4/24/17

Build or Buy? The Evolution of Law Department Sourcing

Recently, I had the pleasure of speaking with Nancy Jessen, SVP at Legal Business Solutions at UnitedLex about a survey recently completed with ALM on legal department insourcing, entitled "Build or Buy? The Evolution of Law Department Sourcing". Our chat was really interesting, different than what I expected. Here's what I learned.

We are all too familiar with the challenges facing law firms – the rise of competitive pressure, rate  squeezing, the need for better project management so as to be able to not only price and staff matters effectively but also turn a profit.  We also know of the impact of legal technology in the e-discovery space, in contract drafting etc. and all of the many AI applications that are threatening to take jobs away from lawyers. We think of these issues and many others as law firm issues rather than legal industry issues and look to the alternative model law firms, and outsourcing as the answer or at least on the path to legal market euphoria.  Nancy, and some of the ALM survey findings, point out, however, that legal departments face many of the same issues. 
For many years, law departments were immune from pressures and expectations that almost every other corporate function faced -- cost management, return on investment, justification for new resources, and technology-driven efficiency to name a few.  Then, 2008 hit and everything changed. Not just for firms, but for in-house departments, too. In-house teams were also being forced to demonstrate value, provide legal recommendations that supported business objectives, create internally efficiencies AND strategically direct external counsel.  A difficult task for
in-house counsel, just as it is for law firms trying to make sense of the new world order in legal.
Today, in 2017, managing e-discovery and other litigation software, supervising external counsel and overall legal spend is table stakes for in-house departments. Like their firm counterparts, today, almost 10 years later, General Counsels are focused (or trying to focus) on demonstrating value by increasing operational efficiency of the in-house team, from balancing high-cost/low-value staff against low-cost, inexperienced staff; dealing with the constant fear of the next budget cut  - something Nancy referred to as "death by a thousand cuts;" or the hardest part of it all, insourcing/staffing strategic lawyers who can sit with the C-Suite, make business decisions, help the company grow, avoid risk and support initiatives with the highest and best business impact.
The survey results, which include data from the ALM Intelligence 2016 Corporate Counsel Insourcing and Outsourcing Survey, highlight some of these moving parts:
·       In 2017, only 26% of law departments expect their annual operating budgets to decrease, while 32% expect an increase, and 42% expect it will stay the same.
·       In 2016, 34% of respondents said the number of full-time, in-house lawyers stayed the same, and 52% plan on maintaining that level in the next 12 months, indicating that increased insourcing within law departments may be slowing down.
·       In 2016, 39% of legal departments surveyed decreased their overall use of outside counsel, and 43% estimate they will do the same in 2017. Similarly, those who said their utilization of outside counsel would not change increased from 43% in 2016 to a projected 47% in 2017. Only 4% said they would increase the use of outside counsel in 2017.
·       Regarding Alternative Service Providers, 57% of respondents send work to ASPs. Of those, 25% said they plan on increasing the number of ASPs they use in the next 12 months, and 28% said the amount paid to ASPs will increase in the next 12 months.
In-house counsel, too, are subjected to shrinking budgets, doing more with less, engaging technology, and resourcing efficiently.
Just as many are calling on firms to radically change their paradigms, it seems the in-house departments are also looking to shift the paradigm. We see this in some small ways, with bold statements from in-house departments wanting firms to increase diversity. In-house departments can do more to change the archetype, but whereas firms have to deal with the complexity of the partnership models, in-house teams face obstacles around C-Suite buy-in, and personal reputation. 
GCs and firms both know they need to change. The question is, how can you best be strategic, deliver value, increase efficiencies AND operationalize all of it?  Would you buy it, or build it?

 

 

 

 

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4/21/17

Law Librarians Do It Best… And With A Smile

One of the best things I get to do as the incoming President of the American Association of Law Libraries (AALL), is reach out to new members that have joined the association and talk with them on the phone. I find that the new members genuinely appreciate that someone has reach out to them, and took the time to welcome them to AALL. I have found that I, too, get a benefit from talking to the newer members because they give me some insights that I might otherwise never encounter. One such event happened to me recently and it helped me understand what we should be pushing as the real narrative of law librarianship and legal information professionals.

The person I was talking to was a Research Attorney (JD w/license, but no MLIS, so not a librarian.) We were discussing the overall structure of the departments, and how her role fit in with the librarians and other professionals on the team. We talked about the reaction from the attorneys and others within the firm, and she said something that caught my attention.

She mentioned that the lawyers would make comments about how “nice” and “helpful” the librarians and other researchers are. She said she commented back that that’s completely missing the point of the true value. These law librarians and other professionals are smart, curious, creative, intuitive, and brilliant in the work they do. They do not waste your time. They are efficient and effective in finding the correct answers, finding it quickly, and making sure that it doesn’t cost you more than is reasonable for the issue at hand. Yes, we can do that with a smile, but that’s the icing on the cake. The real value is that we do what we do better than anyone else. That’s what we need to push as the real narrative. Of course, we can still do that with a smile.

