Fred Headon is in-house counsel for Air Canada in Quebec and past president of the Canadian Bar Association where...
Monica Bay is a Fellow at CodeX: The Stanford Center for Legal Informatics. She also writes for Thomson Reuters, ALM (Legaltech News),...
It is common within the business world for companies to take inventory of innovations happening within other industries and to adopt the most successful practices to help strengthen their own. However, the legal profession is a sector of the market that has a stigma for being resistant to change and late to adopt new things. In this episode of Law Technology Now, host Monica Bay speaks with Air Canada Labour and Employment Law Assistant General Counsel Fred Headon about the benefits that adopting successful procedures from other industries could bring to the practice of law.
Fred Headon is a past president of the Canadian Bar Association. He serves as chair of the CBA Legal Futures Initiative and is the assistant general counsel in-house for the labour and employment law team at Air Canada.
Law Technology Now
Bringing Innovation to the Practice of Law
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Monica Bay: Hi. I am Monica Bay. Welcome to Law Technology Now. We have a terrific guest today. It’s Fred Headon and he is with Air Canada. And we have something very much in common. We are both airline people. My dad was a United Airlines pilot and my mom was what they used to call a stewardess. So without United Airlines I wouldn’t be here.
Tell us a little bit about your history with Air Canada.
Fred Headon: Thanks Monica and it’s great to be here. I am the Assistant General Counsel of Labour Law at Air Canada, which is a United partner in fact, so maybe you even played a role in that.
Monica Bay: I actually flew your airline the very first time when we both were at the Canadian Bar Association about a month ago.
Fred Headon: We hope we will see you again soon on one of them, both because of where I work and also would love to have you back up here. It was a great time at that conference and I really appreciate what you and the other judges did for us at that event. We can chat a little more about that as we go I am sure.
Yeah, in my day job I lead a team of in-house labour lawyers. We are responsible for the labour law work around the globe for the airline, and the full range of things, from employee stuff, through the bargaining, and grievances, and human rights matters, privacy, workers’ comp. And that comes on the heels of most of my career having been spent in private practice with the firm of McCarthy Tétrault in Montreal and practiced labour and employment for them for a number of years as well.
Monica Bay: What’s the most interesting part of your job and what’s the most vexing part of your job?
Fred Headon: They may be one and the same.
Monica Bay: I can see that.
Fred Headon: Thirdly, the most interesting is the industry itself and the dynamic that brings to the employment relationship. This is an industry that long ago started to embrace technology; something the legal profession can maybe learn a little from, but it’s also one where a little like the legal profession it’s a service and so you can’t sort of stockpile product and get through a tough spot. You can’t necessarily store things or reject them for next year. This is something that takes many, many years sometimes to change, if you think about buying a new aircraft or opening new routes or launching new divisions and such.
So it’s an industry that moves very quickly, but in a very complex environment and so that’s certainly kept me on my toes, and trying to keep up with it, not something the law is always very well-equipped to do, but to keep up with what’s going on in the industry has been a very interesting part of the job.
One of the most vexing parts, I suppose maybe that, but maybe let me come at it slightly differently though, because what vexes me perhaps most about this is now appreciating what the airline industry can accomplish, and this is true about any of the major carriers around the planet. I mean, we take pieces of metal and put them close to the speed of sound, 30,000 feet or so above the ground, with a couple of 100 people on board, surrounded in fuel, and safely deliver them halfway around the planet on a regular basis. That is a remarkable feat of engineering.
But when you then add the human dimension to all that goes into delivering that service, I think there’s an awful lot that the legal profession can learn and that we haven’t learned it sooner is the part that perhaps vexes me the most.
I have been trying to encourage my team to adopt some of these same kinds of processes, because start with a simple one, the pilot and their checklist; those are well-known tools of the trade within the aviation industry, many other professions have adopted them now as well, and it takes a lot of the room for error out of the equation.
