IN-HOUSE TOM: SECTION 3.3 Trend 3 #Legaltech “disruption” hopes fading; “Ryanair” moment rising; state intervention hovering; purpose of law needs fixing, first

I’m writing a book with the working title: IN-HOUSE TOM: a new model for the law department, law firm & C-Suite relationship – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 3.3 Trend 3 #Legaltech “disruption” hopes fading; “Ryanair” moment rising; state intervention hovering; purpose of law needs fixing, first

The third, of seven trends, against which backdrop the current in-house target operating model struggles, is that the hopes that technology would somehow change the behaviour of lawyers leading to a “transformation” or “disruption” in legal services are fading; that this creates an opportunity for one or more parties to do what, for example, Ryanair did i.e. to see technology as an enabler, not as a driver, of change and that this might also be a good opportunity for the state to intervene and “encourage” accelerated change – after-all, lawyers are Officers of the Court and, ultimately, servants of the state – an inconvenient truth perhaps, but a truth n’er the less.

This is no surprise to “non-lawyers” who wonder what lawyers are doing noodling about “#legaltech” when their very purpose in society is unclear? Fix your “why”, and your “how”, including your “tech” revolution, will follow. Ask Simon Sinek for help.

“WHEN AI AND THE INTERNET MEET THE PROFESSIONS…

…This book sets out two futures for the professions. Both rest on technology. One is reassuringly familiar. It is a more efficient version version of what we have today. The second is transformational – a gradual replacement of professionals by increasingly capable systems” (Back cover of The Future of the Professions: how technology will transform the work of human experts by Richard Susskind and Daniel Susskind, Oxford University 2015)

The Susskinds must feel disappointed.

As must those who endorsed in the book: Lord Thomas, Daniel Finkelstein, Ian Goldin, Philip Evans, Hugh Verrier, Anthony Seldon, Nicholas LaRusso, Conrad Young, and Richard Sexton.

The Susskinds and their endorsers are bright, experienced and thoughtful people. How could they have got this so wrong? Have they got they got it wrong? Is it too early to say?

Well, so far no transformation. We’d know.

Is it likely soon based on current efforts? Don’t hold your breath.

Here’s what might break the logjam:

  • One ABS licensee led by a “non-lawyer”, or an a-typical lawyer, with deep pockets could “do a Ryanair” which used technology (online booking) to disrupt the no frills airline market
  • The state could intervene and insist that the profession wake up and smell the digits
  • One innovative GC + one inspirational Managing Partner + an onside C-Suite including, er, a CTO might one day get in a room with a flip-chart and some post-it notes and sort this out.

Have you ever seen GCs, Managing Partners and CXOs including, er, CTOs get together regularly in large numbers at conferences? If you have, please DM.

The Susskinds weren’t wrong. They just missed a step:

Humans, not technology, will transform the work of human experts and then they will use technology to enable that transformation.

But the first step is to clarify the purpose “of the work of human experts”.

That’s up for grabs, “big time”, in respect of lawyers.

I’d love to read a book by the Susskinds on that topic including their take on society’s shift towards ESG investing, which in my view, will be the key “disrupting” factor in the legal sector.

Ciarán Fenton

IN-HOUSE TOM: SECTION 3.2 Trend 2 Law firm hubris: no incentives to change; gleeful at the disruption desert but “airline-type” big bang looms

I’m writing a book with the working title: IN-HOUSE TOM: a new model for the law department, law firm & C-Suite relationship – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 3.2 Trend 2 Law firm hubris: no incentives to change; gleeful at the disruption desert but “airline-type” big bang looms

The second, of seven trends, against which backdrop the current in-house, law firm and C-Suite relationship languishes is the increasing and understandable hubris in law firms who have no incentives to change their broken models, are gleeful that, while AI may be an oasis in a desert of legal services disruption, “New Law” hasn’t “caught on”, is frequently viewed as an LLP respray and in any event the “billable hour” is alive and ticking in most firms, save for a few “outliers”.

