The document discusses key components of law firm transformation - processes, technology, and people. It summarizes a panel discussion on these topics. Regarding processes, it discusses how outsourcing low-value repetitive work like non-disclosure agreements can reduce costs while focusing lawyers on higher-value work. For technology, it describes how a law firm uses systems to improve processes, costing, and quality control. Finally, it notes that while technology can improve efficiency, organizational culture and reward structures that prioritize billable hours can inhibit change unless focused on client benefits.

1. Way
ahead.
White Paper.
Technology:
the secret to effective
law firm transformation?

2. 2
Introduction
Process Improvement
Clive Davies, Senior Counsel at Fujitsu examines the
importance of process to make the right-shoring or outsourcing
of legal work effective.
Technology
Barry Gross, Partner at Berwin Leighton Paisner, discusses the
utilization of technology to improve core components of legal
practice.
People
Tony Hodgson, Partner at PwC, describes the barriers to
change that law firms face at an organisational level.
Concluding thoughts
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Introduction
Contents There has been a fundamental shift in the legal
landscape and it is not over yet.
The ‘credit crunch’ acted as a catalyst for the shift,
accelerating the drivers of change and helping
unblock much needed change in the profession.
The need to transform law firm performance – to
maintain and grow profits, retain valued clients
and attract new ones – has not diminished as
the economic outlook has brightened. The true
challenges of transformation are still to come
and in order to not only survive but truly become
distinguishable from the competition, lawyers and
firms need to embrace and undergo significant
change across their people, processes and
technology.
To explore the dynamic between these critical
components, LexisNexis held a panel discussion in
the heart of the City of London. Chaired by LexisNexis
Market Development Director, Mark Smith, the panel
comprised: Clive Davies, Senior Counsel at Fujitsu
who examined the importance of process to make the
right-shoring or outsourcing of legal work effective;
Barry Gross, Partner at Property giant Berwin Leighton
Paisner, who placed his attention on the utilization
of technology to improve core components of legal
practice; and Tony Hodgson from PwC, who concisely
described the barriers to change that law firms face at
an organisational level.
All the panelists shared the same sense of the key
market driver: we are now firmly in the age of the
client. Clients’ needs and expectations are now
shaping law firms’ business models. They no longer
want to pay for the traditional and outdated model
and expect legal work and solutions to fit their needs
rather than the reverse. Clients expect to know the
costs and projected costs of their transaction or
litigation upfront and are increasingly intolerant of
poor cost management.
What’s more, traditional legal set ups foster a risk
averse, near-term focused atmosphere. Rewarding
staff primarily based on chargeable hours is seen as
outdated and often driving the wrong behaviours, as
is the traditional staff career structure. The highest
performing firms are now employing legal project
managers, commoditizing low value repetitive work
and using technology to reduce costs and improve
efficiency across all areas of the firm.
“ Lawyers are so poor on pricing. There
is a market price for most of the work
we do – and it’s not based on an hourly
rate. It’s [about] placing value on the
benefit to the client and then working
out how to do that work for a profit.”
Barry Gross, BLP
“ Companies rarely die from moving
too fast [but] they frequently die from
moving too slowly.”
Reed Hastings, CEO Netflix

