The legal industry is not immune from the basic economic trends affecting every other business. Firms must get better, faster, and more efficient to keep up with modern demands for legal services. Stephen Poor of Seyfarth Shaw LLC joins Law Technology Now’s Dan Linna to discuss how implementing beneficial thinking methodologies can help law firms ingrain innovation into their culture. They explain the process firms should go through when choosing the methodology that best suits their needs, and Stephen particularly recommends Six Sigma, Lean, and Design Thinking. Together, they highlight ways the most innovative firms exhibit natural resilience in the face of industry changes. Later, they discuss how technology solutions create more value for clients and allow lawyers to practice with greater efficiency and accuracy.
Stephen Poor is chair emeritus at Seyfarth Shaw LLP.
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Ingrained Innovation: Creating a Resilient, Efficient Law Firm
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Daniel Linna: Hello. This is Dan Linna. Welcome to Law Technology Now on the Legal Talk Network. My guest today is Stephen Poor, chair emeritus at Seyfarth Shaw. Steve previously served as chair of the firm for 15 years from 2001 to 2016. Currently, Steve serves as an adviser to the firm’s leadership and is an Executive Sponsor of Strategic Initiatives focused on innovation and growth.
Steve, welcome to the show.
Stephen Poor: Thank you, Dan.
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So Steve, let’s just jump right in and what I’d like you to do is can you just tell us a little bit about your time as a practicing lawyer and how you ended up becoming Seyfarth’s Chair in 2001.
Stephen Poor: Sure. Well, I started — I’ve been with Seyfarth my entire career. So I started right out of law school in 1980, and I became a labor and employment lawyer, mostly a trial lawyer doing employment discrimination matters. After a while, I began to serve as the Chair of the Labor and Employment Law Department back in the late 90s and then moved into the firm’s Executive Committee.
One, they asked me to take over as chair-managing partner of the firm from the fellow who done it for about 20 years before me. You asked how that happened. I missed a meeting and that’s the best answer I can give you. I had a lot of experience leading up to that in various functions of firm. I’d been the executive sponsor for marketing. I helped in the Technology Group, I ran the Labor and Employment Law Department, which at the time was and still is the firm’s largest practice area. So I had a pretty diverse background in the business related to law. So as I said, I missed the meeting and you got to nod.
Daniel Linna: Yeah and so you’re the one who got this idea.
Stephen Poor: I got an idea.
Daniel Linna: Yeah, yeah. Well, there’s so many things I’d love to talk with you about today. We’re going to really kind of focus with narrowing on innovation and technology, and particularly Seyfarth’s application of Lean Six Sigma to legal services delivery and it was under your leadership that that began.
And I mean how did that all come about?
Stephen Poor: Well there’s a long story, but I’ll give you the short version, which is if you go back, we really started our lean journey in about 2004, so we’re talking 15 years ago. And if you go back to that period of time, you have to understand what the legal industry was doing which was those early 2000s were boom times for the legal industry kind of not unlike now.
But if you look at the dynamics behind the economics of the business, the industry wasn’t delivering services more efficiently. People weren’t being more productive, they weren’t devising new service delivery mechanisms. They were simply charging more. That’s how they made more money and you raised your rights and you passed the additional profits along to your partners and while everything was good.
And I guess I was I was certainly significantly younger back then and I was certainly more naïve, I couldn’t understand how that business model could continue to be viable and I couldn’t understand how the legal industry was immune from sort of basic economic laws that affect every other business. Why shouldn’t you have to be get better and faster and more efficient to justify continuing your pricing structures.
And so, I was scratching around and I’d had a lot of prior experience with the firms, sort of playing around with technology and we’d started a number of ancillary businesses and training and all sorts of things.
So we had a history of sort of playing around and experimenting, but I read a book on Six Sigma is that sort of the baseline of it, and I get asked the name of the book and I don’t remember at this point. But I was dumb enough to think why wouldn’t that work in the legal industry?
A question I now understand the answer to, but at the time it seemed like a question to ask. So I reached out to one of my partners Lisa Damon in Boston, she was at time managing partner of our Boston office and we put in place a couple of small test cases pilot programs; one around CMBS financing, the level of financing meltdown that brought the whole economy down, and our own conflict system.
And we found out that we have achieved significant improvement in efficiency and margin and effectiveness in both examples to the point where we became convinced that in fact this methodology and this way of thinking could work in the legal industry. So that started us down a path that the firm is still on today.
Daniel Linna: Well let’s go, you initially said, you kind of ask yourself well why couldn’t this apply to the legal industry? I mean what do you think you’ve learned about how maybe it’s different in legal, how I mean — what should we be thinking about to address to kind of make the most in applying Lean Six Sigma to legal?
