9 Ways The Legal Profession Needs To Change: Are You Ready?

The major dysfunctions and pivot points in today’s corporate legal services industry.

Continuing our series of insightful takeaways from the Corporate Legal Operations Consortium (CLOC) annual meeting, we want to reflect on the general sense from Jeff Franke, chief of staff to the general counsel and assistant general counsel of global legal operations at Yahoo; Ralph Baxter, who advises the Georgetown Law Center for the Study of the Legal Profession, Harvard Law School Center on the Legal Profession, Stanford Law School Center on the Legal Profession, and Lex Machina; Scott Westfahl, professor at Harvard Law School; Mark Ross, global head of Legal Process Outsourcing at Integreon; Andrew Perlman, dean and professor of law at Suffolk University Law School; Lucy Bassli, assistant general counsel at Microsoft; and Lisa Damon, partner at Seyfarth Shaw, all agreed that “we need change” and that “the legal industry is at a tipping point of profound change.”

The group identified nine major dysfunctions and pivot points in today’s corporate legal services industry.

1- There are six main players in the legal ecosystem, and each is valuable. They include: corporations, law firms, technology providers, legal service outsourcing (LSO) providers, law schools, and regulators. Although corporations are perceived to hold the most power in this enormous ecosystem, we all share the responsibility of driving the change because we are all in it together. In fact, for us to make any progress as a legal profession, there needs to be greater degree of collaboration and less finger pointing.

2- Lawyers may not be good at quantifying risks and costs. Consequently, we are not always good at calculating value and success, and more importantly at being able to explain it. Many legal departments are still not measured on financial success or business outcomes. In fact, we often remind ourselves that if the business doesn’t realize how much work goes into resolving an issue, then we are doing something right – meaning, we are preventing problems from arising or disturbing the business goals. “Meanwhile, in the background, there is a lot of work that is turned around quickly and with urgency, but no one may ever see all that goes into it” says Bassli. “Therefore, we are at risk of failing to truly convey our value.”  Legal Operations can help attorneys define success metrics and add data in demonstrating the value of the work being done, often quietly, behind the scenes.

3- At no point does anyone train lawyers for actual corporate jobs. Many lawyers go from practicing at a law firm to working directly in-house. During this transition, many lawyers merely go from looking for billable work, to completing an overwhelming amount of work in-house. And when we are truly overwhelmed or need deeper expertise, in-house lawyers tend to call someone at their former law firm for help or ask a colleague down the hall for a recommendation. This is not a sustainable or efficient way to allocate resources. It results in many departments lacking the basic resources – human, financial, or technological – for strategic planning.

4- The culture in the legal profession of building relationships as “trusted advisors” prevents us from becoming leaders. Being a unique “trusted advisor” is in opposition to modern corporate values. We sometimes struggle with bringing other professionals into the room as part of our legal practice. We need to embrace all other professionals as partners, not simply as clients who need to “be advised.” Without them, we won’t be able to make any meaningful changes. For example, legal departments need data scientists to effectively collect, measure and interpret internal data to become leaders in a modern, metrics-driven environment.

5- Even though other professionals have a lot to offer, lawyers continue to live in isolation. Innovation in the legal profession does not happen quickly enough. We need the support of other experts to be successful, especially because many lawyers are not skilled at technology, data, project management, and many other important modern business skills. We cannot function in the antiquated lawyer/non-lawyer paradigm. The modern corporate world thrives on cross-departmental collaboration. Bassli asks attorneys to take the pledge of not dividing the world into those that lawyer and those that don’t.

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6- There are also shortcomings in the legal regulatory environment. The regulatory process is designed so that lawyers practice independently. Numerous laws and regulations insist that lawyers can’t partner with non-lawyers, prohibit equity stakes from non-lawyers, and forbid the “unauthorized practice of law.” As a result, the traditional law firm approach is isolated and lacks innovation.

7- Law firms take many cues from their clients — corporations. Therefore, firms need true partnership with law departments to drive change. It is not enough to simply demand it and let the law firms figure out diversity, billable rates, work/life balance, and other important problems on their own. Corporate departments need to provide input, and act as both partners and collaborators. This is the only way the legal ecosystem will shift the current paradigm.

8- We are in a period of evolution, and it will take time. There are many barriers we will have to change or work around. For example, LSOs still need credibility with regulators. They don’t even have a seat at the table! Our state-based system of regulators makes it challenging to include all of the important parties. Most key rules are not made at the American Bar Association (ABA) or state bar association. They are made at the Supreme Court of the state. Corporations, law firms, technology providers, LSOs, law schools, and regulators need to be more involved and more actively shaping our future.

9- At many law schools, especially top ranked law schools, faculty have never actually practiced law. There is an overwhelming emphasis on pure academic research and scholarship. Individual efforts are over-emphasized and students are given no incentives to collaborate. This does not match the modern corporate world reality or practices, and leaves new lawyers unprepared to positively contribute to the corporate world.

Although many of these conclusions may seem bleak, the good news is that with disruption comes opportunity. The legal profession is opening its doors to those from diverse backgrounds. Career paths beyond the traditional BigLaw route are becoming more viable and attractive for top talent. We find that change is frequently in the nuance. We encourage each of you to stay alert and proactive on these nine issues, because each of us has the potential to impact the legal profession of tomorrow.

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Olga V. Mack and Katia Bloom are startup enthusiasts who embrace the current disruption to the legal profession. Long gone are the days when in-house legal departments simply manage outside counsel or provide services. Today’s legal department is a sophisticated business unit that co-manages the company’s bottom line, embraces technology, and analyzes risks constructively. Mack and Bloom love this change and are dedicated to improving and shaping the future of the legal profession. Together they passionately collect and share inspiring stories of legal leaders who are thriving through the ongoing tectonic shift. Mack and Bloom are convinced that the legal profession will emerge from this revolution even stronger, more resilient, and inclusive than before. They are currently co-authoring a manual of the skills and traits lawyers need to succeed in — and even enjoy — today’s rapidly evolving in-house legal departments. You can reach them at olga@olgamack.com and katia@katiabloom.com or @olgavmack and @bloomkatia on Twitter.