LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Lean Legal:
How the Lean
Canvas Can
Benefit Your Firm
Jason Moyse and Aron Solomon

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

The way to the ocean was found

by conquistadores who sought
silver and gold, not oceans.
- John Kay

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Lean Legal: How the

Lean Canvas Can
Benefit Your Law Firm
For lawyers, the process of evaluating and launching a new
business or initiative within your existing law firm can be
extremely challenging. Fortunately, today, the traditional
laborious business plan has been supplanted by new,
innovative tools in business planning and creation.
One of these tools is the Business Model Canvas, a creation
of Alexander Osterwalder. During his Ph.D. studies at
the University of Lausanne, he imagined the notion of a
lean startup template for developing new or documenting
existing business models. The Business Model Canvas he
created is a means of mapping customer segments and
values to a business resources and activities. Using this
canvas, you can create and weigh a business or project
plan before implementing it. Further changes created the
modern Lean Canvas that can greatly benefit the New
Law vertical.
Lawyers are smart and certainly can be creative, but
they are not always capable of hanging in the question.

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The Lean Canvas is a means of testing hypothesesand

feedback on the starting propositions may lead to you
having to let go completely and start from scratch. The
purpose of the canvas is testing and validating whether
you have a problem worth solvingfrom there, you
can build out the minimum solution to address a set of
problems - hence - the Minimum Viable Product (MVP).
This is a very different approach than most lawyers utilize,
who typically like to solve problems on behalf of clients.
Lawyers want an approach based on deep research and
experience and from a place of as much certainty (and
knowledge) as possible. Lawyers are trained to consider
ALL of the potential outcomes and traditionally prefer
to provide memoranda which could border on treatise
when giving advice. And getting a lawyer to commit to
a final recommendation? Substantive strategic decisions
are left to clients, with both lawyers training and ethics
regulation requiring obtaining informed consent in
many scenarios.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

A
B

Because of this, often lawyers can be uncomfortable

having to tell someone to pick A over B. Theres just so
muchuncertainty.
Lawyers have a tendency to fear the wrong decision.
However, if you are building a business--the only measure
of a bad decision is if you are causing harm to others or not
making profit. In professional practice, you may have the
objective of building a great real estate practice. But, if you
keep getting referrals for commercial work & end up bringing
in way more revenue, would you consider that failure?
Entrepreneurial lawyers should become comfortable
with the concept of obliquity, which is achieving goals
indirectly rather than directly. This concept is outlined
beautifully in a book by John Kay who among many adroit
quotes mentions that, The way to the ocean was found by
conquistadores who sought silver and gold, not oceans.

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The concept of obliquity:

recognizes that complex (or uncertain)
objectives are best tackled through a process of
experimenting and discovery and in fact, the
objectives may change as more information
becomes available; acknowledges that there
may be no predictable connections between
intentions and outcomes. Therefore, problem
solving becomes iterative and adaptive rather
than a well known route where all one needs
to do is execute what has been done many
times before; and is necessary because we live
in a world of uncertainty and complexity and
our goals are not always clearespecially as
circumstances change quickly and often so that
direct approaches are often unimaginative.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

True leadership, entrepreneurship and captaining just

about any other type of ship requires one to make decisions
not so much by the a superior vessel of knowledge, but by
being honest about the extent to which that knowledge is
limited. That is not how lawyers are used to sailing - but
the winds are indeed shifting.

So lets take a run at the Lean Canvas.

For clarity, the Lean Canvas is split into two sides: the left
side is about your product (or service), while the right
side focuses on your market.

The Lean Canvas works as an approach because it allows

for obliquity. It is minimally sufficient in precision and
adaptable as more information, inputs, metrics and
milestones become known. In short, you dont have to
see the whole staircase before taking the first step.

SERVICE

PROBLEM

SOLUTION

KEY METRICS

COST STRUCTURE

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MARKET

UNIQUE VALUE
PROPOSITION

UNFAIR
ADVANTAGE

CUSTOMER
SEGMENTS

CHANNELS

REVENUE STREAMS

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Lets break the canvas into its segments:

 Problem

Channels

Describe the problem. Ideally, break this down into more

than one problem youre solving.

