Thursday, May 05, 2011

Cognitive bias and the practice of law

This post is for Legal Eagle.

In a post at the start of May I wrote:

Staying with Club Troppo, Ken Parish's Rooting out Cognitive Bias 101seeks advice - a wisdom of crowds thing - on some seminars in jurisprudence seeking to correct perceptual bias. This led skepticlawyer to write a companion piece, Crowdsourcing bleg – getting lawyers to think creatively.

Now this must seem pretty dry stuff, and in some ways it is. However, bear with me for a moment.

One of the issues that I have been trying to think through is the reason why lawyers so often fail to address the real needs of their clients. This is directly related to cognitive bias installed during legal training, as well as the dynamics of the profession.

I decided to write a companion post, but found it almost impossible. Both Ken and SL address the issue from a macro level whereas my concern is very micro, professional failure in the handling of individual matters. I do want to write something on this, for I actually spend a lot of time on this blog trying to address cognitive bias, the way in which our mental frameworks affect our perceptions and judgements. However, it will have to wait.

Legal Eagle encouraged me to write my post. Normally I would put it on my Managing the Professional Services Firm blog, although my purely professional writing is suffering just at present. However, I decided to say something here because this blog has a wider audience.

In considering the brief remarks that follow, I think that it would be helpful to keep in mind that:

  • Lawyers are trained to think in terms of law and legal responses.
  • Legal agreements of all types are simply the legal wrapping placed around a transaction or arrangement. A fair bit of law is linked in one way or another to the interpretation of that wrapping. 
  • Transactions generally fail not because of the legal wrapping, but because of failures in the transaction or arrangement.


In medicine, the first thing a doctor does is to undertake a diagnostic.

No doctor worth his professional salt would take what the patient says and simply prescribe based on that. Have a bad headache, here is a powerful pain killer. Yet this is what many lawyers actually do. Here's my transaction or arrangement. Please draw up a contract  or arrangement. Yes, client.

I accept that clients are their own worst enemy. I accept that we live in a just in time world in which clients have too little time to think and then issue skimpy email instructions expecting an instant response since its now at the top of their mind. Still, the reality is that lawyers are not trained in diagnostic techniques that force the client to define and test the detail of what they have in mind. Not the law, but the underlying transaction.

The case studies included in this post are all actual if disguised examples 

Case study. A Government agency was concerned about a GST issue. They went to a leading law firm seeking advice and a tax ruling. The law firm did not test the client's thinking, but simply accepted the instruction. The client did not fully understand what they were doing, nor the advice provided. Finally, the assignment was cancelled when the client realised that what they wanted could not work for practical policy reasons. The cost to the taxpayer was over $57,000. The failure was foreseeable.

Once the instructions have been issued, the legal document is drawn up. Most legal documents incorporate a series of standard clauses - definitions, remedies etc. For efficiency reasons, most law firms use templates and clause libraries to streamline the process. Nothing wrong with that, but!

Anybody who has seen a variety of legal agreements will agree that some of the clauses seem a little strange, even over-kill. This reflects the fact that the lawyer has not thought through properly the underlying purpose of the agreement. Play it safe and slot the past in.

During this drafting process, failures in the diagnostic increase costs. This leads to higher costs on both sides through a more extended drafting process. It also increases risk compounded by the mechanistic drafting process. 

Case study. The matter involved a joint commercialisation venture between a private company and a research institution to commercialise technology. The two parties had worked together well for some time. The challenge was express the new arrangement in a way that reflected agreed principles while terminating previous agreements.

The initial legal material supplied by the lawyer representing one party was unclear and missed several important steps. The new arrangements required intellectual property (IP) to be clearly specified. The other lawyer investigated and found problems in the definition of IP. When the lawyer tried to insist that the IP be properly specified, the impatient client terminated the assignment.

This case illustrates two very different issues.

The first is the failure of the supplying lawyer to properly identify the issues involved, relying to much on precedents with insufficient real analysis of the issues around which the agreement was to be wrapped. The second was the unwillingness of the client to take the time to supply proper information.

Impatient clients are a very real professional problem for lawyers. Clients feel that lawyers who try to insist on proper information are acting to inflate their bills. This can be hard to manage and requires people management skills, something that most professionals are not well trained in.

The problem of bill inflation and of cutting corners to get things done all links to charging patterns. The critical variables of time credited to a client, work in progress, the transmission of work in progress to client bills and the degree of time write-offs in the process are individually measured. This can make it hard to commit time that professionals believe is warranted when that time might have to be written off. 

in the case I was talking about, the final result may be okay so long as nobody else challenges the IP and the parties themselves do not fall out. In either case, the dance of litigation may begin.

Litigation is a chancy business because it favours the big, is often uncertain in legal terms and becomes a gladiatorial content that feeds egos. To a substantial degree, litigation is as much about non-legal tactics and strategy as it is about the law itself.

Effective litigation requires an understanding of client objectives and options especially when representing smaller clients, for these clients are at greater risk. Good lawyers have to make judgements that have nothing to do with law although they may take legal expression, everything to do with negotiating or forcing an acceptable outcome. Many lawyers just get locked into the gladiatorial contest or lack the skills to understand their client's real commercial position. Other lawyers and barristers become too locked into specific legal issues when the case itself actually has little to do with law as such.    


This post is not an attack on the legal profession. I actually have  a very high opinion of lawyers as a whole. Rather, I have been setting a context focused on the practice of law.    

Both the teaching and practice of law are changing. Once the majority of those studying law whether as articled clerks or at university planned to go into private practice and were taught by those in practice. Today, the majority do not intend to go into private practice, nor are they taught by those in practice. This changes things.

If we look just at those going into practice, the way that they are taught does introduce perceptual bias. They are trained to think of the law as the law, not a means to an end. This is not new, but is deeply embedded.

