis (
which our former president referred to as “boat wakes”), is another item to
be added to the challenge imposed on the corporate offices/firms market,
which is the pressure for/to offer more competitive prices.
Increasingly, companies have been transferring to their suppliers/service
providers their narrowing margins experienced due to the financial
[economic] crisis. It is worth reminding that, although the Law firms do not
think that they fit into this category, the corporations [who contract them]
consider that they do.
In addition to the pressure for better prices, one should add to this the fact
that the corporations expect, and would like ( for obvious reasons) that
their expenditure be predictable and thus possible to be [accurately]
budgeted for so that the charging of unpredictable attorney’s fees (or even
beyond predictable limits) are less and less accepted.

ALSP – ALTERNATIVE LEGAL SERVICES PROVIDERS

The theme of the moment in the legal market is the use of the so-called
"Artificial Intelligence" which, according to some, will replace lawyers in
the future. I simply do not believe it but on the other hand I am absolutely
certain that the new technologies will bring a new perspective to the
exercise of the legal profession and the provision of legal services.
The impact that I consider most relevant is that certain "less intellectual"
works can and will be much more delegated to machines in the future, being
understood as machines the combination of computers with increasing
processing capacity, statistical algorithms and language recognition, human
interpretation and semantic interpretation of texts. As it has always been
(and will still continue to be for a long time), computers are very good at
specific and repetitive tasks and these algorithms will change the
distribution dynamics of legal work.

The redistribution between work performed internally in legal departments

and those contracted externally with law firms is undergoing a redefinition
of the roles of these two market players. The current incessant and intense
search for efficiency and productivity, many of the jobs that were formerly
outsourced will be done internally using robots and with significant savings
for companies.
This is the great challenge that offices must face and the speed of reaction
will determine which ones will position them as innovators and as agile,
modern, competitive and high value-added clients.
In terms of technology, we tend to look "out" and feel that we are always
behind and in the middle of a row of other more developed countries than
Brazil. Because we have noiselessly larger numbers of processes than in
most developed countries, we have become an excellent barn for the
development of systems with the use of algorithms of the most varied types
that will greatly help the efficiency of our justice.
To get an idea, there already exists in Brazil an association of companies
focused on the use of these new technologies for the optimization of legal
services in general. The AB2L (Brazilian Association of Legal and
Lawtechs) was created in the middle of the year 2017, already has more
than 60 participating companies and this number has increased with a speed
similar to the one that mushrooms appear in a rainforest from one day to
another!
As I said, there are already dozens of "Tupiniquins" (1) companies devising
systems that help the market in:
(1)
– Brazilin tribe who lived there when the
Portuguese arrived – Slang used to say it´s a
typical Brazilian thing.

- Analytics and Jurimetrics - Analysis and compilation of data to aid

in procedural predictions and in-prescriptive strategic decisions
(operation, capture strategy, institutional marketing efforts, new
areas, etc.).
- Automation and Document Management - Automation of legal
documents and life cycle management of contracts and processes,
streamlining the production and analysis of documents.
- Intelligent information search systems (internal and external), based
on semantic context and not just logical words and connectors, are
revolutionizing the way we search for and find relevant information.
- Legal Content and Consulting - Information portals, legislation,
news, information security services facilitating access to "bigdata".
- Extraction and monitoring of public data - Monitoring and
management of public information such as publications, procedural
steps, legislation, and docu- mentary documents.
- Management of Offices and Legal Departments - Information
management and production solutions for financial and procedural
dashboards.
 - Professional Networks - Networks connecting law professionals in
Brazil.
- Online conflict resolution - Companies dedicated to the online
resolution of conflicts through alternative ways to judicial process
such as mediation, arbitration and negotiation of agreements.
- Blockchain - use of this technology to guarantee confidentiality in
all aspects.
Moreover, we can not ignore the growing intrusion of other large
companies in the legal market, which, although they are not advi- cacy
offices, are incorporating such services into their portfolios, such as the so-
called big four.
The following figure, taken from the Legal Legal Service Providers 2019
report produced by Legal Executive Institute and Georgetown Legal, shows
the impact of these companies on the American market.

These are just a few examples of the potential for change and innovation
being offered to the legal market, and the quest for performance and
competitiveness is bound to re-think fully the traditional management
model. The adoption of these technologies for market positioning and the
contest for a place in the sun is not an option, it is survival!

ALIGNMENT OF OBJECTIVES
One of the great challenges presented to Law firms nowadays is to attempt
to drastically change the perception about the legal problems presented by
their clients. Traditionally, Lawyers tend to focus their attention on
choosing the best legal thesis/doctrine in order to solve the client`s
problem, and oftentimes not being too concerned with the speed it is
resolved, nor the impact it has on the client’s business interests. The
client, on the other hand, is concerned with exactly these consequences.
Using an expression in English (that sometimes better summarizes some
situations): Law Firms are concerned with the practice of Law and
clients are worried about their Legal Business Problems.
The correct alignment between the client’s expectations and the legal
objectives does not always happen, thus leading to a great mutual
disappointment
What modern Lawyers and their respective offices should do, is to evolve
with the client’s operation needs, to have a clear understanding of how
their client’s business works, and to act more as a business partner and less
as legal counsel.
Another important and most current point (still in the field of goal
alignment) is the use of technology. Law Offices generally invest in
technology in pursuit of efficiency and productivity (which is completely
correct), but sometimes forget to incorporate these advances in pricing their
services, making them more attractive.
We will always remember that more and more, consumers of legal services
want to have as their suppliers and partners, agile, modern and cheaper
services (quality is prerequisite).

LEGAL DIRECTORS, CONTRACTING AND INTERNALIZATION

Some important external changes that directly impact external providers of
legal services (as they are called in-house law firms) are those that are
occurring internally in companies, especially large ones, who are consumers
of such services.
Increasingly, General Counselors are being approached by senior
management (C-Suite), becoming active participants in strategic business
decisions and distancing themselves from the traditional position of only
taking care of their technical-legal aspects. This is making them more
managers and fewer lawyers, which completely changes the criteria in
choosing outside legal service providers.
It has also changed (to less) the average age of the Legal Directors,
approaching those ages whose per- tenents are of Generation X, which by
its more aggressive characteristic makes the traditional aspects of fidelity
less relevant. As a result of the current creation and adoption of stricter
Internal Compliance programs (again more intense in large and multi-
national companies), contracting external legal services is gradually being
transferred to procurement departments, so-called "procurement
departments, "again making office hiring criteria more impersonal and
price-based.
The alternative providers of legal services (ALSPs in English) have put
enormous pressure on the office-client relationship, since the companies
that consume these services are also having access to these new players and
the new technologies.
Internal pressure for cost cutting in companies is forcing the internalization
of a fairly large number of services that were previously provided only by
law firms, and as a result, we are now seeing a reverse trend to that
observed in the 1990s and 2000 where almost all legal services were
outsourced.

II – INTERNAL CHALLENGES
DEFINITION OF THE CORPORATE CULTURE
Below, I refer to an article published in 1996 by the authors Rob Goffee
and Gareth Jones in which they analyze the influences of two human and
partner characteristics they described as “dimensions”’; namely Solidarity
and Sociability. The manner/way and intensity in which these two
characteristics are practiced by a corporation will, ultimately, define its
culture.
Law firms are companies made up, primarily and exclusively by people,
and their social and professional interaction could determine the success or
failure of the company.
According to the authors, the graph below illustrates these
interactions/how these elements intersect:

Source: Rob
Goffee and Gareth Jones - HBR

Organization in Network: High Sociability and Low Solidarity.

It is characterized, not by the lack of hierarchy, but by the profusion of the
way how it occurs. People move from role to another one without much
training and interact among positions without much formality. This
informality provides the company with more agility and less red tape but,
on the other hand, people in those companies develop the competences of
being able to get/obtain and spread information, and also develop the
ability to gain allies or sponsors for their ideas, regardless of the formal
hierarchy.
The companies referred to here are usually very politicized companies
internally, and the persons/employees spend a fair amount of their time
taking care of their own interests, with insufficient/a lack of commitment
towards the company’s objectives. Strong leadership is required!
Mercenary Organization: Low Sociability and High Solidarity.
Individual interests coincide with those of the company and clear
identification of the “external enemy” and the necessary steps to defeat it.
Priorities are defined by upper management and spread/circulated by the
company, without much discussion and with a very low tolerance for low
performance. There is a clear distinction between work and social life, and
loyalty by those individuals towards the company is rarely observed.
Fragmented Organization: Low Sociability and Low Solidarity.
Individuals organized in occupational groups and with little awareness of a
sense of belonging to the company. The Individuals work in their offices (
behind closed doors) or at home with little communicative behavior about
the progress of their projects with their workmates/colleagues, and
sometimes acts of sabotaging/undermining of colleagues is observed.
Community Organization: High Sociability and High Solidarity.
This model represents individuals who have developed friendship bonds
and mutual objectives over long periods and who identify strongly with,
and possess/demonstrate a sense of belonging to the company. Organization
is characterized by several social events with high ritualistic meaning.
Strong solidarity is usually demonstrated/displayed by all individuals such
as taking risks and also characterized by “sharing” of benefits, compliments
and awards by all.
The most important question then is, which culture would be the better fit
for your company, or which one do you and your partners want to
implement?
Always bearing in mind that one of the biggest challenges is to change
habits!
(if you are interested in obtaining more information, read the article “What
holds [a]? modern Company together” published in 1996 by HBR.

ORGANIZATIONAL STRUCTURE AND DECISIONAL PROCESS

As in the human body, the right choice of a remedy for an evil that affects
us is one of the great attributes of a physician, for as we all know, every
remedy can heal, ease the pain, but its administration always brings with it a
series of undesirable side effects and sometimes impossible to avoid. In the
package inserts invariably the chapters intended for side effects or dangers
inherent in the ingestion of that drug are much larger than the paragraph
dealing with its beneficial or positive effects.
In running a business, things are no different. Often in order to solve a
problem that occurs if it is necessary to make decisions that affect the entire
organization and compare with the doctor, the best manager is the one who
can choose among the possible solutions that will have the least side effect.
The cycle of coping with a problem consists of identifying, analyzing,
deciding, solving and managing the results (including and especially the
side effects).
The solution of a problem in an organization where there are several
"organs" as in the human body (finances, staff, procedures, systems,
organization chart, etc.) is hardly a simple challenge where a small change
solves it without any side effects.
Again I use a metaphor to exemplify my thinking. We can associate this
cycle with a flow, where after the decision is made, the results are presented
in a conical spiral (like the figure below)
As in a chessboard, sometimes the movement of a pawn can determine a
brutal change in the strategy of the game and we must always be attentive
to the analysis of all the consequences of any movement.
Depending on the decision and solution adopted, the result and its side
effects may generate the need for other decisions to resolve the side effects
from the first.
The next process can be "virtuous" where decisions and solutions become
increasingly easy and simple until a complete solution to the problem and
its side effects is achieved. Depending on the initial decision, one can also
enter into a "vicious" process where each decision made generates another
problem or increases the initial side effects, which is not absolutely
desirable.
Whenever a business manager encounters a challenge (a problem), the right
posture would be: to stop, analyze its causes, all possible paths to be taken
to face it and decide for that one which will bring the best solution, that is,
the fastest, the least important for the organization and the one that will
have the least impact on the other "organs" of the company.
This wisdom and organizational sensibility identifies the good
manager!
Recent times have been dominated by discussions about technology applied
to Law (Artificial Intelligence, Robots, Chatbots, Machine Learning, etc.),
what will be the impacts that all this will cause in the legal market in the
very near future and I am sure they will not be few!
In addition to the challenges brought by technology, it is good to remember
those endemic ones that we are already accustomed to living with and that
we are "half anesthetized" without much reaction to them. I am talking
about deficient points in the management of the legal business and that has
gone unnoticed and that we think the technology will solve them.
As it has always done, the Brazilian legal market follows the American
model of organization, with a lag of a few years (this difference has already
been greater) in technology and with an important difference in human
behavior, since we are Latin and not Anglo-Saxon, organizational structure
has to be adapted.
In addition we must take into account the maturity, complexity and
investment capacity in the US market compared to our market. Just
compare the numbers: while US offices can have up to 48 branches and still
be considered "average" and others have more than 1000 lawyers in a single
city, our numbers are much less expressive, coupled with the fact that we
are also much younger (the Brazilian market only exploded in the 90s).
Considering all this, we must focus attention and investments (besides
technology, of course) on improving the governance capacity of our offices,
updating and professionalizing the structure and decision-making process.
In most Brazilian offices (except for large ones), the decision-making
process basically follows two models, that is, the centralized one where the
founder and majority partner unilaterally takes all decisions or the
decentralized one, where several members meet (if and when) to discuss
and decide something. I am not saying that the two models are wrong, or
that they are doomed to failure, but that most often lack methodology and
organization to make decisions more rational, more agile and more
assertive. In the first case, the lack of a beacon or exchange of ideas with
another professional (which must be considered by the first as his
"intellectual level") can make decisions that are emotional and sometimes
erratic. In the second case, the academic creation that induces the
confrontation and the argumentation associated with the "vitaminized" ego
of the partners, usually induces heated discussions, delayed and often
without due focus. The worst situation that can occur is that in which, due
to internal political problems and / or by accommodation and not
confrontation, nothing is decided! (if anyone has ever attended a meeting
with more than 3 lawyers, you know what I'm talking about).
Simple things, such as: make periodic meetings that are respected, with
specific themes (operational separate from strategic ones); have pre-defined
guidelines and follow them; define responsibility and deadlines for the
execution of decisions taken; track the progress and collect results and also
define and distribute responsibilities among the members to take care of
managerial matters.
These small organizational and procedural changes are ZERO cost, not
technology dependent and will bring great changes to business agility.

CHANGING HABITS
One of the most basic challenges is to bring about any changes in any
company given the fact that every company is made up of people, and
those people, in turn, have habits.
Moreover, given that any one company consists purely of people, as the
case of Law firm, and that its professionals have very specific
characteristics (see the psychology of the Lawyer), the challenges are even
bigger.
In 2009, researchers from University College London studied the habits of
96 people over 12 weeks, and came to the conclusion that, on average, that
it takes 66 days for a new habit to form, and that this period may greatly
vary among individuals and may take from 18 to 254 days!
The changes necessary to reposition Law firms to be more productive and
competitive, require that new procedures, new systems, new tasks and,
mainly, behavioral changes be adopted (which are also influenced by
psychological habits).
In order to make the necessary change, an endomarketing process must
take place, as well as a process to convince the entire team, performed by
the leaders and/ or opinion makers, to ensure that the change process
occurs effectively.
Surprisingly, in Law firms, the biggest resistance comes from the
management body itself, as illustrated by a survey done by t Alltman Weil
in 2016, a company that specializes in legal consulting. Several of those
sources of resistance are attributable to the accommodation process, as we
have already discussed/seen in Chapter 1 (Client or Consumer?).
 Source: AlltmanWeil

In addition, even if there is the intention/inclination to change, there is a

process through which we all go, which is very well described in the graph
below, based on what Gavin Webber demonstrates/describes as the 7
stages of change:
 Source:
Gavin Webber

INSTITUTIONALIZATION, DEPERSONALIZATION and

COLLABORATION
As we see below, Lawyers are eminently “solo” professionals, as is the
case in other professions (medical doctors, publicity professionals, etc.)
who, traditionally, do not depend, or are highly dependent on other
professionals or teams in order to develop their work. Please note that I
mentioned the word “traditionally”, thus referring to that image of a Lawyer
working in his office, alone or with a collaborator or assistant (information
compiler / researcher of jurisprudences/legal precedents or doctrines) with
the Lawyer being the sole creator of the legal document.
Since the creation of the so-called cross-discipline corporate Law firms and
more recently, with the emergence of specialized legal practice areas
focused on new sectors of the economy (such as the internet, telecom,
biotechnology, life sciences, etc.) this image of the “factótum” Lawyer no
longer has a place in this highly specialized market.
However, several Lawyers still think the old-fashioned way, which is that
they can simply study any new topic and then begin to work on it, and not
keep in mind that the volume and speed of the emergence of new
information make this approach impossible.
In order to overcome this innate tendency of the human being inside Law
firms, the participation of the managing partners and opinion makers is
very important in the endomarketing process, as well as in the difficult
process to convince all participants of the benefits of the changes to be
implemented in the institution. In addition , there has to be an intense
engagement of the services of the HR sector for the scheduling and
performing training, be it implementation, maintenance or follow-up
training.

LEARNING ORGANIZATION, EXPERIMENTATION AND ERROR

One of the biggest difficulties is the difference in how one approaches
management challenges in the legal industry given that Lawyers when
practicing Law, are trained one way, and managers are expected to act in a
different way.
Lawyers are highly intolerant of failures (below we will see that in the
psychological profile) and do not have the luxury of learning by
experimenting! No failures are tolerated in the legal world when preparing a
legal document, as one runs the risk of losing the Lawsuit if that legal
document is a badly prepared/drafted petition, or if even wrong arguments
had been relied upon in an appeal (for example), or to find out, a posteriori,
that he is in an unfavorable position in when negotiating because he had
made a mistake or may have forgotten a clause in a given contract (again,
this is another example).
The management of a business is a process of successive refinements and
continuous adaptation by the institution to the market it is engaged in and
with the economy as a whole, becoming a perennial process of adjustments
and experimentation. What separates a winning corporation from an
unsuccessful corporation is the speed of adaptation and learning from the
previous mistakes that are then transformed into [invaluable] experience.
 The illustration on the
left shows how the learning and experience spiral works. In addition to the
philosophical aspect of facing the challenges of management, one can add
another very important aspect that is the technical legal learning process
that a Law firm must impose on itself. The continuous evolution and
development of the depth in legal knowledge, will only be achieved
through incorporation of experiences and knowledge of all its participants
by means of intense collaboration and knowledge management processes
(to be detailed in the following chapters).
LAWYER´S PSYCHOLOGY
The professional “Lawyer” has a specific psychological profile, which
directly interferes in the challenge of legal business management and it
deserves special attention.
The North-American company CALIPER, specializing in talent
management and evaluation of the psychological/professional profile, has
over the course of the 50 years that it has been in existence, developed
tools that enable it to set comparative statistics of behavior of types of
professionals in relation to the average of the population of that country.
Although the statistics are not from a Brazilian source, I am certain that
Brazilian [professional] Lawyers are not that different from their
American counterparts, and I do not think I am making any wrong
assumptions when using the data only as an informative tool for the topic
that we are discussing in this chapter.
SKEPTICISIM: Lawyers are highly skeptical, and do not believe in
anything that cannot be absolutely evidenced in 100% of the possibilities
and with no exceptions.
AUTONOMY: as has been previously mentioned, Lawyers are basically
“solo” professionals, only dependent on their intellectual capacity to
perform the work.
ABSTRACT REASONING: they have the capacity to assess all the
possibilities of an event/a scenario and find out if there is a failure or an
error.
URGENCY: this is obvious with no further comment necessary. Do you
know the magic word namely “deadline”?
RESILIENCE: due to the “solo” characteristic, of skepticism and
egocentrism, Lawyers are very inflexible and not open to change.
SOCIABILITY: this characteristic refers to the capacity to generate
perennial and deeper bonds with the clients (this has nothing to do with
extroversion).
 CALIPER profile
PERSONALITY US POPULATION LAWYERS
Source: Caliper
TRAITS AVERAGE AVERAGE
Corporation
SKEPTICISM 50% 90%
And speaking
AUTONOMY 50% 89%
specifically
ABSTRACT about leaders,
50%
REASONING 81% compared
URGENCY 50% 71% with the
RESILIENCE 50% 30% profile of
SOCIABILITY 50% 7% to 12% Lawyers that
LEADING are not
PARTNERS LAWYERS engaged in
AVERAGE AVERAGE the
EGO DRIVE 60% 38% management
or leadership
EGO
63% process, we
STRENGTH 43%
see the
EMPATHY 75% 65%
statistics
highlighted yellow in the previous chart with a strong tendency to bigger
egos in leadership positions, which in some situations, may be positive, but
in several highly dangerous.
PARTNERS MOBILITY
In the same way that the level of client´s loyalty of clients to their Law
firms is on the decrease, the “affectio societatis” that connects the partners
to the companies is more and more linked to the financial compensation,
rather than the meaning of the term itself.
In this absolutely materialistic and money focused world in which we are
living, combined with the bad structure of relativization of partners in the
more traditional and old companies, have created situations of imbalance
and thereby generating a growing movement of partners aiming for better
spaces/positions in other Law firms, or even opting to set up their own
firms.
Nowadays, news of firms splitting up no longer causes r a stir in the
market, and has become almost commonplace and uneventful. (we will see
this in more detail in Chapter 8, when we will discuss corporate
compensation).
 CHAPTER 4

THE NEW MODEL

Source: author

LAW FIRMS NEED TO REINVENT THEMSELVES!

 In this discussion, I want to
provoke reflection on the acceleration of changes in all aspects of routine
life, and disruptions in our professional life caused by the technological
evolution that the world has been experiencing, the effects of which we are
already feeling and that will become stronger in the near future. The impact
on people and professionals requires a profound and radical adaptation to
this new reality, and all people and companies are forced into this
environment (again Law firms are no exception)!
Our current economic climate is already forcing all leaders or managers to
fully rethink their business models in order to adapt themselves to a
situation that will continue for years to come! The most common and
immediate adaptations occur through space optimization, the search for
productive efficiency and maximization of sales efforts, cost and staff
reductions (not necessarily in this order nor a topic for discussion now).
Let us now practice some projections based on the strong trends that already
exist in our current reality, keeping the focus on Law firms:
Spherical communication.
The term expresses our current reality in relation to communication with
the world in the search for information very well. The current tools on the
internet enable us to connect with everything and with everyone in a fraction
of a second (and simultaneously), and we are already used to doing it. What
is most incredible is that we can no longer imagine ourselves living without
them! This trend will force service providers to create new forms of
exposure, and mainly new forms of selling and rendering of services.
Detachment from the facilities and from the external signs of power.
More and more aesthetics, organization, content (with the breakdown of
your accomplishments) and user friendly browsing on a company’s site, is
becoming more important to us than its physical address or the look of its
facilities.
This is slowly prompting us to abandon the habit of observation and
subliminal evaluation that we make about the financial “muscles” when
observing the facilities of a supplier that we are about to contract.
This impact of this trend is strong, particularly on those Law firms that
are still too stuck in trying to demonstrate their vigor based on the
magnificence of their facilities. It is important to remember that contracting
companies want good legal services and not luxurious facilities!
Work Flexibility.
This is nothing new in several areas of activity, but represents a significant
paradigm shift in the legal world for the reasons mentioned in the previous
paragraph; the concern an almost irrational preoccupation) with information
secrecy; the need the referencing to millions of physical documents (books,
procedural files, files, etc.); and lastly, the need for personal contact with
their clients, still present challenges the legal world is resisting to embrace.
The following technological trends demystify this pseudo imposition of
fixed work in one single space.
Technical improvements in the communications
It is undeniable that the speed (the one measured in Mb/sec) is growing in an
astounding way and with increasing competitive costs.
The internet2 with a theoretical speed of 10Gbps (this means that a DVD
with a 4,7Gb capacity can be transferred in 3.5 seconds!); the “IPv6”
address protocol will allow 79 octillion times the current capacity of IPv4
protocol addressing; and, lastly, the 5G technology estimated to land/arrive
in Brazil in 2018, has 10 times the speed of 4G only to mention a few
examples. It is important to remember that these technologies already exist
and it is not futurology or science fiction.
These changes will induce several things that today, although they already
exist, still have insufficient performance. As an example, the instantaneous
access to gigantic databases and the performance to conduct a video
conferences with telepresence by means of the holographics (with the
sensation of a real “face to face” presence”).
Cloud system and total digital documentation
This trend that is already occurring enables companies to maintain a
distance from the physical needs (backups, redundancies, special air
conditioning, surveillance, security), from specialized staff (increasingly
difficult to manage and costly) and from making large investments in order
to have a robust and up-to-date platform for their systems. Currently, in
terms of the traditional model, in several cases represented by the physical
IT structure of the company, is in itself an anchor/obstacle that hinders or
prevents the change that needs to be addressed.
With this physical detachment, Law firms will be able to concentrate more
on their “core business” and have the support of professionals who are more
specialized in the maintenance of their equipment, the development of their
systems and in the physical and digital security of their information. This
may also entail that they occupy smaller spaces, with no need for space
(either internal or external) for the physical filing of tons of paper.
Specifically referring to the security aspect, the structure offered by the
current data centers and service providers in the so -called cloud, has
infinitely more capacity than the false security that exists in rooms, office
drawers and their internal servers.
BI, Knowledge Management, Big Data and productivity.
The effective extraction of relevant information for a business from the big
databases (internal and external) with intelligent search systems (search
engines) and ultimately, artificial intelligence systems, robotization/robotic
automation and Cognitive Intelligence (Watson – IBM), will in the near
future represent the difference between being or not being in the market!
Knowledge management with the effective and pragmatic use of its
information (documental, registry and financial) enables an immense
increase in productivity, operational and strategic management, and it is the
key to the present-future, mainly for companies/businesses that deliver
intellectual services.
By placing all those considerations in the universe of companies that render
legal services (“aka” Law firms) we get an idea of the “gap” that still
separates them from the trends (which I once again reiterate, are real and not
science fiction). In addition to adapting themselves to the impositions
mentioned above, Law firms will have to be radically transformed in order
to survive in this Brave New World (stealing the title from Aldous Huxley’s
book)!
I envision for the future (again, not the very distant future):
“offices fully integrated to the digital life (with state-of-the- art and 100%
interactive systems with their clients); smaller than the current “big-Law”
ones; with fewer clients and better support; with spartan physical
structures (less noble locations than the current ones) and telepresence
rooms; with areas for shared use; and much more efficient than the
current ones”!
THE NEW LAWYER´S PROFILE

It is undeniable that all of us people, professionals and companies are being

obliged to adapt to the enormous volume of information that bombards us
daily and mainly to accelerate the pace of all the changes that our society is
facing. The exponential growth of information in the digital environment
such as: judicial decisions; processing pieces; contracts; jurisprudence and,
in particular, e-mails, create in themselves an increasing difficulty in the
search, correct identification and analysis of information relevant to the
needs of a lawyer.
On the other hand, the main function of the lawyer is to outline a strategy
for solving the legal challenge through his ability to analyze information
(provided by the client and existing in the legislation, jurisprudence, etc.),
his intellect and experience in synthesis of his ideas, his ability to elaborate
the arguments, and finally the quality of his oral or written expression in the
elaboration of legal documents or oral submissions still depend on the
human brain, with all its limitations.

Two other important factors are also increasingly applying pressure on the
legal profession: The first is the pressure that the customers exert in order
to obtain faster and obviously correct solutions, with the second being
competitive pressure, forcing legal professionals to better manage their
costs in order to offer more competitive prices/rates, always maintaining
quality. (I point out that quality is not the only differentiation factor
anymore, because, as the example I earlier mentioned illustrates, the
Brazilian legal services market has evolved from a few corporate firms to
hundreds of good firms in a period of 3 decades.)
As if all this was not enough, there is still the pressure exerted by the
change in behavior of society itself, more and more connected with
everything, everybody and at the same time, increasingly generating a sense
of urgency and an expectation for immediate results across it.
All this pressure and also due to human limitations, the legal professional
was/has been forced to find an ally in order to face all these challenges in
order to evolve, and this ally is called technology! Although it does not
seem so (in the eyes of a non-Lawyer) the legal profession is one of those
that most needs and depends on technology in order to provide efficient and
responsive services.
Technology is treated by a Lawyer (and could not be otherwise) as a means
and not an end, and should be used as a very powerful tool to improve
efficiency and effectiveness in the profession.
Increasingly, Law specializations are being divided by the branches of
economics (Technology, Communication, Agribusiness, Life Sciences, etc.)
and no longer by the traditional form, that is, Civil, Labor, Tributary, etc.
The most complete and competitive lawyer should be prepared for the
challenges of his profession, besides the legal knowledge should know
deeply the market for which he provides services, but also:
Management Knowledge: to know and to use the management techniques
of a modern company inserted in the competitive market.
- More comprehensive knowledge in matters related to human
relations in order to better manage their team and their talents by
adopting motivating challenges and using specific "KPIs" in
addition to modern career plans and adapted to the new generations.
- Improved knowledge of institutional and personal marketing in
order to increase their participation in the market through the
modern techniques of participation and projection in digital media.
- Better training in business management to economically, financially
and strategically manage your company with the help of ERP, BI,
etc. software.

Technological Update: to know and know how to use the new technologies,
knowing how to extract the most of them to:
- Find the information necessary for the production of your legal
document by the help of search robots and / or cognitive
intelligence software.
- Organize and correctly use their strategic knowledge (explicit and
tacit), using Knowledge Management (KM) systems.
- Intensively use prediction systems, statistically analyzing internal
and external data, case law and previous de-divisions of courts and
magistrates.
- Use the technologies of generating your documents through
"document automation" software, streamlining the production and
analysis of documents.
- Use modern communication and internal collaboration tools
between its professionals and external clients and partners, always
aiming at increasing efficiency and productivity.
Although technology is only a tool, all legal or managerial activities will be
used and managed by lawyers with the help of intelligent software and
systems, which will require a much more eclectic training, much more than
the purely technical training to which these professionals are currently
being submitted to universities so as not to run the risk of becoming a
Jurassic professional!

More and more and throughout their career, apart from keeping themselves
up-to-date on the Law, Lawyers will be compelled to become professionals
with more comprehensive knowledge on aspects such as: team and people
management, business management, institutional and personal marketing,
communication, and overall affinity with technology and the digital world.