We are susceptible to error too in the legal profession and are there perhaps some things that we could systematize like that. Are there things once you have systematized that you can say, well, you know what, maybe we could train somebody to do a part of this. So we don’t pay the pilots at Air Canada to put the bags on the plane, for example. We train people specifically for different parts of the whole process, and we bring that broader community to the delivery of the service.
We spend a lot of time, as do many other air carriers, hotel chains, anybody in the service industry thinking about customer service, not just business development and how so we sell more, but actually how do you treat the customer.
And I just came out of a meeting just before I joined you, speaking with my team about some of the things I have learned from hanging out with the people who work with our flight attendants about how do you maybe connect a little better with people.
And so what vexes me is why is it taking us so long in the legal profession to perhaps open our eyes to some of these things and absorb them into how we practice.
Monica Bay: When you started talking about the pilots, that immediately made me think of Charles Duhigg’s new book, it’s called ‘Smarter Faster Better’, and one of the most dramatic aspects of it was he did two sections on a plane crash that crashed and everybody died, and on a plane that ran into a problem and everyone survived, including the plane.
It is incredible and it’s exactly what you are talking about, which is we have to look at our processing, we have to look at how we do it, and I know for me, because I am fascinated by this area, it was particularly compelling, but what an amazing differentiation between the way the one crew worked and the other, and literally it was a life-or-death situation.
If you haven’t had a chance to read it, and I would definitely invite our audience to get this book. In fact, I just did a podcast with him about a month ago. It’s spectacular. I think you really nailed something that takes us to the broader issue that we were doing up in the Canadian Bar event.
How do you see law needing to adapt better, faster, cheaper, transparent?
Fred Headon: Those were all big words for our work, and the event that we were so delighted you were a part of, The Pitch, was a bit of a, not necessary a culmination, but a second phase to that work. So let me take you back to the first phase when we began by realizing that the forces that were at play in the market for legal services were putting a rather unique kind of pressure on the legal profession, and we also concluded they weren’t likely to subside anytime soon.
So the Canadian Bar Association, a little like the American Bar, with the Presidential Commission on the Future of Legal Services, saw an opportunity to deliver value to its members by saying, let’s help you understand what’s going on in the lives; the professional lives, the personal lives of your clients, what are the bigger influences that are changing how they behave and how they work and help you understand what that means for you. How do we bring this into your day-to-day?
First by giving you that context and that was really the first part of our work. And we in the course of that work started to look at, well, what do other professions do? What might we learn from other fields that are similar to ours and who may have embraced technology a little better, maybe better at customer service, maybe growing their practices? Of course, one of the obvious examples of a profession that seems to have done that well is the accounting profession and the kinds of services that we now see the Big 4 accounting firms delivering and plenty of others; the Big 4 seem to get most of the attention.
Monica Bay: I am going to stop you for a second, because I am not familiar with that arena and I suspect some of our listeners aren’t. What in your experience have they done well?
Fred Headon: So first of all, they seem to have done a very nice job of training everybody, top to bottom within the firm. If I am at an event somewhere and somebody from one of the Big 4 is in attendance and I have the chance to meet with them, it does not take me long to figure out that they are from the Big 4, in a way that you don’t necessarily see with lawyers.
I mean, certainly in private practice, most of us would be familiar with those folks who seem to have a knack for developing business, a knack for making connections. That seems to be something that they have been able to distill down and train.
I also think though we can see them — well, not think, we can certainly see them broaching a number of new areas of practice; the immigration law work, the tax law work that they are now offering in many of the accounting shops.
Tax law, rather akin to the accounting work granted, and maybe a bit of a natural growth there.
Immigration, well, there’s a business need and one that in many places we have been able to reduce to quite a standardized process for many of the steps, bringing in the lawyers’ expertise where it’s really needed rather than throw. So something else that perhaps is a bit of a natural add-on to the kind of business consulting work that some of those firms would have developed over the years.
