Featured Guests
Larry Port

Larry Port, CEO of Rocket Matter, is also a speaker and award winning writer at the crossroads of the legal profession...

Dave Maxfield

For over 20 years, Dave Maxfield has represented individual consumers in cases against banks, credit reporting agencies, debt collectors...

Your Host
Sharon D. Nelson

Sharon D. Nelson is president of the digital forensics, information technology, and information security firm Sensei Enterprises. In addition...

Jim Calloway

Director of the Oklahoma Bar Association’s Management Assistance Program, Jim Calloway is a recognized speaker on legal technology issues,...

Lean is a business methodology that’s used by Nike, Toyota, and even John Deere, but what does being a lean organization look like for law firms? In this episode of The Digital Edge, hosts Sharon Nelson and Jim Calloway talk to Larry Port and Dave Maxfield, authors of The Lean Law Firm, about what running a lean law firm looks like and the first steps to adopting lean techniques. They also address common misperceptions about the methodology and share some key takeaways of the book, such as seeing your law firm as a system and having the bravery to experiment.

Larry Port, CEO of Rocket Matter, is also a speaker and award winning writer at the crossroads of the legal profession and cutting edge technology.

For over 20 years, Dave Maxfield has represented individual consumers in cases against banks, credit reporting agencies, debt collectors, and insurance companies.

Special thanks to our sponsors, ServeNowScorpionAnswer1, and Clio.

Transcript

The Digital Edge

The Lean Law Firm

04/16/2018

[Music]

Intro: Welcome to The Digital Edge with Sharon Nelson and Jim Calloway, your hosts, both legal technologists, authors and lecturers, invite industry professionals to discuss a new topic related to lawyers and technology. You are listening to Legal Talk Network.

[Music]

Sharon D. Nelson: Welcome to the 124th edition of The Digital Edge: Lawyers and Technology. We are glad to have you with us.

I am Sharon Nelson, President of Sensei Enterprises, an information technology, cybersecurity and digital forensics firm in Fairfax, Virginia.

Jim Calloway: And I am Jim Calloway, Director of The Oklahoma Bar Association’s Management Assistance Program. Today our topic is The Lean Law Firm.

Sharon D. Nelson: Before we get started we would like to thank our sponsors.

Thanks to our sponsor Clio. Clio’s cloud-based practice management software makes it easy to manage your law firm from intake to invoice. Try it for free at  HYPERLINK “http://www.clio.com/”clio.com. That’s  HYPERLINK “http://www.clio.com/”clio.com.

Thank you to Answer1, a leading virtual receptionist and answering services provider for lawyers. You can find out more by giving them a call at 800 Answer 1 or online at  HYPERLINK “http://www.answer1.com/”www.answer1.com.

Jim Calloway: Thanks to Scorpion. Scorpion sets the standard for law firm online marketing with proven campaign strategies to get attorneys better cases from the Internet. Partner with Scorpion to get an award-winning website and ROI positive marketing programs today. Visit  HYPERLINK “http://www.scorpionlegal.com/podcast”scorpionlegal.com/podcast.

Thanks to ServeNow, a nationwide network of trusted prescreened process servers. Work with the most professional process servers who have experience with high volume serves, embrace technology, and understand the litigation process. Visit  HYPERLINK “http://www.serve-now.com” www.serve-now.com to learn more.

We are very pleased to have as our guest Larry Port and Dave Maxfield, the co-authors of The Lean Law Firm, the top-selling book at this year’s ABA TECHSHOW.

Larry Port is a pioneer in the field of legal technology as the Founder and CEO of Rocket Matter. In addition to running a cloud-based legal practice management company, Larry speaks to international audience on issues including attorney health and wellness, technology, productivity, and the business of law. Larry has been recognized by Fastcase as a Fastcase 50 top innovator in the field of law.