ECONOMY I AND ECONOMY II

I will use in this item a concept very well presented by Bruce MacEwen in
his book Growth is Dead: Now What, in which he conceptualizes the
existence of two economies in the world and the denominations of
Economy I and Economy II. The first is the one in which companies that
produce steel, automobiles, pharmaceuticals, consumer products, etc. are
inserted. These companies face fierce competition in the global marketplace
and are constantly forced to modernize and become more efficient and
competitive. In Economy II, companies that do not face these challenges
and that operate in less competitive market niches, such as government
areas, health insurance, education, etc., are included. While they believe in
the advantages of having controls, effective management and investing in
innovation, as they are not subject to the pressures of the former, they tend
to be swollen and inefficient as time goes by. The traditional Brazilian
model of corporate law firms, as still very young and relatively small, has
behaved as a participant in Economics II. Any questions?
As mentioned in previous chapters, this market has grown in a frightening
way in the last 30 years, going from practically two corporate offices with
capacity of attention of international companies in the decade of 1980 to
hundreds today (just consult specific national publications and in- such as
Chambers Global, Latin Lawyer, etc.
This growth, with obvious increase in competition, coupled with the other
current and future pressures discussed in Chapter 3, is shifting the offices of
Economy I to II.
All later chapters of this book discuss the various aspects to be tackled to
achieve the coveted characteristics of efficiency, productivity, and
competitiveness that will ensure future survival and profitability.

PROFESSIONAL MANAGEMENT: THE CONFLICT BETWEEN

PRACTICING LAW AND MANAGING THE BUSINESS
In one of my first metaphorical comparisons about the type of business
called/known as LAW FIRMS, I compared them to a restaurant, and asked
the following question: What makes a person go (or return) to a certain
restaurant?

The answer was (and still

is): great food, great treatment/service and consistent price!
As has already been mentioned, Law firms perfectly fit [in this
answer]/into this analogy apart from just replacing the expression “great
food” with “great legal solutions”, or “great legal solutions, great service
and consistent prices!
For this to be possible, we need great professionals (legal or managerial),
systems that are up-to-date, technology, a lot of training and mainly a
properly sized and very good organization, and it is at this very point that
the previously mentioned conflicts begin to appear.
It is at this juncture, that I once again need to refer to the natural evolution
of a Law firm after its creation. As we has already been seen, Law firms
are generally set up by the agglutination of two or more legal professionals
who, due to several reasons (complementation of areas, complementary
skills, expertise, professional affinity, entrepreneurship, personal and ethical
objectives, etc.) get together and set up a Law firm.
Again, the metaphorical comparison with a restaurant becomes illustrative,
by comparing a Lawyer(s) who holds the knowledge and the technical
skills to provide ideal legal solutions to their clients, to a chef that also
holds the knowledge and skills to make/prepare delicious dishes.
Now, let us imagine that this chef in the evening (just as an example) will
be in charge of preparing of these dishes, but also has to
principally/primarily concern himself with: the correct choice and
purchase of the products (meat, fish, vegetables, seasoning, etc.); the
contracting and training of maîtres, sommeliers, waiters, receptionists, etc.;
the decoration and presentation of the tables and, last [but not least], the
financial aspects of the business called the “restaurant”.
In the same way a chef likes to create and prepare his dishes, Lawyers also
like to advocate and create legal solutions to their challenges, but must also
worry about all the other tasks and decisions that are inherent to the
management of their business and that are generally regarded as “boring
obligations” or” a necessary evil”.
As the business grows, (because of the good dishes or/i.e. the great legal
solutions offered), it is natural that management structures become more
and more complex, increasingly requiring more of the chef’s or the
manager partner’s involvement and “stealing” the time they need to
produce [production of] their technical work/tasks (to which they
like/prefer to dedicate so much time to).
The solution to this conflict presents itself when the company (whatever it
is) begins to worry about with the back-office work, which is as important
as the the so-called “core business” work necessary for the fulfillment of
other requirements in order to be successful.
The correct dimensioning and training of the administrative team to a good
technical level; the adopting the current technological infrastructure and
correctly adapted to the business; the continuous training and improvement
of the skills of all members of the company and mainly everyone’s
alignment to the company’s ´philosophy, are fundamental to provide respite
to the managing Lawyer, giving him more time to dedicate himself to
perform legal work/the legal production.
Al these aspects, added to the delivered product, enable the company to
achieve the quality that is necessary to satisfy its clients and this answers
our initial question!
MASLOW IN LEGAL MANAGEMENT
The first consideration we should make about legal management is to divide
it into two sets of different activities, with completely different
characteristics, challenges and solutions for each.
The first set relates to the management of the legal operation, where all the
activities involved in the process of conception, execution and follow-up of
the legal process until its conclusion are managed.
In this set of activities are concentrated most of the technological
innovations that are creating a revolution in the modus operandi of the legal
services and in the legal profession.
For both law firms and legal departments, impressive tools are appearing
that will / will help lawyers to be faster, more efficient and make access to
justice a little cheaper for the consumer of these services.
Just to outline the main trends, I cite the sites and alternative systems of
conflict resolution (with more or less use of applied technology); compiled
and standardized data providers of processes; systems of judgment
statistics, etc. Some more sophisticated use statistical algorithms and
"machine learning" to facilitate the automatic (or almost) elaboration of
documents; to understand the context of the document through natural
language processing (NLP); to do intelligent research on doctrines,
jurisprudence, etc., to the use of blockchain platforms for records of
documents.
The second set of activities concerns management in the Legal business,
where all the activities inherent to any business are performed, ie, control of
efficiency and quality of production, talent management (formerly HR),
financial controls , billing and billing, institutional and sales marketing,
branding, technology, etc.
In this group, we need to make a further distinction, separating the needs of
ad-vocational legal departments and offices, since some of the previous
activities are completely different (or nonexistent) in each case.
The main reason for this discussion is to make an analogy of Maslow's
pyramid to the hierarchy of human needs with those necessary for the
correct management of a law firm ("aka" law firm) and also to discuss a
little about the use of artificial and human intelligence in this process.
Maslow's original pyramid provides 5 levels (walking from bottom to top):
Physiology, Safety, Social, Estimate and Personal Achievements.

In companies, the physiology is the data and information, because without

them or with them inaccurate, all other activities are impaired or infeasible.
Imagine an operational or strategic decision based only on the "achism"
(guessing) of some manager! I like to quote W. Edwards Demming's phrase:
"Without information, you are only one with an opinion."
The level of security in the original pyramid, relativized with technology,
because it is at this level that physiology happens in the individual and the
processing of data and information in the company. All available
technologies for dealing with numbers and words (texts) create an arcade
that will sustain the upper levels, processing information and data, and
generating managerial reports (currently called dashboards).
The third level, called social in the original pyramid, is equivalent to the
operation in the corporate pyramid, because through the operation the
companies relate to the clients, their collaborators, their partners and
suppliers and position themselves in the market.
The fourth and penultimate level refers to the esteem in the individual or
self-knowledge and is exactly like a company, where through the three
lower levels accumulates and manages its greater good, its knowledge
(especially in companies that sell services, where law firms fit in perfectly)!
The last level in the individual is his accomplishments and again is
perfectly comparable with a company, ie with the four lower levels, the
company is able to exercise effective governance and outline its strategies
to achieve its goals!
The last point I want to address is how the two intelligences (artificial and
human) are used in all these layers of the pyramid of a legal enterprise. As
we have previously seen, the use of AI has been extremely widespread in
the management of the legal operation and would not be different in
business management.
In my (humble) opinion, as we evolve in the pyramid, aspects such as
interpretations, subjective considerations, and multidirectional or
multidisciplinary analyzes become more relevant and more important. For
these cases, even (God knows how much) human intelligence does better,
while at the lower levels, the processing of thousands or millions of
information in short spaces of time is much more efficient with the use of
artificial intelligence .
PRODUCTIVITY, EFFICIENCY OR EFFICACY?
Usually and unconsciously, we randomly use any of the three words to
express what we are about to pursue in order to please the client in
providing legal services (and any other service), but they are totally
different. There is a very important premise to be able to serve the client
well and I will not go into the merits, which is the legal quality, but making
it clear that the client's perception of what "quality of service" is is one with
all these elements.
Using the Houaiss definitions:
Productivity: capacity to produce or volume produced.
Efficiency: ability to achieve better performance with the minimum of
errors.
Efficacy: virtue or power to produce a certain effect.
In fact, the ability that a legal services provider must have to solve the
customer's problem and simply leave it happy, ie, be EFFECTIVE and
depends (besides legal quality) of factors where the three nouns must be
considered and followed.
We can metaphorically compare this challenge with the figure of a garden
plant that needs to be watered and a gardener. The need for water by the
plant can be compared to the client's problem and the gardener as the legal
services provider, whose function is to get the right amount of water to
satisfy the survival need of the plant (remembering that water in excess or
scarcity can kill the plant). The necessary tool for this task is the law firm,
in this metaphorical figure represented by the squirt and that we will
examine it next:

Productivity
The decision of which spray the gardener will use will depend on the
volume or size of the plant to be watered, that is, a jet with a diameter has a
greater capacity to carry a larger volume of water, but will depend on
whether it is complete, has no internal dirt or folds in its entire dimension.
Each fold in the nozzle can be compared as operational limitations that limit
the passage of water, so that the larger limitation determines the maximum
carrying capacity of the water by it.
In companies, these limitations can occur in all possible ways, and can be
related to people / teams, organization / procedures, tools / technology,
management / leadership, each of which imposes a reduction in the
company's potential. maximal provision of their services.
The most important thing to be observed is that achieving the maximum
capa- city, that is, the best productivity, is a process of successive
refinements, because when we solve the greatest limitation, immediately the
second will become the largest and so on , until we can eliminate all of
them (like the folds in the squirt).
In offices, this maximum production capacity can be measured by the total
number of legal professionals multiplied by the number of hours available
for each one's work.
Efficiency
Another important factor that limits the amount of water that arrives at the
plant is the water pressure at the faucet to which the nozzle is connected
and which will ultimately determine the speed that the water flows through
the interior of the nozzle.
In the offices this is represented by the number of hours actually dedicated
to the production of documents, contracts, procedural documents, etc. and
we must take into account three elements that hinder production in its
highest efficiency:
The first element refers to total non-dedication to work, that is, none of us
can fully dedicate ourselves to our work without interruption! These
interruptions are represented by pauses for coffee, caring for personal
matters, "necks" on the internet and on social networks, etc.
The second element is represented by the necessary time spent compiling
data and relevant information that will support the production of the
document. In this specific element, new cognitive intelligence technologies
are being incorporated, which are being incorporated into intelligent
research robots, document assembly systems, prediction systems and
statistical analysis of results, etc. These systems are revolutionizing the law,
minimizing times spent by lawyers and leaving to them the most "noble"
tasks, implicit to the human capacity to analyze the facts and information,
synthesize everything in a document or contract or procedural thesis and
express their ideas and arguments.
The third element refers precisely to this individual capacity of each
professional mentioned above, that is, how long and with what quality each
professional can produce the "piece". In this regard, only the hiring of better
qualified professionals and the continuous training can improve it.
In Law Firms, this efficiency can be measured by the difference between
the theoretical hours of work of all professionals (see productivity) and the
number of hours actually used in the production and collection of fees. I
emphasize here the fundamental importance of the correct use and
management of the timesheet!
Efficiency
None of this will be of value if the gardener deposits too little water or
excess water on the plant, killing it in one way or another.
The correct sizing of time, staff and documentation to be developed and
used will determine the correct pricing of the work to be presented to the
customer.
Legal services must always keep in mind the needs of the client and always
think of the best solution of the problem for your business, even if this does
not represent the most appropriate academic legal solution for the case. The
presentation of the solution, free of self-interest (of billing increase) is
ultimately the guarantee of customer satisfaction and also determines the
position of the office before the competition.
All of these considerations have always been important in legal
management, but they have become survival items in the highly competitive
marketplace where the legal business is currently (and will be accentuated
in the future).
SGIT2W X Q- THE TRANSFORMING FORMULA
As I have long defended, the management of the legal business resembles
the game of chess, where there are only certain types and pieces
(professional profiles) with their delimited movements (job descriptions and
responsibilities), placed on a board ) also with limits of movement, but the
possibilities are almost infinite movements that allow several strategies
with, obviously, also variable consequences. The great quality of the good
chess player (the business manager) is in identifying the opponent's strategy
(the market and consumers of legal services) and anticipating with as much
assertiveness as possible the future moves.
Still talking about Chess, besides strategy, your opponent's knowledge and
self-knowledge, the correct use of your resources (the pieces) and all the
existing techniques and tactics are also crucial to winning in this difficult
game.

SGIT2W x Q is the reduced form for the equation composed by: Strategy,
Governance, Information, Technology, Talent, Work and Quality,
where the combination of the first factors is that it will influence the speed
to achieve the objectives (efficiency, -and competitiveness) and that
multiplied by the "constant" Q (technical quality) will define the success of
the business. Note that I have put quality as constant, since it is defined by
the technical staff of the business and little variable in time (exceptions
made to new hires or training and training, both slow). The other factors
(SGITW) are variables that must be optimized (and have a much shorter
maturation period).

Strategy: "A boat must have the direction and speed set by its captain and
not by the stream." This is to say that the knowledge of all possible
information (numerical or tacit, internal and external) should be used so that
the organizational structure associated with a defined and rational decision-
making process and with the help of tools, such as the analysis SWOT,
allow the placement of the company in a managed direction (not to the taste
of the market).
Governance: Efficient business management, ie, rigid and rational controls
of expenses and costs (regardless of who is applying); creation and ongoing
monitoring of budgets; effective billing and timely follow-up of accounts
receivable; clear and rational investment policies, etc., define the degree of
self-government of the business.

Information: Knowledge Management and numerical management, or se-

ja, encourage the exchange of experiences among employees; have systems
and systems capable of capturing, organizing, indexing and storing for
future use all the knowledge (tacit or explicit) generated in the organization;
train staff for depersonalization, use of prior knowledge, improvement and
constant updating. Adopt management based on complete and consistent
internal data and reports and market statistical information that is far from
opiates and considerations. (???)

Technology: In Business Management, to adopt modern and intuitive

systems that allow all the aforementioned elements to be able to be adopted,
based on the information generated by these systems: ERP's, Corporate
search engines, Classification systems and indexing information, BI and
Analytics systems with the generation of complete and detailed dashboards
on all numbers of the organization and, finally, stop spending (in-dressing)
money on own hardware. "Go cloud"!
In the Management of Legal Practice, to adopt as much as possible (as long
as it is appropriate to its practice) new technologies that allow efficiency,
increase productivity and cost reductions, such as: OCR and analysis of
texts for contracts, (AI) for due diligence and investigations; Machine
Learning for new contract generation and documents and automation in
general; NLP (Natural Language Processing) for text and voice
transformation and vice versa, used to streamline the ho-mem-machine
interface (example Alexia integrated with GED system); Ro-bots (for legal
research and information retrieval in Courts, for example), BigData
Jurymetry for predictive analysis (eg securitization / monetization of
procedural portfolios); image recognition for the second authentication
factor.
Talents: The understanding of the motivational psychology of the various
generations underneath the same roof; the adoption of a career plan
encouraging meritocracy; the creation of aggressive remuneration policies
that encourage productivity; the adoption of a robust investment plan for
training and professional training, etc., all of this must be taken seriously!
Work: Unfortunately, we are living in a time of great changes, great
challenges and enormous competition (both of consumers and technological
changes), great pressures from customers and consumers, and for that the
only solution is a lot of dedication, effort and hard work.

Quality: There was a certain time, especially in our local market, when
there were few law firms that offered their clients training of their
international collaborators, knowledge, experience and organization and
therefore were considered of higher quality and this small amount of
suppliers encouraged the (forced) loyalty of its customers. There are
currently hundreds of good offices (with the features mentioned above) and
this is no longer a differential in the market. Quality has become the
minimum basic condition for competing and competing consumers of these
services.
Customers have become consumers, loyalty is much more tied to all the
factors in this equation and is no longer captive like it used to be. All
variables of the equation need to be worked on to have financial
investments and attention and be optimized so that the final result is
positive and the office content to your consumer, not only satisfies them!

EASTER, PESACH AND INNOVATION

As most people know, especially Christians, Easter brings the message of
renewal, with the rebirth of Christ after his crucifixion and the Passover,
Pesach represents the liberation of the Hebrew people from the Egyptian
captivity in 1280 BC. Those two events represented radical changes and
made possible the beginning of a new age in each of the religions, in
societies and their respective epochs.
Christians and Jews who forgive me if I am using religious values and using
them on a non-religious subject (merely "pagan"), but I think both can be
used as metaphors for the process of innovation in Law and in the provision
of Legal Services .
Much has been said in the specialized media about innovation, technology,
artificial intelligence, "lawyer 4.0" (to this day I can not quite identify the
characteristics of versions 1.0, 2.0 and 3.0 ?? ) and the future of legal
services under this new perspective, but a little more detailed analysis of the
causes, objectives and their effective application is lacking.
Indeed, in my humble point of view, the main cause of this revolution
comes from outside, that is, there has been and continues to be a behavioral
change of society and especially of consumers of legal services, forcing the
affected economic agents (lawyers, law firms, legal departments and all
public career lawyers) to adapt.
Well, how then do you face this challenge? With Innovation, now balls!
Easy to talk, but difficult to do and even harder to identify what needs to be
innovated.

Let us then analyze and discuss some points:

First: the entry found in the Merriam-Webster dictionary of the English

language shows the following:
Innovation: noun
1 the introduction of something new
2 a new idea, method, or device : NOVELTY
This means that innovating in the legal services is not to do faster or better
what already is done but to do different!

Second, what is the purpose of innovation, inward-looking or outwards?

Legal service providers have used in-house all the news and technological
developments that are appearing, most of the time, to increase their
productive capacities, their efficiency and to improve competitiveness.
Intelligent information search, document, and process automation
algorithms are just a few examples of this inward innovation.
The most difficult to identify and adopt and the "outward", or se-ja, what
should be changed at all levels of the organization so that it can provide a
new, different service that surprises and satisfies the customer (not enough
more only satisfy).
For this we have to analyze the needs to reach this mentality the ifficulties
that will be encountered:
Will: this is the main engine of innovation! In order to innovate it is
necessary to want and want very much, because the difficulties are not few.
We want to have a will to change, a will to do, a willingness to try, a
willingness to experiment, a willingness to dare and a willingness to have
the courage to try and make mistakes.
Open mind: it's the second determining factor! Minds without
preconceptions, willing to listen, to evaluate and accept new ideas, pre-
arranged and to experiment, without fear of making mistakes, not being
depressed with their mistakes as learning, are innovative minds,
Think Outside the Box: Get yourself out of the routine, the processes and
procedures that exist and analyze and criticize them; inventing and trying
the new are also decisive factors.
Long-term strategic vision: Look at behavior changes and predict how these
changes will impact the business; identifying trends and needs that did not
exist previously and anticipating are fundamental for innovators.

A very interesting example that I like to mention is the change that some
offices already love not to deliver to their clients: the so-called audit reports
(where process risks are related and that will be subsequently priced in the
balance sheets) with only the three traditional classifications, ie Probable,
Possible, or Remote. These offices are delivering statistical analyzes with
probabilities and / or even suggesting values for agreements based on type
of complaint, type of thesis, adjudicatory body and even judge. This change
allows clients to better budget forecasting and financial planning than the
simple classification in the 3 previously mentioned.
There is still a certain distance between the internal and external objectives
of innovation, causing a certain amount of consumer frustration in relation
to the practical results of the innovation adopted internally in its service
providers, that is, to effectively receive better services, re-ceber service
more agile and of better quality and have greater competitiveness (cheaper
services).

The combination of the two elements of innovation (inward and ou-tward)

and their reconciliation with the expectations of consumers of legal services
will transform service providers into innovators, winners and market
leaders. Like the religious events of the past, these changes open the way
for us to effectively enter a new age in the provision of Legal Services.

ATTRACTION, MOTIVATION AND TALENT RETENTION

In the case of Law firms where their assets go down the elevator every day
and go home in the evening, a clear, transparent and coherent policy aimed
at attracting and retaining (this includes training) talent, is the key aspect
required in order to be able to generate high quality products, which in this
case, are represented by highly sophisticated legal documents with a high
dose of creativity.

Bear in mind that more and

more entrepreneurs need quicker and daring solutions
(obviously grounded in the Law) and as such, the attorney must be
increasingly pro-active, engaged/committed and an expert of his client’s
business, so as to help him in his needs and mainly with regard to speed!

The image of the traditional attorney, who is limited to consulting with

clients and asked for legal advice (and responding in his own time) with l
reference to the Law and simply limiting his opinion to whether a
particular operation/legal scenario is possible, is destined to disappear.
So, how can one form a group and retain attorneys who have this new
mindset? With the offer of a clear career plan, which is at the same time
challenging and promising, associated to an aggressive remuneration
policy with significant sharing in the distribution of the added value
usually accumulated only enjoyed by a just few (in the offices of a more
traditional organization).

The second component is probably the most difficult part to implement and
manage as it precisely represents the mindset to change a Law firm into a
Company of sophisticated legal service providers.
Clients who are in search of this new mindset to implement in their own
organizations, are also in search of services providers who are in tune with
this philosophy, which is the reason why there is a large number of clients
who are dissatisfied with their services providers.

One of the main complaints by consumers in regards legal services

relates to: quality assistance, represented by the client’s difficulty to get a
duly qualified and experienced professional to guide him in a quick,
effective and creative way.

One other aspect of dissatisfaction has to do with the transparency

represented/required by detailing the work performed and the expenses
incurred as is outlined in the memoranda that usually accompany the
invoices of services.

Those distortions originate from a pyramid structure where there is a very

big concentration of responsibility (and remuneration) over a few
professionals, which substantially interferes with the internal quality control
in all respects.
And to correct that distortion, Law firms must be smaller, with a more
balanced ratio between the quantity of professionals (with much or little
experience) and a number that also maintains a client number that is
compatible with the required service level quality.

In order to balance this financial equation, where there is a larger number of

experienced professionals engaged in the market pressured to offer
competitive prices, the advantage is obtained through big investment in
knowledge management, training and technology.

One must understand the concept of investment in technology well, that is,
not in the traditional sense represented by substantial investment in
equipment, expensive software that delivers low productivity/output. The
investment in technology must be approached in a way that is as much
pragmatic as it is possible/feasible, that is, via systems that really bring
about an increase in efficiency and agility in the services of the provider.

LEGAL MARKETING: LAW FIRMS NEED UPDATING

I have written (https://br.linkedin.com/in/josepaulograciotti) about the
resistance by some Law firm leaders to recognizing the true economic
identity of their businesses, and that the establishments formerly called (in
Brazil) “Banca de Advogados” are in fact, companies that provide legal
services.
In my humble opinion, the traditional belief that Law is not a trading
activity is outdated, and by saying this I run a great risk of being criticized
by legal experts, but anyway, from a totally pragmatic point of view, I ask
the following question:
How do we classify the activity of an entity (taking as an example a
small/medium-size corporate Law firm) with about 50 people employed by
it (including the support staff), that has a client portfolio in the region of
two or three digits and that generates revenue of six/seven figures
annually?
The answer (and I repeat, in my humble opinion) is: Yes, it is a company,
and bigger than the great majority of the small and medium- size companies
in Brazil!
In addition to what has been mentioned above, I I take the liberty to say
about this, [matter] as these reflections are being elaborated by four hands,
with the participation of Priscilla Adaime, a professional specialized/a
specialist in communication and legal marketing.
All right. Now, having presented the first considerations, let us
consider/address the matter/issue itself!
Due to my more active participation on social networks, I experienced in
practice what I had already felt due to my experience at those institutions,
that is, most of the “posts” on the networks (small number of participants
in the digital world) still follow the traditional model/ of showing up in the
media, presenting a certain pattern with one or several of the characteristics
listed below:
- Introduction to the market, with a “standard” photo, of the newly
hired partner.
- Characteristic institutional photo with the main partners posted in an
imposing manner and sometimes with the deans sitting in the center
and the newer ones around them.
- Articles with in-depth legal discussions about the amendments to
the Laws, decrees, etc., published in newspapers and on legal
portals.
- Newsletters sent to clients/mailing list about legal news.
- Photos of internal events about, again, legal discussions on a given
subject.
- Notices about commemorative dates ( Lawyers’ Day, Secretary’s
Day, etc.).
- Participation as speakers or sponsors of external events to clients
and prospective clients.
- Displaying logos of awards received and acknowledgments.
- Producing “folders” printed with photos of their facilities and
spending fortunes on printing that often ends up in the trash can.
This digital content, in addition to being difficult to digest, due to the
exoteric/ arcane language used, is randomly replicated on the Internet
(website and social networks) ignoring the characteristics and peculiarities
presented by the online tools available for disclosure of the activities of the
offices. Only a few worry/are concerned about creating strategies for action
for each of the networks and about measuring the achieved results.
Shown again below is the well done/crafted graphic elaborated by
McKinsey (see chapter 1) and published by “Adam Smith, Esq.” where we
can clearly see that the traditional initiatives do not bring perception of
value.

In the real world where efficacy, pragmatism, speed and spherical

communication prevail (where everyone is connected), this type of
exposure is practically innocuous without reaching the target public, which
is the business community!
Firms need updating and need to come/move/position themselves closer to
their target public/market; they should use direct and objective
communication and use the new tools that are coherent with the real
situation of the company/business it renders legal services to:
- Adopt a posture of valuing the institution, its characteristics and its
accomplishments.
- Always remember that the target is the client and not the
competition!
 - Abandon the worshiping of personality and individuality.
- Use current tools, that is, all the social networks and all possible
digital means. Whilst in Brazil firms are ‘crawling’ to produce
content, in the USA most offices/firms have blogs where the
Lawyers publish, on a weekly basis, articles about the novelties in
their practice areas [of performance]. They invest time to create
relevant content, as they know that this is fundamental to gain new
clients.
Local offices/firms are now beginning to produce and use podcast videos
aimed at their target /market, while out there, Lawyers use other means
such as: the Periscope (the app used to broadcast live via Wi-Fi and 3G to
share experiences with their followers); Livestream (to disclose
participation at live events). These are only some examples to illustrate the
gap/expanse Brazilian firms find them in, characterized by little
innovation and being unaware of the new possibilities that could help
them to broadcast/promote/advertise their activities.
I suggest that firms look for an outsourced and experienced consultancy
firm, which is also exempt from/unaffected by any internal political
interactions in order help with image management, in compiling the value
proposition of their accomplishments, and exposure to the specialized and
entrepreneurial media ( especially in challenging times such as the one
experienced at present).

THE FLUID COMPANY

 Copyright : DailyPicksFlicks
http://bit.ly/DailyPicksAndFlicksSite
The QR code on the left is the beautiful video of birds in a flock, but could
also be sardines in a school in the ocean, because the behavior is exactly
similar.
They can stay cohesive because it is much safer; they can act coordinately
without a leader dictating the way; are able to travel extremely fast without
getting in the way of each other and mainly are able to react quickly to any
change or risk posed by the environment.

Let biologists study how this happens, but for me the important thing is that
in some way the sensations, experiences and needs of change or adaptation
of an individual are shared immediately to the group and the group quickly
reacts to the inputs of the individual making the group absolutely cohesive
in all its purposes.

Purpose of direction (by using the knowledge of the most experienced in

determining the path to be taken); of procreation (by choosing the best
place and time, maximizing the growth capacity of the flock); of self-
defense (by forming a group with much more force than the individual); (by
choosing the best place to land and eating with the least risk) and all based
on one word only: Collaboration!

The professional environment that we are beginning to feel, in all areas and
most recently in the legal market increasingly demands from companies
("aka" Law Firms) a great adaptability. Because then we do not rely on the
experience of thousands of years of evolution of some species (which are
weak or even defenseless in individuality, but extremely strong when in a
group), which has this high adaptability and can have the same agility as
individual?

Fortunately (or unfortunately) we are different from birds and because of

our complex social interaction, we create needs and habits in our behavior,
such as hierarchy, authority, bureaucracy, politics, etc. and these "things" in
spite of organizing our social and professional relationship, if used in excess
they create slowness. Let us remember that the word bureaucracy does not
have a negative connotation in its origin, but over time it has been
increasingly associated with slowness, lack of intelligence and common
sense in creating excess controls, which in several cases they do not serve
much.