Stephen Poor: Yeah, so when we first started, we worked with Six Sigma Academy to sort of put together a program and they looked at us like we were crazy and we started with sort of full-bore Six Sigma and then brought Lean Thinking into it and we brought all the jargon, all the methodologies, all the stuff that associated with it and we learned through painful experience that, that full bore application particularly with the jargon around it, with the language around it really doesn’t resonate with lawyers. And so, we had to adapt and modify the way of thinking and the way of presenting that way of thinking in a way the lawyers could understand.
There’s a change management challenge associated with this because you’re asking people to think differently about the way they’ve been practicing all these years and to deliver services differently and people take a lot of pride in the artisan nature or the craft and it’s magic and all this kind of stuff.
And you have to adapt the core concepts of Lean Thinking and Six Sigma so that lawyers can be receptive to it and hear what you’re saying, you’re not changing the methodology and you’re not changing the underlying basis of it. But how you talk about lawyers are great, focused on language, right, so how you talk about it, how you validate their willingness to take a risk by changing it.
And at the end of the day for us, probably the most important voices in the whole process over the years were our clients, because we had a number of client allies with us on this journey, ranging from Caterpillar to DuPont and etc, etc and the more our clients would speak up and say this is what we’re looking for particularly after we hit the recession.
Let’s remember we started in 04, the boom times, it was 07, 08, 09 come along and it’s a very different world and so more and more client voices are being heard and that helped to change dynamic as well.
Daniel Linna: Okay well that last part, there’s a bunch of things you just said there that I want to follow up on, but that last part is interesting. So I’ve been having some conversations with folks, I think the latest Altman Weil survey actually talked about this too, about that one of the chief concerns as far as threats to law firms is a downturn and some people are kind of asking well what will happen to the innovation programs if there’s a downturn.
I mean I suppose it could result in and some innovation programs getting chopped or maybe it might result in a redoubling of efforts on engaging and some of the change that some would say needs to happen in the industry.
Stephen Poor: Yeah, that’s an interesting question and our experience in the last recession was that it worked to Seyfarth’s advantage to be able to say to the clients who were struggling with legal budgets or struggling with the legal services, their companies were having down years to be able to say we have been approaching this differently now for four or five years.
We’ve got experienced this, we’re not just inventing this stuff as a result of the recession and that was a real advantage to the firm back in the day. And I think look, every firm will respond differently to the next downturn.
Let me put to you this way, if it’s an innovation program what I hear when you say that is something sitting over in a little box that you will unwrap and take-out and the marketing guys play with, if it’s just an innovation program sitting over there, it’s a high likelihood of getting chopped in the short term.
If you have ingrained innovation, if you’ve ingrained a different way of thinking into the DNA of the firm and through the way you culture, that’s not going to get chopped and that’s going to resonate with clients and I think the firms will do that and are doing that are going to come out of the next downturn whatever that may be in much better shape. They’re going to enter it in better shape and they’re going to come out of it in a better shape.
Daniel Linna: I think that highlights one of the misunderstandings about what Lean Thinking is all about and a lot of what we did at Michigan State and we will continue to do is kind of connected to The Toyota Way and thinking about creating learning organizations really changing the culture, a lot of people kind of just see it as oh, you may have processes eliminate waste is very boring, kind of like commoditization of legal services.
I mean how do you really get the lawyers in a firm though that’s buy into of this and go through that change management process, the sort of heavy lifting we’re talking about to create that sort of change?
Stephen Poor: Well I’ve only got 15 years so I don’t know completely the answer to that yet. First you have to recognize it’s a long term challenge that you’re not going to get everybody in a firm to buy into anything or once I don’t care how obvious it is, they’re lawyers and they are for there.
And a few things I would suggest is one, you have to understand your audience. Lawyers are unique breed. You read the Larry Richard’s stuff on LawyerBrain on resiliency, you think about the dynamics that they’re adverse to risk, they are adverse to change. You have to recognize that audience that you’re not going to change their dynamics, you have to change their hearts and their minds and so you have to play within that framework over a period of time.
And you also have to think about who are going to be your champions, who are going to be your advocates for change because you have to have support from the firm leadership, it has to be clear that this is something that’s important to the organization not just something we’re doing for marketing purposes.
But that in and of itself is not enough. We were fortunate to have partners who early on had success in serving their clients and growing their practices or becoming more efficient in their administrative responsibilities and we’re fortunate to have clients who saw what we are doing, come in and speak to our partners. And so, we gradually won people over sort of one person at a time.
And people are in different places in their practices, you talk about commodity and yes, this is a way of thinking that applies to high-volume practices but the core concepts of trying to be more effective and more efficient with your time and to really understand root causes and let’s say applies to even the highest level practice. You consistently hear clients say well I’m willing to pay $1,500 an hour for work that’s worth $1,500 an hour. Okay, how do you make sure that what — the time you’re spinning at $1,500 is that magic that’s worth that much money?
