What ‘Moneyball’ Taught Us About Unbundling Diligence
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Sometimes change is sought. Sometimes it is dictated.
Billy Beane, general manager of the Oakland A’s major league baseball team and protagonist in the Michael Lewis book “Moneyball” (2003), found himself in the latter category as his club was cutting expenses—including his best players—while his competition was spending more. He needed a way to beat those teams, and traditional ways of winning typically required great players making big salaries.
We’re in a place now in the legal industry where change is sought and, in many cases, dictated. This is specifically the case for corporate transactions, where many lawyers see the gains in other areas of law and want to duplicate them, or see the opportunities for improvement but don’t know the steps to take to achieve them.
Beane’s solution was to identify how many wins his team would need to make the playoffs over the course of a year, and then ‘unbundle’ all the aspects of how to get those wins. It boiled down to making the sum of the parts greater than the whole, with players who excelled in certain areas (like just getting on base) playing specific, albeit untraditional, roles to achieve success as efficiently as possible. He transparently assigned value to their skills and identified players based largely on data, not necessarily his scouting department. This objective model flew in the face of baseball’s status quo, but was almost immediately successful.
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