I am not against the existence of a hierarchical structure in the companies or

the organization, but the new times demand an agility that sometimes
happens to be incompatible with the traditional structures. Many
hierarchical levels and the creation of committees or commissions within
the structure can be fatal these days, for example. It is necessary to have
leadership (not authority) allied with autonomy with a lot of responsibility
(accountability) to print speed to the decisions of any company.
Modern and future business must behave like birds in a flock, where each
individual collaborates intensely and unselfishly with his or her partner. All
previous experiences, market and business visions, risks and opportunities,
and "feel" about best practices and solutions must be shared among all so
that each individual always has in mind that its collaboration will bring
more strength, efficiency and agility to the company.
 CHAPTER 5
NUMERIC “GOVERNANCE” – ANALYTICS

“Without data, you are just another person with an opinion”

W. Edwards Deming
This quote is perfectly fitted to describe the need for a numerical and
objective base in decision making (be it strategic or operational) by
companies’ managers, and specifically by the partners who perform the
role of managers in Law firms.
As an engineer, I feel compelled to use the metaphor of a building and its
foundations, often used in several areas, including the religious , where one
makes reference to the stability of a building in relation to the quality of its
foundations (a house and a building constructed on a fragile support
structure are destined to become derelict, cracked or may even collapse).
Any decision made by managers of any company are made consists of two
very important elements to achieve success: first, of objective information
contained in all existing material reports and by the knowledge transformed
into accumulated experience; second, in a given higher or lower dose of the
manager’s feeling, which involves entrepreneurial and market strategy
views, and in its affinity/appetite or dislike of risks (a specific subject that
we will not develop/elaborate on in the present discussion).
And now, bringing the discussion into the universe of legal corporative
firms, I can state, without any hesitation ( based on the almost 30 years of
experience I have ), that there are some factors in those Law firms that
traditionally hinder this decision making process, of which I will only
address two, being the factors I consider to be the most relevant :
The first and most representative factor is the concept foremost in the
minds of almost all Law firm partners and that is: “a Law firm is not a
company”! If we follow this reasoning and focus on a medium-size
corporate Law firm (for t5he Brazilian market) of about 20 to 30
professionals and ask ourselves the following questions: What is, after all,
a business that has 50 people working for it (including its staff), that has
around a three-digit client portfolio and which generate revenues of up to
six/seven digits a year? The answer, in my humble opinion, is: Yes, it is a
company and it is bigger than the vast majority of the Brazilian small and
medium-size companies with also the same problems and challenges
faced by those businesses!
The second is the intrinsic characteristic inherent to the attorney’s
profession, which is that all legal professionals are trained for the
“clash”, with strong focus on the skill to argue ( bothorally and in writing)
with the capacity to search and find details on which they can base their
arguments on, or weaken the arguments of their opponents. Again, in my
opinion, the company’s decision, which is in the interest of the institution,
cannot be addressed this way, and transcends personal behaviors, and can
also not be based on opinions that may be in the deviations that are “out of
the statistical curve” of the management data.
Again, going back to the discussion about the elements of decision
making, and concentrating ourselves on the first of them, that is, on the
groundings, it is fundamental for companies (and again Law firms) to have
correct, reliable, relevant information, obtained in a quick manner, so that
the uncertainty that follows every and any decision, is limited only to the
“feeling mentioned before, and not due to errors in the compiled data and
information.
In order to obtain the most robust, relevant and reliable management
reports, it is necessary that the foundation of this ‘building´ is correctly
dimensioned and built, and this can be achieved through:
- a client record file with correct and relevant information about the
business (not only names, addresses and contact persons).
- a record file of topics (cases, contracts, etc) with the description and
characteristics defined in details, the engaged areas and
professionals, etc.
 - a correct record file of all the professionals, their seniority, their
experiences, their charge-out rates and remuneration (form and
amount).
- elaborated detailed budgets and the respective proposals generated
(with mode of charging).
- a correct timesheet and timely completed by all professionals, and
again with the relevant information of each work item/task
performed.
- control and identification of all documents elaborated and involved
in each task.
- detailed information contained in the issued invoices (amounts,
names of professionals, hours charged (or not), discounts granted,
terms, payments dates, etc.
The analysis and the intelligence matching of these pieces of information
may (and should) produce reports that show the scenario of the business,
said scenario generated by magnetic resonance (making an analogy to the
best quality of this exam in the medical diagnosis and treatment, as
compared to a simple X-ray that is much less detailed and precise).
The support of an outsourced consulting firm, experienced and exempt
from internal interactions and relationships, may really help in the
generation of those pieces of information and reports and produce more
effective and professional management of companies/businesses (
particularly in challenging times like the one we are currently
experiencing.)
William Edwards Deming (October 14, 1900 – December 20, 1993) was
an American engineer, statistician, professor, author, lecturer, and
management consultant. Deming is best known for his work in Japan after
WWII, particularly his work with the leaders of Japanese industry. (source:
Wikipedia)

BI CYCLE, BI OBJECTIVES and DATA ANALYTICS

“BI &DATA ANALYTICS Objective: to change behavior, transforming
information into comprehension, ideas and actions”
Like in Knowledge Management (next chapter), which Bi and Data
Analytics belong to, there is a feedback cycle that permeates the business
process.
As the company develops and faces its challenges and opportunities,
observation of the past and present intuitively generates the internal
processes of operation (norms, systems, organization and mainly people).
Those processes are updated and optimized over time by means of the
learning/acquisition of knowledge generated by own experience. By the
time these processes have been consolidated, extracting information then
becomes vital for the consolidation of this learning/knowledge and marks
the start of the creation of a “data and information base” that characterizes
the business.
From the analysis and interpretation of this mass of information one can
extract the bases for the so-called company/business intelligence that will
provide all the dashboard reports, and l serve to support operational and
strategic decisions (by means of the tools that we outlined below).

Bi Cycle
Source: Trovus
In addition to being a feedback process that is effective and positive, and
that can take the company to the next management and competitiveness
level, it must be a virtuous cycle, with growing sophistication and also with
increasingly complex and high objectives aimed at progressively
increasing control on governance.

Data Analytics Phases

Source: Prosperoware

CREATION, CLEANING UP AND HOMOGENIZATION OF

REGISTERS
In my discussions, I always use the metaphoric image of a fan to
emphasize the importance of having and caring for the quality of data and
basic information with which all managers’ reports are devised, and the
decisions in a company will be made mainly based on them.
I always compare the computer (including/ in this word all the technology,
systems and processes that generate said reports) to a fan in a closed room
that has the capacity to circulate air in it. As we all know, the rotation
motion of the blade(s) operates to suck in the air behind the fan, which
concomitantly pushes it forward, thus circulating the air across the entire
room. If an element with a particular odor is placed behind this fan, the
result will be that the odor will be dispersed throughout the room.
If we, metaphorically speaking, change in our minds the fan to a computer,
and this element containing the odor to registers or basic information, the
result of the odor dispersion/permeating [in] the room will be the generated
managers’ reports.

Now, let us imagine

two distinct situations: in the first , we place a bottle of perfume that
contains a pleasant scent (CHANEL #. 5, for example) behind this fan, and
in the second situation, we place a container with feces. In the first
situation, the result will be a room with filled with a pleasant scent, and in
the other situation, the room will smell like shit!
This emphatically illustrates the importance of having and caring for data
that produce correct and reliable basic information, and also produce
reliable reports that are generated as a result of these elements.
Bringing Law firms into the discussion, and always bearing in mind that
oftentimes administrative and red tape aspects are drawn down to a second
level, or (worse), the legal professionals are too busy to be worried about
these less important aspects. The essence lies in the fact that these are the
professionals who hold the correct and precise information for the filling
out of registries and assigning the these tasks to the staff or to the back
office, thus creating the false impression of efficiency and speed, but with
potentially disastrous consequences for the future.
The process of registering relevant information is highly important in the
initial phase, but equally vital, is the continuous follow-up and review
thereof, due to the dynamics of the legal world. The splitting-up, buying
and merging of clients in the same Law firm is a very common occurrence,
and this is only a simple example that causes radical changes in the
invoicing systems, timesheets, the DMS and information background
filing systems.

Another example is
the correct and complete definition of the information that must be stored in
the clients’ database/profile and matters (or cases, contracts, etc.), as most
often, the concern is only with the information that is necessary for the
invoicing.
The client database/profile of the existing client contact information, its
origin, its role and its internal interests and relationships, are fundamental
for collection actions and marketing initiatives, cross-selling, etc., to list
but a few other examples.
Although it is generally relegated to a second plan, I would dare say that
this is the fundamental point (in addition to the timesheet) for good and
efficient governance/management!
The correct definition of the relevant information that must compose all the
Law firms’ databases/profiles is fundamental for its better use in the future.
Please, note that I mentioned correct/accurate information as there are
basically two mistakes that are usually made when those registries are being
created: the first being to create information spaces solely and exclusively
for invoice issuance and “Christmas cards” (something very old and
outdated, isn’t it?) and the other, the exact opposite, which is, that one
exaggerates when talking about the sheer volume of information provided,
making the initial filling out and maintenance an exhausting and boring
task, which undermines its purpose. From past experience, I have
observed that the mandatory fields not considered important, and merely
‘filled out’ with a period (.).
Another point to be considered is the responsibility for the monitoring of
the databases/client profiles. This includes its management, since the
creation/capturing of the information or initial registry, the updating and
constant and periodic continuous maintenance thereof, that is, the cleaning
up and the assurance that all the fields are filled out with the same criteria,
represents the homogenization. (Let us remember the old saying that a dog
that has several owners starves to death!)

These little details will

make all the difference in relation to the reliability of the manager’s reports
(dashboards) created, and consequently in the measuring of the business
decisions that were made and based on them!
LIFE CYCLE OF MATTERS (OR CASES)

This item, although it is covered in the previous discussion, I consider it

deserving of special mention, as we can extract vital information from it
that will help and support several very important decision making actions
in the organization.
In addition to the basic information requirements such as: name,
partner/Lawyer in charge, client contact , opening date, telephone number,
billing address, invoicing arrangements/guidelines, etc., further very
important aspects of information must be added:
 - Detailed description of the subject (or case)
- Budgets/fee projection/anticipated fees
- Proposals incorporating all contingencies
- Changes during /implementation in regards to (scope inclusions or
exclusions)
- Relevant occurrences
- Detailed orientations as to invoicing and charging of fees
- And most importantly: concluding information on matter closing,
containing the names of those involved, the contracted and actual
amount charged, phases/stages/developments, key documents
produced, areas and Lawyers engaged/involved and their respective
roles.
All Lawyers (and also partners) are usually concerned with two aspects in
the life of a matter: its immediate opening in order to commence with the
instruction/work, that is, creation and storage of documents in DMS and
the recording of hours on the timesheet (for those who have those
controls), followed by the closing of the matter in order to avoid the
recording of hours on the timesheet.
This time pressure on those two aspects basically generates two very
adverse and nefarious/harmful behaviors in the mid and long term which
are:
- The apathy towards the accurate and complete filling out of the
information captured on record, as at the time, what is important is
“to open the matter” and
- The postponement/procrastination in the filling out of final
information to close the matter, given that at that juncture, what is
important to avoid is the recording of hours and work/tasks by
professionals that can no longer be invoiced.
All these pieces of information will further be used with the aim of
creating new proposals, to generate records of operations for the purpose
of the institutional marketing and knowledge management, in addition
providing BIO´s for professionals, also for the benefit of knowledge
management itself, etc.
TIMESHEET, OH, TIMESHEET!

The most frequently

uttered word, desired(by few , hated by most/many and that should be
adored and worshiped by everyone!
Very few businesses can afford to have so few, yet important management
indicators and tools as Law have in relation to the Timesheet. Other
companies/businesses have to be managed with production reports (PCPs),
stocks (ABC curves), optimization of strategic resources, production
logistics and distribution, representatives, which are obviously in addition
to all other economic and financial reports/indicators, etc, etc.
Law, mainly in corporate firms, has in the timesheet a single and complete
management tool (except those that are exclusively financially oriented )
and its correct application may provide the most extensive vision of the
business. It is a pity that not all office leaders give the necessary recognition
to this modest procedure that is very simple to implement and even easier
to execute.
A Timesheet is basically a an accurate record of client mandated activities
conducted by their properly equipped/skilled legal representative, who
devotes their time to each task, that is time spent on the task (such as
contract drafting, litigation etc.) , in order to execute the mandate.
Bearing in mind these basic pieces of information plus some in addition ,
such as the collection fee of each professional and his hourly charge-out
rate, the sector in which this professional practices , the classification or
seniority of each professional, the unit, branch or center he belongs to, and
the kind of job/task/activity the professional performed (this is a novelty
introduced by the international systems of electronic billing where each task
receives a specific code called “LEDES”), the timesheet turns itself into the
following tools which are at the disposal of the manager:

1-) As a result, this team management tool can (and should) estimate:
- The performance/efficiency by comparing the time spent on each
task and the expected or time normally spent to perform each task
per [type?] of professional.
- The devotion to compare the downturns] versus the established
goals.
- The consistency between the type of work and the experience
(seniority) of the professional.
- The distribution of the tasks depending on seniority
- A better distribution of the staff in order to minimize
downtimes/inactivity.
2-) Moreover, as a management tool in relation to client matters can (and
should) estimate:
- Which work/task is being elaborated on each matter or client.
- Which professionals are involved.
- How the work is progressing.
- The time estimate to conclusion or what the next steps are.

3-) As cost planning and control tool, estimating:

 - The amounts spent in terms of the costs of the working hours of the
professional versus charged amounts (mainly in cases where fixed
charges apply).
- What the best allocation of the team in matters would be, assigning
professionals that are well-acquainted with the complexity and
appropriate for the amounts charged.
4-) Further, as a budged support tool is able to:
- Collect and estimate previous cases, analyzing the amounts charged
, costs generated, teams engaged and mainly/above all, the results
that were achieved.
5-) As an estimating tool of Performance/efficiency per team, sector, area,
cost centers or branch:
- Profitability in relation to the financial controls and allocating of
costs.
As already mentioned, the simple exact execution of the work/tasks
performed by all professionals in a single system provides a very powerful
tool in the management of any Law firm.
If it is so simple, very powerful and efficient, then why does everybody
not adopt it? The answer is not so straightforward and subject to several
analyses, with the first and most obvious one, given that it is a repetitive
task, it is very “boring” to perform. As it is boring, the professional tends to
procrastinate and delay its execution and this behavior ends up becoming
one of the worst problems because if not done immediately at the end of the
work/task, they forget and cannot recall the details accurately and also
forget the other small tasks that were executed.
In addition to being boring for those who should do it, the task of
reviewing and checking by the team coordinators requires very hard work,
but if correctly executed and checked, provides a highly detailed report of
the work done for the client, which is an important aspect that determines
the client’s satisfaction or dissatisfaction.
Another issue is deeming it to be unnecessary, mainly in the case of fixed
charges or billed by steps or processual phases and by professionals who
earn fixed salaries. Contrary to what it may appear, it is exactly in these
cases where the figure on the timesheet can clearly highlight where the
positive and negative results are, thus preventing blind management in a
“whole” that may potentially be fatal to the business.
The following figures illustrate the effects of bad timesheets compiled
after the fact as Ballefield Systems. LLD survey, presented at ILTACON
2016 by L.Dwight Floyd, scientist and author, former KM director at Paker
Poe, Law Firm from North Caroline, US.

Source: Bellefield Systems, LLD

In other words, there is loss of accuracy of entries by 15% after the first
day of following completion of the work, and by 25% after 2 days.
Another graph illustrates this in another/a different way:
Source: Bellefield Systems, LLD

That is, the quantity/amount of write-offs on timesheets increases

substantially as the speed of entries decreases, reaching a percentage that is
68% higher in write-offs when the entry is made 7 days (or more) after
the work/task was performed.
COST APPROPRIATION - ACCOUNTABILITY
Keeping in mind the focus and objective of this book, which is to discuss
the efficiency, productivity and competitiveness of Law firms, we must
approach/explore the theme of control and cost appropriation.
Regardless whether these pieces of information will be used in the
evaluation and relativization process of partners, sectors or teams (a topic
discussed in chapter 8), the complete and detailed knowledge of the use
and destination of the company’s resources is of paramount importance for
it to be able to achieve/attain effective management.
The first and most important point to consider by following the thinking of
correct creation of the basic records to obtain reliable reports, is the creation
of the detailed financial account plan so that all expenses (expenses and
costs) of the institution are duly classified/categorized, always bearing in
mind the final/ultimate objective of these controls, which may vary from
one company/business to another.
Making distinctions between direct and indirect, fixed and variable costs,
institutional and eventful/contingency? expenses are basic. In corporate
firms clear identification of sectors and teams is essential for the further
analyses of efficiency and productivity.
Another important item in/aspect of accountability controls are the
definitions of the criteria for the fixed cost appropriation, that is, how the
“share” of the fixed costs is divided and appropriated to each cost/revenue
center the institution is comprised of. The main criteria used in those cases
are: the appropriation by use of space (a classic example of this is the rental
costs); per capita appropriation that is, by the number of the professionals
who uses some fixed cost resource (an example is the apportionment of
costs of internet links) and the appropriation proportional to the revenue
generated by the respective cost/revenue center. This is a social criterion, so
to speak, where “those who have more, pay more) and an example to
illustrate this criterion is the institutional expenses!
Obviously, everything mentioned about this aspect is, and must be adapted
to the reality of each company and to the objectives for which it is
intended.
Example 1: Summarized Finance Account Plan

Example 2: Sectorial Appropriation Spreadsheet

Origin of Data and Information

HOW TO CREATE A FULL-QUALITY, STRATEGIC-

OPERATIONAL DASHBOARD

The dream of every Law Firm Manager(s) is to have a complete set of

strategic, operational reports available containing all relevant (and no more
than) business to help you make timely and timely decisions and stay
competitive.
With society's behavioral shifts and the ever-increasing demand for agility
from Corporate Legal Services consumers, this dream to be complete needs
to come in the form of a "DASHBOARD" (as I've been repeating, word in
vogue lately) complete, accurate, reliable and mainly agile and friendly. It is
no longer acceptable that in a so-called "c-suite" meeting the request for
some specific training of any managing partner has to wait days or hours to
be produced by the back-office because of its specificity.

Apparently simple because it is a service provider and does not have a

series of complicators existing in the Industry, for example (stocks of raw
material, finished products, tooling, machinery, etc.) and have only three
large repertoires of information, things are more complicated than they
seem. The basic difference lies in the fact that much of the relevant
information is unstructured (re-presented by texts) and tacit (knowledge).
The following figure shows a "mind map" that helps to better understand
the complexity of the challenge:
Being the main sources of information in Law Firms:

INTERNAL:
Structured: ERP systems.
Explicit Unstrutured: Texts, Documents, emails, messaging (ex.Whatsapp).
Tacits Unstructured: Knowledge Management Systems.

EXTERNAL:
Structured and Unstructured: Big Data
In view of the big picture, let us in this discussion dedicate ourselves only
to obtaining the internal information (the big data discussion will require a
specific discussion on the subject). We will look at the procedures and
challenges for arriving at the correct, reliable and relevant information in
each of the three repertoires and how to bring them together in an objective,
clear, friendly and iterative way.
Workflow for Structured Information – data bases
Workflow for explicit unstructured information – texts
Workflow for tacit unstructured information - knowledge
After passing through the three flowcharts and arriving in each case to the
information (remembering: accurate, reliable and relevant), we came to the
conclusion that everything depends on the information contained in the
registers, its and its acuity and reliability! The final step is to aggregate and
organize them according to your relationship, and ultimately to use an
intuitive, intuitive, intuitive creation, management and presentation tool for
the c-suite. Just by way of example, I mention three of them without merit
of classification or evaluation: QLIK SENSE, TABLEAU and POWER BI.
This discussion was not intended to define what this information is, since
each business has its own "mix" or even define the best form of its
presentation, for the same reason. What is important is that each office finds
its formula to achieve and its way of aggregating its information reliably,
accurately and with quick and friendly access to serve as a basis for the
decisions necessary for its survival

EXAMPLES
Example 1 – Overview
The following example shows a set of graphs generated with data extracted
from the ERP system (invoicing, accounts payable, accounts receivable,
and timesheets) and gathered/compiled for the purpose of an overview of
the company.
In this “dashboard” report ´the managing partners are able to quickly:
1 – Analyze the client’s portfolio by means of the graph of the 20 highest
invoicing matters in a given period.
2 – Get a profile of the “Accounts Receivable” with amounts (not shown)
and “aging”.
3 – Access cost structures by big/the size of entries (as per the defined
account plan)
4 – Assess monthly Evolution of Revenues, Expenses, Total Costs and
Fixed Expenses.
5 – Obtain a profile of the team per category [type].
6 – Gauge the evolution of the hours recorded and invoiced and the team
size (essential for the entire team to adopt the timesheet?] the adoption of
the timesheet by the entire team)
7 – Draw a comparison between the averages of hours recorded and
invoiced by each area that performed the work (it may be done by type of
professional, cost center, etc.).
This example, although it may require hard work t if prepared manually,
given that it is dependent on the extraction and collection of data from
systems that may not be integrated, could be done by a firm of any size
and do this, one simply needs to have correct/accurate records,
implemented timesheets and Microsoft Office (Excel).
Where:
1st quadrant (upper left): “Faturamento” = Billing- 20 largest clients
2nd quadrant (upper right): 20 largest debit balances (with aging)
3rd quadrant (middle upper left): Costs structure
4th quadrant (middle upper right): Revenues versus Costs + Expenses
5th quadrant (middle lower left): Team size by practice área
6th quadrant (middle lower right): Monthly average hours (posted x billed)
7th quadrant (lowest): average hours by practice areas (posted x billed)
In the following examples of “dashboards” a specific market tool was used
to create and show, quickly and intuitively, the necessary managerial
information and that supports the operational and strategic decisions of
any company.
In the following examples 6 tables of existing systems were extracted and
collected in order to show three different views: A strategic view (example
2); a productivity view (example 3) and a view of the use of documents
(example 4).

EXTRACTED INFORMATION
RELATIONSHIP BETWEEN THE TABLES
The QlikSense tool was used in all of examples, but there are others
available in the market with similar characteristics and with billing policies
according to? different licenses ( I highlight Tableau and MS Power BI,
only as examples).
The positioning of the evolution through these tools in Gartner’s quadrant
of the last two years is shown below:

GARTNER – BI & ANALYTICS

GARTNER - DATA SCIENCE
Example 2: Strategic Analysis
Example 3: Productivity analysis
Example 4: Use of Documents
Here, it is necessary to be reminded of the importance of the latter
Dashboard. Obviously for services charged by the hour, the cost of
producing documents is embedded in the hours charged by Lawyers, but
for work charged at fixed price, knowledge of the costs to produce each
document may be the difference between making or losing money!
Other institutional indicators (that may be incorporated into/demonstrated
by way of auxiliary dashboards) are:
- Published works (academic)
- Articles published in the media (who generated it and which media
outlet)
- Visits to own website (Google Analytics)
- Followers on Linkedin (corporate and of professionals)
- Events presented/hosted
- Speeches given

UTBMS CODES
Created in 1995, the Legal Electronic Data Exchange Standard, also
known by the acronym “leeds”, is an initiative of
PriceWaterhouseCoopers that had, as its objective, the standardization of
electronic formats in order to facilitate data exchange and transmission in
the North-American legal market. From that time onwards, several “e-
billing” systems and invoicing information concentration sites have been
created such as: Serengeti (currently Legal Tracker), TyMetrix,
CounselLink, etc., (similar to the “CNAB” code used to generate bank
[notes?codes?] in the Brazilian banking system).
As part of the same initiative, coding for the services of legal professionals
was created with the purpose of “desubjecting” (I know the word does not
exist), the description of the activities executed by them, thus enabling the
creation of statistics with which to make comparative analyses.
This coding is known by the acronym UTBMS , which stands for Uniform
Task Based Management System, and although it is not obligatory and
still only very occasionally /rarely used in Brazil (only by those offices that
have international clients and that use said electronic systems to capture
invoices), my suggestion is that we should begin to use the system in order
to also make use of statistical analyses.
The change needed in timesheets is extremely simple (I have done that at
the previous firm I worked) and it does not impact the “Lawyer’s life” at
all.
Examples of UTBMS coding.
(more codes at www.utbms.com)
 CHAPTER 6
INFORMATION GOVERNANCE
INFORMATION GOVERNANCE STRUCTURE
Source: Devevoise & Plimpton
ELEMENTS INVOLVED IN KNOWLEDGE MANAGEMENT
Note that knowledge is not restricted to the internal aspects of a business
but instead, to all relevant knowledge it interacts with and is affected by,
as we will see below. What I want to highlight in this graph is the existence
of the bigger rectangle that involves everything else represented by
corporate search systems.
There will be no result at all in the implementation of a knowledge
management philosophy if there are no information indexing systems
according to criteria that is relevant to the company and which are mainly
highly intuitive and user friendly search systems.
I suggest Law firms use the following main indexers of information
contained in their repertoires:
Client; Subject or case/matter; Folder or storage location; Type of legal
document; File type (office, e-mail, pdf, photo, etc.); Author (internal or
external); Source / Origin; Legal Area; Legal Theme.
Obviously, there are tenths of other indexers, but it is always good to keep
in mind that, if one the one hand a big quantity of indexers facilitates the
search, then on the other hand/conversely, it makes correct recording
something that would be difficult to do. (this subject/topic was discussed in
the previous chapter when we spoke about records).
There are new systems that starting to emerge in the market use cognitive
intelligence tools, making the automatic indexing process and the searches
much more intuitive (chapter 9).

THE HISTORY OF DOCUMENT MANAGEMENT SYSTEM -

HOW THE FIRST DMS APPEARED

For decades I have been following the concept of Electronic Document

Management and its importance for Knowledge Management in any
company and more specifically for Law Firms.
My first participation in ILTACON, at that time still called "LawNet", in the
year 1996 to search corporate fax systems, when the first e-mail addresses
on the Internet began to be used in Law Firms.
I went to search for this system (deployed in Demarest that year) and I
came across a new world, until that moment totally new for me and for
almost all Brazil. He recalled that it had been only a few years since he had
left the so-called "Informatics Market Reserve" (created in 1984 and
terminated in 1991 with a law sanctioned by then-President Collor).

As the first "non-North American" to attend these events I fell in love with
the topic of Knowledge Management, but I was always very curious how it
had started there and again I went to research and discovered something
very interesting.

The concept of Document Management System (GED for Brazilians)

started with the company SoftSolutions, in Chicago in the year 1984
(Chicago ABA).
SoftSolutions, in 1981, had already developed an ERP System called CLO
(Comprehensive Legal Office) for a firm called CMS Data, but there was
still nothing to do with document management. It was in the CLO
demonstration at the American Bar Association conference in Chicago in
1984 that the concept came about.

In that presentation, the attorneys present

at the CLO demo suggested that it would be very good if, in addition to
seeing and researching their system time-billing (ERP) managerial infor-
mations for each subject, they could also view their documents.
At that time document management was only by word processing
departments (Word Processing Centers) and it was common for departments
in the United States to have dozens of people just for typing texts, an
evolution of typewriters. The software used was Wang, IBM Displaywrite,
and Lanier systems.

SoftSolutions then expanded the GED convention to every firm, including

lawyers and secretaries through WordPerfect 4.2 through the Novell
network and Data General Mini Computers. In 1994, SoftSolutions
accounted for 54% of the global GED market (Gartner Group data).

As the company CMS Data did not have the rights to trade the so-called
"SoftSolutions DMS", only the ERP system (CLO), it eventually developed
its own product, PC Docs, which became Docs Open and now is the Open
Text.
Over the years this system (CLO) evolves and has been perfected and is
now known as ADERANT, one of the important ERP players in the
American market.

The company SoftSolutions was purchased by WordPerfect in 1994, and

that DMS system was eventually discontinued by WordPerfect. This ended
up causing caused a huge market space and iManage company seized the
opportunity and launched a DMS based on the three-tier-architecture
(client-matter-folder) and hiring SoftSolutions employees in technology,
marketing, and sales and launched iManage.

Another curiosity: the company iManage initially (in 1998) owned by an

Indian-American group joined the Inter-woven (2003), later acquired by
Autonomy and this finally by HP (renaming Products for Worksite and
Desk- site). In 2015 the product was again acquired from HP by iManage,
returning to its origin.
In 1997 Ken Duncan, Lee Duncan and Alvin Tedjamulia, SoftSolutions'
original owners founded NetDocuments, and countered the original
SoftSolutions engineers. The company then decided to take the concept of
Electronic Management Documents of "word processing center" and use
the management database technology and launched its DMS innovative
absolutely way for the time, ie 100% in a cloud.
NetDocuments was inaugurated as Cloud GED in 1999 and today, after 20
years is one of the four major players in the global market for Electronic
Document Management (iManage, NetDocuments, OpenText, WorlDox)

DIFFICULTIES IN SEARCHING FOR INFORMATION

Imagine the following situation and then try to remember if you have not
met it many times already: "I wrote to the client" X "a query on the subject"
Y "by writing about" W "in the format of" Z "about" N " "Months ago",
where:
"X" can be: customer, prospect, other party, newspaper, publisher, co-legal,
etc.
"Y" can be: any large area of law, ie, fiscal, social, labor, etc.
"W" can be: ICMS, liability, ineligibility, and an in-finity of other issues.
"Z" can be: e-mail, letter, article, legal opinion, consultation, etc.
"N" can be: days, months or years.

As jobs are similar and repetitive in the life of any lawyer (basically it's
your job to write opinions or legal advice), it becomes very difficult to
remember all the variables and it becomes increasingly difficult as time
elapsed between the act of writing and the need (variable "N" above)
becomes greater. The other difficulty appears when, in addition to having to
remember the first part, you still have to remember "WHERE" that
information was stored, that is, in your HD, GED, cloud, email, etc. !

Now answer me: Has it happened to you yet? How many times? And most
importantly, how long have you (or someone) been slow to find?
From my experience, having lived for 28 years in Law Firms, I can say with
a great chance of guessing that most of the time your memory will deceive
you. I pity the trainees in the past who had to "guess" what the lawyer or
partner actually went out looking for when they were asked to find it.
Example of requesting a member to the trainee or to the knowledge
management sector (if any): please [find for me urgently a legal opinion
that I wrote to the client "Company A" on the subject "IPI" talking about
"incidence on chocolate products in interstate and inter-national sales,
"about 3 months ago].

There is a great chance of being found, for example a written email to the
other company about the IPI tax rate on chocolate products last year!
Incredibly, the greatest difficulty in the search for information is not in the
procedure or form of the search nor in the existing search system, but to
know exactly what information we are seeking and where it can be!

The second biggest difficulty is how to look, that is, how friendly the
system is!
All good search engines accept so-called Boolean connectors, ie, "E",
"OR", "NO", and wildcard characters such as "*" (asterisk) and "?"
(Question mark ), but its use is not intuitive or friendly. For this reason so-
called intelligent search engines have developed algorithms that analyze
users' queries and learn from the past and the user profile thus minimizing
the need to use this method. It's these algorithms that suggest books we like
when looking for something on Amazon's website.

So-called search engines have evolved a lot in recent years. At first it was
only possible to search the created index fields, creating the need for huge
registration forms or the word in the text, generating slow searches with
uninteresting results.
After a certain time, the engines evolved and allowed the creation of
dictionaries of terms or glossaries so that similar words were found
(example: look for the term letter and it also finds correspondence,
memorandum, ticket, message, etc.).
Currently, with the annexation of Artificial Intelligence in search engines,
this has become almost completely automatic, making life much easier for
system administrators, knowledge managers and the users themselves.

In the example cited, the new intelligent search engines have already
learned that that particular partner is interested in (or writes) about IPI, also
knows that it is his client that produces chocolate and that he, partner,
usually give his (simple statistics) opinions in the form of e-mail. Simply
putting the words IPI, Chocolate, and opinion in the search field, with a
huge probability, would bring exactly that document he sought without the
need to involve another person in the search. Much simpler and much more
efficient.

Some search software already brings along the list of documents that meet a
certain search condition, the percentage of probability of success, or a
visual bar of intensity (such as those that appear on our cell phones
indicating the intensity of the 4G signal, for example), demonstrating the
accuracy of the responses to that research.

