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Casey Flaherty

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I am the co-founder and chief strategy officer at LexFusion, the go-to-market collective of legal innovation companies (tech and services). I am also the co-founder of Procertas (competency-based tech training). I was a BigLaw litigator and then in-house counsel who went into legal operations consulting before one of my BigLaw consulting clients hired me full-time to help them build the biggest and best legal project management team in world. A Lean Six Sigma black belt, I tend to think in terms of scalable systems that properly leverage people through process and technology. I am deeply experienced in legal operations, legal tech, strategic sourcing, process improvement, systems re-engineering, and value storytelling, in addition to spending over a decade in the legal trenches as a practitioner. I've long served  as a mesh point between law departments and law firms to promote structured dialogue that fosters deep supplier relationships (read about that here). I am a regular writer and speaker on practical legal innovation.

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At present, the most universal priority for law departments is “controlling outside counsel costs” per 85% of respondents to the most recent TR Legal Department Operations Index.

I understand. I also doubt the marginal utility of simply pressing harder on the traditional levers of cost control (discounts, panels, RFPs, outside counsel guidelines, AFAs). My sometimes solicited, alternative advice:

  • Package work. Identify opportunities to enter portfolio arrangements, including integrated law relationships with New Law offerings.
  • Move work. Right source, including greater use of legal marketplaces to find the right talent at the right price.
  • Re-examine costs on autopilot. Major advances in ediscovery, ADR, court reporting, staffing, etc. present substantial, immediate spend-optimization opportunities.
  • Don’t stop investing in compliance by design. Embedding legal knowledge in business processes is the only viable, long-term approach to meeting the evolving legal needs of business in an increasingly complex operating environment.

If you want to discuss, call me, maybe.

Herein, however, I am not focused on being better. Rather, we will continue our exploration of avoiding worse. The unpalatable message remains that even when something must be done, doing nothing is superior to doing the wrong thing. Running in the wrong direction cannot be course corrected solely by redoubling our efforts.…

Continue Reading Trust Fall: the limits of discounts, panels, billing guidelines, etc.

I’m not really into the whole brevity thing. I already wrote a brief post (only 800 words) that concludes with succint advice to law departments on discounts, AFAs, panels, outside counsel guidelines, RFPs, and, in particular, a humbling recommendation they not ask law firms about the use of technology unless the answers will inform structured dialogue to improve business outcomes at scale and pace (because I’d previously written a book on this subject).

At the conclusion of this off-brand concision, I promised my tiny corps of hard core readers an extended universe of nerd content. Fair warning, this is not for everyone.…

Continue Reading Scary Stories about our Wicked Problems (Legal Nerd Halloween)

I should be taking a victory lap. Instead, I am on an apology tour urging in-house departments not to listen to me—i.e., ignore my long-standing advice re asking law firms about their use of technology. I’ve concluded that the common application of my advice only adds unnecessary friction to an already friction-laden system—similar to the value-subtractive frictions introduced by ubiquitous, well-intentioned, and misguided approaches to discounts, panels, outside counsel guidelines, AFAs, etc.

I understand the motivations. I also understand the constraints. Everyone operating in our space should be able to connect the dots on these four statistics:

  • 75% of GCs recognize workloads will outpace budgets (problem)
  • 80% of in-house lawyers are burned out (consequence)
  • 70% of law departments are not investing in digital transformation (unavailable solution due to resource constraints)
  • 70% of law departments are asking law firms about technology usage (attempt to cope within resource constraints)

…
Continue Reading Legal Buy: We’re Asking the Wrong Questions (and it is my fault, kind of)

I had the good fortune to attend the first in-person CLOC Global Institute in three years. It was an extremely positive experience. Unfortunately, I came home to find I was different kind of positive (new reality; unsurprising after three weeks of travel). I was therefore not able to timely complete my final CGI Dispatch for Artificial Lawyer. Blogs, however, have no deadlines.

To recap:

Dispatch #1 discussed the rise of legal ops in the context of ever-increasing scale, organizational complicatedness, and legal complexity.

Dispatch #2 covered the stellar pre-conference Legal Ops 101 session, highlighting the importance of education when most legal ops roles are net new and, therefore, being filled by individuals with no prior experience.

Dispatch #3 reported on the first day of CGI, which was bookended by sessions on storytelling (one of my favorite topics).

Dispatch #4 was to be a reflection piece. While I could have done without the multiple days of fatigue and brain fog, I am glad I had the opportunity to truly reflect.

Let me set the scene.

LARGE CONFERENCE ROOM — BELLAGIO, LAS VEGAS — CLOC GLOBAL INSTITUTE — LEGAL OPS 101

The presenters are lined up on stage at the end of a three-hour session built around the CLOC Core 12. The Q&A session is commencing. I am part of a sold-out audience of 170+.

Question: At a company where legal ops is new, which of the Core 12 would you start with?

Presenter1: Well, I began by getting the DMS under control.

Me (mouthing silently): What? No?

Presenter2: Typically, ebilling and outside counsel rates get attacked first.

Me (shaking head and whispering): But…but…

Presenter3: Knowledge management.

Me (clutching table and muttering compulsively): No! No! You start with the business! The business!

Presenter4: Department budgeting.

Me (spontaneously combusts)

END SCENE

The above is not a literal transcript. But it is a fair recounting of the conclusion of the excellent Legal Ops 101. What was unfair was my reaction.

While I have been wrong many times before (here, here), I stand by my substantive point in this instance. I am a broken record (most recently, here) about the importance, and unfortunate absence, of centering business needs in law department planning.

