EXECUTIVE SUMMARY - HBR Consulting · EXECUTIVE SUMMARY LegalLab.com ... Hewlett Packard Enterprise ... LAURENT WIESEL Founder & Chief Executive Officer Justly

AUSTIN, TXApril 19 –20, 2017

EXECUTIVE SUMMARY

LegalLab.com | [email protected] | 312.201.8400 © 2017 HBR Consulting LLC. All rights reserved.

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TABLE OF CONTENTS

3 Introduction

4 Key Takeaways Infographic

5 Contributing Executives

7 Law Department Leaders

11 Law Firm Leaders

14 TalentManagement+AlternativeStaffingModels

17 Technology

20 Facilitated Exercise: Design Thinking in Legal

24 Conclusion + Summary

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INTRODUCTIONThe legal ecosystem continues to evolve. New competitors, alternative providers, increasing client expectations, emerging technology and a growing emphasis on diversity are challenging industry norms and creating an impetus for change. At the forefront is the client experience, which is influencing service delivery strategies across the entire legal vertical. All of these topics surfaced during HBR Consulting’s 2017 Legal Lab, the third-annual gathering of law firm and corporate law department leaders who came together to collaborate and share ideas on how to pursue innovation and create positive change in the legal industry.

Legal Lab participants brought their expertise and unique insights on the most significant and pressing issues facing the legal industry today, including diversity and inclusion, the rise and applicability of artificial intelligence (AI) and the criticality of succession planning for the future. Most notable, perhaps, was the strong desire for collaboration and knowledge sharing from leaders across the legal ecosystem.

One thing is certain, leaders are no longer debating about the need for change, but rather collaborating to embrace change in new and different ways. The voice of the client is serving as a driving force towards more diverse and creative matter staffing, value-based billing, enabling technologies, hybrid service models and alignment of reporting and metrics.

This report reflects many of the opportunities and challenges that face legal industry leaders today. I hope you find it helpful when leading your organization through an increasingly complex and exciting legal landscape.

NICHOLAS G. QUILPresidentHBR Consulting

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Legal Ecosystem is Changing

Client Experience is Driving Change toService Delivery Models

Keydifferentiators = technology and talent + staffing

strategies

New + emerging change agents:

Legal Lab, CLOC, non-legal business

leaders + tech-nology providers

“ ”“ ”“ ”Innovation by lawyers is occurring, but is it tied to current market problems?

Disruption is hitting everyone now. No organiza-tion or industry is immune…there are just differ-ent disruptors affecting different businesses.

Diversity and inclusion is paramount and is the canary in the coal mine.

Increased dialogue+ desire for

collaborationcreates opportunity

to differentiate

Constituents are evolving:

Law schools, law departments, law firms, LPOs, tech-

nology providers +consultancies

Proactivity + responsiveness

Predictability + value-based billing

Hybrid service models: tiering work + building

bespoke teams

Invoice + billingvs.

Reporting + metrics

Design thinking strategies

Diversity + inclusion

Value propositions:Cheaper Better Faster

Focus areas: collaboration, work flow

automation, the cloud + AI

Not replacing talent - replacing tasks tomaximize people skills

Service-enabled technology

Limited funding + budgets in corporations present opportunity to leverage externally

Appealing, non-traditional career pathfor lawyers

Top priority: diversity andinclusion + retention

Creativity in staffing + service; collaboration across inside + outside counsel

Bespoke outside counsel matter staffingby law departments

Apprentice models waning newlearning models required

Training on empathy + judgment

Future law firm fewer lawyers,more business professionals

LEGAL LABKEY TAKEAWAYSApril 19-20, 2017 | Austin, TX

HBR Consulting’s Legal Lab is an annual gathering of select industry leaders that collaborate and share ideas on how to pursue innovation and drive changes that support the law firm and corporate client relationship.

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DOWNLOAD EVENT AGENDA LegalLab.com | [email protected]

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Technology

Talent + Staffing

KEY TAKEAWAYS INFOGRAPHIC




strategies









to differentiate







bespoke teams


Reporting + metrics


















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Talent + Staffing

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CONTRIBUTING EXECUTIVES1

NAME TITLE ORGANIZATION

ADAM BILLING Founder Treehouse Innovation

BOB BRATT ChiefOperatingOfficer&ExecutiveDirector, U.S. Operations DLA Piper

ALAN BRYANSenior Associate General Counsel - LegalOperations&OutsideCounselManagement

Wal-Mart Stores, Inc.