But hubris, which in Greek tragedy meant excessive pride and defiance towards the gods leading to nemesis, in law firm terms means a defiance towards the “god” of society which is telling the legal sector that it is unhappy. Very unhappy. An while unhappy markets can sustain for long periods – sometimes very long periods – sooner or later trends collide to enable one or more players to say “enough is enough”.

This happened in the airline sector. Once upon a time flying was for a certain class of person, was massively overpriced and the service provided inconsistent across the range of that service category’s benefits.

Southwest Airlines, Easy Jet and Ryanair put an end to all of that. Their stories are now part of business disruption folklore. But before they did what they did the market was incredibly unhappy but resigned to the status quo.

The legal services market is in the same position now save for one factor: the disruption required in the airline industry was about services whereas the disruption required in the legal sector is not about services but about lawyers and their behaviour.

Legal services doesn’t need disruption. Lawyers do.

Broadly speaking legal services are fine and will improve when they become more customer focused and enabled by technology. That’s not difficult. Time, money and innovation will sort that.

Disruption of lawyers will take longer.

But a combination of one courageous law firm, one a-typical law department and one innovative ESG focused CEO/C-Suite could bring the entire commercial law edifice tumbling to the ground.

The managing partner of a law firm which has reached a “glass ceiling” and is currently failing to break into “the next level” of corporate clients might lead the revolution or maybe a managing partner of a “top firm” who fears such an outcome might do so too.

A GC who combines a brilliant legal mind, with proven leadership skills and exceptionally high emotional intelligence might one day be the “Herb Kelleher” of commercial law’s Big Bang or maybe, a “respected GC” with the smarts to read the runes and the relationships and convening power to facilitate change might do so too.

Or perhaps a young well educated, rounded, well adjusted, emotionally intelligent CEO of a “something-tech” successful and trendy business who cares about ESG as much as money might lead this or maybe a crusty old CEO who sees the tumbrils coming down the track decides to act and help lawyers help themselves.

Or maybe all three, all six or a combination. Who knows.

Either way and whoever does it, as sure as water flows downhill, this will happen.

Covid-19 will accelerate it.

Ciarán Fenton

IN-HOUSE TOM: SECTION 3.1 Trend #1 #ESG: Lawyers will be required to enable the relaunch of capitalism, whether they like it or not

I’m writing a book with the working title: IN-HOUSE TOM: a new model for the law department, law firm & C-Suite relationship – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 3.1 Trend #1 #ESG: Lawyers will be required to enable the relaunch of capitalism, whether they like it or not

In Section 1, I set out the weaknesses in the current in-house target operating model and in Section 2, the steps to building a new one.

In Section 3, I will set out seven trends which form the context in which in-house lawyers will operate. These make a new model not only unavoidable but also achievable.

The first is the unstoppable trend towards the relaunch of capitalism via a focus on environment, society and governance (ESG) in investment decision-making. This is now a multi-trillion dollar business.

Skeptics point to inconsistent metrics, shallow motivations, and no fundamental change in company law on stakeholder holder value despite movements in that direction.

But Covid19 has squashed any remaining doubts that Milton Friedman’s manifesto for the primacy of shareholder value will be consigned to history, despite the protests of the right that state interventions are “temporary and not socialism”.

They miss the point. The loudest noises for a relaunch in capitalism are coming, not from traditional socialists, but from capitalists red in tooth and claw: Larry Fink, The Financial Times, and the 181 CEOs of The Business Roundtable to mention just three.

Society has had enough of trickle-down economics, stagnant wages, high dividends and unjust executive pay.

Until now some ESG rhetoric has been a fig leaf for making more money by by having a “purpose” other than making more money. That goose is truly cooked by Covid19 because it assumes that business will do this voluntarily. Pigs will fly.

Society will bring a big stick to business and will use it in anger, because it is furious and. sooner or later, history tells us that if society “gets mad” and decides to change its mandate it will be sudden and brutal.

