Roland Vogl is the executive director and lecturer in law for the Stanford Program in Law, Science & Technology, and the co-founder and executive director of CodeX – The Stanford Center for Legal Informatics.

More than ever before, lawyers in the U.S. and other parts of the world pay attention to legal innovation. Many firms have hired chief innovation officers and/or put a partner in charge of tracking innovation pertaining to the firm’s particular area of business. They are also hiring more and more legal project managers who are tasked with making sure that a firm’s expertise is packaged and made available to the clients in the most cost- and time-efficient way possible. At the same time, corporate legal departments are hiring legal operations professionals who specialize in the many ways that technology can make legal processes more efficient. In recent years, we have also witnessed an explosion of legal tech startups that provide a broad range of services to law firm or in-house customers. Generally speaking, we see innovation in legal research technologies, in big data analytics, in legal expert systems, in legal infrastructure (such as practice management and lawyer-client match-making marketplaces), and in online dispute resolution. At times, law firms and corporate legal department find themselves overwhelmed with the sheer number of new offerings in the legal tech space, sometimes resulting in a reluctance to try out new solutions.

CodeX — the Stanford Center for Legal Informatics — is focused on researching and developing technologies in the realm of computational law. Computational law is the branch of legal informatics concerned with the automation and mechanization of legal analysis. To that end, it leverages rule-based as well as statistical AI-based techniques (e.g., machine learning and Natural Language Processing). The former rule-based techniques are used to create new “TurboTax”-like solutions for specific areas of the law or for computable self-executing contracts. The latter statistical AI techniques are used to conduct analytics in legal settings, including so-called “predictive analytics.” In essence, predictive analytics is the use of data, statistical algorithms, and machine learning techniques to identify the likelihood of future outcomes based on historical data. The CodeX LegalTech Index, an open source database that at this point counts more than 730 legal tech companies, currently includes more than 38 companies in the analytics space. Those companies are innovating in search, eDiscovery, judicial/litigation analytics, contract analysis, IP analytics, legislative prediction, predictive policing, and lawsuit financing. The use of predictive analytics in law raises important questions. First, there are questions around technical feasibility. Getting access to high-quality training data to build predictions is challenging because most legal documents are in unstructured text form. Secondly, there are questions around transparency and explicability. These become problematic when data is used to not only show trends or patterns to a lawyer, but also to predict legal outcomes or to automate certain legal decisions. Systems that leverage predictive analytics and mechanize certain aspects of legal decision-making must be transparent and verifiable.

We are also seeing an increasing use of multi-sided lawyer platforms to foster new ways of finding or collaborating with clients or other lawyers. Some companies provide both platforms for lawyers as well as predictive analytics capabilities for their users (e.g., contract life cycle management solutions that also provide contracts analytics aimed at predicting risk in transactions; or lawyer client match-making platforms using machine learning and big data analytics to make the perfect match).

Adopting new legal technologies in any legal operation — be it in a law firm, corporate legal department, in government, or the judiciary — is a non-trivial undertaking that frequently reveals the challenges a particular organization faces when undergoing change.

There is no doubt in my mind that future legal professionals will have to approach legal solutions through the lens that an engineer might use when solving a computational problem. In addition to providing their legal expertise, they will have to think about how technology can be leveraged to distribute their expertise in the most efficient and cost-effective way. There will be technologies that replace certain tasks that are currently handled by human legal professionals, and there will be technologies that enhance human legal professionals. In any event, this is the time to rethink how the business of law can work. And there are already many great examples out there that show how legal services can be provided to clients in efficient and cost-effective ways, while still being profitable for lawyers. 

Today, legal marketing professionals are playing an increasingly strategic role for law firms. These professionals bring to the table both the business acumen and skillset necessary to add unique substantive value in helping to drive the business of the firm. This underscores a very important value-add to the firm: providing support to attorneys in the critical area of business growth at a time when budget and resources are stretched thin.

According to a 2016 joint survey[1] from the Legal Marketing Association (LMA) and Bloomberg Law®, more than 80 percent of law firm attorneys cite a lack of time as their primary challenge in developing new business for their firms. An additional 30 percent cite lack of staff as a factor, while another 21 percent point to budget constraints. This comes at a time when law firm focus and emphasis on business development and marketing continues to increase because of internal and competitive pressures. The survey states that 67 percent of attorneys agree their law firms are increasing their emphasis/focus on business development and marketing efforts.

For legal marketing, this move into the role of strategic business partner marks the next evolution of the profession. For more than four decades, legal marketers have played an important role for law firms in such areas as communications, market research, ad campaigns, and event management. Through the years, that role has continually refined with the emergence of such vital tools as mobile and social technologies, and the growing role of Big Data, all making information more readily available and accessible.

As attorneys face the pressure of generating new business, that role evolves even more, with marketing professionals undertaking an increasingly diverse set of roles and responsibilities. These roles touch practice and process improvement, business planning, attorney coaching, and client service and relationship management.

A 2017 joint study[2] by LMA and Bloomberg Law furthers this point, demonstrating a mindset shift from the practice of law to the business of law, with marketing and business development activities being largely aligned with driving revenue for the firm. In fact, the data shows more than 82 percent of leading marketing/business development professionals direct initiatives related to revenue growth.

Today, the strategic legal marketer is one that is considered to be an advocate for the voice of the client, a collaborative partner with all law firm business functions to deliver client value, and extremely engaged with business planning and client service/relationship management initiatives in these fundamental ways.

Invested in the Client

Law firms increasingly place primary emphasis on developing broader and deeper relationships with current clients and growing organically in the practice areas and geographies where they are already strong. Legal marketers are committed to influencing and leading change to better serve clients.  

When it comes to differentiation, professionals surveyed by LMA and Bloomberg Law[3] point to investment in client experience and development of greater knowledge of, and expertise in, their clients’ businesses as the most effective tactics. These two items reflect a shift to a client-first mindset and mirror the growing customer experience trend at the forefront of many consumer products and B2B businesses.

Also reflective of a growing client-first perspective, marketing/business development professionals are clearly focusing business intelligence activities on better understanding their clients by tracking news (87 percent), tracking company information (76 percent), and tracking industry data/trends (71 percent) to prepare for client meetings and deliver news/current awareness updates to attorneys.

Refining Core Skills

As legal marketing professionals look to further position themselves at the center of the firm’s evolution, the need to consistently refine their set of skills is vital. These skills must be founded in both the business and practice of law.

The Legal Marketing Association (LMA) — the “authority for legal marketing” with 4,000 members — defined the core set of skills for legal marketers in a foundational resource called the Body of Knowledge (BoK). The BoK clearly defines the essential and accepted domains, competencies, and associated skill sets within the legal marketing profession at every level.

This resource helps legal marketers hone their skills, assists legal marketing managers to develop themselves and their teams, and provides a universal benchmark against which legal marketers can be assessed. We invited leaders in each of the six BoK core competencies to share their insights on key trends and developments in each area.

The Business of Law

Those marketing and business development professionals who are appropriately proficient in the business of law understand the legal profession and are able to evaluate firm financial and operational performance, build strategies to leverage market opportunities, and implement practices that maximize performance.

When you look at the specific competencies that define these abilities, you start to see important areas of expertise that should be familiar to anyone who aspires to lead within a law firm.

Many competing opportunities exist, which means that legal marketers must play a role in being able to choose those with the highest return and then collaborate to put them into action. The work of realizing opportunities must integrate the efforts of multiple departments. For example, a new practice area will require new promotional materials, but it will also likely involve recruiting new attorneys to fill in missing capabilities; other functions will also have an important role to play.

The “business of law” is changing rapidly because of two factors. The first is technology, which requires efforts across multiple fronts (Technology Management is one of the BoK core competencies); the second involves the evolving nature of client expectations. Leaders understand how these two forces will change a firm, and can be prepared to address and exploit them. Leaders must show the way and not respond after events have already swept by.

Increasingly, an important feature that will differentiate successful and unsuccessful firms is the capacity to bring all talents to bear, irrespective of their position in the firm and legal training. Firms must draw on the talents, perspectives, and energies of all attorneys and professional staff; the perspectives of all roles and responsibilities should inform strategies and tactics.

Client Services

In order to build revenue, firms need to not only focus on securing new business, but also on retaining current clients. According to Harvard Business School and BTI,[4] profits will increase by 25 percent or more when client retention rates are elevated by 5 percent. 

