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

The skills that today’s generation of legal leaders have learned have evolved and tomorrow’s legal leaders will need to rely on new skills adapted to our times for success. These skills will stray somewhat from a straight-forward traditional legal knowledge education and to create this 21st century legal education, providers are working with practitioners and legal firms.

Providers offering bespoke legal tech education

Ten years ago, legal tech skills were the realm of legal nerds with a niche knowledge of coding and technology. Today, legal tech has become a widespread buzz word, legal tech events attract thousands of legal leaders of all ages and legal educators have jumped onto the legal tech bandwagon. Current legal practice course providers such as BPP offer a Legal Technology Innovation and Design module that teaches “an area at the forefront of new skills sought by recruiters [which] focus[es] on building the innovation skills that future solicitors will be expected to demonstrate, including understand[ing] legal technology (e.g. AI, Blockchain, Big Data, and Automation) develop[ing] project management skills and techniques, learn[ing] skills to design technology that responds to problems and engag[ing] in design thinking and process mapping vital in the legal workplace.”

There has also been a rise in more innovative law departments offering more fit for purpose bespoke legal and technology courses. As Alex Smith, Global RAVN Product Lead at iManage and co-author of the book Do Lawyers Need to Learn to Code? A Practitioner Perspective on the ‘Polytechnic’ Future of Legal Education says, “the growth of these initiatives designed to prepare students for the increasingly technological nature of practice reinforces the increased importance placed on cultivating a system of ‘work-ready’ graduates”.

One such course is the Innovation, Technology and the Law LLM at the University of Edinburgh, attended by Ekaterina Harrison, postgraduate student and highly experienced banking & finance lawyer. She chose the course because of her long-standing interest in digital technologies and how people use them. Digital assets, tokenisation, behavioural analysis and other innovations are opening up new opportunities and changing finance products.

“Lawyers like me,” Harrison says, “need thorough knowledge and understanding of the digital space”.

She studies alongside working and was drawn to the flexible approach of the course, which is both part-time and online, allowing her to continue with her main practice areas of banking and finance.

What skills are required by lawyers of the future?

Smith in part agrees with Harrison, writing that in his years of working in legal innovation, his observations are twofold.

“The first is the need to enable the application of learning and skill-building as early as possible to enhance workplace performance; the second is the need to have a core base of legal knowledge”, concluding that “future commercial lawyers need to experience a tertiary education much more akin to an apprenticeship” and that “lawyers of the future will interact with the technology, not write it”.

In other exchanges, he was more forthright and suggested that while tomorrow’s lawyers could benefit from skills such as understanding data, how data is building up, how to measure using data and how to investigate in data (eg eDiscovery or contract discovery) as well as better visualisation of end product skills, learning to code would not yield as clear-cut benefits. Instead, he favoured the idea that lawyers, in general, could stand to work more closely alongside other professionals. More specifically, while lawyers should definitely equip themselves with enough knowledge to be able to work alongside tech developers, product managers, UX, and data scientists, he didn’t believe that lawyers needed that level of professional skills themselves.

That is certainly something highlighted by Harrison as a benefit she has seen in her work, directly attributable to the course. “I think lawyers could learn a lot from how software developers work”, she says. “I mean, the adoption of agile practices. Not all principles of agile working are applicable to legal work but a lot could be borrowed and tailored.” She also mentions a specific example of where new technical skills were coming in useful.

“For example, I can do simple coding in Python. When I worked on a big document migration project, my basic programming skills helped me to analyse thousands of lines of information in Excel. If I had not known how to interpret the data, I would not even have attempted it. But I knew and it was a great benefit for the project. I would identify programming and project management as technical skills that can potentially turn a good lawyer into a great one”.

