Comment: Culture eats technology for breakfast at SOLID
Last week I was honoured to open David Cowen’s London Summit on Legal Innovation and Disruption (SOLID) among fellow speakers such as BT’s head of legal vendor management Neil Willson; Accenture’s deputy general counsel Christina Demetriades; John Lewis Partnership’s director of legal Hannah Hullah; and American Express’s director and counsel for legal services Emer Kelly, to name a few.
The day opened by looking at the big picture and the macro drivers of change in the legal market. I focussed on the fact that ‘culture eats technology for breakfast’ – the deliberately provocative title of my talk, complete with a tongue in cheek image of Pac-Man eating ghosts – and I’d like to share some of the key points here, followed by some of the highlights and revelations from other talks.
The main message I wanted to convey is that corporate counsel should, before thinking about new technology, focus single-mindedly on creating an environment in which meaningful and systemic change can take place, particularly when it comes to how they work with their external advisers.
Other sectors are using technology to completely reengineer their core business, but when it comes to the legal sector, I’d argue that we are still largely congratulating ourselves for tinkering around the edges.
My question when you go out to RFP, I told delegates, wouldn’t be “give examples of how you are innovating?” but “how are you creating a space in which we can work together to fundamentally overhaul our working practices?”
I would ask advisers, “how are you bypassing the failures and limitations of the partnership model when it comes to real innovation?”
Despite the rhetoric around change, we’ve all seen last year’s law firm revenue figures and there is no burning platform for change.
Instead of asking what new technology law firms are using I’d ask, “What steps are you taking to get rid of the billable hour?” “How many matters do you handle on a fixed fee and how has that changed?” “Can you now offer me value-based billing? If not, why not?” “Do you have or use your own ALSP?” And, “Give us examples of where you’ve used legal design to effect change.”
Standard hourly rates still account for the majority of outside counsel spend* and retainers are still really low but DWF, which floated in March this year, has very recently agreed a five-year real estate and insurance managed legal services deal with BT.
It is in partnerships that I see real progress being made. In the US, Microsoft’s commercial legal group has a retainer with Perkins Coie, which takes away the combative and time-consuming need to pitch for work and means that lawyers really understand Microsoft’s strategy and work as an extension of the in-house team.
Hogan Lovells in February 2018 partnered with law company Elevate and more recently Cognia Law and FTI Consulting to create a flexible lawyering programme. Speaking to me recently about Elevated Lawyers, Hogan Lovells global head of legal operations, Stephen Allen said: “One plus one equals more than two.”
Law firms are increasingly launching separate ventures in which technology can more easily be leveraged and that is to be encouraged.
And ALSPs are getting better at presenting corporates with a holistic package: Integreon in the last few months partnered with Seal Software to take on LIBOR repapering and CEO Bob Rowe told me just the other day: “The client doesn’t want to have to put the puzzle together, but they have a lot of people approaching them saying ‘we provide this piece’. We want to make sure that when we walk in, we provide the whole solution.”
Whereas corporates have had to puzzle (aka crowbar) a solution together despite limited resources and a continued drive to do ‘more for less’, advisers should be increasingly doing this for them.
These diagrams from Cognia below show the kind of strategic integration corporates have now and what they can and should expect in the future.
So, let’s continue to get excited about new technology but remember that unless the process and people bit is right, culture will eat technology for breakfast, and probably lunch and dinner too.
Quotes from the day
SOLID consists of quick-fire TED talks followed by table talk, giving delegates an opportunity for free discussion on a variety of topics.
We were lucky to have Willson at the event to give an insight into BT’s arrangement with DWF. BT selected DWF after an extensive procurement process and what jumped out to me was his comment: “We didn’t appreciate how immature the market is and part of the challenge was separating fact from fiction in terms of what law firms’ capability actually is.”
BT has just kicked off its panel process and will be looking at law firm culture among other attributes.
Kelly’s talk was titled “How to reimagine and reinvent the role of lawyers in global legal services” and it this quote that resonated for me: “You need to make data your friend and make informed decisions about your business. Become literate and track what you’re doing.”
Attitudes towards technology are maturing as people become more courageously boring.
Following a fireside chat between Cowen and EY partner Meribeth Banaschik, who talked about the changing role of the legal department, Richard Parnham from Said Business School gave some insights into the research into AI investments and impact being conducted at the University of Oxford.
Parnham looked at a number of high-profile AI companies, anonymised on a slide headed ‘Figuring out the money: R&D for free?’, that appear to be generating little income compared with their losses. Parnham said: “What is still not clear is who is paying for AI.”
Kiwi Camara, CEO of eDiscovery vendor DISCO, discussed the extensive (and I have to say impressive) process that the company goes through to get the UX right. On my table at that time, the head of legal operations at a FTSE 100 company asked during the table chat: “How much do we as lawyers focus on the UX of our product? Not much!” This sparked an interesting conversation about the growth of legal design.
Jonathan Westwood, head of legal at Experian, was brought in to talk about how he had shifted the mindset of a team drowning in work. He introduced time recording – an initially unpopular measure that nonetheless helped to measure what tasks the team was working on to help create a playbook for the business.
Westwood asked Experian’s lawyer to create a traffic light system for tasks and asked them, “What is it that you do that is worthy of gold status?” Experian operates in a highly regulated industry where there are lots of complex issues, but Westwood said: “For anything bronze – high volume low value work – we asked, ‘can we outsource this to other people?”
I liked Westwood’s reference to Sherlock Holmes, who said: “It’s a huge mistake to theorise before one has data. Inevitably one begins to twist facts to suit theories, instead of theories to suit facts.”
Demetriades talked about disrupting Accenture’s legal team, commenting: “We have to digitally disrupt what we do not just to save money but to deliver value.”
As Accenture’s own business has become more digitally focussed so the legal team had to “pivot” and one solution was to halve its panel, remove beauty parades and pitches, and demand better value.
Accenture has created digital platforms to simulate learning experiences and partnered with law firms in innovative training and learning.
Demetriades said: “It’s about a mindset – realising that we wanted the customer experience with legal to be different, and customer experience is at the heart of all of this.”
The lessons learned by Accenture? Change management is hard. Not everything can be successful. Focus on culture: if you want to move the needle and change mindset and skills, get the culture right, including having a brilliant feedback culture.
David Griffin from BT talked about the selection process behind RFP tool Persuit, which he and I have planned to discuss since the summer, so I’ll bring you more detail of that separately.
And as an apology to other speakers that I am missing out here, unfortunately a few of the sessions were interrupted by the logistics of making arrangements for an unwell child: ahh, the joys of parenthood.
I did catch the fireside chat between Cowen, Hullah, and corporate counsel consultant Leah Cooper, who talked about how John Lewis had undertaken an extensive exercise to reinvent the legal team along the lines of its business units.
Lawyers in the John Lewis team were ranked by work; influence; and relevant stakeholders and matched with people in the business, breaking up the cosy but insulated legal team environment. Hullah said: “We have quite a different team now. They are curious about the business and want to know more. What was required was an entirely different leadership team who were not pure legal advisers.”
Cooper said: “To give great legal advice, you have to understand the business and understand their goals. They are craving that support. The more you can focus on tools to help lawyers become business partners, the more highly regarded you’ll be.”
That seems a perfect quote to end on. People came to learn about innovation and disruption, and if I had to pick one recurring theme for the day, it was mindset.