22 January 2020

Law firms still 'don't get' legal operations

Traditional legal practices taken to task as GCs and legal ops heads discuss how they can work together on day two of the CLOC 2020 London Institute

By Dr David Cowan

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“Law firms are still not getting it,” said Curt McDaniel, chief legal officer at Ferring Pharmaceutical. “The global legal services industry has already changed, the disruption is already happening. Their Kodak moment is now, and either they will implode like Kodak, or be like Fuji Film and innovate and find a way forward. The hourly rates are too high, and too remote from the needs of business.”

On day two of this week’s 2020 CLOC London Institute conference, much of the focus was on how operations can work effectively with in-house legal teams and successfully drive through change.

Fergus Speight, general counsel at Royal London, said in-house legal departments were changing and would have a smaller number of lawyers with a greater mix of legal specialists in the future, supported by legal operations teams. This, he maintained, would allow in-house lawyers to focus on “the core competency the client needs”.

The highlight of the conference was a rare public debate between general counsel and their legal operations leads in which the speakers called for an open dialogue between the legal and operations teams.

Constructive relationships

There was recognition of the danger that the appointment of operations executives might unsettle lawyers and the need for both sides – the lawyers and the operations professionals – to work hard to build constructive relationships.

Jenny Hacker, head of legal operations and company secretary at Royal London, said operations executives needed to “translate suspicions into understanding”, a process that could only be achieved by understanding the mindset of the legal team.

“When people think there is an unfair allocation of work, we get them to look at the resources and determine the resources they need for themselves,” she said.

Speaking the same language

Helen Lowe, head of operations at Easyjet, agreed it was important to engage the legal team by discussing their challenges and underlining how operations can help them.

 “Speaking the lawyers’ language is the most critical point,” she said. “Think about what they want to get out of the conversation.”

Nevertheless, Speight had a positive message for operations leaders, urging them to articulate their visions for how processes can be improved. “Have your vision, operationalise it and understand what impact it has,” he said.

And there was recognition that operations experts have plenty of weapons in their arsenal.

Artificial intelligence

“There are more options in legal advice now: automated, inhouse, alternative legal service providers: there’s a big disruption there,” said Sheila Dusseau, head of legal operations at Ferring Pharmaceuticals, although she was sceptical about the usefulness of artificial intelligence in the short-term. “I hear a lot about AI but I don’t see a lot of substance, though in the next five years we will see a lot more,” she said.

Aine Lyons, CLOC board member and deputy general counsel of software company VMware, said the CLOC community was uniquely placed to be a positive force in the industry. 

“We have the opportunity to be leading architects in designing a better future and charting a new course for people who feel rudderless and fearful of the changes ahead,” she said.

CLOC president Mary O'Carroll, Google’s director of legal operations, added: “The rapid pace of change and innovation continues unabated in the legal industry and it's increasingly difficult to stay on top of all the new legal ops technology, legal providers and best practices. 

“That's why CLOC's Institutes and communities are so critical in empowering and enabling legal operations professionals to deliver more impact in the future.”

And if CLOC gets its way, soon those hourly rates cited by McDaniel will be a genuine thing of the past. 

“CLOC gives you a view on the whole landscape," observered Alex Kelly, co-founder and COO at enterprise legal management firm Brightflag, "and looking at billing issues; for the future law firms have to build these issues into their models, and today they need to ask: 'Does the model make sense?'”

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