Viva Legal Ops Vegas!

The two big-deal legal conferences taking place this past week share some things in common. Neither the National Association for Law Placement (NALP ) conference, which dates back to 1971, nor the three-year old Corporate Legal Operations Consortium (CLOC) Institute are concerned with the practice of law as such. Both offer a similar programming mix of plenaries, panels and product demos. Both events are partially, but to an important degree, driven by non-lawyer specialist professionals and consultants. Yet each event represents a different paradigm: one ascendant, the other under fire. While NALP is concerned with the legal profession, the upstarts at CLOC want to remake a legal industry. It’s the case of Schools and firms et al. v. Systems and processes.

NALP brings together representatives of legal employers and law schools to tackle human capital matters: Career counseling and placement, recruitment and retention, diversity and inclusion. Most NALP attendees surely do believe that “a law firm’s most important assets walk out the door every night.” At CLOC, it’s doubtful you could find much enthusiasm for that idea, despite some obligatory-sounding rhetorical nods.

The recent rapid growth of CLOC — from an informal group of a few dozen at its founding just seven years ago, to 1,000+ members today–tracks the explosion of interest in the legal operations field generally. As CLOC CEO Connie Brenton noted to GC, “It’s a relatively new industry and it has hit the tipping point. We used to see one or two job postings [for legal ops positions] a year, now we see ten a month.” At the 2018 CLOC conference, held at the Bellagio casino in Las Vegas, the majority of the 2,000 or so attendees were there for the first time.

It is probably easier to define legal operations in terms of what it is not. It’s apparently every aspect of running a legal department except the dispensing of actual legal advice. According to CLOC, the discipline comprises 12 “core competencies” including data analytics, knowledge management, and litigation support.

The industry’s generally accepted threshold for a legal department headcount size triggering the need for a legal ops specialist keeps shrinking: it was recently 100, then 50, and now some fanatics even claim that an operations specialist should be a start-up’s next hire after the GC.

“What gets measured, gets done”

A, probably true, rumor has it that when Wachtell presents a client with a bill at the conclusion of a matter, it simply reads “For legal services rendered: $[huge number].” This practice is (or was) spoken of throughout Biglaw with aspirational envy. To be so respected and trusted as not to have to itemize invoices! Such is (or was) the law firm Platonic ideal of the client relationship. The legal operation movement does not share this sentiment, to put it mildly.

The very language of legal operations is measurement. When legal ops pros speak of legal services, it is of metrics, of data-driven X or Y, of KPIs, of pricing and scoping, and so on. One CLOC panel session, led by Winston & Strawn’s CIO David Cunningham, gave great insight into the level of reporting detail legal operations would like to see from their outside law firms, or in legal ops-speak, “vendors” (!). Here is a slide laying out, at but a high level mind you, the metrics that legal ops professionals want to be tracked:

One of Cunningham’s panelists told the CLOC crowd that his company goes even farther, by demanding diversity metrics at the level of individual timekeepers. From legal operations perspective, this wide-open-kimono level of transparency and accountability is inevitable. The only question is the degree to which high-end bespoke legal work of the Wachtell variety endures at all.

The Cisco example

Mark Chandler, for 30 years the general counsel of Cisco, is one of the godfathers of the whole legal tech and innovation movement. The remarks he gave in 2007 at a Northwestern Law securities regulation conference are, for many, one of the Urtexts of legal innovation.

It was during his Northwestern speech that Chandler declared, ominously for some, that “[I]f the economic system of the firm is frustrating to associates and even some partners, I can tell you that from the standpoint of a metric driven general counsel, it is more than incomprehensible. It looks like the last vestige of the medieval guild system to survive into the 21st century.”

The final day of CLOC is modestly dubbed by the organizers as “Big Thinkers Sessions,” and Chandler is the star. Chandler’s individual talk (he was also later on a panel with his homologues at HP and NetApp), was both an overview of the evolution of the corporate counsel’s function, as well as a practical demonstration of what those ideas he floated back in 2007 look like today in practice. Turns out they look pretty damn good. Chandler shared two examples: eDiscovery and NDAs.

The efficiencies and cost savings of eDiscovery are probably our most common examples of the benefits of leveraging technology. At Cisco, the numbers, of course, tell the story. In 2006, using outside vendors, Cisco paid an average of $2,500 per gigabyte of eDiscovery processing. Just a couple years later, with the advent of the company’s first-generation in-house eDiscovery tools, the cost per gigabyte dropped to $27. Today, however many generations later, the cost is dropping closer to $7. That’s better than a 99% cost decrease over time. (For the record, those alarmists who claim eDiscovery is driving up litigations costs were absent or silent.)

Once upon a time, getting a routine NDA done would necessitate a lot of manila envelope traffic among desks.

Today, Cisco employees in need of an NDA visit the company’s “NDA Central” and have a self-served, paperless, e-signed, quick and (most likely) lawyer-free experience. Transforming all routine activities that “contribute to competitive advantage” into “self-service” is at the heart of Cisco’s legal ops strategy. (Or was the “self-service” itself the “competitive advantage? Maybe both? I got a little lost. But apparently, this saves them a ton of money.)

CLOC’s subtext: #timesup for Biglaw

“The plural of anecdote is data.” So here’s data: in my conversations at CLOC, with lawyers, consultants, and tech vendors, I always said something along the lines of “Could legal ops be seen as basically a concerted effort to annihilate law firms as we know them?” Answers varied, but were invariably not “No.” Many if not most large law firms would scoff at this. Bro, have you even seen the latest Amlaw 100 PPP numbers? But as Joe Patrice points out, there’s a hidden narrative there as well (“The traditional Biglaw model of relying on a consistent stream of work from large institutional clients beholden to their outside counsel relationship is falling by the wayside…).

Somewhere in the bowels of the Bellagio is a low-ceilinged room packed with metal racks holding approximately 2,000 upside-down bottles of booze hooked up to a complex system of plastic tubes and pumps. Whenever a drink is dispensed anywhere in the casino, down in the pump room one hears a little sucking sound. It’s the pre-measured shot for one of the casino’s 144 varieties of pre-programmed cocktails travelling up and away through the system’s 90 miles or so of tubing to one of the Bellagio’s 50+ bars.

A particularly pessimistic, or drunk, Biglaw partner might see this system as the reification of the legal ops ethos of ruthless efficiency and quantification. The future corporate legal department may be its own sort of pump room: seamless, self-contained, and delivering perfectly measured doses of legal services on demand to grateful customers. What then?

[Note: Many thanks to Brian Dickson of McDonald Carano for the amazing behind-the-scenes tour of the Bellagio]