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Billable hour will die with ‘industrialisation’ of the law
Bjarne Tellmann

19 Jun 2020 / business Print

Billable hour will die with ‘industrialisation’ of the law

Law firms must look to the client-centric big four consulting firms and use data to add value and drive more efficient negotiating strategies, a legal futures webinar heard this week.

General counsel at Pearson and author of the 2017 book ‘Building An Outstanding Legal Team’ Bjarne Tellman said that law firms must become more data-driven because data yields deep business insights.

Harvesting information

Harvesting information on counter-parties can allow for the first draft of a negotiation to be put together based on already accepted precedents, he suggested.

Tellmann predicted the decline of the billable hour as a tool, but a growth in the notion of law as a managed service, available for a fixed subscription fee model, with service level agreements on fixed, reliable outcomes.

The rental model that exists everywhere else in the economy will provide legal solutions to access to justice issues, he believes. 

“As dominant incumbents of the legal industry, law firms should take a close look at the repository and caches of data that they hold, and how they might use that to drive better decision-making, for themselves and their clients,” he said.

Tellmann will move on 6 July to head the legal function at GSK Consumer Health Care, an $11 billion joint venture between GSK and Pfizer.

“We live in an age of accelerations,” he said, predicting the decline of law as a profession and the growth of the law as a business. 

This ‘industrialisation of the law’ will accelerate, driven by data and the need for greater efficiency.

Inputs

Lawyers have traditionally been focused on inputs, such as the billable hour, rather than outputs, he said.

“How often do we delight our clients?

"How comfortable and enjoyable is the legal process? We deal with issues that most clients would prefer not to deal with; going to a lawyer is associated with pain, and problems, and challenges,”  Tellmann continued.

Law graduates emerge with skills that are not necessarily in the highest demand.

Fewer than half of them in the US end up having a legal job, he noted.

Key hard skills for lawyers in a data-driven world include financial literacy, change management, coding, legal technology, process optimisation, lean design and data analytics.

Dearth of executive education

“These are all things that are absolutely essential and there’s a dearth of it in the market today,” Tellmann said.

“There is a dearth of executive education for lawyers and I like to send the top talent back to business school to do advanced management programmes,” he continued.

Seamless communication across silos is key for general counsel, Tellman said, and this incorporates legal, technology, strategy and business skills.

The law has cultivated a ‘solo superstar’ idea, rather than a ‘wolf pack’ mentality, or collaborative group of people working towards business objectives.

Grit

Tellman said that when hiring, he looks for grit and the sustained ability to keep getting up, and back into the ring.

“The world is full of mistakes, errors, embarrassing incidents.

"I look for people who are courageous in finding solutions, and who are engaged with the world, outside of the law.”

Tellmann often asks interviewees which news story has engaged them the most that week, to see if they can take a wider perspective on the world.

Key soft skills are emotional and cultural intelligence, and adaptability, he said.

More-for-less

The 21st century digital lawyer will inescapably be part of a more-for-less dynamic, the webinar heard.

This is driven by globalisation and a proliferation of regulatory regimes and sanctions.

There has also been a blurring of legal risk areas which now travel “at the speed of Twitter”, and quickly become public relations issues.

Digitisation is putting pressure on corporate profits and this translates into fewer resources for legal work, Tellmann observed.

Revolution

However, a simultaneous tech revolution has enabled general counsel to find new ways to unravel the legal services value chain, and to farm out legal work to the most efficient provider.

But real efficiencies require a transformation in organisational structure, a rethink of processes, and a culture shift, he said.

“The real opportunity lies in the data that you are now beginning to harvest, as the basis for rational decision-making,”  Tellmann said.

There are deep business insights to be gleaned from data, he said, and the analytics it yields should be applied across a range of dimensions – descriptive, diagnostic, predictive, and prescriptive.

Prism

Mark Cohen, chief executive of legal business consultancy Legal Mosaic, said that lawyers typically dealt with other lawyers and law is almost always viewed through the prism of lawyers.

“What people expect from lawyers is changing,” he said.

Legal expertise can be leveraged in many different ways and in many different types of careers.

The speed of law historically has been “a snail’s pace”, Cohen  said, but if lawyers are to render counsel that is useful to clients, they must do so at the speed of the client, not at the speed of law.

The legal function’s historic role as enterprise defender can be enhanced by using data to become far more predictive and pro-active to better serve the business, he said.

“The C-suite wants the legal function to contribute to enterprise value,” Cohen continued.

Ethical challenges

Some lawyers will resist that because of ethical challenges.

“I don’t think the role of the lawyer as a professional, and as a business person, are necessarily inimical, quite the opposite.

“The true professional is not just going to be a lawyer, but is also equally going to be someone really valued by the business.”

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