Introduction
Legal Lab 2019 brought leaders from law departments and firms together to discuss challenges like increased competition, data-driven decision-making, and diversity in talent. Participants were optimistic about the opportunities and emphasized partnership and collaboration to tackle these challenges.
The emerging collaborative culture supports agility, diverse talent, innovation, and value-focused service delivery. This report provides guidance to enhance alignment and collaboration as it is crucial for success in the changing legal market.
Industry trends: Market dynamics create challenges and opportunities
Law departments are handling more work internally and using alternative legal service providers (ALSPs) instead of law firms. Some companies are already allocating around 20% of their legal budget to non-law firm providers, and this may increase as accounting firms invest in technology. ALSPs are expected to handle work that doesn't require legal expertise, driven by trends like legal operations, diversity, inclusion, and data analytics.
Talent: An agile, diverse workforce strengthens legal organizations
Today's legal market requires an agile workforce that can adapt. Through inclusion and engagement, legal organizations are broadening recruitment efforts, collaborating with minority law schools and programs like the On-Ramp Fellowship. They also aim to align law school curricula with market needs, emphasizing technology and business skills.
By aligning culture, training, and tools, legal organizations can foster innovation.
Legal skills are table stakes.
Service delivery: Achieving alignment in an increasingly competitive market
The legal market requires a rethinking of how work is done and services are delivered. The traditional law firm model is being challenged by factors such as increased competition. However, participants explored the opportunities presented by the current market and discussed approaches to adapt their work and service delivery models.
To provide value aligned with client needs, they suggested:
- simplifying advice,
- responding quickly, and
- solving end-to-end problems.
Increasingly, law departments require collaboration among outside counsel to create a "community of counsel." Law firms are also partnering with external legal service providers for better client service and efficiency. Key performance indicators and data measurement are crucial for evaluating initiatives and outside counsel's performance.
An environment that fosters change and innovation is necessary, including a learning mindset, change-makers, problem-solving, non-lawyer professionals' involvement, and support for failure. Legal organizations need a strategic approach to lasting change, leveraging data to identify and solve common problems across clients.
Legal analytics: Transforming raw data into actionable intelligence
Legal analytics are rapidly advancing in the legal field, with forward-looking organizations utilizing data and analytical techniques to answer legal questions. Traditionally, attorneys relied on their experience and intuition, but now they can combine expert judgment with quantitative insights to enhance decision-making.
Law departments are now expanding their analytics goals to achieve the best outcomes and value aligned with the company's strategic direction. Law firms are progressing towards more practice-specific efforts, using data creatively for litigation risk analytics and predictive analytics.
The right data, tools, and team are essential for effective analytics:
- Legal organizations need to collect the relevant data, ensure consistency and metadata, and consider the context of internal and external data.
- Commercially available and user-defined analytics tools are both used, with advanced techniques becoming more accessible.
- Multidisciplinary collaboration is crucial, as diverse backgrounds combining computer science, math, legal knowledge, and business understanding help identify opportunities and choose the best analytics techniques.
While legal analytics are still in the early stages of adoption, the goal is to enhance decision-makers' capabilities.
Analytics are only as good as the data you have in your model.
Workshop: Leveraging the drivers of motivation, leadership and innovation to create change
Harvard Professor Scott Westfahl led a discussion on the psychological drivers of motivation, leadership behaviors, and innovation drivers in legal organizations. Understanding motivation is important for recruiting and retaining talent. There are three main sources of motivation:
- extrinsic (external factors),
- internal (within the individual), and
- intrinsic (from the work itself).
Legal organizations should differentiate themselves by offering factors such as interesting work, flexibility, status, recognition, and perks to motivate their employees. Internal motivation is powerful but challenging to influence.
Lawyers are driven by the need for achievement, affiliation, and power. Strength-based training and providing meaning and autonomy in work are important intrinsic motivators.
Leadership behaviors can either build or undermine motivation, and factors such as demeanor, approachability, messaging, and communication of goals and strategy play a role. Leaders should celebrate success and be self-aware of their habits and open to feedback.
Building a culture of innovation requires considering the attributes of the innovation, such as its advantage, compatibility, complexity, trialability, and observability. Elements of an innovative culture include:
- purpose,
- looking out,
- experimentation,
- collaboration,
- empowerment, and
- refinement.
By understanding motivation, practicing effective leadership, and fostering an innovative culture, legal organizations can engage and motivate their lawyers and adapt to the evolving market.
Leaders need to be self-aware of their own leadership habits and remain open to feedback.
Conclusion
This year's event focused on alignment and collaboration with attendees sharing personal stories and real-life experiences of the challenges they face during times of change. Four key themes emerged from these conversations:
- the importance of diversity and inclusion,
- the need for lawyers to expand their knowledge beyond law,
- the significance of both qualitative and quantitative data for measuring performance, and
- the role of trust, passion, and entrepreneurship in fostering a culture of innovation.
Continued collaboration among legal leaders will contribute to the ongoing evolution and understanding gained from each year's Legal Lab.
For the full report, download the PDF.
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