Ep: 58 Deborah Read on Innovating the Legal Service Delivery Model

Deborah Read | Managing Partner of Thompson Hine

Analytical Thinking | Leaving the Herd | Four Areas of Innovation | Behavioral Change | The Success of Others | Different

Here are some highlights of my interview with Debbie Read:

Focusing on the basics like math, quantitative reasoning, and philosophy are three areas that really spur or enhance your analytical thinking. To really excel in law school, it’s all about excelling in analytics.

My family instilled in me pretty basic values that formed my leadership style. Values like to speak truthfully always, don’t have personal agendas, do your very best all the time every day, and don’t expect anything from the people you work with that you’re not expecting of yourself, etc.

My mentor would throw you into the deep end every day, and you had to swim or you would sink. His expectations were really, really high. Rising to them was difficult, but put you in a very good place when you did.

We decided we were going to change the way we delivered services to align with what clients are looking for.

We decided that we were going to focus on four things: legal project management, process efficiency, flexible staffing, and value-based pricing.

As I’ve said to others, you can have the best software program around, but if you don’t teach yourself how to use it, it’s really just a piece of software that sits on the shelf.

We were completely changing our behavior as lawyers and lawyers do not like change. We were telling our lawyers that they needed to understand what a client wanted before they started doing it.

The concept of flexible staffing is to use the lowest-cost qualified person to deliver the services. It doesn’t take a rocket scientist to do everything.

My job is to push the firm forward. It’s not about me as the Managing Partner. It’s about the firm and the success of the firm. Honestly, there’s nothing that delights me more than the firm enjoying success.

There’s a herd mentality around solving problems, and it pays to be different. There were other people who were talking about it. There were much bigger firms with much larger resources that were trying to make a claim.

Links referred to in this episode:

Deborah Read | Firm Website Biography

Deborah Read | LinkedIn Profile

Thompson Hine | Firm Website

Thompson Hine Innovation Survey 2020

The American Lawyer Feature on Mandatory Budgets at Thompson Hine

Thompson Hine Innovation Webpage

Lifetime Achiever: Charles Queenan | The American Lawyer

Altman Weil | Law Department Surveys

Different: Escaping the Competitive Herd | Youngme Moon

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***To Download the PDF Transcript, click here*** 

Greetings, friends. This is Chris Batz, your host of The Law Firm Leadership Podcast.

In today’s episode, I spoke with one of the few female Managing Partners at a large law firm in the United States. We discussed her journey to leading an AmLaw200 firm, and how they, post-2008, innovated in their legal services to create a competitive advantage and deliver value to their clients. We also discussed her leadership style, book recommendation, and so much more.

If you haven’t already, please subscribe to this podcast and leave a review on iTunes. We interview corporate defense law firm leaders, partners, general counsel, and legal consultants.

You’re listening to Episode 58 of The Law Firm Leadership Podcast.

Chris: Welcome to The Law Firm Leadership Podcast. I’m your host, Chris Batz, with The Lion Group.

Today, I have the pleasure of speaking with Deborah Read, Managing Partner of Thompson Hine. Under her leadership, Thompson Hine has transformed its legal service delivery model, and in 2014 launched SmartPaTH, the firm’s framework to provide clients with transparent, efficient, and predictable legal services. SmartPaTH and Debbie have received national acclaim from publications such as The Financial Times and The American Lawyer for innovating the practice of law. Deborah received her law degree from Boston University School of Law.

Welcome, Debbie, to The Law Firm Leadership Podcast. It’s great to have you on the show.

Debbie: Thanks, Chris. It’s great to be here. I look forward to talking with you.

Analytical Thinking

Chris: Thank you, Debbie. We’ll get to your role at the firm, but tell me, was it your plan from the beginning to be a lawyer?

Debbie: I didn’t plan to be a lawyer. I was planning to be an investigative reporter, and I majored in journalism. A  professor encouraged me that I could do something else, that I had an analytical mind, and I should think about doing something other than investigative reporting. He suggested law school and I started looking into it, considering it, and here I am.

Chris: Do you think journalism gave you skills or insights into the legal industry?

Debbie: I don’t think so. I actually was just speaking yesterday with a high school student who’s starting into undergraduate school. She was doing a shadowing exercise with one of our lawyers, as she wants to be a lawyer. She’s doing the classic thing of majoring in political science because she wants to be a lawyer. She asked, “Do you think that’s the appropriate route? Everybody told me to major in political science.” What I suggested to her is a more traditional route. Focusing on the basics like math, quantitative reasoning, and philosophy are three areas that really spur or enhance your analytical thinking. To really excel in law school, it’s all about excelling in analytics. Also, I found the philosophy courses I took to be the most meaningful and most preparatory for law school.