KEVIN CLEM Managing Director HBR Consulting LLC

ROBERT CRAIG2 ChiefInformationOfficer Baker & Hostetler LLP

ADRIAN DAVIS2 ChiefAttorneyDevelopment& KnowledgeOfficer Latham & Watkins

ZEV EIGEN Global Director of Data Analytics Littler Mendelson, P.C.

GAVIN GRAY North American Regional OperatingOfficer Baker & McKenzie LLP

MELANIE GREEN2 ChiefClientDevelopmentOfficer Faegre Baker Daniels LLP

MARK HANSON Executive Director Irell & Manella LLP

GINA KASTEL Chief Operating Partner Faegre Baker Daniels LLP

JODY ROSEN KNOWER ChiefTraining&Professional DevelopmentOfficer Sidley Austin LLP

DEB KNUPP Managing Director GrowthPlay

JANE KOEHL2 ChiefOperatingOfficer Drinker Biddle & Reath LLP

MILOS KRESOJEVIC Global Innovation Architect Freshfields Bruckhaus Deringer LLP

SANJIV KRIPALANI Director of Business Development Lane Powell

JUANITA LUNA2 Director,OfficeofGeneralCounsel Pacific Gas and Electric Company

JAMES MAIWURM2 Chair Emeritus Squire Patton Boggs




strategies









to differentiate







bespoke teams


Reporting + metrics


















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Technology

Talent + Staffing

1 Titles and organization names held at the time of Legal Lab. 2 2017 Legal Lab Advisory Board member.

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NAME TITLE ORGANIZATION

JENNIFER MELLOTT Senior Associate Freshfields Bruckhaus Deringer LLP

LEIGH OLLMAN Co-Director of AkermanX Akerman LLP

RICK PALMORE Senior Counsel Dentons

LAWTON PENN Partner&HeadofDWTDeNovo Davis Wright Tremaine LLP

DAVID PERLA Founder&ManagingDirector 1991 Group

MATTHEW PETERS Partner&National Innovation Leader McCarthy Tétrault LLP

TIMOTHY POWERS Managing Partner Haynes and Boone, LLP

NICK QUIL President HBR Consulting LLC

NIK REED Co-Founder&ChiefOperatingOfficer Ravel Law

EDUARDO RUIZ-MONTOYA ChiefofStaff,VicePresident&Associate General Counsel Hewlett Packard Enterprise

CHRIS RYAN Managing Director HBR Consulting LLC

JEFFREY SCHWARZ2 Principal Concata

LISA SIMON ChiefMarketing&Business DevelopmentOfficer Lewis Roca Rothgerber Christie

GREGORY SMITH ChiefExecutiveOfficer& Managing Partner Husch Blackwell LLP

MADHAV SRINIVASAN2 ChiefFinancialOfficer Hunton & Williams LLP

MARK WHITE ChiefAdministrativeOfficer Baker Botts LLP

LAURENT WIESEL Founder&ChiefExecutiveOfficer Justly

LEE TREMLETT WILLIAMS ChiefFinancialOfficer Troutman Sanders LLP

DAVID WOLFSON Partner&ExecutiveDirector Milbank, Tweed, Hadley & McCloy LLP

CONTRIBUTING EXECUTIVES1

1 Titles and organization names held at the time of Legal Lab. 2 2017 Legal Lab Advisory Board member.

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LAW DEPARTMENT LEADERSA diverse panel of corporate law department leaders kicked off Legal Lab by sharing perspectives on how they are finding new and innovative ways to approach the current legal ecosystem and are promoting efficiency, predictability and proactiveness both internally and externally with outside counsel. Panelists shared how they have seen law firms create unique market differentiators by innovating in key areas, such as service delivery and collaboration. The panelists also discussed how new change agents, such as the Corporate Legal Operations Consortium (CLOC) and ACC Legal Operations, are defining what the industry standard should be for evaluating law firms.