Dave Maxfield is a solo practitioner who runs his consumer protection law firm in South Carolina. He is the three-time Chairman of the South Carolina Bar Consumer Practice section and past President of his County Bar Association.

As a small and solo firm lawyer for the past 24 years, Dave immersed himself in lean systems thinking and has taught lean methodologies to lawyers in numerous CLE’s, including most recently at the 2018 ABA TECHSHOW in Chicago.

So thanks for joining us today, Larry and Dave.

Larry Port: Hey, Jim and Sharon, thanks for having me. It’s a pleasure to be here.

Dave Maxfield: My pleasure as well. Thanks for having us guys.

Sharon D. Nelson: Well, we are delighted to have you with us. Let’s start with you Dave, tell us why you decided to write this book and what needs you were trying to fill.

Dave Maxfield: Well Sharon, I had never written a book before so in the process of writing a book there is definitely times when I asked myself, oh my God, why did I write this book or why did I agree to write this book. But what it came down to was, I was really I guess trying to write with Larry the book that I wish I had when I was younger.

I have always practiced in a smaller firm and in a bigger firm you have the advantage of, you come in as an associate, you have in a professionally managed firm somebody to kind of direct your work, tell you what to do, tell you what not to do, tell you how to do it. But mid to small-sized firms, on down to solos don’t really have anybody to do that.

And while, as I did, when we come into the practice of law, if we are lucky, we have a really good mentor, somebody we can practice with, who sort of shows us the ropes in terms of how to be a lawyer and how to try a case and how to practice law in court, but a lot of them don’t really know the business side of things well and that’s because law schools never really teach us that for the most part. A lot of us come into law school and we get out of law school and we are, like I was, an English Lit major, which isn’t exactly the cutting edge of business, even back in the 90s.

(00:04:54)

So I started really early in my career looking around to see, where can I — let’s see if I can find something that kind of tells me, not so much how to be a lawyer in court, but how to be a lawyer out of court, how do I run the business part of things.

And I found some books. I found a book. I remember it was called Establishing a Law Practice and it was written in about 1955 and it had this schedule in it for what a lawyer’s day should look like. And it had, come into the office at 9 and talk on the phone for a while and dictate some correspondence and then you go to lunch for about two hours in the middle of it. And I liked that part, but then the rest of it was really not very applicable to what we were doing 20 years ago and certainly not now, with email and text and all these different communications channels. So I just never really found what I was looking for in sort of the traditional law book format.

And then what I did find though was in things like the Toyota Production System and particularly in a book that we might talk about a little bit more called The Goal, that manufacturing systems had really found all these ways to be faster, more efficient, and to do things better, whereas law had kind of lagged behind.

And the realization that we had or that I had back then was really all businesses do the same thing. They get some kind of a raw material, whether it’s actual raw material or some sort of a problem, people with problems. They process it in some way and out the other end comes a solution and money. And some of that gets reinvested and some goes back into our pocket.

So it started to become clear that when we looked at these other industries, they were doing things that we could really learn from. And so what Larry and I tried to do was really I guess use those things, write the book that I wish I had had and really teach people lean in the most accessible way we could.

Jim Calloway: Well Larry, I hate to admit it, but when your book first came into my office, I had three new books that I needed to review and yours got opened first because I had heard it was in the form of a graphic novel.

So where did you get the inspiration for a graphic novel format?

Larry Port: Well, I mean look, if you have followed anything that I have done, it’s never traditional, so that’s one answer. But really, I am a big reader, I like books, but I recognize that not everybody is a big reader and likes books. I am always trying to get people to read, like at work and wherever, and it kind of evolved.

The first thing was that we wanted to make sure that we had a book that had like a lot of different types of text in it. We didn’t want just like paragraphs after paragraphs. So we wanted to have like callout boxes. We wanted to have do’s and don’ts.

