Beware the False Idol of Localized Efficiency

As the International Legal Technology Association conference kicks off in Nashville this morning I’m sad to miss it. From what I’ve seen, there are some great speakers lined up and innovative products being rolled out. I look forward to following as much as I can from afar.

With all of the great software and helpful advice being presented, however, I offer two suggestions:

(1) Don’t forget that the world is one big marketing opportunity.

This applies double to any conference environment, and it works both ways. The appeal of a conference is getting exposed to new products and ideas that you can potentially adapt to your own practice. At the same time, remember that for most of the sponsors and presenters, their job is to get you thinking that the problems with your practice look like nails, and have they got just the hammer for you.

This is not a bad thing. There are some excellent hammers out there, and when they do encounter a nail the results can be outstanding. It also isn’t universally true; the best salespeople are those who recognize when their particular product or service isn’t a good fit at that moment and build credibility by saying so. At the end of the day, however, always remember that needs assessment is your job; selling solutions is theirs.

(2) Even a solution that perfectly addresses one of your problems may not be a good investment.

“Wait a minute,” you say, “how can finding a great solution to a nagging problem be a bad thing?” The answer comes from the Theory of Constraints.

In my article “Doing the Thing Wrong or Doing the Wrong Thing,” I discussed how the ultimate purpose of any business is to deliver Value to your customer and receive Profit in exchange. The Theory of Constraints teaches us that most businesses have at most one or two constraints (or bottlenecks) that limit the system’s ability to deliver Value, and therefore to capture Profit.

The corollary is that any improvements you make to parts of a system that aren’t your bottleneck cannot improve the productivity of the system as a whole. If you create efficiencies upstream of the constraint you only increase pressure on the bottleneck. Improve a function downstream of the bottleneck, and your efficient station will be starved for productive work.

Theory of Constraints Graphic

Take your client intake process for example. We all know that client intake is boring and labor-intensive, but necessary. Many firms seek to make it more efficient so they can spend as little time doing it as possible. But improving client intake rarely improves the throughput of the entire practice. You may reduce some tedious work, but intake is almost never the single bottleneck keeping you from a more profitable practice. If your marketing and sales aren’t fully humming upstream, or your delivery processes are choked downstream, then you should focus your resources on finding and addressing your true constraint. Anything you invest in improving parts of the system that aren’t the bottleneck cannot generate a substantial return.

(If you’re inclined to argue the merits of cost savings, please first read why Cost Control is Not the Final Answer.)

So as you evaluate any new technology or service offering that purports to improve some area of your law practice, you should think twice about pulling the trigger even if you are 100% sure the offering will work. The question is not whether the change will improve some function within your law practice, but whether it will improve the productivity of your entire practice.

Questions, comments, or want to talk about how to find and address your practice’s constraints? Please don’t hesitate to contact me.

© 2014 John E. Grant.

1 thought on “Beware the False Idol of Localized Efficiency”

  1. Pingback: The Two Keys to Lawyer Profit (Spoiler Alert: Cost Control is Not One of Them) – Legal Value Theory

Leave a Comment

Your email address will not be published. Required fields are marked *