Chris: You landed at Boston University. Did you know the firm you wanted to work at?

Debbie: I liked Boston a lot and thought I might eventually end up there. I started working for K&L Gates,  which was Kirkpatrick & Lockhart, and I was there in the Washington, DC office. I thought, “Gee, maybe I made the wrong move to go to Washington,” but I ended up really liking Washington, DC. It was a great place for a young person to be a lawyer, but I then met my husband and he took a job in Cleveland. So, I ended up in Cleveland and at Thompson Hine.

Chris: Are you from Ohio originally?

Debbie: No, I’m actually from Pennsylvania, outside of Pittsburgh. I grew up about equal distance between Washington, DC and Cleveland.

Mentor Opened BigLaw Doors

Chris: What led you to Thompson Hine?

Debbie: It was a really interesting process. At Kirkpatrick and Lockhart, now K&L Gates, I was a tax lawyer and I happened to be working quite a bit with the Managing Partner at the time, Chuck Queenan. He was a taskmaster and a brilliant man, and he put in a lot of time mentoring me. When I left, he called all of his Harvard Law School buddies at Jones Day, Squire Sanders, and Thompson Hine and said, “Have I got a package for you.” Each of these firms opened their doors to me because of the call from Chuck Queenan and I selected Thompson Hine.

Chris: Why did you pick Thompson Hine over some of the larger firms?

Debbie: It was the way I was welcomed, and the way I related to people on the days that I interviewed. All of them had great practices. For a tax lawyer, all of them had great tax departments, but I just really liked the people at Thompson Hine.

Path to Managing Partner

Chris: Could you share your path to the head of the firm? Did you wake up one day knowing that you were going to be the Managing Partner of a large law firm?

Debbie: Not at all. When I got here to Thompson Hine, I was given a lot of responsibility pretty immediately, actually. I was put on the New Lawyer Committee which does the hiring. I was the first associate that was put on the New Lawyer Committee. After that, I was then put on the Lawyer Personnel Committee, which regulates compensation and promotions. Now that process is more driven by practice groups, but at that point, promotions for non-partner lawyers happened via the committee. Then, I became chair of that committee. We had a different organizational structure for a period of time, and I was asked to lead a Department of Tax, Employee Benefits, Trusts and Estates, and Healthcare lawyers. Then, I was put on the Executive Committee, and then I was the Hiring Partner while I was on the Executive Committee. And then, I was made Managing Partner. So, I had a lot of experience prior to being the Managing Partner as I’ve fulfilled a lot of roles here.

Strong Moral Compass

Chris: Did law school prepare you for these leadership roles or was it the way you were raised?

Debbie: Law school did not prepare me for this. If anything, I came from a family with a very strong moral compass. My family instilled in me pretty basic values that go a long way to developing your leadership skills. Values like to speak truthfully always, don’t have personal agendas, do your very best all the time every day, and don’t expect anything from the people you work with that you’re not expecting of yourself, etc. Those basic principles did more for me more to get me in the position that I am in than any training I could ever have had.

Chris: Does Thompson Hine have terms or what is their approach for the Managing Partner role?

Debbie: I am at the beginning of my third term, and there is no limitation on how many terms you can serve as Managing Partner.

Rising to Meet Expectations

Chris: Did you have mentors along the journey that helped you in this?

Debbie: The first mentor I had was Chuck Queenan. He was the Managing Partner of Kirkpatrick & Lockhart, the predecessor to K&L Gates. For whatever reason, he took me under his wing and demanded a lot. He demanded perfection every day. When you would go in to report to him on what he’s asked you to look at, it was like delivering a Supreme Court argument. You had to think of everything. You had to anticipate what questions he was going to ask, how to be prepared for those questions, and the answers to other questions that could come up. He would throw you into the deep end every day, and you had to swim or you sunk. He would give you a project and on the way out of his office after every project, just as you hit the door, he would say, “Don’t screw it up.” His expectations were really, really high. Rising to them was difficult, but honestly, put you in a very good place when you did.

Thompson Hine Overview

Chris: Explain to my listeners, high level, what is Thompson Hine?

Debbie: Thompson Hine is truly a great firm. We have hugely talented and skilled lawyers here. It’s not an AmLaw25 firm or a household name, but it is a firm that delivers tremendous work at an extremely high value. This is in large part because of the innovation that we have in place at this firm.

Chris: Where are your offices located?

