The Biggest Disconnect in the Legal Industry?

By Dennis Kennedy on July 2, 2020

Posted in #blogfirst, Articles, Legal Innovation, Value

The Biggest Disconnect in the Legal Industry?
(COVID-19 Version)

We seem to be living in a time when what is most important today already seems like old news tomorrow. It’s difficult, on so many levels. The seeming comfort of a “return to normal” appeals more than the discomfort of change and innovation. However, either/or is a false choice, and we all know that.

Like you, I’ve spent many hours on online videoconferences in the last few months. Since I retired from Mastercard, my Zoom calls have not been so much about specific work issues, but with groups of legal innovators—in-house counsel, outside counsel, legal tech vendors—intimately involved in the efforts to cope with the current crises.

What can you do, today, to bridge the biggest connect in the legal industry with your best clients?

This vantage point has given some unique insights. The title of this article refers to the most important one.

I found myself using the phrase “the biggest disconnect in the legal industry” a few years ago. On my recent Zoom calls, the comments that led me to use this term have reached a crescendo.

I routinely hear outside counsel say that they wish in-house counsel talked to them more about what they need so they could collaborate better. At the same time, I hear in-house counsel say that they wished their outside counsel talked to them more about what new things they could bring to the table to help them so they could collaborate better. That, simply put, is the disconnect.

AND THOSE CONVERSATIONS STILL AREN’T HAPPENING!

When I ask why people are not making the initial contact, I hear a lot of reasons: waiting for the other group to make the first move, too busy, too afraid, and many more. Mostly, I get the sense that lawyers don’t want to admit (or show) that they might not have answers for everything, even in these times. One word: fear.

I see regularly in surveys of Chief Legal Officers that the most common answer to the question “What innovation did you outside counsel bring to you?” is “none.”

In a recent Zoom call, a large group was asked if they had a vendor who had delighted them recently. There was one answer. Someone’s outside counsel had called and told them that they did not need to pay invoices until 2021 if they didn’t want to. While that would have delighted me, other law firm representatives on the call said they didn’t see how they could do that. None indicated that they had reached out to clients in innovative ways.

On the same call, in-house counsel spontaneously started complaining about all their outside firms sending them emails about how to revise and renegotiate “force majeure” clauses. Although there was laughter, there was a sense of great frustration about firms guessing what in-house counsel might think was important rather than talking with them. If you are an in-house counsel trying to help your company survive the current crises and thrive on the other side, force majeure clauses are not at the top of your list.

In one sense, the threshold for outside counsel innovation efforts is quite low and the opportunity to differentiate from other firms is there for the taking, simply by taking initiative. In another sense, however, the examples illustrate the desire of in-house counsel to see their outside firms take the lead in innovation and technology initiatives and their disappointment with the perceived lack of leadership.

Another example of a legal technology “solution” that outside counsel like to advocate is “contract lifecycle management.” Yes, there is a need, but those projects are not at the top of the in-house priority list, are nightmarishly complex to implement, and involve many moving parts within a company’s existing IT and procurement structure.

If, instead, the innovation process ended with a pilot project of a dashboard of highly relevant data, an expertise locator, or a list of places where routine legal review could be eliminated, you would have delighted in-house counsel. Each of those address pain points, solve business problems, and are easy experiments. Each of these also illustrate how you have come in to listen, discover and suggest some options that have worked elsewhere, not to sell a pre-conceived innovation “solution.” And they provide value to the client.

And, if you initiate them, your firm is likely to stay on the panel list when the inevitable panel convergence efforts begin again.

Many lawyers hate to “sell.” Most in-house counsel hate to be “sold to.” The good news is that pitching innovation efforts should not involve selling in the classic sense. It should consist of many of your best lawyering skills: asking good questions, active listening, investigating, getting to the core problem, looking at options, and patience. You want to understand what the client wants before you jump in with a solution.

While there are many definitions of innovation, most of them emphasize “customer-focused” or “customer-centered” problem solving and a focus on desired outcomes. Your client has the problem to solve. Your goal, and your role, are to help your client solve their problem and eliminate their pains and achieve their gains.

Think Yoda, not Superman.

The client does not need or want you to swoop in and save the day with these initiatives, or for you to try to prove that you are “the smartest person in the room,” a term in-house counsel do not use as a compliment when talking about outside counsel. You can do that when handling important legal work. Instead, clients want to be the heroes of their own innovation stories. They want a guide with a plan to help them win the prize while avoiding disaster. Think Yoda, not Superman.

And, if you initiate these efforts, you and your firm are likely to stay on the panel list when the inevitable panel convergence efforts begin again soon.

With that in mind, what approaches work best when discussing innovation projects or processes with a client?

1. Bring it Up First. Since outside firms are known for NOT bringing innovation ideas to corporate counsel, simply initiating the conversation might be a differentiator for you. If you put innovation in the context of improving the relationship, controlling or cutting legal spend, or a new benefit for key clients, you will have a winning combination. Offer to listen. Offer not to charge for the meeting. If I weren’t retired and an outside counsel came to me and offered to have this kind of meaningful conversation at no charge, I would probably insist that they bill me for the meeting at the end because I perceived the value of the conversation and appreciated the effort. Do whatever it takes to get on your client’s calendar. My bet is that you will be surprised by the receptivity you find.

2. Understand Your Client’s Internal Goals and Objectives. In-house counsel and law departments have annual objectives and goals. Understand what those are and make the part of the equation. Visible achievement of annual goals will always be a desired gain for your client. As an example, do not assume that a US client’s goal is to craft a great “we care” Black Lives Matter message; the real focus is on meaningful action steps and progress. That’s here your assistance and guidance become valuable.

3. Pitch Pilots. Upwards of 90% of innovation projects fail or drastically change from the initial concept. That’s a good thing. It’s part of the innovation and start-up process. The more pilots, the better. Pilots give you and the client prototypes to test, examples of possible projects to share with others, and quick wins that build momentum. Pilots show off your creativity, business acumen, and understanding of client goals.

4. Bring the Whole Team. Get the right teams talking, especially in panel convergence presentations. If a law department has a Chief Innovation Officer or innovation lead, they will want to meet and talk with their counterparts. Your client will want to hear from the people who can answer their specific questions about process improvement, project management, productization of services, and other innovation initiatives. From my experience, in-house counsel does not want a return of the days when a senior partner unfamiliar with the details is in charge of pitching a service offering he clearly does not understand.

Innovation initiatives from outside counsel have moved from nice-to-have to must-have. Law departments are looking for help to show innovation results to their C-suites and meet corporate and department goals and objectives. Increasingly, company survival is at issue and legal budget and personnel reductions are likely on the horizon. Think about it: if you were a general counsel under orders to cut costs, wouldn’t you try to keep your own team together and reduce spend on outside counsel who do not bring anything new to the table?

Let me re-emphasize one key point. In-house counsel will be looking for guides who give them plans to achieve what they need and remain the heroes of their own stories. If you can provide that, you will cement long-term client relationship and open the doors to new legal work as a preferred law firm and a valued partner. What can you do, today, to bridge the biggest connect in the legal industry with your best clients?

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This post is part of my #blogfirst approach to writing and publishing articles.

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[Originally posted on DennisKennedy.Blog (https://www.denniskennedy.com/blog/)]

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