I am not going to give you a full report of Richard Susskind’s talk to ILTA last week. Its basic premise is well-known to anyone interested in this area; I have written about it before; if you are interested, you would have read the book; and anyway, recording a Susskind speech is like trying to catch Niagara in a bucket. If you are not interested in what he says, then you will be dead commercially within five years anyway, whether you are in-house counsel responsible to the board, or a law firm hoping to receive instructions. This does not mean that you have to agree either with Susskind’s premises or his conclusions, but you do need to know what the arguments are.
Richard is not, it seems, much taken by my comparison between him and Private Frazer (see Richard Susskind End of Lawyers resources. Of course, (and as I acknowledged) a précis which characterises his message simply as one simply of doom ignores the fact that the title of his book The End of Lawyers? ends in a question mark. Even that chap who used to wander along Oxford Street with a banner proclaiming the imminent end of the world offered redemption to those who repented, and Susskind does the same. Redemption however, whether in business terms or in the wider spiritual context, lacks a simple road-map. We do not even have a destination, just the certainty that where we are is not the place to be. Recognising that much is a good start.
Instead of summarising the lot, I will pick one or two of the points which Richard Susskind made which seemed to me to have particular relevance in the litigation support context.
The first is his Black & Decker example. The point of that company’s most famous product is not the power drill which it makes but the drilled hole which the customer needs it for. There are multiple e-disclosure parallels here: lawyers are not buying technology, they are buying cost-effective solutions to their clients’ problems; clients do not want an impeccable disclosure exercise, they want a cheap and just solution to their dispute; we do not want from judges merely that they impose the disclosure rules rigourously (though it might be nice if they knew where to find them) but that they pursue a proportionate conclusion consistent with the overriding objective. In each of these examples, the power drill (the technology, properly conducted disclosure or the rules) is vital, but it is only the means to a more important end.
Susskind described the conflicting pressures facing in-house legal departments (I use this clunky phrase because the title “General Counsel” is not as universal in the UK as it is in the US). They must simultaneously reduce headcounts, reduce external spend (often by more than 30%) and cope with more work in terms of the risks they must anticipate. Something has to give. This is not, Susskind avers, a temporary blip. The “more for less” challenge will not go away and we will not go back to what he calls “the old tariff”.
The first phase of applying technology to the business of law was essentially one of automation — finding better ways, faster ways, cheaper ways, of doing those things which had always been done. Document assembly, e-mail, website marketing, were all just smarter ways of doing old things. If much of legal services (and this applies particularly to litigation) consists of getting an ambulance to the bottom of the cliff, it is no longer enough that the ambulance arrives faster or better equipped. Susskind has always used this analogy as a counter-point to the opposite, the fence at the top of the cliff preventing the contingency, whatever it is, from occurring at all. This is too black and white, suggesting as it does that the primary objective should be to avoid litigation. Some companies must litigate; litigation is, or ought to be, an essential part of the businesses armoury, and it is not all optional; the demands of a regulator certainly cannot be ducked. If you pursue the cliff analogy further, what is needed is the skills and equipment which allows you to shin quickly and safely to the bottom. Most lawyers and technology companies are simply offering better ropes.
It is not enough, either, simply to say that fee rates must come down. Lawyers belabour litigation support providers for their per-gigabyte costs, apparently oblivious to the fact that their way of charging by the hour is an exact parallel. Richard Susskind refers to the need for an “efficiency strategy” which places the work where it is best done. He listed twelve different approaches (insourcing, outsourcing, multisourcing etc) which, at one level, are merely divisions of labour. What he says here matches the suggestions which I have made in recent posts about working out which parts of a job the lawyers cannot do efficiently and finding others who can do them at least as well but at a better price. Examples to which I have referred recently include Pinsent Masons’ outsourcing of first-pass review and the recent deal announced by O’Melveny & Myers and H5 under which O’Melveny handles the legal work and H5 deals with the science and the mechanics of search etc – a model which, I suggested, scales down to more ordinary players than these.