Let us always keep in mind that the time in the production of documents
(obviously includes the time spent to find information that will compose it)
is a determinant factor in the efficiency, productivity and competitiveness of
legal service providers.
To achieve this, correct registration and correct choice of information,
good organization of the same, associated with an intelligent corporate
search system are not optional, are required for survival.

KNOWLEDGE MANAGEMENT (KM) – CROSS-SUBJECT

PROCESS
I always reiterate and reinforce the pragmatic objectives of this discipline ,
namely the productivity increase and efficiency in all productive processes
with the consequent increase of competitiveness and profitability (in
addition to the traditional objectives collection, maintenance and sharing of
entrepreneurial knowledge).
In Law, the so-called “expertise” (which is no more than knowledge) clearly
defines the capacity to charge fees and also the degree of recognition by the
market, allowing certain specialized Lawyers to charge as much as GBP
1.500,00 per hour in London, and here in the ‘tupiniquim’ land R$ 9.000,00
per hour!
(again: ‘tupiniquim’ is it´s a name of one of the first indian tribes in Brazil
in the past and a Brazilian expression to describe a something that happens
here )
So, the question is: how to reach higher degrees of knowledge, productivity
and profitability? In theory, the thing may be simple, that is, just
implement the virtuous cycle,, but as always, it is not that simple, as, in
order to successfully establish this cycle two fundamental things are
necessary: - (i). the company (or the Law firm) needs to have, or needs to
implement the so-called “learning organization” culture where all the
participants have in their mind that they are in a process of constant
learning and that each new piece of knowledge, process or good idea
absorbed adds a competitive advantage to the company, and – (ii) that
practically all the sectors (or departments) of the company need to
participate in order for it to be effective.
The cross-subject team that must head and coordinate the entire
implementation and maintenance process of the “Knowledge Management
philosophy” in the company (or Law firm), should be made up of:
1 – The fundamental part of the KM implementation process is
“sponsoring”, and the active participation of the company’s high-
levelmanagement (called C-Suite) in the process. As any change or
innovation involves changing of behavior and habits of people, it is [itself?
the process itself?] that will provide the motivation and incentive so that the
organization embrace the process.
You may have noticed that I wrote “process” twice, but did not write
“project”, and this is because KM is not a project with a beginning, a
middle and an end stage, it is in fact, a perennial process to be incorporated
by the organization, perfected as time passes, but never continuous.
2 – As we are speaking about motivation and engagement, the participation
of the People Management sector (each company has its own name for it) is
very important, which given that it knows the team very well, will be the
multiplier and facilitator of this change in behavior.
3 – Of course, participation by the company’s production sector will be
necessary (in Law firms, i.e. the Lawyers of each of the practice areas) so
that they can effectively define which data, information and knowledge
must be catalogued, indexed and made available, which processes, practices
and procedures must be the focus of attention and which professionals with
this tacit knowledge should be involved .
4 – The sectors that coordinate and keep registries, libraries, files, norms,
manuals and profiles of each professional (the Documentation Centers) are
also an important part of this team, as they are the ones that will have the
task to take care for the updating and integrity of all those pieces of
information.
5 – Last but not least, it is the IT team that will have the hard/difficult task
of creating and implementing operational tools in order to have everything
done/functioning. One should highlight the importance of this sub-team that
will practically be responsible for the success or failure of the entire effort,
as the operation of all the tools necessary for the process, going through the
Board’s disclosures and research, training modes and infrastructure,
information capturing and digitalization systems (documents, photos,
videos, etc.), organization systems, cataloging and indexing of the entire
process, and mainly the task to conduct research on intelligent systems and
the use of the stored knowledge.
Source: author
In my humble opinion, I dare predict that in a very near future, those
cross- subject teams will become one of the main departments in
businesses, being responsible for, in addition to their normal repertoire,
supplying all the vital information to all other departments, for instance
operations, marketing, finance and strategy.
 KNOWLEDGE
MANAGEMENT IS AN ONGOING PROCESS OF REFINEMENT
Knowledge is the most valuable asset that a company/business can have.
Please, note that I use the word knowledge and not information, that I
related it to an asset and also wrote “ can have”, instead of “has”, because
knowledge is totally different from information and, in order to have it, a
business must prepare and organize itself (according)to it.
We have never had such easy access to information as we currently have
(every search tool on the internet usually responds to a search with
thousands of documents, in a [time that is hardly longer than one second/
fraction of a second]), but this does not mean that the companies/businesses
are more efficient or productive than they used to be 10 years ago as a result
of this. . So, what is the purpose of so many pieces of information?
The precise/accurate identification of the relevant information and mainly,
its practical use incorporated into the company’s products and services, are
the factors that will boost it in the market. The information will only be
useful if selected, addressed, organized, internally distributed and with its
practical use being stimulated. The information so/thus selected represents
the knowledge within businesses, and the process encompassed by its
identification and its practical use is the management of this knowledge.
Font: author
By making an analogy with regard to the tangible assets of a company, the
investment decision in relation to those assets usually aims to
increase/optimize production; to decrease production costs; the
manufacturing of new products; the incorporation of technological
innovations, that is, the creation of a competitive advantage of its products
in relation to its competitors.
The “asset” that we are referring to is the following: to know the market
better than the competitors and promptly respond to its demands; to quickly
get to know the weak and strong aspects of its competitors; to get to know
and quickly incorporate the technological innovations in their products; to
know exactly where [and how?] the data and information that belong to the
company/business are located, and finally, to get to know the persons who
hold the relevant knowledge in the company.
This is the knowledge that represents our asset!
In today’s market, products are increasingly made “homogenous” and, at
the same time, specialized in accordance with the needs of the different
segments and stratifications of society. Furthermore, these differences are
becoming more and more subtle, and the agility in the identification of
those specific needs and the speed in with which these small competitive
differentials are incorporated into their products (and services), is what
positions the company at the forefront of the market. It is in this context that
knowledge and its management is placed.
One of the classic examples of the practical use of the knowledge
management is one presented by one of the biggest global supermarket
chains, where all the purchases by its consumers are tabulated, organized
in several ways, and this knowledge is used as a base for all the company’s
decisions, from purchases to inventories, stratification and distribution of
the products to its branches, including its sales promotions.
The decision to investment in assets is normally based on the return on
investment (ROI) for a given period, a calculation based on the expectation
of the increase in revenue as a result of that investment. Also, in
knowledge management there is the expectation of the increase in revenue ,
however, the process is inverted, that is, what is calculated is the investment
due to a return rate (i.e. the maximum amount to be invested).
In other words: in the first situation, the investment is known (new
machines, plants, systems), the increase in revenue i.e. what is expected
and the calculated ROI, which is when the decision is taken. In the second
situation, what is calculated is the amount of the investment to be made by
taking into consideration the same variables.
Simple as that? Absolutely not!
Just to get an idea about its [inherent] complexity, consider that
knowledge management:
(i) involves all the company’s processes (from market
surveys, going though purchases, materials used,
constructive processes, storage, distribution and even
marketing and sales);
(ii) mainly involves people and their knowledge;
 (iii) impacts the company’s results as a whole; and
(iv) is a work philosophy, and that is why it should be
incorporated into the way of thinking and attitude of all
the people in the company, and finally, the investment
decision is the part of it that is mixed/combined with
the investment decision on/in relation to other assets.
The decision to “invest” and “how much to invest” in knowledge
management, in fact, is not an unique circumstance that occurs from time
to time as is with investment decisions on other assets. It is a continuous
and an ongoing process in which all the daily decisions always consider the
use of processes that contribute to the strengthening of the main company’s
asset: its knowledge. As it is ongoing, this decision process in fact becomes
a concept or a philosophy about where and how to invest the (usually)
limited by funds a company has at its disposal. It is an ongoing “ process of
refinement”, where the previous learning/experience is used to base the
future decision on.

INVESTMENT CAPABILITY FOR INFORMATION SEARCH

TECHNOLOGY - (SEARCH ENGINE)
 Source:
ClipDealer

The investment in the acquisition of a machine to increase production is

only justified / approved if this expected / calculated increase creates an
extra monthly cash inflow that is placed in the IRR or ROI calculation
equation against the investment, produce a rate of return than a financial
application, for example (economists forgive me for very simplified
reasoning).
In the Right, things are not so simple! It is not a machine but a human
being, and expectations of increased production are not accurate or easy to
determine. When adopting new software that aims to increase work
efficiency, it becomes very difficult to determine what this increase will be
(or decrease the time a professional will experience with this new system in
the elaboration of his tasks). It is even more difficult to determine whether
this "spare" of time will be used by the professor for other billable tasks, or
whether he will simply use that time to "have a coffee" and rest, for
example.
The "approach" then should be a bit different. First, one should make a
careful analysis and identify which or which tasks have deficiencies and
which can or should be optimized. The most common example are those
tasks used in the mining of the information necessary for the production of
the piece and that will base its production and the adoption of an intelligent
search system that speed this search is an essential factor for the increase of
efficiency and productivity
We know that investment capacity varies in terms of size, profitability and
business policy and that most of the time, resources are not left over. Worse
still, in law firms, these resources are theoretically intended for the
compensation of the members and investment decision is equal to the
decrease of member remuneration.
The correct way is to define the possible investment capacity, analyzing the
time savings that can be generated from the implementation of some
solution and estimating how much of this savings can be directed to new
billings. In this way, the investment is supported by the revenue increase
itself.
McKinsey published in 2012 a study showing that "kno-wlegde workers"
spend about 1.8 hours a day searching for documents and IDC published
statistics (shown below) where de-monstra spends about 11, 2 hours a week
dealing with document creation issues.
Source: IDC
Let's take a simple example to calculate the investment capacity of a law
firm. We will take as an example a law firm composed of 50 lawyers and an
average hourly rate of collection of fees in the order of $ 500.00 / hour and
analyze their investment capacity in the implementation of an inter-search
system.
Imagining that we can save for each professional, about 30 minutes a day in
the search for information with this search system and that conservatively
only half of that time will be directed to new jobs (the other half the lawyer
will take one coffee).
In this way we will have the following account:
50 (professionals) x 15 minutes / day x 20 working days x $ 500.00 = $
125.000,00
In other words: A saving of 15 minutes a day in the search for information
and this time directed to new jobs and new invoices (remembering that the
other 15 minutes will be used for coffee) generate a potential increase in
gross revenue that pays any possible time off investment in technology for
document generation optimization!
Make your own accounts and determine YOUR investing ability!
KNOWLEDGE MANAGEMENT IN THREE WORDS: COLLECT,
COLLABORATE AND CONNECT!

I have regularly written and shared

discussions about the need to adopt, especially in Law firms, the concept of
Knowledge Management (KM) as one of the weapons (maybe the most
important one) that should/must be used in t strategic, marketing and
operational management, thereby significantly improving the firm’s
readiness to face the prevailing competition and its adaptation to the
technological future that is making great strides.
KM is not a software unit/program that is installed and then simply put into
operation. It is a concept or a philosophy to address the knowledge
acquired by the company in its entirety, and also the entire externally added
knowledge relative to the activity of that company/business that:
- Involves all the company’s processes (from market surveys, going
though purchase, materials used, constructive processes, storage,
distribution and even marketing and sales);
- Mainly involves/entails people and their training;
- Its use affects the company’s results as a whole; and
 - It constitutes a work philosophy, and for this reason must be
incorporated into the mindset and attitude of all the company’s
entire workforce, and finally, blended in with the investment
decision, is the investment decision in relation to other assets.
This philosophy, in order to be incorporated into the company [ethos],
needs to have at its core some other existing processes or previously
implemented processes, so that it may be an effective:
- “learning organization” concept in which all the members have in
mind/a mindset that ongoing learning represents a predominant
factor for their development.
- “collaborative environment” concept, in which the members share
their experiences and their knowledge.
- “innovative company” concept, in which the company fosters the
research and development of new products, processes and
procedures to increase its efficiency and competitive advantage.
The words “connect” and “collaborate” are closely connected and represent
the entire process that provides the stimulus for the democratization of the
existing tacit knowledge in order to make accessible by all the company’s
team.
In turn, the word “collect” represents all the technological apparatus
involved in the tacit knowledge explanation/elucidation processes, its
organization and its delivery to all concerned, by simple and intuitive means
of survey and utilization.

In summary:
KMOWLEDGE MANAGEMENT HAS TO DO WITH: CONNECTING
PEOPLE TO ONE ANOTHER, TO INFORMATION, TO
KNOWLEDGE AND TO PROCEDURES, ALL COLLECTIVELY
ORGANIZED AND INDEXED WITH THE NECESSARY
TECHNOLOGY NEEDED FOR ESTABLISHING THOSE
CONNECTIONS.
KNOWLEDGE MANAGEMENT & BUSINESS INTELLIGENCE
These two areas that appear unconnected, apparently isolated areas are in
actual fact closely related for companies that provide services, and
especially for Law firms.
Traditionally, “BI” is viewed as a tool used to thoroughly understand the
business, extracting from its data the statistics that can give a clear analysis
of how “things” are going; to show trends and to provide the foundation
for strategic decisions that will impact the future of the company. Perfect!
Now, Knowledge Management is a relatively new concept (mind you, I did
not say a tool!), which involves more tacit information and less numeric or
explicit than BI. However, in my humble opinion I am of the view that it
represents a fundamental difference in the way/approach through which to
obtain the strategic differential in the present and for the future, mainly to
the providers of intellectual services and again, especially to the Law firms.
As mentioned before in (my) other articles, Knowledge Management is
still only beginning/taking off in most companies, being blended in with
drafts (repositories of document templates) or even disregarded and merely
seen as simple activities of document compilation, norms, templates, etc.
and still remain an activity under the exclusive responsibility of the
libraries or the CEDOC´s. A colossal mistake!
Knowledge management is “To deliver the correct information to the right
professional in the shortest period of time”, according to the author Patrick
DiDomenico, and it is within the scope of this much more comprehensive
definition and most of the other dozens of definitions, that “BI” becomes a
very important ally.
We usually associate Knowledge Management with the following
questions which it should answer:
- What is the best document I should use for this topic or solution to
the challenge?
- Where is this document?
- Who prepared it?
 - Who has the necessary knowledge to address the matter or the
problem? With this being the most difficult question to answer!
But, there are some other questions that are much more important from the
perspective of pricing of their work, which is mainly a strategic question ,
that can only be answered through a combination of “KM” and “BI”!
Again, I am going to focus on Law firms, the combination of the
information contained in the timesheets, in the previous invoices, on the
clients’ record sheets, their respective cases/matters and on GED
(electronic document management), we can obtain statistic information that
may answer much more complex questions, such as:
- how much time did a professional use to elaborate a particular
document?- - what documents are, or were part of a given task?
- what “ tasks” were performed in a given case/matter or topic and by
whom?
- what is the statistical distribution of the types of work/types of task
per client, per case/matter, per market niche that the Law firm
performs, and per type of professional?
There are several other questions that can be answered, depending on the
specific characteristics of the type of business, such as what its habits are,
and what charging forms/models it is accustomed to. And therein lies the
danger: The habit is the enemy of innovation!
By answering these and other specific questions, the ‘marriage’ between
“KM” and “BI” can, and should help companies/businesses a great deal.
Again, also help Law firms:
- To improve their methods of elaboration of fee proposals and
pricing of their work (substantially decreasing the “safety
coefficient” that is inserted into all the proposals due to
uncertainties);
- To have a clearer vision of the efficiency of their sectors, teams or
professionals (including per category), improving their assessment
systems and “accountability”.
- To better support the “cross-selling” decisions.
- To support the strategic decisions of investment (in a broad sense,
that is, efforts in areas, sectors, teams, contracting, etc.) just to
 mention a few ...

STRATEGY AND KNOWLEDGE MANAGEMENT

There is one thing we already know for certain: The recession is here!
The [first] question foremost in our mind is: What should we do to
face/combat it?
The answer involves some changes that we will have to make, as well as
several attitudes that we can and must adopt in our companies/businesses (
to my mind there are several and will be addressed in my future
discussions/later on), but for now I would just like to explore some of the
ways Knowledge Management can and should be used in the process of
adjusting existing strategies, and also the defining of the new strategies
that a modern Law firm should adopt and follow in the “rough times”
ahead!
In order to better understand the correlation between the two areas, - the
theme of this article- we should address the concept of Knowledge
Management [KM]. And for us to get/form an idea of the scope of the
topic, we can look at several definitions of “KM”, all very good.
Just for purposes of illustration , I mention the definition of Melisse
Clemmons Rumizen, as the systematic process that creates, captures, shares
and leverages the knowledge that is necessary for the success of a company.
The other definition I refer to is by Carla O`Dell and Cindy Hubert who
state that it is the systematic effort that allows the information and
knowledge to grow, to flow and to create value for the company.
And being more objective and pragmatic, I prefer the very well adapted and
stated concept by the author Patrick DiDomenico, in his book Knowledge
Management for Lawyers, where he summarizes the concept of knowledge
management: to deliver the right information to the right person and at
the right time!
By adopting and applying this concept in the analysis of all the explicit and
tacit data and information that exist in the scope of all the departments of
one company/business, we can surely consider/accept that all this “mass of
information” forms the main base to be addressed by Knowledge
Management. In the (virtuous) cycle of “KM”, the information is
addressed, organized, indexed, distributed in order to for it to be used, and
in the end , kept and updated to feed back to/fed back to? the cycle,
functioning to provide grounds/bases to leverage the critical decisions of a
company/business. In other words, “KM” goes far beyond the drafts and
the creation of the storage areas of standardized models that some Law
firms have been using on their intranet. These are pieces of information
that were usually regarded as being solely and exclusively under the
responsibility of the Financial, Invoicing/ Accounts Receivables and
Human Resources departments.
1- As a first example, we can mention/consider/look at how the lifecycle
of a client matter is treated (“matter lifecycle”).
Traditionally the subjects/matters?client data? are recorded in the
internal systems aiming at the correct issuance of the invoices, the
financial and timesheet control thereof, and in some cases, team
dimensioning and management (still infrequent).
In addition to the mentioned basic information (subject name and code,
type of collection, invoicing address, contact person at the client and
attorney in charge), several other pieces of information must be
included over course of the several phases of the subject life, so that
KM can address and use them in the future in a more comprehensive
and effective manner as part of the strategic and marketing strategies,
for instance:
In the subject/matter creation phase: the correct identification of the
performance/practice area and activity fields into which the client data
is inserted, a detailed description of the addressed topic/matter and all
those people engaged (internally and externally), the internal concept of
the type of work performed (type of /legal proceeding/suit, audit,
acquisition, merger, etc.), the person in charge of , creating the matter,
etc.
In the life phase of the subject: the maintenance and timely updating of
all the changes incorporated during the entire process such as,
 developments, attorneys and consultants engaged, new requests by the
client, etc.
In the final or closing phase: capturing of the information that
effectively occurred in the subject/matter, that is, final amounts received
[and spent?], terms effectively fulfilled/work effectively completed and
relevant documents that were part of the work/instruction (final
contracts, relevant opinions, legal opinions, etc. which are much more
important than background drafts).
2 – A second example is the correct generation of a fee proposal and its
budget follow-up.
Dare I say that very few Law firms have accurate systems for the
purposes of generating budgets and fee proposals , which in the vast
majority of cases, are done based on similar cases from the past and
based on the personal experiences of the more experienced partners.
The complexity of the recent subjects/matters, the volume of current
and past information, the pressure relative to deadlines and
prices/charges, make this method a [very?] unreliable, and what is
worse, with little information that can be used in the future.
The proposals generated by firms should be based on detailed budgets
(in the same way industries do), and considering the complexity, the
team ( everyone engaged providing estimates of the hours likely to be
spent), the indirect costs and other estimated expenses.
In these two examples (there are others), there are pieces of information
contained in the traditional records that are neglected, and which, if
compiled and organized [properly] could generate very important
statistics about the past, its present evolution, as well as the current
status related to:
i. What is (are) the main market(s) where the Law firm has
bigger/more prominence performance/presence or
specialization. Currently there is a large number of legal
services that are specialized and connected to economic
activities, such as “life sciences”, telecommunications,
 (satellites, etc.), security on the internet, compliance, in
addition to the traditional areas (tax, litigation, labor, etc).
ii. Where and how the firm utilizes its resources, and most
importantly, where is it generating poor/ good results.
What is or was the more profitable matter, and what were
the specialisms or the more efficient teams.
iii. What types of work were performed and what were the
results that were accomplished.

In addition, and most importantly, these statistics can and should guide the
marketing and strategy efforts, that is, which markets and types of
companies the firm should focus its efforts on; what are the stronger and
more efficient internal areas, what are the internal weaknesses that need
attention and investment, what fields of activity the office has more
dominance/expertise/authority on the subject and that can be expanded by
cross-selling efforts, in addition to helping make decisions concerning team
dimensioning and formation, contracting and investment in HR (courses
and training).
The two examples referred to were and are being used as important tools to
help the Managing Committee of KLA - Koury Lopes Attorneys, in the
formulation of strategic definitions of growth and serve as guidelines for
their marketing actions.
Knowledge Management is a very important tool to be used in strategic
definitions, and it must be seen this way by office managers in the current
and future management of their businesses.
“CYBER SECURITY” AND KNOWLEDGE MANAGEMENT
The other day, I was reading an article published in LegalTechNews, and
once again appreciated the importance of Knowledge Management in
every area Hence, I am going to transcribe part of an article written by Zach
Warren about the participation of Roy Zur (CEO of the Israeli company
Cybint), at the ACDES 2016 E-Discovery Conference and Exhibition.
According to Zur, the problem lies in the increasing amount of information
people have, but without the proper access to them. Where access means:
getting to handle all the collected information (by any means) and turning
it into usable knowledge and ideas.
Zur names the five main steps to get access to the collected information:

1- Data- Generally, most part of which is collected contains “white noise”

that blurs or hides what really matters. An expert in the area should be able
to “clean” this noise and to place the data in a structured way, also capable
of indexing.
2- Information- To turn data into information, “you should be able to
identify the different parts and understand what exactly they are related to.”
3- Knowledge- “The next step is, in fact, to connect the dots”, he says.
Identifying and understanding the relation among the data, researches can
draw solutions or come to conclusions.
4- Indicators- Experts and researches must identify the standards in order to
use them in future events in this stage. Even not being able to identify those
standards, the mere study of this knowledge makes the future process even
faster.
5- Decision- Finally, Zur says: “This is the final step of our participation as
intelligence officers because, next, the result goes to the operational area”.
Decision making can and takes into account other things that are not part of
intelligence management.
Although this article is aimed at “cyber-security”, mainly about the
prevention of acts of terrorism, it clearly shows the importance of
Knowledge Management.
Bringing this present discussion into the universe of Law firms, the process
of adopting of a Knowledge Management culture has as its main elements:
- Data capturing (represented by [all/the entire?] financial
management structure); unstructured explicit/clear information
(represented by the documents contained in GEDs, e-mails,
registers and CRM’s) and finally, tacit information (captured
from discussions forums, wikis, personals profiles and training),
and;
- The use of an intelligent search engine, user friendly and
customizable to the specific need of each office/firm.
-
KNOWLEDGE MANAGEMENT: EVOLUTION OF OBJECTIVES
Knowledge Management represents a decisive factor/aspect in determining
the competitive position of Law firms nowadays (and in a near future) and
the survival in an increasingly technological, digital and robotically
automated future.
The subject "KM" has been widely studied, discussed its objectives,
effects and the adoption criteria in the global legal market (with special
emphasis on the American one), as already discussed in this chapter. What I
want to emphasize in this topic is its evolution over time and show the
predictions of experts in the subject. In the 1990s, when the subject was
first discussed, the main objective of this "management philosophy" was to
help professionals find the existing knowledge within the company and to
create financial leverage by producing a form document faster, charging the
same fees as if the document was being created for the first time. In the
2000s, it was realized that this reduction in the production time of the
documents (still sought to date) could allow the collection of lower fees and
make the office more transparent to its clients and more attractive in
potential abstractions or proposals fees. With the 2008 crisis, knowledge
management has become an important efficiency-seeking tool, greatly
assisting US offices in improving their in-house processes, especially with
the help of modern "corporate search engines" that have enabled the very
rapid localization of documents, skills and a huge range of deforested
information on their internal and web networks. The current trend is that
knowledge management or, more broadly speaking, information governance
becomes the great manager and organizer of all existing information and
feeder of the new cognitive systems that are surging (natural language
recognition , generation of documents or document assembly, semantic
identification of texts, comparation of intelligent search, etc.).

THE NEW KNOWLEDGE MANAGEMENT STRUCTURE

Before entering into the discussion of the new structure of knowledge
management itself, I want to put some information to contextualize.
First, since the industrial revolution in the nineteenth century with the
emergence of economic thinkers and later with theories of management
(Taylor and Fayol), we have been indoctrinated to think and decide in an
orderly, hierarchical and segmented way. We are "fissured" in
organizational charts, flowcharts, functional hierarchies, job descriptions
and a series of other moorings that makes us think in a modular way.
Second, technology has corroborated this kind of schematic reasoning
since, since the 1960s, there has been a very large development in database
systems inducing pen-sar in the form of rigid structures.
Third and most important: there is no doubt that we are the most
intelligent race on the planet and studies show that this is due to the
amount of neurons that our brain has and also due to the number of
synapses or connections between them, much more than any other
species.
Several studies have been done (see references), but I would like to stick to
these numbers:
Number of neurons in the nervous system: 8.6 × 1010 (86 billion).
Number of neurons in the cerebral cortex: 1.6 x 1010 (16 billion)

Number of synapses: ~ 1.5 × 1014 (150 trillion).

That is, each of our neurons in the cerebral cortex is connected on average
to approximately 9,350 other neurons! This makes us a very powerful smart
machine.
Knowledge management emerged in the 1980s, tied to the concept of
Intellectual Capital and at that time was still very focused on the
management of intangible resources (tacit knowledge).
In the legal world, in the last 40 years (approximately) the management of
legal knowledge has evolved greatly from a simple tool for collaboration
and exchange of experiences to a tool for increasing efficiency, productivity
and competitiveness.
Until very recently, we had to fill in endless and exhausting forms (which
virtually nobody had the patience or the time to do) and to define in detail
all the taxonomies necessary for the correct classification of the documents
(whatever they were). After doing so, the systems had (and still have) to
index all of that information to make it accessible, and only then could we
have the relative certainty of finding the information we needed.
The main problem with this method is that the relationships between the
information were not computed, that is, we could only search for the
defined indexers (keywords within specific fields), greatly limiting the user
experience. It is as if each of our neurons were connected to only 5 or 6
others (correlating with the number of indexing fields of the systems).

Another limitation is the amount of repertoires of information that the

system could access (usually only those existing within the system itself),
further limiting the result obtained and forcing the user to search in various
repertoires.
The technological evolution of the last 15 years (remembering that Google
revolutionized Internet search only in 1998), coupled with the economic
pressure of the last decade (2008 crisis), made knowledge management a
huge leap in its evolution.
The new structure of knowledge management tries to get closer to the
functioning of our brain, making as many connections as possible among all
stored documents (the synapsis). In this way less and less we will be
obliged to know in advance what is the relevant information contained in a
de-terminated document, having to fill out endless forms and having to
worry about updating taxonomic bases.
The exponential increase in the processing power of computers associated
with new systems using statistical and prediction algorithms allows several
repertories (internal and external) to be accessed and searched.
These two characteristics allow us to find not only the exact information we
are looking for, but also to re-think the suggestions of others we have not
even thought of finding.
A good knowledge management system should be able to connect with all
repertoires of structured or non-structured information, internal and / or
external and through AI algorithms, to cross (synapses) as many as possible
of all relevant information without users having to worry about it.

Source: author
The only caveat is what I call the "fan theory". This is my metaphorical
comparison that compares the fan, spreading the smell or stench of what is
co-located behind it with the computer that generates reports based on the
information there is available. The existence of intelligent algorithms does
not dispense with the organization and maintenance of records of all the
information that exists internally. Missing information leads to wrong
conclusions!

References
Azevedo, Frederico A.C .; Carvalho, Ludmila R.B .; Grinberg, Lea T .; Farfel, José Marcelo; Ferretti,
Renata E.L .; Leite, Renata E.P .; Son, Wilson Jacob; Lent, Roberto; Hercula-no-Houzel, Suzana
(2009). "Equal numbers of neuronal and nonneuronal cells make the human brain isometrically
scaled-up primate brain". The Journal of Comparative Neu-rology. 513 (5): 532-541. doi: 10.1002 /
cne.21974. PMID 19226510.
Herculano-Houzel, S. (20 June 2012). "The remarkable, yet not extraordinary, human brain as a
scaled-up primate brain and its associated cost." Proceedings of the National Academy of Sciences.
109 (Supplement_1): 10661-10668. doi: 101073 / pp. 1201895109. PMC 3386878. PMID 22723358.
TOWER DB. (1954). "Structural and functional organization of mammalian cerebral cortex, the
correlation of neuronal density with brain size, cortical neurone density in the fin whale
(Balaenoptera physalus L.) with a note on the cortical neurone density in the Indian elephant". The
Journal of Comparative Neurology. 101 (1): 19-51. doi: 10.1002 / cne.901010103. PMID 13211853.