Well Lean Thinking is one way to accomplish that the way we use it and yes it involves process maps and yes it involves data but it’s really a way of thinking from a client’s perspective. I refer to it as thinking about it from outside in, you’re looking and you are trying to put yourself in your client’s shoes and saying okay how do I help them solve this problem in the most efficient effective way possible.
And I will tell you some of the greatest lawyers I’ve worked with in the firm or elsewhere, they do this instinctively. They push back the notion of putting a label on it but when you ask them how they’re doing a problem, they’ll draw you what I would call a process map not to them. Right, but it’s interesting and if you — the more you can scale that behavior in that way of thinking, the more success you can have in it. And it applies to all areas of practices and all value dimensions within the industry.
Daniel Linna: Yeah, yeah. I’m glad you brought up that point because too frequently we tend to think of process improvement and project management is only applying to commodity practices or basic work and oh, there’s a certain bet the company type of work that to which innovation technology doesn’t really apply, we just let the specialist lawyers handle it, and it’s like you would think well wait, this would be even more important in those areas that we apply these same principles in those areas.
Stephen Poor: Yeah and to be truly great in those areas that’s a way of thinking that you either have to have come to naturally and you can rebel against the label being kind as I said or you have to learn it because if you’re delivering — you’re dealing with a high-value proposition for the client. They’re expecting high-value legal representation and yes that involves really smart people with years of experience doing things that you can’t map out and doing things you can but none of it stands alone and these are practices that aren’t one hour here in one hour there.
They are talking about large mega deals or large lawsuits or sophisticated tax structuring. Okay, understanding how to think through those problems logically and efficiently is key to being able to justify the money that you’re charging.
Daniel Linna: Yeah, yeah. What would you say about I think when I talk about process implement there’s kind of a few different — innovation frameworks, there’s a few different flavors maybe people talk about, they talk about Lean Thinking, talk about design thinking, talk about project management. I mean I can see a role for all three of those, sometimes we tend to just mush them all together. I mean how do you kind of see it from your perspective as far as where you might think a law firm would start and or any legal services delivery organization?
Stephen Poor: Yeah. You hear sort of all of that. I’d put project management off to the side, it’s more a tool, right so you think about it, at least the way we think about it. Now having had experience and design thinking and process improvement and in various sorts of methodologies is each one has its own role, all right and so as you come to the first step is to understand the problem you’re trying to solve.
Right, am I trying to create something new, am I trying to improve an existing process, what’s the problem here and I think our experience is a lot of people don’t identify the right problem right. Too many of these efforts are solutions in search of problems. Start for the problem first and then you can begin to think okay, what methodology should I use to get to the desired result, design thinking works uncertain, this is okay, you’re starting from scratch, I’m trying to design a new process, a new service delivery area, or I’m trying to redesign an entire practice area, all right or I’ve got an existing way people are delivering it and the problem I have is that it’s costing too much or it’s taking too long, the cycle times are too long. You’re going to use Lean Thinking, you are going to use Six Sigma Lean to get you there.
So it’s about understanding the purposes of each one of these methodologies and beginning to select which one applies as you get more sophisticated in your nature of problems. If you are talking about someone who’s starting this process, we started with lean, frankly, and that’s usually where I advise people to start because you’ve got incumbent lawyers doing things now, delivering services to clients that you’re trying to drive improvement, constant improvement, constant learning in the organization. Design thinking is another step after that.
Daniel Linna: Okay what about — so what can you tell us that you’ve learned at Seyfarth as far as the kind of people you need to hire to support this and then the training that everyone needs? So if I’m part of a practice group we want to implement this, we think you can make a difference, what do you think the lawyers who are handling the cases need to learn and what kind of allied professionals do you need to really support a group in doing these things?
Stephen Poor: Yeah. So I’ll give you a little context; of course, when we started in O4 there really weren’t people to hire.
Daniel Linna: Yeah, yeah.
Stephen Poor: I mean nobody was doing this so there weren’t folks to hire. So we sort of created a legal project management office and we use some folks internally in the organization and we slowly over the years began to build out a combination of process engineers, project managers, legal technologists, legal designers and we commanded from a belief that there’s an important role the allied professionals have to play in the organization.
It’s they’re not non-lawyers there are allied professionals, still Bill Henderson folks, right, And they are experts in their field and what lawyers need to understand and what we try to train lawyers to do is to how to think about – how to get used to working in a hybrid working model. So you’re working with various types of lawyers who are in different working relationships with the organization, different allied professionals, whether they be project managers or process engineers or legal technologists to try to put together the right team solve the problem for the client.
So what do we need the lawyers to think about? Well we need them to understand problem solving, we need them to understand what are the core skill sets these people bring to the table, when to reach out and tap their expertise and when to listen to them and how to adapt to it.