Those are kind of familiar, they have had to find ways to structure these arrangements so they stay on-site with all the different regulations and so far they seem to be doing that.
But I was also intrigued here at Air Canada, when we launched our first efforts to produce Corporate Social Responsibility Report. This is something that in many ways many businesses had on their minds for some time. But a few years ago when we realized that other businesses had found ways to really quantify this kind of thing and produce a report about it, the idea was hatched here that, well, perhaps Air Canada should as well, and let’s start thinking about what kind of things could we perhaps measure and speak about in a report like that.
And when we went to market to see who could help us, there is probably somebody out there who has some expertise who could help us put together the framework for a report like that, it was the accounting profession that popped out. And I thought that was interesting, because certainly there are things in a Corporate Social Responsibility Report that you might measure; for us greenhouse gas emissions from the fuel burn of the aircraft, for example, recyclable materials and how often are they getting in there, of course for a Canadian Airline the deicing fluid that you are using on a regular basis.
But at its core Corporate Social Responsibility sounds a lot like doing the right thing, and why weren’t there law firm stepping up and saying, hang on a second, we have that kind of training, that’s part of our skill set and we have something to at least add, if not perhaps compete with the accounting profession in this field.
So we have seen the Big 4 in particular, but I think many others broach these kinds of fields that are close to the legal profession. When I give presentations with my slides about our report, I have a slide that shows a picture of an ad from a mid-sized accounting firm here in Montreal that was advertising sort of debt management services. If you are in over your head with your mortgage and your credit card and so on and so on, come and talk to us and we will help renegotiate things.
And I said, there’s another one, renegotiate, well, we negotiate everyday, and the renegotiating would appear to me to be a number of contracts that you might sign. Where was the law firm to step up there?
And I think these are examples of the accounting profession seizing on some opportunities in the marketplace that perhaps the legal profession ought to have thought about as well, but overlooked.
So we took all of that, we looked at — we did some research with the clients. We hired a public opinion research firm to probe with people who use legal services and some who never have. What it is that they would expect from a legal profession today and we bundled all that up into a report with a series of recommendations about how we might encourage greater innovation in the legal profession, how we might regulate the profession differently to help support some of that, and how we might educate and train lawyers differently so that they can embrace this and really make best use of it. All with the driving force behind this to make sure that Canadians have the kind of relevant, vibrant, capable legal profession that we think they are entitled to.
So that led to our report that was issued back in August of 2014. Now, it’s hard to believe how quickly the time has flown. And since then we have started to roll out a bunch of tools in various forms that our members could use to understand the recommendations and try to bring them to life in their practices. And the most recent one Monica was The Pitch, which we hosted in Ottawa, and which you were a part of, where we tried to showcase some entrepreneurs and give some of them a bit of a shot in the arm as they tried to bring some of this kind of change to life, and to give some exposure to our members to say here are some of the things that are going on out there, some of the things you might want to think about in your practice and think about how you might make use of them.
Monica Bay: It has been such an interesting year. I think you know that I am a fellow at CodeX at Stanford, and for the last year I have been focusing on startups and on how are we going to change this and it has been really dramatic.
One of the issues that I think goes right along with what you have been saying is at our big conference, the FutureLaw Conference, Jim Sandman, who is the Head of the Legal Services Corp, gave an amazing keynote. And one of his suggestions is, it’s time to stop the way that big law, in particular, is doing their work, that because it is so motivated against money and they are so resistant, particularly the baby boomers who are at the peak of their careers or now retiring, and there’s been so much problem about getting them to do better, faster, cheaper, because there’s no incentive for them to, for example, spend a lot of money on tech, because that comes out of their pocket.
And as more and more American firms are run with equity partners, a lot of the partners don’t have equity, a lot of — there’s a smaller amount and there’s no motivation for them to want to cut the billable hour.
