The Legal Update

Last week, we joined two different online events that tackled the impact of COVID-19 and the future of the legal profession from different angles. The first event, focused on law firms, featured Mark Cohen and Richard Susskind in a LegalGeek webinar, while the second was organised by Ari Kaplan with Bob Ambrogi as guest speaker in a relaxed lunch & learn format. What did we learn?

#1 Tech is every legal team’s best friend

It’s a fact: the legal workforce has become a remote workforce in the span of a week. All over the world, legal teams have had no choice but to adapt to lockdown restrictions forcing them out of office buildings. As Robert Ambrogi recently wrote, the speed at which lawyers were able to get up and running outside of their office was staggering with 90% of lawyers making the transition in a week or less and 46% in a day or less. For in-house legal teams already using Microsoft tools, Microsoft Teams has become the go-to meeting spot while others have jumped onto the Zoom or Google Meet bandwagon.

However, tech adoption hasn’t been equal everywhere with in-house legal teams leading the tech revolution and law firms lagging behind, despite claims to the contrary. As a general counsel said, “we’ve worked with legal clients for 25 years, and the gap in understanding remote working communication technology was already widening in the past 5 to 10 years. [The Covid crisis] has just sped up the mindset shift from those who were already starting to embrace technology. The shift has now moved from accepting that the tech is required to understanding how best to integrate it over the longer term with support.”

Whatever the tech solution, the number one take away from the crisis is that latent technologies already existed to collaborate in new ways and have enabled us to understand that traditional models are no longer necessary. Lawyers can work remotely in an integrated fashion. The nature of legal practice has changed to the extent that it could possibly be malpractice to not be technically capable, as tech access, data security, data movement, etc are all part of modern legal services.

#2 Medicine and law may have a lot more in common than previously thought

Ultimately, law is the business of knowledge, much like medicine is the business of health. Like lawyers, doctors were hit full force by the COVID-19 tsunami and remote medicine became the new normal but that is not where similarities stop. In an analogy with the medical sector, Ari Kaplan argues that the legal system needs to move on to a triage system where when you have a problem, you don’t start with a specialist. In medicine, you start with a GP and then move onwards. We might be headed to a legal ecosystem of tools that will help companies sort out more of their own issues, have access to more standardised processes and involve fewer lawyers doing the work.

For Mark Cohen too, the current legal business model is outdated and legal buyers have access to more information than ever before. In the future, law will be a marketplace where it won’t be about pedigree or brand or Oxbridge or Magic Circle but about competency, metrics of customer satisfaction and skills. Taken a step further, this model means that legal buyers will eventually not need legal practitioners to be licensed. Not all future practitioners will be certified lawyers and that is a good thing. If GCs are buying legal knowledge, do they need a qualified solicitor when a legal engineer can do the job as efficiently?

Inevitably, this will reshape the landscape of legal education and training. Up until 20 years ago, legal expertise was the only thing that lawyers needed to succeed. Today, lawyers need augmented skills such as project management, understanding of supply chains, basics of data management and analytics. Lawyers have to be able to read a balance sheet. In addition, they need to master the basics of technology and understand how tech is used in the legal marketplace.

The lawyers of tomorrow will be tech-enhanced multi-disciplinary advisers, which gives a big leg up to millennials and Gen Z who choose virtual environments wherever possible and who as digital natives, are already comfortable with tech
. As Mark Cohen once said, law is not about lawyers anymore but about legal professionals.

#3 Pricing, pricing, pricing

For law firms, the billable hour is the biggest part of the business model that needs to change. Robert Ambrogi went as far as saying that it’s the greatest obstacle to innovation in law firms as it’s founded on the premise of inefficiency.

  • Most participants agreed that restructuring fees would be an opportunity for tech-savvy lawyers who would be able to create digital offers and reach their clients more efficiently.
  • For the time-being, law firms should be putting out COVID-19 pricing or flat rates during hard times.
  • Past the COVID-19 crisis, lawyers would start charging based on the result delivered. If clients are charged for value delivered, it doesn’t matter where the work is done or how long it takes.
  • Others suggested rendering legal services by subscription as a way to offer “more for less” legal services.
  • For multi-month contracts, legal suppliers could offer a flat, monthly retainer that makes it easier to plan and budget for clients, while realigning the focus of suppliers on deliverables.

