ABA Journal

The New Normal

The CLOC is ticking: Will lawyers embrace operational excellence?

By Paul Lippe

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Paul Lippe

From the beginning of our conversation around the New Normal, we’ve argued that the way legal work is created, consumed and assessed would be more and more like other knowledge and digital work. Faster. More integrated. More automated. More measured. Hence New Normal.

For my money, this has all somehow happened slower than expected—and of course not every effort in the New Normal direction has been successful—but the trend lines are quite clear.

Now there’s another significant new development in the New Normalization of law: the creation of CLOC, or the Corporate Legal Operations Consortium, and the CLOC Institute in San Francisco on May 2-4, as discussed by my colleague Casey Flaherty in his piece last week.

Started in Silicon Valley and now global, CLOC is the brainchild of Connie Brenton at NetApp and Stephanie Corey at Flex (along with their peers at other Silicon Valley companies and around the globe), who both combine the role of chief of staff and director of legal operations. CLOC draws heavily on the contributions of Steve Harmon, vice president and deputy general counsel at Cisco. It is a combination of a consortium, best-practices clearinghouse, standards-setter, and training group.

CLOC is not the first legal consortium by any means, nor even the first effort focused on technology and efficiency (the Banking Legal Technology portal in London a decade ago may claim that honor). But CLOC certainly represents the continuing drive of law to enhance quality and efficiency and a convening of most of the top people in the field. (In the U.K., and in law firms, many of the same activities fall under the banner of knowledge management.) And if CLOC starts to exercise its potential in creating new standards for repetitive tasks, performance and measurement, then we should see an acceleration of change in law.

Over the last 40 years, businesses have applied different systems to improve efficiency and quality, ranging from Total Quality Management, Six Sigma, Lean and now Design Thinking. Some of these systems have been focused on efficiency in high-volume manufacturing-like processes and generally been rejected by lawyers. But increasingly folks like Seyfarth have seen the opportunity to implement Lean, and as discussed previously, Design Thinking is likely to prove a good fit for law. The key is to begin thinking about the end result of the legal work in a complex world and a complex organization, not just how it might appeal to an appellate court.

Lean is based on the Toyota Production System. The story is told that Kiichiro Toyoda visited Ford’s River Rouge Plant in 1929 and was extremely impressed with Ford. He went on to found Toyota Motors in 1937. But his successor Eiji Toyoda made a visit to Ford in 1950 and saw inefficiencies, e.g., that Ford was stockpiling lots of inventory, which led to higher costs and less flexibility. So Toyota went from strictly imitating Ford to improving on it, going on to implement the Toyota Production System as profiled in The Machine That Changed the World.

Even though Toyota has openly shared its methods and even engaged in a joint venture with GM, other companies have not been as successful in replicating its quality and efficiency because of the broad cultural adaptation required. So process innovation is not a “commodity,” a word lawyers toss around too casually. Law was once a leader in process excellence, but over the past 40 years, it has been passed by other fields. Now, led by CLOC and other endeavors, we have the chance to leapfrog back to the front.

Last week in Silicon Valley, I had the opportunity to tour some of the hyperefficient production facilities of Stephanie’s company, Flex. It reminded me of an updated version of the factory tour I took at Panasonic in Osaka in 1989, where I was first exposed to many of these ideas. One thing Flex does is ruthlessly test products under different conditions to see when they break, and then goes back and redesigns the product and manufacturing processes to eliminate the source of failure. Lots more sophisticated than what we do in law to identify and prevent mistakes.

For me, the big revelation is that if we apply modern methods in creating legal work, we not only get better efficiency and quality in the legal work, but we can make law a more effective and integral part of how the client does business. We can reduce problems and make the client stronger. And if we start to apply this in areas like housing court or the criminal justice system, we can dramatically improve access to justice.

Law schools (and so largely law firms) still model that lawyers do legal reasoning, with every problem a case of first impression. But in reality, most of law is practice, applying known solutions to similar problems, and it must be done in a world of ever more data, ever more complexity, and ideally for the client, ever more speed. The latest example of the gap between where law is and where we need to get to is last week’s rejection of five banks’ resolution and recovery plans, a keystone of Dodd-Frank.

Here’s a basic chart to illustrate the difference between where law has been and where it is going in a CLOC-driven world:

  Old Normal New Normal
Time-orientation Reactive Strategic
Cost orientation More spend = more quality Save money
Specialization Highly specialized Generalist
Problem orientation One matter at a time All matters, all times, all connected
Source of authority Expertise, ability to compel CEO, board Relationships, ability to persuade at all levels
Source of pride Ethics Effectiveness
Locus of production Individual Team
Information Scarce Abundant
On stones Leave no stone unturned Look under the right stone
Primary knowledge The law The business
Temperament Adversarial Collaborative
Self-image Expert Learner
Commercial success Given Always at risk
Likes Complexity Simple

For those presenting or attending in San Francisco on May 2, you have the opportunity to be in the forefront. For the rest of us, the CLOC is ticking.

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.

Editor’s note: The New Normal is an ongoing discussion between Paul Lippe, the CEO of Legal OnRamp, Patrick Lamb, founding member of Valorem Law Group and their guests. New Normal contributors spend a lot of time thinking, writing and speaking about the changes occurring in the delivery of legal services. You’re invited to join their discussion.

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