INNOVATION IS OCCURRING, BUT IS IT ALIGNED WITH MARKET NEEDS?While law firms and law departments are embracing innovation now more than in years past, industry leaders are questioning if the changes occurring are focused on the most pressing issues. Are organizations changing in a truly thoughtful way that is designed to directly benefit customers / clients, or changing for the sake of change?

Panelists expounded on the topic by reiterating that historically the legal industry has been a lagging market indicator, not a leading indicator, and is based on the seller’s output, not the purchaser’s value. Legal Lab participants challenged one another to think about shifting from this orientation to one that is more focused on the value to the purchaser.

TOP PRIORITY: DIVERSITY, INCLUSION AND RETENTIONDiversity and inclusion continue to be a critical focus for both law firms and corporations. Law department leaders, however, are implementing stricter standards that must be met by law firms that wish to continue to win additional corporate business. Those firms that meet evolving diversity objectives are best positioned to differentiate in the market. Examples of ways that law firms can differentiate include:

PANELISTS:

ALAN BRYANSenior Associate General Counsel - Legal Operations and Outside Counsel Management,Wal-Mart Stores, Inc.

JUANITA C. LUNADirector,Officeofthe General Counsel, Pacific Gas & Electric

RICK PALMORESenior Counsel, Dentons (formerly the GC of General Mills Inc. and Sara Lee Corp.)

EDUARDO RUIZ-MONTOYAChief of Staff, Vice President and Associate General Counsel,Hewlett Packard Enterprise

FACILITATOR:

KEVIN CLEMManaging Director,HBR Consulting

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“SUCCESSION PLANNING STRATEGIES. For many law firms, the stakes could not be higher; retaining key clients and top talent can depend on effective succession planning strategies. Firms that do not have adequate long-term strategies in place are at risk of losing business from clients that do not feel transitions were successful for any one of many possible reasons (e.g., chemistry, practice area expertise, reputation, track record with the client, understanding of current and future business needs).

BUILDING BESPOKE TEAMS. In some instances, law department leaders are driving law firm succession plans. For example, one panelist shared that his general counsel (GC) had set forth a goal to increase diversity across relationship partners at their largest firms. In order to maintain long-term diversity in this role, the GC asked each law firm relationship partner to submit a slate of up to five candidates for future consideration for the relationship partner role, and each candidate had to match set criteria (e.g., one female, one lawyer under the age of 40, one person working on a flexible schedule, etc.). This strategy proved to be successful at building a long-term pipeline of diverse talent while promoting high performance and relationship nurturing amongst the law firm candidates, which has been viewed as a win-win by both the client and the law firm.

NEW AND CREATIVE APPROACHES WITHIN LAW DEPARTMENTS Law department leaders’ roles have evolved to incorporate a greater level of responsibility and accountability to stakeholders in their organizations. C-level executives demand predictability, and law departments are requiring their law firms to provide greater sophistication to support this expectation. To accomplish this, leading law departments are pursuing creative strategies to help reduce or control costs and improve performance in their department. Examples from panelists include:

Diversity and inclusion is paramount and is the canary in the coal mine. If we could solve even one-third of this challenge, we would be much further along as this is by far the biggest challenge in the business world today.

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LEVERAGING TECHNOLOGY TO BECOME MORE DATA-DRIVEN. Law department leaders are beginning to invest in technology to streamline and simplify internal reporting and budgeting processes. With increasing budget accuracy expectations for law departments, effective budget management is a top priority. “If you do not meet your budget one year, you are not going to get more money the next year,” said one panelist. With many law departments expected to achieve 98 percent or higher in budget accuracy, it is critical that they have access to the right tools and technology that allow them to efficiently access real-time data to support decision making.

STRATEGIC TRIAGE TEAMS. Some law departments are testing out triage team strategies. These teams consist of a diverse range of experts – including lawyers, case managers and analysts – who assess investigations based on risk and complexity to determine the best mix of resources to perform the work (e.g.,internal teams and / or external teams that include law firms and service providers). Soon, some corporations plan to take a similar approach to litigation. Triage teams will examine litigation more holistically to determine more creative and cost-effective ways to assign staff to the matter.

INTERNAL TIME RECORDING. While still somewhat rare, an increasing number of law departments are seeing value in implementing internal time recording. These initiatives provide valuable information that can be used to identify more effective staffing on internal matters, validate appropriate prioritization of work based on value and cost, and more strategically discuss the best allocation of internal and external resources with client groups.