It’s mandate to business will change. I call the new mandate ESGP: you must make as much profit as you can (P) because if you don’t we won’t be able to fund hospitals, schools and the police nor will we be able to entice people to risk their capital but you must do so but only after you pay a significant cash contribution to protecting environment, society and the cost of running a business ethically (ESG).

That means business will make less money. That means growth forecasts will have to take account of ESG costs. That means the stock markets will have to reset their expectations on ROI.

Ergo, board decision-making processes will change beyond belief. Since the board is the law department’s client, it follows that the role and purpose of the law department in enabling better ESGP decision-making will become of paramount importance to the organisation because one of biggest ESG risks for business is “conduct risk” which is defined as behaviour over time and the business will need their law department and their external law firm advisers to advise carefully on how to mitigate conduct risk and on internal legal process which can also lead to conduct risk.

If a GC wants to concentrate the minds of their client Board they might ask the following questions:

  • Do you want to be on the front pages for damaging the environment?
  • Or for a #MeToo incident, flagrant unequal pay or tax dodging (which could have paid for ventilators)?
  • Or for serious unethical behaviour?
  • Or any of the above which break laws and could land you in jail?
  • Or perhaps someone you know died of Covid-19 and you now believe in ESGP or you have changed your mind for another reason?
  • Or perhaps you genuinely feel that while you want to make money you also want to contribute to society or at least not damage it?
  • Will you now, please, get out of our way and let the law department do its job which is to enable better ESGP decisions?

How far fetched or far off do you honestly feel that line of questioning is?

Ciarán Fenton

IN-HOUSE TOM: SECTION 2.7 Step 7 Defy law school training; use the F-word; accept the GC as CEO of Legal

I’m writing a book with the working title: IN-HOUSE TOM: a new model for the law department, law firm & C-Suite relationship – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 2.7 Step 7 Defy law school training; use the F-word; accept the GC as CEO of Legal

The seventh, of seven steps, in building a new in-house target operating model is for in-house lawyers to defy their law school training when it comes to leadership processes because law schools don’t value leadership only because law firms don’t value them because they can’t bill them by the hour; for in-house lawyers-as-leaders to use the F-word – Feeling – much more frequently that the T-word – Thinking, because legal training eschews feelings which may work in the practice of black letter law but is disastrous when lawyers have to lead, as so many of them do and, finally and crucially, by ensuring that fellow in-house lawyers accept that one of their number – the GC – is in fact the CEO of Legal, whether they like it or not, and the GC must lead and they must submit to leadership. It’s an action, not a thought.

Leadership is a strategic process

Every target operating model consists of three minimum components:

  • needs
  • strategic resources
  • strategic processes

Leadership is a strategic process. Without it the strategic resources cannnot be applied to meet the needs of “the business”.

The leadership skills of the GC and other in-house lawyers-as-leaders are strategic resources. If these are weak then they cannot meet needs of “the business” effectively.

