Among the stories of global turmoil jockeying for our attention in today’s news, the Ebola crisis ravaging West Africa stands out as particularly tragic and troubling.  In the midst of unfathomable suffering and poignant acts of compassion and heroism, we wonder why has so little progress been made in finding a vaccine or cure in the almost 40 years since the virus was first discovered.  While it is tempting to point a finger at “Big Pharma”, the economic realities of the pharmaceutical sector ensure that rare diseases, especially those found primarily in the developing world, will not receive the needed research dollars.  In the absence of meaningful governmental (such as the Ebola drug research at the Canadian National Microbiology Laboratory in Winnipeg) or philanthropic (such as the Bill & Melinda Gates Foundation‘s work on neglected infectious diseases) involvement, the sad conclusion is that research into vaccines or cures for these rare diseases will continue to be neglected.

As I listened to CBC radio this Saturday morning, I was encouraged to hear Day 6’s host Brent Bambury interview Matt Todd, a University of Sydney chemist, in the segment:  Can open-source pharma cure Ebola and other neglected killers?  Professor Todd, who founded and currently leads the Open Source Malaria project, explains the great promise of open source pharma approaches in collaboratively finding vaccines and cures to neglected diseases such as Ebola.  I encourage you to listen to the interview and join me in hoping for and working towards a better world.

On August 12, 2013, many individuals around the world paused to watch Elon Musk, chief executive of Tesla Motors and SpaceX and co-founder of PayPal, unveil his vision for Hyperloop – the elevated low pressure tube transportation system designed to move passengers and automobiles in capsules from Los Angeles to San Francisco in 35 minutes described in his blog post. While there is considerable ongoing and polarized debate around the feasibility of his “fifth mode of transportation”, Mr. Musk brings a high deal of credibility as a serial entrepreneur who has found great success challenging business sectors he considers “inefficient or uninspiring”.

But what is most striking about the announcement is his decision to “open source” the Hyperloop design.  As Mr. Musk states on the final page of his Hyperloop Alpha design document, “The intent of this document has been to create a new open source form of transportation that could revolutionize travel. The authors welcome feedback and will incorporate it into future revisions of the Hyperloop project, following other open source models such as Linux.”  In other “transportation theme” words,  it is a rather like the Wright Brothers publishing their plane designs before their first Kitty Hawk flight or Henry Ford publishing his manufacturing and design documents, and business plans, before the first Model T rolled off the factory floor.  While time with tell whether Mr. Musk’s “fifth mode of transportation” gets traction, his open source approach to its design truly makes the Hyperloop hyper important – Tak for Alt, Elon.

“Tak for Alt.” [Thanks for everything]

Danish saying when a person passes on

So what is so special about the “new middle’ law firm pVp given that it looks like a mere re-arrangement of what is already being done within traditional law firms?  While it is only a small part of the story, this re-arrangement of service offerings is a fundamental transformation at the heart of the powerful legal services re-bundling process that is underway within some law firms.

Or what is special about a mere stacking of what is already being done within the pockets of legal services innovation?  In the first place, this stacking is really about both the “optimal way of organizing and allocating information resources” and the seamless integration of, and hand-off between, the layers.

While both of these perspectives are valid, we really need to explore a few more layers.  As an alert reader of this blog, you may have noticed that the pVp speaks of “value”  while its diagrams only reference price ($).  You may also remember both the following equation:

Value = price + trust

and the challenges around trust in a complex purchasing decision.

So how does the pVp address trust?  The first and largely traditional answer is that trust is created by having a recognized expert at the apex of the pyramid ensuring the quality of each of the layers below them.  While this is a traditional answer insofar as this already happens within law firms that currently make use of paralegal services and IT/admin systems, what differs in the pVp is that these service layers are being made directly accessible to clients of the new middle law firm.

The second and very non-traditional answer is that the pVp transforms the underlying nature of the client lawyer relationship.  If we look up “client” in the Online Etymology Dictionary, we find that its word origin is indicative of “one who leans on another for protection” (which aligns all to well with the manner in which many lawyers treat far too many clients).  Under the pVp (and the BNR NDA system discussed earlier in this blog series), the client is seen as a competent and resourceful individual who is merely in need of assistance.  Giving her access to the layered resources of the pVp empowers her to tackle certain matters or take them to the point where it makes sense to engage the expert.

While this model is clearly effective from a price perspective, I believe that it is even more effective from the trust perspective.  The individual who has worked his way through the layers to the lawyer has become much more aware of the details and complexity of the matter at hand.

