Managing Legal

My post two days ago cited an American Bar Association ABA Journal article published just this week about what lawyers want to sell to business: Billable hours. It described the latest and most advanced software for, “ensuring that you capture — and charge for — all of your billable time.”

In the legal industry, using software to “capture — and charge for — all of your billable time” amounts to a tech “innovation”. 

Apparently. 

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But there was another development this week.

Announcement of a “moonshot” designed to reduce by 50% the $10.5 million legal spend of a Fortune 500 corporation.

This ambitious effort is a collaboration among (1) a business client in the Fortune 500, (2) a law firm, and (3) something called a “law company”:

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Just yesterday the American Bar Association’s ABA Journal posted — under the category “Legal Technology” — an article that described and evaluated some of the latest and most advanced software for the following task performed by attorneys:

“These mobile time-tracking tools make it possible to track your time and enter it contemporaneously, ensuring that you capture — and charge for — all of your billable time.”

You read that correctly: Applications designed to “capture — and charge for — all of your billable time” are an important part of what’s considered “legal technology”.  

Opening scene:

It was a nightmare for my friend Mary.

Over the past decade – she and her business partner had created a thriving real estate development firm. With what had been until recently a great working relationship.

Now her business partner was in the early stages of Alzheimer’s.

Across from Mary that morning sat her business partner’s wife and adult children. They were understandably upset. They seemed scared. And they were making demands of Mary relating to the firm’s future.

Then Mary reached into her briefcase.

Flashback to 10 years earlier:

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The legal industry has been slow to embrace artificial intelligence (AI)*. But other industries and professions are not waiting to deliver AI’s enhanced precision and cost efficiencies.

How high do the stakes have to be before law begins to catch up with medicine?

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On April 11, 2018 the U.S. Food and Drug Administration announced that it would, “permit marketing of the first medical device to use artificial intelligence to detect greater than mild level of eye disease retinopathy in adults who have diabetes”.

According to the U.S. FDA, the device: “Provides a screening decision without the need for a physician to also interpret the image or results, which makes it usable by health care providers who may not normally be involved in eye care.”

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With all the references to the attorney-client privilege in recent news, I had been meaning to post an article on this important legal protection.

Today’s Wall Street Journal contains an op-ed by former U.S. Attorney General and former federal judge Michael B. Mukasey that surpasses — in practical wisdom and conceptual clarity — any explanation that I’ve received in law school, read in court opinions, or encountered in day-to-day law practice.

The online version requires a subscription — and if one lacks that it’s worth tracking down a hard copy of the newspaper to read this piece.

To protect itself, a company needs regulatory advice from a lawyer who knows how a government agency would view its activities.

Like a pro football team, regulators who bring an enforcement action against your company are rarely playing the first game of their careers. So there should be little, if anything, in their playbooks that lawyers who’ve tangled with a particular agency haven’t already seen.

Your company needs an attorney(s) with sound grasp of what’s up the sleeves of those bureaucrats who might decide to attack your business.

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A decade ago I gave a speech in Washington, D.C. to a group of regulatory lawyers.

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In this blog I describe how to use effective management and liability prevention to control corporate legal costs. This calls for a certain amount of detail.

But in providing that detail I want to be sure not to lose sight of what this blog and my law practice are all about. Simply this:

When a company’s management is unhappy with the job their lawyers are doing, I help its owners or executives to put something better in place to achieve their business goals.

Half a decade ago Harvard Law School’s Professor David Wilkins announced that the legal industry had entered “the Global Age of More for Less” (see this speech, and this journal article).

The response from all but a few attorneys: Crickets.

Seen in the light of their cost-plus business model, “more for less” just sounded to them like “less” money to pay for “more” time. With a “management” technique that consists of assigning bodies-to-tasks, the legal industry is blind to process efficiencies, competitive pricing, and other skills that anyone who works to a P&L has already mastered.

As a result, law firms and in-house counsel won’t acknowledge that the collision between the legal system’s skyrocketing demands and company budgets (that have more constructive uses than to pay attorneys) is unsustainable. Instead, the legal industry tells business clients that the best they can hope for is to minimize (what they tell us are) the inevitable increases in their legal and regulatory line items.

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Casey Flaherty, an insightful lawyer who advises corporate law departments, describes attorneys’ prevailing mindset:

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Company owners and executives need to take charge of legal and regulatory affairs in order to control legal costs, prevent liability, and otherwise cope with the legal and regulatory system’s increasing demands upon business. 

Because their lawyers won’t do it for them. 

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Consider last week’s diagnosis (here and here) from Ken Grady — one of the legal industry’s leading visionaries: 

“NO SIGNIFICANT CHANGES IN LAW

“Today, we talk about the legal industry going through a transformation. We point to new providers, the use of new tools such as project management, and the miracle of artificial intelligence and what it can and will do.

“But, if we look carefully at the legal industry, we can see that not much has changed from 100 years ago even with these tweaks ….”

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