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LAW FIRM DIFFERENTIATORS: CREATIVITY IN TALENT AND TECHNOLOGYAs law departments become increasingly selective about which law firms they partner with and how they build their outside counsel panels, creativity in talent and technology can help to establish a competitive advantage. A key differentiator for law department leaders is when a trusted law firm partner proactively approaches them with a creative idea in an area that they did not specifically ask for.

Law firms that demonstrate creativity in staffing cases with both internal and external lawyers can also gain a competitive advantage. For example, firms that are providing guidance to corporate clients on using internal resources, in conjunction with outside counsel (that may be comprised of lawyers across both large and small law firms) are winning over more corporate business. “We recently staffed a matter with an Am Law 10 firm that paired up with a small, diverse local firm. We really appreciate firms that are willing to work with one another to divide up work and execute more efficiently,” stated a panelist.

Since law departments are viewed as cost centers and rarely seen as contributing to revenue growth, gaining funding for technology investments can be challenging. For this reason, law departments highly value being presented with opportunities to leverage technology externally. One opportunity discussed resides in predictive analytics technology. Law departments are exploring ways to use predictive analytics to quickly and efficiently project possible matter and litigation outcomes. However, many law firms characterize the value of predictive analytics in the context of retaining clients. Law department leaders highlighted that they have not been approached by law firms with ways to leverage and expedite predictive analytics technology and processes, which presents a significant opportunity for law firms looking to differentiate themselves as client centric.

We recently staffed a matter with an Am Law 10 firm that paired up with a small, diverse local firm. We really appreciate firms that are willing to work with one another to divide up work and execute more efficiently.

THE MISSION OF CLOC

The Corporate Legal Operations Consortium (CLOC) is a non-profit organization consisting of a diverse set of legal operations professionals. CLOC was established to drive positive change across the corporate legal services ecosystem and is the “go-to” organization for information about legal operations and connections to the best legal operations professionals in the business. CLOC helps legal operations professionals and other core corporate legal industry players (e.g., tech providers, law firms, LPO’s, law schools, etc.) optimize the legal service delivery models needed by law departments to support their clients. As of June 2017, CLOC has 650+ members across 38 states, 18 countries and 4 continents and is rapidly growing.

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LAW FIRM LEADERSMarket dynamics and increased competition are motivating law firm leaders to drive change and foster innovation in their firms. Current challenges include getting lawyers to buy-in to change, developing fee structures that balance client value and maximize firm profitability, improving recruitment and retention, and succession planning.

DRIVING BUY-IN FOR CHANGEIn law firms, change can be a slow process. Lawyers by nature are characterized as independent thinkers who are risk averse. Because risk is commonly associated with change, having a well-crafted strategy that has both lawyer and leadership buy-in is vital to ensuring successful change management efforts in law firms. Panelists shared that the key to innovation is having a thoughtful, deliberate process.

BALANCING CLIENT VALUE AND PRICINGSome lawyers believe that everything they work on should be viewed as high value by clients. However, clients do not view all work as being equally valuable and therefore do not want to be charged the same rate for work regardless of value. Firm leaders are focused on helping lawyers understand how to best categorize the value of a matter, as well as each specific task, in order to price them effectively. Many corporate clients are seeking value-based billing from law firms, and this is a trend that is anticipated to grow in the near future.

PANELISTS:

GINA M. KASTELVice Chair and Chief Operating Partner,Faegre Baker Daniels

TIMOTHY E. POWERSManaging Partner, Haynes and Boone

GREGORY R. SMITHChiefExecutiveOfficer and Managing Partner,Husch Blackwell

FACILITATOR:

JAMES J. MAIWURMChair Emeritus and Senior Counsel, Squire Patton Boggs

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With the clear desire for predictability, fixed fees continue to gain popularity with corporate clients. The challenge for law firms, however, is to demonstrate the value that the client receives with the fixed fee without providing shadow billing. The key to solving this challenge is by using strong supporting data. “When structured correctly, fixed fees consistently lead to lower cost to the client and higher profitability for the law firm. It may seem impossible, but it is important that law firms understand how to correctly measure profitability,” commented one panelist.

