Why I joined Coordinated Law

I have spent 31 years practicing law across New York, London, Brussels and Moscow. 25 of those years were at law firms, six were in-house at an investment bank.

During that period, and much more so in the last ten years or so, I have spent a lot of time thinking about and discussing law firm strategy and the broader trends in the provision of legal services.

In  September 2017, I joined Coordinated Law. I thought it might be interesting to set out some of the considerations behind that change.

Continuing client unhappiness about value from legal services

While there has been some evolution in the manner in which law is practiced at the major law firms over the course of my career, for the most part, it has not changed fundamentally.

At the same time, the calls for change have grown ever louder and more insistent.

What clients are typically saying, at heart, is that they are looking for greater valuein return for a given legal spend; and also a greater degree of meaningful involvement.[1]

The issue is not whether individual lawyers are earnestly trying to do what is in the client’s interest.  Overwhelmingly, they are. 

Nor is it a question of clients communicating what matters to them -  they have become better and ever more sophisticated in doing so.

Large law firms have heard the main themes many times through their “client listening” initiatives. This is on top of everything published on the topic and countless private conversations and communications.

Nonetheless, a major gap persists between clients and law firms on the perception of value which is delivered in practice.

Why is this so difficult?

Market responses

We have seen several different responses to this perceived value gap. 

For example, we have seen an extension of “business process outsourcing” approaches to the legal sector. Specialist companies were the instigators rather than law firms, and providers like Axiom and Riverview continue to impress.

Within the current decade, a number of law firms have developed their own lower cost alternatives for certain services (e.g. document review and claims processing in litigation and investigations; document assembly, verification and due diligence in transactional work). There is also a body of specialist software to help with this kind of work.

At the same time, we have seen companies increasingly take repetitive work in-house, handling it in a highly process-driven and, increasingly, automated fashion.

Outside the context of repetitive work, a number of law firms are also in the early days of trying to differentiate their offering more broadly through technology-related and legal project management initiatives to help deliver better value for clients.

Despite some notable successes, the perceived value gap remains very great.[2]   

Different kinds of work

Process-driven and automated approaches clearly have much further to go. The fact that they have grown less rapidly in recent years than predicted by many a decade ago is not necessarily a guide to the next decade.

However, some kinds of work cannot be done simply by applying these increasingly familiar techniques.

The crucial difference is between[3]

  1. Projects – and parts of projects – that are complicated – i.e. intricate but repeatable in clearly definable ways, and therefore open to improvement by a combination of well-thought out procedures, automation and, increasingly, statistics and machine learning techniques.
  2. Those which are complex in the sense that significant human judgement is required to deal with elements of uncertainty in a bespoke way. This uncertainty may be driven by economic or political events or by the actions of other people, such as counterparties and regulators. The ever-increasing flow of laws, regulations and (technologically-driven) factual material also contribute to complexity. Many large cross border transactions, projects, disputes and investigations provide examples of this type of work, since the laws of different countries interact in complex ways. However, complexity can also present real problems in a largely domestic context.

Over time, the boundary between these types of work has constantly shifted. Increased use of technology will shift it further, with more falling into the first category.

However, my expectation is that, despite everything, genuinely complex work which requires significant human input and judgement will remain very important as a source of legal spend.

A considerable degree of human involvement will also still be needed to manage such work on behalf of the client if the basic needs mentioned earlier – value for money and better quality involvement – are to be achieved.

Improving value and client involvement in complex work

Major law firms have understood clearly for many years now that their profits are driven by focusing on the complex.[4] The move to internationalise law firms since the 1990s has been based, at least in part, on this understanding. Any matter that crosses a border already adds a layer of complexity while also reducing the number of credible competitors.

Companies seeking to drive growth by tackling newer markets that may lack transparency also face particularly acute complex challenges if they are subject to the highest standards of ethical governance in their home jurisdiction.  Similar complexities arise in the other direction when a company used to doing business in less transparent jurisdictions expands its business to more mature jurisdictions.