And this is someone — I am a software engineer, so this is after wading through textbook after textbook of best like software practices and seeing the ones that worked and ones that didn’t. So having broken up text in little like testimonials and sidebar stories and really breaking up the text was the first thing that we wanted to do to make the book a little bit more engaging.

And then we started talking about this book called The Goal, which was written by this Israeli physicist turned industrial engineer called Eliyahu Goldratt I believe is his name. And the whole thing is a novel. The whole thing is like a fictional narrative about this guy whose plant is going to close and how he turns the whole thing around and he has trouble with his family at the same time and so on and so forth.

So we said, all right, let’s combine kind of a novel aspect of it with chapters. So every chapter goes through like — there are 12 chapters, so it starts in January and every month there’s like kind of a new thing that they roll out. So there’s a narrative piece that happens in this guy’s law firm. And then there’s some supporting stuff in the back end.

So then we are like, okay, so we have this narrative, now we have this fictional thing, why don’t we make it like a graphic novel. So we commissioned an artist and he did it, and to be honest, we approved the panels that the guy was going to use for all the characters and then we are like, this looks great, go ahead, and so we rolled it out.

And in some of the panels our protagonist does look like a zombie. So not only have we rolled out the first graphic novel that the ABA has published, we seemed to have rolled out the first graphic horror novel that the ABA has published.

Jim Calloway: Well, that’s great. Many of us have always believed there are never enough pictures in law books anyway Larry.

Sharon D. Nelson: Well, where did the other ideas for lean come from? Did they come from law firms, other law firms, or did it come from someplace else?

Larry Port: Well, they came from someplace else. The word lean doesn’t really mean like you are trimming your costs or anything like that. It actually is the generalized term for multiple industries of what came out of Toyota, called the Toyota Production System, which was created by a guy named Taiichi Ohno. So in agile, some of the ideas from agile, which we also discuss in the book, also come from manufacturing.

(00:09:50)

And what’s been happening in other industries aside from lean is that these techniques have been adopted. They have been adopted in government, they have been adopted in software, and that’s where I was exposed to them. I didn’t know anything about any of this stuff until I worked as a software engineer.

And we used things like Kanban boards, which we talk about in the book, that help you kind of visualize the phases that things go through. In the way Dave runs his firm, his cases go through these different phases of Kanban board. So they came from other places. And I always thought, I come from this weird place, I always wondered where I am like a software engineer looking at thousands of law firms, I am like why aren’t these law firms employing some of these techniques.

So it didn’t come really from law firms, but there are lean lawyers popping up all over the place, and Dave is one, and I met a guy named John McCormack; he is studying at Vanderbilt, Industrial Engineering, and there’s this guy named John Grant, who is an Agile Attorney, so it’s starting to get there.

Jim Calloway: Dave, if you wanted readers to have one fundamental takeaway from the book, what would it be?

Dave Maxfield: Well, I am going to do one big one and then one kind of quote a little one. And I think the big one that I — I mean, if I wanted somebody to take one thing away from the book it would be to realize that their law firm is a system. Lawyers tend to think of themselves sometimes as like artisans, we craft pleadings and do things like that, which we are in a way.

Or we sort of think of ourselves as like a profession, maybe apart from things like people who manufacture things and like really different than that, but really we are not. Again, all businesses do the very same thing. They take a raw material of some kind, they put it through a process and out the other end comes some kind of a product and money too.

So once you start to see your law firm as a system where something comes in one side, as a case or a prospect, and you do certain things to it to enhance the value of it; solve your cleant’s problem and that’s how you get paid, once you start to see that flow, all kinds of things become possible, because you start to see where all the little levers are that you can change that flow or affect that flow, or in the words of Goldratt, take away constraints that increase the speed of that flow or what we call reduce cycle time. And so that realization is a fundamental shift in thinking that makes everything else possible. So that would be the big one.