When focusing on client retention, one way for firms to differentiate is through client service. Legal marketers continue to play an important role in this function by implementing client service initiatives using the following techniques:

1.     Establish Client Service Standards Immediately – Instituting a process for client intake, therefore ensuring a smooth onboarding with the firm, can really set a positive tone for a client relationship.

2.     Understand the Clients’ Business – In addition to helping attorneys study and grasp client objectives, industry trends, news, and policies; legal marketers also recommend attorneys take time to visit the client and really ingrain themselves in the working of the company.

3.     Keep Clients Informed – Attorneys should be the source of information pertinent to a client’s business. Rather than relying on general firm emails as a means of informing clients of legal developments or upcoming events/webinars, legal marketers counsel attorneys to email content directly and/or pick up the phone to discuss. They also recommend that attorneys establish benchmarks for delivering regular status updates on legal work. Feeling uninformed can result in client frustration. Clients should never have to ask for an update.

4.     Request Feedback – Legal marketers work with attorneys to conduct post-matter reviews so they can hear directly from the client what the firm did well and what could be improved upon. Legal marketers make note of the feedback, develop a tailored action plan for the next matter, and leverage that information across firm clients. Conducting annual client assessments are another avenue for securing feedback on the firm’s overall performance, responsiveness, quality, and consistency. These in-person meetings typically yield valuable, actionable client intelligence, and are often more open and productive with legal marketers in attendance to help facilitate the conversation and provide an objective assessment.

Communications      

Effective communication includes knowing the audience; communicating in a clear, concise, and timely fashion; maintaining a good demeanor; ensuring accuracy (and moving quickly to correct any inaccuracies); and maintaining a resourceful mindset.

Consider this: A marketing liaison on a high-profile project that involves a firm’s IT department and senior partners is instantly faced with three different audiences, each with its own communications style. Some issues that need to be considered are how to effectively communicate the project timelines to these audiences; how often to provide updates; and how to receive information from one audience and distill it for another so that all understand the status of the project at any given time.

The adage is true: Your knowledge is useless unless you can effectively communicate it to an intended audience. This is why having a resourceful mindset is so important. In the scenario above, the strategic legal marketer understands basic IT lingo and then how to translate that into an update for the senior partners and a relevant selling point to convert new clients. Looking at the reverse, it’s likely that the marketer will receive very limited information from the senior partners and have to create a list of actionable next steps for the IT team and/or marketing team.

Strategic legal marketers are effective communicators who are able to receive and distribute complex information in a way that keeps stakeholders satisfied.

Technology Management

Twenty years ago, a marketer’s skills included good writing and having a mastery of design, PowerPoint, print, direct mail marketing, public relations, and event marketing. Today, a marketer additionally must have mastery of the large number of technologies available to effectively market his or her organization.

Marketing has become so technological that many organizations now have a “marketing technologist” — who is considered a bridge between IT and marketing — a technologically savvy professional with a deep understanding of data, analytics, and legal operations coupled with the creative mindset to transition raw data into actionable insights to drive marketing results. But, all marketers must have a mastery of different technologies in order to apply them appropriately.

Marketers must be good technologists for a few simple reasons:

1.     The people that we reach are online;

2.     The ability to engage online is so effective; and

3.     Technologies can amplify marketing efforts effectively.

Technologies used to market

The role of marketing departments in law firms usually spans traditional marketing — the action or business of promoting and selling products or services, including market research and advertising — and sales pipeline management — the action of turning qualified prospects into paying customers.

Consumers can now engage with a company at an event; online through web pages, videos or mobile app; through printed materials; or via social media. Marketers understand the strengths and weaknesses of each of these media and channels — including their costs and potential returns on investment (ROI) — and understand which ones to use for a particular marketing goal. Marketers are proficient at providing a seamless experience, regardless of channel or device.

Business Development

Much like law firms themselves, legal marketing professionals are challenged constantly to prove their worth by adding value for their “internal clients.” Marketers today bring to the table well-honed business development skills and the ability to provide guidance and support to attorneys as they work to expand their books of business. Marketers leverage sharp business development skills and enable lawyers to put their best foot forward in pursuing work.

Many law firm marketers are called upon to provide “coaching” for the lawyers they support. To adopt a sports analogy in which lawyers are the players, business development, when well executed, can and should encompass not just the role of the game-day coach on the sidelines, but that of the team’s entire coaching and front office staff. In winning legal work, as in sports, securing a victory takes more than just fielding the most talented team. Rather, it requires critical behind-the-scenes planning and preparation that all falls under the rubric of business development. This includes assessing the landscape and the opponent, selecting the most effective combination of players, and educating them on the particulars of the challenge ahead. This helps them to develop a unified approach that utilizes each team member’s strengths, ensuring that they practice and condition themselves to identify and seize upon opportunities that may arise, developing contingency plans for how to respond when things don’t go as planned, and being nimble enough to react when momentum shifts. Although execution and implementation may ultimately fall on the shoulders of the players, there is no doubt that the most respected coaches are those who, time and time again, put their teams in the best possible position to win.

By taking on an active role in business development and collaborating with lawyers to map out game plans and training regimens that ultimately yield success, legal marketers are helping to advance the goals of the organization.

Marketing Management and Leadership

 A highly functioning marketing organization transforms what would otherwise be random acts of marketing into systematic efforts that help achieve a firm’s strategic objectives, thereby amplifying the value of the function.

Understandably, managing and leading a function is an advanced skillset that requires both “IQ” and “EQ.” Intelligence Quotient, or IQ, refers to a person’s intellectual abilities. Emotional Quotient, or EQ, measures a person’s ability to identify and manage emotions, both their own and those of others, which helps them create the relationships that enable collaboration and leadership.

The intellectual challenges for a marketing leader start with creating a vision for the function that articulates the difference it can make for a specific law firm. Then, the choice of organizational structure must support the vision, and reflect the culture and strategy of the firm. The next task is designing the work processes that will operationalize the structure, including identifying the marketing technologies and tools that will best support those processes. Finally, a seasoned marketing leader will be able to develop a resource plan, including a budget, to execute the vision.

Of course, people are required to bring the organization to life, making personnel management a central component of successfully leading a marketing function. Attracting, developing, and retaining high-quality talent requires emotional intelligence and leadership ability. These skills can be cultivated and strengthened over time, and the dividends of doing so are high. Instilling teamwork and building a collaborative culture within the function leads to higher productivity and seamless service to the firm. It encourages everyone to contribute and creates joint accountability for the function’s performance. Investing in training and coaching programs further elevates skillsets and helps retain valuable talent, all of which has a positive impact on morale.

An effective marketing leader is also able to adroitly manage vendors and consultants to maximize the value received. These external resources bring several key benefits to the table, including: insight into best practices; the ability to outsource subject matter expertise; competitive intelligence; pressure release on strained internal resources; and professional development and skill enhancement opportunities for the internal staff who work with them. The strategic legal marketer has a keen sense of when and where to use external vendors and consultants in order to provide much needed flexibility.

 A Role Refined

 Today, the role of marketing and business development professionals within law firms looks much different than it did just a few years ago. That role will likely evolve even further in the years ahead.

As new demands continue to place additional pressures on business development and client service, law firms can increasingly look to marketing and business development professionals to play a more strategic role in growing the business. For law firms looking to best position themselves for future success, marketing and business development professionals can and should play a valuable role, particularly when firms are mindful of providing the necessary tools, resources, and support.

[1] Legal Marketing Association & Bloomberg Law, 2016 Joint LMA-Bloomberg Law Survey Report, https://www.legalmarketing.org/bloomberg-lma-survey.

[2] Legal Marketing Association & Bloomberg Law, 2016 Joint LMA-Bloomberg Law Survey Report, https://www.legalmarketing.org/p/cm/ld/fid=2674.

[3] Id.

[4] Frederick F. Reichheld & Phil Schefter, E-Loyalty: Your Secret Weapon on the Web, Harvard Bus. Rev. (July-Aug. 2000), excerpt available at https://hbswk.hbs.edu/archive/the-economics-of-e-loyalty. 

At its core, the argument (against advertising) presumes that attorneys must conceal from themselves and from their clients the real-life fact that lawyers earn their livelihood at the bar. We suspect that few attorneys engage in such self-deception.… Bankers and engineers advertise, and yet these professions are not regarded as undignified.

