'Real disruption is just starting and needs to go much further'
TerraLex CEO Terri Pepper Gavulic on the law firm of future, what innovation really means and why clients aren't always right
Terri Pepper Gavulic was appointed as law firm network TerraLex's first CEO in July having previously served as its executive director and chief business officer. Prior to joining Terralex in 2016, she spent five years as director of legal support for Atlanta-based labour and employment firm Fisher & Phillips. On 5 October, she will co-chair the Law Firm Marketing Summit
How would you describe the law firm of 2030?
The law firm of the future is agile, automated and efficient. Relying on precedent isn’t just about building on matters and cases that came before, but also on capturing data and metrics from prior work that facilitates efficiency. For example, machine learning (AI) will be commonplace and used for everything from early case assessment to contract management and more. The firm rewards those who add value to clients and to the firm’s bottom line, rather than rewarding time spent on matters.
Firms have increasingly combined or joined up with large professional organisations and, as a result, are professionally managed. The number of law firms has shrunk but the firms themselves have grown.
What differentiates a successful law firm?
Successful law firms are differentiated by several key factors:
- They are agile, efficient and focused on delivering value based on their deep partnership with their clients. Routine legal work is managed by technology, so lawyers are focused on the most important and strategic business issues facing their clients.
- Law firms (or the entities that own them) make significant investments in research and business intelligence. This gives them the ability to 'peek around the corners' and see what’s coming up next for their client’s industries and sectors, and thus provide tailored business and legal advice.
- Clients are more 'sticky' because law firms have used technology to create bespoke solutions for them (for example, systems for managing licenses or contracts) and it is more costly for a client to switch firms.
Has disruption gone too far?
In my opinion, real disruption is just starting and needs to go much further. Disruption, which is coming in many forms such as technology, firm ownership and management, talent acquisition and development, has not yet gotten to the core of what really needs to change. Law firms need to change their perspective and approach from billing clients to creating value for clients. This means once and for all removing the billable hour as the primary system used by law firms. To do that, firms need to do a much better job of using the data and metrics they have available in their systems to fairly price their work. We are seeing examples of firms that are making this switch, but they are still the exception and not the rule.
What is the best legal innovation you have seen?
It’s difficult to pick one, but in my opinion, the best innovations are those that not only provide a valuable service, but also create necessary behaviour change. For example, VdA in Portugal recently launched its legal project management (LPM) program and technology. While this is something that many law firms have in place, the VdA system is much more 'baked' into the firm’s culture and produces behaviour change. This is because time entry is handled right in the LPM technology, connecting budgeting, efficiency, and timekeeping in one place.
A major innovation that was a long time coming was thrust upon the industry as a result of the pandemic. That is the ability to use videoconferencing for client meetings, court cases, etc. Now that we are all used to programs like Zoom, we are seeing changes that will be long lasting. For instance, lawyers can now work efficiently and effectively from anywhere, thus being better able to balance work and home life. A great example of this is US law firm Husch Blackwell, which launched The Link early in the global pandemic. The Link is a completely virtual office. What makes it unique is that it is treated the same as any other office in the firm, with office management, its own P&L, specific recruiting. It has been a huge success since launching with clients, lawyers and recruits. Being able to perform depositions or appear in court virtually is another positive outcome that will hopefully drive costs down and improve access to justice.
This year's Law Firm Marketing Summit will be chaired by Gavulic and Moray McLaren, co-founder of Lexington Consultants, and take place on an interactive virtual platform on 5 October. Click here to view the programme and here to book a ticket, taking advantage of the early bird rate, which expires on 3 September. For sponsorship enquiries email email@example.com.
How important are the marketing and business development functions of a law firm?
Unfortunately, in a typical law firm partnership, marketing and business development are not as important yet as they should be. It is still difficult to get a high-level seat at the table. The functions and professionals in these roles are still undervalued and all too often considered fungible – an expense item in the P&L and not value creators.
These roles would be vastly more valuable if firms would permit more client listening to be performed by these professionals and considered them as strategic voices at the highest levels of firms. For example, if a firm truly believed the marketing and business development function was important, it would include the team leader on its management or executive committee, whether that be the CMO or the CBDO. Often these professionals aren’t even invited to the meetings – or to partner meetings either. We quite often see marketing and BD professionals forced to spend too much time on defending their role to the detriment of being able to do the role.
What could Marketing and BD do better?
Marketing and business development should fight to separate the strategic aspects of the role from the operations and tactical components. Firms need all three parts but need to invest in personnel and technology specifically devoted to each. It is difficult for a CMO to be a strategic partner when they are seen to be updating bios on the website or planning meetings.
Further, marketing and business bevelopment should be listened to about which aspects of their role add value and which could be eliminated as time wasters, such as certain directory submissions or event planning activities. If the CMO or CBDO could truly become the voice of the client into the firm, that is a game changer.
Should clients behave differently?
The easy answer is that 'the client is always right' and the vendor (the law firm in this instance) needs to adapt. But that is not fair and there are ways that clients could behave differently that will start to facilitate the needed change to value creation. Mostly it’s a matter of clients 'walking the walk'. Here are two illustrative examples:
- Clients often say they want a valued partnership from their external lawyers, and they want the law firm to be business savvy and accept some risk in their work. Yet often these same clients push for discounts on rates rather than another pricing structure that fosters the goals they articulate.
- Clients always say they want their lawyers to really understand their business and industry so the advice they receive is tailored to their needs. But if these clients turn down requests for client feedback sessions or other types of client-listening that’s counterproductive. Likewise, clients who request RFP responses from law firms but limit the questions a firm can ask when preparing their response and solutions is putting up unnecessary roadblocks.
Please describe your current role
I am the CEO of TerraLex, a global network of leading independent law firms in more than 100 countries. I oversee all aspects of the company with a particular focus on business development – our network regularly helps our members collaborate on pitches and identify client needs that can be filled with a unique solution from a group of independent law firms.