The little one is this I think people shouldn’t be afraid to experiment. We keep in my firm saying, well, traditional law firms do this, but what if we didn’t do that anymore, and we keep kind of taking away these things or changing something and waiting to see if there is some kind of a punishment or negative consequence that the market imposes on us for doing that. And most of the times, not only does it never come, but there is some kind of a benefit that we didn’t see that we get out of that.

So number one, your law firm is a system, every business is a system; and number two, don’t be afraid to experiment.

Larry Port: And if I can add something quickly to the whole idea of seeing the law firm as a system, I think that’s very important, because what a lot of people do, and they go to ABA TECHSHOW and they go to these different sessions and they learn about certain efficiency techniques and automation techniques, but you can actually make your overall system less efficient by only automating certain portions of it. If you make one aspect of your system very efficient and don’t optimize other things, you can end up with major bottlenecks.

So it’s very important I think for people to understand when they go to make something more efficient in their law firm to view it holistically and to view it as an entire system and to really have an understanding of how one thing affects another in their workflow.

Dave Maxfield: And I want to add one thing to that because one of the things Larry does a very good job of describing in the book are the things that you use, key performance indicators, we call them KPIs, to measure whether you are doing things the right way or not.

Rather than having like some really giant performance review, what we try to get people to do is to say, look, there’s about four or five little gauges that you need to keep your eyes on that will tell you if things are going the way you want them to or not. And those are things that really speak to the speed and health of the system as a whole.

Larry is absolutely right, you can say, and what most people I think do is say we are going to change this and say this is the greatest automation tool we have ever seen, let’s employ that and do not realize the unintended consequences of that, because they see that part of their business in isolation and they don’t see what’s this doing to the whole system.

And so when you look at something like cycle time, for example, you can directly see how those things impact the system, and if they are not helping it, then that’s the kind of thing you want to get rid of. So much becomes possible when you look at things that way.

Jim Calloway: Before we move on to our next segment, let’s take a quick commercial break.

[Music]

(00:14:45)

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[Music]

Welcome back to The Digital Edge on the Legal Talk Network. Today our subject is The Lean Law Firm and our guests are Larry Port and Dave Maxfield, the co-authors of the book ‘The Lean Law Firm’.

Larry, there is talk about lean in the book and as you know, I love the book. I meant to say that earlier that it really is one of the most original books I have read in a long time and kind of fun to read, but there is also talk in the book about agile. Can you tell us about agile and how it differs from lean?

Larry Port: Sure. So agile is really a different type of methodology for production systems and is very popular in the software industry. So lean is all about this kind of derivation from the Toyota Production System; Agile is kind of an umbrella organizational methodology for doing things. And there are certain meeting rhythms that are really, really handy for agile, and we talk about a couple of these, but one of them is the retrospective, which I think if you are going to incorporate one meaning from the book or one takeaway from this podcast is a really, really good thing to do, because it allows you to incorporate change.

The retrospective allows you to say, okay, what are we doing that we should continue doing, what should we stop doing and what should we start doing that we want to try? So that’s the retrospective meeting.

We also talk about the daily stand-up meeting and some of these other kind of rhythmic meetings that law firms can do that really help move the ball forward and keep everybody on the same page in a very low overhead way.

Jim Calloway: Dave, what’s the first step that legal professionals should take if they want to incorporate lean techniques into their law firms.

Dave Maxfield: Well, I am not sure if I am allowed to say go buy our book or go to our website. I mean it sounds like I should be on late night TV, selling a seminar at the Holiday Inn, but it really is — I do want to say this. I think it’s a very easy place to start. It’s deep enough to tell you what you need to know. It’s specifically made for lawyers and it’s very accessible. I mean the story is the hook that pulls you through it.

One of the things I am very happy about when we hear comments from people is that they really like the story part of it and that makes it easy to read. So I would recommend our book.

I would recommend that you — another book of course, ‘The Goal’ that Larry mentioned before and I mentioned before. There’s a book called ‘The Phoenix Project’, which again is one of this sort of business novel, story, parable, very accessible ways to get the concepts.

