Cool heads prove their worth in a crisis
Lawyers are used to crises. Some might say that crises bring out the best in the legal profession. In the financial crisis of 2008, the Financial Times Innovative Lawyers report covered legal innovations that helped to rescue financial institutions and other businesses. Brad Gans, then general counsel at Citigroup, the US bank, even called law firms “the calm heads in the storm”.
This time the crisis involves the law firms’ very own survival. Not only must lawyers help clients deal with economic and, in some cases, existential crises that appeared overnight, but law firms themselves are also braving the same turbulent waters. They too face economic uncertainty and the challenge of maintaining their organisational culture while their people are working remotely.
The pandemic has accelerated underlying trends in the profession: the move to digitalisation and agile working; the increasing complexity of client challenges; and the changing career expectations of young lawyers.
There was another impetus to change too, when the killing by a white police officer of George Floyd, a black man, in the US, prompted many leading law firms to re-examine their diversity and inclusion agendas and their role in society.
A commercial legal profession that is both responsible and robust enough to adapt is the picture that emerges from the submissions to the 2020 FT Innovative Lawyers awards from 71 US, Canadian and Mexican law firms.
Most firms were able to switch seamlessly to remote working in March, with many making the most of the virtual environment.
Latham & Watkins, for example, looked to invigorate its training approach both for summer associates and attorneys with the firm. It set up an online observation deck so that young attorneys could watch the court proceedings of more experienced Latham lawyers and provided the equivalent of more than 8,000 billable hours of training and 1,100 hours of mentoring to junior colleagues.
Covid-19 also forced firms to overhaul how they share knowledge with clients quickly, with most setting up hubs of information for clients with government updates and regulatory and legal implications. Ropes & Gray, a firm with a leading healthcare practice, set up a pioneering hub of pandemic-related intelligence within five days at the end of February, at a speed that surprised even the firm’s leadership.
The crisis underscored the trend towards a multidisciplinary approach to the practice of law.
For Ropes & Gray, that moment came when it was called on not only for legal advice to businesses and government, but also for more general advice to help hospitals in their daily processes. “We learnt a lot about what our clients need from us beyond ‘Covid-specific’. What they absolutely need is the knowledge that comes with market understanding,” says Julie Jones, the firm’s chair.
For many law firms, the pandemic has been a time when their digital health practices, which are inherently multidisciplinary, came of age. DLA Piper was able to call on its digital health practice, which includes a doctor, a biostatistician, health economist and former congressman, to help clients with such challenges as emergency US Food and Drug Administration approvals.
The overall winning law firm in the Innovative Lawyers awards this year, White & Case, showed its commitment both to clients’ evolving needs and making a social impact.
On the former, it has been re-engineering its relationship with long-term client Deutsche Bank. In this, it has moved from a partner-led, transaction-focused approach to one that now involves more of the whole firm, aligning it better with the bank’s products and services. More transparency, real-time reporting and new cost structures, driven by the firm’s project technology team, have won it more work, despite Covid slowing down some activities.
As for social responsibility, White & Case set out the legal strategy that won a novel class action case for 30,000 children in Michigan who had been exposed to lead poisoning. The firm’s success enabled the children to have access to special educational resources. White & Case’s legal technology team played an important role, helping the lawyers assess thousands of documents, and its audiovisual team created powerful deposition videos for the trial.
While no law firm can yet be described as truly digital — when client relationships and business models have been transformed by digitalisation — many are making significant strides forward.
Over the past 12 months, there has been an uptick in firms’ outlay on modernising their information technology. The pandemic has led to a permanent shift from audio conference calls to visual, for instance. In addition, many firms have reported a marked shift to using electronic signatures, managing corporate legal work, and contract creation technologies.
Use of data is triggering fundamental change
While the use of these technologies represents mainly infrastructural improvement, there are signs that law firms are starting to question fundamental assumptions about the way they work in certain parts of their businesses. For example, many now recognise the importance of using data — augmenting their legal advice with historical deal or case data — and the need to present it visually.
Mitch Zuklie, chair of Orrick, this year’s highest-scoring firm in the overall “most digital law firms” category, is not worried about technology wiping out swaths of lawyers’ jobs. “The core trend we see is that innovation in business is faster than the regulatory environment can keep up with, which means the demand for lawyers will be more important than ever,” he says.
At the same time, however, he points to increased collaborations with clients and senses that law firms offering a commercial legal career are now beginning genuinely to take into account the desire of young lawyers for meaning and purpose.
The 2008 financial crisis accelerated the use of technology and efficiency across the profession. The health crisis of 2020 has speeded up use of tech and data again. But it also looks set to increase firms’ awareness of the needs of their staff for a more human approach to the workplace and for clients’ desire for a better experience with their law firms.
Research methodology for Innovative Lawyers: North America 2020
This is the 11th year that the Financial Times has published its special report on innovation in the North American legal industry. It also marks an unprecedented year for the sector, propelled by Covid-19 and the Black Lives Matter movement.
In this unusual year, the FT and its research partner, RSG Consulting, took a different approach to the report. The number of category awards was reduced to focus on five key areas of a law firm business: its work for clients in the practice of law; its approach to the workplace; social justice and inclusion; its response to Covid-19; and leadership. Firms were asked to send submissions into these five areas. The examples that best demonstrate the changes under way in the legal industry are featured as mini-case studies in the report.
Entries were scored out of 10 on originality, leadership and impact for a maximum score of 30. However, this year, scores for each individual entry have not been shown.
In addition, law firms were asked to complete a use of data and technology survey and a practice of law survey. The results of the data and technology survey were used to compile the list of the “Most digital law firms”, while the practitioner survey was used to inform the subcategories used in the practice of law section.
Some 247 submissions and nominations were received from 71 law firms and 35 in-house legal teams.
RSG researchers assessed the submissions and interviewed clients, senior lawyers, executives and experts between September and December 2020.
Top law firms in North America 2020 (above)
There are three separate lists of law firms in the region. The list of “Most rounded performers” is based on firms that scored the highest aggregated scores in three submissions. Firms could make up to five submissions.
The firms featured in the “Most digital law firm” ranking are those that received the highest score based on the data and technology questionnaire. Each of the 10 questions in the questionnaire were scored out of five and benchmarked against RSG’s institutional knowledge about data and technology in law firms.
The shortlist of the “Most innovative law firms” shows the five firms that received the highest combined score from their submissions and the data and technology questionnaire.
Most innovative in-house legal teams in North America 2020
Research was focused on five discrete areas of a corporate legal department: response to the Covid-19 pandemic; inclusion, diversity and social justice: digital transformation: risk management; and talent development and rethinking the workplace. The overall list of 10 is a selection based on each in-house legal team’s performance in the report and is based on the sum of scores for all submissions to the report by in-house legal teams.
RSG Consulting has a record of devising ranking methodologies for professional services firms. RSG researchers: Reena SenGupta, Yasmin Lambert, Kate Barlow, Mary Ormerod, Georgie Lyon and Tom Saunders.