-        Bates v. Arizona, 433 U.S. 350, 369 (1977)

The business of law has radically changed over the past 40 years. This change was underway before Bates v. Arizona, in which the Supreme Court authorized advertising. The case transported the business of law out of the shadows and into the open. It meant that lawyers had the constitutional right to treat the practice and profession of law as a business.

The case was brought against John Bates and Van O’Steen, partners in a two attorney legal clinic they started
 almost right out of law school. While the case involved only a small printed ad in the local newspaper advertising reasonable priced legal service, the ripple effects from the decision ultimately have produced a tsunami going beyond the United States. It affected the entire world’s legal profession. Internationalization and now globalization spread the idea around the world that law is indeed a business with advertising, marketing, pictures, websites, logos, directories, rankings, mergers, bankruptcies, alternative structures, consultants, networks, takeovers, and more.

Ethic rules were not ignored, but they simply could not apply when dozens of firms had more than 15 offices outside of London or New York. Advertising their offices in the United States meant indirectly advertising the offices in other countries. Local firms remained handcuffed by the rules and sought out business alternatives to protect their market. The underlying ethical rules governing the practice and the business of law began to erode.

More competition meant that more services were offered and more products were created to allow firms to openly compete. Products and services were now aimed at getting a competitive advantage and increasing profit. Almost anything seemed to be okay for the small advantage of obtaining and keeping a client.

However, the business of law was still largely tethered to the earth until the mid-1990s.

The Internet and communications technology propelled the business of law into a new era. The Internet, while applicable to every business, has asserted a profound effect because law is a business based upon information. In the practice of law, it is information on clients and opponents.

In the business of law, it is information on business practices.

The authors of this compendium have explored each aspect both on the micro- and macro levels of the business of law. Each of the chapters in this book relates back to the changes that have manifested themselves. Consultants have become specialists; in fact, everyone has become a specialist.

So where does the business of law go from here? In my opinion, five primary macro trends will push the business of law into uncharted waters.

Law firms’ structures will change. Five of the very largest law firms have opted to become networks using Swiss vereins as a way to accelerate their expansion. They have copied the largest accounting networks, whose brands are recognized worldwide. This will push the largest firms to move even farther toward a new business entity model. This will require restructuring, redeployment of resources, training, and technology to manage the attorneys in culturally diverse offices. The expertise to accomplish this will be found both in-house and with outside consultants who can lead the firms into the unknown.

Branded firms will compete with the largest independent regional or national firms. The branded firms will also increasingly compete with local firms in order to effectively and efficiently utilize their resources. This will require new services and products for both the largest and the smallest firms.

At the same time, outside of the United States, the PwC, Deloitte, KPMG, and E&Y legal networks will rapidly redeploy into the legal market by focusing initially on tax, mergers and acquisitions, labor, immigration, and other commercial areas. This will be a cause for concern for even the largest independent firms, given the resources and organizations of the Big 4.

Social media marketing will come into its own as the Internet generation takes leadership positons in law firms and corporate legal departments. This will allow the smallest firms to compete with the largest. Specialty firms will become even more specialized and be able to market their services using social media.

Technology combined with redefining legal services has resulted in the unbundling of services traditionally provided by law firms. Firms and corporate clients will have an opportunity to take advantage of these services. The leaders and influencers will affect the pace and development of these alternatives. Both law firm and corporate counsel leaders will create alliances with the alterative resource providers.

John Bates and Van O’Steen were leaders who challenged the legal profession. Today’s leaders in legal media, consulting, networks, law firms, bar and professional associations, legal process outsourcing, and other services and products will continue this tradition by posing the same challenges.

 Law is a profession – Law is a business.   The two are inseparable.

Joseph Borstein Co-Founder and CEO of LexFusion and was a managing director with EY. He is a former global director of legal managed services at Thomson Reuters, formerly Pangea3, and previously served as director of Litigation Solutions. In this role, Borstein lends his expertise to existing and prospective clients by providing them with the latest information regarding the law, ethics, and best practices in the rapidly evolving world of electronic discovery. Clients will likewise benefit from his extensive experience in data collection and preservation.

     Prior to joining Pangea3, Borstein practiced law at the New York office of Kasowitz, Benson, Torres & Friedman LLP, where he litigated complex civil cases in federal, state, and administrative courts. He has extensive experience in law suits related to securities fraud and market manipulation; civil racketeering (“RICO”); intra-corporate disputes; contract disputes; disputes from derivatives and other sophisticated financial products; as well as S.E.C. enforcement actions. He also has personally managed and conducted complex document reviews or productions in litigations involving regulated financial institutions, insurance companies, real estate investment trusts, hedge funds, private equity consortiums, and pharmaceutical companies. Borstein received his B.A. in psychology and his J.D. at the University of Pennsylvania. He is located in Pangea3’s New York City headquarters.

Edward Sohn SVP, Head of Solutions at Factor and was  a managing director with EY. Previously, he worked at Thomson Reuters. He contributed his extensive experience in managing all aspects of the eDiscovery process including preservation, collection, review, production, and fact investigation, ensuring that Thomson Reuters LMS clients received superior quality through cost-effective and efficient processes. His role involved developing the strategy for new client engagements, managing client-dedicated project teams and mentoring project managers. 

     Prior to Thomson Reuters, Ed was a senior attorney in business litigation at King & Spalding, LLP in Atlanta, Georgia. At King & Spalding, he represented financial institutions and Fortune 500 companies in matters related to civil and regulatory financial claims, class action and securities litigation, government investigations, healthcare litigation, and commercial disputes._

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Biglaw is boring. In mid-2014, we pitched a regular column on legal entrepreneurship and alternative legal services providers to a leading legal blog, Above the Law (“ATL”). In our pitch, “our holy purpose” was to prove to the broader community of lawyers that traditional players (Biglaw firms, in-house departments, government entities) are no longer the only show in the legal-town, and certainly not the greatest show on earth.[1] We wanted to show that there are awesome alternative legal businesses employing some of the nation’s best legal talent, changing the legal system for the better, and bringing home the proverbial bacon. ATL agreed that we had unearthed a story that wasn’t being properly covered and graciously gave us a bi-monthly column, which we dubbed “alt.legal.”

Since the launch of the alt.legal column, we have published a number of stories on legal startups and entrepreneurs. We have traveled the country interviewing legal innovators, writing about everything from legal hackers to legal machine-learning to robot law enforcement to Biglaw refugees reinventing litigation management. And we didn’t have to search far — our inboxes have been inundated with new stories of legal entrepreneurs, alternative legal service providers, and legal technologists working hard to change the game for the better.

The market has taken notice: measured in investment, venture capital is flowing into legal startups at an accelerating pace ($458 million in 2013, up from $66 million in 2012).[2]

Bottom line, the “practice of law” is being deconstructed, redefined, and opened to new players. Specifically, the forces creating this transformation are: (1) market pressure from upstart entrepreneurs and alternative service providers; (2) value and expertise imported from models of process and business efficiency; and (3) structural changes challenging the traditional boundaries of legal practice. How big are these changes? Here are some examples.

·       Our company (a formerly wholly-owned subsidiary of Thomson Reuters and now a part of EY (2019), employs approximately 1,500 full-time attorneys (largely in India), conducting large scale legal support projects for many of the Fortune 100 and AmLaw 100 firms. We believe we are the largest private employer of attorneys in a country of 1.2 billion people.

·       According to Legal Business magazine, a U.K.-based trade publication, one of the top 10 “overall advisors” in the U.K. market is Axiom, a legal services company that is not a law firm.[3] kCura, the developers of e-discovery software Relativity, received $125 million from San Francisco-based ICONIQ Capital to invest in people and technology.[4]ccording to Legal Business magazine, a U.K.-based trade publication, one of the top 10 “overall advisors” in the U.K. market is Axiom, a legal services company that is not a law firm.[3] kCura, the developers of e-discovery software Relativity, received $125 million from San Francisco-based ICONIQ Capital to invest in people and technology.[4]Legal Businessnot a law firm[3][4]

While we are fascinated by the disruptive changes brought by technology and globalization, we have focused the remainder of the article on legal managed services (“LMS”) companies. These companies are corporations (not partnerships or law firms) conducting large-scale legal-support services, traditionally performed by law firms or corporate counsel. LMS companies are not staffing agencies that add temporary body count to law firms or corporate legal departments. They are stand-alone businesses whose clients are law firms and corporate legal departments. Over the past decade they have proven their ability to be better, faster, and cheaper than the traditional legal players in a wide variety of legal-support tasks (contract lifecycle management, litigation document review, M&A diligence). They have achieved this by implementing: best-in-class business processes; high-end, permanent talent in lower-cost jurisdictions; permanent task specialization and training; and dedicated technologists and cutting-edge technology.