Obviously, clients expect lawyers to have a knowledge of law, to be lawyers. That is a necessary precondition of practice, but it is not a sufficient condition. Lawyers are failing clients because they cannot stand outside the law and recognise and analyse other elements.

The solution? I do not have one. I can only indicate things that I consider to be important.

One thing is to focus on the discipline of professional practice, not just legal practice. Doctors do face similar problems to lawyers. Lawyers can learn from the concept of the diagnostic.

A second thing is to force lawyers to recognise the non-legal aspects of the work they do, forcing them to think outside the box while acquiring new skills.

This may sound abstract, so let me make it concrete.

I have been involved in the development of training on contracts and contract drafting. These are pretty important to the practice of law. We use case studies that require participants to actually analyse the business problems facing their clients and to relate suggested legal solutions directly to those business problems.

A small thing, but quite effective in forcing paradigm shifts.


I woke up this morning still thinking about this post. Sad, I know!

All professions teach ways of thinking. One of the problems in multidisciplinary work, the reason why true multidisciplinary working is so difficult, lies not just in variations in fields of knowledge but also in patterns of thought. For that reason, some of the professional writing I have done has been concerned with ways of encouraging true multidisciplinary working.

In his original post that started this discussion, Ken Parish referred to the concepts of frames and framing. I first came across this concept a long time ago through the work of economist Kenneth Boulding on images, the term he used to describe the frameworks that we all use to simplify and interpret a complex world. In my writing on this blog I have used the term mental mudmaps.

At the time I first read Boulding I was back at UNE doing postgraduate research in history. I found the concept useful not just in thinking about the past, but also my own interpretation of the past. Take, as a simple example, the effects of speed of travel on the way we see the world around us. This really does affect the way we see the world.

A little later, I found Boulding's concept and the ideas I had developed based on the concept very helpful in developing new policy that required changes in thought. One problem today is that so much politics and policy actually plays to, reinforces, current frames.

Ken's focus in his post was on the possibility of introducing his students at CDU to problems of cognition and cognitive dissonance. He wrote:

I have in mind a couple of seminars that would explain the basics of each of these research approaches to cognitive biases or shortcomings.  We would also have students undertake versions of some of the surveys that led to these research findings.

However, what I’m also wondering is whether there are any well accepted practical techniques for diagnosing and correcting such cognitive biases in ourselves, other than the obvious but difficult one of attempting to adopt a skeptical stance in interrogating one’s own thought processes, especially when dealing with a question likely to arouse strong emotions?  And what useful indicators might exist to tell us when to engage in that sort of careful skeptical reflection about our own motives, assumptions and thought processes?  Heuristics and habit are unavoidable and useful behaviours.  None of us has the time or energy to reflect carefully and skeptically on every decision we make in our daily lives, and in most cases repeating behaviour that worked previously is both efficient and sensible.  Are there any reliable guides for picking when that might not be so?

I obviously come at the problem that Ken is trying to address in a different way. I think that you can make people aware of things like framing and the way it affects thought in a general sense. I think that you can use examples that will help people interpret the effects of frames or images, aiding them in understanding others.

To go from this to increased ability to critically monitor our own frames and preconceptions on an on-going basis is much more complex. I'm not sure that there is an answer to Ken's final question. I also wonder a little whether or not its the right question in the specific context Ken is talking about.

This is not a criticism. Ken was trying to articulate ideas. But its a big leap from increasing understanding in a general sense to individualising it. I suppose my feeling is that it would be best, and that was in a sense the purpose of this post, to link the concepts to the actual theory and practice of law.                


Anonymous said...

This is very interesting Jim.

I can relate some of it to my own years of experience in negotiating with over a hundred different law firms for supply of my small firm's software. Very early in the piece we secured one of the largest law firms as a new client, and in follow up installation work I stumbled upon the timesheet attached to the review, rewording and approval of our own contract for services - a few thousands of dollars time charge.

I discarded our standard (lawyer drafted) contract, thinking that surely most later firms would follow this new 'precedent' for our services. But we ended up with well over eighty different versions by the time I retired.

It's interesting that the closest I ever got to mutual understanding and regard for any of these contracts was with the managing partner of another large firm, who after signing off, looked at me and said "if either of us has cause to ever review this agreement, we will both have a problem".

That relationship lasted for over ten years until I retired, and fits my personal view of the importance of legal documentation.

Anonymous said...

Geez - all those words and forgot to add my moniker, and wish you a lovely day!


Jim Belshaw said...

What a fascinating story, anon. That senior partner was a wise man.

A bit off topic, but in all the consulting work I've done over the years, by far the worst and most cumbersome contracts I've seen or had to deal with were in the Government sector. The concept so popular in Government of "best practice procurement" is a real oxymoron because those drafting the contracts did not really understand their purpose!

Jim Belshaw said...

Hi again, KVD. I suspected that it was you! I hope today will be nice and relaxing with lots of writing!

Legal Eagle said...

Somehow I missed this at the time it was written - must have been a stressful time at uni or something.

Yes, I agree with you. I know that lawyers often just use "boilerplate" agreements with all these silly clauses which are just overkill. I also agree that there's a failure of diagnostics on many occasions. You really need to test your client's assumptions, otherwise they just end up blaming you when it all goes pear-shaped.

I would like to make a distinction, however, between "front-end" work (which seems to be what you and KVD are mainly discussing) and "back-end" work (when it all falls apart...i.e. litigation). I mostly did back-end work. The considerations for the two are different. But many "front-end" lawyers are thinking about the back end when they are drafting - hence all the strange clauses in contracts or the like. They want to cover every possibility if it ends up in court. This produces a problem, because that's not necessarily what is best for a client...