While in Atlanta recently for a weekend getaway, I was attracted to an article in the Atlanta Journal Constitution which profiled Dr. Donald G. Stein. He had noticed the significant difference in the ability of women to recover from brain injuries in striking contrast to men. Suspecting a gender based distinction rather than random chance, Dr. Stein spent 25 years studying the clinical data. Finally, it was determined that the causative factor in women’s ability to heal more rapidly is the hormone progesterone. Emory University is now engaged in full scale clinical trials to bring to men the natural capability women have to heal from brain injuries.
Most impressive was the doctor’s recognition that great discoveries never occur in large leaps. Instead, transformative innovations only take place one contiguous step at a time. Although he long suspected the link, it wasn’t until a clinical study first established it would be safe to experiment with progesterone in men, that the link was discovered. As stated by one of his colleagues, “In some respects, Don’s discovery was hiding in plain sight for decades.”
This describes the principle of “adjacent possibilities” as best developed by Steven Johnson in his great book on innovation, Where Good Ideas Come From. The Wall Street Journal lauded Johnson’s book as one of the best business texts of 2010.
Johnson analogizes the process of effective innovation as moving from where we are to “the next room”. It is as if we find ourselves in a room with four doors, each of which leads to a new room. Once we choose a door we find ourselves in another room with three new doors. As we explore each new room we can only do so from the perspective of the room we left. Innovation does not occur by “leaps and bounds” but by the next “adjacent possibility”. Otherwise, the best ideas are simply “ahead of their time”.
In exactly this fashion, mediators can only incrementally help people caught in conflict move from the place where they find themselves to adjacent potential solutions to their problem. Parties who agree to meet with a mediator have taken the first step, but only the first step toward resolution. Agreeing to ground rules or norms of expected behavior in the mediation room is another important step. As the Chinese proverb states, “The journey of thousand miles begins with a step.” With each agreement reached on “small” items, larger concerns can be addressed more readily through the process mediators bring to bear on the problem.
It seems that the legal services industry is ripe for a next step, which ten or even five years ago would have been unthinkable. All business people, and most lawyers, know that the legal services business model is unlike any found in the client corporations or businesses the lawyers serve. While business has been moving steadily toward a business model which rewards efficiency, law firms have been stuck in the “billable hour” conundrum by which the more time spent on a matter, the greater the fee and the more economically successful the law firm.
Clients have been recoiling at this incentive system for decades, but law firms have known no other way to budget or reward success than through the billable hour. However, the recession of the last few years has significantly altered the leverage. Corporate clients have called a halt to the ever increasing hourly rate and have begun to insist on no rate increases at all, even demanding discounts on prevailing hourly rates, some as high as 25% off standard rates.
As a result, law firms are now looking for ways to modify the profitability paradigm. Although the billable hour will never disappear, for the first time law firms are examining quality management methodologies such as Six Sigma and Lean for clues about incentivizing efficiency and improving quality. Project management skills and cost estimating strategies have found their way into the law firm manager’s lexicon. We are in a new room and the adjacent possibilities are exciting, although daunting in the extreme.
When law firms follow the path of innovation to the next room they will discover what their corporate clients have already learned. Enterprise technology solutions can improve efficiency (good for the client), reduce time spent on legal matters (good for the lawyer), improve the quality and delivery of legal matters (good for the client and the lawyer) and improve profitability while actually decreasing the cost of services (great for the law firm and the client). The solution has been “hiding in plain sight for decades.”
The conflict inherent in change initiatives of this magnitude presents a perfect opportunity for mediators. As the legal services industry faces the need for fundamental innovation at its foundation, law firms will be divided into the early adopters of change and those who resist it. Law firm survival may depend on the manner in which these treacherous shoals of intra-firm conflict are navigated. Mediators with close professional ties to the legal profession can effectively market their services to law firms caught in the spiral of massive change. What a great time to be a lawyer/mediator or to serve as mediator to lawyers and their law firms.
For more information about these adjacent possibilities see The Legal Services Industry White Paper.