Over the following chapter, we will discuss: the rise of legal managed services companies; the workflows, processes, and technology they employ; and the future of the legal business structure. Finally, we will touch on the benefits (yes, benefits) to law firms (even boring Biglaw firms) and what this radical change all means.

The Rise of Legal Managed Services

Axiom is based in the U.K. and works closely for clients in commercial transactions, M&A, litigation, and other areas. Axiom’s lawyers are highly trained and carry top credentials. But Axiom is not a law firm. It is a corporation that places its attorneys through insourced and outsourced solutions. Like many good companies, Axiom prides itself on operational efficiencies that are rarely found in the traditional law firm structure, like low-cost overhead, a culture of agility and flexibility, and a centralized command structure. And perhaps the great distinction is that Axiom can — and does — receive outside investment, operating formally in a way that blurs the line between business and law.

As mentioned earlier, Legal Business magazine proudly proclaimed that Axiom had breached the top 10 “legal services providers” in the U.K. Outside of Axiom, the Legal Business list of prestigious “firms” included all the usual suspects (Allen & Overy, Clifford Chance, Freshfields, Linklaters, Slaughter and May, and DLA Piper). This was the first time a non-law firm has appeared in these ranks, but it will not be the last. Legal Business noted that this breach of the coveted top 10 was “significant” and “demonstrate[ed] how non-law firm providers are winning over some bluechip clients.”[5] In our view, this breach demonstrated something else: alternative legal services providers are not just “winning” the business of “bluechip” clients but are gaining their respect and trust. Axiom has won that ephemeral prize every attorney desires: prestige.

For those that have been following the alternative legal space, Axiom is just one of many recently birthed companies fueling this transformation. Like Axiom, many of them find their heritage in entrepreneurship and investment. While Biglaw firms rely heavily on their storied history and prestige, many of the new heavy hitters were birthed after 2000. Companies like Axiom, Pangea3, Quislex, and UnitedLex are relatively new players, but are steadily increasing their headcount, revenues, and market share.

The increase in the legal market share for LMS businesses explains unusual trends in the overall legal services marketplace. The New York Times reported on detailed research into the legal market HBR Consulting, a leading provider of legal metrics. This research found that companies worldwide increased their total legal spending by 2 percent in 2014. Yet, during that period spending on outside law firms fell 2 percent.[6] Surely some of this is attributed to corporate counsel insourcing functions that were previously given to Biglaw firms. But we believe much of the work is being sent to LMS providers, which have become part of the corporate legal departments’ growing arsenal for improving efficiency. At Pangea3, we have seen a double-digit spike in demand over this time period, and we hear that our competitors have too. The legal services pie is getting bigger, but law firms’ share is decreasing.

Still not convinced? Read this year’s report published by Georgetown Law Center for the Study of the Legal Profession and Thomson Reuters Peer Monitor on the state of the legal market. That report squarely addressed how “the market for legal services has changed in fundamental — probably irreversible — ways.”[7] The report then defines “the dominant trends impacting the legal market in 2014 and key issues likely to influence it in 2015 and beyond.”[8] The report recommends that law firms need to accept, anticipate, and act on the growth in market share of non-traditional competitors.[9]

The trend is becoming clearly observable, but we are often asked why this is happening. Why, seemingly out of the blue, are LMS companies are growing so quickly, and why are they able to tackle this work better, faster, and cheaper than the traditional legal players? Part of the answer depends on circumstance and the forces creating a crucible of efficiency after the Great Recession in 2008. But a more interesting answer comes from the business world, which has always implemented project management, specialization, and technology optimization to improve quality, efficiency, and low costs. LMS companies represent the long overdue application of these practices to the law.

Legal Managed Services: Project Management, Specialization, and Technology

LMS businesses do not include providers of temporary staff augmentation or part-time contractors.

As the name indicates, managed services employ full-time professional staff, business excellence, principles, and process efficiencies, while leveraging a globalized workforce and adopting technology.

Project Management

This is where the traditional legal industry has simply lagged. For the most part, and with some modern exceptions, law schools simply do not teach project management. As a result, most of the powers-that-be in Biglaw firms simply do not know anything about project management and do not see it as a core skill their new attorneys need to grasp. Some firms are seeing the light (employing project management strategies in the practice of law), but many attorneys resist the change, protesting that bespoke, tailored legal advice should not be jammed into a predetermined workflow. It is fair for Biglaw partners to debate the merits of project management in their practice of law, which is often as much art as science. But there’s no debate that for process-driven legal tasks (large-scale contract analysis, derivative documentation, or litigation document reviews), proper workflows, and team management are of paramount concern.

In fact, as the volume and complexity of legal support work has increased (due to the exponential increase in electronic communications), managed services providers gained prominence by proudly implementing the business world’s best practices and statistical error reduction methodologies.

Methodologies such as Lean Six Sigma ensure statistically validated work and allow errors to be tracked, corrected retroactively, and eliminated going forward. These project management techniques both reduce the number of errors in large-scale legal support projects, while ensuring attorneys complete tasks in a measurably efficient and productive way. Better, faster, cheaper.

Specialization and Domain Expertise

Biglaw firms often do not hold “non-lawyers” in high regard, but LMS companies believe in that bringing legal, process, and business expertise together creates a better final work product.

For example, while Pangea3 employs well more than 1,000 full-time attorneys, we also employ and empower experts in Six Sigma error reduction (some of whom are certified Black Belts), experienced project managers, experts on financial compliance (some of whom are CPAs), and e-discovery technology experts (many who are CEDS-certified).

These differentiators drastically improve the quality of the work product and ultimately spell the difference between a traditional LPO (legal process outsourcing — think labor arbitrage) provider and a true Legal Managed Services provider (think expertise and specialization). An LMS provider can tackle more sophisticated work, such as organizing and managing the facts of your case using sophisticated case management tools, freeing up Biglaw lawyers to do what they do best: win their cases and provide legal advice.

Technology Enablement

As discussed, a key force driving the need for high-quality Legal Managed Services companies is the staggering volume of “Big Data,” and the burden and complexity of the high-volume legal-work it creates every day. Whether it’s a document review in high-stakes litigation or a review of corporate policies for the compliance department of a multinational, the stakes are high, and a critical “hot” document could be anywhere. Technology created Big Data, and it has finally begun to provide solutions to the Big Data problem. However, Biglaw firms and corporate legal departments rarely have fluency with the rapidly changing technology solutions such as machine learning and data analytics. These are rare skill in the traditional legal field, but are standard offerings for LMS companies.

Quality LMS providers possess this expertise and employ capital and human resources to ensure they remain on the cutting edge. They are able to wield advanced technology with efficiency and good judgment, and can typically consult traditional lawyers on the right tool for the job at hand.

This again allows attorneys to maintain their primary focus on the traditional practice of law.

Accordingly, firms are able to decrease the total cost of representation, while maintaining the quality clients expect from their trusted outside counsel. With the same tools, but in the right hands, the individual lawyer is able to maximize time spent on important legal issues.

Future Reforms in Legal Business Structures

Speaking of the practice of law, in the United States, legal practice is highly defended and protected from “non-lawyer” interlopers by the ABA and state-bar associations. Non-lawyers cannot share profits with lawyers and law firms cannot sell equity stakes to business professionals. A non-lawyer engaging in or profiting from legal practice will be punished, and hours of scholarly debate focus on when lawyers are or are not providing “legal advice.” Originally intended to protect the objectivity of counsel from conflict, in the modern legal practice, this prohibition may have become more harmful to the consumer of legal services than good.

In the U.K. and some other jurisdictions, things are changing fast. By defining and dividing out specific areas of practice, the new U.K. laws encourage more competition from “non-lawyers.” Critically, the U.K. now allows for a new structure of law firm called alternative business structures (“ABS”). Critically, ABSs allow non-lawyers to sit in professional, management, and even ownership roles. In the past few years several large consulting and professional services companies have obtained ABS status — including KPMG, BT, and PriceWaterhouseCoopers.

