Giulio Messori is CEO of Sweet Legal Tech, an Italian legal technology consultancy which helps law firms and legal departments to enhance their productivity through technology. He has managed numerous digital transformation processes, and shares his lessons-learned as our guest author for CLP InPRACTICE.
Lawyers of the 2020s are called upon, whether they want to or not, to deal with the disruptive event of technology. It's a new look in the mirror that revolves around a single question, one that other professionals in different fields (e.g. marketing, sales, procurement etc.) have already addressed: Is my work (still) efficient?
If it is true that technology, by its very nature, proposes to perform certain actions better and faster than before, lawyers cannot ignore the way in which this will change their profession. What is needed, then, is a method for understanding:
This article will consider just one of the possible methods for setting up a technological transition plan within a legal team, whether within a firm, a law firm, or any other institution that wants to understand how to change its legal processes. Please note that for the purpose of this article, we will define (legal) technologies as:
Applications and technological solutions, mainly in the form of software, dedicated to digitizing, automating, streamlining or simplifying activities and processes within the legal professions (G Messori, ‘Legal Tech’ in G Ziccardi and P Perri (ed), Legal tech dictionary. 584)
2. To change or not to change?
‘Why should I change?’ is the first Hamletian doubt that a legal manager faces. In some cases, change is required as a result of external events, such as the development of increasing competitive pressure from the market, or the risk that the firm will no longer be attractive to prospective clients, both in terms of offering and pricing. Such external events carry a potential risk of failure. In other cases, change is independent from external factors: the legal manager may wish, following an analysis of internal processes, to revolutionize the way things have been done to date, with a particular focus on technology.
It is clear however, that the difficulty in making decisions arises from the presence of uncertainty, which is often tied to the future of the organization. Questions such as, "will my team be able to work-from-home during the Pandemic?", or "will we be able to satisfy clients’ needs in time with the implementation of this new technology?", are some of the legitimate questions being asked by legal managers.
As a matter of fact, uncertainty means ‘limited predictability of a given system, whereby each decision has a range of possible acceptable outcomes. This implies the fundamental notion of the decision-maker's choice, which leads to the concept of responsibility’ (see Montefusco A., Change Management, Egea, 2011, p. 151). There is no doubt that the legal manager who decides to change must bear the responsibility for uncertainty over the future of the organization on his or her shoulders. This uncertainty curve, however, can be reduced and limited through the use of certain Key Performance Indicators (KPIs): numbers that are able to "photograph" a given situation and direct the decision-maker towards the main question: to change or not to change?
The first step in determining whether a change is needed is to choose the process, project or activity that is "in doubt," that is, the one that objectively deserves to be improved or changed, and to make an initial pre-assessment. In this article we will take as an example the drafting of a large and very technical document within a law firm, a Service Level Agreement (SLA), which the legal team (composed of 10 people) drafts several times a month for several clients.
In the pre-assessment, the key questions to be explored relate to the:
In our case, the pre-assessment questions could be defined as follows:
The description of these first qualitative elements then leads us to the definition of the quantitative elements: the KPIs. By its very nature, it is very rare (in the writer's opinion) for lawyers to devote time to measuring their activity through the use of data. However, it is still useful to try to collect approximative data, estimates that give an idea of the current process for carrying out the identified activity. In a process, such as drafting the SLA, for example, we can identify: the time spent for each phase; the number of people involved in each phase; the cost per hour of each person involved; the cost per hour of the entire process. These initial KPIs, if put in order, are already a first identification element which can be used by the legal manager to understand the progress of the current situation. It is here that the entrepreneurial component for legal managers resides. Where there is inefficiency (blocking elements, or atypical numbers that deviate from the reasonable expectations of running a business) there is a need to explore change, including the use of technology. So let's remember this point: inefficiency (demonstrated through qualitative and quantitative indicators) = exploration of change.
3. How to change? The path through legal technology
Exploring change means, first and foremost, establishing and managing a structured plan, which details the steps needed to reach an “ideal situation”. The ideal situation, moreover, must be able to be demonstrated through the establishment of new KPIs, compared to those identified in the pre-assessment (see previous paragraph). In the experience of the writer, change in legal processes can be achieved in two ways, which can of course be combined: 1) through the refinement and introduction of a new efficient working methodology; and 2) through the introduction of new technology. For the purposes of this paper, we will refer to both cases as the introduction of a new system.
While it is true that the introduction of a new system increases uncertainty, it is also true that the introduction of a new system highlights lack of knowledge and imbalance in corporate culture (the way a given process has been understood up to that point). There are some people who are particularly adept at processing change under conditions of stress and time pressure, while others are only able to adapt slowly. This is why the versatility and skills of the human capital that is part of the legal team is essential: the higher the ability to process change under stressful conditions, the more the whole organization will be able to come to terms with the legal change management plan in a productive and stable way. In this sense, we can no longer think of the lawyer as a professional who only knows about law. In the coming years, those professionals who are able to adapt, and manage to maintain the right mix of technology and process efficiency, will be at an increasing advantage.
In addition, it is also true that in some situations it is not enough to explain the change in a "rational" way: for example, why should I change my way of writing SLAs, which, until today, was done using the more common Word editors? Why should I opt for a contract automation system, starting from tomorrow? Some of the most famous scholars from the adjacent discipline of economics, demonstrated in the 1970's that human action does not seek an optimal result but a "satisfactory sufficiency" (See Herber A. Simon, Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization). In my experience, this is how we should approach change: as a structured plan, aimed at refining or introducing a new work methodology or a new legal technology, with the goal of creating a new ideal situation, not intended as a "perfect" result but as a "satisfactory sufficiency".
4. The legal change management plan
Learning is the only way through which individuals within the organization can return to a reassuring environment (which brings them back to the original situation of comfort, before the change) and which allows them to act autonomously (again). The change plan must therefore be organized in such a way that it promotes the integration of individuals’ learning processes together with the organization’s learning process. Each individual should be given an objective, an operational question (e.g. How do you normally draft contracts?), an operational answer (e.g. From tomorrow you could draft contracts using this contract lifecycle management solution) and a phase for experimentation and knowledge consolidation (e.g. the period from June 2021 to August 2021, within which you can explore the functionality of the system and raise concerns about its use).
However, people are not the only factor to be considered in a change management plan, which must be designed according to all the variables present in the legal team. More specifically, the:
Furthermore, a change management plan should also be composed of a framework that allows every user to understand:
With regards to the last two points, tools such as GANTT charts or AGILE Frameworks are useful for managing these tasks.
Finally, change plans often lead to discomfort. It is therefore helpful to anticipate criticism from those who will actually go through the change from the start. A brainstorming session on the possible criticisms will help the legal manager to respond in a timely manner and avoid situations of non-constructive conflict.
5. Concluding Remarks: confronting results with the help of legal KPIs
Once the legal change management plan has been deployed, it is often useful to test the newly introduced system periodically, and this should be done with the same KPIs that have been identified at the beginning of the process (plus any additional new ones which become relevant). As efficiency must be maintained over time, it is essential to embed this data-driven approach in one’s legal organization. Whilst this highlights the problem of constantly recording the data entry activity of team members, it is part of the methodological and behavioural change needed to accept the value of data-driven and process-orientated change.
If you wish to explore the work we have done in integrating technologies and helping legal teams to manage legal change management processes, please do not hesitate to contact me at giulio(at)sweetlegaltech.com.
Giulio Messori, CEO, Sweet Legal Tech (sweetlegaltech.com)