GCRC Interview: Larry Bridgesmith from ERM Legal Solutions

Our latest interview on GCRC is with Larry Bridgesmith, Chief Relationship Officer at legal project management specialist company ERM Legal Solutions and Adjunct Professor at Vanderbilt University School of Law. Larry has over 30 years experience in the practice of employment and labor law and he now provides counsel, education and legal services to various clients and young lawyers. Speaking at conferences as well, Larry is at the crest of a wave of lawyers heralding the emergence of what Richard Susskind would call ‘the new norm’. In our interview we discussed this emerging transition in the legal profession, touching on the political landscape within which the law is changing, legal technology, and legal education among other things.

At ReInvent you talked about lawyers entering an age of transparency, collaboration, technology and parity. Technology is a recurring topic here at GCRC. How much are the other three facilitated by technology?

That’s a great question and I think it is technology that is the facilitator. When I speak of parity I’m also speaking of the decline of hierarchy which is only sustained by secrecy – you can only really be in power over others if you maintain some degree of clandestine knowledge. As we’ve seen, technology changes the way in which our culture functions and really the advent of the internet and the access to it through smart phones, all of those things have lowered the hierarchy and brought about greater parity.

Just watching that rollout in Egypt beginning today (03/07/13) – it wasn’t that long ago that a dictator was brought down and with the ensuing democratic election, we were watching the power of the internet and the ability to communicate, protest at the ground roots, and that has really changed the dynamic of politics.

To answer your question specifically, technology makes accessible, and transmits broadly, information in real time, and those are the things that bring down hierarchy, or flatten the earth as Thomas Friedman would say. In like fashion the ability to communicate with peers now creates a collaborative environment and that is the essence of transparency. I don’t think that any of those three pillars that you mentioned could be possible without the incredible advances of technology.

How much is the growing demand for transparency to do with the growing accessibility that clients and non-legal civilians have to legal information online through the internet and how much is it to do with a distrust of the legal profession?

I believe secrecy is exactly the reason that there is so much distrust. I have practiced law for over 30 years, and I still love my profession; I’m not anti-lawyer at all, I just think we’ve lost our bearings. When I entered the profession a trusted advisor or a councillor of law was the common vernacular for the relationship between client and attorney but that has now changed and denigrated over time in large part because of the secrecy over what lawyers have done and how they have served their clients and delivered their services. When I first started it was not uncommon for an invoice to go to a client that simply said the services rendered with a number – an amount to be paid. That didn’t represent much other than an expression of trust that the lawyer was doing all but no more that served the client’s best interest.

Corporations in particular have known over the course of their existence during my career that you can’t always trust what someone represents. It’s corporate initiative, as the purchaser of legal services, that has driven the transparency demand. If a corporate client can add real-time instantaneous transparency into the matters which are being performed on their behalf, that would rebuild the trust so that right down to the basic level, technology can allow the client, if they have the requisite amount of leverage with their lawyer, to insist on greater information in real time as to what they’re doing and sometimes before they do it.

Anticipatory sharing of information will rebuild trust and that is the transparency that clients expect and are entitled to. It is only with the great recession that corporate clients now understand that they have the leverage to insist on that and you’ve heard, as I have, that figure which says that over 200 companies are presently responsible for purchasing 80% of the legal spend in the world. If anything remotely like that is true, then legal departments are running the legal business model and also the legal services model that their firms are providing them. It’s a remarkable time.

Central to the distrust of the legal profession is hourly billing. There are technologies that can now track billing, making billing more accountable and transparent. How much is the legal profession’s reluctance to become more technologically minded to do with the desire of law firms to keep hold of hourly billing?

The resistance to changing the billable hour model is probably greatest where the law firm feels the market pressure the least. There are still going to be pockets of resistance, probably at the very top-end of the legal profession where in “bet the company cases” it really doesn’t matter how much is spent because its life or death for the client. Therefore as a client you’re not going to question the spend, you just want the job done and you go to the best you can to do it. There will always be that high-level of price insensitivity. Then at the other end, the less sophisticated the client, the less pressure there will be to abandon the billable hour.

That issue of price predictability is one of the things that is driving this change and that means, unlike in the prior business model where the billable hour was the means by which everything was measured, both law firm budgets, lawyer reputation as well as compensation, the fact that you could simply increase your hours without considering the consequences of cost has generated a significant amount of wealth. But now clients are saying we no longer want to bear the risk of a budget overrun. It’s good to have a budget with an expectation of price but we want price certainty – you tell us what it costs – and the law firm, in many cases, is expected to bear the risk of a cost overrun.

That’s a radical shift in the way in which billing has taken place over the last few years. To the point you just referenced, if legal departments within corporations can shift that risk back to the law firm instead of bearing it themselves, they’ll do so. That’s why we’re having such a vibrant conversation about pricing in the legal community because the larger the client, the more insistent they are that pricing be fixed as opposed to open-ended.

In-house lawyers, we believe, can drive a change towards using technology in this respect but also in a wider way. We believe they have to because, as Rob Thomas told us recently, in-house lawyers are required to “operate the law department like a business unit”. Do we need more business-minded lawyers to drive the change towards faster technology adoption in the legal profession?

