The following are highlights from Part 2 of our podcast series, “From the Inside Out,” bringing non-obvious insights from in-house legal departments to law firms and other lawyers on the outside. “From the Inside Out” is hosted by Ian Connett of Evolve the Law and sponsored by Lake Whillans, a commercial litigation finance firm with offices in California and New York.
In our third installment, we sat down with Jason Barnwell, Assistant General Counsel at Microsoft, to discuss the value of law firm experience, what makes for good outside counsel, and the role technology plays in law. Jason has a B.S. in Science and Engineering from MIT, as well as a law degree, and today leads a legal business operations and strategy team that helps Microsoft’s legal department serve its clients more effectively and innovate the practice of law.
Jason’s role is a bit unique, because the senior leadership at Microsoft actually wants their legal team to innovate in real ways, and holds them accountable for moving things forward. Innovation runs the full gamut, from building their own legal technologies, buying others, and partnering with outside technology solution creators. Microsoft’s legal department thinks about their work holistically — it’s not necessarily about trying to build end-to-end solutions for every scenario, but instead thinking about the core scenarios that they need to own and having mastery over their data and centralized business processes.
How did law firm experience prepare you for your current career?
The training was fantastic and a great investment. I saw up close and personal the challenges that are created by the current law firm business model. The billable hour model doesn’t always create incentives that are aligned with some of the things clients care deeply about, specifically innovation and efficiency.
How has an engineering background enabled you to look at the law differently?
Engineering gives you three superpowers: 1) you realize that big problems can be broken into smaller problems, which are easier to digest and work through; 2) there’s almost always a manual somewhere, or someone has done some sort of scholarship or research that explains how you do a thing; and 3) you’re not always going to have excellent instruction, so you have to learn to teach yourself. Combine these three and it’s a strong fundamental base of problem-solving skills that you can apply to most things.
Is large law firm experience critical for new hires at Microsoft?
Not necessarily, but you have to have gained experience somewhere, be it a law firm or the public sector or somewhere else. Law firms are historically very good at turning people into truly viable lawyers who have the necessary skills to practice their trade. There really is no substitute for having a legal practitioner who has more experience than you pick your work apart and take you to task. In the end it’s that feedback loop that ultimately teaches us how to do things.
What kinds of matters typically get outsourced to law firms instead of being handled in-house?
Microsoft usually turns to outside law firms for litigation and intellectual property matters. Beyond that, there are two typical scenarios that require outside counsel — either we lack the amount of talent necessary to handle an issue, or it’s an area requiring unique specialization. Outside counsel brings the benefit of serving many clients and seeing a diversity of perspectives. We can benefit from an external perspective and can evaluate what other companies are doing in the market.
When you have to use outside counsel, what goes into your decision in choosing a firm?
You want to find the best partner for the type and complexity of a particular matter. Microsoft has implemented guidance into our matter creation system that provides specific recommendations to employees when they’re looking to partner or are considering a specific firm. It’s important that outside counsel aligns with the policies the company most cares about and has positive peer feedback for doing good work.
What qualities keep an outside law firm on your roster?
The firms that perform consistently well always start off by delivering high quality legal work with appropriate cost and value. They’re on the ground, come spend time with us in our space where we can have close-quarters conversations, and they proactively share information with us and allow us to connect our own dots. Just taking a little effort and time to be nice and pleasant goes a long way. And it might sound counterintuitive, but some of our most trusted counsel tell us how we can get better, which we value because we’re constantly trying to improve as an organization and as individuals. Partners who deliver great value invest in their people. We also really like firms that work well with other firms. The best firms figure out how to treat us relationally rather than transactionally, looking at us holistically and really understanding our business rather than just looking at a specific matter.
Should law firms be investing in technology to enhance their strengths or are these purely human-based qualities?
It always starts with human side — machines don’t understand what we’re really trying to get done here. But then when you want to deliver excellent value at scale, tools tend to help. Firms that marry the two things together will be great. We want great legal professionals partnering with very skilled technologists to bring us the best of both worlds.
What’s the main reason a GC would sever relations with a law firm?
They don’t listen — they’ve been told something and don’t change their behavior. They exhibit bad judgment, making decisions that don’t make sense based on the information. Some firms take a short transactional view on the work, which can be okay, but if you treat us transactionally, you should expect us to treat you transactionally and move on when the matter is done. Some firms also seem to have a really hard time bringing a diverse bench of people with the breadth of perspectives that we want.
Is it fair to view legal departments strictly as cost centers, or can they help with revenue generation?
It’s always a little dicey to operate a cost center with an expectation that it will be a high contribution profit center, but law departments can generate all kinds of value for the enterprise. It just may not have a strict dollar amount attached to it. Your law department can accelerate your business. Our main goal is how to get high quality legal guidance to our clients quickly, because that’s how we create more value to our enterprise.
If you could change one thing about the traditional law firm model, what would it be, or what should never change about law firms?
I would change the incentives and the culture that inhibit efficiency, innovation, and long-term investment; those are things that are just standing in the way of so much value that could be created at law firms. Law firms are absolutely great at serving clients, so that should never change. They should also continue to a great place to train the next generation of attorneys and legal professionals.
Listen to our entire discussion with Jason Barnwell here to gain more insights from the in-house world.
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