Hello, and welcome to another edition of The Law Firm Disrupted. I'm Law.com reporter Roy Strom, and this weekly email briefing attempts to make sense of the biggest challenges and opportunities facing law firms today. Quick scheduling note: This is our last briefing of 2017. To let me know what you'll be watching for in the year ahead, write me at [email protected].

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A Ground-Up Change Management Approach

 

“For whom are you managing this law firm?” That's a question I often ask managing partners.

The answers are usually similar. The leaders will say they manage the firm for its owners—the equity partners. Then sometimes there's a pause. And they go on to list all the other constituencies within the firm. It usually ends with a nod to the first-year associates.

Managing partners have a tough job. Law firms have competing groups of interest, especially over longer time horizons. That's why the job of planning for the future—and responding to the changes in today's legal market— should at least include those who have the longest future at the firm: associates.

That's why I was interested in a story I mentioned last week regarding a top Canadian firm, Aird & Berlis, sending one of its associates to work at a contract review startup called Diligen. I spoke last week to Aaron Baer, the associate who will spend a month on “secondment” to Diligen, which happens to be headquartered down the street from Aird & Berlis, a Toronto-based firm of about 150 lawyers.

Baer's story probably mirrors that of many associates who are interested in doing things more efficiently at their firms. In addition to his J.D., he has a degree in business administration from the Richard Ivey School of Business at the University of Western Ontario.

He's been at Aird & Berlis doing corporate and M&A work for a little more than three years. Baer had heard about legal technology firms in Toronto, and about a year-and-a-half ago began to bring those companies into the firm for demos and discussions about their products. He was convinced the legal world was changing.

After meeting some internal resistance to these new ways of working, early last year Baer set up a meeting with Aird & Berlis' managing partner.

“I'm an associate, but I figured I've got all these ideas and I'm spending all this time looking into things. I don't want to keep spinning my wheels. So I asked, 'Is this something you would support?'” Bear said. “Thankfully, that's exactly what I got. I got a clear message from our leadership that we're interested in technology and innovation.”

Less than a year later, Baer will be helping Aird & Berlis train Diligen's contract review software to more quickly handle due diligence for the firm's M&A team. There is enthusiasm for the product after Baer said they implemented it on a M&A matter that came in at the end of a Friday with a turnaround deadline for Monday. Baer said all the associates said, given the choice, they would rather work with Diligen than without it in the future.

“We know where the industry is heading,” Baer said. “Any young lawyer that's out there with a long career ahead of them should be thinking about technology, processes, analytics, you name it. And how that's going to change the role of the lawyer. We're seeing it changing already and the pace of change is only going to increase.”

Baer's story may not be all that remarkable. Plenty of law firms have signed up with automated contract review systems. But this at least is an example of a young lawyer being empowered to help his firm adapt to a changing market.

In the first Law Firm Disrupted, I wrote that every firm is undergoing a change management process that some partners will buy into while others will be reluctant. Firm management should cater to the lawyers—even if they are associates—who want to drive change. That's a way of letting young lawyers know that the firm is being managed with their future in mind.

 

Roy's Reading Corner

 

Breaking Bad (Law Firm Business Models): Jordan Furlong writes about how “innovation destroys hours” and what that means for law firm innovation. Hint: Not good things.

Furlong's takeaway: “If you want to successfully introduce innovations into your law firm, therefore, you first need to recognize that these innovations pose an existential threat to the way the law firm does business. So your real challenge—the challenge every law firm faces, whether it wants to innovate or not—is to change the way the law firm does business.”

Hack Attack Response: The Wall Street Journal (subscription required) sat down with Donald Jaycox, chief information officer for the Americas at DLA Piper, to discuss how the firm responded to a massive malware attack in June. The story reads like a nightmare scenario for any IT manager.

Jaycox got a call at 3:20 a.m. about the disruption in DLA Piper's servers, and he was out the door 10 minutes later. “We had planned for the loss of an entire data center, the loss of key critical online services. What we hadn't planned for was the complete loss of everything,” Jaycox said.

DLA Piper likely isn't the last law firm to face such a scenario. The Brisbane Times reported this week that two unidentified firms in Queensland, Australia, had lost millions of dollars as a result of an email scam.

More Bullshit: D. Casey Flaherty, whose blogs about “marketing bullshit” I've happily linked to before, is at it again with a post about the challenges facing in-house lawyers. Flaherty writes that insourcing lawyers to companies is not a sustainable approach to bending the cost-curve for the legal profession.

“The result is that we have law departments that suffer from the same pathologies as the law firms to which they were supposed to be the cost-effective alternative,” wrote Flaherty. “When it comes to true alternatives to lawyer time, most law departments still need to overcome the stifling persistence of not here, not yet.“