Originally published as a live, developing conversation on Bloomberg's Big Law Business (to see how these work, follow March 15's new discussion), this interview between ReplyAll co-founder Zach Abramowitz and Google's head of legal operations, Mary O'Carroll, discusses the changing landscape of legal operations and how the modern corporation is keeping up.
As Dan Carmel, CMO of iManage, recently told me, “The profile of the customer is changing.” Industry insiders I’ve spoken with estimate that more than half of the Fortune 500 companies employ at least one person in legal operations, while some estimates are much higher. Consider that the Corporate Legal Operations Consortium’s (CLOC) conference last year had around 500 attendees while this year they are expecting closer to a thousand attendees at their conference in Las Vegas.
One of the pioneers of the legal operations movement is Mary O’Carroll, head of legal operations at Google and part of the executive leadership team at CLOC. On March 1, Mary joined me to discuss some of the key developments in legal operations and how companies can use best practices to transform their business.
Zach Abramowitz: I was looking over your closing remarks at CLOC's conference last year, and I was struck by this quote:
Let’s not spend time arguing over what is considered an alternative fee or convincing anyone of why value-based billing can be a win-win, but how to do it right. We don’t need to be talking about the importance of knowledge management and why it is critical that we capture and reuse information, but how to make it happen. Not why esignatures, but how. Not why e-discovery software, but how. Not why outsource, but how. We need to start talking about the HOW and with each other ... not in silos. Let’s change the dialogue here and now. Together.
Nearly one year later, how and why has the dialogue for folks in legal operations changed?
Mary O'Carroll: Over the last year, I've really seen CLOC facilitate this dialogue among legal operations professionals by creating a forum for us all to connect and share. Many of us had been working on our own islands, but with CLOC, we've all kind of found each other. We have this incredible members alias/forum and if a member poses a question, other legal ops folks are immediately chiming in with advice and help.
There are also these things called "CLOC Initiatives" which are basically working groups that include representatives from all parts of the legal ecosystem who have come together to create industry standards, play books, or just some work product that others can leverage. This is facilitating the dialogue across the industry and I think change is going to happen a lot faster as a result. The collaboration has been really cool.
Zach: What's an example of an issue with clear and unanimous best practices? And what's an example of an issue on which there is still a fair amount of healthy debate, and it's still too early to make a determination?
Mary: There are so many areas that legal ops covers, but here's a few best practices off the top of my head:
- Standardize firm engagement letters and billing guidelines
- Implement an invoice review function (saves tons of money and precious attorney time)
- Disaggregate legal work and focus on "right sourcing" to optimize your resources -- bring work in-house, leverage alternative service providers, etc.
- Use fixed fees for more predictable transactional work
- Capture structured data and analyze it to make informed decisions
- Leverage technology wherever and whenever possible
Things we're still trying to figure out?
The biggest thing that comes to mind is knowledge management—how do we easily capture, find, and share everything that our department collectively knows? There's also been a lot of talk recently about how best to do legal department strategic planning (setting and tracking objectives and key results), how to structure the department (should legal support and admins be centralized or decentralized?), how to set annual budgets effectively, and of course, how to move more outside counsel work to value-based billing structures.
I still consider legal operations to be a pretty nascent field, so there's frankly a lot we're still trying to figure out.
Zach: Why is knowledge management in particular such a challenge? And what are some of the current solutions legal departments are using?
Mary: So many reasons ... That knowledge capital we value so much is mostly stored in the heads of our lawyers and the rest of it resides in email and other work product. Trying to capture and share that is challenging because lawyers work very autonomously and sharing and collaboration isn't currently part of their workflow.
It's not that they don't want to share, but rather it's a change management issue. It's an extra step that we're asking folks to take when there is no benefit to them. Think about it. We're essentially saying "Please pause what you're doing several times a day and tag and upload any useful or reusable advice or work product into a sharable repository." You can see why it might be difficult to gain adoption.
A successful solution has to be lightweight and built into the attorney's current work processes, so for example, email integration is a must. I think it's going to take AI to really solve this for us. Once you have the machines automating that, then we're golden. :)
Zach: I trust the software companies are paying attention!
I spend a lot of time speaking with the folks at many of the new cutting edge start-ups, and, speaking with them gives me the impression that software is eating the legal industry. But when I talk to many lawyers (in particular at law firms), many are unfamiliar with new technology—it's not even on their radar.
Do you see that same disconnect?
Mary: Sure, but there are also plenty of lawyers and firms who do embrace technology.
In-house legal departments and in particular, legal ops professionals, are really driving the demand for new technology. We are focused on efficiency, data and transparency, so automation and technology are obvious solutions for us.
On the other hand, the law firm business model is still very much focused on driving billable hours and revenue, rather than profitability. As a result, technology that drives efficiency (and therefore reduces revenue) is not a priority. That's changing though because clients are demanding it. In the end, the firms who recognize the need to adapt their business models and focus on efficiency and profitability will be the ones who succeed.
Zach: One of the things I've heard you talk about is the need for law firms, legal ops, and in-house counsel (all parts of the ecosystem really) to not view each other as adversaries, but to think collaboratively.
That seems like a real challenge in terms of implementation. How have you made that a reality at Google and how are you advising others based on your own experience?
Mary: Oh, I don't see us as adversaries at all. In fact, all the law firms we work with are great partners and are more than willing to collaborate and try new things together.
To be honest, often times it's the in-house counsel that are more resistant to change. Uh oh ... Can I say that? Who's reading this?
Zach: You can most certainly say that!
Mary, thanks for your time and for your thoughtful responses. Before you go, do tell me why I had better not miss this year's CLOC conference in May.
Mary: Last year's CLOC Institute in San Francisco was described as a "religious movement" and as "the beginning of something big." Many people on my own team described it as the best legal industry event they had ever attended. There are going to be over 70 sessions, a huge exhibit hall featuring the latest technologies, and several networking opportunities ... plus, those who attended last year will attest to the great food, and plenty of it!
Seriously though, it's the only industry event that brings together people from throughout the legal ecosystem to collaborate and drive change together. I'm a big believer that it is going to take people from legal ops, law firms, legal service providers, tech companies, and law schools to collectively pave the way forward for this industry. We're in the middle of some transformational times here... Don't you want to look back in 20 years and say you were part of it?
Thanks for the interview. This was fun!