We don’t need — we don’t try to train everybody to be a full board certified project manager. We are not trying to train everybody to code, many of our people in these areas, we’re lawyers, who are trained as lawyers and are now not practicing lawyers, but we don’t want our practicing lawyers to feel like they need to code to be able to succeed. We’ve got people who know how to code, like what we need are people who can listen to understand the client problem and begin to work with the right people to design solutions for the clients.
Daniel Linna: Yeah, well I want to talk about technology a little bit here more as well, but one thing I want to just you talked about having some pilots or being able to gather some data about lean, lean thinking and process reengineering working, I mean I’ve seen actually in the Altman Weil survey as a matter of fact, they talk about process reengineering and year-over-year I’ve seen that. It’s shown to be one of the most effective interventions to increase profitability but yeah, very few firms are actually, actually doing it.
And when I bring up the example Seyfarth means some people talk, well, well it’s mixed, mixed signals, whether how successful it’s been or they’ll some people say well Seyfarth that’s an employment firm and that’s a little bit different.
I mean I asked multiple questions there I guess but, I mean what kind of metrics did you use internally to show that this was working and what else would you say I guess to some folks maybe who are skeptics of this as far as your — why would you say it is something that can make a difference in improving better, faster, cheaper legal services?
Stephen Poor: Well, we don’t use the word cheaper, so I’ll push back, I will push back on that.
Daniel Linna: Okay, okay.
Stephen Poor: Better and faster certainly.
Daniel Linna: Okay.
Stephen Poor: You did ask multiple questions in there let me try to sort of tease it apart a little bit. In terms of metrics what we look at will depend upon the particular process or project or effort that we’re trying to do, but there we’re looking for improvement in sort of core metrics within the organization.
So as I mentioned the first two projects we had one was a certain lending program, where the precise numbers are lost in my memory at this point, but was running basically at a loss and we turned it into two things happen. We turned it into profitable business and the client was so delighted that they became give us larger size loans and deals to handle. So their business grew.
So those metrics which lawyers are used to looking at hit every box lawyers who are used to looking at.
On the conflicts part, we measured the number of errors, we measured the cycle time. We put those up on the board to partners and then we measure what happened after we went to the program and the numbers didn’t just prove out, people felt it, right because they were putting stuff in and suddenly instead of things taking a week to turn around, they’re getting turned around in a day or ten hours.
And we continue to build on that by trying to measure continual improvement depending on what the client’s success looks like, depending on law firm’s success looks like. You know and as the skeptics look, I’ve learned that the industry is always looking for reasons to say something different can’t work.
Daniel Linna: Right.
Stephen Poor: And I’m happy with people being skeptics because that’s just less firms for us to compete with and driving value to clients, but if you’re truly focused on what your clients need, they need you to be their business partner and being their business partner means helping them succeed and helping them succeed means solving problems for them in the most efficient effective way possible. And it’s very hard to argue with that and if you can find a better way to accomplish that, that’s great. I had no problem with that. This is the way the firm Seyfarth found, just believe it’s not a path for everybody, but a number of firms have gone down and had equal success.
Daniel Linna: Yeah, yeah. Well, okay so I want to shift the technology in a second but I just wanted to first ask a wrap up kind of a little bit on the process, project management piece of this. I mean I think I really think one could argue, and I’ve explored just a few guests before that, that the lack of project management, a lack of processes in the legal industry and in law firms could contribute to some of these broader problems that we have in the legal industry like the lack of work/life balance, alcoholism, depression, lack of diversity and so on.
I mean do you think that, do you do you have any data that you’ve been able to gather at Seyfarth that not only is this better serving your clients but that when you have processes in place and better project management that it can actually improve the lives of the lawyers inside the firm as well?
Stephen Poor: Well you’re putting a lot on lean thinking you know my friend. There are drivers, there are pressures in the industry no matter what. I think I have a particular Bugaboo about the way services are priced and delivered, the hourly, I think the hourly rate pushes against all of these dynamics and creates a stressor as firms are trying to, they make their money by the hours people put in and Lean Thinking and lean approach I think helps people dramatically but as an industry wide, I don’t think it’s — it solves all the underlying problems that you’re that you’re relating to.
Because these are most lawyers and big law firms have been highly successful, there wouldn’t be lawyers in big law firms, they are type-A personalities, they are risk-adverse, they’re there in an environment of high achievers who are usually willing to be there on a Saturday or willing to work all night, and most firms still have high billable hour requirements.
Those pressures don’t — are not going to be solved until you solve some of the underlying pricing structural issues and some of the competitive nature of the industry.
But to answer your question more specifically, I can’t say that we’ve created metric, happiness metrics, that’s not something we’ve done, that’s an interesting — it’s an interesting concept, but we do find that the — what happens when you engage in this thinking is that it’s inherently more collaborative and people are working with other lawyers, they’re working with other allied professionals and they’re working with their clients and almost consistently that produces a positive reinforcement for the lawyers involved, they like doing it.
