Managing Legal
The Point
Earlier this year I summarized Casey Flaherty’s exhaustive study of what’s overwhelming corporate Legal, and why it matters: “For most companies, the legal system’s demands on corporate Legal exceed that business function’s capabilities to respond … So some tasks vital to a company’s legal safety go begging, exposing those companies to potentially catastrophic litigation and regulatory exposure.”
Richard Susskind, British lawyer and Oxford PhD in computer science, and the world’s most cited author on the future of legal services, offered his solution to this dilemma in a presentation this week, as he released the 3rd edition of his classic Tomorrow’s Lawyers:
In order to do “more for less”, the corporate Legal function needs to “rethink” how it serves the business, and then “design the processes and systems” to increase capabilities at scale — rather than simply rely on “more lawyers”.
This Matters to Your Business
Dr. Susskind described four realities shaping the way business will get its legal services in the coming decade:
1. “Globally … our legal services are creaking“, including those supplied to “the largest general counsel” of major corporations. “Our legal services are increasingly unaffordable.”
2. “Clients have for some years been asking more for less … They’re increasingly regulated, and they have less resources to spend on external law firms and internal capabilities.”
3. “We need to rethink the work of the legal professional,” rather than simply churn out more of the traditional, law school-trained attorneys we rely on today.
4. Instead of simply adding “more lawyers”, during the next decade, the legal profession should call upon business process specialists, data analysts, legal tech experts, and legal operations specialists — as well as conventional attorneys — “to design the processes and systems that will replace our old ways of working“.
Because …
The legal profession won’t “replace our old ways of working” on its own. So it’s up to business people in the C-suite — not lawyers in-house or in law firms — to make sure that something like Dr. Susskind’s prescription is implemented in their businesses.
The legal profession’s business model is based on raising lawyer headcount in response to increased demands. Law firms are unlikely to “replace our old ways of working”, because they make their money almost solely on individual attorneys’ hours billed to clients. In-house departments too, because their primary response to high law firm pricing is to “bring more work in-house”, meaning hire more full-time lawyers on company salary (see here and here).
As to Dr. Susskind’s “replace the old ways of working”, attorneys in law firms and in-house pay lip service to this. But in terms of practical action, they relegate this to mostly cosmetic “innovation” initiatives. The real money, and so the serious attention, goes to lawyer headcount in law firms and in-house.
As a corporate function, the attorneys in charge of Legal’s agenda, for the most part, resolutely cling to “more lawyers” as the solution to the “more with less” dilemma (though with lip service to “innovation”). The business process designers, data analysts, legal tech experts, and legal operations specialists are available now — but they remain at the periphery of Legal’s agenda. CEO’s, CFO’s, and others with genuine management wisdom need to step in and make the big decisions about scaling Legal’s capabilities.