In late February 2018, I released a column titled “Recession Proofing – Why Now? Perhaps the Better Response is Why Not?” It struck a...
The Role of Technology in the Legal Profession #LegalTechLives with Duc Trang, Managing Director of Landon Advisory Services
This week’s #LegalTechLives features Duc V. Trang, Managing Director of Landon Advisory Services, which provides consulting and legal services and professional and leadership training. Duc’s work ranges from providing legal and commercial advice on complex transactions to strategy and human capital consulting for legal services organizations. He also coaches senior counsels and law firm partners on developing leadership and strategic thinking skills to enhance their careers. This piece is part of a two-part series. Stay tuned next week for Part 2: The Human Side of Lawyering.
Are legal services organizations looking at technology in the “right” way?
There’s certainly a lot of attention on technology and the law today. I’m a big fan of technology adoption and innovation in the legal profession. Technology can change the way lawyers work, how they deliver legal services, the business models of legal services and provide better or more access to law and justice.
However, I fear that there’s a lack of perspective and context around the discussion of technology and process innovation in the legal profession. Without context, we risk wasting effort and money and delaying needed changes. Unless you have a methodology to think through the role of technology in the profession and in your own legal services organization, there’s a high risk of what management consultant Geoffrey Moore would call “wasted innovation.”
How do legal services organizations make choices about investments in technology?
In order for legal services organizations (e.g., law firms, in-house law departments, etc.) to make better decisions today—about technology, training, education, etc.—we need to ask about long-term outcomes. Only then will we make more informed short-term decisions so that we can make changes that will position us for the right pivot once longer term trends become clear.
Technology and process innovations are undoubtedly changing the industry and will continue to do so, in ways that we have not yet contemplated. But we also know that failures will come. We are now in the “hype” phase of the technology adoption curve, and we will (soon) go through the disillusionment phase. The key is to move quickly through those phases so that the adoption of technology will be sustained and more valuable to stakeholders.
Failure generally is good in the adoption phase of technology, but there is an insidious danger when people and institutions make changes for the sake of change. Failures under those circumstances will embolden the naysayers. There will be a lot of “I told you sos” and then reversion to what always has been done. Then it will be even more difficult for the change agents and innovators to initiate change, and it will take even longer for the profession to institutionalize changes.
Second, all organizations are faced with choices that are interlinked. There are four principal areas of choice: business coverage/alignment, operational excellence, financial and resourcing strategies, and human capital. An effective organizational strategy recognizes that the overall strategy will be distorted if you “lock and load” certain choices without considering the impact on other areas. Many organizations are in danger of making choices about technology in isolation—including both private organizations (law firms, in-house departments) and law schools. Many firms are making bold investments in technology without thinking deeply about what their people will be doing, the impact on the profitability model, pricing models, the value to clients, etc. Law schools face the same dangers. There is talk about law schools teaching coding and data analytics to students. I’m not saying these are not important skills. I just don’t know whether law schools are uniquely qualified to teach them or how such a course would fit within the teaching philosophy of law schools. It would be difficult for a law school to make that assessment unless it considers (in collaboration with the practicing profession) the entire life cycle of learning for law students and law graduates, the sequencing of the teaching of certain skills, and the role of other stakeholders.
Assuming that technology will continue to be adopted at an increasing pace, what will the role of lawyers be? In other words, if we “normalize” the advancement in technology development, what is the expected role of lawyers?
We should continue to promote the development and adoption of technology. If anything, it will provide us with quicker, cheaper and greater quantities of information. But those elements, for now, primarily go to the operational efficiency of lawyers. The so-called technology trigger is just beginning, and we’re only starting to understand how that may change the profession. For now, technology will provide lawyers with more, better structured and faster information.
But is operational efficiency the factor that distinguishes lawyers from other professionals, such as accountants or bankers? I don’t think so, and I think clients generally expect (and hope) that lawyers will adopt technology to be more efficient and cost-conscious. Adoption of technology will be seen as necessary, but not necessarily sufficient to make lawyers stand out. Don’t get me wrong. Most of the profession is so inefficient that there’s a fairly long runway for improvements in operational efficiency by leveraging technology and process innovations.
Where lawyers are valued is when they exercise complex problem-solving skills to help clients make better decisions. That role, I believe, will not disappear any time soon. That strategic advisor role is even more important (and valuable) as technology gets embedded in the profession and takes over the less complex legal tasks, including subject matter knowledge.
What needs to change in legal education and training?
