Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Brian Deas, founder and principal of Manley Deas Kochalski, LLC and its related companies, to discuss how mortgage companies can benefit from working with an innovative law firm. 

Q. Where do foreclosure firms fit within the larger discussion about innovation in the law?

Brian DeasA: We think the best foreclosure firms today are models for traditional firms of the future.  Futurists like Richard Susskind argue that innovation is necessary because the traditional model in which lawyers bill by the hour is no longer suited to the demands of clients. It's an inefficient model because it rewards law firms for hours devoted to a matter. And this reward is often at odds with the client's interest. The firm wants to grow revenue; the client wants to cut costs.

To close this gap in interests, traditional law firms must become more efficient. And to do this, futurists say, law firms must embrace technology, utilize business process ideas and new kinds of non-lawyer professionals in managing their work, and accept alternative billing arrangements. These ideas are the subject of debate in the legal profession. What’s missing from the debate is recognition that the future model for traditional law firms is the standard model for today’s top foreclosure firms.

Q:  Why is MDK an example of an innovative law firm?

A: MDK’s clients refer tens of thousands of new matters to MDK each year. These matters arise in 536 counties in six states and 12 federal jurisdictions. It’s a complex, high-profile legal environment. Every matter presents MDK with a new combination of legal, compliance, and business requirements. These requirements change all the time, which means MDK must be comfortable with managing change and confident its technology can deal with it. The complexity of the situation is not a revenue opportunity. MDK must meet these requirements for a fixed fee.

As a result, MDK fully embraces technology, starting with its proprietary practice management system. Every new matter runs through this system. It assigns a workflow to each matter consisting of standard individual work items and optional sub-processes. The workflow engine is unique in that it allows MDK to make changes to any process in real time, based upon any set of facts relevant to the change, and to apply those changes to active cases, regardless of their stage, without any disruption to the user. Users don't notice that a change is happening; they just know they are always working from the most up-to-date version of the workflow.

MDK supports its case management system with standard integration and automation tools and other proprietary technology platforms, such as its vendor management system and e-mail filtering tool, and with skilled IT personnel and business analysts who work closely with MDK’s lawyers. The level of detail in the system produces valuable data, and data drives process improvements.  MDK uses the vast amounts of data from its system to assess and improve performance, chart trends, spot anomalies, and, most importantly, to advise its clients accurately and timely on the results of its work.

Q. What does it take for a law firm to become innovative?

A. It takes leadership and openness to new ideas to create the law firm of the future. It's a collaborative process, and it works only when everyone at the firm is aligned on the same objective, which is to solve clients’ legal concerns within the parameters of their business objectives. Some legal matters require consultation between lawyer and client, for which the billable hour is appropriate. But that’s not true of all legal matters. 

If the legal industry is resistant to changing its traditional legal model to handle process-oriented matters more efficiently – and it isn't too hard to find resistance – the industry need only look to the best foreclosure law firms of today for proof that innovation works.