Perhaps most importantly, the new middle law firm pVp no longer sees the client as one in need of protection.  Rather, the empowered, competent, and resourceful client now teams with her lawyer to address matters that require legal assistance and this team engagement fosters trust on both the client and lawyer sides.  The new middle law firm pVp enables the client to evolve from a subordinate consumer of legal services provide by his lawyer to a c0-creator of legal service value with his lawyer – in other words, he is able to move

from Client to Cosumer

As mentioned in my last post, a great deal of excellent work is being done in law firms by administrative assistants, para-legals, and IT professionals.  For the most part, this work is either being done in support of partner and associate billable hourly work or as a part of a further law firm profit centre (much like the all too prevalent mark-ups on photocopying and faxing charges).  In general, the law firm value offerings looks something like this:

On the other hand, many of the promising pockets of legal services innovation are focused on developing an offering in one of the following distinct areas:

While both the work being done in law firms by administrative assistants, para-legals, and IT professionals and the pockets of legal innovations are extremely important, the greatest value will be unleashed when the “new middle” law firm deploys service offerings aligned with the Prowse Value Pyramid:

We will explore the reasons why over the next couple of posts.

While it may not be entirely clear given my limited graphic skills (and blog budget!), each of the four layers in the Prowse Value Pyramid (pVp) are distinct value strata.  The pVp, which represents an optimal way of organizing and allocating information resources, not only reflects the software support model – it also captures and provides a framework for the ATM/ABM innovation in the banking industry and the BNR NDA system discussed earlier.

So what is the significance of the pVp in relation to professional services in general and legal services in particular?  Let’s start by applying the bank analogy to the law firm.  Setting aside, for a moment, the excellent work being done in the background by administrative assistants, para-legals, and IT professionals as well as the promising pockets of legal services innovation, the client, after perusing the very limited amount of free information from law firm and law society publications and web sites, needs to stand in the “teller line” at the law firm in order to obtain legal services.  While this line is usually short (and often comfortable if not luxurious), the client’s first substantive contact is with the law firm equivalent of the bank manager (i.e. partner) or the assistant bank manager (i.e. associate).  The client gets to choose between the expensive hourly rate of the partner, the slightly less expensive rate of the associate, or some blend of the two.

In other words, the client interacts directly and only with the very limited “free information”and “expertise” layers of the pVp as illustrated below:

Yet, the software support model itself is simply a lead example of a very efficient way of  organizing and allocating resources in an information economy.  While it is conjecture on my part, I suspect that commercial software was one of the earliest examples of an interactive information economy.  While information services such as broadcasting and telecommunication predate commercial software, they lacked the “to and fro” that is inherent in the support and update cycles of commercial software.

So instead of talking about the software support model, let’s look for a more general model.  Returning for a moment to a theme in my Encyclopaedia Britannica post earlier in this series, we have witnessed the evolution of information from “scarce and expensive” to “free and accessible”.  But while information is accessible and free, reliable information still has value.  Yet reliable information is less valuable than knowledge, while expertise is more valuable than knowledge.  Or to reproduce this graphically:

 

Upon further reflection, I realized that the attributes of the software support model are both present and emerging in other areas of business and life.

As one example, I am old enough that a portion of my Friday afternoons at university was spent standing in a line at my bank.  The long line for the teller gave me enough time to fret about how much money I should withdraw.  If I took too much out, there was a good chance that I would spend it all.  On the other hand, if I took out too little, I might forego some big adventure with my friends since I had no weekend access to cash (or credit!)  When I finally got to the front of the line, I would be greeted by a pleasant and competent man or woman with a wide range of banking skills and information that spent most of their day simply counting out money.

While it was tempting to herald the arrival of the Automated Teller (or Banking) Machine solely from the point of view of my changed elationship with my money, the real significance of the ATM (or ABM) was its transformation of the human resources profile of my bank.  While fewer tellers were now required, the jobs of the remaining tellers became much more interesting since they no longer spent most of their day counting money.  In fact, most of their business now consists of “corner cases” brought by people like me who have been unable do what they need to do using the ATM, telephone banking, or the internet.

In other words, the banking industry has adopted a tiered approach to customer support.  My bank, through its web site, telephone banking service, and ATM equip me to do both self and first line (Tier 0 and 1) support using machines to do what machines do best.  If tier 2 support is needed, I turn to the teller who is able to use his or her generalist skill set to tackle my corner case.  If additional support is needed, the teller can hand me off to the loans officer, the branch manager, or even the district manager or the bank head office for specialized tier 3 support.