And then I would look at people like John Grant. He runs a great website and consulting service that really helps people how to get started in these techniques. And also, there are other websites too that will kind of lead you on that path.

But what I recommend you don’t do is like dive into the Lean Six Sigma Black Belt Manual #9, because it’s just going to make your head explode and it’s not made for lawyers really, you have to do all that translation. And so what the resources that I have described do I think is really translate that into lawyer and that’s what we wanted to do.

Larry Port: Yeah. And if I can just add to that briefly, John Grant is Agile Attorney, so you can look him up,  HYPERLINK “http://www.agileattorney.com” agileattorney.com. Our website is  HYPERLINK “leanlawfirmbook.com” leanlawfirmbook.com. And you can always email me or Dave. I am  HYPERLINK “[email protected][email protected] and we can connect you with other people. I think talking with other people is really helpful to move the ball forward and share experiences with us, since it is a new field.

Sharon D. Nelson: Dave, how does your approach work with hourly billing?

Dave Maxfield: Well, that’s a whole other discussion, but I guess what I would say is we are sort of following that trend that kind of is moving away from hourly billing. We talk about of course contingency fees which smaller firms maybe tend to do more than larger firms, but also flat fees, which is kind of a national trend anyway.

(00:19:59)

You can cut the time it takes for you to produce a product while you still improve that product’s quality, but if you’re still billing by the hour then you don’t get the benefit of that improvement that you’re trying hard to make, and really your client may be they’re still paying by the hour, and there’s almost a disincentive for you to get better and faster.

So, I think that maybe it is against the client’s interest too, but overall, you can still gain a lot if you are an hourly biller in terms of like quality of your product and really the market-ability and price of your services because when you become standardized, repetitive, process-oriented, you tend to have a better product and so that makes you maybe worth more, but we really like going to like if you’re going to build people upfront in a flat fee model, seems to work better for everybody.

Jim Calloway: Is there one misperception that people might get from the book that you’re going to correct?

Dave Maxfield: Oh, that’s a good question, Jim, and it kind of goes hand-in-hand with the billing discussion we just had. One misperception you could get from the book would be because we’re saying, look, speed is important, being able to move something across the finish line and a lot of things across the finish line in terms of productivity it’s really important.

Some people, especially if we’re talking to somebody who does a lot of contingency billing, like on personal injury cases, can take information like that and say, oh, you want me to settle everything because that’s faster or settle on the cheap? And that’s absolutely not what we’re saying. What we’re saying is, build the best product you can, the best case you can, and that with standardization comes quality and with repetition comes quality.

Ferrari builds amazing cars and they do it because they’re attentive to their process, but you won’t find them building selling machines. They are very much in a certain niche and not to get into marketing too much, that’s one of the things that we really try to counsel as to say, figure out what you like, figure out what you love, get really, really good at it and become the best at that, and that makes you more sought after, even if you are an hourly biller maybe you have a higher rate that way, but what we’re not saying in this book, Jim, is we’re not saying, settle stuff on the cheap or turn yourself into like a settlement mill or something like that, we’re saying be mindful of your cycle times, realize how that impacts your bottom-line, build the best case you can build in the best amount of time, and clients in every kind of a practice I’ve ever been in have always appreciated having things not drag on forever, and I think that’s one of the biggest complaints that lawyers get which is why hopefully our processes will really help people make clients happier too.

Jim Calloway: Before we move on to our last segment, let’s take a quick commercial break.

[Music]

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[Music]

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Welcome back to The Digital Edge on the Legal Talk Network. Today our subject is The Lean Law Firm and our guests are Larry Port and Dave Maxfield, the co-authors of the book The Lean Law Firm.

Larry, you are not a lawyer, so why do you feel you are able to help deliver the lean messages to law firms?