This discussion left me with a smile on my face as well. Even better, it left me with a clear narrative to make sure that smart, curious, creative, intuitive, and brilliant are included in that discussion.


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3/28/17

Timing is Everything

Years ago I got into the legal speaking circuit after presenting on the future of the legal profession to a group of bar leaders. I called the presentation "Staying Relevant." I credit this moment with pushing me into the spotlight of change in the legal profession since it lead to a slew of speaking invites and for me becoming known for driving change in the legal market.
This was 1999.

A lot has happened since then - but somethings from my presentation have yet to materialize. On one level, I should have published a book based on that presentation. That, along with a British accent, would have lead to much greater fame and fortune. But such was not to be.

The presentation covered a broad range of trends, from the incursions of technology to the emergence of alternative providers. At the end of the presentation I commented on the need for the profession to "stay relevant." My catch phrase which I still use today is the "Paradigm of Precedence." This label is meant to highlight how the profession is indoctrinated from an early age to look backwards - not forwards. At the center of that paradigm is that the courts look to the past for direction on today's needs. This approach is bedrock to the judicial branch of government.

However, this thinking has spilled into every corner of the profession. Thus my recommendation to stop driving the boat by watching the wake.

Last week I presented at a courts and technology conference. I actually used my paradigm of precedence phrase as it was very applicable. What caught my eye at the conference was another session on the vanishing trial. The session noted how only a few cases ever go to trial anymore. 1 in 100 was the stat quoted. This is not new news. However, the session went on to talk about how the rule of law is threatened since without trials, the courts are no longer setting precedence. Instead, settlements, arbitrations and the like are where disputes are resolve: in private where they do not impact the law ... or set precedence.

The punch line of my 1999 presentation was that lawyers can sit back and watch change, or they can engage and shape it. I noted that the three letters that should scare lawyers the most were H.M.O. - referring to the fact that when doctors sat back, there were real consequences for their profession. At the core of that concern for lawyers, I suggested, sits the Rule of Law. Back then I noted that if disputes were no longer resolved in public, by the courts, then the rule of law would be up for sale. So it should be of paramount concern to lawyers that the courts retain a viable place at the center of legal ecosystem.

A mere 18 years later the courts noticed - sort of.

This makes me take stock of all of my current thinking about change in the legal market and how it will be relevant in 18 years. And it gives me an idea for the title of my new book: Timing is Everything.


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3/16/17

Who Leads the Law Library? How About Law Librarians?

There are two standard answers to questions asked in a law firm setting.

  1. Well... it depends.
  2. You have to understand, we're unique.

Both of them drive us nuts, but we get used to them and adjust or responses over time to limit the eye-roll and shaking of the head to a minimum.

When it comes to where a law firm library falls in the structure of law firm administration, both answers tend to get applied. If you were to look at the AmLaw200 firms, you will find that the law library function falls under many different types of leaders.

  1. Library Directors who report to:
    - COO
    - CMO
    - CIO
    - CKO (non-librarian)
    - (I'll group these as CxO from this point)
    - Managing Partner
  2. Library Managers who report to:
    - KM Directors
    - CxO
  3. CKO (librarian C-Level) who report to:
    - COO
    - Managing Partner
By my count, there are approximately 7 CKO where they are Librarians in the AmLaw 200. (Or some variation, like me, where I am a Chief Knowledge Services Officer) As you might think, I have a bias toward this style of management. I've stressed the ability for law librarians to direct their own fates for nearly the entire decade I've written this blog, and will continue to do so as I take on a President role in the American Association of Law Libraries in July, and well beyond that. 


I mentioned in a post last year that if Law Librarians don't find themselves a seat at the table, they will find themselves on the menu. When I tell other law librarians this, they agree, but then they look at me and say, "Greg, you have to understand, we're unique at my firm." What this typically means is that their firm doesn't want to challenge the status quo, and likes things to stay as they are. There are firms with Library Directors that are much more progressive and forward thinking than me, yet there is no path to a C-Level for them at their firm. That's a shame. The Law Library and its functions of compiling, analyzing, filtering, and producing legal and other information is one of the most important administrative functions that a law firm has. It keeps attorneys practice ready and up to speed on the very functions that drive the legal industry. We do the due diligence necessary to keep our attorneys informed and prepared. In the Information Age, we are the Information Professionals.

BloombergBNA President, Scott Mozarsky, penned a recent Above the Law article where he stressed the importance of what law firm libraries and librarians do to drive business in the door at law firms. He mentions that law librarians and legal marketers are teaming up and becoming a powerhouse within the firm to help drive business development and client awareness of the firm's abilities. He mentions that this is a great collaboration, and that he is seeing more firms adopt the Researcher/Marketer team approach. I've seen this exact scenario going on in law firms for nearly two decades, and I'm sure it preceded my entry into the market. Mozarsky is correct in that this makes perfect sense to team up the analytical skills of the law library researcher, and the business and marketing skills of the law firm marketer. It's a perfect match of strategy put into action.

The one area that I have to alternate from the path with Mozarsky suggests, is that this means that it makes perfect sense to place the library under the CMO. To that, I would have to answer, well... it depends.