But being right is different than being fair.
Continue Reading CLOC Global Institute – Reflection (Delayed)

Tropes around tech utopianism are attractive fictions that promise quick wins and deliver long-term pain, ultimately undermining our efforts at effective value storytelling (series recap, plus prior screeds against tech-fixated magical thinking here, here, and here)

A new bombshell lawsuit against a contract lifecycle management provider offers a stark reminder of the promise and peril of CLM—and therefore an unfortunate but instructive example of how tech-first solutioning can go terribly wrong.

Bad contracting processes have consequences. At the center of the complaint is a ~$5m contract for CLM services and tech. The plaintiff claim they terminated the contract early for alleged uncured breaches thereof and then mistakenly continued to make ~$1.7m in payments to defendant.

Isn’t it ironic (in the Alanis Morrissette sense of the word) that in a lawsuit centered around a disastrous effort to improve contract management a substantial percentage of the alleged damages are due to alleged failures in contract management.

The business value of better contracting is not in question. As discussed previously, a 20% improvement in contracting efficacy has, on average, 32x the business impact of cutting outside counsel spend by 20%. Tech has an important role to play. But tech should not be the star of the show, especially in the beginning.

When tech is not the primary problem (or the primary solution). The complaint begins its retelling in October 2019 when the defendant gave an in-person platform demonstration. In June 2020—seven months later “following a rigorous selection process”—the parties entered into the $5m contract only to terminate it in April 2021, ten months post execution. Suit was filed in November—more than two years after the demo (which is unlikely to have even been the beginning of this ill-fated journey).

Important for our purposes, the plaintiff specifically alleges only one tech-related misrepresentation giving rise to their claims (the ability to “apply a single contract amendment to multiple agreements simultaneously”). Beyond that, every issue raised in the complaint relates to the enormous amount of work required to properly implement CLM.

Characterized as inadequate in the complaint:

  • Staffing
  • Availability of key resources
  • Status tracking
  • Training
  • Documentation
  • Discovery
  • Design
  • Feedback
  • Data mapping
  • Data conversion
  • Data migration
  • Data validation
  • Template harmonization
  • Contract sorting
  • Clause matching
  • Implementation
  • Integration

The tech is not the central grievance. The gravamen of the complaint is the absence of expertise:…
Continue Reading Tech-First Failures – Value Storytelling (#6)

Start with Why. Value storytelling is essential (series summarized here). But, as storytellers, we’re not experimenting with the form. We should tell simple, compelling stories with no mystery as to the What, How, and Why.

What is outputs. How is inputs/process. Why is purpose, outcomes, and value.

What, How, and Why all matter. But, for our business audience, legal’s What and How are inherently uninteresting. Always start with their Why.

Why is the subject of the previous post. Business value is the one true Why. The call to action. The hook. The propulsive force. But the framing of Why is context dependent. The way we talk about business value will often need to be calibrated to our subject matter and our target audience—identifying our target audience and understanding what messaging resonates with them is quintessential to mastering our own context.

The stories we tell must cohere with the stories our audience tells themselves about their own starring role in the business’s journey. We must present ourselves as allies in the same cause. Which we are. This sense of shared purpose is most crucial when we are engaged in productive disagreement and accountable for persuading our allies of unpalatable truths—whether seeking to rejigger their perspective on value preservation (e.g., refining their legal-risk/business-reward calculus) or recommending that finite resources be allocated to the legal function despite the very real opportunity costs.
Continue Reading Start with Why – Value Storytelling (#4)

I interrupt our regularly scheduled programming—the continuing series on value storytelling—with a rant inspired by my pending Continuing Legal Education deadline.

Despite the temptation to satisfy everyone’s daily outrage quota by taking on a soft target, I consider our collective (and my personal) annoyance with CLE a minor symptom of a major problem. Our culture of learning is broken. This has all manner of downside implications, including for innovation.

But, first, a little rantastic fun. Can you spot what’s missing from this ad I received in the mail?

I am getting CLE right now. While typing these words, a CLE audio file is playing in the background on mute. I felt compelled to acquire hard evidence before launching into a tirade.

What’s missing from the advertisement is any suggestion I might learn. No mention of quality or relevance. Rather, the repeated, bolded promise of “no final exam” struck me as an assurance there would be no requirement I pay attention—i.e., I could avoid learning anything at all. A promise made; a promise kept.
Continue Reading CLE is Broken (as is our approach to learning/innovation)

Business value is business-centric. Law departments frequently ask me about metrics. My response is not nearly as definitive as they desire. I recommend they start with the customer—incorporating the metrics the business is already using and then proceeding accordingly to develop the complementary, internal (to the law department) metrics necessary to manage the department in supporting business objectives.

Talk to most (not all) law departments, you find the inverse. Most law department metrics are law-department centric, full stop. Most track their spend, consistent with a savings-centric narrative, the pitfalls of which I discussed last post. Spend with law firms. Spend v. budget. Internal v. external spend. Necessary. Fine. Limited.

You can also find excellent content online on how a more sophisticated law department can, and should, measure itself. Matter volume. Matter velocity. Cycle times. Better. Rare. Still law-department-centric.

To ground the conversation, we require some metrics on metrics. The most common law department metric is Total Spend By Law Firm, in use at 90% of law departments. No other metric cracks 60%. Cycle Time, by contrast, is near the bottom, tracked by only 16% of law departments. Legal Spend To Revenue is in the middle of the distribution at 29% penetration.

Critically, excepting diversity, these metrics are essentially meaningless from a business perspective. The CEO cares as little about how many matters the law department handles as they do about how many tickets the IT help desk closes, despite the fact both are essential to running the business. These are useful measures for managing workload within a specific function but irrelevant for managing the business—unless and until they are translated into actual business impact (i.e., value storytelling).
Continue Reading Defining Business Value – Value Storytelling (#3)