RECRUITMENT AND RETENTIONLaw firms are finding that the key to successful recruitment is in developing a long-term strategic plan and creating a vision for the firm that lawyers want to be a part of. Recruitment strategies become much more efficient and effective when there is a clear vision that can be shared with prospective talent and that is communicated in a way that makes talent want to be a part of the overall strategy.

However, successfully recruiting and onboarding top talent is just the first step and cannot be considered success in and of itself. The key to preserving top talent lies in career and leadership opportunities, and an increasing number of lawyers are vocalizing interest in non-traditional (i.e., non-partner) career paths. Law firm leaders today are challenged with transforming established career models to open more doors and opportunities to retain top talent.

PLANNING FOR THE FUTURE Succession planning strategies continue to be a priority for both law firm leaders and corporate clients. Law department leaders are interested in how law firms are approaching succession planning to ensure that law departments are not impacted during transition periods. Law firms that are not prepared to readily share well-documented plans with clients risk losing future business.

The main priority during all transitions is to retain as many clients as possible after a client relationship partner has left. After all, the relationship owner has spent years cultivating and servicing key clients, and changes in this area are often difficult for the law firm and client alike. Not every partner enthusiastically embraces the idea of letting go of client relationships. Therefore, gaining the relationship owner’s commitment to a transition plan is critical to success. Law firms should make it clear to their partners that developing a mutually agreed upon transition plan is a priority.

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TALENT MANAGEMENT + ALTERNATIVE STAFFING MODELSAcute competition across the legal vertical has upended many firms’ compensation and recruitment strategies. Between flat law school enrollment, increased competition and more law firm partners nearing retirement, firms face numerous questions about how to recruit, develop, compensate, retain, and support succession planning strategies for their top performers. Career development is shifting in new and alternative directions, new forms of legal support are emerging, and an increasing number of non-lawyers working in law firms will create new challenges in the future that firms must acknowledge and address.

A NEED FOR NEW LEARNING MODELSAs the legal support talent pool advances, so does the need for new and different models for learning and development. In law firms, apprentice models are waning and innovative l earning models are being introduced. For example, the 70:20:10 model is being leveraged by some firms to guide training and professional development programs.

Training on judgment, however, is critical and is something that many firms are trying to accelerate. There is an unwavering need to prepare lawyers to effectively address challenges and deal with failures they may encounter, as well as prepare them for uncomfortable or challenging communications with clients.

RECRUITMENT: A CHALLENGE AND AN OPPORTUNITY Gone are the days where law firms are competing solely amongst themselves or with corporate law departments for talent. The new competitive landscape includes law firms, law departments, alternative service providers (ASPs) and technology companies that are all competing for legal talent, and competition for talent is only expected to increase in the future. Thus, recruitment strategies present law firms and law departments with both a challenge and opportunity to differentiate.

PANELISTS:

JODY ROSEN KNOWERChief Training and Professional DevelopmentOfficer,Sidley Austin

JANE C. KOEHLChiefOperatingOfficer,Drinker Biddle & Reath

LAWTON PENNPartner of Davis Wright Tremaine and Head,DWT De Novo

FACILITATOR:

ADRIAN DAVISChief Attorney Development and KnowledgeOfficer,Latham & Watkins

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Successful recruitment strategies require finding candidates who have the knowledge and skills needed to succeed as lawyers. However, there are crucial intangibles that are highly sought after when recruiting for legal talent – including passion, judgment, trustworthiness and cultural fit – that are difficult to identify when assessing candidates. Leaders who can recognize and promote these intangible qualities will benefit immensely.

THE FUTURE FACE OF LEGAL SUPPORT A case could be made that much of what lawyers do is not practicing law. Many lawyers never expected to be involved in business development and administrative activities (e.g., conflict clearance, pricing discussions, etc.) that require an entirely different skill set. An opportunity exists to identify and leverage creative staffing models and technology to more efficiently support the types of work that do not clearly fall under the practice of law. And while corporate law departments lean on outside counsel firms for two main reasons (specialized expertise and labor), this does not mean that lawyers need to support all aspects of client work.

According to one panelist, “The law firm of the future will have fewer lawyers and more business professionals.” The panelist also added that she expects to have as many non-lawyers as lawyers working in her D.C. office by the end of the year.