Debbie: We have four offices in Ohio, and additional offices in New York, Atlanta, DC, and Chicago.

Chris: How large is your headcount now?

Debbie: It goes back and forth between 370 and 400, depending upon days of the week, when the new classes enter, etc.

Chris: Can you tell me about some of the core practice areas you focus on?

Debbie: We are a full-service general practice firm. We’re about evenly split between litigation and transactional work. We handle a lot of significant litigation for large corporate clients and institutions. We also have an absolutely marvelous M&A group. We handle mergers and acquisitions for very significant clients across the country and internationally. It’s a pretty sophisticated practice. Then, we have all the other things, labor and employment, tax, and a marvelous employee benefits practice, a marvelous transportation practice, and other regulatory practices. We are absolutely a full-service firm.

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Setting the Stage for Real Change 

Chris: Would you share about the exciting things Thompson Hine is doing with innovation?

Debbie: This starts with coming off the economic downturn. We were several years removed from the economic downturn as I was taking the helm at Thompson Hine. During that period of time, general counsel were under terrific pressure to reduce the cost of their legal services and to really get significant value from their service providers, outside law firms included. They began to change the way they were purchasing legal services. Up until the economic downturn, and certainly was the case when I was coming up through the ranks, it was really the law firms and not the clients that dictated all the things that went into a project. Law firms decided what the deliverables were going to be, what timetable the project was going to take, who was going to work on the project, how much effort was going to be put into it, how much it was going to cost, etc. Back in the day, clients would call the law firm, and the law firm would do the work and present the client a bill and the bill wasn’t very detailed. The economic downturn really changed all of that. General counsel were being told by their CEOs, “You need to reduce your legal spend by 20% this year,” and they were turning to their law firms and saying they needed more value with work done at a particular cost. They needed to be sure that the law firm was going to honor that cost, and that was a new playing field for law firms. 

As I began to prepare for this job and read what clients were saying about how they were purchasing legal services and how law firms were delivering those services, there was a real gap between what clients were asking for and what law firms were delivering. I remember, very vividly, an Altman Weil survey that I came across as I was doing my analysis, and it asked, “In your opinion, in the current legal market, how serious are law firms about changing their legal service delivery model to provide greater value to you?” Your answer could range from zero to 10 with 10 being doing everything they can and zero not doing anything. Altman Weil ran this survey for a number of years and the median score was a three and the average score was going down. I looked at this and I said, “Wow, these are customers talking about their service providers, and they’ve been ranking them at a three for about five years.” In what industry would that happen? Not many. I thought about how this was a big opportunity for the firm. The firm agreed with me, and we decided we were going to tackle this. We decided we were going to change the way we delivered services to align with what clients are looking for and that set us on our way.

Four Areas of Innovation

Chris: So, what did the firm say yes to, Debbie?

Debbie: We decided that there were some overarching themes. Clients were looking for more predictability, they were looking for more efficiency, and they were looking for more transparency in how law firms were doing things and arriving at their charges for what they were doing. If we could build a system that delivered that, we knew clients would view us as responsive to their needs. Our leadership embraced this and we put together a group of people, some of whom I knew would be naysayers and I knew would not embrace the changes we were making. We decided that we were going to focus on four things: legal project management, process efficiency, flexible staffing, and value-based pricing. We bit off legal project management first because I knew it would be the hardest to embrace and succeed at and we had this task force rallied around teaching our lawyers legal project management. Needless to say, we went down a couple of avenues and changed course. We finally arrived at a spot we needed to be. Our own program developers created some proprietary software that our lawyers could use to budget projects, to monitor our progress against the budget, and to produce these great graphic depictions that we could share with clients about where we were against budget. We started our lawyers working with this software, and as I’ve said to others, you can have the best software program around, but if you don’t teach yourself how to use it and how to perfect the development of budgets under the software program, it’s really just a piece of software that sits on the shelf. So, what we really needed was behavior change, and that was hard.

Changing Behavior is Hard

Chris: Share with my listeners about that behavior change. 

Debbie: Lawyers do not like change. We were completely changing our behavior. We were telling lawyers they needed to understand what a client wanted before they started doing it. They needed to scope out the project before they started working on it. They needed to come up with a budget, and a work plan that matches the budget based on how they scoped the project out with the client. They needed to decide who’s going to work on it and at what rates in order to meet the budget goals of the project. They needed to monitor that as the project went on, particularly for the multi-year projects, which is hard to do. When they started to veer off course on a budget, they needed to make some course corrections. Or if they were veering off course because something unexpected occurred, they needed to go back to the client and talk to the client about the options for dealing with that. They had to ask the questions of whether the client wants to spend more money or spend the same amount of money by adjusting the rest of the work the attorneys are doing. At the end of the day, the attorney needed to do an analysis of how they performed against the budget with their client. In some instances, those budgets lead to fixed fees while in other instances they’re just budgets. If they lead to fixed fees, and the attorney veered off course, then the firm obviously is assuming the risk of veering off course. 