I always like to say this, I have been saying the billable hour would be dead in five years for 17 or 18 years now, but it really does resonate with what you have just said, and there’s such a disincentive.
And if the audience hasn’t had a chance to take a look at Jim’s stuff, they can ping me, it’s HYPERLINK “mailto:[email protected]” [email protected], and I can send you the link to listen to what he said, but it’s really, really amazing what’s going on and you just hit it on the nail.
A really good example, this is Julie Pearl, you were talking about immigration and about 20 years ago she started both her law firm and a tech firm, and what they do is so amazing because there’s stuff that they can do by using tech that they physically could not do if they were doing it manually because it would take too much time. And ironically, by using the tech it actually made more money for the company because by doing it with technology they could identify areas that would have been too costly to find in the first sense.
So I am rambling a little bit, but I think we’re at a point where we’re going to see some real changes because the baby boomers are leaving and we have people coming up who never lived without any Internet, it’s just amazing how time flies. So I completely resonate with what you’re saying but I’ll let you continue.
Fred Headon: No, and I wholeheartedly agree. We have a generation of folks who have legal needs now, for whom the idea that you wait three years for anything this seems completely perplexing. Yet if somebody walked into my office this afternoon and said let’s head off to the Superior Court in Downtown Montreal, I’d say, okay, well, we’ll get a ruling in three years. It just drives an irrelevance, it creates a gap between us and our clients I find and so some of is the cost stuff and two, the CodeX Conference you have mentioned earlier, I have heard some other feedback from that too where this is a bit of a theme and we need to understand as a profession, a) that that expectation is not going away. The cheaper, faster, better, that’s pervasive, that’s how everybody works.
I tell a story when I do my presentation of some of this material about how that starts at the top of most businesses and find its way down all through all the ranks and you need to understand the importance of energy professor not just because you might serve a CEO or a CFO but because everybody who works for those people also has that expectation now. So it doesn’t really matter what your practice is? This is a pervasive trend and we need to be able to answer that.
Now sometimes there are things we are going to do that are very complicated and do require an awful lot of skill or judgment, experience and such, our research show people are willing to pay for that when it’s needed, and that’s I think one of the tricks that we need to figure out, is how do we identify those points in the process but we really need that expert judgment that people will pay for because it will be needed, but it really behooves us for the rest of it to find ways to do it in a way that really connect and some of that is doing a quicker because everything else is happening quicker and it’s somewhat better because everybody else has processes to check their quality and some of its cheaper because it’s a market and others are going to start to do it, so we need to be cognizant of these things.
Monica Bay: I predict that you are spot-on about the Big 4 and I really am seeing more and more and more and more. I think the Big 4 is going to come in and take over a lot of the work that the corporate counsel are doing. I see a big movement because the corporate counsel are having — it used to be if you were a woman you went to be a corporate counsel if you want to be a lawyer because nobody would pay you enough at big law, but what’s shifting is very dramatically the Big 4 and procurement is becoming more and more and more, we ain’t going to take it anymore.
I went to an amazing conference earlier this year and it was really interesting because it wasn’t the same people that I usually see at all the events that I go to and the amazing things that they are doing with — they are turning it over, it’s not just the lawyers handing them. When I put myself through Law School I typed the bills that said, for services rendered, a number with a lot of zeroes after it, that was the entire bill.
Now they want to have details and everything, but I really think we’re going to see the Big 4 being embraced by corporate counsel and having them take over a whole bunch of stuff that the lawyers are doing right now.
Fred Headon: I anticipate you’re right. I think they and a number of other service providers are going to step in and it’s interesting your reference to procurement because if you’re in a sizable corporation you have rules about when procurement needs to be involved in purchasing and purchasing legal services especially when you bundle up the annual spend often hits that threshold.
So I do anticipate we’re going to see more-and-more people from a procurement department, from a strategic purchasing department sticking their nose into these conversations that right now have been between senior partners, relationship partners on the one hand and general counsel and assistant general counsel and as such on the other hand, and I think the firms will need to think about how do we engage in that conversation, because the procurement people are used to dealing with people who have titles like VP (Sales).
