The New Normal

‘Legal rebels’ or just weavers of the new normal legal fabric?

Posted Jun 26, 2013 2:18 PM CDT
By Paul Lippe

Paul Lippe

We got the happy news the other day that the New Normal “blog” has been nominated for a digital “Azbee” award. We also saw Weil Gotshal (an “old normal” firm if there ever were one) refer to a “New Normal” in the legal market in announcing a firmwide restructuring.

I just got back from London, where I visited with a number of legal departments (of banks, mostly) and law firms, so let me offer a quick rundown of some New Normal developments.

Law professors Dan Katz and Renee Knake ran ReInvent Law London, a fantastic conference. What Dan and Renee are doing at Michigan State is extremely cool, and I think we can say with certainty that every law school in the country will try to replicate it over the next three years. I missed some of the early speakers, so apologies for not citing everyone, but the special highlight for me was legal visionary Richard Susskind’s talk on the history and future of artificial intelligence in law. Richard’s talk was very compelling, tracing his own personal contributions and exploring what has worked and what hasn’t, making a set of important predictions about the near future. I can’t imagine any law firm retreat wouldn’t benefit from having Richard as a keynote.

The theme at the banks in the United Kingdom (and in the U.S.) can be summarized in one word: operations. The combination of increased regulatory complexity, tightening margins and the need for global consistency means that legal departments have to manage much more from a systems standpoint, integrating information and rules from a variety of sources into a coherent whole. The banks (which support a huge chunk of the very high-end of the legal market) are now talking about importing lessons from manufacturing to streamline and re-engineer operations.

Every bank is beefing up its operational spending in order to reduce costs and improve quality. As we’ve discussed, this initially presents as “cost reduction,” but it is really about managing complexity. Barclays even called in their law firms to discuss how costs can be better-managed.

The term “fabric,” which has been used in the tech world for a while to describe disparate elements that come together through a network to create a reasonably coherent whole and connect different systems, people and information, is now being applied to law. If so, it may make lawyers “weavers.”

I met with one large U.K. law firm that has done precisely this kind of “fabric” development (full disclosure—we work with them, although not on this particular project): combining technology, process, lower-cost resources and their traditional “bespoke” firm practice to deliver an integrated solution to a large banking client.

I also met with attorneys from Riverview Law, a firm you may know from its hysterical “fixed fee” video. I suspect Riverview is the fastest-growing law firm in the world. It has a very New Normal model, and it is taking advantage of the new U.K. rules on alternative business structures.

Let me note two other developments here in the U.S. that I think are quite important.

Banks are starting to require their law firms to go through their information security review processes. Since my company goes through these like it’s our job, I can tell you that most law firms will struggle with these. Imagine a bank with 600 law firms. Once it’s done 20 or 30 reviews with its biggest firms (who will be able to handle the reviews in most cases), will the bank continue to do the work to qualify more firms, or will they lose energy, leading to consolidation in their panel and so in the market?

At the same time, regulators are beginning to question the role of the accounting firms in this “law adjacent” work because of independence and related issues. So I suspect there will be a huge opportunity for law firms to get back into this work, assuming they can demonstrate reasonable operational competence.

In London, an English friend said to me: “It’s no wonder you Yanks are a bunch of legal ‘rebels,’ all you ever do is foment rebellion.” But I was able to remind him that the leaders of the American Revolution—john Adams, Benjamin Franklin, Thomas Jefferson, James Madison, Alexander Hamilton and others—were among the leading Enlightenment thinkers of their day who wanted to restore the rights of Englishmen, only rebelling when the status quo become dysfunctional. Take a look at Nathaniel Philbrick’s new book, Bunker Hill, to get a sense of whether you’d want to be one of the “rebels” or a defender of the status quo.

So I’ll aspire to .00001 percent of the wisdom and common sense of a Franklin, and adopt the label of “weaver,” with this cite from the Colonial Williamsburg Journal.

“During the Revolution, when Americans could not get English goods, weaving became a necessity and a patriotic duty [emphasis added] …”

Paul Lippe is the CEO of the Legal OnRamp, a Silicon Valley-based initiative founded in cooperation with Cisco Systems to improve legal quality and efficiency through collaboration, automation and process re-engineering.

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