Legal sector rethinks push for efficiency

North American law firms are notoriously slower than their European counterparts to adopt new ways of working. After all, if a firm is very profitable, why change? However, some forward-looking firms and in-house legal teams are moving on to the offensive to tackle inefficiency and create new ways of delivering their services to clients.

A common theme among this group is that they view fixing the problems as a continuing process, in which they rethink ways to practise law, rather than one-off tasks. They are also likely to borrow tactics and technologies common in the business world, but which the legal profession “hasn’t always embraced”, as Lawton Penn, an employment lawyer at Davis Wright Tremaine, puts it.

Ms Penn heads DWT’s De Novo team, which was created to help clients procure legal services better. She had noticed costly inefficiencies in how work was delivered from the start of her career 26 years ago. “I’ve been passionately dissatisfied [about this] for most of my career and finally have an opportunity to work on the solution,” she says.

De Novo’s “tricks and tools that businesses have been using for years”, she says, include techniques such as process-mapping, data capture, analysis and visualisation, and the use of dashboards to help clients track the progress, status and cost of legal matters. The team also benefits from including people with fresh insights, she says. Their backgrounds range from legal tech and recruitment to consulting and information science, as well as law firm and in-house experience.

The work falls into several categories, whether better ways to handle routine, high-volume tasks, or using visual tools to digest large amounts of data, such as a map with filters to show how and where trademarks are used around the world.

De Novo’s work can help pre-empt disputes and claims. “Say you’ve got a spike in a type of harassment claim in a certain business division. We can help our client focus its resources to discover whether there are any process breakdowns, or reveal trends that show HR or management is overloaded,” Ms Penn says.

She cites a client where “one very small group in the company [had] more than four times the cost in legal fees and settlements. The claims were all similar in nature. After spending a year on cultural change and awareness initiatives with that group, the data could be used to show that figure drop steadily in the three years following that effort.”

Successful companies are constantly reinventing themselves. We don’t have that culture in our profession

Taking time to create a strategic framework for problem-solving has also paid off for Aon, the insurance and consultancy group. Audrey Rubin, chief operating officer of Aon’s global law department, held a series of workshops that mix its own lawyers with those at outside firms to work on a common business problem, using real legal issues.

The workshops have opened up channels of communication between the department, its law firms and other legal support staff and taught them a common approach and shared vocabulary for solving problems, Ms Rubin says. They have also led to an “appreciation of the need to invest in planning, in regular, larger-team communications”, Ms Rubin says. Even the simple act of mapping certain routine tasks can help identify inefficiencies. At one meeting, participants had to guess how many steps were involved in handling a subpoena. One senior partner thought 12; in fact, there were 52. That led to a cut in the time and resources allocated to the task.

“They have seen for themselves that the traditional habit of a lawyer jumping in right away to start the work is not as effective or efficient as waiting until multiple perspectives and disciplines are communicating together regularly,” Ms Rubin says.

The traditional habit of a lawyer jumping in right away to start the work is not as effective or efficient as waiting

Catherine MacDonagh, a former corporate counsel who advised Ms Rubin on improving project management at Aon, says: “These are very smart people — they don’t need a lot of hand-holding, but they need the framework and they need the right way to think about this stuff.”

In-house departments everywhere are under pressure to do more with less, particularly on the high-volume tasks that consume lots of time and money.

Citi Legal, Citigroup’s in-house legal department, initially undertook a bottom-up review of its work, with a particular focus on harmonisation across myriad offices, jurisdictions, time zones and divisions. It has since developed ways of streamlining payment processing and managing suppliers, and has made its automated e-billing systems more sophisticated.

The bank’s general counsel, Rohan Weerasinghe, says it is also investing in tools such as natural language processing, and “freeing up our lawyers’ time to focus on the issues, risks and subjective decision-making”.

The sheer size of the bank’s legal requirements is “one of the most significant challenges we face”, he says. Citi has more than 200m customer accounts, doing business in 160 countries and jurisdictions, and the in-house legal team has a physical presence in 63 countries.

Like other innovators, Citi aims to tear down silos between in-house and outside lawyers. This year it held an “innovation briefing” with a group of nearly 20 law firms across its network to discuss how to deliver better services and prices, and adapt to disruptive practices, he says.

By taking time to create a framework and process to find and follow through on improvements, some US firms and legal departments are laying foundations that will potentially reshape how the legal sector works.

“Successful companies are constantly re­inventing themselves,” says Ms Penn, at DWT De Novo. “We don’t have that culture in our profession . . . What it’s going to take is business and clients and consumers saying, ‘we need more from the legal profession’.”