The future of legal departments will depend on the increasingly important roles of legal operations directors and chief operating officers of legal departments, according to author Richard Susskind, who has written several books on the future of legal and professional services.
Susskind, a lawyer and visiting professor at the University of Oxford, will be speaking at the Corporate Legal Operations Consortium annual institute from May 9 to 11 about his book “Tomorrow’s Lawyers: An Introduction to Your Future.” The book, first published in 2013, is launching in its second edition at the institute.
He recently spoke with reporter David Ruiz about what’s next for legal operations, technology solutions of the future and why, in his view, the head of legal operations will play an important role in the development of legal services.
David Ruiz: What is the biggest emerging trend you’ve seen in legal operations in the past few years?
Richard Susskind: The emergence of the chief operating officer, the director of legal operations, a whole bundle of different titles…. The recognition that operations, innovation, technology and procurement should actually be the responsibility of an identifiable individual, rather than part of the portfolio of the general counsel. I regard the chief operating officers [of legal], as a consortium, as a community, [as] more influential than the rather scattered community of GCs that we had three or four years ago [handling legal operations for their companies].
… Another trend I’ve seen amongst these chief operating officers is the recognition that even in the world’s most complex deals and disputes, even in the highest-value legal matters, when you break down these matters into identifiable tasks, you find that a lot of the tasks involved are actually themselves quite routine and repetitive. That’s where the real savings are to be made. Routine work comes in two shapes and sizes. It’s high volume, low value, and it’s also the elements of complex work that can be taken out and done differently.
DR: What effect will the future of legal operations have on all arms of the legal industry, including law firms, legal departments and third-party service providers?
RS: From the supply side, we’re going to see, as we’re already seeing, the emergence of new players in the market. For example, the Big Four accounting firms are very committed—less in the U.S., absolutely, [for] regulatory reasons—but around the world. If you look at PwC [PricewaterhouseCoopers ] for example, they’ve already got three-and-a-half thousand lawyers in 90 different countries. So, on the supply side, you’re going to see major new players in the market, providers.
[There is] another category of providers: the legal tech companies. In a couple of years we’ve gone from having a few hundred around the world to having a couple of thousand, and every one of these legal tech companies is trying to do to law what Amazon[.com Inc.] did to bookselling. The pressure that legal operations people are going to bring to the marketplace, as well as the opportunity, will create a market in which traditional law firms will no longer dominate. And already we’re seeing this with legal process outsourcing, but that’s an early example.
On the buy side, this new competition will bring costs down and that is absolutely vital. Secondly, it will actually increase quality, because I think people are going to be more process-oriented, more project-management oriented, more technology-oriented, so we’re going to see an increase in the consistency and quality of the work. Basically, the arrival, in my view, of the chief operating officers in the legal world is essentially a key step in the maturing of the legal market.
DR: Is there a road map for those who want to survive or thrive in the changing legal industry?
RS: Two years ago, I published a book with my son who is an economist, called “The Future of the Professions.” In it, we looked well beyond law.
We looked at the world of medicine, we looked at education, we looked at tax, we looked at audit, we looked at consulting, journalism, architecture, as well as the clergy. Of all the areas we can learn most from—it’s probably tax.
You can divide tax into two very broad areas. There’s the compliance work, which is essentially about the submission of tax returns—the routine work—and there’s the planning and advisory work, which is more complicated. What we have seen over the last 10 to 15 years has been a transformation in compliance, a move from being a traditional handcrafted, what I call a bespoke service, to being highly automated. One only need look at the evolution of tax to see how it is that law might evolve. And now they’re turning to the more complex work—the advisory and the planning work—and identifying the components that can be subject to automation.
You can also learn a lot from medicine, for example, in the way that medicine embraces technology. In dermatology, say 10 years ago, dermatologists were looking at suspect moles through a fairly traditional magnifying glass and then came along the Dermascope, which is a very powerful magnifying glass. That’s automation of the traditional process. But if you look in Nature, you’ll see an article a couple of months ago showing that AI techniques based on machine learning have actually led to the development of a diagnostics system that outperforms the best dermatologist.
DR: What is the Dermascope of legal operations?
RS: The Dermascope was simply an example of magnification. It was a complimentary technology. That seems to me to be the same level of basic document automation, document review in litigation, due diligence. These are using the technology to do complex and large tasks more easily. What we haven’t yet got is, for example, automated risk management systems, which will identify potential problems before they arrive …We need to move from reactive lawyering—where the problem arises, we sort it out—to systems that actually are [engaged] in real-time monitoring.
DR: How far away are we from an AI-type system that can, for example, in real time, analyze a company’s new business vendor contracts in a new country and present information about said country’s record on supply chain disclosures or its history of settlements over bribery and kickback schemes?
RS: This is something for the 20s. It’s not something for the next couple of years.
DR: What is the future of the legal operations director?
RS: Their role is very interesting, because, in a way they’re what I call the process analysts. Their role is to assess the legal needs of an organization and ensure that these needs are most efficiently and effectively met. What they therefore need to do is ask the question: ‘What legal resources do we need to service the needs of this organization and to manage the risks of this organization?’ Historically, the answer to that question was: ‘Well, we need some lawyers within the organization, and we need some external lawyers.’
What we’re now seeing is there’s a whole bundle of new providers, basically cheaper people, and there’s a whole bundle of new technologies, legal tech organizations. The pivotal role that the [heads of legal operations] will play is analyzing, mapping and understanding the legal needs and then identifying the best way to source that. In some organizations, it’s entirely predictable that far fewer lawyers will be needed. It’s entirely predictable that you will have paralegals. It’s entirely predictable that you’ll not be using law firms but other types of providers, technologies.