That is a trend and I believe that in-house lawyers are being driven by their in-house clients. By that I mean the law department is there to act as an in-house firm there to meet the needs of the operational clients, departments and executives within the corporation. The difficulty in the recent past has been that most in-house lawyers have come from outside. They’ve gained their skills and honed their craft in outside law firms. The culture that many lawyers have brought to the job inside the corporation comes from the culture they were familiar with in outside law firms. As a result there has been much resistance within legal departments, until very recently, to change the billing model to something that they have little experience in.

They knew how the billable model worked and therefore they were willing to live with it as the means by which they served their client, their in-house owners and executives, because they felt they could manage the way they had in the outside law firm. That’s changing radically. The reason for that is the pressure from the in-house department to the law firm to do business the way the corporation does business. The in-house lawyers are now talking about things like process improvement, quality management, project management and the tools that businesses have been using for decades to run their businesses efficiently in a global economy. It’s taken longer than I think it should have, but legal departments are now talking and walking the walk of business management in terms of legal services.

Various office technologies help lawyers towards improving all-round as workers in the company and lawyers, and there is also the emerging world of automated legal services. ERM deal with automated legal project management. How does this work?

Well, technology again is the equaliser. Lawyers have grown too fond of billing time for processes, which technology is far better at serving, rather than practicing law. An example is the process by which many litigation firms grew wealthy, by training lawyers in how to manage discovery in a litigation case, and it was not uncommon in the past for a law firm to dedicate a large number of young lawyers to go through large mounds of paper to find documents that are relevant to a particular piece of litigation that should instead be found in discovery. The cost was horrendous and that’s a process that technology can do far better, far cheaper and far more accurately than humans. So the whole industry of e-discovery arose which was driven by technology and took the processing of discovery out of the hands of professionals and allowed technology to do it more efficiently, more accurately and more cost-effectively.

There are numbers of other processes that lawyers are fond of thinking of as the professional practice of law. I’m a litigator. My career has largely been in the management of litigation matters, cases, filed against employers in employment related complaints and it dawned on me well over a decade ago that there is a lot of process in the management of a piece of litigation. Every litigation is different without question. But the processes and the pattern of every litigation is pretty much the same. You follow a series of phases, each of these phases has discrete elements, sometimes you do more or less than in another case, but when you can begin to see your project as a process, you begin to understand the power of project management.

The irony is that while lawyers have been saying the process of law is too complicated – there are too many variables, too many uncertainties, you can never reduce it to a process – well the same can be said for many other human achievements such as launching satellites into space and building skyscrapers. There are enormous variabilities in every one of those projects, but they’re all managed very efficiently so that they are brought in on budget, under time and with quality through project management. Once it occurred to me that it the same approach to very complex human problems could be applied to the practice of law it was like the light bulbs went off.

Once we begin to manage our legal matters, whether that’s litigation, transaction or very very simple matters, like a process we can improve our productivity rapidly by using the techniques of project management. Add technology to that and technology can take a great deal of the processes out of the hands of the professional giving the professional far more time to do more professional practice, enlarging their capacity to service clients, and that’s the dynamic that has been slow to dawn on the legal profession, but the time has come and that time is now.

So this is a service that will make lawyers’ lives easier and more productive, and yet they don’t want to use it. Why?

It is bizarre and I think its borne out of fear. The fear comes out of the reality that you can’t know what you don’t know. Lawyers may think that the only way to increase value to the firm, their family and to the people they support is through higher revenue gained through more time spent on the projects. It may be really difficult to understand that is only one dynamic. However, there is another reality which is may be more economically viable and sustainable, that says you can actually improve your value to your client, to your firm and those you support by increasing your efficiencies in your projects thereby getting back more time in each day. You can spend that time doing more work, if that’s your desire, or to spend more quality time in a life that’s largely out of balance, with family and friends, in relaxation, and making yourself more completely functional as a human being. You can actually get that time to invest in other pursuits and if you’re driven by more work and more business you can apply that extra time to that, just as much as you can to visiting the pub, if that’s your choice.

This may tie into Susskind’s quote, “it’s hard to convince a room full of millionaires that they have their business model wrong”. Are we getting to a stage where we can say, “it’s easier to convince a room full of millionaires that things are inevitably going to change”?

I do believe that’s true and they’re saying so themselves. There are a number of indicators out there that even the millionaires realise the goose has been cooked. Therefore there is a limited number of golden eggs to be harvested by the old model. A number of things I’ve said have supported that. For one, the former notion that the magic circle, or however you want to categorize it, the largest and most successful firms, are contracting and constricting and they acknowledge that there is a scarcity of legal work available for them to continue to justify their high-profitability.

More recently in the US, the Weil, Gotshal layoffs are a stark reminder of the new normal. Of all firms, that’s an invincible firm. How on earth can a firm as big as that be suffering economic decline unless the market’s contracting? I found it fascinating that the reason they had to reduce their numbers of attorneys and reduce their compensation to partners and to layoff so many support staff because of the “new normal”. I think Richard Susskind is responsible for injecting that into our vocabulary – it has arrived, it is here.