#4 Law is a buyer’s market

According to Mark Cohen, “consumers are now driving the legal bus and that will accelerate post-covid.” For a few years, GCs have already been experiencing the future of legal with the “doing more with less” challenge, adhering to budgets and considering where they buy their legal services. Until now, long relationships forged between traditional legal providers and companies have somewhat shaped legal buying but with stricter budget controls, clients will realise that they can get the same value from a range of different providers” ie Big 4, companies like Obelisk Support, managed service providers etc.

The COVID crisis is effectively empowering big corporations to set demands and we recently saw an example of that when BT announced to their legal panel that they would look at things like expertise, experience, culture, approach to innovation, and diversity and inclusion to select their legal suppliers. In incentivising the panel firms to adhere to the principles of a charter signed by the client, BT is forcing cultural changes within their supply chain.

#5 Metrics vs Values

Based on Mark Cohen’s observations on US law firm culture, metrics like profit-per-partner (PPP), profit origination are the measures of success and drivers of law firm culture. Law’s scorecard in how it treats its own profession is currently very low – including higher rates of suicide, divorce, drug abuse, and alcoholism than many other professions. Every metric of despair points to the fact that lawyers are doing well financially as a group but yet they’re not very happy.

Yet in the UK, pointed Richard Susskind, there is a growing concern about profit versus purpose. This COVID-19 period is a fundamental challenge to values. Law firms that responded in the first two weeks saying they cared about people and two weeks later, fired them, will have a problem. They’ll be seen as purely profit-making companies.

The virus has given us an opportunity to look at how legal services can be delivered differently and that is the greatest impact of the virus on the legal world. The crisis offers an opportunity to step back and contemplate what’s important to us, noting that it’s hard to change values as you move along. 
Sooner than later, vendor profiles won’t just include security profiles and corporate history. Clients will start asking about in-depth work from home measures, commitment to gender and diversity equality, as evidenced in the report Built to last? A blueprint for developing future-proof in-house teams.

Making Work, Work

On Tuesday June 25, 2019, the Academy Awards of the legal industry, aka The Lawyers Awards, took place at the Grosvenor House Hotel in London. Obelisk Support was shortlisted in the Excellence in Diversity & Inclusion category and we were particularly impressed by the winning entries in the in-house category. Via Obelisk’s legal blog, The Attic, we contacted some of the winners of the In-House category to learn about their secret recipe for legal success – and congratulate them along the way.

General Counsel of the Year: Tess Bridgman, Cory Riverside Energy Group

Tess Bridgman, general counsel and company secretary of recycling and waste disposal firm Cory Riverside Energy Group, won the much-coveted title of General Counsel of the Year 2019 thanks to the impressive evidence of technical, leadership and strategic excellence at the heart of a complex and business-critical project she led. Indeed, Bridgman has been right at the heart of the action at her company’s most significant steps forward in recent years. In 2018 the company was acquired by a consortium of infrastructure investors and in 2019, it went through a major debt refinancing.

Aged just 34, Bridgman helped steer one of the most impressive turnarounds in the market, transforming Cory from an over-leveraged, distressed conglomerate into a focused and profitable infrastructure business aimed at serving Greater London. In parallel, Bridgman changed Cory’s in-house team from a siloed structure to a department that is now considered not just an enabler, but also a creative leader of change.

Tess Bridgman shared the following with us. “Winning the General Counsel of the Year award means a lot to me, topping off an incredible three years at Cory Riverside Energy. When I joined, the company was undergoing huge change and was undertaking multiple complex transactions simultaneously. With no prior GC experience, I was really thrown in the deep end and am so proud to have come out the other side with this award. This is not something I could have done, however, without the incredible wisdom, support and challenge that I received from my colleagues and advisers.”

“To be a great GC in today’s world you need to be more than “just the lawyer”. It is beginning to sound trite, as I know GCs and in-house counsel have been saying this for some time now, but the role is about being a truly trusted adviser to the board, the CEO, the senior management team and, effectively, the whole business. It is about taking a leadership role in influencing the strategy and direction of the company and / or major transactions, and taking the skills learned as a lawyer and applying them to situations that may not, on the face of it, be “legal” (for example, the ability to synthesise complex issues to enable clear commercial decisions to be taken; or the ability to project manage). Success requires an enquiring mind, and having the confidence to ask questions or speak up and make a stand on issues that matter – whether these relate to matters of commerce, governance, sustainability, diversity or any other important issue facing your organisation. It requires energy, to manage multiple issues and projects at one time, and determination and empathy, to lead and influence others and navigate multiple and varied stakeholders.”