The chart below, presented at the last Iltacon 2017, at the KM Tools
Lawyers Love seminar, demonstrated by Sally Gonzalez, Patrick Dundas,
Patrick DiDomenico and Meredith Green and in-property intellectual
property of Michael Farrell Associates LLC and Fireman & Company,
shows this evolution over the last few years.
KNOWLEDGE MANAGEMENT - NEW TRENDS
Discussions and Knowledge management content has not been produced for
a long time and the subject seems to have lost its eye-catching position in
law firms because of the current hype very focused on Artificial
Intelligence and, more recently on Blockchain.
Moving away from the spotlight, let's continue to remember that the main
function of knowledge management is to transform information and
information into knowledge and the latter be used as wisdom, that is, to
allow the company to be more efficient, productive and mainly competitive.
In the beginning, the issue was treated as a tool to increase productivity and
enable the collection of the same previous fees, but with an increase in
profitability due to an increase in efficiency (to charge the same thing with
less time to execute).
After some time, the issue came to be seen as the possibility of treating fees
to clients with more transparency and to allow the respective fees to be
reduced to greater competitiveness (to be able to charge less and be more
competitive). At present, the issue is treated as a primary need for survival,
allowing to manage the colossal volume of existent information and
growing exponentially and still able to extract in a timely manner those that
are important and necessary for the provision of good service (managing to
manage an enormous amount of information and still be productive). The
importance of the KM theme has evolved not only by the exponential
increase of information created internally by the "big data" phenomenon,
but also by the incorporation of the new AI technologies (Mathematical /
statistical algorithms, Machine Learning), associated to the exponential
increase in the processing capacity of new machines (who will be able to
predict what will happen when quantum computers hit the market ...).
Another point to be considered is the evolution in the pragmatism of the
"approach" to the conviction for the adoption of KM philosophy at all levels
of professionals. The traditional discourse has always been to convince
everyone that a small sacrifice at the time of knowledge creation (to
correctly index the same through "tags") will greatly assist their search and
future location, as well as allow that other professionals make use of this
knowledge produced.
As human beings and mainly lawyers in relation to the use of new
technology and tools behave like water (which always the easier way to go
from a higher point to a lower), the incorporation of all technologies cited
above makes convincing almost unnecessary when presenting these
professionals with intuitive, easy-to-use and efficient tools.
Repeating what everyone already knows, legal services companies sell their
knowledge and their ability to use it for solving legal problems that
interfere in the business of their clients and in my point of view of several
other scholars of the subject (and in mine as well), knowledge management
has become one of the main tools for increasing efficiency, already testing
the integration of speech recognition systems with corporate search
systems.
In spite of all the mentioned evolutions, the great challenges that exist to
make KM effective are: the collection of all relevant data and information
(explicit and tacit), its correct treatment and sanitation, organization and
classification, - principally the use of an intuitive, powerful and intelligent
search and access tool that allows them to be used quickly and accurately
(repeating what has been said previously)
Considering all the points mentioned above, we can no longer think of
trying to implement the culture of knowledge management without the use
of a high quality corporate search engine or a back-office structure trained
to do all the preparation work of the so-called "knowledge base".
For companies that want to stay alive in the market, adopting the
philosophy of Knowledge Management is no longer an option, it's a
must!
 CHAPTER 7
TALENT “GOVERNANCE” AND
LEADERSHIP

COMMITMENT OR ENGAGEMENT?
Sometimes we use these two words as synonyms to indicate one of the
most used subjective “KPI´s” to evaluate the dedication of a professional
towards a company or an activity, but their meanings are different from a
semantic point of view and radically different from a professional
evaluation point of view.
The “HOUAISS” (Brazilian Portuguese dictionary) shows us the following
differences in meaning between the two words::

COMMITMENT ENGAGEMENT
 noun  noun
Act or fact of committing oneself Act or effect of getting engaged;
engagement
COMMIT TO ENGAGE
a transitive verb  direct, bi-transitive verb
Be binding by commitment make it get engaged or get
engaged in; get involved

As we can clearly see, t commitment is a much “stronger” attribute, as it

subliminally involves a moral and ethical aspect in the process of
participation by a person in one activity.

It is really evident that all businesses want, like and need to have
professionals who are committed to their teams in order to be more
productive, efficient and competitive, mainly during a time of crisis like the
one we are going though right now. Just being hired or being part of a team
already [makes them involved/entails that they are involved, but [and] this
is not enough.
Professionally [speaking] - and explaining this in a humorous way - I
consider the best image we can use to illustrate the difference between
these two words, is by assessing [of the participation of] the two elements
that make up the traditional ham and cheese sandwich. We have the cow
that engages into this process by providing the milk (that will be turned into
cheese later on) and the pig that commits itself to this process by giving its
own life in order to provide the ham!
In addition to the aspect of synonymous use of the aforementioned
attributes, there are other factors, which over the course of time,
disqualified/negated the importance of its use:
- The term commitment, due to its overuse, that is, of its excessive
referral in almost all professional evaluation models, became
watered diluted and lost the strength which is intrinsic to it.
- The lack of a clear (professional) definition of which behaviors
correctly characterize the commitment of a person within one
organization.
- Also, as it is a subjective evaluation attribute, it is closely linked to
the generation to which the evaluator belongs.
Examples: an evaluator who is of the “baby boomer” generation may
consider (because he was evaluated/appraised like that) commitment to be
the dedication of the professional to businesses over the years, that is, how
much time of his life he dedicated to the company, his punctuality, his
attendance, etc. Another evaluator who is of the “X” generation looks
much more to the “guts”/vigor with which the professional faces his
challenges and which is considered his efficacy of his dedication. Now, an
evaluator who is of the “Y” generation may disregard the attendance and
punctuality aspects (as he grew up in a connected and virtualized world) in
his evaluation.
I do not mean with these arguments that the attribute should not any longer
be used in the subjective evaluations of professionals, but rather that it
must be used correctly!
First and foremost, in my opinion, the commitment attribute should not be
used as an individual evaluator but instead, as one intensifier among all
other subjective attributes of evaluation/appraisal, as any activity can be
performed with higher or lower commitment.
Second, one must clearly define which characteristics or behaviors will be
regarded as indicators of commitment so that the evaluators can align
themselves and the evaluated persons become aware of it.

THE CHALLENGES IN THE GOVERNANCE OF LAW FIRMS

In this present discussion, I am going to talk about corporate law firms
(with dozens or sometimes hundreds of lawyers and partners), designed to
serve medium and large companies with all their multitude of legal
challenges in an increasingly regulated and complicated world.
Before discussing the topic itself, let us contextualize this entity called
“law firm”, a little better in both the subjective and objective sense.
In the first , the subjective, we have the following:
Traditionally, these firms are formed by a group of lawyers who have
certain features in common such as: technical quality/ability in specific
areas of law, entrepreneurial spirit and good interpersonal relationships,
who decide to work together due to for their mutual benefit by using of
each of their skills. They may have grouped themselves together at two
completely different stages of their lives, that is, at the very beginning of
their individual careers, or as a “split-off” from a larger firm, but the
reasons remain the same. From a rational point of view, this amalgamation
makes a lot of sense once the technical complementarities create a more
comprehensive capacity. Nevertheless, these members who are already
partners are human beings, and as such must have something bigger than a
simple technical-commercial interest to keep them together as time goes by.
In addition to the technical affinities, other types (not less important) of a
purely emotional-psychological nature should also be part of the decision
making process to form a partnership such as companionship, trust,
common goals over the long run, and the most important of all, personal
and ethical affinities!
As already mentioned in a previous discussion, it is necessary to
understand how the lawyer thinks, how he behaves, and which kind of
educational training he had in the past. This professional has a very low
tolerance to failures, a high degree of skepticism, great autonomy and low
resilience, and lastly, little or no academic training in management. (see
Professional Help in Law Firm Management).
Another point to be considered is the outdated notion that the great majority
of firm leaders have that “a law firm is not a company”, compounded by
other concept existing in the status of the class that says that law/legal
practice has no trading objective.
In the second , the objective field, we have the following:
Again, I go back to their origin, the incorporation and evolution of those
offices/firms, which most of the time, start as small offices with sparse or
almost no administrative structure. The problem is not related to starting up
with a poor administrative structure, on the contrary, the importance of
understanding that this structure is a necessary evil and a minor component
of the organization.
As time passes, this concept ends up creating a deficient administrative
structure, and also poorly remunerated (where the cheapest professional
possible is hired), as a consequence, poorly prepared/equipped and with
low intellectual capacity thus causing a gap to develop between the three
structures (administrative, productive and managerial), resulting in the
inability to supply management with information and high quality reports
when necessary.
For management to be created and to be effective, it must be supported by
a tripod formed by an active leadership of good quality, a motivated team
that is aware of the values and objectives of the institution, and a technical-
administrative infrastructure that is able to provide support for decision
making. In the case of law firms, it is essential to accept that these entities
are businesses with the objective to make profit, and must be treated
accordingly.
Leadership is an innate feature (there are several books that even classify its
styles) that not all people have naturally in their personalities, but in its
absence, may be learned and trained!
One of the major roles of a leader is to establish (and clearly communicate
at all levels) the values and targets to the entire organization in a clear way
so that each person can become completely engaged when performing their
job, taking decisions, or having any other professional attitude involving the
institution and himself/herself.
Team motivation is probably the most difficult part to achieve as it
involves human relationships and how managers deal with/relate to their
subordinates. In law firms, companies that are solely and exclusively
formed by people, there is one more complicating factor, as the leadership
function is not exercised/performed according to a chart with strict
departments and job posts, but in fact, almost exclusively by the
professional respect (technical know-how) that each attorney has towards
their most experienced colleague. And your “boss” does not always fit in
this situation/into this scenario!
In firms with less strict structures, the existence of a structure to attract
and talent management talent consisting of a clear career plan with well-
defined attributes that the institution expects from its stakeholders at all
levels, combined with a judicious assessment method and reward policy, as
well as offering professional challenges at the same level of each stage of
the career track, are determining factors for the creation and maintenance of
a motivated and productive team.
Last, but not least, the technical-administrative structure represents, in my
opinion, the Achilles’ heel in most offices, because as we have already said,
it is considered to be a necessary evil and receives less attention and
investment.
To establish an administrative structure that is coherent with the productive
structure, we need to invest in order to hire qualified staff, do a lot of
training, and invest heavily in applied technology.
The creation and standardization of procedures, the pro-active maintenance
of all registers and mainly, determining which pieces of information
belong to those registers, should form the framework for the creation of a
robust and reliable database in which the reports used in the decision
making actions are reliable. Good quality systems (specified for the sector)
and a robust IT structure are fundamental, but on their own, without the
previous parts mentioned in this paragraph, will not solve the problem.
NEW GENERATIONS
A very important factor that must be remembered, is in fact that the bigger
the law firm is, the more likely it is that 4 to 5 different generations may be
work “under the same ceiling” 4 who must be understood, treated and
motivated differently. I am not an expert on this subject, and I know the
theme is the motivation for the writing of several full-length text books on
the topic. Nevertheless, I would only like to present two brief comparisons
between the generations, as shown below.

1 – Infographic published by Karrie Lucero on October 4th, 2017:

Source: Karrie Lucero

2 – Infographic published by Kalpathy Ramaiyer Subramanian on his
article “The Generation Gap and Employee Relationship” em
www.ijmer.net, issue 6 (nov-dez-2017):

Source: Kalpathy Ramaiyer

3 – A more comprehensive view (including the 5 generations) according to

the appraisal conducted by Nielsen Global, a global research company of
consumer behavior (www.nielsen.com)
Source: Nielsen Global

Given this scenario, it is a strenuous challenge for the manager of a

company with such diverse expectations to get everyone engaged and
motivated, and in addition, be more and more prepared for the increasing
influence of the younger generations (Y and Z) in decisions that involve
people. In our case, that is law firms, where the main/core asset is people,
ALL OF THEM!
LEADERSHIP IN LAW FIRMS

Leadership is an innate trait

(there are several books that even classify its styles) that not all people
naturally have in their personalities, but in its the absence, it can be taught
and learned . In this regard, there are dozens of books and theories about
styles and forms/types of leadership, which, in the present discussion, I am
not going to go into. I particularly regard Ichak Adizes as one of the writers
that best (pragmatically) define this subject.
One of the most important roles of a leader is to establish (and clearly
communicate at all levels) the values and aims of the organization in a clear
way so that each person in the workforce is completely engaged when
performing their job, when taking decisions [or having any other] and the
adopting of a professional attitude towards the institution and
himself/herself.
In the present discussion, I want to address the factor I consider to be the
most important aspect of leadership overall, that is the continuity. Leaders
are people who should last!
For this continuity to happen, the leader must have some characteristics
(regardless of their leadership style, as mentioned above):
- He/She/They have to be admired ( note I said admired, not loved).
Those led must find some characteristics in the leader that they
can look up to, follow or even want/aspire to be in the future.
- They must be coherent. No matter their style, the team must have
professional confidence in the attitudes/abilities of their leader
(note I said coherent, not predictable).
- They must] be the example. Consider dictum that states: “Do what
I say, do not do what I do” is the worst attitude possible (
especially when the team consists of people from Generation Y).
- They must be ethical (further comment here is not necessary/this
speaks for itself).
Important to say: Leadership is complete different from Management.
The following illustration from Alaine Karoleff, PMP, CSM is very nice to
show these differences.

Source: Alaine Karoleff

In organizations that are loosely vertically structured, as in the case of law
offices/firms in general, “delegation” occurs much more frequently due to
the technical know-how and past experience of the most experienced
leaders, and also due to the professional respect (technical) of the younger
for the older professionals, winch may generate conflict between
“delegation” and leadership, which are very different things.
Another point to be considered has to do with the intrinsic characteristic
related to the lawyer’s profession, in which all the professionals are trained
in preparation for the “clash”/confrontation, with a strong focus on
reasoning skills ( oral or in writing) and in developing of the ability to
search and find details on which they can base their arguments or weaken
the arguments of their opponents. This reality makes the leadership exercise
much more challenging and requires the leader to demonstrate all their
mentioned skills in order for them to be respected those they lead.
All actions taken by the leaders have consequences in the short, medium
and long term, for the company/business and in the team, and how this
cycle is completed will define the continuity of the leadership!
External and experienced support, exempt from interactions and internal
relationships can help a lot in the guidance and training of leaders, and
towards a more effective and professional management of teams.
EVALUATION OF LAWYERS – STILL VERY FEW KPI´S USED

Before we get into this discussion

about the evaluation itself, we have to do an analysis of this specific
professional and also contextualize them in the kind of company/business
where they j work. Besides it/Apart from that, let us focus this discussion
on the lawyer (partner or associate) of the so-called (here in Brazil)
corporate law firms that have their structure focused on representing
businesses in several areas of law.
Given that the appraisal of any and all “knowledge worker ” (as Peter
Druker says) consist of several factors, ranging from strictly objective to
the subjective aspectsa, and that the definition of this blending is closely
linked to the business philosophy adopted by the law firm where they are
inserted.
As previously mentioned , a lawyer is a professional who has got a peculiar
behavioral psychology, and we have to understand it in order to analyze and
understand the way they behave.
Now, let us list a lawyer’s main psychological features: i- a very low
tolerance to failures; ii- a high level of skepticism, iii- great autonomy, iv
- a high reasoning ability, v-a high level of abstract thinking, vi-a high sense
of urgency, vii- very low resilience and viii a low socialization ability. (by
Caliper Human Strategies (UK) LTD).
With regard to the evaluator/In the case of the appraiser, difficulty usually
emerges, which is their confusion between the subjective indicators and the
qualification or the background of the professional. Factors such as the
technical / academic background, previous professional experience,
specializations, languages, etc., are aspects related to qualification, and
that should be taken into consideration at the time when the professional
position in the remuneration grid and their career plan is determined, and
should not be used in/form part of the periodic performance appraisal
exercises.
Another difficulty, this one in relation to the office, and which I consider to
be the most important aspect, is the lack of more elaborate objective
indicators (obtained in management reports that should exist to help in the
economic-financial management of each office). As the majority of the
small and mid-size law firms still perform their own management as well,
due to lack of professionalism and inadequate computer systems, the
objective evaluation of their lawyers usually show only a few indicators,
such as number of appointments and invoiced hours.
The Performance indicators (KPIs) should be much more encompassing and
only take into consideration any variation during the period of appraisal.
This also becomes a barrier to be overcome, as, the evaluation policy when
implemented, ends up showing distortions from events that originated in
earlier in the professional´s career, such as: i.-wrong interpolation/inclusion
in the career plan and remuneration grid at the time of
contracting/appointment; ii.- insufficient/inadequate professional previous
evaluations and iii.- lack of a well -defined career plan. In the same way we
may not use pliers to affix a nail, but a hammer, one must not use the
performance evaluation to correct those distortions.
Let us mention now some performance indicators on which lawyers
should/ could be evaluated on:
Productivity indicators - number of:
- Total invoiced hours / appointment hours
- Total invoiced hours / target hours defined by the office
- Total invoiced hours / invoiced hours by the partner in charge of
the area
- Invoiced hours on matters in the area / invoiced hours in matters
of other areas
- Invoiced hours in their matters / total hours invoiced inthat/the
same matter (for/by partners)
- Corrected or cut hours/amended or hours written-off

Financial Indicators:
- Net individual contribution (invoiced – salary)
- Entered/recorded gross amount / invoiced amount
- Invoiced amount / received amount
- % equity in profitable matters or not
- Growth in the period
- Profitability of the closed /finalized/ concluded matters (for
partners)
Client acquisition Indicators / cross-selling:
- Client received/acquired in the period
- New outstanding matters by indication/referral
- Amounts generated to/by other areas
Institutional Indicators:
- Hours allocated/designated for speeches and organization of
marketing events.
- Hours allocated/designated for articles and publications
- Hours allocated/designated to internal training sessions
- Hours dedicated/allocated to pro-bono matters
- Hours dedicated/designated hours to help management tasks

Subjective indicators:
- Technical evolution/development in the period
- Managerial evolution/development in the period (team)
- Evolution/development in client management / matter (autonomy)
- Level of client satisfaction ( if available)
In addition to said indicators, we could list several others , but all will
depend on the existing/available managerial reports, as well as on the
definition of blending of values and weights in relation to the work
philosophy and ranking in the market of each office.
LAWYERS CARRER PLAN – THE FREEWAY METAPHOR

There are basically four choices of career choice (only in traditional ones)
for a lawyer, after completing his/ her academic professional training and
obviously after being qualified by the OAB to practice law. I will not dwell
on this discussion about the new possibilities that already exist and will
surely exist in the near future involving the incorporation of the new
technologies that are transforming the profession and the legal services.
Following only the traditional line, the possibilities are: academic career,
public career, corporate career and individual career and in each of them
there is a higher goal to be reached (career apex), such as being the Legal or
General Director Counsel in the corporate career.
For those who choose the individual career of professional (and financial)
development, the culmination is to have their own office or to be a
successful partner and it is in this option that the metaphor of the motorway
will unfold.
Every driver who has ever driven on highways knows of the basic rule (at
least for us that we have the direction of the left side of the vehicle) that is
right lanes are reserved for the lower speed vehicles and the left lanes for
those who traffic at higher speeds and / or for overtaking. In addition, when
accessing a freeway, coming from a smaller one where smaller speeds are
allowed, there is usually a range of accommodation (which unfortunately in
Brazil are ridiculously small) that allows the vehicle to accelerate until the
equalization of its speed with that of others vehicles and settles without
creating too much interference in the flow.

In my metaphor, the secondary roads can be compared to the probationary

period, the most common ones (double-handed) are compared to the career
of the lawyer (or associate), the self-employed with the partner career, and
the accommodation range as the process of choosing and introducing the
associate into the society itself. As on the roads, there are clear and different
rules for each type, that is, each time you travel from a road to a freeway,
rules of speed, overshoots, bending radius, etc., the rules also are changing,
requiring the driver to change his behavior behind the wheel. In the career
of the lawyer there are also rules (which should be clear as the rules of the
road) for each stage of their professional development so that when talking
about career plan, this should cover all these professional stages, from the
trainee to the senior partner in the office. On a road (in my metaphor, the
stage period), the driver is not required much skill or much experience at
the wheel, because speeds are low and traffic is usually very low. Neither
does it require much of the power of the vehicle also for the same reasons.
Trainees usually do not expect technical knowledge, but rather dedication
and willingness to learn.
When moving to a larger road, those with a double hand (which in my
metaphor refers to the working period as an associate), the driver is already
demanding greater skill and experience at the wheel, as well as greater
power of the vehicle which will be required in overtaking. As we move to
larger roads, speeds increase and danger as well.
Another point to consider is the size of the vehicle (referring to the liability
assigned to the lawyer), because as the vehicle increases in size, it increases
the complexity in your driving. That's why there are thousands of ride-on
drivers and a very small handful of special-purpose truck drivers (those
with dozens of axles and wheels). At this stage, the company is expected to
gain increasing knowledge or even specialization, increasing autonomy and
especially greater involvement with customer acquisition and management
and business management.
Imagining that the "driver" has passed the minor roads (trainee career and
lawyer) and has done well in addition without having caused an accident,
when arriving at the freeway, will have to go through an adaptation process
again.
The accommodation range (represented in this metaphor by the evaluation
period to become an office partner) allows the driver to adapt to the new
rules of the road, where greater attributes of the driver are required, such as
traveling at higher speeds, paying attention distances between vehicles and
overtaking, etc.
Imagining that motorways have three or more bearing ranges (in our
metaphor the various categories of partners), as already mentioned, the left-
hand track is reserved for the higher-powered vehicles, which develop
faster and surpass the slower ones . These are the senior partners, with
greater technical capacity, greater experience, greater capacity of capture
and with vitality for this.
Newcomers newly on the freeway are initially in the lower right-hand
speeding lanes, adding experience and safety until they are able to "change
lanes" and gradually move to the higher speed lanes .
Over time, some members may experience high technical knowledge,
sufficient experience, a portfolio, involvement in management and, above
all, vitality, and may reach the last wave. With speed greater than those
already there and, as on the highways, ask for passage flashing the
headlights to "vehicle" slower ahead. At this point, conflicts between
members may arise in disputes over internal political spaces and mainly in
remunerations, and again in comparison with the Freeway, on some
occasions the driver of the vehicle at the front (in an irrational way) feels
offended by the psycho of headlights and refuses to give way!
Another situation to be compared is that where the "driver" who travels in
the left lane, for several reasons decides to slow down his speed and with
that should change to the rightmost tracks and yield passages to those who
are traveling at higher speeds. Usually in law firms this moment is reached
(or should be) by partners who reach a certain age or when they feel more
relaxed from the point of view of their career development and also from
the financial point of view and are available to use their vitality for other
aspects of their professional life or person.
Finally and again comparing with roads, the life of the driver mainly
depends on the respect to the rules of driving your vehicle on the roads and
in the professional life is no different. Once defined the rules (which must
be clear) that define the company-individual relationship, the path is open
to those who have the most capacity, knowledge, dedication, effort,
adaptation and vitality. Excessive speed and dangerous overtaking can be
fatal!

CAREER PLAN FOR LAWYERS AND PARTNERS

There are several career options available to lawyer’s in the legal market,
but the main options are: the career in the public sector (judges, district
attorneys, prosecutors, etc.); a corporate career (legal / general counsel in
legal departments), and in each these there is a natural evolution and one
career apex to be achieved.
In this discussion I will only focus on the progression of the career of that
professional who chooses the latter option, that is, in corporate law firms
where the career apex is to achieve the position of partner in the law firm
they work at.
This career track, like in all careers, goes through a learning phase,
technical development, followed by a managerial phase. and finally a
natural deceleration.
In my opinion the figure/graph below clearly shows these phases in the
evolution of the legal professional who has elected the option of working in
a corporate law firm:
The first phase is that of a trainee/intern, represented in the graph by the
area on the left at the start of the green curve.
The second, and in my opinion the most important one, is the phase of the
lawyer’s professional evolution where they perfect and enhance their legal
know-how and commence with engaging in the intricate management
process of a law firm. Generally, this phase takes about 12 to 15 years, and
bearing in mind that we are talking about the current scenario , as in the
past (in the older and more traditional law firms) this phase took much
longer, and even worse, without a clear definition of the attributes to be
developed/attained, and without a defined timeframe. It is in this phase that
the “KPI´s” have to be defined and communicated to the team (refer to the
previous item)!
This interval (12 to 15 years) is not random, but a necessary time for legal
and professional managerial growth, and must coincide with the
psychological maturity, that all people undergo and typically reach in their
40’s !
At this juncture, a critical period for the lawyer-office relationship starts,
where, on the one part, stricter assessments by the more senior lawyers
concerning management and commitment issues start, and on the lawyer’s
part, the more critical assessments in relation to the philosophical model
that exists in the institution, and their adherence to it. Further, the “Y’
career option may also exist where the professional feels comfortable with
the technical - legal challenges, would like to develop/take on, and go
deeper into these challenges, but without identifying themselves, nor
wishing to develop managerial attributes that are necessary to take up a
partner’s position. If this type of decision is acceptable to parties, (the
lawyer and the firm), then the professional will become a “consultant”.
Once the challenge to become a partner is successfully conquered, then a
new phase in the evolution of the legal professional’s career begins,
associated with an increasing deepening in their legal knowledge (let’s
remember that the partner in a given practice area of law must in that
environment act as the “oracle” to all lawyers in their team, and
furthermore, be the person to whom the client, ultimately place their trust
with regard to technical ability), coupled with the learning and
improvement of the attributes that are necessary to constitute the managing
body of the institution.
Again, the timeframe necessary for this evolution to occur, shown in the
graph is not a random period, adding another decade to the professional’s
career for this improvement, and coinciding with the apex of human
maturity, which is the 50’s!
The penultimate phase is the most fruitful/profitable and also the most
gratifying, as in the ensuing period, between the age of 50 and 65, the
professional is accomplished in all respects, and at the apex of their
intellectual development. Note that the curve is not horizontal, instead,
ascending slightly as there is always something new to be learned!
The last phase represents the deceleration, during which for several
reasons, the professional begins to balance their professional activities with
others of a personal nature, and naturally and gradually decides to dedicate
themselves to those other activities. In addition to being a natural evolution
on the part of the professional, it is also highly beneficial to the firm,
enabling its evolution, oxygenation and creation of room for the younger
generation of legal professionals.
In order for this process to materialize, several actions measures need to
be implemented by the managers/ leaders of the firm, in a way as to create
the “glue” that attracts and agglutinates the partners (refer to The Law Firm
and the Brownian Motion), combined with correctly defining the “KPI´s”
and properly train those lawyers who are willing to become part of the
group.
In my humble opinion, there not only exist career plans for lawyers, but
also career plans for professionals who engaged in the challenge work,
operate and manage law firms thoroughly skillfully, which in turn
encompass the several phases represent their roles..
What I mean is that career plans for lawyers need to be interconnected and
compliant/integrated with the “partners’ career plan”.
Indeed, one must also have a career plan for partners and the set of “KPI
´s” defined for partners must contain all the indicators that form part of
the lawyers’ plan, plus other ones which will be used to appraise and
relativize the partners in the society (refer to The Metaphor of the Human
Hand and the Office Management in chapter 8) so that the transition
between one plan and the next becomes as natural and smooth as possible,
with no interruption in continuity.
The most tacit examples are: legal autonomy, the capacity to capture/ client
portfolio, management capacity (team, issues and clients), institutional
promotion and marketing and business outlook, all of these highly
important for the assessment of partners and which must be fostered from
the very beginning of a lawyer’s career. What must be changed along the
way is the importance given to each one of those “KPI´s” while the
professional becomes more senior in the career.
Therefore, the general plan of to guide professional career must include the
KPIs which embrace the entrepreneurial philosophy created by the leaders,
and/or founders of the firm and define the values on which this society is
based on.
 CHAPTER 8
PARTNERSHIP GOVERNANCE

THE DELICATE RELATIONSHIP AMONG PARTNERS IN LAW

FIRMS

After more than 30 years of coexistence with members of law firms, I can
very calmly say and
without fear of making mistakes that the relationship among these
entrepreneurs is one of the most de-lax and sensitive, comparing it to other
markets.
The reasons are several, but just pointing out the most important (in my
humble opinion) is that law firms are not equity companies where the
relative importance or power ratio is defined by the amount each member
has of the company's assets or value invested. Let's remember that the
patrimony of an office goes down the elevator every day and goes home!
In addition to not being patrimonial, the factors that determine this
relationship or relativization, as I usually call it, are mostly not objective.
Attributes such as legal knowledge, experience, relationships, recognition in
the market, capturing capacity are only a few of them that decisively
interfere in the relative importance of the partner and are almost all
subjective and very difficult to evaluate. Some of the few objective factors
in this complicated equation are your own or team turnover and portfolio
percentage, which are typically used by the "eat what you kill" offices.
Ultimately, each partner "holds" in society what all other partners "think" it
is worth.
Another factor that makes this relationship more difficult is that all of this is
changeable over time and as the professional becomes more experienced
(and old), it also changes the way he sees his ambitions and his own
personal life. All this will change the corporate material in a slow, almost
imperceptible way and a situation of comfort among partners defined at a
certain moment may not guarantee this stability forever.
We must remember that this relationship among partners is in principle the
basis of everything, because the behaviors of the main opinion formers
permeate society and will ultimately determine explicitly and / or
subliminally all the behavior of the team, thus defining the business
philosophy.
All this subjectivity combined with the diversity of personalities and the
different phases of the life of each partner generate visions, sometimes
totally different from what should be the business philosophy and the
objectives to be pursued.
As all this is very fluid, I want to add in this discussion an even more
subjective point, but in my point of view they are part of the basic
infrastructure to which all others support and for all this to coexist in a
harmonious way there must exist two basic assumptions:
On the one hand, in regard to every partner to the principles of society, the
awareness that the interests of the whole are greater than the individual
interests ("the whole is greater than the sum of the parts"). To have in
particular the real vision of the relationship between their contribution to
society and their participation (in terms of quotas or percentages in the
forum) and the humility to understand that the word society gives the right
to any other member to request clarification on attitudes that interfere in the
life of the company (accountability).
On the other hand, the professional, rational and respectful behavior that
each member must have when requesting from any other partner (s) the
clarifications mentioned above. To summarize: "it is the duty and right of
every member to give and receive clarification on all his attitudes and those
of others that interfere in society", in other words: "the right to know is
exactly the same as the duty to explain"!
PARTNERS AND THE ATOMIC STRUCTURE

Source: Wikitionary

Since I was little I was always curious

about everything that referred to the atom, its structure and how this tiny
particle works. The figure represented by a nucleus filled with balls inside
and several others orbiting around it always fascinated me.
I also like metaphors and am adept at the saying that "a picture is worth
more than a thousand words" (I think because of the difficulty I have
always had in expressing myself through written language).
Putting the two together, I saw a metaphorical figure of the traditional
atomic structure (that of the balls) as adaptable to the functioning of a law
firm, as follows:
The nucleus, made up of protons and neutrons being the partner formers of
this society and the electrons gravitating around the nucleus as the
attributions and functions that must be exerted by the partners so that the
structure remains stable.
The first analysis or analogy we should do is about the composition of the
nucleus. In physics, we know that the nucleus is made up of protons and
neutrons, and we also know that the nuclei are positively charged, and the
others (by its name) have no charge. The question that most people ask is:
how particles of the same charge, which should repel, hold together and the
answer is the existence of a physical force, called a strong force.
We can attribute to this strong force, in the case of law firms, the various
attributes, interests and even coincidences that bring together several
lawyers to form a society. Enumerating the main ones: technical
complementarity, entrepreneurship, personal affinities, commercial /
financial interest, strategic vision, complementarity of personal attributes
and personality, etc.
We can also imagine the protons as those partners with more
entrepreneurial characteristics (capture, vision and marke-ting, etc.) and
neutrons as partners with greater agglutinating characteristics (management,
coordination, execution, etc.).
Just as there is strong force, which kill protons together, there is also the
force of repulsion (because they have the same positive charge), which in
the case of societies is formed by a set of small forces that tend to distance
the partners, that is, internal competition, disputes for greater participation,
space, importance and recognition, incompatibilities of the most varied
forms and especially egos.
The stability of the nucleus will only be maintained as long as this "strong
force" is greater than the repulsion between the protons. If there is an
imbalance in these forces, there will be nuclear fission with catastrophic
results.
The second analogy we will do is the electrons that orbit the nucleus, which
I see as the attributions that the nucleus must carry out in order for the
whole structure to be stable. As in physics, there are different orbits for
different electrons and in the case of societies, the different functions that
all societies should exert.
The partners must be responsible for the correct execution of the work,
must be the quality standards and also be the coordinators of the team, the
projects or work and the relationship with the clients.
Another important function is the capture of new jobs and / or clients,
institutional promotion, marketing and maintenance of the client portfolio.
No less important is business management, comprising finance, billing,
operation, hiring, and training and team building.
Finally, the definition of business strategy, entrepreneurial vision, new
business, investments, etc.
Source: author

All this orbits the nucleus and we also

know from quantum physics that these orbits are not fixed or stable, and
may be closer now, or further away from the nucleus depending only on (in
the case of physics) a statistical analysis. In our case, these orbits may vary
depending on the capabilities of each partner or several deans, giving more
or less emphasis to each of the functions mentioned above.

