Lawyers are known for being risk averse and that has translated into being viewed as gatekeepers rather than enablers. In part one here of our three-part series, we looked at in-house operations with respect to technology adoption and change management. Here, I examine leadership from in-house lawyers, expanding on some of the ideas discussed at a May 2015 Evolve Law event. I’ll also delve into how law firms need to partner with in-house departments as both sides of legal services evolve.
I worked for years as the head of finance, and I oversaw related departments including human resources, information technology, and legal. As the CFO, I often had to evaluate risk versus reward before approving projects. The best department heads that I worked with were those who recognized that the business operations led the decision-making process. And the new legal operations model draws from that principle; it’s the perfect blend of law, business, and operations subject experience.
Josh King, General Counsel (GC) of Avvo, summarized it best: “the most important thing to GC success is not so much being the best lawyer or knowing the most about the law. Rather, it’s about two things…integrity [and] having great judgment. If you think about technology, even though there’s all this technological change, it’s truly about the in-service of those things.”
Lawton Penn spends time with clients trying to solve in-house problems with technology: “What I hope for, too, is bringing more brains to the table than just lawyers. I think, so often lawyers try to solve problems with lawyers, so I think anytime you can involve technology, business folks from your company that are the end-receivers of your legal output, and really bring different thinking, and I think that’s where you’ll get your best solutions for, ‘Are we solving the right problem?’ ‘Do we have the right technology identified?’ and ‘Have we built a strategy to bring it in and support and train and get adoption?’”
Josh outlined how lawyers need to move past their risk aversion to facilitate change and serve the business. Here’s how he views the in-house role: “Business people succeed by taking smart risks. And we as lawyers, in our business partner role, really have to put on the hat of helping our internal clients understand what those smart risks are.” Maja Larson took it a step further: “Being a business person, as much as being a lawyer, you can’t just sit and answer questions and write contracts. You actually have to be out in the organization talking and understanding the business.”
Also, Lawton relayed the story of the former general counsel of a major airline who described his weekly meetings: “the leaders of all the different groups from around the company would show up with visuals, budget metrics, return on investment, analytics. I walk in with my yellow legal pad, and they’re managing $200 million budgets within 1%. And I can’t even really tell you how we’re going to spend the money going forward or let alone be able to show it and visualize it.”
Partnerships with Law Firms
All the panelists described a new level of need for data and transparency from their law firms—moving toward a partnership rather than a black box approach. Ken Callander shocked some of the audience by describing alternative fees, including those for litigation: “In my practice, I work with companies’ in-house departments, moving them off hourly fees and on to value-based fee arrangements. At Uber, we don’t do anything on hourly fees anymore, and I’ve got a number of other companies that wish to go that direction.”
This brings up technology issues because matter management systems do not yet work to that type of fee model. As Ken explained, “you look at matters in terms of the actual value of the matter, and looking at lowering what you’re paying for the effort and focusing more on results and success. That’s where I think the legal industry’s going. And there’s really not a lot of technology out there that’s able to manage that well.”
Firms that wish to survive will have to let go of some of the work. For example, panelists all agreed that non-disclosure agreements (NDAs) needs to be automated if not already done so. Lucy stated, “we’ve automated the NDAs. Because we said, ‘Just fill in the blank, click, send, DocuSign, and go.’ And even that was emotional for a lot of the attorneys, because NDA is special; it’s a big customer. So, it’s an evolution.”
Embracing and managing change and demanding the same of law firm partners is certainly the direction that was reported in our panels last year. In-house counsel can add the most value by taking the seat at management table, but as facilitators not gatekeepers. Next time we will look at five-year predictions for the GC. #onwards.