All of the channels you can possibly use to reach your

customer.

Customer Segments

Who are the users of what youre building? Can we try to

further break them down? For example, local banks vs.
regional banks?

 Unique Value
Proposition
What is the reason that your product is different. Why
should I buy yours instead of someone elses?

Solution

Clearly show why the product or service youve build

solves the problem youve identified.

Cost Structure

All of your fixed and variable costs.

Revenue Streams
Heres a quick guide to revenue models, describe which
applies to your business idea.

Unfair Advantage

Your unfair advantage is your secret sauce. Its what you

have that someone else cant copy, steal, or just go and buy.

Key Metrics

What do users of your product need to do for you to make

money? What activity drives revenue?

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Lean Canvas Applied to

Contingency Fee Firm
Lets take a look at what a Lean Canvas might look like for
law firms with a contingency fee practice. The value of the
Lean Canvas here can be huge.
In a plaintiff s employment law practice, we can use a
Lean Canvas to build out the business line:

Problem
For the plaintiff s employment lawyer, the problem is that
it is difficult to predict which contingent fee clients will
win their cases. Thus it is difficult to know which clients
cases the attorney should accept.

Customer Segments
The users are all plaintiffs with a contingent fee
employment law claim,

Unique Value Proposition

My expertise is plaintiff s employment law, including a
strong record of winning judgments and settlements for
my clients, is my UVP.

Solution
(note: here is where creativity matters - so, in our
example, the attorney has a method for a fast track to
settlement). My fast-track method allows me to invest
less time than another attorney over the life-cycle of
the matter, to arrive much more rapidly at settlement or
judgment, or to decide more quickly to drop the case
and the client, investing no further resources.

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Key Metrics
Here the key metrics of users is full participation in the
streamlined litigation process. Clients/users must see
your time deadlines as important as you do - as important
to the process and their desired result.

Channels
Traditional and non-traditional avenues through
which clients are attracted, including print and online
advertising, client information sessions, and more.

Cost Structure

All of your fixed and variable costs.

Revenue Streams
The sole traditional revenue stream in a plaintiff s
employment practice is your fixed percentage of a
client award. You, however, have also found that clients
may be willing to pay a fixed fee for work that leads to
a very fast settlement using your unique skill set and
techniques, thereby creating a new revenue stream and
allowing you to intake more clients at the top end of
your recruitment funnel.

Unfair Advantage
Your new fast-stream technique is your unfair advantage,
as is your experience and track records, as compared with
competing attorneys in your space in your locality.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

So how does all of this actually help you make more

money as a legal practitioner? First, its actually better than
what you have now and that shouldnt be underestimated.
Lawyers generally focus only on top line revenue, which
is the value of their time. Working through a Lean Canvas
allows them to think more about margin specifically and,
generally, more creatively about their entire business.

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Also, increasingly, attorneys are leveraging technology,

contract automation tools, document assembly, virtual
services, and fractional service providers to the law firm.
So by using the Lean Canvas they can think more fully
about what the canvas embraces, such as their channel
partners, and much more.
While not always thinking in terms of the Lean Canvas at
a conscious level, some lawyers have carved out practices
organically which clearly fit within the model.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Consider as an example Ben Carter of Louisville,

Kentucky who is a consumer advocacy lawyer in the low
bono space. While he has an exemplary background
and experience having served on behalf of the Legal Aid
Society of Louisville, these days, he is running his own
legal practice and producing a nifty podcast Lets Start a
Law Firm.
Upon taking a walk with Ben through the Lean Canvas,
you can see how it applies and also confronts the
challenges of making money in a low margin, yet very
important, market. The concept of obliquity is definitely
at play as successfully running a money making practice
attending to this particular constituency requires
something other than a direct approach.

Problem
Bens practice bridges the gap between legal aid cases and
personal injury or consumer law. These types of cases do
not qualify for legal aid and yet, the vast majority of the
population needing these services do not have significant
resources to hire a lawyer.
These cases are unique in that there are not a lot of lawyers
that would necessarily accept them because on their own,
they represent either low margin or high risk in terms
of achieving outcomes that result in repeatable and
predictable revenue.

