Graeme Johnston / 27 December 2022
This is the first in a series of posts on how I think the ways legal topics are handled are likely, or unlikely, to change over the next decade or so.
My focus will be on the UK, but some of the themes will be of broader relevance.
Although there are some novel factors in play nowadays, most of the topics have been discussed and experimented with for many years now. I thought therefore that I would start by looking at my old notes to see what my state of mind was on some key topics a decade or so ago.
Back story: I started to step back and pay closer attention to ways of doing legal work around the time of the last recession, now over a decade ago. I’d been working as a lawyer in a major global law firm since the mid-1990s. I was becoming a little jaded over the inherent conflicts, process-amateurism, poor value for money, exclusionary tendencies and other issues of the standard business models, as I saw them. I was very much in the mode of thinking aloud, investigating what was going on, trying to figure out what was inevitably messy or expensive, what was ‘fixable’, and how. That last recession did at least open minds to the need for change, I think, and prompted some interesting experiments.
Ten themes from the personal archives: I have various things I wrote in 2008-13, including from the period between Christmas and New Year (plus ça change 🙄). Mostly private notes, though a couple of short quotations from 2010 are online. Looking back on that material over the current holiday period, ten big themes stood out. I should stress that these were expressed in a number of contexts, not limited to any particular organisation. It’s also worth noting that I was concerned at that time with how business legal issues could be better addressed, not with consumer issues and not with legal system reforms.
- Defined process, organisational interfaces and labour arbitrage. It was obvious to me and many others by the late 2000s that the process for handling elements of the legal work within larger matters was highly definable and would benefit from a more active and professional form of management. Major examples which I explored at the time included data-heavy reviews of documentary evidence, due diligence and preparation of intricate documents from a playbook. I thought that joining this up wasn’t as straightforward as it might appear from some contemporaneous writings. Various examples of limitations, and mess-ups, from using outsourced / offshored services were also available. I reckoned that something better could be achieved by combining
(1) a focus on process
(2) predictable, moderate working hours
(3) modern technology (including machine learning or, to use the jargon of the late 2000s, ‘predictive coding’)
(4) doing the work somewhere onshore with credible legal talent but a lot less expensive than a major international centre (London) and
(5) integrating it sensitively with lawyers working in more traditional ways – a non-trivial, easy-to-underestimate issue.
At the time, there weren’t any major precedents (always scary in the law…) except possibly for a centre established by the US firm, Orrick, in West Virginia. Though I couldn’t find out much about the details of that.
It also comes across from what I wrote at the time that I felt that this was a good thing to do ethically, as I felt the UK’s London-centric economy was a problem for UK society. Plus the inward investment agency in Northern Ireland was up for supporting it financially, which helped overcome some sceptics.
- Over-specialisation. High-end law firms were, I thought, at risk of becoming ever more specialised on massive, super-high value work. This has implications for the variety of experience they could provide to people and thus, in the long term, for quality and retention. More effort ought, I felt, to be made to provide people with a range of experiences, either in other organisations (e.g. secondments, but also being more open-minded on hiring) or within a single firm operating a more varied business model. But the topic of sub-brands proved controversial as there were worries about dilution.
- On demand lawyering. One idea widely discussed in the market at the time which I was cautious about was the establishment by law firms of captive ‘on-demand’ units to provide flexible working (via single person consultancy companies) on the basis of no commitment either way. I could see that it would meet a certain need on both sides, but it felt to me (in the context of a large firm mostly not working like that) to be a departure from what I thought was a valuable firm/individual mutuality or relationship. I also thought it was a potentially, unintentionally discriminatory distraction from taking a look at the expectations around the requirements for the traditional partner career path. The context was that the latter issue was widely thought hard-to-touch at the time.
- Organisation type. I paid quite close attention at the time to the debate on organisational types which had gained a high profile in England following the Legal Services Act 2007, passed at the peak of the boom years. I had a fairly conservative view on the relevance of ‘ABSs’ (i.e. alternative business structures, not owned by lawyers but authorised to provide legal services) to complex business law work. I could see how a corporate/capital structure of the sort typically seen outside the law could be a better way of managing (i) the sorts of set-ups mentioned in points 1 and 3 above, (ii) volume contracting and (iii) certain types of work relevant to consumers and micro-businesses (e.g. conveyancing, certain claim types, employment, tax, company set-up). But for more complex business work, I though that existing models of partnership and individual practice (within which there are many variations) were quite well-suited. I also reckoned that, for complex work, an organisation above a certain size (hundreds or at most low thousands) size was probably a disadvantage for various reasons. I felt that these outweighed the much-discussed investment and management authority benefits, and that a bigger danger for large law firms to watch out for was increasing competition from really focused, ‘single practice-area’ law firms of varying sizes, who I saw as likely to become more competitive (and capable of avoiding some of the office, staff, conflict and internal friction costs of larger firms). So, in short, I felt that, so long as law firms could address points 1, 2 and 3, and bring in a wider variety of talent (not just lawyers) and make such people feel part of the team (no small ask), there was hope for the partnership model.
- Automation. A decade or so ago, I reckoned that there was
- Continuing scope for automation to provide more benefits of the type already seen (albeit very unevenly distributed) at that time, particularly in document-intensive work and in highly intricate (‘complicated but not that complex‘) work such as conveyancing, tax, employment and regulatory compliance.
