Engineering and legal advice – a contradiction or are law firms entering the next level?
It has been almost twenty years since one of the world’s largest automobile manufacturers published its recipe for success: customer centricity and a culture of continuous improvement, teamwork and respect. “The Toyota Way” is still considered the gold standard for a process improvement culture and laid the foundation for modern working methods in many industries. The legal sector, currently growing into the agile world, is no exception to this – especially in light of the growing demand on law firms to offer, in addition to best-in-class legal advice, more innovative solutions to their clients. Therefore, applying engineering methodologies to legal advice is a growing trend and a promising approach for law firms who continuously wish to improve their services and products.
Nevertheless, before I applied for a Continuous Improvement job at one of the leading law firms, I must admit that I had to google ‘Clifford Chance’ first. As a biotech engineer working as a business excellence manager in the pharmaceutical industry, I did not associate law firms with process improvement or agile working methods at all. This may be one reason why I was surprised to learn that law firms are facing similar challenges to all other industries. Despite my initial prejudices, I was all the more pleasantly surprised to see how innovative the firm already was in dealing with those challenges. However, when you reflect on it, it is not at all surprising to see law firms facing the same challenges as other industry players. Challenges such as increasing cost and competitive pressure, digitisation, market differentiation or sensitivity to customer needs are logical effects of the technological revolution and the globalisation of markets. It is probably safe to say that these challenges are facts and will not go away – they need to be solved, and that in turn requires changes in the established ways of working and thinking. The only question that remains is how well prepared law firms are for these inevitable changes. In this respect law firms seem to adapt slower than others. Does this mean that other sectors such as tech or manufacturing are more agile and quicker in changing than law firms? Yes! Does this mean that law firms are behind? No! Why? Because demand determines supply. It is precisely this demand that has increased in recent years and is now calling on law firms to be more efficient, customer-centric and innovative in providing services. Consequently, now is the right time for law firms to adjust their way of providing legal advice.
Excellent legal advice will (have to) encompass end-to-end solutions for clients
Experience shows that some moves which were initially considered to be innovative, such as Legal Tech, will no longer boast a good enough unique selling point. For example, Legal Tech tools alone do not provide a satisfactory response to the need for more efficient service delivery and are therefore no longer a differentiator but have become an expected standard. A clear differentiator, however, which is becoming more and more important is a deep understanding of client needs and agile processes that can adapt to these and offer fit-for-purpose solutions – with Legal Tech tools being just that: supporting tools. The same is true for other, formerly stand-alone topics such as Legal Project Management, Knowledge Management or Alternative Pricing Concepts. This means that excellent legal advice will encompass end-to-end solutions for clients with all the functions mentioned as an interlocking organisation – it goes without saying that first-class legal expertise forms the basis of the entire package. The reason I ultimately joined Clifford Chance was because the firm clearly understood these needs and the potential for new ways of working to improve the way legal work is delivered. The firm is heavily investing in process innovation, project management, lower-cost centres and technology solutions to evolve its services to clients. The result is an ever more robust, consistent, efficient and forward-thinking approach – an end-to-end approach that was poured into a program called Best Delivery a few years ago.
Continuous Improvement – the magic formula
What does all of this have to do with engineering today? The answer is Continuous Improvement (CI). Continuous Improvement is a vital part of Clifford Chance and its approach to improving client and internal customer experiences and streamlining the legal processes within the firm. Continuous Improvement is a philosophy that puts the client at the heart of everything, so that our people, lawyers and non-lawyers alike continually ask what is in the best interests of the client and design their process accordingly. Within the CI program, we use elements of the Lean Six Sigma toolkit to map out the way in which we deliver most common legal work types, because we recognise that process improvement techniques can be applied to any work type in any industry to increase the efficiency of the service. In practice, it means that we invest time thinking about the way in which we work and challenge ourselves to ensure that we are delivering what our clients need in a cost and time-efficient manner. This approach is highly interactive, inviting clients, lawyers, transaction lawyers, legal project managers and business professionals alike to map and analyse the way we work in collaborative workshops. However, like Legal Tech, Continuous Improvement is just a tool. What really matters is the added value for our clients. This means a holistic, end-to-end view of the entire value chain of our service offering is required to be in a position in which we can develop and deliver truly innovative solutions for our clients. Taking such a view of our services proves the point that partners, associates, transaction lawyers, business development managers, pricing specialists, legal tech professionals, IT experts, legal project managers and Continuous Improvement people are each only one part of the solution and that in turn no value-adding solution can be developed with one of these parts missing.
Innovation & Best Delivery Hub: Where it all started…
To remove barriers and to accelerate the development of such holistic solutions for our clients, Clifford Chance founded its award-winning Innovation & Best Delivery Hub last year. The Hub sees itself as an integrated innovation, digitisation and Legal Tech centre for building and realising new ways of thinking, methodologies, technologies and products. As a stand-alone program and by providing a physical space for a permanent core team with all the above functions, our Hub goes even beyond other known frameworks in engineering such as think tanks or scrum teams. Opening the Innovation & Best Delivery Hub in our Frankfurt office as part of Clifford Chance’s global hub network, we were the first to implement such a truly innovative and diverse concept. Having created our Hub, we now see a change of perspective and the transition to a “Service-as-a-Product” offering as an imperative next step for us as a firm, but also for other law firms. To an even greater extent, such a perspective will place the needs of our clients at the centre of everything we do with the goal of bundling our legal services into marketable products. Together with an agile framework like our Innovation & Best Delivery Hub, we are able to develop stand-alone and frictionless legal products.
First stop: Digital M&A process
One good example of this approach is the development of our digital M&A diligence product. In one Continuous Improvement project, a team of Lawyers, IT specialists, experts in knowledge management, transaction lawyers and legal project managers from various offices met in our Frankfurt Innovation & Best Delivery Hub to optimise the M&A due-diligence process based on client feedback. Applying the Legal Design Thinking method, sub-teams took a closer look at the various steps of the process, focusing on issues and weak points, and designed a new, more fit-for-purpose solution. Significant efficiency potential was uncovered in the context of M&A due diligence processes. Together with Thomson Reuters and our cooperation partner for KI, EVANA AG, the first step was a cross-interface data transfer from software to software, a KI-based evaluation and the automated transfer of the findings into report format. In a final solution map, several solutions were visualised, assessed and refined. The result is our digital M&A process, which replaces inefficient process steps with digital solutions and will soon be able to be offered as a stand-alone and end-to-end legal product.