In my personal experience, and from the anecdotes I've heard from my peers over the past twenty years, it was the librarians that have been pushing for the teaming up of marketing and research, and the CMOs have been very reluctant to adopt this strategy. I know... I know... ever firm is unique, so this may not apply to you. However, I would go out on a limb here and say that most firms that have this type of collaboration, the idea was pitched by the library staff and the marketing department had to be won over to try it out. That's not to say that CMOs are anti-library, but it does say that librarians tend to be very good and leveraging the existing tools, resources, and people to augment the overall strategy of the firm. We understand that driving new business, or expanding existing business is a strategy that all firms have, and we know that we can contribute to that goal. Because we sometimes lack the seat at the table, the idea of leveraging this wealth of resources already at the disposal of the firm may have been overlooked.

The law library at most firms contain the most credentialed staff in that firm. The fact that the most credentialed staff in the firm doesn't have a Chief voice speaking directly for them is a lost opportunity for those firms who ignore them. I am quite proud to talk with others and tell them that they need to understand, my firm's unique. We have a voice at the table, and we are heard.

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3/2/17

The Strong Silent Type

All too often in law firms when we talk about marketing failures or look for new marketing successes, we look to see how "other industries" are doing it. We look at the marketing spend of consumer goods companies which make our budgets look like a small child's allowance.  We bemoan not having enough money to really make a difference or we lament the time and energy spent on directory submissions for minimal tangible ROI, yet we still participate in these things marketing activities since we are bound by the street rules of the legal marketing game.  When we think about legal marketing, I think we would all agree, that despite the smaller budgets that our B2C counter parts, we have evolved beyond pricey tickets to sporting events, and are focused on content or account marketing. Yet, despite the laser  focus on true client development we still struggle.

We struggle to make the impact on our firms that we believe marketing is having in other industries.  Lately, I can't help but think the answer (or part of it anyway, but this is a blog, so let me think big and unrealistic), lies not on the marketing communications side of the equation, not even in the traditional business development side either, but in the CRM or sales cycle part. The part with the dirty word (sales) and the acronym most people still struggle to really understand outside of "invite list" or "mailing list".  I have written before about how I think CI is really or should really be about CRM+. More and more, I am starting to see how these two functions, that are often behind the scenes – the introverts next to their extrovert MarCom buddies, the strong silent types that comb through data, deserve more attention in the client conversion or retention conversation.  

Regardless of what CRM system a firm is using or even more to the point where there is no formal CRM system in place, there is often resistance to having contacts and related activities shared within a firm. Whether owing  to the law firm as hotel-for-lawyers mentality, privacy issues, fear that others will ruin the relationship, lack of trust among partners or some other reason lawyers generally don't want to share their contacts and firm's have yet to find a good way to change that behaviour en masse.  There are always exceptions to the rules, but if you talk to your friends at sales organizations, the CRM system if the life blood of the organization and those that don't share are the exception.  Not only are contacts shared but client touches are also shared – who has had dinner with whom, who sent pricing information and when, responses to pitches are recorded and client lessons are shared on the go through the CRM system. Occasionally, I am a the target of these sales pitches and for a moment I am always surprised that a new, or new-to-me sales person knows so much about me and my relationship to the organization.  Then I remember I am but a record in the company's CRM system and a smart sales person will look me up before making contact and will therefore intimately know my history of engagement, how I feel about a product or service, who my account reps is and so forth before even picking up a phone. They may even know some personal details about me to help break the ice. Combine this knowledge with sales training or soft skills around appropriate communication so as not to come off creepy or stalker-like and imagine what you can do.  What if you had the ability to call a client on any given day, and say something like "Hi, I see you are subscribed to our X Practice newsletter and received our most recent update on issue  Y, I know you had lunch with Partner W last week, but I still wanted to follow up to see if you had any questions and to invite you to an event we are hosting on related topic Z. I believe partner W and some of his clients you might want to meet will also be there "  There is real value in that for clients, instead of waiting for the phone to ring with a retainer, lawyers can be proactive in providing client service that is tailored, builds the firm's and the lawyer's relationship, engenders trust and requires very little effort other than consistent recording and reporting on the part of the lawyers and the CRM professionals.  All you need to know who is subscribed to what, who is reading what and who is taking whom for lunch or to a golf tournament. Being able to connect those internal dots, along with knowing is what happening in the client's organization or industry so you can help your clients avoid surprises or capitalize on market activity - including your firm's own bespoke networking events, is client service euphoria. 
Data is driving insights across all kinds of disciplines from healthcare to retail, data is also driving revenue for all kinds of B2C companies, culture is the only thing standing in the way of making data driven client service a reality for law firms as well. Its a simple methodology that does take some data clean up and data strategy, along with a workflow assessment, but with the right people in place and a culture that supports client service above all else it can happen.  CRM and CI might not have all of the glitz and glamour you associate with legal marketing, branding and social media buzz, but I do believe that partnered together and used effectively as in the example above, these two strong silent types can effect real and tangible change for firms. 

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