Doesn’t that sound a lot like the software support model?

While we, and most importantly our clients, were very happy with the new NDA system, my honest conclusion was that we had collectively accomplished something that was effective but not particularly innovative.  Having the privilege of working closely with software development and support teams, it was obvious that we had, in fact, merely emulated the basic software support model.

In the world of software, the first line of support is always to write good code that is well documented for the end user.  By writing quality code, you greatly reduce the need for support.  By providing end users with quality documentation, you enable them to do some degree of self help should any issues arise.  For my purposes, let’s call the combination of good code and quality documentation Tier 0 support.

The next level  is usually Tier 1 support in the form of a general help desk or e-reporting system.  The typical functions of Tier 1 support include capturing the details of the end user and the issue and providing that end user with certain general information (such as advising them of a related data centre outage).  In the case of a help desk, the support prime might also address some general matters (such as ensuring that the software is being used on a supported computer and operating system).

The next line of support, Tier 2, is typically handled by software professionals who have knowledge of both the supported software and the software and hardware that it normally interacts with.  One of the key roles of Tier 2 support is fault isolation and identification – a major challenge in a complex multi-vendor world.  If the issue is either general in nature or the result of the interaction of the software with some other system component, the  Tier 2 professional’s broad skill set positions them to address the issue.  If, on the other hand, the professional determines that the fault is internal to the supported software and not within their skill set to tackle, the matter is sent on to Tier 3 support.

The Tier 3 support level usually involves either the authors of the software or a professional with a deep code level grasp of the supported product.  The resolution of Tier 3 issues usually consists of some form of work around, often in the form of a bug fix or patch, that may be incorporated into the next release of the software.  In other words, Tier 3 support is the level of deepest expertise since the “buck stops here”!

Applying this software support model to the BNR NDA system, it is pretty obvious that we simply collapsed Tier 0 and 1 support into the portal itself and tasked our wonderful paralegal to provide Tier 2 support to its end user.  This them allowed us to position the two BNR lawyers to do Tier 3 support for our clients on an as needed basis.

If we use the public debut of the World Wide Web on August 6, 1991 to demark the old information order (scarce and expensive) from the new information order (free and accessible), I spent only 4 years as a lawyer in the first order and over two decades as a lawyer in this new information order.  Yet as I contrast those first 4 years as lawyer in a private law firm with my last 3 years there just a couple of years back, the nature of legal services has not changed significantly.  Even though telex was supplanted by fax and then email; numerous case report and legislation books were replaced by on-line services; and typewriters and centralized word processing yielded to desktop computers and then laptops with remote access, legal advice remained scarce and expensive and is still measured out by lawyers in 6 minute increments to individual clients who can afford to seek it.  In other words, law firms remain entrenched in the old information order prompting Mark Chandler, the Cisco Chief Legal Officer, to famously describe them as the “last surviving medieval guild”.

But that is not to say that the legal profession has been untouched by the new information order – in fact, its impact on the in-house lawyer has been profound.  This truth was first brought home to me in 1994, shortly after I joined Bell-Northern Research (BNR) as in-house counsel, as we were working to tackle the day to day challenges of non-disclosure agreements (NDAs).   While NDAs were important to the BNR legal department, we realized that our team of 2 lawyers, which provided legal support for the R&D activities of some 10,000 engineers, could only afford to spend a very small portion of our time on them given the demands of the more important documents and tasks.  Yet, NDAs were almost inevitably time sensitive and very often the initial stage of those “more important documents and tasks”.

While it took me some time to realize it, our solution to the NDA challenge proved to be one of my early steps into the new information order.  We began by hiring a para-legal who was tasked with the design and development of an internal BNR NDA portal.  The portal provided all BNR employees with access to the legal department approved NDAs and guidelines for their use and was combined with a corporate delegation to the Director level to allow them to sign these standard NDA forms.  Any changes to the standard BNR NDA forms, together with any third party NDA forms, required BNR legal department review and approval prior to signature.  This review was done by our paralegal, whom the lawyers provided with guidelines and pre-approved alternative clauses and back off positions, and she would only bring us in on an “as needed” basis.  The resulting system allowed NDAs to be handled promptly, professionally, and efficiently and freed up my colleague and me to address the more important documents and tasks.

In short, certain legal information, which remains scarce and expensive in most private law firms, became essentially free and accessible through the deployment of the BNR NDA portal.  This delivery of information was combined with both delegated authority to support a degree of self-service and efficient tiers of review as warranted.