Monica Bay: Right.
Fred Headon: Right? So there is a different language and a different set of unwritten rules and different ways of engaging in those kind of conversations and we’re going to have to think about them.
Now the other one that I know is dear to your heart too is are the startups who are popping up and it’s been delightful to see some of the traction that some of them have been able to get in the same legal space.
I think they too are responding to a need to do their cheaper, better, faster, but also embracing technology in a way that helps overcome that gap, I mentioned. It helps us reach through to the customer and say, here, we can do this like everybody else in a way that’s time-sensitive for you, do it when your kids are asleep or do it after you’ve finished looking after mom and dad or whatever else is on your plate in the course of the day, do it with an interface that is easy to follow, because it looks like a lot of other interfaces that we might use in our day-to-day, and I think that is going to go a long way to helping power of different lawyers and say when the sports teams are powered by different energy drinks and such we are going to power law firms with some of this technology.
We’ve seen some of the — we’ve seen some signs of the Big 5 to coming into that space. So in Toronto, Deloitte picked up a document review company, the EDD bought the business, right? Put it on the side of the new product line. I anticipate they too are probably keeping an eye on this market for those kinds of opportunities to bring more of these kinds of services online.
And then the procurement people can start to say to the law firm, well, okay, let’s have you do this part of this project because it really requires that legal judgment, the experience or maybe this where the research really needs to be done well, because we can see there are particular issues that may arise, but you know what, for the document review, we’re going over here and you are going to work with in this case, Deloitte. I think we may see more of those kinds of packaging of services coming online as well to try to fill the gap, unless of course the firm step up and offer that themselves which would be another option for them.
Monica Bay: Yeah, I think it’s going exponentially. It’s not linear anymore and I think the next five to ten years are going to be extremely dramatic, especially I am always so amazed by change management. The first time I flew was in a DC-6B and it was seven hours to get to Chicago and my dad was flying the plane. Now you go on these 777s that might as well be cruise hotels on the ocean, it’s just amazing how huge these things are.
Change is just amazing and it’s been what, about 15 years now since the Internet was truly running and going and whatever, and it’s changed everything, absolutely, everything. It’s so magical, it’s so exciting. It’s just so magical.
Fred Headon: It certainly is and I agree wholeheartedly with the exponential. We really seem to be accelerating the pace of change with all of these things. The idea for this event and maybe just for the listeners you can think of these shows where entrepreneurs come on in front of a panel of potential investors and then pitch their product, that was the inspiration for this event at the last CBA Annual Conference.
It came out of one of our recommendations and said there should be an incubator for the entrepreneurs in Canada who would like to turn their minds to the legal space and basically the time it took us to do our research and come up with our analysis and prepare our report and the idea for the incubator was one of our earlier ones and all of this, we were quite, this is quite novel and creative and we thought we throw it out there and see what we could do and maybe find the CBA some partners who would be willing to join us and then put something like this together and not really being a core strength of a Bar Association to run an incubator.
In the time we’re doing all this, two of them come online, right? Two of them actually are up and functioning and that led to a real shot in the arm for that community, entrepreneur community here in Canada is looking at the legal space and we were delighted that one of those two incubators, legal acts which is affiliated with the MaRS Discovery District, a larger incubator in Toronto partnered with us on this event and helped us find the folks to participate, but we sent out our call for participants and we had over 30, I think 34 was the final count. There were entrepreneurs who came forward and said, hey, we’d like to be part of this.
Two points of contacts there, one, your point, these things are changing quickly, well, 34 starting at zero and not so long ago, is a pretty good number, the other one for your listeners of course is, as we like to say, Canada as always about one-tenth the size of the US, so in terms of population and the economy is that give us some credit there, other than for geography and Stanley Cups won, we seem to trail the US in that kind of a ratio most of the time.
