As you say, it must ultimately make business sense for lawyers in a firm to collaborate with each other and 'productize' standard offerings in order to do things more efficiently. They just need to find new ways of charging for their work to reflect this. But fixed price packaged or standardized services could be very profitable.

If something takes 100 hours to do the first time, but only takes 10 hours to do by re-using standard stuff that's been built up over many previous assignments, then you might be able to sell it for the equivalent of 50 hours and still be providing good value to the clients. I'd be interested to hear to what extent this kind of approach is starting to be used by law firms.

Thanks for your comments. You should meet each other!

If KM is done correctly, it should result in improved quality and productivity. However, that won't be seen as truly valuable within an hourly billing structure unless there is a surfeit of work. In which case, KM helps deal with the problem of opportunity cost.

The value of the approach described in my post can be appreciated best when there is less work to be done and clients are demanding lower costs. Better quality work at lower cost is a value proposition most clients would embrace. From the firm's perspective, however, it's important to follow the Susskind approach so that you have a fighting chance of actually documenting the improvements in quality and decline in cost. It's in that analysis that you find ROI. Anything else is wishful thinking.

- Mary

First, maybe its time to drop the “alternative billing” label. I think there is hourly billing and non-hourly billing. (Someday, hourly billing will be the alternative.)

Second, it is hard to get an ROI with hourly billing. KM results in producing better work product more efficiently. Logically, that leads to fewer hours spent on a task, which leads to a lower bill. Good things for the client, but hard to measure the benefit to the law firms. That gets turned on its head when you move away from hourly billing.

I think the KM movement should embrace Susskind's message.

No doubt I am oversimplifying – but how does this work in practice in typical law firms? How can the benefits of KM in terms of improving productivity be translated into improved margins and so quantified as a return on the investment?

As you say, it must ultimately make business sense for lawyers in a firm to collaborate with each other and 'productize' standard offerings in order to do things more efficiently. They just need to find new ways of charging for their work to reflect this. But fixed price packaged or standardized services could be very profitable.

If something takes 100 hours to do the first time, but only takes 10 hours to do by re-using standard stuff that's been built up over many previous assignments, then you might be able to sell it for the equivalent of 50 hours and still be providing good value to the clients. I'd be interested to hear to what extent this kind of approach is starting to be used by law firms.

Thanks for your comments. You should meet each other!

If KM is done correctly, it should result in improved quality and productivity. However, that won't be seen as truly valuable within an hourly billing structure unless there is a surfeit of work. In which case, KM helps deal with the problem of opportunity cost.

The value of this approach can be appreciated best when there is less work to be done and clients are demanding lower costs. Better quality work at lower cost is a value proposition most clients would embrace. From the firm's perspective, however, it's important to follow the Susskind approach so that you have a fighting chance of actually documenting the improvements in quality and decline in cost. It's in that analysis that you find ROI. Anything else is wishful thinking.

- Mary

First, maybe its time to drop the “alternative billing” label. I think there is hourly billing and non-hourly billing. (Someday, hourly billing will be the alternative.)

Second, it is hard to get an ROI with hourly billing. KM results in producing better work product more efficiently. Logically, that leads to fewer hours spent on a task, which leads to a lower bill. Good things for the client, but hard to measure the benefit to the law firms. That gets turned on its head when you move away from hourly billing.

I think the KM movement should embrace Susskind's message.