It was a tremendous behavior change. Honestly, the way we got there was by starting to require budgets. I give credit to the head of our business litigation practice group. He was the first to start to require budgets. What I mean by that is that if you had a matter and you didn’t have a budget in place by the requisite period of time set by the practice group, your matter shut down the billing time. As a lawyer, you could not enter your time for a given matter if you didn’t have a budget in place. If you know anything about lawyers, they’re measured in part on the time that they bill, and not being able to bill time is a pretty big thing to a lawyer. It really forced people to embrace budgeting. They had to. They had no choice. And like Malcolm Gladwell says, “You do something enough, you get pretty good at it.” Our lawyers are pretty good at it now.

Chris: That’s tremendous. So, it sounds like the head of litigation championed and required change.

Debbie: Now, we have mandatory budgeting for some significant amount of work in 11 of our 16 practice groups, and our goal is to get it to 16.

SmartPaTH, Thompson Hine’s Service Delivery Approach

Chris: So, it’s still a work in progress?

Debbie: Not only is it still a work in progress, but we’re constantly refining the budgeting software that we put together. We’re constantly making it better. We’re engaging in enhancements all the time to make our budgeting tool more accurate and easier to use. Right now, one of the things we’re doing is tagging our budgets with identifiers, so if you have a matter you can put a description into the database and it will spit back budgets that are like your matter in size, discipline, type of project, etc. That efficient access to similar budgets really allows lawyers to start at a good place. We’re also mining our own data to make our budgets smarter. So, if we can see that the average amount of time devoted to preparing an expert witness in a trade secret case is 150 hours, and you’re doing a budget for a trade secret case where you put in preparing an expert witness is 75 hours, you’re going to be off the firm’s norm. We’re starting to build in drop-down menus on things that we do a lot of so that you can see how much it takes the average Thompson Hine lawyer for this task. It helps you question if you’re putting in another number, do you have a reason to be an outlier?

Chris: Was your software tool developed internally or did you hire a third party?

Debbie: We’ve developed this budgeting software internally, and we developed a number of pieces of software technology in-house. We do enter into a cost-benefit analysis. There’s a lot of software out in the marketplace, and if it’s software that does what we need it to do and we can buy it off the shelf, obviously, that’s a cheaper way to go. Sometimes we buy software off the shelf, and then we augment it with some of our own development to get us to where we need to be. It depends. We don’t create everything but we create those things where we think there’s a void with what’s available in the marketplace.

Chris: Is there a thought of licensing that to other firms?

Debbie: A lot of people have asked me that. Right now, no. Once we get to a point in time where we’re way past this and other firms are just getting there, maybe.

Flexible Staffing

Chris: Can you share more about the flexible staffing model? 

Debbie: We do have people all along a spectrum. We have partners, senior partners, mid-level partners, junior partners, etc. We have four different categories of associates in terms of their levels of seniority. We have senior counsel and those are typically well-developed lawyers with pretty significant skillsets who offer the firm a lot but aren’t necessarily interested in generating business and all the things that go with becoming a partner. Another category would be counsel, which is usually a lawyer that isn’t quite as developed as a senior counsel, who for whatever reason is off the partnership track. It could be their state of life, it’s not what they want at this time, but they might jump back on the partnership track in the future. We have staff attorneys that are employed by us. We also use contract attorneys from outside providers. 

The concept of flexible staffing is to use the lowest-cost qualified person to deliver the services. It fits nicely in our budgeting because when you budget a matter,  the variables are time and talent. How much time you put into things might be how many steps you take, but how many steps you take is about how much time you put into things and who’s going to do it. The more experienced the person undertaking the task, the higher the cost. Many people have pointed out that law firms have a flawed model on pricing because the more time you spend with the most expensive timekeeper, the bigger your bill is and the more you get paid. What we’re really trying to do is deliver value by coming up with a budget and then tailoring our staffing to that budget. It doesn’t take a rocket scientist to do everything.

Value-Based Pricing

Chris: Is any of the pricing and fees you receive based on performance?

