Managing Legal
Part 1 of this four-part post introduced a February 19, 2019 Forbes article, “Clients Need Legal Services But Not Necessarily Lawyers” — by Mark Cohen, both an accomplished business attorney and former chief executive of his own (non-law firm) business.
Part 1 introduced Cohen’s observations about the process management and technological benefits of “disaggregating” what law firms and in-house departments traditionally have viewed as “legal” tasks. In this connection he wrote about “alternative legal service providers”:
“Law is not solely about lawyers anymore ….”
“Several new-model legal service providers … have replaced law’s brute force, labor intensive lawyer-does-all model with data-driven, customer-centric, automated, corporatized, scalable, collaborative, multi-disciplinary, and well capitalized service models. These providers are often managed by business professionals and entrepreneurs, not licensed attorneys …”
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Why this “disaggregation” of “legal tasks” now?
Because, says Cohen:
“‘Legal problems’ have become ‘business challenges that raise legal issues.’ The complexity, speed, and new risk factors impacting business—together with the impact of the global financial crisis, technological advances, and globalization—have changed the legal buy/sell dynamic.
“Law is undergoing a gradual, systemic transition from a labor-intensive, provincial-by-design, lawyer-centric ‘practice’ model to a tech and process-enabled, capitalized, global, scalable, efficient, multidisciplinary delivery model aligned with consumer needs and expectations.
“Lawyers are an integral element of that process, but they are not always ‘the straw that stirs the drink.’ That’s because managing the delivery of legal services requires skills that relatively few lawyers presently have—notably business and technological.”
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Because the delivery of legal services now requires these process management and technology skills that attorneys mostly lack, Cohen reasons, “law has become multidisciplinary; it is not solely about lawyers”:
“Clients—not lawyers–now determine what resources and expertise is required to solve problems. They are not concerned with the nomenclature of the provider source(s)—in-house, law firm, law company, professional services firm. They are increasingly focused on required expertise, breadth and depth of talent, track record, technological compatibility/security, and an ability to scale. They expect providers to use data and other predictive tools not only to manage risk but also to be proactive in detecting it early and to diffuse it.
“… The Big Four, for example, are leveraging their brands, deep C-Suite ties, range of professional services expertise, technology, and deep war chests to make increasing inroads into the ‘legal’ space. The boundaries between law and other disciplines are blurred. Even within the ‘legal’ space, there is growing recognition that ‘practice’ (what the Brits call regulated activities reserved for licensed attorneys) requires different skillsets than the business of delivering legal services.”
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From my vantage as a practicing lawyer — and former executive at GE and Whirlpool — I believe that Mark Cohen is dead on when it comes to the potential for management processes and technology applications to make delivery of legal services to companies faster, more accurate — and cheaper.
But here’s where my take differs from Mr. Cohen’s: For now, this potential is largely stymied by law firms’ insistence upon — and in-house law departments’ acquiescence in:
- Hourly billing,
- Duplication of effort among lawyers,
- Use of apprentice-type junior lawyers for routine* tasks — with resulting resistance to technologies that could reduce attorneys’ hours billed, and
- Lukewarm interest in preventing legal problems while emphasizing a reactive posture to litigation and regulatory risks.
For me, the significance of Mark Cohen’s view is this: The management processes and technology tools are available now to achieve greater accuracy, speed — and efficiencies — in the delivery of legal services to companies.
Here’s my question: When will business owners and managers demand these process management and technology capabilities — and related cost reductions?
In Part 3 I offer some detail around “alternative legal service providers”, as revealed by a major survey (register to access report for free) last month published by the Georgetown Law Center.
* Of course, tasks to which apprentice-type junior lawyers are assigned are “routine”. Otherwise, the inexperienced attorneys who bill the client for those tasks could not perform them.