Customer Segments
Ben serves two segments

Ben is not serving price-insensitive large enterprises.

Rather, his customer segments involve clients from a
particular socio-economic background which, like most
of the population, would not normally be able to afford
legal services.

Unique Value Proposition

This is pretty straightforward. Ben takes on cases that
other lawyers do not wish to accept, while at the same
time, given his unique background, he is ideally situated
to execute.
Thats what it is to play Moneyball -- spotting value
from places that others either overlook or in some cases,
actually avoid.

Solutions
Bens experiences with cases beyond his current
constituency are actually what allow him to serve his
current clients so well. After the 2008 financial crisis, Ben
began work with national consumer law groups which
brought him exposure working along side some of the
best lawyers in the state on multi-million dollar cases. It
was this exposure to the routines and approaches on those
more sophisticated and large stakes cases that provided
him with a training ground for the practice he ultimately
developed on his own. Smaller financial stakes cases can
require the same level of skill as larger cases, but with
fewer available resources to utilize in execution.
In his words, Ben takes a plaintiff s bar approach to
consumer cases.

The traditional personal injury cases (car accidents)

or legal negligence cases where contingency fees
are the likely route to payment.
Aggrieved consumers who have no idea where else
to turn with their problem.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Key Metrics
From his past experiences with Legal Aid, Ben noticed
that tracking the number of intake calls or people served
was a key metric. Now that he is in the for-profit space,
the metrics tend to be the realization rate in terms of the
number of billable hours provided and invoiced versus the
amount collected. Regrettably, Ben has experienced those
hollow victories (financially speaking) where he obtained
excellent results, but ultimately the opposing party could
not pay the judgment. In some cases, Defendants have
sought to avoid paying his clients by filing bankruptcy.
Another key metric is the amount of retainer required
up front from his clients. Serving clients with limited
means, but real legal problems, and potentially significant
financial recoveries from litigation, requires a calculation
in almost every case. Ben asks for something meaningful
and non-trivial from his clients based on their current
financial situation. The client has to be serious about the
case and also have some skin in the game.

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At the same time, payment for the legal fees incurred

are likely to be derived from the judgment awarded in
favour of Bens client, so he also has to do a cost/benefit
analysis on whether he thinks his clients case is ultimately
a winner.
Over time, using enough data points, some form of risk
analysis template will assist Ben in choosing his cases by
something greater than simply a gut feeling. For example,
if he knows it will take 500 hours to win a $5,000 case, it
is not a good bet.
Given his penchant for detail and love of the nerdier side
of practice--Ben may develop just such a test if he can find
the time. He admits that the cycle time of considering
which cases to accept has shortened considerably as he
has found the sweet spot of the type of cases he prefers
versus those he would refer elsewhere.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Channels
Having a clean and informative website, not to mention a
podcast, serves Ben as one potential channel to reach his
clients. He also has opportunity to continue to speak on
substantive areas of consumer law including the National
Association of Consumer Advocates. Public directories
such as a lawyer referral service are also useful, particularly
as there so few other lawyers in the practice area.

Unfair Advantage

Bens unfair advantage is that he is an expert in an area

of law that other lawyers dont want to tackle. His path
for getting there is a testament to the concept of obliquity.
Originally, Ben worked on behalf of people trying to
navigate the home buying process. Then, 2008 happened
and the pivot through the agency where he was working
at the time was to defend foreclosure proceedings. Thats
where Ben became a visible expert.
He also has credibility as an authority from all sides
relating to consumer law. From grass roots cases on behalf
of legal aid, to learning and lecturing on the far reaching
consequences of Wall Street Asset Backed Securities and
mortgage foreclosure laws and back to serving regular
people with real legal problems--Ben has served the
entire gamut.
Prior to his own practice, Ben also had the advantage of
working cases without a requirement to earn a profit--which
meant he could learn the most effective advocacy possible.
Most importantly, after working with the best attorneys in
the state and lecturing throughout Kentucky on issues related
to the foreclosure crisis, Ben is the first person that comes to
mind for many other attorneys. For example, his primary
presentation on the foreclosure crisis was conducted close to
100 times throughout the state. So the referrals that come in
today are from those that knew him in 2009.
If its a consumer law case - other lawyers simply tell their
clients Call Ben.