All leaders do three things; so must lawyers-as-leaders

  • Create an environment in which the people they lead thrive
    • Lawyers-as-leaders struggle with this. They are litigators trained not only to win, but to ensure that the other guy loses, bigly. The notion that they might help someone else win does not compute. It’s counter intuitive. That’s why GCs must pay more attention than they think to leadership development – their own, particularly.
  • Grow and develop whatever they lead
    • GCs must grow and develop the legal department as a business because money is involved. One GC I worked with felt this characterisation of Legal-as-a-Business was “far too simplistic”. I understand this view and its etymology. Legal training promotes brilliance in legal practice to a God-like status whereby lawyers vie with other to be the “brightest in the room”. Small wonder therefore that they find themselves so frequently left outside “the room” in “the business”. In-house lawyers would help themselves more if they tried to be less snooty about the art and science of business and leadership and more aware that it’s hard work leading well and is a skill to be cherished, not ignored.
  • Please stakeholders – all of them, not some
    • In-house lawyers-as-leaders must please
      • The Court: they are Officers of the Court although I find that many don’t like to be reminded of this inconvenient truth. It sits uneasily with the nonsensical “pragmatic business partner” trope encouraged in recent years at in-house conferences. You’ll never hear a CEO facing the possibility of being fitted for an orange jumpsuit talk about lawyers-as-business-partners. They’ll be desperate for that “privileged” conversation, which privilege (sic) is granted to in-house lawyers by the Court.
      • The Board: the Board, not the CEO, is their client. The board also pays the law department’s bills.
      • Society: people died in trenches to allow lawyers to practice in a free democracy. Society expects lawyers to bear society in mind when advising “the business”. This expectation will intensify as businesses realise that ESG – environment, society and governance decision-making – is here to stay. It’s not a fad.
      • “Direct Reports” – Lawyers-who-lead have a duty to the people they lead. It’s a duty, not an option.
      • Other functions: people who work in other functions in “the business” look up to Legal to model behaviour: “If Legal isn’t worried, why should I”?
      • Regulators – Legal and other regulators are key stakeholders. It’s unfortunate, however, that legal regulators fail to help in-house lawyers with their “independence” challenges more than they do.

The GC is the CEO of Legal

Sadly, all but the most a-typical of in-house lawyers and fortunately there are a few of those, struggle with the notion that one of their number must lead them.

Being led doesn’t sit easily with these heroic soloists.

What if GCs and lawyers-as-leaders were to take Charlie Munger’s famous advice:

“Never, ever think about something else when you should be thinking about the power of incentives”.

So what’s the incentive for in-house lawyers to change their behaviour when they have resolutely failed to “disrupt” anything in the last five years and they show no signs of doing so now?

I recall giving a speech to an in-house legal conference many years ago setting out the arguments in this book. There were about 180 in-house lawyers in the room. Less than ten showed any active interest. I think I said: you are all here on expenses, with your five weeks holidays, pensions and LTIPs. Why should you care? Where’s your pain? Why don’t we stop the session and go and drink pints? They laughed.

I don’t/didn’t blame them.

There’s only one incentive that will move lawyers to action: that’s peer pressure.

When a-typcial lawyers-as-leaders connect with the “boiling frog” reality of legal services they will act. Their peers will respond. They’re not stupid. They’re “bright”, remember.

What will make a-typcial lawyers act?

Society.

“Changes in the macro-environment” is the “in” phrase.

That’s what the next section of this book, Section 3, is about:

Why the legal frog should jump out of the warming waters, before it’s too late.

Disrupt on their terms rather than be disrupted on the terms of others.

Either way, just like the parent who says to a child at bedtime: “Would you like the blue teddy or the brown teddy?” [But you’re going to bed] – society will, unless lawyers act, tell which lawyers which teddy they will have, like it or not.

Allowing the water to boil isn’t “bright”, is it?

Ciarán Fenton

IN-HOUSE TOM: SECTION 2.6 Step 6 Negotiate a business plan which meets business needs but honours Legal’s purpose

I’m writing a book with the working title: IN-HOUSE TOM: a new model for the law department, law firm & C-Suite relationship – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 2.6 Step 6 Negotiate a business plan which meets business needs but honours Legal’s purpose

The sixth, of seven steps, in building a new in-house target operating model is to negotiate a breakeven law department business plan which meets reasonable business needs but at the same time must honour the purpose of any law department which is to enable better decisions using excellent legal counsel and process.

By “negotiate” I mean to negotiate a deal with the Board where you agree to deliver “seven things for seven dollars not ten things for seven dollars.” (Ibid).

This requires selling skills, covered earlier, and negotiating skills ensuring the business feels that this approach is in its long term interests.

By “business plan” I mean a plan which allows you to run Legal as a business, not like one, over the next three to five years.

You can use any business plan template.