Fittingly, Bridgman is also a strong voice for female leadership – no doubt inspired by her ancestor, New Zealand suffragette Kate Sheppard who led the women’s campaign for women’s votes in 1893.

In-House Commerce and Industry Team of the Year: Post Office

For state-owned company the Post Office, the biggest challenge has been to become a commercially sustainable business and financially independent of government funding. It goes without saying that its legal team has been busy, winning In-House Commerce and Industry Team of the Year thanks to their hard work in modernising the Post Office as a business. In the last year it has overhauled its panel, created an academy to upskill its lawyers and created new procedures to streamline the contract approval and legal risk management processes.

A Post Office spokesman shared the following with us: “We’re delighted and proud that the Post Office’s legal team has won this award following a year of supporting the business during its continuing transformation.”

“The team’s achievements include supporting major Post Office strategic initiatives such as its acquisition of  Payzone Bill Payments and the negotiation of a new agreement with major high street banks for the services provided on their behalf through Post Office branches.”

“At the same time, the team has implemented changes to increase efficiency and value in managing the broad range of business matters it is required to support.”

In-House TMT Team of the Year: Farfetch

Fresh from winning Luxury Deal of the Year and Luxury Business In-House Legal Team of the Year at the Luxury Law Summit in London in April 2019, the Farfetch legal team wins TMT Team of the Year thanks to how they supported a period of fantastic growth for the company, culminating in the NYSE listing in September 2018. The legal team was also commended for their ‘keeping sane’ approach to procuring external counsel assistance.

The legal function at luxury fashion tech platform Farfetch was set up just five years ago, and has been at the centre of the company’s strategy and operations for all that time, advising the business through super-charged growth. 2018 was truly a year to remember; it achieved a US$5.8bn listing, a group re-organisation including a new holding company in the Cayman Islands, the acquisition of a digital and technology business in China, a global partnership deal with Harvey Nichols and an innovation partnership with Chanel, and the acquisition of a US-based premier streetwear online marketplace. At the same time, it was involved in the launch of an office in India and a tech hub in Portugal. The breadth of regulatory changes, corporate transactions and commercial issues was enormous, but the team, led by general counsel James Maynard, took it all in their stride.

In-House FTSE Commerce & Industry Team of the Year: Tarmac

Reflecting a building materials industry changing with the underlying construction industry, Tarmac has been through major restructuring and managed to forge a culture of innovation, having recently developed a new rubberised asphalt using recycled waste tires. Corporate innovation and changes came with high-stakes legal challenges. Tarmac wins FTSE Commerce & Industry Team of the Year thanks to their strong application of legal skills, leadership, management and innovation in demanding situations and under lots of pressure.

Katie Smart, general counsel for Tarmac, shared the following with us: “We’re absolutely delighted to have won this award which is a fantastic reflection of the hard work and dedication of very single member of the legal and compliance team.

“We’re all proud to work for Tarmac and this recognition from The Lawyer Awards helps shine a spotlight on the range of exciting career opportunities available within our company, as well as the wider construction industry which is such a great place to work for many professions.”

In-House Banking & Financial Services Team of the Year: Zopa

Pioneer P2P lending fintech Zopa matches people looking for a competitive loan rate with investors looking for a higher rate of return, and has lent more than £3.7bn to low-risk UK borrowers since 2004. Zopa’s bank is scheduled to launch in 2019 with plans to offer FSCS protected deposit accounts, credit cards, and a money management app. This company growth into new territory has been supported along by the legal team and this week, Zopa’s legal team won In-House Banking & Financial Services Team of the Year thanks to their creative legal advice and collaboration to facilitate the business as well as for the team’s focus on returners and diversity.

The Zopa legal team pushed into new regulatory territory over 2018, spearheading the launch of a new challenger bank to sit alongside its existing business, creating the world’s first hybrid peer-to-peer and digital bank.

General counsel Olivia Broderick saw Zopa through its acquisition of a banking license, the new bank creating unusual challenges alongside the existing peer-to-peer lending entity. The new bank needed people and assets to prove to the regulator that it was a resilient business and for this, the legal team led a TUPE transfer and a series of asset transfers from the P2P business to the bank.

Congratulations to all the winning teams for their achievements!