Using tech skills to the client’s advantage

Another lawyer we spoke to made it clear that she believed “understanding data is key for business – if you can access and use your own data, you can develop a competitive advantage over your competitors”. Clare Weaver, a legal consultant and previously in-house counsel, now specialises in using legal tech to her client’s advantage. After two Oxford University Online courses from the Said Business School in Bitcoin Strategy and AI, she was able to re-skill to a more tech-orientated skillset. This allows her to be able to advise clients in both the FinTech and tech sectors, in particular that knowledge of how AI works and what applications can be used.

Weaver too speaks of how helpful it is for lawyers to be able to understand how natural language processing (NLP) and machine learning works. She reiterates Smith’s point that she doesn’t think lawyers need to learn to code but “should understand how developers create and build products, whilst guiding the user experience side of things which is most important of a product is to be useful”. “For me”, she says, “that’s the most interesting point – how to adapt products for use by different users and why adoption differs in different communities”.

But do lawyers need to learn to code?

No, seems to be the general thought. As Smith summarises, tomorrow’s lawyers “should be developing curiosity, humility, growth mindset and willingness to work in truly cross-functional teams” or, as he concludes in his book, “developing their interpersonal skills, comprehending the emerging user-centric business world, engaging with their curiosity and creative problem-solving skills, listening carefully to their clients’ needs and openly engaging with the changing world within which their clients operate and the leadership dynamic that governs that operation”.

In other words, a legal tech qualification isn’t ever going to make you a tech professional (and physically being able to code isn’t necessary) but getting a good grounding and understanding of the tech space generally may well help you be a better future lawyer in a world that is now definitely digital.

Making Work, Work

At The Attic, we are always interested to talk to people doing interesting things in the legal industry, so we were delighted to have the chance to catch up with Gavin Sheridan, former investigative journalist, now CEO of Vizlegal. Having previously worked in a social media startups, he became interested in law and felt that there were opportunities to use technology to improve things for people working in the law. The result was Vizlegal, a legal search and tracking platform.

Can you tell us about your background and what brought you to legal tech?

I’m Gavin Sheridan, the co-founder and CEO of Vizlegal. My background is in investigative journalism – freedom of information (FOI) and open source intelligence, in particular. I previously worked as Director of Innovation at a social media startup called Storyful that specialised in open source investigations, and which was later acquired by News Corp.

I became interested in law via litigation involving my FOI and Aarhus requests for information to Irish public bodies. I felt that there were opportunities to improve the state of the art when it comes to legal information, litigation, and mobile accessibility and open data.

How would you define the scope of Vizlegal?

Our scope is global but we’ve started with Ireland, the EU and the UK. We think there’s an enormous amount of data out there to acquire and organise.

The intention of Vizlegal is to “empower lawyers by indexing and graphing the relationships of all the world’s legal information.”

So why do lawyers need Vizlegal? What benefit does that bring to a firm or the everyday working life of a lawyer?

Lawyers use us every day for various reasons – but mainly it boils down to two main things: searching for things, and keeping up to date with things.

This can include knowing

  • what stage your case is at,
  • when the other side has filed something, or
  • when a new judgment is issued that contains a certain phrase you are interested in.

For others, it’s being able to quickly look up a court rule or practice direction on your phone. And for others, it’s digging through tribunal or court decisions to find a key one.

What is it about the intersection between law and technology that is interesting to you?

I come from a technical background, so I tend to take an interest in the application of technology to any field. Law is interesting because it has been relatively unaffected thus far by digital transformation.

Do you think it helps to come from a non-legal background?

It certainly gives you a different perspective. As a non-practitioner, I tend to look at things with a fresh pair of eyes, which may give some advantage in identifying inefficient processes that could maybe be improved.

In every industry, including journalism, there are many things done because “that’s the way we’ve always done it”, and law is no different. We think that there are many, many opportunities to make the lives of our customers (practitioners!), both less stressful and more productive.

Access to data is central to access to justice – does that resonate with you?

Yes it does. I’m an FOI advocate, litigator and trainer and have spent a decade in the access to information domain. I believe that without adequate access to legal data or information, access to justice is hindered for everyone.

How is Vizlegal changing the legal space in Ireland and legal outcomes?