The O’Melveny initiative, as I reported, derived from a conscious effort by the firm to address the question “how can we do this differently?” and had as its aim the encouragement of more litigation rather than merely increasing O’Melveny’s share of what exists already. I am not knocking this (far from it) but this is in reality another example of the faster and better-equipped ambulance. Something more and radically different is needed, Susskind says, to reconcile the demands imposed on and by companies who have traditionally turned to lawyers for their skills
Susskind drew attention to an inherent paradox. The lawyer justifies his expensive tailored service by thinking of himself as a “fine mind starting with a blank sheet of paper” and asserting that every problem is different. The very thing which brings the clients to a law firm is, however, the fact that they have done it before. This point again, was something I referred to in my article about O’Melveny & Myers where I suggested that “each such exercise begins as if there had never been one before”. Some parts of the process can be systemised, and once they have been systemised, the clients will say “why can’t we do this for ourselves?”. If the lawyer is to keep his place in the process, he must recognise that litigation (perhaps more than any other legal function) is not a single, seamless task but one whose components raise different considerations. Richard Susskind breaks down legal functions into five categories, bespoke, standardised, systemised, packaged and commoditised. He also identifies nine components to litigation — document review, research, project management, litigation support, disclosure, strategy, tactics, negotiation and advocacy. Different parts of the process from first instructions to final determination fit in to different boxes. The application of law to the issues, the tactics and so on require the best skills of the “fine mind with a blank sheet of paper” and the clients are willing to pay good rates for fine minds thus applied – but not for everything.
This still takes us no further than the mechanics. Decomposing the task and addressing O’Melveny’s question “how can we do this differently?” is met in part by an efficiency strategy which places stages of the work where it can be done most effectively and efficiently. This seems as obvious, at least in retrospect, as the transition from typed letters to e-mail and is of the same kind — automation and systemisation of things which have always had to be done. It will not, however, be enough to resolve the conflicting pressures of reduced headcounts, reduced external budgets and increasing risk.
The man who was willing to face mockery when he predicted the use of e-mail by lawyers is not shy to make similar predictions in relation to today’s technology. Their common feature is the ability to create instant communities. Instant messaging, blogging, Twitter, Wikis and social networking may seem trivial in application. They have, however, the potential to undermine the personalised service which the lawyer offers to his clients and they pose a serious threat to lawyers on several levels. For one thing, they allow companies with like interests and problems to share information. Instead of merely asking their external lawyer’s advice in a silo, in-house lawyers can pool views and information. That may range from matters of high strategy (implications of privacy legislation, for example) to matters of detail (charging rates, technology implementations, service quality etc.). Lawyers have a choice here: they can let this discussion go on above their heads or they can join in just as, a decade ago, they could choose whether to share some of their knowledge on the web or keep it close to their chests, hiding their lights under a bushel.
This sharing of views and knowledge is not the end of it. Clients increasingly expect the lawyers to share the risk as well. Susskind gave an example of lawyers being invited to quote a fixed annual fee for all litigation; inevitably, they wanted to hedge their bets by reserving the right to look at cases individually. That misses the point — once they are on a fixed fee, they have the same incentive as the client to minimise costs and risk. I have suggested above that a supplier’s per-gigabyte charge equates to the lawyers hourly rate. The lawyer contemplating agreeing a fixed annual charge will want to lay off part of the risk by coming to a matching agreement with a supplier of litigation support services. The supplier’s instinct will be to reserve its position in relation to “difficult” data, as they do now, and will meet the same objection from the lawyers as the lawyers face from their clients – if you want my work you must share my risk. It must also follow from this that coyness about costs will have to go. Quite apart from any other considerations, the chatter of the instant communities will put an an end to the present nonsense (understandable nonsense, but nonsense nevertheless in marketing terms) that clients are expected to commit to a service without knowing what it will cost them.
Richard Susskind ended with another of those illuminating flashes which seems obvious once articulated. Traditional marketing involves identifying how your rivals threaten your interests and then working out your defence. A more positive approach involves seeing what methods others are using to erode your business and then doing the same. That has moved beyond matters of improved mechanical process even before most of the world has got their minds around that much. The slow, incremental moves towards automation inspired in the US by Zubulake, the FRCP amendments and the rise in sanctions, and in the UK by Digicel and new judicial focus, is too slow to adjust to the pressures which clients face and must pass on. The threat is not merely that clients will take work in-house or that non-lawyers will erode the lawyers’ work or that other firms will take away their clients. Better processes are necessary, but not sufficient, as a way of meeting the threat that the clients will not merely shop around for the cheapest way of getting the job done, but simply abandon it.
There is a story from long ago of a lawyer coming out from a Susskind lecture and saying “that is all very well, but what do I do today?”. That misunderstands the role of this kind of thinking. The wider things we are talking about here do not lend themselves to neat codification nor are the needs of every client the same. If the clients themselves had neat shopping lists of what they expected, then it would be relatively easy to comply with them. The first step in the collaborative world which Richard Susskind describes is to take part in the collaboration and join in the discussion. Many clients themselves have not got beyond identifying the broad problem – that they are expected to do more with less. The starting point in addressing the question “how can we do this differently?” is to know what practical solutions exist. At a basic practical level, if you do not know what technology solutions there are, what they can do, and roughly what they cost, you cannot begin to take part in the wider and deeper collaborative discussions about doing things differently. Others will be there.