Larry Port: So, it’s a pretty good question. I do think that I have an unusual vantage point coming into this. So you have a guy who is a software engineer that comes from a different industry is not a lawyer and observes how thousands and thousands of law firms operate. So, the big takeaway for me is that I really was shocked at the lack of business savviness that I’m seeing out there amongst small law firms especially. The larger ones seem to do better, but the ones that have less than five employees especially, and understandably they really do not seem to have some of the basic tools that I think they need in order to move forward.

(00:25:12)

And I also had to learn how to do all this stuff because when I was building Rocket Matter I’m coming from a software engineering role and I’m a specialist like a lawyer is a specialist, so I had to learn how to run a business and the tools are out there a lot more for people who are building software companies as it seems to me, I mean, there’s all sorts of blogs, there’s all sorts of material Inc. magazines seems to be made for people like me who are building software companies. So, it is a combination of like having gone through the experience, having known about these tools and how wonderful they are and that they can jump from manufacturing to a knowledge industry and then seeing that there is a lack of information in that industry being the legal field and it just seemed like it needed to happen, so I was happy to step up to the plate on it.

Dave Maxfield: And, yeah, just to echo one thing about that, I think Larry is a brilliant guy and a great writer and one of the things that kind of made it really great for me to work with him, and I think made the book a good product is we have really this — he’s got this sort of 30,000 foot view and I’ve got kind of this view from the trenches sometimes, so we can really kind of like talk back-and-forth about whether this would really work and not just be academic about things but really have everything in the book be kind of battle-tested which has been on a macro and micro level, which I think makes a lot of sense.

Jim Calloway: Larry, how do you feel about the reaction to the book so far?

Larry Port: I’m pretty thrilled with the reaction. I was very pleased that there was so much interest in the TECHSHOW, that it was a top-selling book at TECHSHOW, and I just feel like maybe this is the right idea at the right time. We got very lucky during the show and — because this is when the book debuted by the way back in early March, early March of 2018 and Dan Katz in his keynote address mentioned lean processes, and Dave and I had our session. So, there was like a lot of interest in it and I’m very, very pleased with how it’s been received so far and I’d be curious to see if David on the same page as me.

Dave Maxfield: Yeah, for sure, I mean, the fact that we’re on The Digital Edge podcast on the Legal Talk Network, I mean, I think it says it all.

Sharon D. Nelson: Well, that was pithy and that was short and concise. So, we want to thank you both for being our guest today, Larry and Dave. I’m truly a fan of this book. I love the way you introduced the fictional part, I loved the illustrations and you go back-and-forth between the story that you’re telling and then what you’re trying to teach, it is both educational and entertaining at the same time. I’m a little better than halfway through the book at this point and looking forward to writing a very positive review when I’ve concluded it because it really is fun and it certainly is original, so thank you again, both of you, for being with us today.

Larry Port: Thank you, Sharon.

Dave Maxfield: Thank you.

Sharon D. Nelson: And that does it for this edition of The Digital Edge: Lawyers and Technology. And remember, you can subscribe to all of the editions of this podcast at  HYPERLINK “http://www.legaltalknetwork.com/”legaltalknetwork.com or on Apple Podcasts. And if you enjoyed our podcast, please rate us in Apple Podcasts.

Jim Calloway: Thanks for joining us. Goodbye Ms. Sharon.

Sharon D. Nelson: Happy trails, cowboy.

[Music]

Outro: Thanks for listening to The Digital Edge, produced by the broadcast professionals at Legal Talk Network. Join Sharon Nelson and Jim Calloway for their next podcast covering the latest topic related to Lawyers and Technology. Subscribe to the RSS feed on  HYPERLINK “http://www.legaltalknetwork.com/”legaltalknetwork.com or in iTunes.

The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

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Published: April 16, 2018
Podcast: The Digital Edge
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The Digital Edge
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The Digital Edge, hosted by Sharon D. Nelson and Jim Calloway, covers the latest technology news, tips, and tools.

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