We are less focused on legal outcomes than we are on improving the lives of our customers. If we can reduce anxiety, increase productivity, make peoples’ lives easier and happier, then we think that we are achieving our goals. We think that these things lead to second-order benefits in the system overall and that’s a good thing.

How will technology affect the legal landscape?

We are in an information-heavy industry and that information needs to be organised and structured. We think that technology will mean that more lawyers can do more things with less time and more productively. The machines can focus on the mundane tasks, while the humans apply their skills in the areas where human brains are best.

What key skills do you think lawyers need today (particularly in terms of tech)?

Understanding product development and customer empathy is an interesting area – it is a skill that many other industries are focussed on. Also, understanding that data is not scary and that spreadsheets are great! (Journalists are going through the same thing!)

What key skills, particularly tech, should tomorrow’s lawyers be developing?

Continued focus on customer happiness and success is important – and learning new ways to achieve the same goal, but better is also great. I think that the keyword is adaptable.

What’s next for Vizlegal?

We continue to add to our coverage and we continue to add tools to make the life of a practitioner easier: including better court date management, better alerts, better and faster ways to search and improvements in managing lots of these things on mobile devices.

Always the goal is: how can we reduce the number of steps, clicks or taps to achieve the job that is needed to be done by our customers. We will expand into the UK market this year and then, to the rest of the world.

Any last words to add?

We enjoy buying coffee for lawyers so we can listen to their problems – be it using court forms, rules, badly built government websites or anything else. Our door is always open.

The Legal Update

The legal blogsphere is thriving, with ever-more law bloggers stepping up to discuss taboo topics and change the way we think about law and the legal industry.

Legal blogs are a valuable outlet and asset for lawyers and companies alike; acting as a marketing tool for your expertise, and allowing some creative headspace to examine issues of personal intrigue outside of your own work. Whether you are thinking of starting your own legal blog and need some inspiration, or simply want to follow for extra insights and opinion, here are some of our picks of today’s most highly-rated and recommended English-language legal blogs.

UK and Europe Legal Blogs

Regulation for Globalization 

Regulation for Globalization by Kluwer Law International blog is discusses the significant changes taking place regarding international business, especially trade law, EU law, and labour law. Contributors are leading legal experts from diverse backgrounds who report on the latest developments with ‘fresh, high-quality, and timely examination of the new rules facing international business’.

Legal Cheek Journal

One of our favourite legal media companies, Legal Cheek’s online journal covers current affairs in law with typically lively and irreverent style, proving that law doesn’t have to be stuffy or mince its words on even the more controversial topics making headlines.

Legal Hackette

Written by Catherine Baksi, barrister turned freelance legal affairs journalist, this blog features lunch interviews as well as legal news and book reviews. Catherine knows how to create an atmosphere and her in-depth interviews are great insights into the life of prominent lawyers.

Juro 

Juro is an AI-enabled smart contract workflow platform with a Human First approach, helping legal teams at fast growing businesses make contracts work better within their organisation. Naturally, their blog focuses on legal tech and innovation but also discusses the importance of hiring and cultivating the right team for business success.

Barrister Blogger

This award winning legal blog by Matthew Scott is direct and simple in approach. Scott is not afraid to share his decisive opinions on legal issues dominating the news sphere, and has a way of setting the scene of well-read (and some not-so-well read) legal stories that keep you engaged from post to post.

Crafty Counsel

For the YouTube generation, Crafty Counsel publishes bite-size legal videos (10 minutes and shorter) featuring legal professionals discussing legal topics in verbal “bullet point” format. Some recent videos tackle varied topics such as “The art of building a relationship: In-house counsel & law firms”, “How can you champion women in the workplace?” or “Building a great Legal Team – the Software.”

The UKCLA Blog

The United Kingdom Constitutional Law Association publish this highly credible resource of expert comment and analysis on matters of constitutional law in the UK and further afield, with articles cited in academic writing, official publications and in the news media.

