As technology advances ever forward, and information volumes explode, those in the legal field are under increasing pressure to do more with less. In reality, this can often mean having to do much more, with much less. To accomplish such an objective, we must be open to innovation, and not unlike Steve Jobs, “think differently” about how legal services are delivered. Yet legal professionals, and lawyers in particular, have earned a well-deserved stereotype of being late adopters, resistant to change and in many cases, years behind their counterparts in the rest of the business world. “If it ain’t broke, don’t fix it” is a concept many of those same men and women adopt in both their short and long-term operational decisions.
But in Silicon Valley, where I live and work, the companies that gave birth to the modern tech era are actively bringing the spirit of innovation and data-driven analytics into their legal operations, and more than that, they are openly sharing about their experiences with colleagues across the industry. Just as Jobs’ introduction of the iPhone signaled a new age in personal computing, legal operations leaders who spoke recently at two conferences held in San Francisco—Apttus Accelerate and the Corporate Legal Operations Consortium (CLOC) Institute—have left little doubt that in order to succeed, corporate legal departments must focus on increasing efficiency. But what does efficiency have to do with innovation?
“Alright, now I want to show you something incredible.”
-Steve Jobs introducing the original iPhone, September 2007
Ines Gonzalez is one of the legal operations professionals at the forefront of this movement. Ines, who is LinkedIn’s legal director, has overall responsibility for the company’s contract lifecycle management (CLM) initiatives. Her presentation at the Apttus Accelerate conference—“Making Change and Driving Value: Measuring the Impact of CLM”—began with a very simple, yet extremely relevant question: “How many of you have heard of The Life-Changing Magic of Tidying Up?”
What Ines read in a Japanese cleaning consultant’s book about decluttering one’s home turned into a professional passion for improving processes through the elimination of waste. Her reading inspired her to spearhead a large corporate initiative to improve the various processes involved in LinkedIn’s CLM workflows. Her first step was information gathering.
“For me, data without context is meaningless,” she explained. “I had to go out to our stakeholders and find out how they used the data…My favorite question to ask them was…‘What spreadsheets are you creating?’”
As she listened to her colleagues’ responses, she quickly zeroed in on the amount of time and effort involved in manually compiling offline spreadsheets from downloaded data.
“I think of myself [as the] queen of efficiency,” she proclaimed. “I hate inefficient processes, so I tried to find a way to ease their pain points [and] make those problems go away either through changing the process, training people or making changes to systems.”
Ines’ approach was echoed throughout the three-day CLOC Institute held just a few weeks later. Within numerous presentations given by industry thought leaders to more than 500 corporate legal operations professionals, the predominant theme was operational process improvement through knowledge sharing. Google Director of Legal Operations Mary O’Carroll reminded attendees during her closing remarks that CLOC’s purpose is not to facilitate a discussion of why initiatives like efficiency performance enhancements should be undertaken, but to share best practices regarding how they should be accomplished.
“Both law firms and legal vendors are telling us that they hear all this buzz and are looking to their clients for direction, but that their clients are not asking them to change,” Mary said in a pre-conference interview. “[T]hat’s where I think groups like CLOC are critical in providing a forum for legal department operations professionals to share knowledge and best practice recommendations. Together we can actively partner with legal service and legal technology providers to influence the future of the industry. Things are changing and at a more accelerated pace now than ever.” 1
“We’re thrilled with the results…”
-Steve Jobs on partnering with Google, September 2007
One of the most striking examples of legal operations efficiency gains discussed at either event was given by Ines during her Apttus Accelerate presentation, as she summarized the transformation of LinkedIn’s sales contracting processes.
“One of the most successful things we’ve done is … buil[d] [contract] templates that are as reasonable as possible,” she said. By setting a new goal of presenting customers with contract terms that do not necessitate forwarding to customers’ legal departments (or, at worst, do not require negotiation once reviewed by customers’ counsel), LinkedIn was able to reduce the number of “nonstandard” agreements its legal team was required to review to a very small percentage of the overall total.
It was Ines’ focus on “decluttering” that yielded positive returns to LinkedIn’s bottom line. By reengineering contracting processes in a manner designed to increase efficiency through the reduction of waste, Ines and her team achieved significant savings over the past two years, while simultaneously enabling the company to process significantly more contracts over the same period of time.
“[T]hey can’t change down the road if you think of another great idea…”
-Steve Jobs on competing mobile phone interfaces, September 2007
When Steve Jobs introduced the original iPhone to the public in 2007, he touted the ability of its operating system to do something no other competing platform could – install applications developed by independent software developers. In doing so, he placed Apple’s “think different” philosophy in sharp contrast to the comparatively static, change-resistance model employed by mobile phone competitors like Nokia and Samsung, whose customers were forced to utilize operating systems that were largely unable to progress beyond preset limitations.
