CLOC Wrap-Up: Forget Legal Tech Startups and Artificial Intelligence; The Real Disruptors Are Your Clients and their Legal Operations Teams

Topics: Alternative Legal Service Providers, Client Relations, CLOC, Corporate Legal, Legal Innovation, practice engineering

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Law firms trying to plot a strategy for the future have any number of bright, shiny objects that can distract them. Artificial Intelligence, Lawyer Robots, and all manner of legal tech startups are regularly declared to be the latest thing that pushes the legal services industry into a state of disruption.

In fact, the biggest disruptors of all might be right under their noses: their clients, specifically the increasingly influential and effective teams of legal operations professionals that work for forward-looking in-house legal departments and their General Counsel.

That form of disruption flies a little under the radar. It is incremental and doesn’t attract as many headlines. But it was fully apparent at the recent Corporate Legal Operations Consortium’s (CLOC’s) annual CLOC Institute.

This is an organization that started as a regional interest group in 2009, had only about 30 members in early 2015, but was able to attract about a thousand attendees to an engaging and substantive event at the Bellagio in Las Vegas this month. The group is planning for 2,500 next year. What’s the secret? It’s largely about the shifting of power in the industry to the buy side, through the use of the right tools — data, technology, supply chain management, workflow and knowledge management — in the hands of the people who really know how to use them. And most of those people are not lawyers.


In fact, the biggest disruptors of all might be right under their noses: their clients, specifically the increasingly influential and effective teams of legal operations professionals that work for forward-looking in-house legal departments and their General Counsel.


The list of sessions at this conference — 76 of them — reads like a list of strategies for companies to wring more out of, or bypass altogether, the outside counsel that these in-house departments work with every day. It’s not necessarily about a hostile or a disruptive intent, but each one of the sessions over two-and-a-half days quickly developed a subtext: getting legal work done more cheaply, efficiently and quickly — with or without the help of outside firms.

The chart below sorts the various conference sessions into some high-level categories. This should provide a sense of where CLOC members are focused: pricing, metrics and analytics, technology and workflow management. Inside these sessions, members shared experiences and, more often than not, described how they are partnering with their law firms to work on all these issues. As a result, law firms should not be surprised if they find a need to find legal ops people of their own to work with those already inside their client companies. But in many cases, CLOC members make clear that they are actively looking for resources other than law firms to leverage — including their own, cheaper professionals, and alternative legal service providers (ALSPs).

CLOC

Are CLOC members and their counterparts at corporate in-house legal departments really in a position to execute on this wide a range of initiatives? Are they in a position to be the primary disruptive force in the industry? Perhaps, but clearly, they are feeling their oats.

A key “Big Thinkers” session brought together leaders from all parts of the legal system and started to lay the groundwork for a “Magna Carta” of key principles around which CLOC wishes to drive change and address needs and grievances in the legal industry. The panel included:

  • Ralph Baxter, former Orrick chair and chair of the Thomson Reuters Legal Executive Institute Advisory Board;
  • Scott Westfahl, Professor of Practice and Faculty Director at the Harvard Law School Executive Education;
  • Mark Ross, Global Head of Legal Process Outsourcing at Integreon;
  • Andrew Perlman, dean of Suffolk University Law School, and chair of the Governing Council of the ABA Center for Innovation;
  • Lucy Endel Bassli, Assistant General Counsel, Legal & Corporate Affairs at Microsoft Corp.;
  • Lisa Damon, Partner at Seyfarth Shaw.

This panel covered a lot of ground, and presented a balanced view of the entire legal ecosystem, because all were represented: corporates, firms, law schools, regulators, ALSPs, and technology providers. What differentiated this panel from any number of other discussions of the state of the industry was its emphasis on action, and on convergence around principles. In particular, one sensed three strong values, represented both on this panel and throughout the Institute:

●      Inclusiveness — Bassli in particular was passionate about embracing the values that allied professions bring to legal — the analysts, process managers, designers, and various other roles that aren’t filled by lawyers, but that are critical to the future of the industry.

●      Ambition — The panel was also adamant that CLOCs mission wasn’t just about improving in-house legal operations, but that it extends to reform in all parts of the industry, including law firms, legal education, and regulation of the industry. Bassli made the point that most in-house lawyers come from law firms, and “we just transfer or law firm behavior to in-house work.” That law-firm centric worldview is clearly threatened by an engaged CLOC membership.

●      Influence — While the panel acknowledged that all parts of the industry are needed, it’s the in-house legal departments that seem to hold the best cards right now. It’s a simple case of “follow the money.” Most of the money in the legal industry — the money that flows to firms, to law schools, to technology providers, and to ALSPs — comes from corporate legal budgets. CLOC seems poised to start exercising that power of the purse more assertively.


For more on the CLOC Institute, see links to additional coverage at Legal Current.