- But I had a fear that increased automation could lead to more complication rather than really adding value. A sort of legal version of ‘Andy and Bill’s law.’ I also feared that it could, paradoxically, further exclude people without the ability to handle even more complication.
- I did, however, also see real benefit for other types of automation not really explored in law at that time. Obviously a big topic, so I’ll cover that separately.
- Complex work. Whether it was possible to get substantially and systematically ‘better’ (in various senses) at handling genuinely complex work, was something that exercised me a decade ago. It’s clear from my notes that I saw it as a major challenge somewhat separate (though not entirely) from the other points above. I didn’t take this too far at the time, as there wasn’t much appetite to do so among the organisations I was working with. Also, my own thoughts on it were less mature. I’ve done a lot more work, and gained more experience, in that area in more recent years. But a quotation from way back (2009) which makes me smile with its understatement is:
- ‘I think a more professional and systematic approach to project management would enable [a law firm] to offer clients greater certainty in cost structures for carrying out the kinds of tasks which make up the bulk of expenditure on large matters. Of course this would be a complex matter…’
- ‘I think a more professional and systematic approach to project management would enable [a law firm] to offer clients greater certainty in cost structures for carrying out the kinds of tasks which make up the bulk of expenditure on large matters. Of course this would be a complex matter…’
- Visibility. I wrote quite a bit back in 2010 and 2011 about the difficulties of seeing from data what people were really doing. This had become painfully apparent to me from tackling other topics above. Work codes and narratives just weren’t that useful really – lots of bad data. It seemed to me that, until this was resolved, there were limits in how far we could improve process, communication and budgeting, because people would just talk about what they thought ought to be done, and we couldn’t really test what they actually did beyond a rather superficial level. I also expressed some doubts about metrics, and about what was then being talked about quite a lot as ‘process mapping’ – I didn’t think that flow charts would realistically be followed by most lawyers. As well as the friction and unfamiliarity of the artifacts, I felt that the topic had to be addressed in a more bottom-up way, capturing more effectively how people wanted to approach work, and learning from and refining that, rather than telling them how to do it in a top-down way. My thoughts on this became more concrete over time, particularly as firms started to experiment more with specialist project managers and as the results and challenges of doing so started to become clearer.
- Time costs. I was concerned that things had become a little out-of-whack, commenting rather inelegantly that:
- ‘It is just commercially irrational to pay high rates for huge amounts of hours to be incurred on tasks which don’t really need the high level of skill implicit in the high rates. Why use an expensive sledgehammer, charged at high hourly rates, to crack a huge number of nuts. The paradox becomes even stronger when one considers that associates with a few years’ PQE are these days charged at a very significant % of the hourly rate of a leading partner with 15 or 20 or 30 years’ experience. That is understandable from the law firm perspective given the huge salaries paid to such associates, but from a client’s perspective it must be really galling to be paying for a sledgehammer to crack nuts which isn’t even a proper sledgehammer.‘
- ‘It is just commercially irrational to pay high rates for huge amounts of hours to be incurred on tasks which don’t really need the high level of skill implicit in the high rates. Why use an expensive sledgehammer, charged at high hourly rates, to crack a huge number of nuts. The paradox becomes even stronger when one considers that associates with a few years’ PQE are these days charged at a very significant % of the hourly rate of a leading partner with 15 or 20 or 30 years’ experience. That is understandable from the law firm perspective given the huge salaries paid to such associates, but from a client’s perspective it must be really galling to be paying for a sledgehammer to crack nuts which isn’t even a proper sledgehammer.‘
- Money and life. One thing I felt quite strongly at the time was that the tension between profitability and work / life balance within law firms could be resolved, though I put it in rather guarded corporate language:
- ‘[Managing work more effectively] could not only be more financially successful… but also would be likely to promote better job satisfaction because it would enable… a larger number and variety of cases, and would enable… lawyers to focus on more strategic tasks.‘
- ‘[Managing work more effectively] could not only be more financially successful… but also would be likely to promote better job satisfaction because it would enable… a larger number and variety of cases, and would enable… lawyers to focus on more strategic tasks.‘
- In-house counsel. I also speculated that the market in the 2010s was likely to see a growth in sophistication of in-house counsel with the time and ability to manage matters more actively (rather than leaving so much to the discretion of law firms). One thing that I wrote, provocatively perhaps, for a law firm audience at the time was that companies had options for solving value-for-money problems if any particular law firm did not. That said, I was unsure for various reasons how effective in-house legal departments would be at pushing this – I was aware of the agency problem but thought that companies would become better at handling it. Big topic, and one I learned much more about in later years.
Looking back on all that:
- Point 1 is fairly clearly resolved as a ‘thing’ with its own market niche these days, though I think it’s fair to say that it hasn’t gone as far or fast as some people expected a decade ago.
- Points 2 through 10 have seen some developments, but I think it’s fair to say that change has been relatively modest. Various worthy efforts, some real progress, quite a lot of theatre (though perhaps moderating in the last two or three years). Even some backward steps on certain points. A mixed picture.
All right. So much for that little dive into what I thought a decade ago. In following pieces, I propose to discuss how I think these themes might develop over the next decade or so, trying to learn from history (so far as I can figure it out) but also trying to identify what’s different.
There are also a number of themes which weren’t sufficiently in my mind a decade ago to leave a record in my notes, but which I think are important. I’ll also discuss some of these.
More to follow.
Photo credit: Alberico Bartoccini on Unsplash