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Revenue
The traditional fee for service model is at play in Bens
practice, but with a podcast and excellent information
for consumers, it is at least possible, for him to draw
revenue from information products and advertising on
his podcast. For now, retainer and collected money from
cases are the revenue source.

Cost Structure
This is where Ben has proven himself to be very savvy out
of necessity. It certainly helps that he has a lot of interest
in tools, workflows and technology in running a practice
as set out in his podcast and through his blog. Check out
his posts Technology for a Law Office: 60 Tips in 120
Minutes or Law Office Equipment Guide and you will see
that he has thoughtfully considered his options and made
sensible decisions that keep his monthly expenses low. As
a small firm lawyer, Ben is keenly aware that his personal
and business expenses require attention and he has been
conservative and practical on both fronts. As an example,
where he used to utilize an outsourced bookkeeper -- today
he uses Xero because it provides more value and control
for his business. He also acknowledges that making a big
expense investment in his law firm takes away his ability
to draw income to support his personal life.

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LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

Conclusion
The Lean Canvas is a tool of great utility for lawyers
seeking to re-imagine their practice and create new
revenue streams. The Lean Canvas is a current and
visceral reminder that the practice of law is a business as
the canvas itself helps you build your business. While its a
sweeping generalization, lawyers are good at many things
but arent great at setting up and running businesses. They
want to practice law.
The Lean Canvas provides an opportunity to flesh out
business using a reference mode, not unlike the EDRM
the reference model for e-discovery. It allows for a simpler
way to think about the business than the antiquated
business plan.

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A key problem with the existing law firm business model is

that lawyers have no retained earnings - they leave nothing
in the business for reinvestment. The canvas reminds us
that being strategic in our practice is significantly better
than always being hungry for new revenue.
While a Business Model Canvas might work best for
commoditized work, the Lean Canvas can extend its
rational application to bespoke work and thats critically
important.

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PROBLEM

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COST STRUCTURE

KEY METRICS

SOLUTION

SERVICE
UNIQUE VALUE
PROPOSITION

REVENUE STREAMS

CHANNELS

UNFAIR
ADVANTAGE

MARKET
CUSTOMER
SEGMENTS

LEAN LEGAL: HOW THE LEAN CANVAS CAN BENEFIT YOUR FIRM

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YEAR END PLANNING FOR LAWYERS

Aron Solomon
is a globally-recognized expert on innovation in the legal
and education verticals. A serial entrepreneur, Aron has
traveled three million miles and visited China close to
60 times in the business of learning how to do and make
things better.
A Montrealer by birth, Aron is multilingual and counts
Reykjavik, Seattle, Stockholm, and Amsterdam as his
favorite places to create and recreate.
Aron is Innovation Lead for LegalX as well as a Senior
Advisor in ICT at MaRS Discovery District in Toronto.

Jason Moyse
has served on global teams implementing major customer
experience initiatives as a connector/doer/spark and key
trusted advisor to the C-Suite, Senior Leadership and
Governance Teams for legal and business matters.
With a depth of experience leading and facilitating cross
functional teams, Jason has served as a core or extended
team member on numerous change management projects
impacting legal, finance, I.T. and customer experience,
often via a Lean Six Sigma methodology.
Along with his partner, Aron Solomon, he has written
articles (www.lawmade.com) and hosted events focused
on #legallean, startups and the NewLaw fusion of
technology, design, process improvement, document
automation and lean strategy as applied to legal and
advisory services.
A lawyer and Lean Six Sigma Black Belt, Jason is Manager
of Legal Business Solutions on behalf of Elevate Services
- a next generation legal service provider helping law
firms and corporate legal departments improve efficiency,
quality and outcomes through consulting, managed
services, technology and talent.

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