A Conversation with a Builder
I recently found myself speaking to a builder. They were feeding back on the way that the current economy was affecting them but also on a recent experience with lawyers. There were the inevitable jokes about who was most expensive and cost overruns but some more interesting themes emerged too.
Previously, some of you may have read my A Conversation with a Carpenter — Hyperscale Group Limited and A Conversation with a Postman — Hyperscale Group Limited A Conversation with a Postman 2 — Hyperscale Group Limited articles. These articles were very much about views on what was happening in Covid. This article is more about what law firms and legal tech could learn from builders.
First of all, some similarities. It became apparent from our conversation that both types of business had several things in common:
- Builders and law firms both effectively operate to a cost plus model. They model a project, resource it and ensure that there is sufficient margin when delivering.
- Both professions are suffering from a labour and skills shortage. For law firms maybe this is driven by the battle for talent, rising salaries and people who have perhaps decided they want a different life post covid. For builders there is similar salary pressure but also this is compounded by Brexit labour shortages.
- For both businesses costs are going up with inflation. This is happening in law firms in areas such as operating costs, energy and salaries. For builders it is across the board with materials and labour having their own pricing dynamics.
- Cost predictability is hard. This is particularly the case for builders with charging materials prices. A benefit for lawyers is that many projects are relatively shorter whereas for builders a number have been caught out by fixed price contracts where materials prices have materially shifted.
- Both builders and law firms have enjoyed good trading conditions for the last two or three years but they are now beginning to worry about the headwinds of recession.
What other lessons can be drawn from this comparison?
- To me there is a huge lesson about training and development in relevant subject matters. Many would perhaps perceive that lawyers’ training was much more involved with lengthier courses and qualifications. In some ways however you could argue it is builders that are better trained. By this I mean that all skilled trades on a site have a very specific qualification, whether it be electricians, crane drivers or carpenters. Lawyers do not have this to the same extent; they qualify more generally and then get specialised on the job experience.
- On building sites people are given more specific tools to enable them to do their job than at law firms. When you focus on a law firm often the technology tools are the same as they have been for the last 25 years in that the operating model has comprised a Practise Management System, Document and Email Management system, supplemented by some CRM and Case/Matter management. The equivalent on a building site is that everyone is issued with generic tools such as steel toe capped boots, high visibility jackets and helmets. On building sites they have historically gone further to support specialisms electricians will be given mains testers, electricians screwdrivers and wire scrimpers. Carpenters will be given an array of specialist tools, saws, levels and planes. Plasterers will be given hawks and finishing trowels. Bricklayers will be given specialist trowels, clamps and dori blocks. This is perhaps a gap for LegalTech in that start-ups are beginning to address this by providing domain specific tools, examples of which include, say for property work, Veya, Orbital Witness and Avail. Does LegalTech need to be more like builders in recognising these specific needs over and above our “high vis jackets?”
- In addition to the generic needs, should we give practice areas more specific tools and also go one step further and train people how to do their jobs with these tools and link qualifications to them. Every plumber is trained with pipe threaders and drain down hoses. We are beginning to see demand for this under The Professional Alternative but surely we should envisage a world where a corporate lawyer is trained on how to use products such as Kira or Clarilis and one of the multiple transaction management platforms.
- One area where there was huge similarities was on the increased desire for better project management with a real recognition that there were efficiencies there. In many ways however, some (I suspect not all) builders are really embracing this and there are a plethora of project management tools to help them deliver their jobs. Both markets are also looking at supply chain tools. In legal this includes the growth of capacity management products (e.g. BigHand, Fliplet, Peppermint as well as pricing tools (e.g. Foundation Software and Clocktimizer). Please see point 9 of my previous article The Failure of LegalTech — Hyperscale Group Limited.
- Another key area where real change is recognised is in Automation. Neither builders nor lawyers think that their job can be completely automated but it is recognised that there are increasingly sophisticated tools e.g. robots which can lay bricks which will have an impact on the industry.
- Another key similarity that we touched on was the growth in sophistication of projects. For both sectors there are of course generic vanilla products. However, both areas are witnessing an increased growth in regulation as well as an increased sophistication in work that is being Lawyers have to grapple with Blockchain, NFTs and AI regulation just as builders are having to grapple with the internet of things and increasingly intelligent buildings giving rise to the birth of specialized law firms like Conexus Law.
- One final area that was interesting was the growth in site safety and the role of Health & Safety. It is fair to say this is now fully engrained in the building industry. The legal profession has clearly taken steps to improve the mental health wellbeing of its people but we still see many leaving the profession due to the long working days and billable hour culture. This too is having an adverse effect on diversity (which incidentally appears to be improving in the building world).
In summary, in many ways law firms are highly specialised industries but compared to others we still perhaps have a lot to learn. This reminds me of a trip around the JLR factory some years ago where it became apparent that the sophistication of their processes machinery and data was several steps above what you often see in the professional service firms. That being said JLR have the luxury of having very few products whereas the average law firm has perhaps 2000 plus and don’t enjoy the same volumes. This makes processes very hard to optimize.
The lesson for the professions is we can never be good enough; we always need to keep looking and learning from other markets but perhaps the biggest immediate thing is to address that LegalTech has spent far too long providing generic tools to its users and we need to up the ante in specialisation. We also need to train people better both generally using tools like LTC4, and The Professional Alternative, and more specifically on tools that are actually used to deliver the jobs people are doing.
This is a fascinating time to work in this industry and we should all feel privileged. The professions have moved a huge way in the last 20 years but I suspect the next five years are going to be even more interesting and a real period of opportunity.
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