Articles Posted in Thinking

An article from Conference Rev., Winter 2011 at 37, tickled me. It lampoons business jargon. Throughout, the article skewers all manner of clichés, acronyms, styles of obfuscatory speech, and words sucked of all meaning. The Orwellian/Dilbertian mess of messaging presents easy targets. So, I thought I would compile my own list of bugaboos.

Never, ever use the following jargon unless you state immediately after them what you mean in plain English. Having done that, uproot the jargon weed.

Client-centric, core competence, delayering, end-to-end, interface (as a verb), kaizen, leverage, mission critical, paradigm shift, quantum leap, win-win, proactive, re-engineer, state-of-the-art, strategic, synergies, thinking out of the box, value-add, value proposition, and world class.

Richard Koch and Greg Lockwood in Superconnect: Harnessing the power of networks and the strength of weak links (Norton 2010) at 80, refer to psychological studies that find that “we are less satisfied when we have more choices than when we had fewer.” More choices means we pay a higher opportunity cost for the choices foregone and so can more easily regret our eventual pick (See my post of Nov. 13, 2006: decision difficulties when there are too many choices.). If ten law firms propose to handle your work, you might more frequently look back with rue than if only five proposed. This phenomenon explains a bit of the allure of panels. They simplify our choices.

More choices also mean that expectations escalate. It seems only reasonable that with more firms to choose from, or more providers of software, that you should get a better result. Your expectations steadily climb with the wealth of choices. The actual result, therefore, is more likely to disappoint you.

Another aspect of this cognitive and psychological limitation comes from Columbia Mag., Winter 2010-11 at 23. It notes that McKinsey & Co., partly in recognition of studies on the stress caused my multiple choices, has instituted its 3-by-3 Rule. “Never present clients with more than three options at a time.” That rule deserves serious consideration by in-house lawyers when they outline choices for clients.

More than a decade ago, the Economist wrote about a man, Art Hammer, and his deductive methodology for number crunching, multivariable testing (MVT). It is a mathematical way to sort through many variables in a decision and determine which are better without time-consuming calculations.

As explained in the Economist, Aug. 8, 1998 at 56, the software combines variables in its “tests” and deduces a result using average outcomes. It would appear that law departments with certain decisions that have multiple variables, perhaps choosing software or selecting a law firm, might put MVT to good use. It might not reach the ultimate answer, but it could clear out the lesser choices and let the department’s staff concentrate on the most crucial variables (See my post of Aug. 9, 2010: software that complements decision-making with 6 references.).

The methodology is alive and well a decade later, as at least one company, QualPro, specializes in it.

“A network is a set of interconnected people or things that can communicate with each other, share information and achieve results that would not be possible if the network did not exist.” Richard Koch and Greg Lockwood, Superconnect: Harnessing the power of networks and the strength of weak links (Norton 2010) at 6. Four parts of this definition contain the gist of it.

Interconnected: network participants can reach each other;

Communicate: when they reach each other, they can transmit information back and forth;

“Any seemingly grand idea can be divided into an infinite series of smaller, previously known ideas.” This quote from a book by Scott Berkun, The Myths of Innovation (O’Reilly 2007) at 7, set me to thinking about innovations in law department management and the shoulders of giants they were built upon.

Convergence seemed a worthy idea to deconstruct even though many other innovations would serve as well. The wizards of Wilmington did not summon the idea out of the clouds, unparented, whole cloth and all. Far from that. The pieces they assembled were many.

Agreements, since the terms under which the Primary Law Firms (PLFs) agreed to represent DuPont had to be spelled out;

One of the myths exposed in Scott Berkun, The Myths of Innovation (O’Reilly 2010), is that people love new ideas. They don’t, especially if the idea challenges their accustomed way of thinking or their power. Berkun lists (at pg. 57, with more at 90) ten negative things often slung at those who put forth a new idea (See my post of Oct. 12, 2010: how to defend your good ideas from attack.).- I have paraphrased eight of them as if a senior staff meeting were considering offshoring legal services.

“This offshoring will never work.” “No client will want their work done in India.” “The theory may be fine but it can’t work in practice because of this, that and the other problem.” “Our clients and law firms won’t understand it.” “Getting these legal services done isn’t a problem.” “These legal services are a problem but no one cares.” “Getting these services done is a problem, our clients care, but we can solve it better another way.” “This is a solution in search of a problem.”

I will add two more: “What other Fortune 500 companies identical to ours have years of experience with offshoring these services and found it to be terrific?” And, “We already tried it, remember, and it bombed.”

A thoughtful and useful book, Scott Berkun, The Myths of Innovation (O’Reilly 2010), should correct many of the misimpressions we hold about much-vaunted innovation. To summarize them, this post takes discounts from a law firm that increase as fees increase. Let’s apply the myths to that innovation, since it had to have happened for the first time somewhere.

It is unlikely that some mid-level lawyer leaped up, shouted “Eureka!” and announced the epiphany: “Let’s set tiered discounts.” Nor was there a smooth, progress onward and upward to that novel mandate or an established methodology followed that produced the new concept.

Other myths punctured by Berkun deflate also. Other members of the department probably disagreed with the new idea, found it objectionable, unworkable, even unthinkable. And, the idea for step discounts did not emerge from the fertile mind of a lone lawyer, toiling away in isolation until the grand conclusion was unveiled.

Rewarding or penalizing inside attorneys based on outcomes of legal matters overestimates how much of the random variability of the world the attorneys actually control. A din of “noise” clutters what happens out there, which means that good managers can suffer from bad outcomes as much as bad managers can enjoy undeserved outcomes.

An article in the Harvard Bus. Rev., Dec. 2010 at 40, by Dan Ariely dandan@duke.edu urges companies to reduce their reliance on evaluations of stochastic outcomes. One step he recommends would have managers in legal departments document their crucial assumptions at the time they make decisions they recognize are import. If, in retrospect and regardless of what eventually happened, it was sensible to make the decision based on the assumptions at the time, it is unfair to punish the decision-maker. Second, check to see whether the person who made the decision took available information into account.

Third, did the person genuinely consider the range of available options. Fourth, were there any conflicts of interest tugging against the lawyer’s making an objective call. Fifth and finally, taking into account these indicia of solid thinking, it is important to “reward good decisions at the time they’re made.”

A theory-based article in the Academy Mgt. Rev., Oct. 2010 at 579, analyzed studies on expertise and proposed an ”entrenchment perspective.” The author proposes “that a trade-off is associated with expertise. Specifically, as expertise is acquired, flexibility may be lost.” Harry Truman made a similar point acerbically, “An expert is someone who doesn’t want to learn anything new, because then he wouldn’t be an expert.”

Inside counsel dive deeply into certain areas of law. They live it, study it, spot its risks and frontiers everywhere – very proud of their mastery. That level of deep knowledge may close them off from some tests of mental flexibility. No one likes challenges to what they know so well.