There are two very important words law firms need to talk about, right now, today—collaboration and competition
Why?
(1) “Collaboration will be the next decade’s imperative,“ Jeff Day, Senior Manager of Strategy and Planning at Cisco and keynote speaker on “Meeting the Collaboration Imperative,” at the upcoming LSSO RainDance in Chicago June 5-6, told me last week via telephone.
(2) Immediately I thought about the downfall of several iconic law firms in the recent past and how their (speculation on my part) inability to shift from a model of competition—the underlying approach in most law firms—to one of collaboration may have played a major role. Other thoughtful theories on why law firms fail may be found here, here and here.
Let’s break it down.
COLLABORATION, more than the intersection of common goals seen in cooperative ventures, is a deep, collective, determination to reach an identical objective. The word comes from the Late Latin collaboratus, and is the past participle of collaborare. Com- + laborare (labor) = to labor together. (Source: Wikipedia)
COMPETITION is defined as a contest between organisms, animals, individuals, groups, etc. for territory, a niche, or a location of resources, for resources and goods, for prestige, recognition and awards, for mates and group or social status, for leadership; it is the opposite of cooperation. It arises whenever at least two parties strive for a goal which cannot be shared or which is desired individually but not in sharing and cooperation. Competition occurs naturally between living organisms, which co-exist in the same environment. (Source: Wikipedia)
Competition is the enemy of collaboration.
Just sayin’…the competitive model alienates collaboration. It creates a silo-ed approach and shuts down opportunities to realize greater goals as the market changes. And even the experts say, collaboration allows for innovative responses to changes in the market.
Experts question the constructiveness of competition in profitability.
Scott Armstrong and Fred Collopy (1994, “The Profitability of Winning,” pp. 61–63) argue that competition-oriented objectives are counterproductive to raising revenues and profitability because they limit the options of strategies for firms as well as their ability to offer innovative responses to changes in the market.
In addition, the strong desire to defeat rival firms with competitive prices has the strong possibility of causing price wars, according to J. Scott Armstrong and Kesten C. Greene (2007) “Competitor-oriented Objectives: The Myth of Market Share” (pp. 116–134). We all know this is a losing proposition for law firms who want to stay in business.
It’s only natural.
Competition occurs naturally between living organisms, which co-exist in the same environment.
All lawyers, co-existing in the same environment, are taught from the get-go that it’s all about competition. They compete for LSAT scores, entrance to top law schools, class rankings, and law review editor. They pass the Bar exam and compete for a job at a top law firm (or any job in today’s market!). Then they compete for a chair on the big case, the firm’s best client’s deal, and of course, billable hours. They compete for partnership, compensation, directory rankings, originations, practice leader, managing partner, the best office, and so forth. Isn’t it crazy; EVERYTHING appears to be focused on the individual’s desire to win territory, resources, prestige, recognition, awards, social status or leadership? The last thing on earth a lawyer could imagine doing is COLLABORATING. Thus they operate in a silo, and to shift from competition to collaboration would be risky to their balance and well-being—or so they might think. Yet we all know that repeating the same process over and over, expecting a different outcome, is futile. Worse, you may find yourself on a sinking ship.
To prove my point, when I first started speaking to groups of attorneys about social media I often used the words “community,” “sharing,” and “collaboration.” I saw eyes glaze over or big question marks appear on their foreheads. I lost them—if social media was about collaboration, then they didn’t want to have anything to do with it (unless it came with a guarantee of revenue that day). So I removed collaborate and all the other touchy feely words from my jargon. Today I get a totally different response.
Now hear this:
Jeff studies collaboration behavior and technologies. He talks about important stuff that law firms need to hear; like these:
Organizations (businesses, governments, non-profits, NGO’s, professional corporations, etc.) of all sizes know they need to get smarter in order to squeeze out revenues and profits, for some it will be the difference between existence and non-existence. They will become smarter the more integrated they become with the concept of collaboration, and technology is making it happen.