In our view, this simply makes too much sense to ignore. Shouldn’t estate planning, for example, involve experts who provide tax and accounting insight alongside legal advice? Shouldn’t high-volume discovery matters also include e-discovery technology and IT consulting? Why don’t technology consultants include IP attorneys and their wisdom in their offering? Wouldn’t clients benefit from HR consulting paired with labor and employment legal practices? ABS entities will begin to create these innovative, integrated legal/business offerings and compete globally for the business of multinational companies. We struggle to see how they do not end up claiming market share in the States and “arguably open the world to legal services providers.”[10]

The American Bar Association (“ABA”) has investigated this in the past, but even small steps in this direction were halted. Given the pressures, however, and the enormous potential for innovation and profit, incremental steps forward are anticipated by many. In the meantime, LMS providers will play a big role in bridging this gap and allowing U.S. Biglaw to compete. We foresee future partnerships between Biglaw and LMS providers to be a necessary interim step until our laws are liberalized.

Legal Managed Services: Benefits for Law Firms

If LMS companies are eating into Biglaw’s market share, it would stand to reason that they are natural-born competitors. After all, it was not long ago when outside counsel collected virtually all fees related to representation — from legal research, to long-distance telephone calls, to document review, to closing arguments at trial — as revenue to the law firm (even with some of those costs as pass-through).

Today, with technology startups, and LMS companies on the scene, law firms are seeing revenue from traditional legal support tasks departing coming off their books. And the Biglaw firms are perceiving this “threat” from LMS providers: according to a recent survey, 68 percent of respondents from large firms believe that non-law firm providers of legal services are either presently taking their business or pose a threat to do so.[11]

We respectfully disagree. If leveraged correctly and incorporated as part of a larger strategic approach, the deployment and integration with LMS companies can result in new business lines, market advantages, and increased job satisfaction resulting from an increase of the actual practice of law.

Project Management is Not What Lawyers Signed Up For

Today’s law firm attorneys are asked to do the impossible: handle increasing workloads and increasing the quality of work, while somehow simultaneously lowering the total cost of representation and improving overall profitability and margins. These tasks are not easily achieved in any industry, but they are particularly difficult within the constraints of the traditional law firm operating model. This model (the traditional pyramid) includes costly physical overhead and personnel, a culture of following precedent, and a decentralized command structure.

Ultimately, legal managed services present two major advantages. First, managed services can free up law firm associates to spend their time on the most complex, outcome-determinative work, allowing them to achieve better results for their clients. Second, they allow firms to be agile and create value within a new reality. As a result, firms can become more competitive, winning new clients, and increasing profits on work with existing clients.

Lawyers Actually Practicing Law Again

Working strategically with LMS companies can help top firms improve their ability to recruit, train, and retain the world’s top legal talent by sending a clear signal to the marketplace that a career at their law firm will not revolve around years of inefficient document review or other high-volume, repetitive (but important) work. Furthermore, attorneys in such firms will more quickly develop their skills in the traditional practice of law, including oral advocacy, witness preparation, and legal writing. Associate morale can improve by reducing the tremendous cost of a revolving door, and increased retention also improves the ROI on training associates on the firm’s practice.

A Competitive Edge

Law firms can also deploy managed services to create a competitive advantage. In an RFP or fixed-fee scenario, the firm presenting the lowest overall price tag on representation will often have the winning edge. If deployed correctly, partnering with an alternative services provider can give law firms a competitive advantage in attracting new clients.

Research shows that the vast majority of firms continue to face price competition, despite the recovery in the overall economy. Moreover, many are adjusting their pricing strategy by integrating fixed rates whereby the risk of cost overruns is born exclusively by the firm. Future-focused firms are getting creative, pairing alternative fee arrangements with outsourcing, and advanced technology. And it’s working: They are winning business with a lower cost solution, while still maintaining non-discounted rates.

For smaller firms, the support of managed service providers can be a game-changer that can level the playing field when competing with their larger rivals. Today, small- to mid-size firms with lower headcounts are better able to compete for big, bet-the-company matters, because engaging with high-quality LMS providers allow them to scale up with professional staffing without increasing overhead.

Conclusion

Despite all this action, the focus of the mainstream legal media still remains fixated on the AmLaw 200 and their always-exciting profits per partner (“PPP”) numbers. This boring narrative misses the most dynamic and disruptive area of the industry, and we hope you continue to follow this story on Above the Law, as we at alt.legal follow the disruptors working hard to make the legal system work better.

Stephen McGarry, B.A., M.A., J.D., and LL.M. (Taxation), founded World Services Group (WSG), a multidisciplinary network, in 2002. As president, he grew it to 150 firms that have 21,000 professionals in 600 offices in more than 100 countries. In 1989 McGarry founded Lex Mundi, the world’s largest law firm network. As president, he grew it to 160 law firms that today have 21,000 attorneys in 600 offices in 100-plus countries. These two networks represent 2 percent of all the lawyers on earth. In 1995, he founded HG.org, one of the first legal websites. Today, it is among the world’s largest sites with more than five million pages and 900,000 users each month who download almost two million pages. McGarry is admitted by exam to the bars of Minnesota, Texas, and Louisiana. In 2002, American Lawyer Media (ALM) published McGarry’s treatise on Multidisciplinary Practices. McGarry has authored numerous articles on associations and international business transactions.

Introduction

All businesses comprise a pool of financial and human capital that creates a product or performs a service. This capital can be configured in an unlimited number of ways to achieve specific objectives for the service provider or manufacturer. With professional services, objectives are achieved via a controlled entity, such as an accounting or law firm, and membership in an association of independent service providers. These associations are commonly referred to as professional services networks or associations.

Law firm organizations are defined by elements of purpose, structure, and process.[1] The purpose of a network is different from that of a company or professional firm in that it is limited to specific activities that will benefit its members and enhance its performance. Within the network, they can operate to pursue their interests. These interests can include referrals, joint venturing, access to expertise, developing regional expertise, publishing articles for clients, branding, technical information exchange, market positioning, pro bono services, and more.

Beyond the objective of a law firm network is the need to create a framework with the potential to allow the members to expand their services. The network’s structure reflects the activities it seeks to promote and the underlying cultures of the members. The scope of these interests is defined not by the members, but by the network. Therefore, each network must be different.

One of the major factors influencing the need for networks is the globalization of the economy. Supply and demand are no longer local. The price of commodities is affected by a number of uncontrollable factors such as the weather halfway across the world or by demand in developing countries. In a market where production takes place wherever utilization of assets and human resources occur most effectively, professional services providers need to represent their clients globally. Networks are the only practical method to accomplish these objectives.

A network is more than a support organization or collaborative framework in which the members can meet clients’ needs. It is an entity entrusted with a common corporate identity. Though the network and not the members own the logo and brand, the network name can establish and represent a standard required of all its members. Consequently, membership in the network creates a global corporate identity. The goal of this identity is network participation that will ultimately translate into business for the individual independent members.

From a theoretical point of view, networks are an effective model and a powerful system of enhancing services. The members and the networks are different parts of the resource equation for providing members seamless and high-quality local and global services. There is no real limit to what can be accomplished through a network when the network and its membership work together. This collaboration is at the heart of the network.

Why Do Firms Join?

When asked why they joined, members usually state tangible reasons: to receive referrals from other members; to have reliable firms to which they can refer; to maintain independence; to meet clients’ needs; to retain existing clients by being able to provide services in other states or countries; and to use the membership to obtain new clients in their market.

They also join for intangible reasons. In today’s world, change is both constant and accelerating. Therefore, having access to other members can be important. A network helps to reduce the degree of uncertainty by bringing together a greater number of specialized resources to work on a problem. In addition to facilitating the exchange of knowledge that can reduce risks in firm operations, network memberships also reduce possible loss through burden sharing. Membership is a proactive way to profit from change and, at the same time, conserve resources. Membership can enhance the prestige of the member by being associated with prestigious firms that the client already uses.

Networks achieve these objectives in a way that is very different from corporate structures in which executives have command and control. Networks emphasize reputations, commitments, and trust of each member.[2] In networks, there is collaboration between members and the network’s staff. Personal motivations move the network development forward.[3] However, personal motivations can also impede forward momentum. 

Law Firm Networks – History

There were two distinct and different reasons for networks developing in the legal profession. The first was internationalization, which became globalization.[4] Law firms simply needed international connections. The second was the expansion of a number of large United States firms who pushed to become “national.” Smaller firms or firms with a niche practice required this same expertise in other states.