Techno Llama 

Cyberlaw is one of the fastest moving areas of law, and there’s plenty of interesting analysis and thought pieces over at TechnoLlama by Andres Guadamuz, with emphasis on open licensing, digital rights, software protection and virtual worlds. Articles are often whimsical, with a serious underlying message.

USA and Canada Legal Blogs

The Girl’s Guide to Law School

Founded by Alison Monahan, a former member of the Columbia Law Review, the Girl’s Guide to Law School aims to help young women get what they want from law school. Alison shares her own experiences and that of guest posters to create a conversation about the unique stresses faced in law school and how to overcome them.

Clio Blog

Clio are a Canadian legal practice management software company, whose tech-focused blog also tackles the wider themes around better management of law firms, including looking after lawyers mental health and wellbeing, communication with clients, legal tech trends and much more.

Lawyerist

What began as a one man legal blog turned into a full-blown media company, home to the largest online community of solo and small-firm lawyers in the world. Articles, survival guides and podcasts share ideas, innovations and best practices, with a particular focus on technology.

CLOC Blog

At the cutting edge of legal operations, the blog by Corporate Legal Operations Consortium (CLOC) provides how-to articles aiming to help legal ops professional optimise legal service delivery models. Posts are monthly but contain plenty of content to consider and incorporate into your strategy.

Gen Y Lawyer 

This series of podcasts interviews by Nicole Abboud introduces a new generation of professionals who are doing something a little differently in the profession. Abboud talks to millennials both inside and outside of the legal profession who are going after what they want on their own terms.

The Law for Lawyers Today

Published by Thompson Hine LLP, TLLT is a resource for lawyers, departments and firms focusing on legal ethics and professional responsibility, including the ‘law of lawyering’, risk management and legal malpractice, running a legal business and other related topics.

Asia and Australasia Legal Blogs

China Law Blog 

This is a no-frills blog discussing the practical aspects of Chinese law and how it impacts business for anyone who is currently or about to begin conducting business in China. The blog is run by international law firm Harris Bricken, and its contributing writers help to challenge Western misconceptions of Chinese law with accessible and engaging articles grounded in real experience.

LGBT Law Blog 

Stephen Page is a leading divorce and surrogacy lawyer committed to championing the rights of and interests of LGBTI people in Australia. His posts tackle discrimination parenting, property settlement, same sex domestic violence, and same sex law issues. This will be one to follow as Australia goes to postal vote on same sex marriage laws.

Zoë Lawton’s #MeToo Blog

Zoë Lawton is a legal researcher specialising in family law, criminal law and legal tech. Her #MeToo blog ran for one month in February 2018, posting the experience of women (and a significant proportion of men) in law who had been subject to sexual harassment and assault, bullying and discrimination within the profession. A full copy of the blog was presented to the New Zealand Law Society and all NZ law schools, and the archive of posts now acts as a resource for those who want information on how to report their experience to the Human Rights Commission, the NZ Law Society, their employer, or their university.

Law and Other Things

Law and Other Things publishes informative court and case updates, news articles, interviews, book reviews, petitions and announcements relating to India’s laws and legal system, courts, and constitution.

Singapore Law Blog 

Singapore Law Blog covers the latest Singapore court decisions and legal news, as well as routinely showcasing practically relevant law journal articles and covers Continuing Legal Education events. It invites guest contributions and even providing access to a database of articles on Singapore law from both domestic and international sources, ensuring a number of voices and a variety of expert opinion is at your fingertips.

Finally, we couldn’t go without including Obelisk’s own thinking space! The Attic offers a weekly mixture of thought pieces on working culture in the legal industry, profiles of consultant and event speakers, and guidance on career development for lawyers and legal consultants looking to work differently.

What legal blogs do you follow? How do they help you in your work? Send us your recommendations at [email protected] and we’ll add them to our list…

The Legal Update

Guest blogger Louisa van Eeden-Smit of LexisNexis UK follows her recent article on smart contracts with another future-gazing blog, this time looking at what you need to future proof your career for the law firm of the future.