Collaboration may be perceived as a nice to-do for the current decade, but those organizations that neglect innovation, specifically technology that allows us to collaborate, will be left behind. Collaboration will be the next decade’s imperative but why wait when you can get ahead of the game, as new models of collaboration are available today.
Collaboration tools are as critical to an organization as getting on to the Internet was in the mid-90’s, or as revolutionary as getting on an airplane to conduct business was in the 50’s and 60’s. The world is getting smaller, but the need to communicate effectively with diverse groups across invisible boundaries isn’t.
Technology transitions will creep up on you when you’re not paying attention and catch you off guard. Productivity, benefits, and enhancements will come through collaboration initiatives.
“The Goldcorp Challenge”
One example Jeff used to illustrate the power of collaboration—from Don Tapscott and Anthony D. Williams groundbreaking book, WIKINOMICS (PORTFOLIO, 2006)—the “Goldcorp Challenge.” It’s worth repeating.
(Summarized)
Mining is an intensely secretive industry. Goldcorp’s (a small Toronto based mining company) test drilling in their 50 year old mine in Red Lake, Ontario, which market analysts thought to be dying, revealed deposits of new gold, as much as thirty times the amount they were currently mining. The trouble was that they did not have the resources they needed to take advantage of their data. Taking a page from the Linux mode of open source code development, they decided to “open source” their data to the global community of geologists, to harness some of the best minds in the industry to find the illusive gold deposits. They launched with $575,00 in prize money. Submissions came flooding in from around the world, including some from unexpected and surprising sources. Contestants identified 110 targets, 50% of them new to the data they had, and over 80% yielding substantial quantities of gold.
Today Goldcorp is reaping the fruits of its open source approach to collaborative exploration. They were innovative. They bucked a downward industry trend by sharing the company’s proprietary data to exploration of what remains a conservative and secretive industry.
The authors also go on to tell of companies such as Boeing, BMW, and Procter & Gamble that have been around for the better part of a century, and yet these organizations and their leaders have seized on collaboration and self-organization as powerful new levers to cut costs, innovate faster, co-create with customers and partners, and generally do whatever it takes to usher their organizations into the twenty-first-century business environment.
So, can law firms collaborate?
I think yes and they must begin now to take steps—even baby steps.
One example of “a step” quickly comes to mind. A U.S. based, international law firm I work with is not investing huge sums of capital in often-expensive physical office space in foreign countries; they are establishing their presence through collaborating with local talent. More than affiliations in a law firm network, which in my experience can be hit or miss, they carefully select top practioners in strategic markets, bring them under the firm’s umbrella, complying strictly with all the laws governing legal practice in each particular country, and work toward a common objective. To do this, some of the stateside lawyers have acquired licenses in those countries allowing them to further collaborate with the firm’s international partners. The firm staffs its US headquarters with multi-lingual lawyers who speak and write fluently in the languages of their foreign offices. They have a deep, collective, determination to reach an identical objective—serve clients in cross border transactions, litigation and arbitrations. They also collaborate on business development and marketing.
Client feedback has been extremely positive as it enables them to complete cross border transactions seamlessly. For the firm, collaboration does not require millions of dollars to expand their footprint because there are no fancy outpost offices to build, market and maintain. (Contrast this to the mega firms who opened physical offices in China, Latin America, and the Middle East, for example, only to find they are a drain on resources and worse, unprofitable.)
Another would be the ACC Value Challenge that provides the technology to enable in-house counsel to post feedback for outside counsel on the handling of matters and initiate improvements. In other cases, law firms are using client interviews to understand client perceptions and needs and to collaborate on a mutually beneficial outcome. Client sales and service teams also provide a gateway to innovation.
Technology.
Of course none of this collaboration stuff can happen without the technology that is available today. Collaboration and technology go hand and hand. Jeff is the guy to explain how it works. If you are interested in learning more about collaboration strategies and tactics consider attending LSSO RainDance 2012, June 5-6.
Thanks to Jeff for inspiring this post and taking the time to speak with me.