Even outside the international context, though, the increase in laws and regulatory regimes and the ever-growing volume of data and documents to be engaged with are drivers of complexity (as well as complication).

As a client, unless you develop effective ways to deal with uncertainty-at-scale, you will be disregarding a core aspect of the value gap.

Technology for complex legal projects

My colleague Graeme Johnston has observed that most of the technology used and discussed in the context of large legal projects falls into a few categories.

  • One category is technology that’s not really specific to law, e.g. messages, document storage / collaboration.
  • The second is focused on managing the administrative and financial implications of the standard large law firm business model, e.g. time recording, practice management and e-billing software.
  • The third is software designed for issues that can either be handled by lawyers working in a traditional, highly autonomous way (e.g. legal research and proof-reading tools) or by teams working on complicated tasks in a more “industrial” fashion (e.g. document assembly and review tools).

The Juralio software, employed by Coordinated Law, takes a different approach, being built specifically for the particular human communication and collaboration needs of complex legal projects.

It provides a readily comprehensible overview of what’s actually going in different work streams (as opposed to having to cut through the usual mass of numbers, documents and messages) while enabling the user very easily to access any detail when needed.

It’s something that has the craft of lawyering and the needs of clients in mind and reflects a deep understanding of what really matters in complex legal projects.

Summary

It is a hallmark of high value complex legal projects that you need to employ a significant amount of human judgement within teams who bring different skills and perspectives.

Expecting a law firm to make most of the calls on what to do and not do  is not a sustainable approach for genuinely complex work, unless cost is immaterial.

This problem is not going to go away even though the details will change over time.

What you are ultimately trying to do is to try and make sure that the right decision makers are able to make informed decisions in a timely manner based on all the available relevant information.

In practice, though, lawyers in law firms and clients often find themselves overwhelmed with the challenges of managing the lawyers’ work. Simply staying on top of what is going on, in sufficient depth to make good decisions, is, I believe, often more difficult and time-consuming at present than it really should  be.

In such a context, I believe that lawyers who have experience delivering legal services (and coordinating the delivery of such services by others) from within law firms can play an invaluable role in facilitating more effective collaboration.

We can also bring to bear our knowledge of the technology options available in the market, as well as a realistic understanding of what technology can and cannot help with.

Our aim is to help clients achieve better value for money in a sustainable way which results in a more efficient spend and a more satisfactory involvement.

We seek to work in a proactive way which helps avoid incurring of cost in the first place, i.e. not doing work which the client does not value. This can, I believe, work well for law firms as well by helping them maintain margins while at the same time reducing spend.

Here at Coordinated Law we are seeking to make this service a reality. We’re also working hard to align our interests with the types of value that the client is seeking to maximize. 

In this way, we hope to help with the perceived value gap at the intersection of the client and the law firm while allowing both to achieve their goals.

This is the possibility that Coordinated Law opens up.  I am very excited about being part of it and believe strongly that now is the time where this type of market entrant can respond to a real and growing need in the market.

Endnotes

[1] See Victor Bekink’s blogpost on this topic, summing up with the observation that “insight leads to happy relationships.”

[2] For some recent research in this area, see this report by Dr. Kishore Sengupta of the Judge Business School who explores the gap in expectations between clients and law firms.  He views the issue as a “fundamental” part of the operating model of law firms arguing that where the chief metric is chargeable hours “there is a fundamental point of tension between law firms and clients.”  . 

[3] See Graeme Johnston’s post of 3 November 2017, describing the difference between the complex and the complicated.

[4] Importantly, the complicated aspects of complex projects are still a significant source of revenue or (from the client perspective) spend. Even in 2017, they are often not untangled effectively. However, the ability to do so is now so widely understood that it’s hard to see this as anything other than an example of the future already being with us, just not yet completely visible to all.

Allen Hanen