But we were going to encourage that we had that many come forward, we did a pre sort of an assessment of everybody with a panel of judges there and they came down with five who actually presented but just the idea that in that period of time and the couple of years that we were doing this work that the environment could transform that quickly that we’re now actually seeing viable opportunities for startups to approach outside funders, to get the kind of support they need from other entrepreneurs who are interested in working with them, and bring to market a variety of products and they really span quite a horizon, it was one at LegalX that helps people with an app on their phone navigate the small claims process.
There is another one called Closing Folders which just does that, when you’re closing the deal it automates all of this kind of process. We’ve got some, I mentioned one document review company in Toronto, there is another one that’s doing a different kind of analysis of documents. We have got a company called Beagle working with these incubators as well. It’s just remarkable what’s come online and encouragingly from people from outside the profession and other Canadian group that we are quite proud of are the folks who were working under the name ROSS which has gained access to IBM Watson.
And what I love about the story about ROSS was when IBM opened up a competition for people who wanted to see what they could do with Watson, a number of computer science students in Toronto thought, well, maybe the legal profession could be of some help and they went looking for a lawyer to help them, and that’s how that whole project got started and now they are away to the races and doing all sorts of great stuff in the legal world, but others are coming into the conversation and joining with those of us who are looking at how we might practice law differently, which I think is a great source of inspiration, and energy, and hopefully some validation for those who might be skeptical in some ways about what we might be able to do in this space. I think if we take some time to learn from some others, we might find there are, and in fact, things we can pick up from elsewhere that can help us do a better job of being relevant to the people we are supposed to serve.
Monica Bay: Yeah, and I’ve just been so delighted to have been at the opening last year of LegalX and I just had such a great time at the Canadian Bar, I was so thrilled to be invited to be one of the judges and it was such a great experience. I was blown away, really excited by the quality of the people and everything else.
We’re running out of time unfortunately, we can talk for hours on this. Before I let you go, tell us a little bit more about what you’re doing now with the Bar and what do you see as the next year or two, what do you think is the most important thing for us to all to watch for and to be aware of?
Fred Headon: So with the Bar I continue to serve as the Chair of the Legal Futures Initiative and we are thrilled to see the ABA report come out as well. We work closely with the folks there and then we’ll be looking for — we’ve already spoken with them about where we might see some opportunities to work together and hopefully that will come online so we can cooperate across the border.
We are going to continue to help support our members by helping develop tools they can use in their practice. We came up with a guide for young lawyers to think about their career recently. We have some stuff on strategy for law firms as they look at these kinds of forces in the marketplace and the work we did in the works and other one that’s specific for the solo and small firm kind of community, and I think you’ll see more of that kind of programming as we saw in Ottawa that the annual meeting continue to roll out across the country as we help lawyers get themselves ready for the new realities of the marketplace.
So I think that’s going to keep us busy for the next little while and hopefully with the a fair bit of cooperation across the border because it really has been delightful to work with the likes of yourself, Monica on this —
Monica Bay: Thank you.
Fred Headon: — and so many other like-minded folks on the US side of the border. We can sometimes feel like a small community, so it’s great to stick together and help each other when we can.
Monica Bay: Absolutely. If someone wanted to reach out to you, how do they reach you?
Fred Headon: Best would be by email, which is [email protected]
Monica Bay: Well, thank you so much. The time went so fast and I’m really looking forward to getting to know more about the Canadian Bar and I just thank you very, very much.
Fred Headon: That’s my pleasure, Monica. Thank you for all your help with it and for your listeners who might be listeners most of the time, I understand they’re going to put up the video from that event we were at and I’m sure you’ll be a prominent in there, so I will have to send you the link you can share with that up and running.
Monica Bay: Oh yeah, my famous line. So we won’t get into that. Thank you so much.
I’m Monica Bay and thank you for listening today to ‘Law Technology Now’.
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