Again making analogy with physics, we know that excited electrons, when
changing orbits, release, energy in the form of photons and producing light.
Activities, among those previously mentioned, very well elaborated and
coordinated produce the effect of "emitting light" (in a metaphorical way)
and positively project the society in the market in that characteristic.
It all depends on the strong force that unites the core!
THE LAW FIRM AND THE BROWNIAN MOTION

Definition: The Brownian

motion can be defined as the random motion of microscopic particles
immersed in fluid(1).
In a fluid (liquid or gas) there are basically two forces that constantly
interact: the first is the force that amalgamates the molecules and keeps
them together thus forming the liquid (I will not discuss or define this force
now), and the other is this vibration that is inherent to the particles and
makes them “collide” with each other.(2)(see footnotes).
If energy is applied to the fluid (example: if we boil water) the vibrations
among particles increase, as more energy is applied and ends up reaching
the threshold of breaking the force that joins the said particles (example: the
water boils and is transformed into steam).
To justify my statement, I would like to use the metaphor of FLUID rather
than the image of the so-called corporate fabric due to a purely physical
aspect: in a fabric the forces may only be applied in two directions, as fabric
is something two-dimensional and in a fluid the forces exist in the three
dimensions and the model more closely resemble to the real world
scenario where the aspects involved may, and do occur in any direction or
route.
In this metaphorical comparison, I draw the following parallels with a law
firm:
1 – As it is not an equity company, every law firm is a dynamic organism,
not a rigid one, where relativization (relative valuation) among the partners
depends on several factors, such as: technical qualification, client portfolio,
volume of revenue , market recognition and several others. In my
metaphorical comparison, it is FLUID (that adapts to the container in
which it is poured and reacts to the energy applied to it in a quick and
sometimes intense manner) or, as it is referred to, the corporate fabric!
2 - The force that agglutinates the fluid particles (the partners) may be
compared to the technical, complementation, commercial, personal and
ethical affinities that draw the autonomous professionals closer together
and join them get together to create a “law firm”.
3 – The vibration of the particles, that is, the individual characteristics, that
can be listed as: different professional experiences, different stages of ,
individual objectives, commercial aggressiveness, ambition and particularly
personalities and egos form the “Brownian motion” that constantly generate
friction and impact the “particles” that tend to separate them.
4 – Finally, the energy contained within this FLUID organism is
represented by the pressures to which a law firm are subjected, with the
biggest being the way how the partners, who are individually different
(refer to the previous item), perform their relativization, and reciprocally
value themselves and directly interfere in the most sensitive organ of the
human body: the pocket!
 When this energy force is
too strong, or in other words, the differences that can be temporary too big
(example: a partner who over a long period does not perform satisfactorily,
and as a result not entitled to his/their share in the profits as determined by
the firm), this difference drastically increase and disturb all the other
“particles” of the corporate fabric. And just point out that this is only one
example of the force or energy to which a law firm is subjected.
This relativization formula should be formulated in such a way that it may
balance, in an organic, dynamic and fluid manner (as in the law firm), the
two opposing forces to which the “particles” are subjected, that is, making
the affinities compatible with the result that the partners are amalgamated
with despite their differences and ambitions!

(1)
The name is given to honor the Botanist Robert Brown. In
1827, when he looked through a microscope and detected the
particles that are found in pollen grains in the water, he observed
that the particles moved through the water, but was not able to
determine what mechanisms had caused this motion
(2)
The Corpuscular Theory of Matter.
PARTNERS COMPENSATION IN LAW FIRMS: THE SEVERAL
SOLUTIONS TO THE EQUATION

There are dozens of books

on this subject, but anyway, I am going out on a limb by providing some
very simple and objective perspectives (remember that I am an engineer) so
that everyone can think about them in a quick and pragmatic way.
Structurally, there are two basic forms/models to remunerate the partners of
a firm: the most traditional method is the appropriation of the net income
and its distribution to the partners depending on the effective participation
of each one in the company, and the second more aggressive method, is the
remuneration based on certain performance criteria. That is when
problems arise!
In terms of the first method, the difficulty lies in defining what exactly the
share interest of each partner is, as law firms are not equity companies.
What I usually state is that the equity or asset (using accounting terms) of a
firm goes down in the elevator every day and goes home, that is, if no
lawyer returns the following day, the value of that firm is zero ( its material
worth is merely the value obtained from the sale of existing physical assets
which is very low). The real value of a firm is in its accumulated experience
and in the people who hold it!
The exact definition of the share interest of each partner is really
complicated/complex as there is a relativization aspect present between
each of the partners attributable to their experience, partnership
time/seniority, clientele, etc. (we will elaborate this topic later on), which is
a highly volatile issue, subject to frequent change due to personal and
market factors.
The second method also presents difficulties to it being implemented on
account of three factors:
i.-Consensus among the partners as to the definition of what the
performance indicators and their weighting should be;
ii.-The lack, (almost always) of numbers and reports with a certain degree
of reliability, and finally iii.-Which internal department or person will make
the evaluation (objective as well as subjective) of the engaged partners !
Now, having highlighted the difficulties, let us now go to the attempt solve
the equation! In order to solve any equation, we need to contextualize and
define its assumptions, variables and factors (no variable elements).
The assumptions in this equation (that are applicable in relation to
both methods referred to above) are the following:
1 – Maturing and institutionalization of the company, i.e., all the
operational and strategic decisions must be arranged and assumed with
professionalism, aiming for the best alternative that are in the best interest,
and would promote the longevity of the institution, which also has to be
fully exempt from egos and personal interests. As I see it, this assumption is
more difficult, and very few firms are managed accordingly. .
2 –Affinity in terms of the philosophical thinking of the company (what
type of firm we want to be) and alignment of objectives in the short, mid
and long term.
3 – Sound relationships between partners, moral, ethical and personality
affinities, mainly/especially professional and personal respect (the
“amalgamation” that unites the partners).
The “factors” in this equation contain several variables (which are
exactly the shareholding interests) are the elements that are inserted in
the equation that define how the partners will be “relativized” among
themselves during every period (usually 1 to 2 years). For illustration
purposes, I refer to some of these below, which shall not be regarded as
the only ones, as each firm may opt for and define other factors depending
on the focus that it wants to imprint in the company. Two types of factors
are shown, the objective factors obtained from managerial and accounting
reports, and the subjective factors obtained from evaluations (to be defined
how) of each partner.
It is always worth remembering that for each cause there is a consequence
and the definition of the mix/blend of factors will determine, in the mid and
long run, how the partners and the entire team will behave.
1 – Client acquisition – This is probably the most acclaimed factor and
more easily obtainable in any firm than any of the other factors,
representing the quantity (in numbers) of clients acquired by a given
partner for a given period.
2 – Portfolio – The percentage each partner holds of the total client
portfolio of the firm. To obtain it, it is necessary to have a correct and
updated record file of each partner and their client list.
3 – Production - What is the value in terms of fees generated by the partner
and/or by their team in relation to the total revenue generated by the firm.
4 – Retention: This is probably the least used one and more difficult to
determine. It represents how much of the clientele was retained in the firm
(taking the increase, decrease or loss of revenues into consideration).
5 – Strategic Vision – What is the capacity of each partner to
interfere/contribute and add positive insights in the firm strategy.
6 – Financial – Economic Vision – This represents the capacity of each
partner to analyze and understand the entire financial functioning of the
firm.
7 – Team Management – It is the ability of each partner to manage and
motivate their team and the people/workforce/staff in the company.
8 – Technological Updating – Ever-increasing focus on novelties and the
technological trends that are becoming more important and essential when
one thinks about what lies on the horizon in the life of an institution in 5 to
10 years’ time.
9 – External Recognition – represented by the participation in associations,
entities, intellectual and academic production in order to project and to
consolidate the name of the institution in certain areas.
10 – Dedication Time –it represents how much time out of their life each
partner has dedicated/devoted to the institution.
Finally, the variables (to be found) are the participation by each
partner and the equation then assembled would look like this:

(n1* f1 + n1*f2+...n1*f10) + (n2* f1 + n2*f2+...n2*f10) ...... +(nn* f1 +

nn*f2+...nn*f10) =100%
f1+f2+f3+f4+......+f10 f1+f2+f3+f4+......+f10
f1+f2+f3+f4+......+f10
where:
“f” represents each of the defined factors
“n” is the evaluation of each partner in relation to each factor.
As already mentioned, in any form of profit distribution or remuneration of
partners, be it traditional or aggressive, the definition of the factors to be
used and their relative weighting among themselves will determine the
result of the equation, which, in the end, will determine how the institution
will behave internally and externally.
Finally, every company is a living entity that evolves and is molded
according to the internal interactions and the market influences. I reiterate
that firms are no different, are also subject to change over time, and this
results in the insertion of another factor into our equation: time itself.
One shall always bear in mind that the solution of the equation is not
perpetual and unchangeable, because, as the firm grows and adapts to new
conditions, some of these factors may have to, and must be reassessed.
What is the ideal solution? What should the reassessment time be?
In my opinion, there are no ready answers for these questions. Each law
firm must find their own!
Support by an outsourced and experienced consultancy firm, which in
addition must be exempt from internal political interactions, may indeed
help in [the working out of/finding the solution to] this challenge, and may
as well provide the necessary input in order to define the management
model and future strategy.

PARTNER´S COMPENSATION AND THE INTERACTION WITH

THE INSTITUTION.
Law firms are generally formed by lawyers that have certain features in
common, such as technical quality orability in specific practices of law,
entrepreneurial spirit, good interpersonal relationships, and who decide
to group together (early in their careers or following a “split” from an
existing firm ), with a common objective and interdependent utilization of
one another’s skills.
This technical complementation creates a more comprehensive
entrepreneurship and the personal affinity (character, ethics, companionship
and trust) creates the most important aspect of all, which is its continuity.
The same “glue” that approximates and binds these lawyers is the
responsible for the entire entrepreneurial philosophy that the experts call
“vision, mission and values” and that will (or should) guide all the decisions
and attitudes to be taken as long as the firm exists.
As I have always maintained, law firm management plays out on a
metaphorical chessboard, where there is an intricate interdependence among
all the engaged elements. The remuneration of partners is one of the most
important pieces on this chessboard, and its definition or change (position
or movement on the chessboard) practically defines the strategy of all the
other elements.
In a firm there are two entities that should function hand in hand], mutually
feeding themselves in a virtuous symbiosis, which are: the institution and
the partners. The decisions of the latter directly and intensively impact the
institution, but as for every action there is a reaction of the same intensity
and in an opposite direction, the institution reacts in its own discretion, in a
positive or negative manner in relation to those attitudes. The virtue or
merit lies in the correct choice of the decisions in a way as to transform this
process into a virtuous cycle of relationship between these two entities.
Once the entrepreneurial philosophy is defined, the cycle in the “institution”
entity goes through the strategic planning, which in turn, defines objectives
and targets. The mid and the long-term objectives define the career plan of
the attorneys and partners, and the short-term objectives define the
evaluation criteria of the professionals. These two elements should
feedback the strategic planning for eventful course correction.
As for the “partners” entity, the cycle goes through their behavior in
compliance with the philosophy and the consequent definition of the talent
attraction and retention criteria. Those criteria make up the career plan of
the professionals, and define the evaluation criteria of the attorneys and
partners (that is correct! - the partners must also have evaluation criteria).
Finally, the definition of the remuneration method for the partners must be
fully integrated with the entrepreneurial philosophy, and all this
together/jointly will then make up a single cycle of virtuous feedback,
which will be vital for the long lasting/longevity of the institution, as well
as the financial happiness/prosperity/health and professional
achievement/success of the partners!
COMPENSATION STRUCTURE - STRUCTURAL MODELS
In every society, there is a “bond” or “links” among its members that may
have several features, but the main one is the individual conscience that
being together is better than being alone.
In law firms, this glue is mainly represented by a technical
complementarity, that is, lawyers from different specialties that get/group
together in order to render a more complete service to their clients. Apart
from this, for the society to prosper, other characteristics are also necessary
in order to feed its growth, such as: entrepreneurial vision, technical
knowledge, relationships, capturing/acquisition capacity and skill in
managing clients and staff.
All those attributes, when “gathered and mixed” (referral to a fashion
expression) make up the relativization matrix among partners, but the way
it is structured and the importance given to each attribute varies from one
firm to another, and the result of its use in the partners’ compensation
model may become the weak link in the chain that connects/binds them.
The first aspect we should understand is that this matrix of attributes may
not be correctly applied, mainly due to the lack of reliable data and/or
information for the correct among the participants. This constraint may be
higher or lower, depending on the level of the maturity of the controls the
society is part of in each of the phases of its growth. One would expect
that in the initial months or years, that the organization will not have
sufficient financial means to invest in an administrative managerial
structure and systems able to produce the necessary reports.
Another very important aspect to be taken into consideration is the so-called
entrepreneurial philosophy adopted by the company, which in law firms
tend to be the mirroring of the individual characteristics of their founding
partners. Example: a firm that is incorporated by an attorney with a
predominant profile for client attraction/acquisition will have in the initial
period of its existence the tendency to value this attribute in its team s and
partners.
Regardless of the previously analyzed aspects, we can practically place in a
bi-dimensional matrix those two perspectives of how the partners see the
philosophically correct forms for self - relativization and control of the
investment, costs and expenses of their organization.
From the first perspective, this relativization may vary from a more
subjective “approach” of equivalence among the partners, imagining that
each individual has their better, or less, developed capabilities in relation
to each of the five characteristics that make up the “glue” among/between
the partners (referred to above), and which compensate them thereby
establishing equality/parity and (i.e. placing them in lockstep with each
other) to an extreme level where what is of interest is what one can attract,
produce and invoice (eat-what-you-kill).
In terms of the second perspective, we can vary from the complete
socialization of all investments, costs and expenses, where all that is under
the institution’s liability, regardless of its originator, need, sector or partner,
across to the other end where all expenses are individualized/attributed
individually and computed as being under the generator’s liability.
If we position these two themes in a bi-dimensional structural matrix, we
will arrive at the figure on the side that I devised to show the various
characteristics, needs and consequences of the combinations among them:
In the lower left quadrant we have the equivalence/parity between partners,
that is, there is compensation among the five attributes that make up the
“glue”; the partners must be technically alike and the expenses
(investments, costs and expenses) are ‘socialized’ in the institution. In this
quadrant the “lockstep” form of relativization can be a perfect fit, but it is
only kept intact if there is no big variation between the individual
dedication and commitment by each partner over time.
In the upper right quadrant one finds the concept that is diametrically
opposed to the previous concept, where each partner is valued due to their
individual characteristics and according to the importance given to the
attributes in the company, which are normally those that represent “cash
on hand”. In reference to expenses, there is also the identification and its
complete individualization to the partner or the sector for which they are
responsible for. Consistent with this model, each sector operates as a totally
independent cell, as if it were a firm within a firm. In this quadrant, one can
identify the firms that subscribe to the so-called “eat-what-you-kill”
philosophy.
In the lower right position we have what I refer to as the “Gerson’s Law”
quadrant and for those who are young, not Brazilians and do not know
anything about it, a brief explanation: A player in the three - time world
Soccer champion team of 1970 starred in one advertisement for cigarettes
where he said “I like to take advantage of It all, right?” and unfortunately (
for him) this ended up generating, at the time, the negative image of the
smart person!
In our case this is the image one wants to convey, as in this quadrant the
revenues are computed by considering the individual generating higher
importance to its generator and the expenses are socialized/shared by all.
This is not a formula that will work out correctly over time!
In the upper left position, one finds the quadrant with the equivalence
among the partners and the individualization of the expenses, which
contradicts? to the own/the very philosophy of equivalence, and as far as I
am concerned, there is no firm in this situation (but it is there for didactic
purposes only).
I am not going to define as right or wrong the perspectives described and
simplified in the illustration above, because I am quite sure that every firm
defines their own and that blends with the characteristics of the managing
partners, but anyway I will express my humble opinion: I consider the
intermediate situation prevailing between the lower left quadrant and the
upper right, provided they have well defined attributes, as well as correct
and reliable reports, thus presenting the more rational situation and the one
that has a better chance of survival over time!

THE MOST ATTRACTIVE MODEL IS THE WORST IN LONG

TERMS!
Several authors and writers have written about the method for determining
the formula for setting and calculating the correct compensation for the
members in a law firm.
The conclusion I arrived at after many years of working as a firm manager,
is that there is no perfect formula and more importantly: it must be adjusted
for each company and it must also be changeable/adaptable throughout its
existence.
It should basically be adjusted according to the business philosophy
created and imposed by its partners, to the firm's own composition, to the
objectives and expectations of each partner, to their age group, to their
expertise and to its managerial attributes. In this way, each society must
define the compensation model that is acceptable to all and reasonably
comfortable for most.
I have always repeated a mantra that says: "in a law firm there should be no
happy partner" for the following three reasons.
First, law firms are not equity companies and the relationship of
importance, influence and decision-making power of each partner is not
defined by the financial participation in the acquisition of company assets.
Let's remember that the "assets" of a law firm are the people who work in it
and that a firm without these people is worthless!
Second, this relationship between partners is defined by a great deal of
subjectivism, which includes: market projection and recognition,
management skills, technical knowledge, seniority, oral and written
expression (besides some obvious objective indicators such as billing,
customer portfolio and customer capturing/client acquisitioning).
Third, it is part of human nature, this feeling /perspective we all have that
we are worth more than others think we are.
Putting all this together, it is a situation where each partner always feels
that they are worth more in the partnership than the partnership considers
them to be worth, and thus, the point of equilibrium among/between
everyone must be the point where all partners are "slightly unhappy." This
dissatisfaction must not be uncomfortable enough to induce conflict or
breakup. In other words, if any partner is extremely happy with their
compensation, it is because one or some of the partners are very unhappy,
and this is the first trigger that may cause a future split.
The following graph shows that there are three zones in the relationship
between the dissatisfaction of the member and their remuneration in
relation to their relative value in the partnership (objective and subjective
attributes that should establish parity between the partners ). The first zone
on the narrowest left zone, represents the situation where dissatisfaction is
so great that it generates a rupture in the partnership. The second, the largest
and most dangerous zone, represents the situation of conflict and dispute
between partners caused by the strong discrepancy between relative value
and compensation. It can develop in the medium and long term, and may
be accommodated or lead to breakup/termination/dissolution, depending on
the ability of the members to find – or not find - a formula that
accommodates the attributes of each. The third zone is where the relative
differences in values are not relevant enough to cause dissatisfaction that
could lead to conflict, let alone rupture.
I have seen several firms that, trying to escape this potentially conflict
situation, have adopted a formula that initially avoids this conflict, which is
quite attractive for lateral growth and the quick incorporation of new talent
and portfolio growth.
The model adopted is basically that of simplified "eat-what-you-kill"
model, in terms of which each partner receive the entire proceeds of their
practice, contributing to the institution only their share of the fixed costs,
the so-called "overhead". There are some variations to this basic formula,
where one partner can remunerate another partner for the
capturing/acquisition of a client, if the subject/matter or the client had not
been captured by the first (the so-called "client fee" or "referral fee")
Partners or collaborators can be remunerated through work done by
members of another team (due to lack of availability or knowledge to
perform a certain task).
This model is often used by small, new firms, unknown in the
market/industry, and is often very efficient when it comes to attracting new
members who have a certain customer base and are dissatisfied with their
positions in other firms. Usually, it is a fast way of growth and leverage in
business, because the discourse of "independence", "synergy", simple
allocation of fixed costs, and absence of conflicts for corporate
participation is very captivating/compelling!
Another model assumed by some (which I consider a variation on the
previous one) is one that is usually adopted by firms already established for
some time (not long though), which are not very large but who already
have a reputation in the market, usually on account of one or two senior
partners, who are reputed and who hold the power to attract/acquire new
clients. In this case, these firms have already reached a stable level of work
and organic growth, because their partners have already used most of their
selling capabilities in each of their portfolios. The discourse in the case of
incorporation of new members, is usually very similar to the previous one,
that is, independence, apportionment of fixed costs, synergy, furthermore
the opportunity to use available resources, for instance the power to attract
and acquire new partners in order to leverage the portfolios of the
incorporated/existing members.
The difference between this model and the previous one is that in this
model, in addition to the apportionment of overhead costs, all the income
of incorporated firms does not remain 100% within these firms, but a part
of it is allocated to the founding partners, as a way of remunerating them for
the investments they made, and also for their ability of "opening doors" to
new businesses prospects for the incorporated partners. The latter tends to
be the more attractive route for partners with low power of capture/
attract/acquire new clients, typically those lawyers with good technical
capacity/ability and with small portfolios.
My criticism of these two variations of the "eat –what- you- kill" concept
is despite being very attractive and avoiding the great knot that exists in
law firms, which is the "relativization" between partners, it presents a
massive defect/shortcoming in the medium and long term:
In both examples, there is a strong stimulus to the formation of watertight
cells inside the same firm, which is extremely harmful to the formation of
an institutional culture and collaboration, which are crucial for the
perennialization/longevity of the organization. Another consequence caused
by the indifference and impermeability that exist among those cells, is the
deterrence and lack of long-term motivators for the teams.
Despite being the nerve center of law firms, the process of " relativization "
of partners combined with objective and subjective evaluators, in my
humble opinion, is still the best way to achieve a stable balance between
partners, to create an institution and make it perennial, balancing individual
characteristics such as work capacity, technical knowledge, management
capacity, entrepreneurship, personal goals, dedication and commitment, and
especially, egos!
THE HUMAN HAND METAPHOR
The human hand, along with the brain, is the main units/organs that are
responsible for the differentiation of human beings [from other
species?]and of our dominance on earth. With its 27 bones and 35 muscles,
it can hold, push, hit, pull, carry, gesticulate, besides having/possessing
vast sensorial expertise. It is a wonder of the evolutionary engineering!
And what does this have to do with the management of law firms?
[In my humble view,] I will make an analogy between these two elements,
as the rational and efficient management of a firm (and virtually any
company/business) should basically have a thinking and decision-making
element (the brain), associated to a very capable, flexible, efficient,
sensitive and adaptable performer element (the hands).
The human brain finds its analogous element in the decision-making
rational structure that every firm should have: the founding
leader/entrepreneur, for example, from the small-sized operations to
those with the most complex organizational structures comprising CEO’s,
boards, executive committees, managers, etc, in the large-sized firms.
For this organizational structure to work properly, it is necessary to have a
tool (two, in the case of humans ) that is able to perform the tasks correctly
and efficiently. For this to happen, each one of these elements should have a
specific combination of function or features to properly perform all its
functions (like picking an object up).
For the management of a firm to be efficient, in the same way that our hand
picks up an object , it is necessary to have the proper distribution/allocation
of the job posts/tasks for each one of its elements (the fingers), and
accordingly, I devise/construct/put together the characteristics as shown
below:
Note: the distribution of duties was merely random. There is no specific
function for each finger!
1- Technical quality and production capacity: in this “finger”, we can
place the technical and level of legal capability of the firm (as a last
resource of/to its members) responsible for the capacity to assist clients as
well as representation in more complex matters, to add value to their
solutions with the consequent efficiency in collecting its fees, and its image
in the market.
2- Capacity to attract clients and institutional marketing: In this
“finger” we place the capacity to attract clients and all the institutional
marketing initiatives that are responsible for feeding the company’s growth.
3- Support to clients and quality in the rendering of services: in this
“finger” (one of the most important in the current scenario), we can
associate the ability to support, fulfill, and if it is possible, to impress
clients with pro-active and innovative approaches in the rendering of the
services. It s important to point out that good services go from telephone
support, e-mail, WhatsApp, etc., through to the rendering of the actual
legal services , including the expertise necessary in the emission/issuance
of invoices and subsequent monitoring.
4- Work and staff management skill: in this “finger”, we place the way in
which the different components of the firm organize their work, manage
their teams ( from a technical and motivational viewpoint), those matters
under their responsibility, as well as their contacts.
5- Entrepreneurial Vision: in this “finger”, we should place the capacity to
understand the causes and the consequences of all the attitudes and
decisions made internally and that will affect the management of the firm,
that is, finances, management, growth, investments, strategy, image, etc.
In this metaphorical figure, we can also fit the ideal characteristics of the
composition of the partnership (of its partners) or in other words, the
individual characteristics of each partner. By being aware that every person
has their own professional profile, we can predict that every individual
may have only some (usually one or more) of those innate or more
developed characteristics, and managing a combination of these types of
people in a company/business is an art.
It is important to highlight, that, like the human hand, in order for a firm to
operate well, all the fingers are necessary and therefore need to be present,
with their individual, combined and balanced characteristics, and not
merely a the set of several identical fingers. Can you imagine what it
would be like if we had 5 index fingers or 5 ring fingers? It would not
work/function very well!
INCENTIVES AND DESINCENTIVES
Following all these considerations, the conclusion that we likely have
reached (me, if I could guess and have the ability to define, and you who
crave a magical solution) is that there is a perfect formula, a "holy grail" for
the equation of a partnership, but unfortunately, the answer is that it does
not exist!
Each law firm is made up of people who are absolutely different, one from
the other, and in different quantities/measure, which makes the solution
absolutely/distinctly individual, and most importantly: the solution must
vary with the life of the firm. The solution that may be suitable for a young
firm, with 3 young partners (for example) will not be anywhere close to the
ideal solution for a longer-term firm with a larger number of partners, and
with partners in another phase of their lives.
Here I go again with my metaphors ...
I like to cite Newton's three laws that I call the "water behavior theory" to
exemplify/illustrate this point of incentives and disincentives.

Newton’s First Law (or Law of Inertia):“Lex I: Corpus omneperseverare

in statusuoquiescendivelmovendiuniformiter in directum, nisiquatenus a
viribusimpressiscogiturstatumillummutare”, that is:
"Every body persists in its state of being at rest or of moving uniformly
straight forward, except insofar as it is compelled to change its state by
force impressed"
This has to do with our habits and the difficulty we have to change them
(CAP I and II).
Newton’s Second Law: “Lex II: Mutationemmotisproportionalemesse vi
motriciimpressae, et fierisecundumlineamrectamqua vis illaimprimitur”,
that is:
" The change of momentum of a body is proportional to the impulse
impressed on the body, and happens along the straight line on which that
impulse is impressed."
This was to alert managers that major changes require great efforts (CAP
II).
Newton’s Third Law (the best known):“Lex III: Actionicontrariam
semper et aequalemessereactionem: sinecorporumduorumactiones in se
mutuo semper esseaequales et in partescontrariasdirigi”, ouseja:
“To every action there is always opposed an equal reaction: or the mutual
actions of two bodies upon each other are always equal, and directed to
contrary parts”.
Source: http://teachertech.rice.edu/Participants/louviere/Newton/
This serves also to alert managers that there is no decision without
consequence, that is, any attitude or decision taken will produce direct and
collateral effects and the great merit/virtue of a good manager is to choose
the one that has the greatest impact with the least possible side effect.
Theory of water behavior: Water in nature, because of the action of
gravity and because it is a liquid, always chooses the easiest way to move
from one point to another. This can be observed in springs, streams, rivers
and even tiny cracks in concrete structures where "leaks" occur. (remember
that I am a civil engineer).
Almost every human being looks for the simplest solutions that require the
least amount of effort to solve their challenges.