Daniel Linna: Yeah.
Stephen Poor: No, we haven’t measured that but it’s anecdotal, but it’s – I bet a lot of money that it’s real.
Daniel Linna: Yeah, yeah, well I’d love to get it more data on things like that and look at the effect on laterals and retention maybe the potential there. But I don’t know that’s my hypothesis, we’ll see.
Stephen Poor: We’re trying to test it out for you, there my friend.
Daniel Linna: Okay. All right well before we continue our interview with Steve Poor, chair emeritus of Seyfarth Shaw, we are going to take a quick break to hear a message from our sponsor.
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Daniel Linna: And we’re back. Thank you for joining us. We’re with Steve Poor, chair emeritus of Seyfarth Shaw. Steve, we’ve been talking a lot about Lean Thinking and you also mentioned when we first started talking that of course, you had technology projects going on as well when you first took over as chair, and it’s interesting, I see some of the discussion these days. It seems to really be this binary discussion about technology versus processes or service design. And I think most people pretty clearly see these things as kind of fitting together in a lot of ways.
Tell me about how the technology projects you’ve been able to implement, like what’s the connection to lean and what kind of opportunities when you go through lean and improving processes, managing projects, what kind of additional opportunities do you open up for using technology?
Stephen Poor: Sure. Well, some of the technologies in my current role at the firm I work with are tech R&D function and so there’s basically 15 or so of us, developers, solution software architects, legal solution architects, et cetera, and we’ve been playing around with robotic process automation, various machine learning technologies, document automation, collaboration technologies, et cetera.
And there’s a correlation in thinking as you think about process engineering, as you think about lean thinking or design thinking, whichever particular methodology you happen to be in. As you’re trying to think about the various components, what’s the right team of people you need to solve this particular problem, what’s the right process methodology you need to knit those people together, and how does technology play a role and that either in supplementing what people are doing, augmenting what they’re doing, becoming the key part of the process.
So it’s — for us it was a natural evolution as a way of thinking of all the various components and how we can put them together to move technology and technology solutions into it. And as technology has continued to advance and become more, ever more interesting in terms of what it can do, it becomes an important driver in finding solutions sometimes standalone and sometimes in conjunction with process reengineering and sometimes in redesigning whole ways of thinking and delivering services.
So for us, there’s a direct connection.
Daniel Linna: And I know that one of the efforts behind the whole Seyfarth lean initiative was mapping various processes and last I’d heard I think there were over a thousand process maps.
Stephen Poor: I’ve lost track, something like that yeah.
Daniel Linna: And I guess my understanding was is that so you have these maps and it’s not just a map of the process, but now you’ve got knowledge guides and doc, template documents. I mean to me that, I mean you’re laying the foundation there for being able to say how you can start tying in more advanced technologies with these process maps.
I mean how are you using these maps, like where’s that — if I’m a new hire at Seyfarth like how might I engage with these is it actually embedded in the technology now at some point kind of –
Stephen Poor: Yeah, it’s embedded, so it lives on people’s desktop to extent they want it to live and you’ve sort of described it correctly. There are process maps and they have ornaments hanging off of them that are — they could be documents, they could be training modules, they could be all sorts of things. It’s really a knowledge management system is frankly what it is.
From a technology standpoint, what we’re looking for, what are the applications of advanced technologies, that the technology I was described sort of is we’ve been around for a long time and we’ve been using it for many years.
But as we think about advanced technologies, what we begin to think about is how can technology create an additional value for the client offering, so it might be through software robotics that you’re taking steps out from a process, a very classic lean way of thinking, where you’re moving data from one field to another field or you’re moving information through the system, instead of having people do that you can have software and robotics do that. To machine learning where you’re training the software to extract key pieces of information that lawyers in term can interpret and apply and analyze instead of looking at 4,000 documents or looking at clauses from 200 documents.
Those are examples of how you use technology and so, yes, it correlates to process maps, but I also think in most cases, we don’t really rely that much on process maps for thinking about what we’re currently doing, because we’re trying to understand capabilities and then we think about capabilities and we think okay, what problems are there, where this would be a solution to that particular problem.
And sometimes, the answer is there are none. Okay, then we need that particular technology to go away or go work in another field or go to somebody smarter who can figure it out.
But yeah, so that’s how we sort of approach our technology development people bring us problems. We’ve understood the technology and we’re beginning to build out a portfolio of solution sets to think okay, we can incorporate this, but rarely is it just a standalone, we don’t just make software and go install it and everything is fine.
It’s what’s the business problem, how do we create a solution. The first question is, are there solutions that don’t involve technology and then okay, what role does technology have to play.
Daniel Linna: So one of the things that I’m hearing a lot about the conversations these days is pretty much the scope of AI seems to be really increasing, everyone’s just calling everything AI.
Stephen Poor: It’s really irritating, yes.