3. 43
Process Improvement
Lawyers need to move up the value chain and more
effectively match skills to client value.
The work which is low value and repetitive, and
which was once the preserve of junior lawyers and
paralegals, needs a more manufacturing mindset
applied to it. Considering what adds most value to
the client’s business and allowing the lawyers to
concentrate on the high value work, whilst assessing
what could be done differently with the lower
complexity work, is a valuable exercise.
Clive Davies, Senior Counsel at Fujitsu, used an
example of the use of NDAs in sales transactions
to illustrate the value of this approach. Fujitsu
outsources all initial stages of non-disclosure
agreements to their legal function colleagues in
India. Every sales transaction requires an NDA yet
his research showed litigation of NDAs was very rare.
Even non-standard NDAs which do require lawyer
input are first directed to their legal team in India, who
can assess and refer to a more experienced UK lawyer
where appropriate, but this process deals effectively
with much of this work. It has taken about a year to
fully train the lawyers in the Indian centre, who all
follow a strict process delivered by a playbook, but
it has dramatically reduced costs and improved the
client experience.
Measuring how effective the transformation has
been can be hard to quantify and an ongoing
challenge. Upfront planning that identifies desired and
measurable benefits will assist with this. It can include
KPIs which can be put in place to measure progress
(including increased turnaround time) and also has
the benefit of enabling fee earners to spend time on
higher value work.
The process improvements and the matching of
resource to task naturally lead to where technology
can be applied to further speed up and increase the
quality of those processes. The discussion therefore
turned to technology and its role in transforming
efficiency.
“ Put the transformation focus clearly on
the benefit that the client will receive.”
Tony Hodgson, PwC
Other identified needs for technology included
common platforms to allow e-signatures for signing
and witnessing contracts, deeds and documents.
Both lawyers and clients have better things to do with
their time than wait for a penned signature. There
is an obvious cost benefit as well as reduced risk by
ensuring every party has the same final copy of
the document.
Technology
Firms such as BLP are using technology to improve
a variety of processes across their business.
Barry Gross, Partner, talked about BLP’s own
experience and activities, including an overarching
case management system, a process mapping tool
to identify ways in which they can streamline work
and a near-shored legal service team in Manchester
which utilizes cheaper resources to deliver the same
work in a different way. The technology also allows
Gross to effectively and accurately cost the work.
This has significant benefits for enhancing BLP’s
pricing competitiveness in the market, increasing
value for their clients and growing and maintaining
the firm’s profit.
The technology doesn’t simply enable the process
to work more smoothly. BLP use technology to
assist with risk management. They use tools such
as LexisDraft, which dramatically speeds up the
basic proofreading task, to ensure a higher level of
consistency and quality between the legal services
team in Manchester and the client-focused lawyers
in London, which significantly reduces risk.
Turning to technology selection, Gross emphasized
the need for technology to be driven by business
needs rather than the technology itself. This highlights
the changing role of the IT department: IT needs to
engage and encourage fee earners to find answers
to business solutions. Lawyers need to be more
tech-savvy generally; legal skills alone are not enough
anymore. Most pieces of software are sold to IT
departments but most software is not used by those
departments. A change in technology cannot exist in
isolation; a change in working practice is also needed,
which links into the earlier ideas about redesigning
and optimizing legal process. It is much easier to
implement new technologies when leaders change
how they operate first.
Finally, Gross also provided a strategic overview of the
implications for firms: technology can indeed assist
with the low value commoditized work and let lawyers
do more of the work that adds value and on which
a profit can be made. This changes the traditional
pyramid model but it is not going to herald the
overnight demise of traditional law firms. What it does
mean is that it is likely that there will be fewer junior
legal jobs in the near future as a result and the industry
must still address the challenge of how to train and
recruit lawyers to fill the senior positions when they
are not able to learn and cut their teeth
in the traditional trainee/junior assistant role that
exists presently.
All of this naturally drew the discussion towards
the final piece of the puzzle - the people and
organizational structures and culture that law firms
operate in.
“ Changing technology necessitates
changing working practice.”
Barry Gross, BLP

4. 65
Tony Hodgson, from PwC, described the dilemma:
the very nature of partnership structure makes
change hard. What’s more, lawyers are often risk
averse and traditionally do not like change. Involving
and having input from staff to improve the firm is
crucial and yet, until achieving billable target hours
is not the only way to success and promotion, staff
will find it hard to buy into the conversation.
Next, transformation needs investment and as a result
lowers earnings for partners or increases debt. This
means the need to change has to be compelling in
order to drive it forward. That is the current dilemma:
there is not enough of a burning bridge for law firms to
really accelerate their transformation plans.
Finally, and linked to the above, the reward model
inhibits change - despite challenges the legal sector
has faced, Partners have remained generally well
remunerated and aren’t really motivated to see
significant change. The historic system of people
being heavily rewarded for solo and siloed behaviours
of legal excellence leaves little time to build
management and people skills or strategic focus.
Recognizing the above, Hodgson proposed some
criteria for leading change that firms could use to
ensure success:
• Put your best people on transformation
programmes to signal its importance.
• Put strong governance on the programme
led from the top, but with the team
empowered to make changes.
• Focus clearly on the benefit to the client.
• Build a compelling case for change: review
the wider market and the current and future
competitive threats.
• Look to other professional services
organisations.
• Partners who are the biggest rainmakers will
need to be onside early; the respect that
people have for them will communicate how
the firm sees the changes.
• Make sure partners and fee earners are clear
about what is in it for them and become
involved in affecting the change.
• Seek partners who are stars of the future
- it is in their interest and they are less
influenced by the past.
• Link strategy to individual targets.
People
“ The impact of change on firms who
do nothing will be telling.”
Tony Hodgson, PwC
The very nature of partnership structure makes
change hard.
Concluding thoughts
Of course, change is not necessarily about
revolution, it can be evolution.
Transformational change doesn’t guarantee to
deliver the best outcome at the end and needs
constant evaluation, including assessing the market
and the industry as well as evolving business needs.
However, the speakers made it clear that real
benefits can be delivered by addressing process,
technology and people issues inherent in the
traditional law firm model.
Much of the change that the profession is currently
facing has been successfully navigated by businesses
in other industries. Aligning people, process and
technology into a new operational model that better
fits the needs of today’s clients is at the heart of
this challenge. While many firms are making great
progress, the lessons from other industries are stark –
many of the firms that don’t change, or don’t change
fast enough, will find it increasingly difficult to thrive in
the new world.
“ This is bottled-up
innovation that had
to happen to allow
law firms to really
find out what their
true sustainable
competitive
advantage is.”
MarkSmith,MarketDevelopmentDirector,LexisNexis

5. Reed Elsevier (UK) Limited trading as LexisNexis. Registered office 1-3 Strand London WC2N 5JR Registered in England number 2746621 VAT Registered No. GB 730 8595 20. LexisNexis and the Knowledge Burst logo
are trademarks of Reed Elsevier Properties Inc. (c) The information in this document is current as of July 2015 and is subject to change without notice.
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