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Liquid Legal: Transforming an industry toward high performance

Legal – an industry that once appeared to be as stable as the law itself – now struggles to keep up with the pace of globalization, the disruption caused by technology and the new thinking brought to it by young talents.

In Liquid Legal: Transforming Legal into a Business Savvy, Information Enabled and Performance Driven Industry (Springer, 2017), 30 authors from all sectors of the legal profession explore the new patterns that make up the future fabric of the legal industry amid this ongoing digital transformation. The authors have one overriding question in mind: What is positive about this transformation of the legal industry, and how can that be emphasized?

Already a consensus has emerged. There needs to be a laser focus on the fundamentals: what the purpose and potential of the legal industry are and will be in the future. This focus has to identify the main streams of change and be supported by a holistic approach to the topic.

For example, look at this transformation through the lens of in-house legal. The view immediately begs the question: Why should legal departments exist in a future that will provide technology and outsourced models for almost everything lawyers do today?

While admittedly slightly exaggerated, this question helps us to gain clarity into the situation because the answer must provide a credible, relevant and specific added value that cannot be delivered by “robots” or by straightforward process outsourcing. Modern general counsel (GC) must create a clear vision as to what this compelling value will be; they must rally their teams behind it and must redefine the claim of legal at the company’s executive table. This undertaking requires us to strengthen the voice of legal by defining the business value that it creates and demonstrating how this value can be measured.

Ultimately, we need to change the predominant traditional perception of the in-house legal department away from being seen as a reactive, risk-averse function whose sole purpose is to guard legality – the proverbial office of “no” – into something else entirely.

Streams of change

Against this background, the second aspect around the streams of change becomes clearer. The change is touching four major elements: technology, process, organization and people.

Clearly, the breathtaking speed of innovation in legal technology creates enormous potential. However, in-house departments too easily fall into the trap of buying up the technology first and investing into smart, but monolithic solutions for one particular challenge … and then moving on to another one. The result? A fragmented, inefficient landscape that is costly to maintain.

This is why the authors of Liquid Legal make the argument for holistic legal information management (LIM) – a strategy that aims to provide access in real time to all relevant information that is required for legal to create the business value described above. This LIM strategy, acting as a consistent data layer atop the rest of the technology, will make it a lot simpler and easier to design flexible applications to a given process. Clearly, this cannot be achieved overnight, but it must be the goal to take legal eventually onto the “data Autobahn” – rather than into another dead-end street.

As far as process and organization, it’s evident that legal departments will require distinctly different skill sets in the future, including a strong legal operations function. In their article for Liquid Legal, the founders of the Corporate Legal Operations Consortium define the role of legal operations, as well as its challenges and opportunities. It is a role that is crucial to running a legal department with business discipline, by applying advanced spend management, establishing innovative partnerships with law firms and legal process outsourcers (LPOs) and other operations functions within the company. Yet, it is also just one element of the functional legal leadership that, overall, needs to start acting as the C-suite of the legal department.

Last, but not least, adding the people aspect into the picture, the skills matrix for players on the legal team has changed and grown as well. Several dimensions and new needed skills have been added to the traditional tent poles of “generalist” or “expert,” such as business savviness, legal project management and IT skills, just to name a few. In Liquid Legal, the editors coined the term “orchestration lawyer,” describing a legal professional that understands and can make use of all means available to get the job done, be it automation, outsourcing, risk decisions, etc. In essence, orchestration lawyers combine full creativity with full understanding of the business value that can be created.

Liquid Legal addresses areas that will be impacted by this, such as how to hire for the legal department of the future, how to build the organization 4.0 in legal, and how to enable and motivate lawyers to become intrapreneurs.

The holistic view

Liquid Legal forms the holistic view of the transformation of legal into a business-savvy, information-enabled and performance-driven industry. The book establishes four pillars:

  1. The legal function will shift from a paradigm of security to one of opportunity.
  2. Future corporate lawyers will no longer be primarily negotiators, litigators and administrators – they will be coaches, arbiters and intrapreneurs.
  3. Legal knowledge and data-based services will become a commodity.
  4. The legal of the future will measure everything it does.

To the last point, key performance indicators and metrics will become a center point in the discussion about a future legal function. Fundamental questions must be addressed to succeed in this transformation: Where can we obtain the data, such as legal applications or company-wide IT, like a Customer Relationship Management system? How can we obtain such data while avoiding extensive (manual) data gathering by each team member? How can we explain to the team that this data is crucial for both managing the team well and for communicating the value that legal brings to the business?

As the project to publish Liquid Legal gained shape, one prominent common denominator emerged: collaboration! The change needed within legal is too fundamental, the speed is too high and the aspects are too many for GCs to take on behind closed doors.

Connecting to other in-house departments will provide benchmarks and access to ideas, and it bears the potential for agreeing on new conventions on how to do things better, faster and more efficiently. Academia also holds a wealth of knowledge that can be leveraged – while in turn, the practicing innovators can help law schools to advance the curriculum and prepare the young talent for a very different working reality. As LPOs and law firms turn from suppliers into partners, they become managed service providers that directly influence the outcomes and the value that the in-house department is able to return to the business. Toward this end, all three groups must find a new way of combining their strength.

For today’s GC, this changing legal environment offers a tremendous opportunity to lead! If everything flows, then everyone (no matter where they are on the legal playing field) would be wise to change their state of aggregation and – in the spirit of collaboration – continue to share what they learn!

Dr. Dierk Schindler Dr. Dierk Schindler is head of Legal Field Services for Europe, the Middle East and Africa (EMEA) and Global Legal Shared Services at NetApp. He has a Ph.D. in law from the University of Augsburg and a Master of International Law from Lund University. Dr. Schindler also lectures at the Management Center Innsbruck in Austria, and Technical University of Munich in Germany.

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