In-house teams and law firms rarely innovate together
Here's why that should change.
I was inspired this morning. I had a call with James Howell-Richardson, general counsel at Omni Helicopters. Omni lease lots of aircraft every year.
Like most folks involved in finance transactions, James is frustrated with the amount of paperwork and steps involved to complete what’s essentially a highly standardised, repeat transaction.
“There’s hardly any real negotiation involved, yet the whole thing can take months.”
Although this seems to frustrate the in-house legal teams on both sides of the process, no one has figured out how to redesign it.
Now, this is a story I hear on a weekly basis. The next thing that usually happens is that some quite justifiable fingers are pointed at the usual risk averse suspects: the finance provider, as well as any and all of the law firms involved.
But that didn’t happen on my call this morning. What inspired me was that James has found a way to approach this as a joint problem in a blame free way.
He has invited one of the major aircraft leasing companies he usually deals with, their lawyers and his own lawyers to all sit down together and figure out a more efficient way in a workshop.
Although it’s not clear yet whether it’ll work, I feel he’s already gotten a few steps further than most!
Why multi-party problems are hard to fix
What’s typically hard about redesigning processes with multiple parties, is that each side needs to understand why the change will benefit them. Otherwise, keeping things the same is just too easy. It’s the default.
And without involving all parties, you can only ‘clean your own street’, and there are usually just incremental gains there, not exponential ones.
So lets map out the benefits of the redesign. For the in-house legal teams it’s quite obvious. They’re doing a deal because they want to do the deal. So a more efficient process means:
close the deal quicker
less time spent by them or their internal stakeholders
less work for their law firm.
What’s in it for the law firms?
To get the law firms interested in investing the time to change the process, it’s probably necessary to offer them an explicit deal:
calculate the average fee they charged per transaction (on their hourly rates) historically;
allow them to charge a similar amount going forward but on a fixed fee basis;
show the law firm that by redesigning the process they may only need to do 50% of the work, yet can keep invoicing the same amount.
I’ve always felt this logic should appeal to law firms. They know they’re going to have to change how they bill at some point, especially if AI may take care of more and more of the work.
A deal where clients get transactions done really quickly and on fixed fees, and law firms can increase their margin seems like one worth taking!
Don’t jump to tech too quickly
One final point on this. It’s tempting to just look at legal tech as the ‘solution’ to inefficiency. But when applied too early on, legal tech often just cements an inefficient process.
It’s better to first zoom out, figure out which steps can be removed wholesale (see the video here for a framework). On the remaining steps you can then see if it’s worth investing in tech or not.
Keep in mind that the cost of tech is not just the license fee, but also the sheer effort of implementing and changing workflows. So think twice before adopting ‘big all-in tools’, we’ve had much more luck with ‘point’ solutions that just improves the most time consuming part.
(Shameless plug: this is why we designed LexPlay to be so easy-to-buy and use - no need to make changes to how your organisation works, but you get big improvements on the 20% of the work that takes 80% of the time.)
Thanks for being here,
Daniel
CEO at Lexoo
LinkedIn
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PS: Missed the risk heatmap workshop? You can watch the edited recording here (38 mins). After watching the video, you’ll be able to:
use fishbone diagrams to visualise the root causes of complicated issues;
use process maps to find the biggest opportunity areas in your contracts work
run a risk heatmap workshop, where you can agree the ideal playbook positions in a collaborative way.