And what does this have to do with [our] partners and law firms?
If we combine Newton's three laws and my "theory of water behavior" we
can draw a parallel with the behavior of the partners, and consequently the
law firm, in the functioning of the attitudes and decisions taken in relation
to the individual attributes that will be valued/considered for the definition
of the relativization of the partners:
Examples:
A partnership that overestimates the attribute related to
capturing/acquisition of clients will, over time, produce professionals
extremely focused on that aspect, thus leaving the other aspects so
exhaustively discussed in this chapter in the background: the quality of
production/service delivery, the management of people and teams, the
technical and intellectual deepening and financial management become
burdens that no partner wants to assume.
On the other hand, if we encourage too much production, that is, the
remuneration linked to the amount of billed hours (individual, team or
area), the result will be professionals who will view client
capturing/acquisition, institutional marketing and cross-selling, for
example, to be a loss of valuable work time and, therefore, loss of
remuneration.
The correct and balanced combination (assessed on a case-by-case basis) of
the evaluated attributes and the definition of their weighting and amounts,
will ultimately define: productive capacity; growth; competitiveness; the
longevity of the partnership, and especially, the equilibrium between the
partners!
 CHAPTER 9
TECHNOLOGY & INNOVATION

LAWYERS AND TECHNOLOGY

First of all, we need to contextualize the Law Professional ("aka" Lawyer)
who has adopted the professional approach of working in Law Firms and
who are relatively different from those who have opted for academic, public
or corporate careers and upon which we are not going to discuss.
Do you remember the movie "Pretty Woman" starring Richard Gere and
Julia Roberts? One of the first scenes shows that she is able to get him out
driving his Ferrari with a mechanical gearbox, because he only knew how
to handle an automatic gearbox in his life and then she appears and "saves
his life"!
Well, we're not here to discuss the movie. It was produced in 1990 and it
has been 28 years since its introduction to the public (in terms of
technology this is an eternity)! How would it behave with a more modern
dashboard and / or steering wheel with no keys, digital sensors, paddle
shifts, suspension controls, steering mode definitions, etc.?
The metaphorical figure I want to use for today is a Formula 1 steering
wheel, where the driver has all the electronic controls of his car in his
hands, he has to know how to use them precisely when he is driving at a
speed of more than 300 km / h. How is it possible?
This is only possible with the careful selection of some pilots who have this
ability, with great willpower and persistence, having passed and been
winners in lower categories (where controls are simpler and the speeds
lower) and they undergo intense training in simulators and on the lane to
get to where they are. And most important of all and want to do that!
Bringing the discussion to the provision of legal services and to lawyers,
how will these professionals accustomed to working in a traditional way
(automatic exchange) will adapt and prepare for the new technologies that
are being incorporated into the profession?
I am a staunch defender of technology and optimistic about what it will
bring to all of us in the future, but we need to adapt and prepare ourselves to
use it to our advantage. On the other hand, I am extremely critical of what
some companies and the specialized media have been propagating about
this same technology, that is, it is very simple to implement, solves all
problems and replaces the human figure in a very short time!
Putting under the right focus, the technologies presented so far in the legal
profession, that is, predictive analysis, document self-management,
intelligent searches, language processing and several others will effectively
negatively impact those professionals who are in the " automatic exchange,
"but they will also offer huge competitive advantages to those who are
willing and able to use them.
Again the same question asked earlier: How will it be possible? And the
answer is exactly the same!
Not being reactive and having an open mind to understand that technology
(as always) comes to help; having the criterion when choosing the right one
that fits your need; progressively adopting more complex technologies,
learning to deal with them and adjusting correctly to their reality and finally
undergoing an intense process of training and personal adaptation.
Another point I would like to point out is that most of these technologies
are geared towards "legal operation management", bringing greater
productivity to those who are prepared to use it, but there is still the issue of
"legal business management" (specifically for law firms and legal
departments) where other factors must be taken into account, such as team
management, process management (internal, non-legal), leadership,
customer service, financial management, marketing and business strategy.
Being repetitive, all technologies will and will help more and more that
legal manager who is prepared to be more efficient, productive and
competitive, so get ready!

An important point that we have to consider is the professional psyche of

the Lawyer and that is very well shown by the statistical study elaborated
after years of observation in the American market by Caliper
(www.calipercorp.com). This observation generated the lawyer's
professional profile Caliper and his deviations from the average American
population, as described below and published in the book "Growth is Dead:
Now What?" By Bruce MacEwen of the Congregation Adam Smith, Esq.
Already duly quoted and discussed in Chapter 3.

TRAIT US POPULATION LAWYERS

AVERAGE AVERAGE
Skepticism 50% 90%
Autonomy 50% 89%
Abstract Reasoning 50% 81%
Urgency 50% 71%
Resilience 50% 30%
Sociability 50% 7% (12% if you
include rainmakers)
Although it is a study conducted in the United States of America, with
thirty years of experience in dealing with these professionals, I venture to
say that if it is not identical to ours, it is very close to our reality.
In order to adopt something new (whatever it is) you need some
characteristics such as: believe and trust professionally in other
professionals (who are bringing the news), be willing to experiment, have a
team spirit (to realize that your mu-dance can help the team), if you plan or
plan how to adopt the news and use your and team's feedbacks and mainly
do not have reactive posture.
If we analyze in detail the characteristics listed above, in my point of view
it will be very clear the impact of these on the topic of our discussion. The
new always generates a reaction of distrust and fear in precision (a very
important characteristic for the profession of Law).
Another point to be considered is the affinity of the professional (who chose
a human subject to study) and his / her own academic formation that has /
had a very subjective and interpretative approach in language and very little
pragmatic or mathematical, usually focused on the exact professions (by
which systems and software are developed).
This "gap" of training brings a natural difficulty for the lawyer to absorb
and understand the logic connectors (which is "dumb" to the eyes of these
professionals). To cite as an example, all search engines use logical
connectors (called booleans) and attorneys have to absorb the difference
between the “and” connector which in mathematics means “intersection”
versus the meaning of the additive conjunction “and” used in written and
spoken language which means "union".
In addition to the difficulties responsible for lawyers, it is also necessary to
consider the "hardness" of the systems offered to them, which, because they
were developed by professionals in the field of auditing, are very unfriendly
to non-technical "laymen". We should all thank (over and over) Mr. Steve
Jobs daily that he introduced the concept of ease and intuitiveness in his
products into the world of technology and that generated a revolution in all
the systems and gadgets developed after the iPhone.
The ones who are “older” like me, should remember the evolution of video
cassette players in the 80's and 90's when they became more and more
sophisticated until we reached a point that we did not know how to operate
them anymore! Nowadays everything has to be easy and intuitive and the
new systems offered to lawyers should be too! This is called
consumerization.
Much more important than the adoption of new technologies is the change
of the mindset of lawyers and especially of those who run law firms, since
the change is much greater than the simple adoption of technology. It is the
adoption of a revolutionary culture, as has happened in almost all other
markets and not simply the evolutionary, thinking of doing better than ever.
The market in general expects all players to present different and more
competitive options.
The history of the evolution of the law firm brings us back to the 70s and
80s, when there were only a few offices with quality and international
training, combined with the fact that we were living a market reserve. At
that time there was practically no competition and soon after the opening of
the Brazilian market the sector experienced a boom of growth and the legal
market started to live a comfortable situation of "sellers pricing". At
present, the situation is exactly the opposite, with a lot of competition, price
pressure and mainly for efficiency and excellence in service delivery. The
market is defined today as "buyers pricing" and the adoption of everything
that brings effectiveness and competitiveness (including in this technology)
is no longer an option but a survival factor.
INNOVATION IS NOT ONLY TECHNOLOGY

Source:: Shutterstock
Slogans: Smart and Apple

Much has been said lately about the impacts of new technologies in all
areas and the law would not be different. Several authors have advocated
until the end of the profession, which in my view is a bit of sensationalism
to draw attention to as great-of-future gurus.
One can not deny that technological evolution is being brutal and that
everything will change around us, from the simple fact that we use the
internet (with all those softwares that discover our navigation pattern and
automatically suggest something that may interest us in any browser we
use, as if they were part of the original page) to the newest robots that go to
the kitchen (www.moley.com).
I am passionate about the future and everything about new technologies and
I am sure that this new revolution will impact us in a way that we have
never felt, but the point I want to abort is lately confusing innovation with
technology (which is a type of innovation) and these concepts are quite
different.
The legal market is undergoing brutal pressure, not caused by technology
but rather by the threat of heightened competition, by the changing
responsibilities of Legal Officers and their departments, by the tightening of
such departments in their legal service providers and all this demanding
brutal adaptations in a market that has always been in a comfort zone.
What has surprised me the most is the endogenous view that office
managers still have of themselves, because when asked about their
differentials, they almost always respond with the phrases "we have the best
lawyers" (they speak English, they have LLM , worked in American offices
and so on), "we serve our customers well" (there is almost always a phase if
effect on the sites), "we have the best expertise", just to mention the main
ones. I do not know if this attitude is self-deception, "wishfull thinking" or
even the wrong view of your business.
On the other hand, the same managers perceive that they have internal and
external problems and that they appear in the absence of a correct career
plan the current one (remember the expectations of the new generations), in
the absence of a professional criterion of relativization of members, in the
absence productivity and profitability in the absence of a deeper
understanding of the market they are engaged in and the lack of planning
(minimal) of their current activities and future movements.
Emblematic questions that highlight the internal difficulties:

- Why cannot I make good professional hire?

- Why cannot I get more commitment from my team?
- Why cannot I improve the level of my services?
- Why is it so difficult to increase profitability?
The simple adoption of technology notes will, without a shadow of a doubt,
bring about an increase in efficiency in the operation, but it is only an
evolutionary approach, in which we try to do a little better what we have
always done. What the market expects from the legal market is an entire
change in the way you provide such services and this only happens when
you change the "mindset" of your managers, skipping them to a
revolutionary approach, ie thinking outside the box and mainly having the
courage to try new solutions. Thinking ahead does not mean doing better,
but doing different, more agile, cheaper and better!
This change will not come from the implantation of new systems, but from
a new relationship with clients, changing from the traditional way of
passing the client's legal advisor to be the business partner of the client.
The questions that should be asked are:

- What does my client actually do for me?

- What does the market expect from legal service providers in the
current economic climate?
- Does the service I offer (for the amount charged), the market want
to consume?
- Am I effectively attractive to the professionals of the future?
- What are my competitive advantages and disadvantages?
- How do I improve my efficiency and effectiveness?
Of course, the technology will greatly help in solving all the problems
identified when such questions are asked and answered.
In short, much more than the simple adoption of new technologies, you
have to change the way you approach your business, your customers,
your market, and offer all of these element solutions that will surprise
and excite you. This is Innovation!
THE NEXT SUCCESSFUL LAW FIRM (IN THE VERY NEAR
FUTURE!)

In this discussion, I want to

prompt reflection on the acceleration of changes in all fields of the routine
life and disruptions in our professional life caused by the technological
revolution. The world has been experiencing the effects of which we are
already feeling that and will be stronger in the near future. The impact on
people and professionals demands for a profound and radical adaptation to
this new reality, and [all people in the society and companies are inserted
into this scenario (again the Law Offices are not an exception)!
Our current economy is already forcing all leaders or managers to fully
rethink their businesses strategies in order to adapt to a situation that will
endure for some years to come! The most common and immediate
adaptations relate to space optimization, search for productive efficiency
and maximization of the sales efforts, reduction in costs and staff numbers
(not necessarily in this order nor a topic of present discussion ).
Now, let we make some projections based on the strong trends already in
our current reality or part of our daily existence, keeping the focus on law
firms:
Spherical communication.
The term encapsulates our current reality in regards communication with
the world in search for information very well. The current tools available
on the internet enable us to simultaneously connect with everything and
with everyone in a fraction of a second , and we are already used to doing
it. And what is most incredible is that we can no longer imagine us living
without them! This trend will force the service providers to create new
forms of exposure, and specifically, new approach for rendering their of
services.
Detachment from facilities and from the external and ostensible
images of power.
More and more the aesthetics, the organization itself, its substance (with
the breakdown of its accomplishments) and the user friendly browsing on
a company’s site, are becoming more important considerations to us about
a company than its physical address or the appearance of its facilities.
As a result, we are slowly abandoning the habit of observation and
subliminal evaluation that we make about the financial healthand and the
“muscles” when looking at the facilities of a supplier that we are about to
contract.
This trend impacts strongly, particularly on firms that are still too caught
up in trying to demonstrate their vigor based on the magnificence of their
facilities. It is important to remember that contracting
companies/businesses want good legal services and not luxurious facilities!
Work Flexibility.
This is nothing new that in several fields [of activity], but it is a significant
paradigm shift in the legal world that due to the remarks the previous item:
the concern (an almost irrational preoccupation) with information secrecy;
the need [ to make reference] to millions of physical documents (books,
procedural files, files, etc.); and lastly, the need for personal contact with
their clients still, the legal world is [fighting to adopt the present challenges
and resisting to embrace it . The following technological trends demystify
this pseudo imposition of fixed work in one single space.
Technical improvements in the communications
It is undeniable that the speed (the one measured in Mb/sec) is growing in
an astounding way and with increasing competitive costs.
The internet 2 with a theoretical speed of 10Gbps (this means that a DVD
with a 4,7Gb capacity can be transferred in 3.5 seconds!); the “IPv6”
address protocol will allow 79 octillion times the current capacity of IPv4
protocol addressing; and, lastly, the 5G technology estimated to land/arrive
in Brazil in 2018, has 10 times the speed of 4G, only to mention a few
examples. It is important to remember that those technologies already exist
and it is not futurology or science fiction.
These changes will induce several things/factors that today, although they
already exist, still have insufficient performance. As an example, the
instantaneous access to gigantic databases and the performance for
conducting of video conferences with telepresence by means of
holographics (with the feeling of the real “face to face” presence”).
Cloud system and total digital documentation
This trend that is already ongoing enables businesses to maintain distance
from the physical needs (backups, redundancies, special air conditioning,
surveillance, security), from specialized staff (increasingly difficult and
costly) and from making large investments in order to have a robust and
current platform for their systems. Currently, in terms of the traditional
model, in several cases represented the physical IT structure of the
businesses, in itself, an obstacle that hinders or prevents the change to be
addressed.
With this physical detachment, firms will be able to concentrate more on
their “core business” and have the support of professionals who are more
specialized in the maintenance of their equipment, in development of their
systems and in the physical and digital security of their information. This
may also entail that they could occupy smaller spaces, with no need for
spaces (both internal and external) needed for the physical filing of tons of
paper.
Specifically referring to the security item, the structure offered by the
current data centers and services providers in the so-called cloud, is
infinitely bigger/has infinitely more capacity than the false security that
exists in rooms, office drawers and their internal servers.
BI, Knowledge Management, Big Data and productivity.
The effective extraction of relevant information for the business from the
big databases (internal and external) with intelligent search systems (search
engines) and, ultimately, artificial intelligence systems, robotization/robotic
automization and Cognitive Intelligence (Watson – IBM) will , in the near
future represent, the difference between being or not being in the market!
Knowledge management with the effective and pragmatic use of its
information (documental, registry and financial) enables an immense
increase in productivity, operational and strategic management and it is the
key to the present-future, mainly for companies that deliver intellectual
services.
By placing all those considerations in the sphere of companies that render
legal services (“aka” law firms) we get an idea of the “gap” that still
separates them from the trends (which, I once again restate/reiterate, are
real and not science fiction). In addition to adapting themselves to the
impositions mentioned above, law firms will have to be radically be
transformed in order to survive in this brave new world (stealing the title
from Aldous Huxley’s book)!
I envision for the future (again, not the very distant future):
“offices fully integrated to the digital life (with state-of-the- art and 100%
interactive systems with their clients); smaller than the current “big-law”
ones; with fewer clients and better support; with Spartan physical
structures (less noble locations than the current ones) and telepresence
rooms; with areas for shared use; and much more efficient than the
current ones”!
COLLABORATION TOOLS
Over time, the e-mail tool, although it was created with the purpose of
electronic communication among people, ended up becoming,
mainly/particularly in law firms, a discussion and collaboration tool
among professionals.
The effect of this change was the exponential increase in the volume of
emails that were exchanged, and even worse, filed, thus leading to costly
consequences impacting aspects such as hardware sizing and really
adverse repercussions relating to historical information search processes.
“The American Lawyer” organization, responsible for the AmLaw 100
publication, conducted an internal study and its results concluded that
81% of e-mails received by law firms are generated internally!
The impact of this is brutal/immense on aspects of the life of a
professional, such as: excess information in their in-box, causing
difficulty in the planning of their daily activities, possible loss of focus on
what is important and being able to separate “the wheat from the chaff”.
Let us imagine for a moment the effect created by an e-mail of a client who
requests an internal lawyer to amend some clauses in a document related to
a merger & acquisition transaction, and which normally involves several
areas/aspects of the law. The first reaction of this professional is to copy the
referred e-mail to all those engaged/involved in the transaction, and as a
consequence, this act will generate the exponential propagation of the
request with comments being added [and eventful] other professionals are
being involved.
As most lawyers are highly concerned with loss of information, or have
the “obsession” that they will need them in the future, there will be a ‘flash
flood” of e-mail filing in the document management system, despite the
[eventful?] internal rules or norms that attempt to decrease duplicate filing.
On the institution’s side, this entails the management of an enormous
volume of e-mails stored, blended with information of little relevance, and
a lot of rreplicated information that represents an accumulation in trash on
the internal network.
Although there are nimble communication tools in the market today, such
as Skype, WhatsApp, Slack, etc., these products require integration with
the corporate system, that may possibly cause loss of relevant information
in internal discussions and in communications with clients.
Already available in the market (in the North-American market), is a
product called “ThreadKM” that performs this task of nimble integration
of communications between professionals, able to quickly generate
“discussion rooms or forums” with no need to use e-mail for that purpose,
and able of being integration with corporate systems, also facilitating the
filing of all discussions generated about a given document or a matter.

EFFICIENCY, PRODUCTIVITY AND TECHNOLOGY ON LEGAL

SERVICES
In order for us to analyze the need for and the effects of the use of
technology in law firms, we must first carefully observe a typical day of
work by a lawyer in that environment.
We humans unfortunately (or fortunately) do not have the ability to dedicate
100% of our time uninterruptedly and with 100% focus to the tasks we are
working on, such as computers. This I call human inefficiency and it varies
from person to person.
The main features of a lawyer in my point of view are his/her analytical
ability associated with an extreme ability to synthesize and express his/her
ideas. These characteristics allow the professional to clearly understand the
extent of the problem or challenge, to analyze all the details and
possibilities, and to elaborate a reasoning (written or oral) to propose a
solution to the challenge presented.
For this to be possible, after analysis, the lawyer needs to collect the
necessary information and use them efficiently in the preparation of their
work and it is at this point that a large majority of offices spend a monstrous
time. This I call technical inefficiency.
In addition to the two inefficiencies cited, there are also other factors that
interfere with the productivity of the professional lawyer. The first factor
that interferes is managerial and administrative tasks, such as team
management, timesheet preparation, proposal writing, job review,
accountability, and many others. These tasks, although important and
mandatory, end up drawing the attention of the professional from its main
task, which is to generate a legal document.
Another important factor is the misuse of an expensive and rare resource
(good lawyer) for tasks that can be worked out in other ways, that is, using
an extremely skilled professional to do repetitive tasks that practically do
not require intellectual property. The infamous "copy and paste".
In this way we can schematically illustrate the factors that interfere in the
productivity of the professional lawyer and reduce their theoretical
production possible:

Now that we've seen the factors that interfere with a lawyer's productivity,
let's look at where technology can help.
1 - Personal matters and breaks. In this factor, technology can not help
much, but a good organizational structure associated with control, training
and incentives systems can minimize these productivity losses.
2 - Management and Administrative Work. In these factors, the use of
complete, intuitive and easy-to-use ERP systems can greatly reduce the
time required to complete these important tasks.
3 - Search for Information. This is one of the factors where technology can
and should help a lot in increasing efficiency. Intelligent sorting, indexing,
and searching systems allow the professional to spend less time locating
and capturing those information that is important and necessary for the
development of his/ her work.
4 - Non-Intellectual Work. This is also another on-the-art factor the current
technology can greatly assist the lawyer. Document analysis systems,
automation systems, prediction systems, and others (most using AI) can
shorten the times required for the development of non-intellectual tasks.
5 - Intellectual work. Finally, the capacity previously mentioned for
analysis, synthesis and expression is an intrinsic characteristic of the
professional's intellect, that is, the quality of the "final product" (legal
document) and the time it takes to produce it -only depends on your training
and your brain and technology in this regard can not help at all.
But it can help at almost every other point!
In a schematic way, we can summarize this way:
ARTIFICIAL INTELLIGENCE AND THE LEGAL MARKET

Lately, this has always been

a topical theme in all the discussions about the future of the legal services
market, involving big and small firms and the very way the legal profession
will be affected by this new (or not so new) technology.
This theme has been studied for at least 25 years, but became public
knowledge when in 2011, IBM’s cognitive computer system, the so-called
“Watson”, beat two champions of the famous entertainment program of the
American television, called “Jeopardy!”, a show that has been broadcast
by CBS since 1964.
Over those 25 years, several parallel fronts/teams? of developers have
specialized in the recognition of images and faces, understanding/studying
and processing natural human language, robotics, computational learning
(“machine learning”), unstructured logics (language) and computational
neural languages, which all together form what is known as artificial
intelligence.
Source: NeotaLogic

Since then, the theme has been introduced in all the discussions and
speeches made by futurologists, and stressed as an inexorable path to the
substitution of human beings by the machines, almost representative of the
grim view of the film ‘ Matrix’.
Bringing the discussion into the sphere of reality and greatly simplifying
the issue, what is generally called artificial intelligence, are in fact,
mathematical (rather sophisticated, by the way) algorithms developed for
very specific tasks, associated with the increasing exponential computing
power with the skill to self-adjust according to the results that are obtained.
It is true that all this is already causing an impact and will impact even more
all the professions as we now know them [today], but said impact becomes
clearer in law as this sector has been relatively protected along the
mentioned period, precisely owing to the difficulty, thus far, in processing
the language and unstructured information by means of the computer!
In the Legal area, there are several fronts of development using artificial
intelligence (or at least parts of it) such as: knowledge automation, legal
research, forecast or prognosis, contracts analysis, e-discovery and/or smart
search engines. All these systems and technology have not been created to
replace human beings, but to help them to be more efficient and should be
adopted by all those (firms and their managers) that are attentive to the
evolution of the market and the profession.
There were at least 35 companies in the North American market (based on
ILTACON 2016) relying on products that are ready for the above-
mentioned operation/purposes, and also at least a dozen large international
firms embracing this technology and becoming more efficient!
In a market that is effectively evolving due to the increase in
competitiveness (internal and external), as well as pressure on
prices/charges/fees, segmentation and consistent loss of revenues (at least in
the North-American market), adopting technologies such as “AI” is not
only an option, it is a question of survival!
 Source : NeotaLogic

ARTIFICIAL INTELLIGENCE AND HUMAN INTELLIGENCE

Again I return to the subject of the discussion of the use of Artificial
Intelligence in the Law, but this time I propose to make a more detailed
analysis of the two capacities, qualities and limitations of the two
intelligences: Artificial and Human.
I reiterate (as I have said on other occasions) that I am not opposed to or
skeptical of the benefits that the use of this tool already brings to the
profession of Law, and especially to the profound changes it will bring in
the near future, with its development, to legal services and the relationship
between lawyer and client (or rather to the legal services provider and its
consumers).
First let's go into more detail on what the market is calling Artificial
Intelligence.
Increased processing capacity: Since 1965, when then-CEO of Intel,
Gordon Earl Moore said that the number of transistors encapsulated in the
processors doubles every 18 months, so-called "Moore's Law" was
formulated at the processing capacity of computers doubles every 18
months. If we consider the time elapsed since 1965, by making a quick
count we get a growth rate of 2 to power 47 (something like 1.4 quadrillion
times the processing power of the processors of that time). This has enabled
many mathematical calculations, which require a lot of processing, to be
executed in much less time.
Increasing the amount of information available in today's world: With the
advent of the internet and global server networks, the amount of data and
information stored and available for use grows in a frightening way.
According to the website bigdatabu-siness.com, for the first time since the
creation of the Internet, in 2016 global data traffic on the network has
exceeded the 1 Zettabyte (1 billion terabytes!) Mark, according to a
published white paper by Cisco. This represents 5-fold growth over 5 years.
Keeping the levels projected, in the year 2020 will be generated about 1.7
megabytes of new information per second for every inhabitant of planet
Earth!
Statistical and mathematical algorithms, such as: De-split trees, Naïve
Bayes Classification, linear least squares regression, logistic regression,
support vector machine, ensemble methods, clustering algorithms, applied
together with NLP (Natural Language Processing) allow you to statistically
treat words, previously only possible for numbers. It should be noted that
most of these algorithms have been around for years (Alan Touring started
NLP studies in 1950!).
To sum up: the combination of "brute force" processing, using various
statistical algorithms with NLP associated with a colossal amount of data
and information produces what we now call Artificial Intelligence!
On the other hand, we have the human brain!
It is known that primates, a class to which man and apes belong, arose 70
million years ago. The common ancestor of ho-mem, the chimpanzee,
appeared about 25 million years ago. Already the earliest hominids
appeared on Earth between 3 and 1 million years ago and scientists believe
that the first representatives of modern man existed on the planet 200,000
years ago.
In a study published in the Neuro Science News on 9/24/2016, our nervous
system consists of about 100 billion interconnected neurons that are capable
of performing complex calculations: one cell speaks, the other listens. The
number of synapses that a single neuron can develop varies considerably.
Depending on its type, a neuron can have anything in the order of just one
or more than 100,000 synapses. On average, each neuron has about 1,000
synapses, resulting in a network of approximately 100 trillion connections,
according to Reinhard Jahn - Max Planck Institute published in the Neuro
Science News on 9/24/2016.
These 200,000 years of Darwinian natural selection associated with cerebral
connective complexity give us some advantages over machines: ability to
be creative, inventive, ethical, moral, legal, and emotional aspects,
negotiate, play, not to mention those not so much as lying . Most
importantly, we have been able to combine all of these capabilities while
tracing strategies, that is, we are able to THINK, because machines do not
think!
On the one hand, we have a brutal mass-processing capability, but still
limited to the amounts of existing "cores" for parallel processing (news
from December 2017 shows Intel launching 72-core processor) and also
limited to the use of mathematical algorithms .
On the other side, we have thousands of years of natural evolution of 100
million neurons capable of processing trillions of operations without limits
of processing queues, but with limit of processing of large amounts of
information.
Which one is the best? THE UNION OF THE TWO!
All this to say that in the Right, there is an infinite number of extremely
painful works that can and should be self-tinted, such as searches of
jurisprudence, doctrines, similar previous cases, statistics of past judgments,
creation / others. For these jobs the computer (with the so-called Artificial
Intelligence) performs them much better than the human, bringing
efficiency and productivity and consequently decreasing costs and prices.
For the lawyer human being must remain the real intellectual work, that is,
his ability to analyze the relationship and understand the problem with the
client, allied with his ability to interpret the study of the situation and all the
characteristics and in-formations involved (then with the fundamental help
of the machines) and finally with its capacity of synthesis in the elaboration
of a strategy in the solution of the challenge.
The great challenge will be to adapt and learn how to use the new tools and
especially to efficiently perform those human functions that the machines
have not yet been able to replace!

DEMYSTIFYING ARTIFICIAL INTELLIGENCE FOR THE

LEGAL AREA.

As I have been saying all

along, everything goes through a “faddish” period when when something is
used excessively, and this, after a given point, begins to be incorporated in
our lives and no longer fascinates us nor does it generates desire its
consumption. This also occurs in the corporate world and in the language of
the businesses! Do you remember those terms “Balanced Scorecard”;
“ROI”, “SWOT” and more recent “Dashboards”?
Well, the same is happening right now with the term “AI” or Artificial
Intelligence” and is bombarding (as they say in the network speak) the legal
area!
It seems the Holy Grail to solving all the problems of the legal
market/services sector is “AI” and much is published and shared about the
matter (I myself do that as well).
Let us form a better understand of this :
First point: The term Artificial Intelligence was devised in the 60’s by the
scientist John McCarthy: “AI is the science and engineering of making
intelligent machines, especially intelligent computer programs” and, since
then, several scientists and researchers have developed and are still
developing those programs.

Second point: Artificial Intelligence is nothing other than a series of very

complex and specific arithmetical and/or statistical algorithms that enable
machines to very quickly reach/produce results that are close to human
reasoning (again for very specific tasks).
In these algorithms, one includes the ones of Regressions, “Statistical
Ensemble”, Dimensioning Decrease/Dimensionality Reduction?,
Clustering, just to name a few.
See the illustrative slide below:
Source: NeotaLogic

Third point: The development of processing and semantic cognition of the

language and cognition of images (other specific algorithms) enabled the
machines to begin to understand the message that is embedded in a written
text, in addition to the pure meaning of the words.
The combination of several of those algorithms and the cognitive
processing enabled computing science to begin to invade the area of human
sciences, where information and knowledge are expressed by words and not
by numbers (easily computed), even if timidly, as the processing need is
much higher than the numeric one.

Fourth point: The exponential development of the processing capacity of

the processors (Moore’s Law) and the development of the so-called neural
networks, where computers are interconnected in a three dimensional
network, enabled said algorithms to begin to be produced and traded
(beyond the academic world).

Fifth point: The development of specific algorithms for decision making

by computers coined the term “Machine Learning” where computers
“learn” with their prior decisions in a supervised way by humans or in an
unsupervised way (by statistical analysis).

Now, let us imagine that all those developments (which have evolved in
parallel over the last decades) were, and are made available to the creators
of systems and programs for the legal area, and being allowed to
emergence, thus far, ( with much more to come) of the following systems
all under the label of Artificial Intelligence:

1 – Legal Research.
2 – Prediction
3 – Document Assembly
4 – Contract Analytics
5 – Knowledge Automation
6 – e-Discovery (sophisticated search engines - Electronic cognition,
classifying, categorizing, correlating, inferring and deducting - largely used
in the U.S.A. due to the procedural obligations that exist there and not in
Brazil).

The truth is that, even though a natural evolution of technology, it is the

first time that it has reached the legal market with such intensity that will
force us to quickly adapt to it, but on the other hand, it generating
(temporary) uncertainty about the new.