I have developed this one tailored for legal departments:

Legal Department Business Plan Executive Summary Template (and notes)

  1. Definitions [To Be Agreed with “the business”]
    1. “Legal” The legal department…
    2. “The business” The Board…[not the CEO]
    3. “The needs of the business” : See Appendix A
    4.  “The budget”: See Appendix B
    5. “Foresight” [Not a crystal ball…]
    6. “Legal counsel”: legal advice
    7. “Legal process”: all processes which have a legal component
    8. “Lawyer-Leaders”
      1. Lawyers who lead teams and need to develop appropriate leadership skills
    9. “Exclusions” Appendix C
      1. The list of services that the business needs but which cannot be funded within the budget therefore not part of this plan.
  2. The Purpose of Legal (Why)
    1. “A vibrant, independent legal profession is an essential element of any democratic society committed to the rule of law… lawyers also owe overriding specific duties to the court and to society, duties…which may require lawyers to act to their own detriment, and to that of their clients.” Lord Neuberger
    2. “The lawyer has a duty to the court which is paramount….He owes allegiance to a higher cause. It is the cause of truth and justice…. He must disregard the specific instructions of his client if they conflict with his duty to the court” Lord Denning Rondel v Worsley 1967
    3. Work with the business to foresee risks
    4. Provide excellent legal counsel and process
    5. To develop in-house lawyers and lawyer-leaders
  3. Legal Strategy to achieve this purpose (How)
    1. The primary strategy to achieve its purpose will be to focus on communicating how scarce resources are being exploited to foresee top end emerging risks and to provide essential counsel and process
  4. Legal Behaviour (Approach)
    1. Operating as an independent breakeven business
    2. Emphasis on maxmising personal and team performance and fulfilment
    3. Best practice in internal marketing and operational management of scarce resources
  5. The Agreed Needs of “the business”
    1. Foresight
    2. Visible/vanguard
    3. Engaged in the business
    4. Excellent legal counsel
    5. Excellent legal process
    6. Value for money
    7. Within budget
    8. See Appendix D
  6. The opportunity
    1. To demonstrate that “foresight” can be delivered to and with the business
    2. To have a new conversation with the business which matches needs to resources
    3. To create an environment in which lawyers and non-lawyers can thrive
  7. Internal Marketing Plan
    1. Internal marketing, not just communications, is a key component of Legal strategy. All Legal Operating Board Members need to understand what Internal Marketing is and how it is works in practice. The Plan will follow standard marketing principles i.e. ‘The 4 Ps”:
      1. Product (Service)
        • Foresight
        • Counsel
        • Process
      2. Price
        • The Budget
      3. Place (Delivery)
        • 1-1
        • 1- many
        • In writing
      4. Promotion (internal marketing)
        • Legal “brand”: Professional, High quality
        • Reliable: forward looking, risk managers  etc.
        • Seminars led by Legal team members
        • Relationship marketing – stories
  8. Operations Plan
    1. Business need
    2. People
    3. Resources
    4. IT Plan
    5. Finance Plan
    6. Behaviour Plan
    7. Cost
  9. People Plan
    1. Legal Operating Board
      1. GC as “CEO”
      2. CFO from Finance Department or external
      3. COO
        1. Practice Heads
      4. CTO from IT Department or external
      5. CMO from Marketing Department or external
      6. HR
      7. GC to Operating Board
    2. Risk Committee
    3. People Committee
    4. The Organisation Chart is set out in Appendix E
    5. Legal Operating Board will set out, in conjunction with HR, its own People Policy particularly in relation to the creation of a culture of excellence for lawyers and those who support lawyers
    6. A separate Policy document will be agreed by Legal in respect of external counsel and in particular the use of “new law” providers.
  10. Target Operating Model
    1. Taken together, the  sections above constitute the Legal Target Operating Model (TOM), which is about how, ideally, the law department would like to operate. The components of the TOM are needs, strategic resources and strategic processes:
    1. Need: The agreed needs of the business
    2. Strategic Resources: People, External relationships, Knowledge
    3. Strategic Processes: Operating Board, Risk Committee, People Committee, Workflows, etc
  11. Finance
    1. Detailed Budget: See Appendix
    2. Financial Reporting processes
    3. Monthly management accounting reports with variance analysis and narrative to be presented to the Legal Operating Board
  12. SWOT & Mitigation
    1. Strengths:
    2. Weaknesses:
    3. Opportunity:
    4. Threat:
      1. Mitigation
        1. A
        2. B
        3. C