Another panelist described an approach that includes a “quick strike bench of lawyers” comprised of both law firm employees and outside contractors. Teams are leveraged for specialized, fixed-fee matters and are able to deliver work in an efficient, cost-effective manner that is both appealing to clients and satisfying for lawyers seeking non-traditional career paths at different stages of their career. ”

70:20:10 MODEL FOR LEARNING + DEVELOPMENT

70% On-the-job experience

20% Networking + meaningful relationships 10% Formal training

The law firm of the future will have fewer lawyers and more business professionals.

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TECHNOLOGYThe pace of change in technology is increasing exponentially, and new platforms and technologies are continually entering the market. Organizations are preparing for increased opportunities and potential disruptions that new technology is presenting now and in the future.

Technology is not only changing how lawyers work, but also where they may choose to work, with technology companies attracting lawyers in droves who are looking for interesting work outside of the traditional law firm or corporate landscape.

ARTIFICIAL INTELLIGENCE IS HERE TO STAYJust five years ago, people said that artificial intelligence (AI) was not for lawyers. Fast forward to today, billions of dollars are being invested in developing and commercializing AI technologies across all industries. So what has changed? Many factors have converged to form a catalyst for AI, including shifting business revenue models that necessitate efficiency, proliferation of big data, increased demand for collaboration and automation, the internet, and the ultra-accessible cloud.

Over time, expectations have also changed to focus on providing intelligent tools and problem-solving resources that do not replace talent, but rather tasks. The nexus of problem-solving in the legal profession is understanding the problem, framing the questions, interpreting the law and applying reasoning within nuanced fact patterns to develop and guide legal strategy. Opportunities arise when AI enables lawyers to maximize their skills. The lines are blurring between traditional roles in the legal profession, presenting an unprecedented opportunity to reshape careers and businesses alike.

PANELISTS:

DR. ZEV J. EIGENGlobal Director of Data Analytics, Littler

NICHOLAS REEDCo-Founder and Chief OperatingOfficer,Ravel Law

LAURENT WIESELFounder and Chief ExecutiveOffice,Justly

FACILITATOR:

BOB CRAIGChiefInformationOfficer,Baker Hostetler

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REPLACING TASKS TO MAXIMIZE PEOPLE SKILLS

The value proposition of new technology should always be one of three things: cheaper, better or faster. When implemented and supported effectively, technology benefits everyone – law firms, law departments and individual lawyers. However, AI is complex and requires a great deal of domain expertise to be effective, and while lawyers can and should be good consumers of AI, they should not be administering AI technology on their own; this should be handled by subject matter experts who understand the data and technology. By replacing administrative, low-value tasks using technology, lawyers can focus on responsibilities that are of higher value to clients.

MAKING DATA MORE EFFECTIVEIn today’s data-driven world there is strong market demand for tools that can transform disparate data into actionable insights. Law firms and law departments are using internal reporting to compare themselves to competitors and make sure they are not falling behind. Furthermore, AI is currently enabling the legal profession by:

IMPROVING BUSINESS MANAGEMENT (e.g., mining data for business intelligence, aggregating data / dashboards, predictive analytics)

IMPROVING SERVICE DELIVERY (e.g., legal research, contract analysis, contract authoring, outcome prediction, litigation analysis, due diligence in mergers and acquisitions)

SHOULD LAWYERS BE CODERS?

Legal Lab participants discussed this notion and agreed that while there is value in lawyers being strong consumers of technology, they should not be involved in building technology. As one panelist stated,“People can learn to be good drivers without needing to know how to design and build cars.”

”“The lines are

blurring between traditional roles in the legal profession, presenting an unprecendented opportunity to reshape careers and businesses

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FACILITATED EXERCISE: DESIGN THINKING IN LEGAL Other industries continue to innovate in terms of product development, and design thinking is a concept that has helped to transform and invigorate some of the world’s most successful businesses. In the legal environment, however, the ‘product’ is the act of delivering legal services. Legal Lab concluded with an interactive exercise where participants rolled up their sleeves and examined how design thinking could be applied in a legal environment.

The session began with a high-level overview of design thinking, focusing on three different types of innovation. Next, Leigh Ollman explained how Akerman LLP applies design thinking through AkermanX, profiling how the Firm incubates ideas, generates buy-in and support to monitor the process and communicates its results. The session concluded with an interactive group exercise that brought the concept to reality, led by innovation and design thinking expert, Adam Billing.

