Start with the Work and the Technology will Follow

As firms globalize and face increased competitive pressure, many are wondering about how they should think about technology in their practice.  This is especially true for firms that want to reach clients outside their borders without costly branch office investments.   These firms should focus on increasing value to clients, managing change, and using a People, Process & Technology approach to new tools to ensure success.

Let’s start with a basic question: what is most important technology used by law firms today?

  • Paper?
  • Elevators?
  • Electricity?

To quote an old boss of mine, “technology is anything that didn’t exist when you were 14; if it did, it’s just ‘stuff’.”  Lawyers use dozens of technologies every day; the real question is, “ How should we think about using new technologies that we don’t currently use?”  Since the real focus is on new technologies, the question is why and how we should change.

Humans are tool users.  Throughout history, humans (individually or in groups) have adopted new tools.  New tools often upend pre-existing hierarchies, because they empower folks (think archers versus knights at Agincourt, or nuclear physicists versus battleship commanders in World War II) who create and use the new tools at the expense of those who were on top with the previous generation of tools.  The use of technology is not isolatd; it requires an integrated approach to People, Process & Technology.

Professionals are no different.  Lawyers are no different.  But we think we are.  Why?  Part of the nature of professional training is to emphasize the role of the professional rather than the actual work they create, and law school (unlike other profession schools like medical school) has very little orientation to ongoing innovation, group work, or the power of new tools and methods to enable superior performance.

So it’s no great surprise that lawyers in law firms frequently resist the use of new technology.  Part of that resistance lies in a rational, if shortsighted, aversion to change, and part rests on a fundamental misapprehension of technology, rooted in a misapprehension of the role of lawyers.

Let’s address the latter first. Let me suggest that the fundamental misapprehension is that lawyers in practice often think of themselves as “micro-judges” (again, no surprise, since law schools are heavily oriented to training judges and not so much to training lawyers).  They believe their job is to reason from precedent and first principles to establish rules or advice to approach a particular situation.  But when lawyers are operating in a commercial setting, what they usually do is identify the most similar problem to that which the client faces, apply a known solution that has worked before in that situation (with appropriate refinement), and then help the client implement the solution.

Many lawyers mistakenly believe that new technologies will displace the reasoning process they go through to help clients.  I think that’s fundamentally wrong.  Lawyers will remain the pre-eminent reasoners for a long time to come.  But if you look at all the other steps in the process, they are all about managing information, and lawyers have fallen far behind professionals in other fields in the way they manage information.  Lawyers are good at reasoning (not a technology-centric activity), but not so good at managing information (a very technology-centric activity).  If a big chunk of lawyers’ jobs is to help manage information, then they inevitably have to start to apply the common methods of optimally managing information.  You wouldn’t imagine a lawyer in 2014 saying “I can’t be expected to use electricity in legal practice—I wasn’t taught electrical engineering in law school.”    Electricity is part of the infrastructure of practice.  In the same way, lawyers must assimilate the modern tools for managing information.  This is a culturally hard change for lawyers, since a baseline self-definition for any professional is that they have greater expertise than the client.  But to change and adopt better methods of managing information, lawyers have to acknowledge that clients know more than they do both about managing information and about managing change.

Here are some steps to help lawyers in your firm improve managing information:

  • Maintain a robust database of the relevant materials (documents, precedents) that can help in solving the problem.
  • Share information across a team and with the client with appropriate online collaboration tools.
  • Codify and refine detailed processes to move projects (whether a single large matter or multiple, similar matters), including defining the roles of larger teams to be most effective.
  • Start the matter with as precise as possible a definition of the desired outcome and the steps to get there.
  • Think about how the information (work product) will be used over the next five years – not just over the course of the matter.
  • Assess, measure and refine the effectiveness of the approach applied.

Most lawyers understand clients’ frustration today to be around cost; but cost is only a symptom of the problem.  The real issue is complexity.  Because legal rules and business organizations are getting dramatically more complex, and because the underlying organizational information is growing radically, legal solutions (but not necessarily legal reasoning) must be prepared to cope with a much higher level of complexity.  You’ll notice that once a firm has taken some of these steps, geography becomes much less of a constraint, so it can be attractive to clients from other countries.  As you learn more, you’ll also realize that these approaches are not very expensive, so mid-sized firms can use them to level the playing field with larger firms and engage more deeply with clients.

Let’s apply this model to a familiar type of matter, mergers & aAcquisitions.

Most law firms will spend a great deal of time in an M&A deal focused on nominal risk mitigation in areas like negotiation of reps and warranties, establishing board governance processes, and even eliciting a “fairness opinion.”  Yet my experience (validated by many others) is that these steps do little to reduce risk.  The primary risk in M&A (as validated by McKinsey and lots of other research) is that the acquired company does not perform as modeled by the acquirer.  So a much better place for lawyers to spend time is with a detailed analysis of the acquired companies’ contracts to facilitate post-M&A integration.  We sometimes call that “MOLA,” or Massive Online Legal Analysis, which requires the right People, Process and Technology to implement.  Not only will the firm that applies this better approach to managing diligence help the client manage risk, they’ll also become “sticky” with the client post-acquisition, by having people and systems that have a more detailed understanding of the client’s activities, as well as developing a more innovative approach to People, Process & Technology that they can apply elsewhere.

How can law firms respond to the new complexity challenge to ensure their success?  Acknowledge reality and proceed from it.  Adoption of technology is not a magic bullet, but requires an orientation to People, Process & Technology.  Lawyers are not especially adept at managing change, and change won’t happen overnight, so just accept that and figure out how to proceed incrementally without over-investing in decision-making.  Your firm doesn’t have to “beat the bear…it just has to beat the other camper. ”  All firms will struggle with change; your firm can win if you just work at it diligently, with no expectation of perfection.  Whenever someone is tempted to say “our law firm can’t do that,” just substitute “our competitor law firm can’t do that, but we probably can.”

The way to jumpstart change is widely understood, (but of course runs against the consensus-based law firm governance model or the professional’s expectation of superior knowledge):

  • Identify motivated people who want to change—change is likely to come from new people, not just existing leaders.
  • Empower them to proceed with 2-3 experiments that try new approaches—keep them reasonably sized, don’t try to “electrify the ocean.”
  • Ask clients how you could do your work materially better.
  • Diligently study what innovative practices are being applied in other firms and legal departments.
  • Sustain the experiments for a reasonable period and objectively study the lessons learned.
  • Keep your radar tuned to what’s happening in other places you respect where they are trying these innovations.
  • Partner with innovators (including law schools) to refresh ideas and get feedback.

We are in the midst of a significant shift from what we might think of as “lawyer-centered law” to “information-centered law.”  That certainly doesn’t mean lawyers will go away, it just means that the most successful 21st Century lawyers will be as adept at managing information and change (or hiring those who can do it for them) as they are at reasoning and persuasion.

About the Author

Paul Lippe is the CEO of Legal OnRamp, a collaboration software company for legal departments.  Paul writes regularly for the ABA Journal under the New Normal.  

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