Busieness Plan Steps

  • Debate and agree Draft 1 at Legal Operating Board meetings
  • Full Legal Operating Board to present Draft 1 to the business
  • Debate
  • Review and agree Draft 2 at Legal Operating Board Meetings
  • Re-present Draft 2 to the business
  • Repeat as required
  • SIGN OFF
  • DELIVER

Ciarán Fenton

IN-HOUSE TOM: SECTION 2.5 Step 5 Invest cash in innovative providers to help close the C-Suite gap & end the in/out myth

I’m writing a book with the working title: IN-HOUSE TOM: a new target operating model for law departments – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 2.5 Step 5 Invest cash in innovative providers to help close the C-Suite gap & end the in/out myth

The fifth, of seven steps, in building a new in-house target operating model is to fix what’s broken with “out-of-house” by abolishing the vanity of “panels”, investing cash in long-term relationships with innovative suppliers of legal counsel and process, allowing them access to your C-Suite so that they can help you close the yawning “gap with Legal” and in doing so end the myth that in-house and out are in any way different save that in-house should be “in the room” by right.

Bjarne Tellmann quotes Sun Tzu in his book “Building an Outstanding Legal Team” (Globe Law & Business 2017 p.155): “If you do not seek out allies and helpers, then you will be isolated and weak.”

He’s right and, although I don’t agree with all of his views on out of house relationships, he makes a crucial point that “it [outside spend] is likely to comprise the largest component of you legal spend”.

Why then do law departments not exploit, positively, this awesome buying power on “eat all you can for a fiver” joint venture deals over three to five years instead of over-priced “à la carte” legal menus offered by panels?

Law firms’ business models are constructed and thrive, at least financially, on the current dysfunctional relationship between in-house, law firms and the C-Suite.

As one equity partner explained to me: “…we advise businesses how to get from A to B. This involves counsel and process. We undercharge for counsel and overcharge for process. But it nets out ok in the end…”

It may “net out ok” for some law firms, but business and therefore society is underserved.

The cure is painful and demands courage but would put law departments in the driving seat of “legal disruption” with innovative providers up front with them:

  • abandon panels: time-wasting, expensive, vanity beauty contests
  • invest cash in innovative providers: help them fund their target operating models over several years so they can de-risk yours
  • be confident enough to allow them access to your C-Suite: they can help you develop and sell in your Legal Business Plan
  • make them part of your team; invite them to your operating board meetings
  • help them build businesses which have good people but not reliant on any personalities
  • have the courage to avoid the “none got fired for instructing a “Magic Circle” law firm hamster wheel by helping your joint venture suppliers invest in talented lawyers as good as the best
  • end the “magic circle” myth once and for all; it isn’t magic

The magic circle myth perpetuates the in/out myth which is that there is an unbreakable caste system in law: in-housers are perceived by some as a tad intellectually inferior to law firm lawyers; that they have taken “the corporate shilling” and pay law firm’s exorbitant bills only because their in-house relationships with the C-Suite are so dysfunctional they dare not as they need substantial air-cover.

This merry-go-around serves no-one. Not even the big law firms who know that their models are disintegrating because their billable hour cultures are not sustainable.