UNDERSTANDING THE CONCEPT AND THE BENEFITS The tone of conversation across the legal vertical has become much more collaborative over the past year. With this shift in mentality comes excitement, as well as some uncertainty, about how various parties can work together to achieve successful outcomes for all involved.

Deb Knupp, managing director at GrowthPlay, kicked off the session with an overview of the three types of innovation in the market today – core, disruptive and reinvention – and how forward-thinking organizations can best support these types of innovation. Deb describes the renewal of the legal industry as “great law” that is comprised of three core elements.

WHAT IS DESIGN THINKING?

“Design thinking is about accelerating innovation to create better solutions to the challenges facing business and society. It starts with people – what we call human centered design – and applies the creative tools of design, like storytelling, prototyping and experimentation to deliver new breakthrough innovations.”

– Tim Brown, CEO, IDEO Change by Design, 2009

PARTICIPANTS:

ADAM BILLINGFounder,Treehouse Innovation

DEB KNUPPManaging Director, GrowthPlay

LEIGH OLLMANCo-Director,AkermanX

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OLD LAW ECONOMICS GREAT LAW ECONOMICS

Lawyer productivity Scalability

Revenue / PPP Client mix / profitability /talent retention

Playing not to lose;silos / burnout / scarcity

Playing to win;collaboration / engagement abundance

GREAT LAW IS ABOUT:

1. GREAT BUSINESS.

2. THE TRIPLE BOTTOM LINE. Profit: where the most profitable clients want to buy.

People: where the most talented people want to work.

Planet: where the most inspired leaders want to impact.

3. GREAT INNOVATION.

Because there is an inherent belief in the industry that lawyers are experts who know what clients want, lawyers often operate independently and focus on quick responses to client inquiries. This emphasis on speed and responsiveness can undermine opportunities to bring new and innovative ideas to light and engage in deeper conversations with clients.

The design thinking process relies on groups and teams, rather than individuals, to innovate, as is usually done in law firms today. By engaging with and observing individual clients, design thinking users are able to gain inspiration and identify unmet needs that can lead to a competitive advantage. Design thinking strategies should be viewed not as an end, but rather a means to help law firms and law departments innovate across different areas to achieve better results.

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PROFILING DESIGN THINKING IN AKERMANX Akerman is recognized by Financial Times as one of the most forward-thinking law firms in North America and is ranked among the top 100 firms in the U.S. by The American Lawyer. As one of the first law firms to train a significant portion of its lawyers in design thinking, Akerman has been using the technique to tackle complex business challenges and develop new products. Leigh Ollman, co-director of AkermanX, walked attendees through how her team embraces new ways of thinking and working to better serve their clients. AkermanX provides the framework for the Firm’s innovation activities and is the driving force behind Akerman’s commitment to creative problem solving, technology innovation and a thoughtful study of the future.

AkermanX focuses on four key areas:

• Client collaboration: designing and creating with clients. • Culture and community: developing thought leaders to drive change.

• Change management: evolving the Firm’s structure to enable innovation.

• Capacity building: equipping lawyers with skills to think and work differently.

Client needs guide AkermanX activities through the Akerman Research and Development (R&D) Council, a unique innovation co-venture with clients. Creating a structure that connects clients and their insights into the firm’s R&D process and providing them with meaningful influence into the Firm’s innovation strategy reflects a key element of the design thinking process.

While we may be a fifth generation law firm, a key ingredient of Akerman’s success is that in many ways we operate like a first generation firm.

Carlos E. Méndez-Peñate, Akerman Lateral Recruiting Partner

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Akerman lawyers are using design thinking principles to co-create project management tools with clients, gain actionable insights from recent lateral hires and develop practice group business plans. Through the AkermanX Lab, the Firm’s in-house innovation space, lawyers are encouraged to collaborate and connect with entrepreneurs, industry innovators and other outside professionals to design new services and products.

TURNING THE CONCEPT INTO REALITY Adam Billing, founder of Treehouse Innovation, closed out the session with a review of who is using design thinking – Microsoft, American Express, Accenture, eBay and PwC, to name a few – with supporting reasons of why organizations are using it. Finally, Adam facilitated a group exercise where participants learned new strategies for brainstorming, prototyping and experimenting to apply within their organizations.