So now the invincible firms have begun to constrict and the leaders of firms acknowledge that the situation is not going to go back to what it was prior to 2008. They also acknowledge that they don’t know what to do about it as was evidenced by the recent Altman Weil survey of law firms in transition which is just a month or so old. That’s a perfect situation for innovation.

A key theme that is emerging in our interviews about the law is the concern over legal education, namely that future lawyers are not being sufficiently prepared for the changes going on in the legal world. You’re involved in legal education yourself. Do you share this concern?

I believe that’s very true. I’m really grateful for some of the innovative legal educators out there such as Dan Katz and Renee Knake at ReInvent. They aren’t alone. They are certainly leaders in a movement to re-energize the education of lawyers, which is currently unsustainable as it stands today. The education of lawyers has to find a new way to serve the market that it seeks to serve and I firmly believe that there are going to be law schools, at least in the US model, emphasising more the educating of skills of practice for lawyers who graduate.

There was an initiative that I read about today (03/07/13) that the American Bar Association is initiating which was an effort to redefine the core competencies that the ABA, which accredits law schools and oversees them, will expect out of their law schools. It’s not unlike the recent UK legal analysis undertaken in respect to its legal education model as well. All of that says there is an enormous amount of inquiry and interest in revising the way in which we educate lawyers. I think that too is going to be driven by the economics of the market place.

In the US for example, the history has been, and it hasn’t changed much at all, that about 45,000 lawyers are graduated from law school every year and the market cannot accommodate that level of new lawyers if they’re seeking the same kind of law that my generation sought – practice in law firms for example.

So Dan Katz, Renee and the ReInvent initiative, as well as Richard Susskind, has reminded us that law can be an incredibly valuable asset in a wide variety of career paths, so that the traditional practice of the law need not be the only thing that law school graduates expect. In order to have a group of systems analysts with legal training, or computer engineers with legal training, all of which can bring to bear on the legal industry the same level of innovation and creativity that those skills have bought to other industries already.

So, thank you to Richard Susskind for changing my pessimism about the future of law, but I believe that young people that are innovative people can take these skill sets, combine them, and make a new career path. It won’t be found in a book or in the career planning and placement office as a career path to choose, but bringing those skills to bear and combining them with a legal education really can provide a lot of opportunity.

But to your point, the law schools that are going to continue providing the best and the brightest are going to have to change the way they educate lawyers in order to help them become more equipped to pursue whatever career they choose. If they don’t, this level of supply is going to winnow out the weakest law schools in terms of equipping students to actually succeed in their profession and there will be fewer of them; those that will survive will be those that change in order to supply for a greater set of relevant skills.

So it’s as important to be an entrepreneur in the legal world now as much as it is in other worlds?

I believe that to be absolutely true and again. Dan and Renee and that whole movement, with Richard Susskind, remind us that innovation and technology and entrepreneurialism go hand in hand. Unfortunately the history of legal education has been far more theoretical and far less focused upon the economics of commerce and I see that changing. I see law universities beginning to offer in some cases joint degrees with their business schools so that graduates leaving law school with a business education are far better equipped to move into commerce and are therefore more helpful. I also see law schools adding to their curriculum, courses like project management and eDiscovery and finance and entrepreneurialism. It’s a slow and steady movement but one that I will think will grow as the best and the brightest will be attracted back into the law by these opportunities to achieve whatever it is that they believe they need to do in their work world.

We read on the Economist earlier this week about e-Learning, especially adaptive learning softwares, as already revolutionizing the way education is done. Are we at a stage whereby there is no excuse for ambitious lawyers not to learn new skills through these new learning processes?

I agree. There are just too many opportunities to acquire the knowledge and even if a law school is highly ranked and therefore feeling fairly impervious to this economic pressure, if they continue to graduate lawyers in the traditional theoretical sense and expect those lawyers to go elsewhere to acquire the skills of practice, then as you suggest, there are innumerable ways in which that can be done now. To see the power of eLearning, I wouldn’t be at all surprised to see massive online courses that are designed to educate people with other career steps and skill sets in law and vice versa.

In the US there are even law schools that are offering a non-licensed path so that in a year someone who might be an engineer or finance executive or whatever their core training might be, can enroll in law school and can be educated in the domain of law, with no intention of ever licensing or practising law, but providing them an essence of how law works in their world. I see law schools rising to the challenge of helping educate the more generally educated public, or more specifically educated professionals, in how the law interacts and intersects with their world.

I guess I go back to those four pillars we began with and one of them is the collaborative concept that I think is really taking over our culture and our commerce, in which multi-disciplined learning and multi-disciplinary career paths are opening up so that the best and the brightest, those ambitious students or practitioners, have no excuse not to acquire the skill sets to accomplish whatever it is they desire to do in their career path.

About William Barns-Graham

William is the content manager and head of communications at GC Research Club. He is a professional journalist, researcher and strategist. He has worked at GC Research Club since February 2013 and has rapidly become a distinguished voice in the in-house legal blogging community, writing on Lexis Nexis and interviewing leading legal thinkers and writers, in house lawyers and CEOs within the legal tech world. He has also coordinated the GCRC Sports Panel series.
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