Liz Truss was correct. Well, on one fundamental point

To improve efficiency, one needs to invest in time, people and technology. Without that, productivity will be like a lettuce trying to bench press – a valiant effort, but the results will just wilt.

By Philip Rodney, Senior Adviser, Saxton Bampfylde

According to the latest Begbies Traynor ‘Red Flag Alert’ research, more than half a million businesses are fighting for survival as the UK economy stagnates. It is, therefore, all too easy to adopt a blame culture.

Now, painful though it may be to concur with the assessment of someone who came second to an iceberg lettuce in terms of shelf life, and while disavowing all her other comments, I must agree with our former PM on one fundamental point.

For a society to be successful, strong economic growth is crucial. The UK’s productivity languishes behind that of France, Germany, and the US. In a report Cracking the Productivity Code: An international comparison of UK productivity by John Van Reenen and Xuyi Yang and published by the LSE last November, the authors state that ‘The UK productivity problem can be summed up in three words: investment, investment, and investment. Or lack thereof.”

Some of the factors behind the slowdown in productivity that began after the financial crisis of 2008 were global, but half of the slowdown in the UK has been due to a failure to invest in capital and skills.

While it’s less than clear whether lack of productivity is the cause of the present recession, it certainly will be a factor in a recovery. There can, however, be a positive correlation between recession and increased productivity: we simply must make do with less. We can sometimes learn about efficiencies through the steps we need to take when times are challenging.

Productivity is not just a statistical measure. Empowering employees to perform efficiently and effectively is about more than maximising profit.

Having the right tools for the job and a workflow with minimal obstacles makes employees happier. Research by Oxford University’s Said Business School found a conclusive link between contentment and productivity; happier workers are 13% more productive. So a happier firm tends to be a more productive firm and vice-versa.

So what are the strategic steps that the legal sector could be taking to improve its productivity?

Here are some thoughts:

  1. The aphorism “work smarter, not harder” is a great starting point. We are often wedded to processes that may have delivered historically but haven’t been properly or recently examined. As Simon Sinek says, you have to start with the why rather than the what and the how. Why is it that we do it this way? I recall that when practice management systems came along around 20 years ago, there was a nuclear arms race among law firms to have the biggest and most complex piece of kit you could afford. However, it turned out that the PMS was only a tool – not the solution. Rather than work out what it was they wanted to achieve, many law firms bought the kit and then reverse-engineered their processes to fit the system with predictably disappointing results. Similarly, while AI can undoubtedly assist in improving productivity, the starting point must be to understand the improvement you are trying to achieve in terms of client service delivery and then identify the building blocks required. Some of these will be IT related, but others will be about people and processes. As an example, you won’t have to look that hard in most organisations to spot duplication. Replace that with collaboration, and your productivity will jump. 
  2. We often think that productivity is about increasing speed of process. When discussing his approach to winning grand prix, Sir Jackie Stewart, three times F1 world champion (and one of my heroes), said that “the smoothest and quietest way – the slowest way – is the fastest way.” Speeding up processes does not aways result in improving them. Errors are extremely costly. Creating a calmer, more methodical workflow where deadlines are more likely to be achieved and mistakes avoided benefits all. While Gantt charts have been used for decades in other professional service firms, it is surprising how few law firms embed project management in their business model. Investment in that undoubtedly increases productivity, 
  3. In chasing efficiency, there is a danger that we focus on internal processes in the abstract and and lose sight of our clients. With very few exceptions, the “if we build it, they will come” approach doesn’t work in the legal services market. Creating shortcuts that reduce cost but distance the client is counterproductive. On the other hand, tailoring a service which mirrors the client’s requirements will create smoother service delivery and so increase productivity. Before implementing change, it’s important therefore to engage with the client, understand their perspective and bring them along with you. In a profession that is driven by personal engagement, while it may sound counter-intuitive, sometimes processes that create more – not less – client-facing time can be more productive in the longer term. If there is a common thread running though these observations, it is that any underperformance as a sector is down to more than lack of graft. Rather, to improve efficiency, one needs to invest in time, people, and technology. Without that, productivity will be like a lettuce trying to bench press – a valiant effort, but the results will just wilt.

This article was written for Centrum Magazine, Spring 2024 edition


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