The same battle between champions of progress and those who resist change remains as relevant in today’s legal world as it did in the mobile phone industry nearly a decade ago; even the most stalwart champions of efficiency within their corporate legal operations departments will be constrained by the simple fact that lawyers are notorious for resisting change. As a result, the internal (and, for some, seemingly eternal) corporate struggle will therefore remain:
How can legal operations efficiency gains be realized when significant stakeholder resistance is a near-certainty?
It is only when market influence and client pressures place undue strain on profit margins that those opposing reform tend to react. It should come as no surprise, then, that just as the original iPhone’s popularity fundamentally changed the way Apple’s competitors designed their products, the financial crash in 2008 initiated a fundamental shift in the legal marketplace that tipped the balance of power from private law firms and their often expensive billable hours to corporate clients seeking cost certainty and lower legal spends to offset reduced margins.
At both the Apttus Accelerate and CLOC Institute events, a resounding message from countless thought leaders within the legal operations community was likely heard loud and clear– legal operations professionals, and their mandate to eliminate process inefficiencies within corporate legal departments, are not only the new norm, but entities without similar initiatives will soon find themselves trying to proverbially sell rotary phones at the Apple Store.
“But we didn’t do this alone. We did this with the help of a lot of folks.”
-Steve Jobs, September 2007
Whether one is a litigator, transactional attorney, or another form of legal professional, that person is in the business of providing a set of legal services for his or her employer. As such, legal professionals engage in countless processes throughout the day, be them small and isolated (e.g., making copies and drafting a letter) or part of a much larger initiative (e.g., large-scale electronic document review, KYC/KYV surveys and updates). The task of simply evaluating these processes to determine what, if anything, should be done to make them more efficient is one that can literally take years to accomplish, especially for someone without formal training in process auditing or reengineering.
Fortunately for those seeking guidance and/or assistance, help is available. Resources include:
- Lean Six Sigma2 professionals, who are trained to identify and examine these processes (and the sub-processes found therein), identify and improve value-added steps, remove waste, reduce costs, improve returns, increase the quality of the work being performed, and provide many other secondary benefits to their corporate legal clients.
- Legal process outsourcing companies, which can be levied to handle high-volume, low-complexity work, to reduce overhead, freeing up internal resources to provide more valuable services, and allowing legal departments to instantly scale personnel in response to urgent deadlines or volume increases beyond capacity.
- Corporate legal departments, which, when banded together, can motivate outside counsel to reach similar process efficiency gains through sheer market pressure. As CLOC session leader and Winston & Strawn CIO David Cunningham put it, “Most firms will [only] change at a pace defined by their clients.”
“Pretty cool, huh?”
-Steve Jobs, September 2007
Efficiency initiatives in corporate legal departments may not have the incredible global impact that the iPhone generated back in 2007, but their impact upon those working in corporate legal departments cannot be denied. Whether or not founded in the teachings of LSS professionals or books about home cleanliness, it is clear these projects have produced impressive cost savings or increased output from those law departments savvy enough to take them on. They have combined to spur a full-fledged industry movement regarding how businesses operate – and organize – their legal departments.
While these efforts to drive efficiency in legal operations may not seem as significant to our world as the introduction of the iPhone, they nevertheless reflect what many see as a tectonic shift in the legal services landscape.
One need only look around at the hundreds of legal operations professionals gathered at the Apttus Accelerate and CLOC Institute events, and more recently at the ACC Legal Operations conference in Chicago, seeking out information regarding everything from the latest contract lifecycle management software solutions to tips on starting new legal operations divisions to working with legal process outsourcing companies, to know that the legal efficiency “revolution” has most certainly begun. If it continues, those corporate legal departments who refuse to “think differently” may very well be at as much of a competitive advantage (and behind the times) as Apple’s competitors were just a handful of years ago.
About the Author
Michael Kline is Director of Business Development, Western U.S., based in the San Francisco Bay Area for Integreon. With more than 15 years of experience in legal services and consulting, Michael’s role at Integreon involves regularly working with corporate legal departments and their law firms to address needs in the areas of e-discovery, document review, compliance, contract lifecycle management, and other legal outsourcing areas. Michael has a Juris Doctorate from Pepperdine University School of Law and is a member of the Association of Certified E-Discovery Specialists (ACEDS).
2 In short, Lean Six Sigma (“LSS”) is the name given to a set of techniques that are used to improve the efficiency and effectiveness of any given process. “It helps you use the right tools, in the right place and in the right way, not just in improvement but also in your day-to-day management of activities. Lean Six Sigma is really about getting key principles and concepts into the DNA and lifeblood of your organization so that it becomes a natural part of how you do things.”
Perhaps the most commonly-known example of the application of Lean Thinking principles is Henry Ford’s development of the first automotive production line. Ford revolutionized manufacturing by recognizing the inefficiency of each worker building a car from start to finish, and achieved monumental gains in that process’ effectiveness by utilizing multiple workers who specialized in building the same part on multiple cars.