Those who are older (like me) ought to remember the reaction of some
lawyers at the time of the emergence of text processors (Wordstar and
Word), when they argued that with the functionality to reuse the recorded
documents and the use of “copy& paste”, they would no longer be required
think anymore! Imagine a lawyer, nowadays, without a word processing
system on their computer? Has anyone become dumber?

As I stated earlier, I do not have this “dark” vision, where in the future,
lawyers would be substituted by machines, instead, I have a more
pragmatic vision, where those professionals will be forced to adapt to
changes and thus change ( for the better) their method of working
promoting elevated use of their brains for complex decisions, and allowing
the machine to do the more repetitive procedures, and incredible as it may
seem, “less intelligent”.
THE REAL TECHNOLOGICAL REVOLUTION IN LAW
Much has been said about Artificial Intelligence and its impact on the legal
profession, some futurologists even claiming that the profession will be
totally replaced by robots and / or computers in the future and this has
caused a "frisson" and aroused insecurity in many professionals.
I do not agree with this categorical statement, but I agree with the
revolution that new technologies are imposing. In my humble opinion, I
believe that this technological wave will, in fact, make a revolution not only
in the legal profession, but in all the professions called human and that still
depend a lot on the interaction of the human being to be exercised .
First, we must dismember the term "Artificial Intelligence", which is
nothing more than a series of technological advances that are enabling the
application of numerous theories and statistical models, some of them
existing for several years.
Let's start with Moore's law.
According to Moore's prediction in 1975, the chips would double their
capacity every 12 months, with their size reduced by half, and this has been
true over the years and must reach a physical size limit (measured in
nanometers) by 2025. This exponential increase in processing capacity has
allowed what was once unthinkable, especially when one speaks of words,
images and videos, which require a "musculature" vastly superior to that
needed to process numbers.
On May 2019, CRAY and AMD declared their dubbed “Frontier”
supercomputer will have on 2021 the processing power of 1.5 exaflops
which is 1.5 quintilion calculations per second !
Another important item relates to the time the industry in general has been
engaged in the development of tools for processing numbers or other
information and is closely linked to the previous item.
Database analysis tools began to be developed in the 1960s and it was in
1970 that IBM introduced the concept of a relational database and
Structured Query Language (SQL) and in 1980 Oracle introduced Oracle 2
and which together revolutionized the way in which numerical data were
treated.
It was only in the late 1990s that Google came to re-revolutionize how to
search for words on the Internet (the Google search engine "bombed" in
1998), and that almost 40-year lag explains in part why tools are just
starting to appear that deal with words.
Also in the wake of hardware development, we must talk about the
evolution of communication speed. The internet2 with theoretical speed of
10Gbps (this means that a 4.7Gb cover-city DVD can be downloaded in 3.5
seconds!); the "IPv6" address protocol will allow 79 oc- cupions of times
the current IPv4 address- ability; and finally, 5G technology, expected to
land in Brazil in 2018, has speed 10 times that of 4G, just to mention three
examples.
According to information from IBM, 88% of the information available
today on the Internet is still inaccessible to the digital and statistical
treatment (which was the great leap generated in the 60's with the
databases), since they are words, images and sounds . Also, according to
her, Watson currently has the ability to process (and interpret) 800 million
documents in 1 second!
All this technological advance allowed the research and development
industry to focus on solving the difficulties we have (so far) in digitally
processing the so-called "human natural language", in addition to simple
word search.
There are dozens of statistical algorithms (some exist for years), such as:
decision trees, clustering, ensemble, re-gressions, Naive Bayes, etc.,
associated with the dictionaries of meanings and synonyms have allowed
computers to interpret the words inserted in a given context and
consequently the meaning of the text itself.
These or other (no matter which) algorithms allow corrections in their
responses, so that as the results are presented, the system improves and
increases the level of accuracy in the responses. These corrections can be
done by the human being ("supervised machine learning") or automatically
by the computer by statistical analysis ("unsupervised machine learning").
The example I usually use refers to how a machine (hardware and software
set) can correctly search and differentiate in context when a lawyer searches
for the word "warrant." Take as an example two texts stored electronically
and in one of them there is the phrase: "the judge had ordered the wearer to
get his clothes in his house" and another, the sentence: "the judge issued a
search warrant and home seizure" and the lawyer searches for words
containing "judge," "warrant," and "domicile." Only through algorithms and
the analysis of the rest is the text that a "smart seeker" will differentiate the
two sentences and bring the correct one.
As I mentioned earlier, in my humble opinion, the great revolution that is
happening in the Law (and in all other human professions) is the ability to
treat words digitally and statistically, that is, "Words are approaching to the
numbers "!

LEGAL BUSINESS MANAGEMENT IN THE ALGORITHMS AGE.

Algorithms are methods used to extract patterns of large amounts of data
and information, trying to give to the computers the ability to predict and
infer conclusions as the same way the human mind does.
There are dozens of algorithms and some of them have more than 40 years
of existence. All of them are based on statistical analysis and form the basic
structure of one of the main components of Artificial Intelligence called
Machine Learning (see figure below)

Three associated factors enabled the revolution we are witnessing in the

Law, that is, Machine Learning associated with NLP (Natural Languge
Porecessing) and the exponential increase in the processing capacity of
computers, enabled the development of statistics and elaboration of
analyzes in texts with words, which previously were only possible in
numerical documents.
Which Attorney or Office Manager has heard of "Random Forest", "Naive
Bayes", "K-nearest Neighbors" "Gradient Boost & Adaboost", "Logistic
Regression"? Probably very few, but that's not the important thing!
The important thing is that current legal managers must adapt to this new
reality and adjust their way of thinking and solving problems, that is,
changing their mindset.
In the area of procedural legal management or not it is happening the great
revolution and I mention some examples:
The surveys needed to prepare the pieces (petitions, resources, contracts,
etc.) no longer depend on the human factor, since the intelligent search tools
are much more agile and precise
The definition of defense strategy or procedural attack is not limited to the
analysis of legislation, doctrines and jurisprudence, but now also has the
statistics offered by jurimetry and the intelligent analysis offered by the
prediction algorithms.
The monitoring and forecasting reports offered to customers (called audit
reports) will no longer be as simple as today, where only three possibilities
for that process are expressed: "probable, possible or remote." They should
contain much more detailed information, that is, the percentage
probabilities (with margin of error) of the occurrence of a given court
decision by type of complaint, presented thesis, cut to which it is submitted
and even judge who will judge it.
The preparation of the pieces can be aided by intelligent systems of analysis
of previous documents and the current conditions, providing an important
automation tool and speeding up legal work.
Finally, the way in which the work carried out, as well as the budgeting of
proposals, should be reviewed in the light of these technology notes.
In the field of business management, the data analytics tools used in the
internal information associated with the external, the so-called "big data",
provide fundamental tools for the definition of operational and strategic
decisions for the business.
Time statistics for document preparation, productivity of professionals,
teams, subsidiaries, etc., detailing of productive and unproductive jobs and
clients and subjects can help a lot in the correct preparation of proposals
and budgets. Statistical analysis of work developed by sectors (or legal
practices) for the various branches of client activity can greatly help in the
strategic decisions of cross selling, expansions, investments, training, etc.
These are just a few examples of how algorithms can interfere with legal
management and legal business (they are different things!) And are forcing
managers to adapt to this new way of seeing and managing their business.
TECHNOLOGY, ARTIFICIAL INTELLIGENCE AND
MANAGEMENT
It is public knowledge that Artificial Intelligence (as we have always
commented, another term of fashion!) is changing the way society relates to
the world around it. Moreover, AI is nothing more than the combination of
statistical algorithms associated with a huge amount of information
processed and analyzed by current computers, which have brutal processing
capabilities, allowing us to see statistics and associations that were
previously almost impossible to (or take a long time to be processed,
making them non-operative in practice). Bringing the discussion to the legal
world, we must add the appearance of the Natural Language Processing
(NLP) systems that enabled the use of the algorithms mentioned above and
using statistics with words, not just numbers. This opened up a new
dimension to all the analyzes that were once in the dream field. Analysis of
contracts, criminal and compliance investigations, procedural statistics, pre-
judgments and a multitude of uses that we cannot even glimpse. Like
everything in fashion, there is a strong expectation and a great illusion that
all our problems will now be solved by this new technology, but
unfortunately this is not true. The phrase "We tend to overestimate the
effect of technology in the short run and underestimate the effect in the long
run," became known as "Amara's Law," coined long ago by American
scientist and futurist Roy Charles Amara , already deceased. If on the one
hand we have to adopt all the new technologies in the best possible way (so
that we do not become jurassic because of the speed they evolve), on the
other hand we cannot fail to think of all the other points necessary for the
good governance of the legal business. Again remember that "management
of legal activity" is one thing and "legal business management" is
something else!
The indiscriminate and mainly unprepared adoption of any technology can
bring countless frustrations, unnecessary expenditures and above all they
point to the existing inter-faults, ranging from erroneous procedures,
problems of coordination, orientation and even directing top management.
Before acquiring any system that claims to have Artificial Intelligence in its
development (the observation serves for any other system) check the
following points:
 - What is the type of your business (advisory, procedural, mass,
etc.).
- What are the shortcomings (more detailed reports, agility, controls,
etc.).
- How are the quality of your records (registration, procedural
follow-up, filing of documents and emails, etc.).
- What standardization and rationality / efficiency exist in existing
human procedures?
- What is the organizational chart of your business?
- If the job descriptions are clear and well detailed. Are there
overlaps?
- If the flowchart is defined and clear, ie is there clarity of the
"requirements" and the "feedbacks" and their back and forth
paths are well defined?
- Is the team capable, well-sized and trained?
- Are there controls for the defined tasks?
After this internal analysis, check the qualifications of the system (s) by
asking:

- Is it suitable for my business?

- What is the level of adaptability to my business (does it fit the
structure or should I change the structure and precedents to use
it)?
- How is accessibility? (cloud, "on premises", etc.).
- How is security done? (authentication levels, for example).
- If it is machine learning, what is the time and learning curve?
What is the expected percentage of correct prediction?
- What is your Total Cost of Ownership (TCO)?
- What are the team, equipment and training needs for its
implementation?
- What impact (positive and / or negative) expected?
- How to motivate people to adopt it?
Brazilian law firms have adored the American model, called "big law", as a
pattern of organization and behavior, and we have always used the US as a
benchmark for our developmental stages, but there are differences that we
sometimes forget to consider.
The first and most important is the quality of the organization of American
companies and the degree of objectivity and focus of their constituents
(some people may see this not as quality but as a defect because of the lack
of flexibility in solving any we are not here to discuss this). Law firms do
not escape this rule and for many reasons, including investment capacity,
American offices are much more organized than Brazilian counterparts. In
my point of view the great difference lies in the difference in behavior
between them (Anglo-Saxons) and us (Latins), making them, laws, rules,
procedures, and structure much more serious than here.
Making a metaphorical comparison (which I love to do), is the equivalent of
having a person with disabilities in their basic education (elementary and
middle school) subject to the more complex reasoning demands of a
university. She will certainly have enormous difficulties and will have to
solve them concomitantly with her new apprenticeships.
Before you go out buying and deploying systems and more systems in your
office to make it more efficient and modern, first check whether your back-
office structure is consistent with its size and sophistication, make sure that
its organization, work flow and its procedures are objective, practical and
clear, and the whole institution is properly trained, focused and committed
to the goals and goals set by the top management. When all this is working
properly, the results in implementing any technology will be enormously
more effective.

THE NEW TRENDS IN THE LEGAL BUSINESS

I was privileged to attend ILTACON 2018 (International Law Technology
Association Conference), which in its current iteration, counted 3.500
participants (among them speakers, audience and exhibitors).
The sole purpose of introducing this topic, is illustrate to all those engaged
in Brazil’s legal business sector the extent and the level of concern in the
international market with regard to the huge changes to which the legal
industry is currently being subjected to.
As to be expected, our Brazilian industry strictly follows world trends, and
more and more, the time-lag among in these trends and international events
are narrowing.

This (international) industry is being shaken up by several forces to which it

was not accustomed such as: financial pressure from the clients, a more
and more competitive market, a bigger segmentation within the market
itself, a significant and consistent decrease in billing/collecting, and
ultimately, a huge change in the behavior within society with the
“consumerization” of all services and products as a result of the iphone-
effect in the world (where everything needs to be easy and intuitive).

In order to face these challenges, it is vital to completely reset the current

business model , which, due to having being accommodated, is very
inefficient and neglectful with regard to efficiency. The continuous
acceleration in technological development and the emergence of the so-
called disruptive technologies are, on the one side, exerting more pressure
in this “melting pot” but, on the other hand, offer ( to those who have a
prepared/willing/disposed vision) a very interesting option in order to
adapt, to become more efficient and to get ready for the changes in the
near future, thus obtaining a competitive advantage in the market.
In addition to adopting those technological changes, the business will have
to be managed in a different way and by people who have an open mind,
people who like the new, who have great resilience and who have no fear of
experimenting, making mistakes and learning. Only then will
companies/businesses (and the law firms) be prepared for the changes that
the future holds for them and for us/society.

Several trends stand out in the technological field, and all of them are
strongly based on the Artificial Intelligence concept (“AI”), which is
present in solutions such as Knowledge Automation, Legal Research,
Contract Analysis, e-Discovery and Enterprise Search, as well as in
forecast and prognostic systems. Among the 212 present companies
(producers of software, equipment and services), 35 of them presented
solutions involving artificial intelligence in some component, highlighting:
1 - The ever increasing real and practical use (it is no longer a futurology
exercise) of the computational learning concept, popularly known as
“machine learning”, where mathematical algorithms are developed for
specific tasks and that have the ability to self-adjust hence analyzing their
own results and becoming more and more precise as time goes by.

2- The intensive use of knowledge management (KM) in a more

comprehensive way involving the use of internal knowledge (explicit and
tacit), structural data (with the use of BI tools), competitors and market
data, as well as information (Big Data) and more recently, the statistics of
Courts, Judges, judgments and theses precedents.

3- More and more sophisticated tools (involving Artificial Intelligence) are

being employed in the fight against cyber crimes, the so-called “Cyber
Attacks”, which already represent losses of billions of dollars in the North-
American market.

4- Increased adopting of the “data driven model” concept, where the

business is increasingly managed with the help of systems that are focused
on reports, statistics and structural data analysis of companies/businesses.
In this realm, so-called information governance is gaining more and more
traction in corporate governance, evolving from a utilization tool by the
CID, CKO or COO, to the most important tool of the CEO, providing the
basis for the operational and strategic decisions.

5- Forecast or prognostic algorithms developed at Michigan State

University are already able to estimate with 70% probability the decisions
of the North-American Supreme Court, and with a 71% probability the
correctness/accuracy relative to the individual votes of the judges!
The Watson cognitive intelligence software designed by IBM beat, in 2011,
the two previous champions of the TV program “Jeopardy!”, and
demonstrated at that time the power of Artificial Intelligence. Since its
introduction, its performance has evolved [and improved] to over 2400%,
and it was the most important cognitive intelligence technology brought to
the legal world/industry and has been fostering dozens of initiatives (less
costly) developed for specific solutions in the legal world, such as the ones
previously referred to.

The trend for the use of the artificial intelligence in the legal world may be
asserted/reinforced by the graph shown below, where it shows the statistics
based on the answers to one of the questions posed in the survey done in
March/April 2015 by Altman Well, Inc., directed at 797 “Managing
Partners” of North-American firms (with over 50 lawyers) and answered
by 320 0f them.

Copyright 2015 Altman Weil, Inc. All rights reserved

 CHAPTER 10
TRENDS

LAW FIRMS MUST INVEST HEAVILY IN INTELLECTUAL

CAPITAL, KNOWLEDGE MANAGEMENT AND TECHNOLOGY

There is no doubt about the growth of the service sector in the economy all
around the world. If this is such a well-known and universally accepted
fact, why is it then that service provider companies ( into which
sector/industry Law Offices/law firms perfectly fit), are so reluctant to
adopt a pro-active attitude towards the topic, especially in relation to their
customers?
To answer this question, you can ask yourself a very simple question and
stop/pause a bit to think about the answer.

Why do some companies have the image of excellence associated to their

brand label?

In order to answer it, let us first make an analogy by asking another

question:

What makes you return to a restaurant after the first visit?

The first component would be an excellent cuisine, with creative and

delicious dishes; the second includes good attendance including quick
service, a nice environment, a good maître d’, good waiters, a good
sommelier, good valet parking, etc, etc, etc, and last (but not least), the
third component, that is the final price/bill (which should be
commensurate with everything that was offered and above all, should be
competitively priced!) This equation has dozens of solutions, but only one
that balances all its components and ensures the success of the restaurant as
well as its longevity. ( refer to the detailed discussion in chapter 2)
Bringing the example in the sphere of service providers, the equation
above must contain the three following components blended in a perfect
manner:

I- High quality and innovative products or services

II- Excellence in service delivery (includes attendance, efficiency
and responsiveness).
III- Commensurable and competitive prices.

Simple to answer, very complicated to achieve!

And how should we go about accomplishing this?
Through very heavy investment in intellectual capital, Knowledge
Management and technology!

For t law firms, where the assets go down the elevator every day and go
home in the evening, a clear, transparent and coherent policy of attracting
and maintenance/retaining (this includes training) of talent, is key in order
to be in a position to generate high quality products, which in this case, are
represented by documents of very high legal sophistication and with a high
measure of creativity.
Remember that more and more entrepreneurs need quicker and daring
solutions
(and obviously based in law), which entails that the attorney has to be
increasingly pro-active, engaged and an expert on his client’s business, so
as to assist the client with their needs, and mainly/especially with regard
to speed!

The figure/image of the traditional attorney, who is limited to consulting

with clients and asked to provide legal advice (and responding in his own
time) with reference to the law and simply limiting his opinion to
whether a particular operation/legal scenario is possible, is destined to
disappear.

So, how can one form a group and keep the attorneys who have this new
mindset? By offering a career plan, that is both challenging and
promising, combined with an aggressive remuneration policy with
participation in the significant distribution of the added earnings usually
accumulated/shared between just few (in the more traditional lawfirms ).
The second component is probably the most difficult part to implement and
manage, as it precisely represents the change of the mindset of a law firm
into a Company/Business of Sophisticated Legal Services Providers.
The clients that are in search of that new mindset for the implementation in
their own organizations are also in search of service providers who are in
tune with this philosophy. That is the reason why there are a large number
of clients who are dissatisfied with their service partners.

One of the main complaints by consumers of legal services relates to:

quality [in the assistance, represented] representation
highlighted/emphasized by the difficulty a client has to obtain the services
of a duly qualified and experienced professional to guide them in a fast,
effective and creative manner.
One other aspect of dissatisfaction has to do with the transparency in
relation to provision of detailed itemized billing of the work performed and
of the expenses incurred, which usually accompany the invoices of
services rendered.

Those distortions originate from a pyramid structure where there is a

major concentration of responsibility (and remuneration) of a few
professionals, which significantly hinders internal quality control in all
respects.
And to correct this distortion, law firms will have to be smaller, with a
more balanced ratio between the number of professionals more or less
experienced lawyers) and that also maintain a number of clients that is
compatible with the required level of quality service delivery.

In order to balance this financial equation, where there is a higher number

of experienced professionals engaged practicing in a market where there is
pressure for competitive prices/rates, the advantage is attained through
heavy investment in knowledge management, training and technology.
One must have a good understanding of the concept of investment in
technology, that is, not in the traditional sense as represented by substantial
investment in equipment, expensive software that produce very little. The
investment in technology must be approached as pragmatically as
possible, that is, in systems that really contribute efficiency and agility to
the service provider’s operation.

In the law firms and in other companies that sell knowledge and
specialized experience, the reduction in the time needed the search for
data, information and existing knowledge/precedents (internal and
external), is key for their success in the current competitive world.
In this line of thought we find Knowledge Management systems that
include: Document Management (GED), Pro-Active Record Management,
Data Mining, Business Intelligence, Content Management, Project
Management, Search Engines and, Collaboration Systems (internal and
with the client), just to mention some of the main systems.

Said systems enhance the generation of operational, strategic and

marketing information, which are absolutely essential for the effective
management of any company ( even more so in challenging periods such as
the current one).
Additionally, it enables/facilitates a more accurate analysis for the
identification of conflict of interests (a very serious issue in law firms).

The future holds a bifurcationing of ways/practices in all

companies/businesses, and notably for law firms: "Adaptation or
Decline/Adapt or Die!"

5 HINTS/SUGGESTIONS TO NEW LAW FIRMS

Before we begin the discussion about the suggestions I dare make to new
law firms (on account of my nearly 30 years of experience in the
management of these institutions), the introduction of some assumptions or
prerequisites in order for these suggestions to make sense, will be
required/are needed. ( lawyers love/like to call them “recitals”).
We all know that for a business to prosper and succeed, we have to have a
blend of certain characteristics of their founders, such as: entrepreneurial
spirit, technical expertise and a lot of hard work; I base this on the premise
that these pieces of advice or suggestions listed below are intended for
offices/firms that meet these criteria. (let us keep in mind that
hint/suggestion in itself does not ensure/guarantee success, but merely
bring success sooner).
Think as an enterprise - In my point of view/opinion, this is the most
important hint (although it seems obvious and even childish/trivial!).
Worship, invest and work for the institution in every aspect/sense and
remember that the sum of all is greater than the sum of each
[one]/individual[ individually]. The result consequently generated, brings
fulfillment, prosperity and prestige to its partners. Put the ego aside, as well
as the cult/veneration to personality and other vices that people who have
strong personalities enjoy.
Think big and act in a homeopathic way - That is: You must have a
medium to long term target and always base all day- -to- day actions and
decisions on this target. Never lose your focus!
Invest in technology and talent - More and more, things like efficiency,
timely response and decisions, quality of work and mainly productivity are
required from all enterprises (and law firms fit into this category). So, you
must have a clear policy to attract and retain talent (whether lawyers or
administrative officers/staff) and [take good care/look after them well.
Remember that a law firm’s main equity asset goes down in the elevator
every day and goes home. If this [patrimony??/asset?] does not return next
day, the law firm they work(ed) for is worth nothing!
Think in a modern fashion/manner and act accordingly - The niche
formed by law firms has a strong tendency to be extremely conservative
because of the academic background and the practicing of the profession
(laws, doctrines and jurisprudence are always in the past). This habit
hampers/impedes creative and intuitive thinking that should focus on the
future, disconnected from facts and statistics from the past. Apply modern
methods in the marketing of your enterprise and not of your personality, by
using all the existing tools on internet and other social and professional
networks.
Exercise a great deal of client care - Marketing wizard Philip Kotler says
that the biggest “asset” that all the enterprises have is their clients; the rest
revolve around them! Take care of them as if they were consumers, not only
clients (this requires the office/firm to be much less tolerant of minor flaws
and will serve to prevent a mindset of natural accommodation that
manifests over time). Surprise your client by engaging in non -billable
activities that bring some value to them. (newsletters not being the case in
point!)
Obtaining the services of an experienced outsourced consulting firm
exempt/free from internal political interactions may really accelerate this
process.

LAW FIRMS IN THE FUTURE - TECHNOLOGICAL TRENDS

In conclusion, I include
reproductions of some of the most impressive slides that were part of the
recent lectures I attended at international conferences focused on the
legal industry, mainly the ILTACON.
1 – The evolution of decision aiding algorithms presented by Daniel Katz,
Associate Professor of Law, Chicago Kent College of Law:
Source: Daniel Katz
2 - Forecast of the evolution of automation of activities for the legal market,
according to Karl Haraldsson, Senior Consultant, Janders Dean and
Kingsley Martin, President & CEO, KMStandards, in the presentation
“USING THE RIGHT DATA TO DRIVE YOUR KM PROGRAM –
Quantifying the Practice of Law, (Iltacon 2016).

Source: Karl Haraldsson

3 – Forecast of the evolution of the treatment of data, according to Karl

Haraldsson, Senior Consultant, Janders Dean and Kingsley Martin,
President & CEO, KMStandards, in the presentation “USING THE RIGHT
DATA TO DRIVE YOUR KM PROGRAM – Quantifying the Practice of
Law”, (Iltacon 2016).
Source: Karl Haraldsson
4 – Evolution of digital information management on the Web, according to
Ben Gardner - Data & Information Architect Linklaters in his presentation
“Artificial Intelligence Real Business Applications in Legal”, (Iltacon
2016).

Source: Ben Gardner

5 – The "HYPE CYCLE" is a graphical form developed by Gartner to

represent/illustrate the maturity, adoption, and application of emerging
technologies. It illustrates in a graphically conceptual format, 5 phases:
1st phase: Technology Trigger: This occurs when a potentially innovative
technology starts to arouse the public interest, starting/initiating a period of
great/major exposure in the media. Often, the commercial viability of the
invention is not even proven when this happens.
2nd phase: Peak of Inflated Expectations: The second phase is when the
popularity of the technology comes to the fore as well as the expectations
about it. Early publicity produces a number of success stories, but also
failures.
3rd phase: Trough of Disillusionment: Due to some exaggeration about
the expectations created in the previous phase, questioning begins and the
public starts to realize that maybe the novelty "was not all that". Thus, a
stage of disillusionment is reached, when the curve turns downwards and
the adoption of the technology falls considerably.
4th phase: Slope of Enlightenment: In the fourth phase, after/following the
exaggeration and disappointment, people and companies/businesses that
approached the technology in a more rational way, remain, and
thenceforth/thereafter new interesting cases arise, and it becomes easier to
understand cases in which the use of the technology is interesting/useful
and cases when it is not.
5th phase: Plateau of Productivity: The last stage is the plateau of
productivity, when a technology is more stable, it is widely accepted
(without exaggerated hype) and its application is better known. The more
conservative companies usually start using it only at this stage.
(References: Lucas Diniz – https://goo.gl/Oh2h30, CIO –
https://goo.gl/CgMdbp, The Fifth Wave – https://goo.gl/oX96M9,
Computer World – https://goo.gl/jHMASD)

I dare not make predictions, because if I had that ability I would certainly
use it to predict the 6 numbers in the Mega Sena (hahaha). I will just
analyze past events by trying to imagine possible future behavior and trends
and to pass on this brief discussion my expectations about the legal market
in Brazil.
Some preliminary considerations:
About 3 years ago, a wave (hype) about the use of Artificial Intelligence
began and the discussion at that time as in all hype, preached the
replacement of lawyers by machines and also that the profession would be
extinguished in few years. That's not the truth!
As in all other innovative processes, we tend to over-estimate short-term
effects and undervalue long-term effects associated with always
overexposing the subject at the outset. The graph below shows well the so-
called "hype cycle" created by Gartner and the position (demarcated region)
where we are in time in relation to the use of AI in Law.

In the next chart , the author, GRAIG ARMOUR shows the "hype cycle" of
emerging technologies
Source: Graig Armour

After the first impulse, the market is checking some points: (i) it is not so
simple, nor easy, nor cheap to develop tools with the use of AI; (ii) it does
not fit all, and (iii) as a whole mathematical model, is not perfect, always
having a margin of success. For these three reasons, we are still in the
marked phase in the graph and there is still much to be invested, developed
and used in the near future, but it is very important to remember that
technology has come to stay and those who despise it or prefer not to adopt
it, will certainly be left behind.
The lawyer's profession will have to adapt to this and know how to make
the most of this wonderful tool called technology.
Other important points to consider in the analysis are, in my view, the main
challenges being posed to the legal market in general. The first is the
change caused by the change in the behavior of society and, as a
consequence, the consumers of legal services (I do not call them clients)
who expect from the market in general, agile, modern, efficient and
competitive companies (cheap in the final analysis) .
The second is the inverse trend to that experienced in the above-mentioned
decades, that is, companies are now increasingly internalizing legal
services, leaving only tertiary services with more tertiary services, those
whose internal teams do not have capacity or qualification to do them.
The third relates to increased competition for the customer. About 30 years
ago, there were practically two corporate offices with an international level
of service and quality in Brazil and today there are more than 500 (see
specific publication of the area). Add to this the fact that large audit firms
are making an aggressive effort to pinch this market. Let us remember that
the Brazilian market is no longer in the "glory" experienced in the 1990s
and 2000s with its opening to the world and eager for quality legal services.
Currently, every customer attached to a portfolio accounts for almost 100%
of the time the loss of the same customer in another portfolio!
What I have witnessed over the past two years is a certain polarization in
market interpretation and trends (or expectations of them) as to how
consumers of legal services should behave in the future and how suppliers
of such services should adapt faced with these changes, mainly in relation
to the use of technology.
On one side there are the large and medium-sized traditional offices, with
their stable portfolios and a relative comfort zone, and on the other hand,
advocates of radical changes in the form of legal services represented by
Legaltechs and ADRs Dispute Resolution) that already bloom at dozens in
Brazil.
I am in favor of the concept that extremes are not good and the search for
the middle ground or consensus is the best position to follow. Those
accommodated should force themselves out of the comfort zone and
provide a more modern, agile and cheap service (repeating) using as much
of the tools as possible and the futurologists come to be a bit more "down to
earth" and understand that legal services depend heavily on empathy and
old and good conversation, never giving up on the human figure.
As I have said repeatedly, what I feel is happening in the legal market is the
metaphorical figure of a wave that is approaching and for a person in this
situation there are only two possible positions, that is, either he surfs the
wave or the wave will swallow him!
For all the reasons quoted above, there is a radical change in the way the
market sees legal service providers (and here all their elements: offices,
legal departments, lawyers, judges, etc.) fit in.
The future begins today and does not end and to be able to accompany it,
the professionals involved in this market (and any other) will have to
change radically, that is:
(i) INVEST a lot in technology; (ii) TRAIN enough to get the most out of
it; (iii) LISTEN to your client and invest in what he wants and needs; (iv)
FOKE in increasing efficiency and productivity; (v) SURPRISE your client
/ consumer with INNOVATIONS that improve the relationship with them;
(vi) MOTIVATE any team or company to behave in this way; (vii)
ENCOURAGE the exchange of knowledge and experience; (viii)
MANAGE your business professionally; (ix) USE ALL of the information
within your reach to improve governance and (x) CHANGE, as the Market
has changed!
Source: Successories.com
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