Daniel Linna: And one of the examples that I see is where just what we would have called data analytics or even descriptive statistics maybe, it’s like people are calling it AI now and I know you were a litigator, I was a litigator and when I first started teaching at Michigan, I was teaching negotiation and I was teaching at Michigan State and I really thought that we’d be by now see people using data in litigation a lot more and trying to make predictions, time to resolution, outcomes, things like that.
Craig Glidden wrote a good article with Marc Victor, he’s at General Motors now, but he was at ConocoPhillips. I’m not really seeing, I don’t know, I guess I haven’t seen a lot of uptake on that. I mean it –
Stephen Poor: Nor I, and it’s an interesting dynamic and so you think and just ask yourself why is that and I’ve sort of sorted through to a few reasons. I don’t consider them particularly good reasons, one is lawyers have a belief that they know everything and they don’t need these tools to help enhance their learning.
And I hope the generation of lawyers, your training and turning out into the workplace will approach it differently. But there is also fundamental challenges and it’s not the analytics part of the data, it’s the data part of the app, and so what do you want to know, you want predictive analytics, so it’s going to tell you, okay, am I going to win or lose this case.
You’re not going to get that, right, there’s so many — there’s so many variables associated with this and you still have a hard time getting we’re talking about litigation, you’re still having a hard time getting complete access to – I mean settlements are usually confidential, what’s the value of most cases that have been resolved, nobody knows, right, because it’s confidential.
And that’s really one of the data points that people want to know, what’s the value of this case. I don’t know, 90% of the cases settle within this range in this particular period of time. It’s hard to get that underlying data. I think a few businesses have begun to sort of crack that nut a little bit, Lex Machina, et cetera.
Daniel Linna: Yeah, yeah.
Stephen Poor: And I think they’re doing some really cool stuff, but until you get clean data and you get data that’s readily accessible and what’s interesting to me is I’ve always wondered why clients haven’t been willing to require their law firms to pool data. There’s all sorts of issues around the ability to co-mingle data and from client confidences and can you ethically do it and can you not.
But if the clients are saying we want this data pooled and fed back to us, it’s going to happen.
Daniel Linna: Yeah, yeah.
Stephen Poor: I don’t quite get one, nobody seems to be doing that.
Daniel Linna: Yeah, yeah.
Stephen Poor: It’s not to my knowledge.
Daniel Linna: Yeah, yeah. I don’t know if it either and I would love to see more of a push for that to happen. I mean I think it’s easy let’s say client confidences are the obstacle but there’s got to be –
Stephen Poor: Yeah, you can anonymize it and there’s ways of doing it and you’re right, do people do call the data analytics part AI, which is just drives me crazy.
Daniel Linna: Well yeah, it’s really interesting that the terminology in this space, I think that that once we kind of get more agreement and start being more precise, I guess about the way we’re describing what we’re doing, can be another way to help kind of speed the adoption of –
Stephen Poor: Yeah you begin to think about what are the barriers to adoption within the space and there are — there are barriers for in-house counsel and there are barriers for law firms and you can come up sort of five or six sort of key barriers in each sphere but one of them is the point you’re making which is understanding what we’re talking about.
Okay, understanding AI does not mean robots coming to sort of throw us all out the window and begin to advise clients, that’s not what we’re talking about, we’re talking about different types of technology, different types of data analytics. If you look at the streams that comprise AI, it’s all sorts of different neural networks and machine learning and Robotic Process Automation, inputting broad marketing labels on it so that we can attract people to the seminar doesn’t help garnering understanding.
And if viewers don’t understand something they either dismiss it or they fear it and so the more people can understand at least what we’re talking about when we come to talk about technology I think helps break down at least one of the barriers.
Daniel Linna: Yeah. Well I think and going back to the being data-driven piece of it and I asked the question about prediction, but even a simpler question is just I mean I did a lot of troubled supplier litigation and I know when I was practicing, shame on me, I wasn’t capturing the small data about cases and just even using and creating an Excel spreadsheet and keeping track of some of this stuff and being able to tell the client.
Yeah, we’ve done 20 of these for you and –
Stephen Poor: Right, lawyers don’t do that, and so you begin to think about okay what are the data fields we need to capture to spit back, let’s forget the predictive, what’s the outcome of the case is going to be, what’s anticipated closure time. How do you close cases compared to what the industry close cases?
That’s the information at least in the federal court you could get, right, when is the order dismissing the case.
It requires lawyers to actually in their own internal systems to close the matter. Well some are better about that than others, and so, you get to these very real, they seem like nitpicking but if you’re not getting clean data, you’re not able to produce the kind of useful information that the lawyers need or the clients would I think be entitled to expect.
Daniel Linna: Yeah, yeah. Well I think a related question to that, I mean well how do we produce more of that data and this relates to what we’re talking about here just a thing of the small data side but then also as bullish as I am on — we see technology the way it’s changing every other industry. I think it can have a huge impact in the legal industry but we have this big problem where we don’t have these same kind of feedback loops.