Debbie: Yes, we have performance-based fees. One of the four concepts that we rallied around at the time we decided we were going to innovate our service delivery was value-based pricing. About 15% of our fees are other than on an hourly rate basis and we would welcome that to be higher. We’ve embraced a large series of matters that are on a contingency or partial contingency basis. I think that number will climb. But we do have value-based pricing so that when we deliver for a client, we may be paid more. And when we don’t or a deal doesn’t go forward, we may be paid less. The classic case is a contingency piece of litigation. Typically, in a pure contingency fee litigation, you only get paid if success, as you’ve defined it with the client, is achieved. We do have some of those cases, but there are lots of different ways that you can provide value-based pricing short of a straight contingency fee. Another would be when you’re working on a transaction. Oftentimes, we will work on a transaction at a discounted rate throughout the transaction, and if the transaction closes, we will be paid a success fee for the closing of the transaction that makes up the discounts that we provided throughout the life of the transaction, and then some. We’re happy to embrace those models if clients are interested in them. We’ve got a full-time pricing manager who assists us with all different pricing models. We catalog what works and in various circumstances, we’ve become pretty schooled on how to structure these, and we welcome them.

Non-Attorney Hiring

Chris: Debbie, because of all these changes, are you hiring non-attorney professionals into the law firm?

Debbie: Oh, absolutely.

Chris: What kind of people and what kind of skills or titles are you looking to bring in?

Debbie: The first person that we hired to help us on this journey was our Chief Practice Innovation Officer. It was a full-time job to focus on the innovation of legal project management, flexible staffing, value-based pricing, and process efficiency. I was looking for a needle in a haystack, and I found him. His name is Bill Garcia and he’s been terrific. He has really been my partner leading this charge, and he’s really moved our needle forward. Back in the day at law firms, there were lawyers, secretaries, an IT person, and the finance department. Law firms today are really complicated. We have a number of people working in our Practice Innovation Group. Recently, we hired legal project managers and they’ve been remarkable. They really help us stay on task and on budget for these large projects. They have allowed us to delight our clients because they add tremendous value. It takes the senior lawyer out of having to watch the budget, monitor the budget, tweak the timekeepers, or stay on the backs of people who are working on matters to keep them working at budget. Hiring legal project managers is something we’ll do more of. They report to Bill, our Chief Practice Innovation Officer, and they have really helped us deliver on our value proposition to clients. In our IT group, we have people who love to write code for us and love developing programs for us. Usually, IT people in a law firm are all about the security of our systems, making sure the system is up and running, etc. We’ve got people who love this innovation aspect of what we’re doing, and to the extent we can have our own people write our programs, it’s terrific.

It’s About the Success of the Firm

Chris: Debbie, how do you define leadership?

Debbie: There are lots of different definitions, and there are lots of different styles. For me, what has worked is probably most classically described as servant leadership. My job is to push the firm forward. It’s not about me as the Managing Partner. It’s about the firm and the success of the firm. I will say that our innovation has really pushed the firm forward. We have great lawyers, and I said that in the very beginning. We’ve got some real talent here, and without that real talent, it doesn’t matter what your innovation is. So it starts with a highly-skilled group of lawyers. We’ve developed resources around that highly skilled group of lawyers that allow clients to experience higher value, but it’s really about the success of the firm, and that’s what I thrive on. Honestly, there’s nothing that delights me more than the firm enjoying success. I view myself here as long as the partners would like me to lead them, but it’s all about the success of the firm.

Leaving Herd Mentality

Chris: Debbie, would you share a book you really love for my listeners?

Debbie: It’s a non-traditional book for law firms or lawyers. It’s called Different by Youngme Moon, a professor at Harvard. One of the themes of the book is that people in an industry all strive to solve the same problem. There’s a herd mentality around solving that problem, and it pays to be different. It is one of the things that pushed me to go down this innovation path. There were other people who were talking about it. There were much bigger firms with much larger resources that were trying to make a claim. But I was hanging out there for a while, and I didn’t know if this was going to work. But it was absolutely different. That book, in part, spurred me to keep going. People were focused on other things like developing strong industry expertise and claiming a stake in industry expertise, which is not a bad thing to do. But lots of people are doing it. This was really different, and that book really pushed me in the direction to go for it.

Chris: If you could do anything, and there were no restrictions and nothing would get in your way, what would you be doing?

Debbie: My husband and I both like art very much. I would probably travel all around the world and study art.

Chris: Debbie, it’s been an honor, a pleasure. Thank you for your time today.

Debbie: Absolutely, it’s been a pleasure for me as well.

Thank you to everyone who listened to this episode of The Law Firm Leadership Podcast.

***To Download the PDF Transcript, click here*** 

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