We have to change our philosophy of training and education. First, we need to overcome the longstanding myth in legal education about the strict alignment between theory/law school and skills/practice. The distinction does not make sense and has serious negative consequences: (1) it prevents innovation in curriculum development and (2) it prevents the interaction required between legal academia and the practicing profession to connect what is taught in law schools and the practice of law, something that we often see in other design-based professions such as medicine, engineering and architecture.
Second, lawyer and strategist Kenneth Grady and others are now discussing how law schools may need to think about different kinds of educational programs and certifications for different roles in the profession. For example, they are asking whether law schools in the U.S. should keep the full JD program or create shorter programs for qualifications for which a JD may not be necessary.
Third, many law firms will need to rethink their learning and development program. There are a few exceptions, but most of the funds for L&D at firms go to training of subject matter expertise and practice skills (e.g. drafting skills, negotiation skills, etc.), as well as a smattering of client management and business management skills. Higher value and complex skills, such as commercial acumen, problem-solving skills, etc., are often left to “experience” and merely stated as expectations of what partners-to-be or partners are to do. Firms will need to build the training of those complex skills much earlier into the learning and development cycle.
The failure of the profession to train lawyers in complex problem-solving skills existed before the rise of legal technology and continues to be a problem today. My fear is that technology will absorb a disproportionate amount of attention when it comes to the innovation needed in legal education and training.
What are your goals for the future in this space?
I’m trying to “operationalize” the learning of complex skills such as commercial acumen, judgment, strategic thinking, etc. Technology will continue to develop, so I want to solve the problem of how to teach lawyers the complex problem-solving skills that clients demand—that they will have more time to do.
I’m doing this at two levels—at the transactional (or micro) level and at the business (or macro) level. At the micro-level, I’ve developed a framework to help lawyers design and architect transactions. I’m writing a book on it now (The Architecture of Transactions), which will be published later this year. The framework—based in part on the works of the 1996 Nobel Prize winners in Economics, Professors Hart and Holmstrom, and others—provides a set of tools for lawyers to design contractual arrangements that will facilitate the closure of the transaction. The framework is industry agnostic and can be applied to transactions ranging from the sale of a used car, the provision of outsourcing services, to treaties between two nations. Unlike traditional training methods where we rely primarily on experiential training in specific industries (which is inefficient and leaves gaps), the framework uses pattern-based methodologies and tools for lawyers to design deals.
The initial data in training law students and young lawyers has been positive. They demonstrated a high level of sophistication about commercial transactions. This is supported by research in cognitive science that suggests that expertise creation is effective only when there is a baseline that will help lawyers extract expertise as they begin to work on deals. My thesis is that the framework will enable lawyers to develop complex problem-solving skills in design/architecting transactions for clients earlier in their careers. That baseline creates the commercial context that helps lawyers decide when and how to apply their legal skills strategically to achieve the business (and not necessarily just legal) results for their clients—a reflection of “commercial acumen” and “problem solving.”
The other project that I’m excited about is—using the same approach of providing pattern-based tools to solve problems—a set of analytical tools I’ve borrowed from business academia. I’ve refined and contextualized these tools and methodologies for lawyers. The problem I’m trying to address is the clients’ criticism or demand that their lawyer should have a deeper understanding of business. A related problem is the ability of lawyers to design and operate their legal services organization—whether it’s a law practice or an in-house department—as a business.
In our program, lawyers first use the tools to deconstruct a business with which they’re not familiar—from the company’s strategy, go-to-market models, customer engagement models, to human resources, marketing, business strategies, etc. They then use the same tools to analyze or deconstruct how they would go about redesigning or operating their law practice or in-house department. Using this pattern-based methodology, lawyers have the basic tools to understand fundamental questions and issues about the design and operations of a business in any industry, including the legal services industry. Again, my theory is that if we provide lawyers with foundational tools, their learning process will be exponential in areas that we have not had success in teaching at scale—commercial/business acumen, creativity, judgment, strategic thinking, etc.
I’m hoping that my work will prompt others to think deeply about transformation on the human side of the legal profession. For real change to take place, innovation has to happen at both the machine level and the human-capital level.
CEO & Co-Founder of ROSS Intelligence. International speaker on the subjects of AI, legal technology, & entrepreneurship and has been featured in publications such as The New York Times, BBC, Wired, Bloomberg, Fortune, Inc., Forbes, TechCrunch, the Washington Post, and the Financial Times.
The Altman Weil, Inc. 2018 Law Firms in Transition survey that was recently released contains a number of thoughtful insights including perhaps capturing the...
Law firms are facing greater competition in a changing legal market, but they’re still not doing enough to prepare for the future, according to...