The Changing Lawyer

Cheaper, Faster, Better: Changing Client Expectations

by Litera Microsystems

 

Clients are all too often frustrated by the service they receive from law firms: What can firms do to rekindle the magic?

There was a time, not so long ago, that general counsel were seen as having a rather cozy relationship with law firms. The finer points of their business would be discussed over a four-course lunch or around 18 holes, and billed hours approved with few questions asked.

The crash of 2008 pretty much brought an end to all that. Organizations across the board saw their legal budgets cut, competitive panel pitches became de rigueur and law firms found themselves classed as suppliers, lumped in the same bracket as the company servicing the coffee machines. The past decade has seen the GCs retain the whip hand, demanding more for less, but it has also seen a growing awareness that return on investment (ROI) is more important than straightforward cost.

All this has come against a backdrop of changing buyer behaviors across the whole professional services market. An increasingly technologically aware workforce is upping its expectations, in terms of the use of technology and effective, rapid communication between service providers and clients.

In the legal sector, however, there remains an enduring undercurrent of frustration, suggests Casey Flaherty, founder of legal technology assessment firm Procertas, and former corporate counsel at Kia Motors America.

“One of my all-time favorite quotes involves a protester at Tiananmen Square in Beijing [in 1989],” he says. “A reporter asked him what he wanted and he replied: ‘I don’t know, but I want more of it’.

“That’s how law firms’ clients feel. They’re deeply dissatisfied with the firms and they’ve got a long list of grievances. They find them inefficient and they don’t think they’re cost-effective. But if you ask clients exactly what they do want, they’ll say they’re not sure. They think law firms need to figure it out.”

This can create serious tensions, Flaherty adds. “Clients don’t want to take ownership of their relationship with law firms. They want to purchase a finished product at a particular price and they want that product to get better and the price to go down. Legal services have been a buyers’ market for the past decade and what law departments like to see are returns to scale. It’s not unreasonable to expect larger law firms to produce services more cheaply than smaller ones, but that doesn’t tend to be true.”

 

Legal Services Demand Chart

Embracing tech

Some of the larger firms are, however, leading the way towards greater use of technology to meet their clients’ needs.

International firm Clifford Chance, for example, has been working to implement an AI platform that allows firms to filter thousands of pages of regulation and legislation by their business type, clients and products. It streamlines the review process and provides draft clauses for adoption in documentation.

The Magic Circle firm says it is offering this toolkit to its clients for a fixed upfront fee, thus allowing them to access complex legal advice at a price far below that of individual analysis.

“By embracing artificial intelligence, we’ve managed to develop a tool that gives our clients just what they need, right when they need it, at a much-reduced cost,” explains Monica Sah, financial regulatory partner at Clifford Chance. “We’re confident that this tool will provide real value to a range of our clients, from global investment banks to boutique asset managers.

“By working with technology providers we are able to package our advice into powerful products that save time and money, and enable our clients to deploy that information in a smart way throughout their organization. It also opens up our advice to a wider range of potential clients who might otherwise be priced out by the fees for one-off, bespoke analysis.”

Other firms are also making substantial investments to meet their clients’ needs. Nashville-based Baker Donelson, for example, has put in place database infrastructure to help speed up its decision-making process.

Speaking to news service Law360, Meredith Williams, chief knowledge management officer at the firm, said: “Being able to tap into every piece of information within your organization within a matter of seconds is critical. It’s Google for a law firm, or shopping for information. It allows you to really be a game changer.”

The firm also uses data modeling to forecast case outcomes, for example analyzing a selection of cases that have appeared before a certain judge, to help lawyers formulate better strategies to assist their clients.

“If you can know that information going in, think about the communication you can have with your clients,” Williams said. “The client is very happy because we have all this information. They’re able to see data and start analyzing on their own, and we’ve got extra cases. If you truly connect with your client in that regard, that’s a whole other stickiness factor.”

Former in-house lawyer Flaherty agrees: “Ultimately, it’s about business industrialization. Law firms need to deliver a better quality service, better contracts, better resolution of disputes. And they need to do it cheaper and faster and simultaneously.”

 

Perception Gap

Mastering the basics

That’s not all, he suggests. While firms may be keen to make big announcements about technological innovation, Flaherty says they routinely underestimate the importance of getting the simple tech right.

“Most lawyers are still terrible with something as basic as Microsoft Office or Adobe Acrobat,” he says. “They can’t use the essentials. It sounds like a simple thing, but it’s one of the biggest problems.”

While working at Kia Motors America, Flaherty became so frustrated with the time being taken by outside counsel to do basic tasks such as interpret spreadsheets, he created mock assignments and would time law firm associates trying to do them. Generally, he found tasks that should have taken one hour were taking five. Disappointing results would mean he would negotiate rates down, with the possibility that if firms implemented processes and training they might get some of that money back.

Since leaving Kia, Flaherty has developed his test, called The Legal Tech Assessment, to be used by corporate legal departments to quiz their outside law firms on how quickly and accurately they can perform common functions in popular programs, such as editing a contract using the “search and replace” function.

The test rewards efficiency, which goes against a yardstick that lawyers have traditionally used to value their work: time. Understandably, it appeals to in-house counsel for whom the realities of work are far removed from those relaxed discussions that once happened on the golf course.

 

 

Originally published by Litera Microsystems 2017.  To read the full publication click here. The Changing Lawyer document was created by Litera Microsystems and distributed in the Red Carpet Club - United Airlines over the 2017 Holidays. While it has no copyrights or publication information, all credit goes to Litera Microsystems . 

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