Internationalization of the legal profession began much later than in accounting firms.[5] There was no real need because, unlike the accounting firms that conducted worldwide audits, law firms in each country were equipped to deal with client matters. This changed in 1949 when Baker McKenzie began to expand to non-United States markets to assist U.S. clients trying to expand overseas following WWII.[6] The first step was establishing correspondent relationships with firms outside of the United States. This was necessary in that many countries would not permit a law firm to operate without a local name.[7]

The Need for Global Networks[8]

Internationalization was slow to start because the legal profession was much more restrictive than accounting in allowing foreign firms to enter and practice in their countries. There were rules requiring that the names of the partners be present in the name of the firm. As a firm expanded, it began to use its name when possible in as many countries as commercially feasible. The purpose was the same as in accounting: establish a brand and attract clients to it. The downsides were that the legal profession looked down at the Baker McKenzie model and its own competition pejoratively characterized Baker McKenzie as a franchise.[9] The forces of the international community converged in the late 1980s. American and English firms began establishing branches in the primary commercial centers. This niche competition in local markets had the immediate effect of forcing local firms to evaluate alternative ways of providing services to their international clients.

Law firms, like the accounting firms, were looking for niche markets. The difference was that U.S. law firms focused internationally on a niche market. In the 1970s, niche markets focused on serving financial services and then branched out to clients in manufacturing.[10] The result today is that more than 100 United States law firms have offices outside of the country.[11] However, the reality is that internationalization is very limited among U.S. law firms — among the largest 100, the average has five overseas offices.[12]

The New York and London firms that opened offices at first generally did not practice local law, so the regional firms were protected and received referrals on local matters. This also changed as the number of branches increased and the firms indigenized. With the advent of legal advertising, U.S. firms gained the opportunity to market their services in the U.S. and, as a result, indirectly began to market themselves in each of the countries where they had offices. Local bars to which attorneys received their licenses had severe restriction on their own firms that were not lifted until very much later.[13] For example, local partners and associates were required to be citizens and to be admitted to the bar where they practiced. Naturally, when foreign firms began to meet these criteria, local firms became concerned. The result was a need for local firms to band together, and networks became tools to compete against the much larger intruders to address this expansion. In fact, the first network of local firms came about primarily as a result of the invasion by London and New York firms.

Networks can be evaluated at different by the level of organization and activities pursued by the network. There are four levels. In the legal profession, there are no Level 4 networks unless you count the large international firms now organized as Swiss vereins as networks. A case can be made for this development.

Level 1 international networks, called clubs, generally consist of 10 firms in different countries.[14] The typical format consists of holding several meetings a year among managing partners to discuss management and market-related issues. Secrecy shrouded the networks because the members feared losing business from other firms if they knew of these networks.[15] On the other hand, many did not hesitate to advertise to their clients that they had foreign connections and correspondents. Today the clubs are commonly known as “best friend’s networks.” Examples include Leading Counsel Network[16] and Slaughter and May.[17]

Level 2 networks began in the 1980s when the Level 1 clubs evolved into networks. By that time, networks were not as secretive and even published directories, materials, and brochures.[18] The members met annually, and some networks focused on specific practices, such as litigation,[19] while others were more generic. Because networks were not thought of as franchises or strategic models, the membership selection process was not particularly rigorous.[20] Many of the networks that were innovators in the 1980s reached Level 2 and had no intent to develop beyond this level. This is evidenced by the fact that their membership over several decades has not increased, their websites contain no information, their governance depends on the same individuals, and their operations are limited.

Level 3 networks began in 1989 when Lex Mundi was formed.[21] It was the first network that required each member to be one of the largest and most established firms in a state or country. Unlike a Level 2 network where all activities are internal, 50 percent of its activities were external.[22] The list of internal and external activities reflected approximately 30 different items. Another difference existed in Lex Mundi’s operations: It was a network organized around a home office with staff, rather than a staff being assembled after the network was established. Finally, Lex Mundi set itself apart by using collaborative efforts among its personnel, board, councils, and members to achieve the objectives. In essence, Lex Mundi operated as a business that provided members with many alternatives to expand their resources. While different from the accounting network, the concept was that of an entity which provided services to members and should also have an established brand.

Other networks like TerraLex[23] and Meritas[24] soon followed with a similar business-based model. Their stated objective was to create a branded alternative to the large United States and English law firms that had expanded into their countries. These networks were not secret, and all of them have many of the features of Level 3 networks.

U.S. national networks also joined the revolution. The first was the American Law Firm Association, a network that focused primarily on insurance litigation.[25] The second was the State Capital Law Group, which began as a national network of firms dedicated to government affairs.[26] To qualify for membership, a former governor needed to work at the firm. Both of these networks became international and changed their names to ALFA and State Capital Global Legal Network, respectively.

The same national expansion occurred in other regions. For example, there are 80 European-centric networks. Some cover most of Europe, while others focus on a specific region like the Nordic or the CIS. In Canada, national firms have gradually opened offices in most provinces. However, there is a clear demarcation between the two approaches. Canadian firms that did not agree with this strategy joined the better-known networks.

Law firm networks are not all organized by law firms. Some, like the DuPont Legal Network for example, have been organized by corporations.[27] DuPont first established its network in 1992 to consolidate its outside counsel, then generated internal efficiencies by creating a network to which all of the outside counsels were also members.[28] Additionally, networks organized by corporations can exist for other purposes such as offering pro bono services. Thomson Reuters[29] has organized such a foundation that selects law firms that add prestige to its network for membership. It matches experienced firms to work together on projects. Participating firms find unique and priceless motivation through the opportunity to establish new contacts, who will in turn become paying clients, at no financial cost — simply by working on pro bono cases.

With more than 170 already in existence, law firm networks are here to stay. However, networks in the legal profession do not garner the same level of respect found in the field of accounting. One reason could be that the networks were simply a reaction to the initial globalization of large New York and London firms. Additionally, the large law firms have much bigger marketing budgets than networks. Perhaps legal networks remain tarnished because they originated as clubs or even franchises. However, in the light of day, it is now possible to argue that many of the elite law firms are themselves no more than networks.

The world is coming full circle.[30]

Gerry Riskin is a Canadian lawyer and business school graduate with a global reputation as an author, management consultant, and pioneer in the field of professional firm economics and marketing. After winning two Queen Elizabeth Scholarships, he began practicing law in 1973. In 1979, he became a partner with Emery Jamieson and then in 1984 the managing partner of Snyder & Company.

     In 1983, Gerry co-founded The Edge Group, which in January 2001 evolved into Edge International. Over the company’s history it has topped the list in a survey depicting the most popular marketing consultants by major U.S. firms and has been named one of the top three legal consultancies by U.S. managing partners.

     Gerry has served on the Conference Board of Canada, is a visiting fellow of The College of Law in London, a visiting professor at the University of Pretoria in South Africa, and is a fellow of the College of Law Practice Management.

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“We phoned you because we need help,” they’ll say. Those on the other end of this call are typically intelligent, caring lawyers involved in the leadership of their firm. They call with the optimism that maybe you can help. The caution they feel obliged to frequently offer is that the firm had a consultant before, and everyone hated her/him, so it is not clear that it would be safe to bring back another one. Often, I will get a pass because I am a former practicing lawyer and managing partner of an international firm. Maybe I will be safe, after all... It’s far from certain, but possibly worth exploring.

Planning

Many law firms don’t have a plan. Some think they have a plan, but if you ask them what it is, they don’t know. Jargon puts most firms off. If you mention “strategic planning,” many will tell you they tried that six years ago, and it was a complete failure. If we can get the jargon out of the discussion, we find that a firm typically has things it hopes to accomplish. If they believe that you can help them, they are willing to explore possibilities.

Planning is a process. Once the leadership has signed off on the process with the optimism that it will attain its objectives, people tend to cooperate to a significant degree because it seems useful enough, and we avoided calling it “strategic planning.”

Executing the Plan

Everything about a law firm rests upon it being able to achieve its objectives. Individual lawyers are focused on serving their clients; even quality non-billable initiatives take second or third place. Executing the plan is like going to the gym. “I bought the membership... Isn’t that good enough? ... What do you mean, I have to go there? Well, I was going to go, but a client called.”

The good news is that if you have clarity as to the plan and leave the lights on (an expression I like to use with my clients, meaning that they remain aware of where they stand relative to what they want to achieve), you will find that they are very capable of executing the plan, much to the delight of everyone involved.

