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Maybe the ROI for legal tech comes from happier workers who stay.

Emily Chang: What do startups have to do in order to have a successful exit, whether it is an IPO or just building a great business?

Paul Graham: They have to make something that actually makes people’s lives better. It’s funny how straightforward it is.

“Y Combinator’s Graham Says Startups Must Improve Lives,”  YouTube, June 17, 2011.

Here is my prediction: companies are about to spend more on legal technology, but not because they are trying to save money or be more efficient. Law firms and, to a lesser extent legal departments, are beginning to see investment in technology as a solution to unprecedented burnout and talent attrition. The further entrenchment of remote work will only amplify this trend. Smart marketers have figured out that this messaging is resonating. The deluge of messaging connecting tech and talent will shift how companies justify their return on investment. Technology does, in fact, have the potential to improve the day-to-day experience of the people on legal teams, but there is some important nuance. Let’s dive in.…
Continue Reading People-driven tech: How new priorities and remote work are increasing #legaltech adoption (299)

Clients too often ignore law firm incentives and market power.  They also substitute management for leadership.

Editor’s note:  This post returns to a subject first addressed here in Posts 029, 030, 031: successful law firm convergence and the management of law firm panels.  In this article, Dan looks back over AdvanceLaw’s work in the intervening five years and identifies four of the most common and consequential flaws in corporate law firm panels.  What follows draws on input from the staff of AdvanceLaw, where Dan is a Managing Director.

Why law firm panels matter

Law firm panels are a primary client strategy for controlling legal spend, but they also help stimulate innovation.   Innovation matters because panels wouldn’t be worth the effort if they didn’t produce better performance, which requires changes in how things get done.  Yet as Legal Evolution has documented in its posts on diffusion theory (tip: start with Post 001 and read chronologically),  many forces resist innovation in legal services, and those forces can only be overcome by sustained change management efforts from both law firms and clients.  Neither firms nor clients will commit to this effort if their relationship is temporary or poorly defined, so structured approaches like law firm panels are necessary to create the conditions under which innovation is at least possible.
Continue Reading The four fatal flaws of law firm panels (297)

Several in-house innovators are converging on a set of best practices.

In Competition based on better commercial contract terms (211), I reviewed the current norms surrounding commercial contracting and postulated that the growing transparency regarding what is market for a particular term would cause the market for contracts to evolve from its current souk-like state to something that more closely resembles a modern e-commerce marketplace.  Since that post came out in December 2020, numerous companies have been employing AI tools such as TermScout. and crowd-sourced data such as Bonterms, to make their contracting practices more data-driven.
Continue Reading The emergence of data-driven contracting: notes from the field (292)

A. Because it requires us to evolve our culture.

The building blocks to create the next level of Legal are now available, so why aren’t we “there” yet?

In this month’s NewLaw column, I suggest that Legal’s modernization journey is cultural as well as technological.  Indeed, without the evolution of our culture, our innovation efforts are destined to frustrate and underwhelm our key stakeholders.
Continue Reading Q. Why aren’t we “there” yet in modernizing Legal? (286)

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The legal profession appears to be on autopilot.

This post is for legal market analysts who are looking for updated and reliable data on the current legal services market. Collectively, its eight graphics reveal several themes that ought to give us pause, as we (the legal profession) may not have unlimited runaway to focus on strategies related to income and profit.

Most of the underlying data come from the Economic Census, which is a detailed ongoing survey of US businesses conducted every five years (years ending in 2 and 7) by the US Census Bureau.  Because of the size and scope of the data collection effort (it’s a census, not a sampling), it takes the full five-year cycle to complete the analysis and release the findings. The final—and in my view, the most interesting—installments were published last fall.
Continue Reading Eight updated graphics on the US legal services market (285)

An honest and candid assessment of corporate legal, circa 2021

Several months ago, before we had even completed our first year of operations, Bill invited us to write a legal market year-in-review.  His reasoning was simple—our business model entails a lot of listening.  Over the past twelve months, we heard the hopes, dreams, and fears of 240 law firms and 327 law departments (corporate legal) spread over 2,600 meetings.

Perhaps you’re anticipating a conversation about what’s hot in Legal Tech and NewLaw.  And back when we accepted Bill’s invitation, that seemed like a logical direction.  Yet, much to our own surprise, we find ourselves writing a year-in-review essay that focuses on the primacy of culture and cultural adaption.
Continue Reading LexFusion’s Legal Market Year in Review (280)

How can we keep up with exponential increases in demand and complexity?  Invert the pyramid.

Bill Henderson once advised me not to use the term “industrialization” to describe changes in the legal profession to attorneys. It offends us, and we disengage. But I titled this field note “industrial evolution” because we must embrace industrialization as a necessary and valuable part of our transformation that will elevate the value of our profession in a digital age. Cf. Post 231 (Henderson breaking his own advice for the same reason, comparing legal to the early days of the auto industry).

This post is part of a series that reflects my legal industry learning journey, building upon my career journey (080), professional evolution (143), focus on knowledge work (159), and future practice design theory (210). This installment examines the changes happening now that require us to evolve to serve a civilization experiencing exponential change powered by the fourth industrial revolution, and how we might get there faster, together. See Erik Brynjolfsson & Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (2016) (cognitive automation will produce creative destruction).
Continue Reading Legal evolution is industrial evolution (277)

Putting complex and often intimidating topics into context.

Chapter 8, Technology

No discussion on contracting process improvements is complete without focusing on technology. Scarcely a day goes by without an article, blog, or webinar on legal technology and, more specifically, about artificial intelligence (AI). There are many conferences and webinars about contract management systems—on selecting them, on what to use them for, how to derive greatest benefit, etc. Usually, those educational programs are provided or delivered by the contract management systems providers.

Technology is always at the core of any discussion about innovation, for example, but I maintain it should not be. Before any conversation about technology takes place, there should be an assessment of the current state of the people and processes involved in contracting, which is why this chapter follows my previous chapters on People and Process. Only after a thorough review takes place, and there is agreement within the organization that the right people are doing the right steps in the best order, should a discussion about technology begin.
Continue Reading CLM Simplified Part IV: Technology, Metrics & Data, and Outsourcing (272)

The hard work that comes before any discussion of technology

Chapter 5, Playbooks

The need for creating playbooks for templated contracts is a subject of much discussion. This is because playbooks are one of the ways in which contracting is simplified. But they can take many forms. Luckily, distinguishing and differentiating between the necessary types of playbooks is possible without creating too much complexity. Not only are they used to create standardization across a law department, but they also empower the business.

Playbooks educate, create consistency, and are an absolute requirement for any type of outsourcing contract review. I submit for your consideration that there are two basic types of playbooks: The Law Department Playbook and the Empowerment Guide.…
Continue Reading CLM Simplified Part III: Playbooks, People, and Process (271)

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“Contracts are the lifeline of the company, so it’s no wonder it is an ongoing cycle.”

Chapter 2, What is CLM?

The term contract lifecycle management (CLM) is a hotly discussed topic in legal operations and legal technology circles. It is important to dissect the concept and understand what precisely I am referring to, especially in trying to tackle and improve the contracting lifecycle.
Continue Reading CLM Simplified Part II: What is CLM?, Legal Policy Review, Templates (270)