Why are organizations using design thinking?

• To connect deeply with customers.

• To transform data into actionable insights and ideas.

• To consistently spot new opportunities to create value for clients, the firm and its people.

• To implement new solutions faster and more effectively.

• To increase client satisfaction and employee engagement.

• To improve agility and keep up with the pace of ongoing change.

Design thinking is new to legal services, but as innovation continues to rise as a top priority for law firms, the age of the ‘design thinking law firm’ is upon us. “Empathise to Innovate” (Managing Partner June 2015) by Adam Billing explores how design thinking might help law firms create competitive advantages in the same way as their corporate counterparts before them.

http://www.managingpartner.com/

http://www.managingpartner.com/

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LESSONS LEARNED + KEY TAKEAWAYS

• GREAT LAW IS ABOUT GREAT INNOVATION, which can be supported by design thinking strategies.

• BEGIN WITH CORE INNOVATION and harness access to every person in the organization to contribute.

• TAKE AN OUTSIDE-IN PERSPECTIVE and engage users / customers early and often.

• EXTREME EXAMPLES ARE BENEFICIAL: ask people to show you rather than asking why or how.

• TODAY’S ORGANIZATIONS ARE STORYBOARDING: show your solution and how the user interacts with it.

• FAIL FAST TO SUCCEED SOONER and celebrate successes.

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CONCLUSION + SUMMARYAcross the legal ecosystem, a combination of people, process and technology strategies are driving changes that support improvements to the client experience.

PEOPLE • Diversity and inclusion present the biggest staffing challenges today; if we could solve even one-third of the problem it would be significant progress. • Retention is the other top talent priority, which is a focus for internal and external counsel alike. • Law firms are changing the way they approach career development, transitioning from apprentice to learning models, and are placing on explicit focus on training on judgment. • Corporate law departments are placing a greater emphasis on creativity in staffing and are rewarding law firms that do the same. • User adoption of technology is a people issue more than a technology issue; organizations rely on people to use technology, which takes time and money.

PROCESS • Predictability and value-based billing are big focuses by law departments and are expected to become the standard in the future. • Hybrid, flexible and collaborative service models are emerging, with the assessment of risk and complexity playing a bigger role in resource alignment. • The importance of data and measurement is growing and creating both opportunities and challenges.

TECHNOLOGY • The promise of AI for the legal industry lies in the automation of certain processes, enabling lawyers to devote more time to more valuable and interesting work. • Technology is creating appealing, non-traditional career paths for lawyers. • We are living in a data-driven world and there is strong market demand for tools that can transform disparate data into actionable insights. • The value proposition of new technology should always be one of three things: cheaper, better or faster.

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Aswereflectonthethird-annualLegalLab,anoverarchingthemewashowthegrowingpressure from clients can be leveraged to create an impetus for change. An opportunity existsforlawfirmstoengagewithclientsinnewwaysthatwilluncoverunmetneedsand allow for better alignment of resources and services to differentiate in the market. Across the legal vertical, lines are blurring and constituents are intersecting in new and unexpected ways. The practice of law and business of law are merging and the face of legal services has and will continue to transform in response to client expectations. While corporate client expectations may be evolving, law department leaders desirechangesthatwillbenefittheentirelegalecosystem.Byapproachinglawfirms with thoughtful discussions on how to increase collaboration and transparency, law department leaders are leading the industry to a state where the strongest relationships, satisfaction and results will be achieved. At HBR Consulting, we believe the most successful organizations of the future are thosethatareclearlydefiningtheircorecapabilitiesandstrategicallycollaboratingacross the entire legal ecosystem. Organizations that are taking steps that could have beenperceivedasriskyinthepastarebenefitingfromtransformationandcontrollingtheir future destinies by setting a new bar for the industry. This enables organizations to concentrate on what matters most: their clients.

HBR Consulting (www.hbrconsulting.com) delivers advisory, managed services and software solutions that increase productivity and profitability, while mitigating risk for law firms, law departments and corporations. As trusted advisors with deep industry experience, clients partner with HBR to achieve significant, sustainable results.

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