Accomplishments must be tracked. If you ask even the leadership team what they have achieved over the last year, there is an uncomfortable restlessness as they try to recall specifics.

Teams that keep a running inventory of achievements have much more self-respect and better internal communications. They also have objective improvements to report, like increased profitability.

 Leadership and Management Training

“I'll come to your weekend course if you can teach me to golf like Tiger Woods.” Leadership and management are about taking a group of people for whom you are responsible and making them better than they would have been without you. Yes, managing ferociously independent, critical, and analytical lawyers is worse than herding cats. (Patrick McKenna and I wrote the book “Herding Cats” a long time ago, and I’d be happy to send you a complimentary copy.) Notwithstanding the challenges, leaders who spend some time getting involved with those whom they lead can have a very positive impact on the outcome. In fact, I am aware of a global study that indicates that success is more dependent on the group leader than any other factor.

Training a leader over a weekend is inadequate; the process has to be ongoing for a period of time of a year to 18 months, and has to involve individual feedback based on ongoing performance as a leader.

Performance Enhancement

The managing partners’ lament, “You don’t tell them anything different from what I’ve been telling them for years, but for some reason they listen to you.” (This is where it really helps that I was a managing partner and can completely empathize.)

Performance enhancement fails in most firms because of the “knowing versus doing gap.” As lawyers, we are so cerebral that we think we can solve any problem with the powers of our minds. A delicious discussion is better than a medieval feast.

In order to dramatically enhance the performance of an individual, the individual needs to want to improve. I ask for firm leaders who are offering performance enhancement training to require an email application. It is a short email, and the elements are simple. “Tell me why you want assistance, what you hope to achieve from it, and what the firm will achieve from it. Please touch on your objectives as you answer these questions.”

Firm leaders make the frequent error of saying, “Sally or George really needs this kind of help... I am going to strongly encourage them.” Sally or George will succumb to the pressure and then sabotage the process so subtly that they don't even know they are doing so themselves. Those who show some internal motivation tend to perform magnificently. I can tell you anecdotally that not all, but many of the people who are helped in this way increase their performance to a degree that pleasantly surprises their firms. They also love the process, which is the polar opposite of sabotaging it.

The elements involved in helping an individual enhance performance include:

1) Reducing quantifiable objectives to writing;

2) Exploring whether they need to enhance their substantive expertise;

3) Determining by whom they wish to be better known and then enhance their reputation to those constituencies;

4) Broadening relationships with clients, especially business ones, with whom they have only one connection; and

5) Helping them present more effectively in all contexts including speaking, writing, responding to RFPs, using social media, and more effectively networking at social functions.

Mergers and Competitive Intelligence

“Should we remain local or regional, or should we merge internationally?” It kind of depends. Many firms need help in assessing their position in their respective marketplaces. Most do not have the tools of competitive intelligence or an understanding of the various contexts in which they are practicing and the options that may be available to them. Some of our most satisfying work is finding information relevant to competition, but also addressing appropriate candidates for lateral hire or merger. This is far too complex a subject to go into in any depth here. Suffice to say that some of my proudest moments are those where I have helped prevent a merger that would have been a disaster or prevented a lateral hire that was a poor choice.


Back to the Future

Working with the Florida State Bar and its task forces into the future has immersed me in the disruptive technologies and impact of social media on the legal profession. We have long had important traditions, but external changes are coming at us like bombs in a video game. I seek permission and often am allowed to offer some catalytic information about these changes in order to open the minds of those with whom I am working to get them thinking about how they might strategically prepare for a changing future.

The greatest challenge in advising law firm clients about the future and social media is that the changes are happening so fast. I keep finding myself saying, “Well, that was true two years ago...” For example, does each lawyer need to have a profile on LinkedIn? Five years ago, “no.” Two years ago, “maybe.” Now, “yes.”

We recently sent some information to some senior litigator clients on an Excel worksheet. We were politely reminded that Excel would be a little difficult for most of them, and we should use Word instead. In essence, we were reminded that many lawyers even in the most sophisticated firms are technologically illiterate. I am not making this up. The challenge, therefore, is to help lawyers in a gentle and empathetic way to see ahead of the bow of their ship so that they can contemplate their future transcending what most lawyers have on their minds today.

The Law Firms that Motivate Consultants

The most exciting law firms to work with have some or many of the following attributes: 1) they have leaders who are willing to lead and are not simply trying to avoid criticism from those who elected them; 2) they are imaginative, and delight in thinking of new practice areas and industry configurations aligned to the changing needs of their marketplaces; and 3) they try. It is impossible to help an athlete who remains slumped in a chair... The athlete has to try and try again and again. This affords a good consultant the opportunity to fine-tune the performance and help the athlete attain great results. Lawyers are athletes, too...

An Acknowledgment to the Sophisticated

Many of the largest firms in the world, including those founded in the United Kingdom, have extraordinary internal management resources and deploy them brilliantly. In fact, my own view is that it is because of them that the legal profession has to raise its game and become far more sophisticated in a great hurry. I have the privilege of serving some of these amazing firms, and I’m very grateful to them for allowing me to help, but also for what I learn from them in the process.

Tony Harriss is the Non Executive Director for Law Business Research. Formerly Non-Executive Director of Globe Business Media Group. Established in 1996, Globe is a business-to-business content and connections company, specializing in the legal and intellectual property markets worldwide. It produces market-leading information, data, networking, software, and marketing services for lawyers, C-suite executives, and HR professionals, and their organizations, globally.


 The author would like to thank Alex Morrall, a long-time peer in the legal media industry, and Carolyn Boyle, Globe’s editorial services director, for their invaluable input.

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The Evolution of Legal Publishing: Who Will Survive?

What does the future hold for the legal market and the legal publishing sector?

Will a Korean client 3D-print a chip holding all U.S. case law to plug directly into her neural pathway in a William Gibson-esque 2030?

Will a technology giant such as Google have applied artificial intelligence to merger control regulations worldwide, enabling companies to bypass both law firms and legal publishers?

Perhaps cohorts of micro-bloggers will replace the legal publishing behemoths by delivering niche content to defined audiences funded as law firm marketing exercises, or by micro-revenue streams from Taboola and Google ads?

The sharing economy may take hold, establishing one or many legal wikis that leave publishers disintermediated.

Will lawyers be automated out of existence? Or will it all still just be about getting the right content to the right people at the right time?

Technology — Friend or Foe?

With the application of technology, the publishing industry as a whole is undergoing its biggest revolution since Gutenberg. At the same time, technology, process engineering, and commercial pressures are changing the legal services market beyond recognition. Sitting at the nexus of these two industries, legal publishing has changed dramatically in the last decade and the pace of that change is only set to increase.

Legal publishing is just one trade vertical. Lessons learned in other sectors, such as medical or tax, will be transferred. Major technological developments in another area, when applied to law, may be more powerful than anything yet developed in the legal space.

Legal publishers used to sell textbooks or standard forms in loose-leaf volumes; now users complete online forms about transactions that generate a full suite of documents instantly, while algorithms compare documents in order to look for unusual language. Like many of their mainstream counterparts, legal publishers are reinventing themselves as media technology businesses.

A number of start-ups are challenging the existing models of both law firms and publishers. One of their key philosophies is that knowledge is a commodity, and that it is the management of knowledge — and in particular, the application of technology to it — that creates powerful digital products. As the big data explosion continues at an incredible pace, data scientists look set to be in huge demand at publishers as they present improved ways to analyze, visualize, and curate this endless stream of information.

The bountiful supply of (free) basic legal information and know-how is changing not only how lawyers consume information, but also what they consume.

Perhaps the biggest threat to some publishers comes from technologies that can process vast quantities of information and apply advanced technology to analyze and curate it. CodeX, the Stanford Center for Legal Informatics, is a good example of the kind of initiative that will drive change in the legal technology marketplace. As they put it: “What happens when you combine legal code and computer code?”[1] One business to have emerged from the stable is Ravel Law,[2] which illustrates how tech-powered disruptors can challenge the publishing incumbents. Seeing that cases themselves are just a commodity, Ravel applies analytics and visualizations to the connections between cases, facilitating a more intelligent approach to legal research. 

User Experience

Customers experience powerful and evolving user interfaces every day. They shop online, read the news on a tablet, watch TED Talks, connect with others on LinkedIn, and use countless apps to solve small problems. All of these services combine a customizable experience with some degree of automatic tailoring. Customers are also experiencing the benefits of collaboration through wikis, forums, and listservs; Wikipedia seemed to replace the Encyclopedia Britannica as the default general knowledge bank almost overnight. Publishers will seek to leverage the potential of crowdsourcing opinions and information.