If you are Amazon or you are Netflix, you display five movies of Steve and if you clicked on one of them, you get immediate feedback. In the legal industry, there’s so many places where we do lots of stuff as lawyers and there’s never like that we know the X variable like we did something but we don’t know what happened as a result of doing anything.
Stephen Poor: Yeah I wish I had an answer for that but that’s a real problem because until if you sort of think about the corollary field of diversity within the profession, progress is being made, it’s too slow, it’s too spotty but part of the reason progress has been made as clients are insisting on seeing measurement statistics around the diverse teams being fielded. And with increasing granularity, not just what’s the makeup of the team but who’s got what responsibilities, who’s got billing responsibilities, et cetera, and those measurement tools can affect behavior.
Now, it doesn’t solve this particular problem overnight but it does change behavior and so as clients begin to ask for more statistical information as what I hope our new generations of lawyers are coming into decision-making roles within corporations that are more amenable today, that are more accessible to data, as they begin asking for it that in turn will be the biggest driver of change within the industry.
Daniel Linna: Yeah. Well so related to all of this as far as reasons to innovate and I mean it seems to me that there are opportunities in law firms to innovate and use that to increase revenue and good reasons to do it even just for their own bottom line but thinking broader than that and thinking about our obligations as lawyers and for anyone in the legal profession generally, I mean we know that there’s a lack of access to legal services, justice systems that need to be improving and that’s just here in the United States we think globally, the opportunities to improve rule of law things like that.
I mean I know Seyfarth has done some work with legal aid organizations, Seyfarth lean, I mean is that a bridge too far to say that we also have an obligation to be doing these things because of the broader impact it can have or do you think there is a connection between those things?
Stephen Poor: I do not think it’s a bridge too far and at the firm, we have worked a lot with first legal aid organizations to try to help them think about how they can maximize their ability to serve their constituents. Now, there are all kinds of real-world barriers out there in terms of funding, you think about okay technology can solve this problem and there’s some very cool work being done in the A2J space on technology.
But it requires people to have up-to-date computers and that requires money and you get into arguments about people who – is there a divide between people who can afford to go in and get a human being as a lawyer versus talking to a computer can argument being getting information online or through a computer if you’ve got that technological resource available. It’s better than not having anything at all. My oldest daughter is a public defender. She tries capital murder cases down in Mississippi.
Daniel Linna: Well, wow.
Stephen Poor: And yeah and so I sort of firsthand know some of the challenges people who contribute their livelihood to this area have and technology can be a part of the solution but underlying funding and willingness to approach this incredibly important issue is important. I mean you probably read a couple of years ago, the future of law study put out by the ABA.
Daniel Linna: Yes.
Stephen Poor: Which mostly dealt with access to justice issues and some of the numbers none of which I remember were just appalling.
Daniel Linna: Yeah, yeah.
Stephen Poor: And so I do think we’ve got an obligation as an industry, as a group of professionals that have financially by and large done extremely well practicing law to think of how these techniques and what we’ve learned can be used for broader access to justice issues.
Daniel Linna: Yeah, yeah. Well so a related question, a question that’s related to this I’m sure you’ve saw a kind of what’s unfolding a little bit in California and of course, there’s been a lot of discussion about changes to regulation for a while. I certainly pay attention to that but then sometimes I worry that that’s a little bit of a distraction that, hey there’s so many things we can be doing right now to improve but obviously that would be — I mean that would really change the landscape of a state like California or other states, I mean what are your thoughts kind of on what’s happening out there and —
Stephen Poor: Yeah so it’s really interesting to watch what’s happening and your guess is as good as mine is what the ultimate result will be. But if California changes their rules in the way they’re talking about it, that’s a major change because California is often viewed as another country but the reality is it sets a lot of standards for the rest of the country to follow. Now, will every state follow it?
No, probably not but you suspect New York probably will, key major legal markets will, and that has salutary effects on the access to justice issue we’re talking about in me in my judgment. But it also has corollary issues about okay what does that mean for the big four, practicing law in the states.
Daniel Linna: Yeah.
Stephen Poor: Do they now start snapping up law firms as they’ve done elsewhere in the world, answer probably so, think about the capital they have to deploy for technology and process improvement and everything else it’s sort of the numbers are startling when you begin to think about the size of the big four and the capital they have to deploy.
So we’re talking about potentially a very big issue and one that where the changes nothing in this industry changes immediately. I mean if you look at the UK and the changes when they made their code changes to allow non-lawyers to invest or practice, it took a number of years before that really began to pick up some steam. But it ultimately did, same pattern will probably repeat itself here.
So it’s a really interesting thing, people should be watching this.
