Change management: leading by example

How do you help to affect systemic, transformational change within your organisation?

This was a question posed at Legal Leaders IT Forum (LLIT) in Gleneagles, to a panel of four recognised legal innovators from both the corporate counsel and private practice sector, who have turned to IT and process improvement to overcome some of the familiar challenges facing other organisations.

When BT undertook a process excellence project in 2010 with the aim of improving efficiency and bringing down costs within legal, it turned to BT Legal’s general counsel for UK commercial legal services, Chris Fowler, to lead the project.

Fowler told LLIT: “In my view, there are a number of parallels right now, between where telecoms was and comparable issues that are being faced by the legal industry.

“If you look at the revenue that BT used to earn, approximately 85% of it was from a variable charge.  The longer you used it, the more you paid.  I’m sure many of you remember when a bill would arrive through the post and it might have been very thick and sound like an encyclopaedia as it hit the floor.  That doesn’t happen now, because in reality the majority of the business that was derived through variable charging, has disappeared and been replaced with a fixed charging model.”

Technology has changed the services that BT provides in a way that would have previously been unrecognisable. Fowler said: “There’s a huge opportunity for legal service providers to use technology to move into adjacent markets.  Some of the alternative legal service providers are providing services which are IT enabled. It’s sticky and they don’t depend on one conversation or one relationship going wrong – those services, when they’re in, effectively they create an operational dependency which needs to be managed.”

Since 2009, BT’s top line revenue has dropped but its profits have increased and that is largely thanks to better systems and processes. As part of its process excellence project, BT worked out which staff do what and why. It uses a triage or ‘front door policy’ (now provided by Axiom but the inaugural arrangement was with UnitedLex) to decide where work is directed – to alternative providers, to the internal team or to external lawyers. This has not only enabled BT to be consistent in its approach to instructions but to understand, analyse and manage the peaks and troughs in its workload.

BT’s legal leadership team now spends more time talking about technology and the challenges in implementing it than almost any other topic.

Fowler told the IT directors present at LLIT: “I would love to see more of the people who are in this room on pitches that law firms give BT.

“There’s huge value that external firms can provide in really bringing to life practically the way in which they’re using technology and then externalising that. Ultimately, it leads to more sticky propositions for law firms.”

Technology is something that Claire Debney, former vice president and general counsel, group legal affairs and compliance at Reckitt Benckiser is no stranger to, having spearheaded a complete overhaul of the way the FTSE 100 company’s legal team interacts with the business by enabling the business to generate its own contracts. Debney set up i-Legal and i-Contract – a ContractExpress backed global contract management system and repository, which have given the business the freedom to instantly turn around contracts ranging from nondisclosure agreements to slightly more complex contracts.

She said: “You’re never going to take everyone along on the journey, but I think people get there eventually.

“The one thing I learnt from starting the i-Legal project was, I needed to talk the language of my business and I needed a grass roots up uptake of the technology and the solutions.  And what we did – our front door was, give the power to the business and make their own decisions.”

BT and RB undoubtedly have one of the most advanced legal teams in the industry and not every in-house legal team is at the same developmental stage, rightly pointed out Mike Polson, managing partner of Ashurst’s Glasgow office, which is being used as a centre for innovation at the UK top 15 firm.

However, understanding the client is key to helping to drive change and Polson, who spearheaded Ashurst’s recent deal to automate all its precedents globally, said: “If you understand what the client pressures are and the client challenges, you can start to think about that in the context of how you provide your help, your support, your solutions.”

He added: “If you can find an anchor into a client, a client opportunity, a client challenge, and you can help fix that, and you can help win work – that is transformational in terms of the role you will play within the firm, how you are perceived within the firm.”

Building bridges internally is equally as important, starting with identifying the best relationship builders within IT. “It will also help you in your firms if you can find some respected evangelists.  There are some people who are very, very effective lawyers, have huge trust/confidence internally, huge kudos, and get the whole ‘the world is changing’ and the tech role,” Polson said.

At Ashurst, Polson is working closely with Tae Royle, a former corporate associate who leads the automation process. The Glasgow office has also recruited legal technologists who have a law degree and understanding of automation, cloud computing and big data. Polson told LLIT: “IT are often driving on an operational business as usual basis, the lawyers the same. What we need to find are resources who have a role, a proper role, that sits right in the connection between IT and the lawyers with an understanding of both sides.”

While a few law firms have an R&D budget they are in the minority and Polson said: “Law firms are generally not good at R&D, they don’t really do it in a way that their clients do.  Imagine BT not having an R&D focus or RB not thinking about their next product – it’s just R&D doesn’t exist as a theme, as a function, as an investment in a law firm in that sort of way.  And I think that has to change.”

EY legal risk director Matthew Whalley, who was previously head of legal risk at Berwin Leighton Paisner and who spearheaded its ‘artificial intelligence’ deal with RAVN Systems acknowledged the challenges surrounding delivering real transformation. But he said: “For the next ten years, technology-enabled transformation is going to be the key to competitive advantage and sustainable business models in the legal sector.”

Big data and artificial intelligence are complex to capitalise on but Whalley said: “There’s a huge amount of insight that law firms can give to their clients that you can give if you can get to grips with how to extract and analyse data from your core product, which is legal work.  It’s an incredibly difficult issue to deal with, whether it’s IBM Watson or RAVN or one of the other AI providers.  You need to let them loose on a huge amount of information that you don’t really want to let them loose on, extract data points and start to try and make patterns out that. But it brings huge benefits in terms of bringing your business from purely transactional legal work to strategic advisory insights.”

This article first appeared in the April Legal IT Insider