Users bring expectations from those experiences with them to legal publishing. Legal publishers will thus need to provide interactive, granular, and tailored experiences.

The effects of diversified distribution and content are also making themselves felt in the legal sector. Law firms large and small have seized on digital content marketing as the best way to promote themselves to clients and prospects. Blogging platforms, along with content discovery and enrichment tools, are enabling them to publish quickly and effectively on niche topics. Thus far, reliance on word of mouth and social media to grow audiences is limiting their reach, and they are still turning to publishers to tap their intended audience.

The larger publishers with more content and datasets of primary sources will respond with further attempts to become the place to do legal research, slicing and dicing, repurposing, and tailoring their content to meet the needs of as many niche audiences as possible.

But technology is a double-edged sword for publishing companies, representing as much threat as opportunity. The combination of more focused search and abundant free resources online means that, for many lawyers, Google is their starting point for research.

One of the best examples of a publishing model being blindsided by changes in the digital world is Martindale-Hubbell.

Factors Driving Change

·       Rapid change in the legal market. 

·       Continuing globalization of business and regulation. 

·       Big data explosion. 

·       Artificial intelligence and machine learning. 

·       Customer expectations driven by digital experiences. 

·        Increased and potential competition from outside the sector. 

Changes in the Legal Market

As discussed elsewhere in this book, the role of the lawyer is inexorably moving toward that of a business advisor, and further away from document processing and painstaking legal research. Likewise, the type of information and training that lawyers require will change. Law firms are under pressure to charge fees that reflect the value added and avoid reinventing the wheel.

As the disaggregation or unbundling of legal processes, long predicted by Professor Richard Susskind, becomes a reality, publishers are seeing clear opportunities to become integrated in that workflow and provide content at the point of need. Exactly how high up the value chain they sit will depend in large part on how successful they are in applying technology to their content.

One of the best examples of a publisher succeeding by playing a specific role at a key stage of the legal process workflow is Practical Law.[3] It identified major inefficiencies around the production and maintenance of what is essentially generic content, ranging from current awareness to standard contract templates.

By the turn of the millennium, U.K. business law firms had streamlined their processes by employing non-fee earning lawyers to work on their own knowledge management as professional support lawyers (PSLs). This was one of the early examples of firms breaking down their processes and identifying areas that could be handled more efficiently. Librarians and PSLs were charged with providing front-line lawyers with databanks of content that they could use in their practice. Fee earners were given basic resources to which they could apply their skill and experience to add value — for example, in negotiating an agreement rather than drafting it from scratch.

What Practical Law saw then was that there was little difference in much of the output of PSLs among firms. By hiring, replicating, and in some ways improving what these PSLs did, it was able to produce digital products that became integrated in clients’ workflow in a way that made them nearly indispensable.

Without the confluence of process reengineering and technological advances, this would not have been possible.

Publishers like Practical Law, which bring real efficiencies to the table, sit squarely with the growing band of disruptors that are helping to drive change in the legal market (e.g., new model law firms such as Axiom Law,[4] legal process outsourcers (LPOs), and the plethora of e-discovery providers).

As the legal market evolves and the players find their places on the value chain, there will inevitably be competitive tensions between publishers and their largest clients: law firms. Publishers providing powerful but easy-to-use research platforms or automated suites of contracts will rub up against law firms that have not yet embraced change and are focused on what they can do beyond the commoditized and vanilla. The relationships between publishers and LPOs will be interesting to watch as well. LPOs, while offering efficiencies in many areas over law firms or in-house legal teams, currently offer services to clients in some areas where a publisher would instinctively want to offer a product to a much larger set of clients at a lower rate.

Globalization

The continued globalization of international markets and business is another powerful force that is having a major impact on the legal market. In-house counsel at multinational firms must stay on top of an ever-multiplying set of laws and regulations in a growing number of countries. This increasingly complex and interconnected global regulatory environment has seen law firms forge alliances or open offices across the globe. Often deterred by the multitude of languages that prevent economies of scale, publishers have been slow to follow, covering developments in smaller jurisdictions at a relatively high level. This is something that technology will surely address in the foreseeable future. 

Revenue Models

With the exception of those focused on news and opinion journalism, legal publishers have not been beset by the challenges facing the wider newspaper and magazine industry as it grapples with declining advertising revenues and customers’ reluctance to go behind the paywall in a world where so much information online is free. Newspapers are focusing on high-quality, often long-form journalism to build loyalty with readers and convince them to use their credit cards. This is exactly the kind of content on which legal publishers have focused.

Those with a co-publishing, financed content model generally ensure that their projects are financially underwritten in advance. They may be free to air, require registration, or require a subscription fee from one or more classes of user, but branded content has long flourished in the legal sector and looks set to continue, especially given the importance of content marketing to law firms.

As publishing has moved online, expectations around advertising have changed greatly. No longer can publishers simply quote readership numbers based on a multiple applied print runs. Advertisers are seeking highly targeted opportunities and real-time analytics on usage. Those that fail to deliver will be left behind.

There is increased competition from outside the sector from the likes of LinkedIn and Google, which can target users in the way that previously only a trade publisher could.

Legal directories of one sort or another have long been a mainstay for many publishers. They continue to provide valuable intelligence to readers, and serve as both a marketing tool and a competitive benchmarking tool for firms. They are still driven by advertising; as of yet, no one has moved to fees based on the number or value of the introductions made.

Much of the innovation in this space will come from new market entrants, many of which bring with them “freemium” models. Just as with so many services outside the space, they work toward proof of concept and build user bases by offering a free service before introducing premium features.

Tailored Knowledge

In our lifetimes publishing will always be associated with books, but modern legal publishing is as much about data mining and digital analysis as it is about the printed page. Law libraries may still be filled with rows of weighty reference tomes, but lawyers now practice in the digital space.

The future of legal publishing is about streamlining the workflows of lawyers and law firms, giving them access to the latest legal data and market analyses on an individual basis. This will be delivered through the power of artificial intelligence to collate, curate, and learn, and from using the most authoritative sources. In addition, they will have the ability to create documentation on the fly — the contracts that underpin transactions or agreements needed to react to legal or market changes in real time, and the knowledge and training to do what it is they do. It is about the most efficient delivery of bespoke know-how for every lawyer.

Editors are now digital curators, knowledge professionals, leading teams of coders, and technologists, producing products more complex and more efficient than lawyers can create or supply. This is the value-add that the successful legal publishing industry must create. Merely cataloguing information is now the domain of the search engines; however, books will always be useful things against which to lean your tablet. 

Onward or Downward?

Those publishers with a blend of revenue streams from subscriptions and advertising — as well as, increasingly, software licensing — will have a more secure future. The holy grail of a high annual renewal rate, providing predictable revenues, will give publishers the best opportunities to invest in developing products that capitalize on the changes taking place and the technology available to them. While there is a risk that new technology from outside the legal sector may eat their lunch, the legal publishers of the future that successfully embed themselves in customers’ workflow through the intelligent application of technology to information will play a more valuable role in the legal services market.

One thing is certain in today’s technology-driven, more-with-less era of seemingly limitless free information: Those delivering legal content must demonstrate real, improved outcomes for customers or face extinction.

Oliver Yandle, CAE, of Chicago, Illinois is the forme  executive director of ALA. Oliver comes to ALA from the Commercial Law League of America in Chicago, Illinois where he served as executive vice president.

     Oliver’s law association experience includes holding the executive director position at the International Association of Defense Counsel, in Chicago, Illinois, and he served as an adjunct instructor of legal analysis and writing at the Washington College of Law at American University.
In addition to his legal experience, Oliver has had a long-standing career in association work, most recently having held the position of executive vice president for Commercial Law League of America. He has held senior director positions at SmithBucklin in Chicago, Illinois, at the International Bridge, Tunnel and Turnpike Association in Washington, D.C., and at the Intelligent Transportation Society of America in Washington D.C.

     He is active in both the American Society of Association Executives (ASAE), where he holds the Certified Association Executive designation and the Association Forum of Chicagoland.      Oliver is a native of Louisiana and holds a B.A. in journalism from Loyola University of the South in New Orleans, and a J.D. from Washington College of Law at The American University in Washington, D.C