Daniel Linna: Yeah, yeah, yeah. So it will be a very interesting to see as that continues to unfold. Well we’re coming close to the end of our time here but I had a couple of additional questions I wanted to ask. So first of all well, I mean there’s a lot of discussion about that it’s really the clients that are pushing things forward today, what do you think it is that clients in large corporate legal departments really expect from their lawyers and law firms today?
Stephen Poor: Anytime you try to paint with a broad brush like that you are in the risk of getting it wrong because it’s not a monolithic industry but I think increasingly, they’re expecting you to help them solve the problems that they have. And they could be budgetary problems, they could be just purely – rarely is it a pure legal, these are business problems that clients have and I think their most valued law firm relationships are with firms that have the ability to come in and say we understand your business problem and we will work with you to find a solution even if it means we wind up billing fewer hours, even if we wind up lowering your cost of service, because at the end of the day, there’s something in it for us which is a larger and deeper relationship.
I think that’s what most clients want. It manifests itself in different ways, we get we see RFP process, you see all sorts of issues questions these days around technology, diversity is an important issue, different pricing structures are important issues. So they’re looking for firms that are not just we bill by the hour, we send you for fees rendered, thank you and have a nice day and it hasn’t been that way for a while.
Daniel Linna: Yeah, yeah. Well you just mentioned billable hour too like so do you — I mean there’s a lot of debate about billable hour, I think there’s some data and there’s a sense from anecdotes that there is a slow shift away and we are seeing more alternative fee arrangement —
Stephen Poor: Slow being the operative term, yeah —
Daniel Linna: Yeah well so it’s hard to — well when you see companies like Microsoft saying they well, I think it was 95% of their matters, maybe —
Stephen Poor: Something like that, yeah.
Daniel Linna: Yes. So I mean it’s certainly no — I’m not always someone who said that I don’t think there’s — I think for certain matters, there’s nothing wrong with and a matter of fact I could think if you had well-defined transparent processes, if I’m a client there might be certain places where I’d say it’s okay we’re going to do this by the hour but —
Stephen Poor: And we’ve had that occasion sometimes when we sit down with a client and say okay, this is the way it’s going to play itself out, here are the various permutations, here’s what we think the time is going to be. Do you want to reduce this to a flat fee? They are going, no, we get it.
Daniel Linna: Yeah, yeah.
Stephen Poor: So but I do think that the billable hour in and of itself does not drive efficiency, there’s just no argument to be made that it does.
Daniel Linna: Right.
Stephen Poor: I mean people are used to managing it, people are used to evaluating it, and they — they’re comfortable with it, which is why it’s hung on for so long. But you look at consulting firms they do complicated business problem solving for their clients, they don’t do it by and large on an hourly basis, they do it on project basis or different fee structures, it’s not alternative fees for them, it’s just the way they do business and ultimately it help the legal profession moves to that as the standard and the alternative fee comes in hourly.
Daniel Linna: Yeah, yeah. So wrapping up here, what would you say to, I mean students in law school now or even young attorneys as far as the way that you’re seeing the landscape evolve? I mean some of the students I have right now hack 20 years from now, they’re just going to be in the middle of their careers, and I think we both expect that the legal industry is going to look very different 20 years from now.
Stephen Poor: Yes.
Daniel Linna: I mean what would you say that they ought to be doing to start trying to prepare for this evolution in the legal industry, so they can be successful attorneys, have a chance to make partner at firms like Seyfarth and along the Am Law 100, 200 generally.
Stephen Poor: Right. Yeah, I guess the first thing I would say to them is, it’s an exciting time to be moving in the profession. There’s obviously — there’s change afoot and change is scary and nobody quite knows what the profession is going to be look like 20 years from now, but that’s what makes it exciting.
And the more you can approach it from a multidisciplinary standpoint, understanding at a high level technology and what it does and not being afraid of it. Don’t be afraid to learn, don’t be afraid to learn new methodologies, new technologies, and think about, be curious. And I think probably the — I have one of my favorite rants on law schools so we try to drive out intellectual curiosity, it’s in the book, this is the way we think about it, don’t feel different.
I think intellectual curiosity is the most important trait new lawyers are going to have, because it’s going to allow them to think about new technologies, and how they apply, and think about how we can continue to raise our value to our clients whether we are in corporate law firm, law lawyer or an outside law firm. So keep an open mind, don’t be afraid of change, don’t be afraid of failing, continue to learn and continue to push the envelope.
Daniel Linna: Sounds like great advice.
Stephen Poor: Oh it’s easy for me to say harder for them to do.
Daniel Linna: All right, well thank you so much Steve for joining us today.
Stephen Poor: Thank you.
Daniel Linna: This has been another edition of Law Technology Now on the Legal Talk Network.
If you like what you heard today, please rate us in Apple Podcasts. Join us next time for another episode of Law Technology Now. I am Dan Linna, signing off.
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