Business consumption of legal services from in-house teams is becoming more “productised”
Simon Drane, March 18th 2019.
As I mentioned in an earlier article, when I attended the Alternative In-House technology summit, it struck me that the combined buying power of those in the room (many from very large corporations such as Vodafone, BT, Accenture, Sky, Société Générale, Barclays, Standard Chartered, Experian, Novartis, Prudential, National Grid, to name a few), combined with how technology is being considered, has the potential to dramatically transform legal service provision.
There was so much to unpack from two days of excellent discussions that I decided to break it out into an overview article (of which I have extracted some parts for continuity) and then some follow-on pieces. As I outlined,
There is a form of supply chain review operating here which more effectively connects the real consumer to the legal service providers.
In order to get to the challenges for the legal in-house teams and then the knock-on challenges to law firms you need to go to the start of the chain first, namely that the business consumption of in-house legal services is evolving, and in my view becoming more “productised”. The same drive towards productisation is also happening with the law firms but I will pick this up in a separate article.
The core challenge is around the way in which corporate business functions do, or perhaps do not, effectively interface into legal. There is clearly a shift towards things such as a single “front door” to the legal team, ensuring more accurate and efficient engagement. Representatives of several organisations talked about the focus on this area, including Amy McConnell, Head of Legal Ops from Vodafone. In Vodafone’s case they use EY Riverviewto manage the end to end contract management process including a single “front door” that runs from requests for legal support to the closing of matters. Karina Messaoudi, COO of the global legal function at Société Générale, also talked about an instruction portal to farm out the work more effectively as one of the first things that she needed to put in place.
Both of these large organisations seemed to have evolved relatively advanced approaches compared to where the majority of corporates are currently. Vodafone talked more broadly about the transformation plan and goals around intelligent contracting, expert risk navigation, insightful analytics and their people. Société Générale discussed how the instruction portal sat on top of the legal functions of controlling legal risks, judicial risks, legal and regulatory watch and controlling legal fees. This in turn was underpinned by their approach on resource management, matter management, orchestration workflow, reporting BI, knowledge management and finally an underlying “legal data hub”. Both though had a similar approach to the way the business now engaged through a “front door”.
Another key area that has productised the delivery of services to the business is self-serve document automation of, for example, NDAs; and better linkage to tools like SalesForce, combined with the use of electronic integrated signatures, resulting in more effective contracting. In-house teams are progressing quickly in this area and using tools such as Thomson Reuters contract express and Clarilis to do so. One excellent breakout session around document automation was with Mo Zain Ajaz, global head of legal for National Grid. Mo outlined the impressive drive towards greater automation which enables more of the business to self-serve and reduce pressure on the legal teams. Once contracts are automated for the business then it really becomes a question of driving usage by making them integrated at the point of need. Another session touched on how to achieve this through linking into things like SalesForce.
What was also interesting was the number of people across different organisations expressing concerns around the potential number of commercial relationships currently that just don’t have effective contracts because these productised solutions are not yet widely implemented, and the traditional methods of engaging with legal can often be seen as creating delay and complication in the mind of the business person. As an aside, the busiest breakout sessions seemed to be around the areas of document automation and contract lifecycle – perhaps indicating where people feel there are the quickest wins for corporates. I’m going to cover the contract lifecycle more in the next stage of the supply chain in the next article.
Another speaker who outlined the real benefits of removing repetitive tasks from lawyers and automating for the business was Maurus Schreyvogel, chief legal innovation officer for Novartis. Maurus shared the approach taken on working with the business around addressing their pain points and then selling automation principles to the lawyers by giving them two hours back a day to do more valuable and interesting work. As part of this conversation, Andrew Mills, legal director from Experian, raised an interesting point around needing to get to the heart of concerns about the way the business engages with legal – this often seems to be around the contracting process taking too long. In their case they concluded that a key challenge is the way people interact and the fact that contracts often flow through an organisation in series rather than a more productive parallel process. Andrew also pointed to the benefits of effective involvement of legal upfront so that things like liability are addressed ahead of price. This feels like a growth area for technology businesses to really address guided decision support for the business users around legal considerations that extend beyond pure document automation. I will pick up on this in a future broader topic around contract management.
Related to decision support, organisations are also exploring the use of chatbots to help the business self-serve, as Paul Peake, legal Director from StubHub (an eBay business) outlined. Paul outlined a lot of interesting things that they have focused on including addressing the fact that the business was often asking the same legal questions. They created a series of FAQ pages and then used a chatbot to make the business interaction easier to find and do things. Paul covered many interesting areas of focus namely, contract automation and analytics, law firm management, AI review, legal platform, AI corporate memory and intelligent drafting.
This overall area of the supply chain, around the business interfacing with legal, does through feel the most embryonic stage currently but is really key to unlocking customer pain points and identifying solutions. Technology has a key role to play here, but so does really understanding the people dynamics and how to deliver change (which was also a key theme at the summit). At the heart of this all were a lot of excellent examples where in-house legal teams are engaging more with their business customers to reengineer how they best meet business needs.
Also of relevance is looking at how best to deliver the productised solutions to the business users, and who can help organisations achieve this. Law firms are also increasingly moving towards a more productised approach and can help the in-house function more in this area, as can those experienced in the product strategy and development discipline. I plan to pick this theme up more in another article specifically around the shift towards productisation.
In the follow-on articles I will expand on the other aspects of the supply chain, namely that legal operations in running an in-house function are evolving through use of technology and buying in and managing of external services from law firms is also evolving. As I said before though,
What was really clear is that when you combine the possibilities of legaltech across the supply chain stages with the economic buying power that the in-house group has, it can only lead to a real shift in the legal services space.
If the ultimate customer of all this is mostly a business person in a corporate and they are after quicker, more predictable, better outcomes, then arguably whoever helps them get to this will be the ultimate winner. You can also start to see why there is an emerging conversation around shifts to outcome pricing in this light.
As I said previously, I wonder how many law firms are engaging enough with their customers on their real needs (which are driven in turn by their business customers), or perhaps they are but it becomes challenging given their current partnership-structured, services-based business models. It appears their in-house customers may be moving faster to more productised, self-serve, data-driven, outcome-based models. This shift in the way in which areas that were previously services based are becoming “productised” is at the core of why I set up earlsferryadvisory. More on this shift to follow in another article soon.