Soon the matter will be taken out of their hands as society wakes up to the over-priced mess that is the legal services sector which still allows corporations to go under while employing law departments the size of law firms and with no ABS obligations and “light touch” regulation and who were not “in the room when that decision was made” but, strangely, were in the room when that “legal privilege moment” was urgently required. Officer of the Court one moment, “blocker”, the next.

The water is getting warmer around the frog.

Clever law firms and providers should “get in there now” and help sort out this mess before the “revolution”.

Clever law departments should invite them in.

Ciarán Fenton

IN-HOUSE TOM: SECTION 2.4 Step 4 Sell to your Board the purpose of Legal; be ready to walk away en masse & don’t bluff

I’m writing a book with the working title: IN-HOUSE TOM: a new target operating model for law departments – initially as a series of blogs.

You can follow the full index of the blogs as they build here: IN-HOUSE TOM: INDEX

IN-HOUSE TOM: SECTION 2.4 Step 4 Sell to your Board the purpose of Legal; be ready to walk away en masse & don’t bluff

The fourth, and toughest of the seven steps, in building a new target operating model for your law department is to sell to your board the necessary reframing of the purpose of Legal, ever before you present your Legal Business Plan – incorporating your new TOM – and that you are ready to walk away en masse if they don’t buy it, and you are not bluffing.

And pigs will fly, I hear readers say, because:

  • we don’t, really, report to the Board even if we are supposed to
  • we report to the CEO, if we’re lucky
  • and they have us over a barrel through our employment contracts, annual reviews, bonuses, share schemes and LTIPs etc.
  • we can’t “walk” en masse because we have nowhere to go
  • our places would be filled in an instant by compliant lawyers
  • in any event lawyers don’t do anything “en masse” – that’s a joke
  • we don’t have each others’ backs, when it comes to the wire, that’s how we’re trained

I have heard all these arguments many times from lawyers and lawyers are very skilled and persuasive in argument.

But not in selling.

If they understood Selling 101 they might feel differently.

Selling 101

  • There’s no sale without pain, explicit or implicit
  • The pain of “the business” is legal risk and uncompetitive process
  • Legal must demonstrate, not assert, its ability to deal with the pain
  • It the must understand “the business” perception of the gap between its need and Legal’s pitch
  • Then Legal must close the gap or walk away

The PSB of Legal

The generic purpose (P) of any legal department is to enable better decisions by their Board, and everyone who reports to it, in terms of legal counsel and process.

The generic strategy (S) of any legal department should be to act as an independent internal business; walk with a big stick and use it occasionally.

The generic behaviour (B) of any legal department should be to deliver ten things for ten dollars excellently or seven for seven but never ten for seven.

Walk away; don’t bluff

If Legal sells properly then “the business” will buy because it needs legal. If Legal fails to sell properly it has only itself to blame. But if “the business” is too stupid to buy what it needs, and the Regulator won’t back Legal as it currently is failing to do, then Legal must walk away en masse, without bluffing.

To where?

That’s a good question and reminds me of a valuable lesson I learned from a learned boss when I was a young and inexperienced managing director of a business which was part of a group. We had a key supplier who supplied a business critical bespoke service and was asking for more money that we could afford. We were “over a barrel” because we were deeply embedded in that supplier’s internal value chain. They knew it.

My boss, the group CEO, told me a) to find an alternative provider within budget and b) plan for the disruption of a move and c) tell our current supplier that if they didn’t agree to our price we would definitely move.

I did. They didn’t. We moved. The move was less painful than we thought. The supplier suffered a major “risk event”, to put it mildly.

So, where would a law department move to en masse, if it had to?

To a law firm.

An innovative law firm.

Why?

Because that’s Step 5: Sack your Panel and joint venture with innovative law firms from the start; make them part of your team.

Find law firms that will have your back.

Further snorts of derision, I hear.

What would make any law firm do that?

Society will.

Lawyers won’t change. Society will. Then they will demand change. Lawyers will have no choice.

Society’s change is happening much sooner than lawyers think.

It’s the boiling frog syndrome.

Ciarán Fenton