What will the law firm of the future look like? It’s a reasonable question to ask considering how much the legal market has changed already, and the ever-increasing pace of change moving forwards.

PwC’s 2018 Law Firm Survey found that 100% of the top 10 firms cited technology as the key challenge to growth over the next two years, but there is an overall optimism about the direction the industry is heading and the ability to stay competitive. The key questions that seem to come up in our experience are: How much will technology change the face of legal service? Will the generalist die out? Will more firms merge, or will the niche outfit emerge triumphant? Will more lawyers become self-employed, providing virtual services to organisations?

Regardless of the outcomes, there are ways that legal professionals – be they part-time, returners, flexi-workers, or full-time in-house – can future-proof their careers.

Here are 5 key ways that legal professionals can move forwards in this changing world:

#1 Be flexible

A degree of agility and flexibility will be necessary regarding how lawyers deliver legal services. This is as true now, with the advent of new regulations and an increasingly tech-savvy and informed client base, as it will be in the future. A willingness to adapt will serve you well, as well as open-mindedness regarding alternatives to the traditional model of working that is fast becoming a relic. From portfolio careers to flexible working, there are more models than ever to suit professionals – and benefit both employer and employee.

#2 Listen to the client

Client loyalty isn’t a given in a market replete with so many options – it’s earned. Today’s client is more informed and tech-savvy than ever. They are willing to shop around and they are empowered. When clients demand efficient, tech-led services, for example, legal services providers should listen and adapt.  It’s also important to be proactive and show how the firm is anticipating future change and preparing to evolve services.

#3 Develop relationships

Client loyalty may not reign supreme anymore, so it has become critical that law firms prove themselves to the in-house legal teams they serve. Listening to what they need and learning the business from the inside out will allow them to stand out from the crowd by offering in-house counsel exactly what they want, exactly what they consider to be valuable. “Deep knowledge of the business is what really breeds loyalty,” according to Richard Harris, Chief Legal Officer at Robert Walters Group.

#4 Be more commercial

In addition to learning about the business in order to provide more nimble and forward-looking advice, a future-proof and commercial legal professional is one that acts proactively. If you can look ahead and anticipate what issues might impact your business and put forward relevant plans of action, you will prove yourself to be indispensable. Such advice is “worth its weight in gold”, says Dean Nash, Head of Legal and Compliance at Monzo Bank, and will allow you to retain business in a competitive market.

#5 Make technology your friend

In-house legal teams consider it to be a win-win. After all, with technology streamlining the service, the process becomes faster, and invoices get lower. Legal tools are just that – tools that can be used to support lawyers, not replace them. Harnessing them to provide efficient service is a no-brainer, especially considering the fact that it can free up lawyers to focus on the parts of their job they actually like.

Overall, legal professionals who are willing and able to jump in and run with the changes – namely, maintaining a lean, agile practice, one that uses technology and offers efficient, business-centric service – will find themselves in a good position – and way ahead of the curve.

It also seems there is a common prediction emerging – part hope, part anticipation based on current trends – that law firms will be more holistic in the future. This applies to both client service and employee care. There is a hope that law firms will take a broader look at the service they provide; addressing the whole commercial picture of the business, as opposed to offering discrete pieces of legal advice, for example.

Similarly, more holistic practices with regards to employee care, respecting work-life balance and acknowledging their varying needs, are expected. As Alison Unsted, head of global diversity, inclusion and wellbeing at Hogan Lovells, said in a recent LexisNexis piece on the perks and benefits future law firms might provide: “As the make-up of our people changes over time, as a firm we need to ensure that we are agile in our response, so that our benefit offering continues to attract and retain talent.”

For consultants or legal professionals moving into this sphere, or laterally moving within it, there are more opportunities than ever to have the kind of career you want. The legal market is constantly evolving and allowing for more diverse working opportunities – the only question remains: what does the legal team or law firm of your future look like?

Making Work, Work

We already know the modern work paradigm is shifting; sitting at a desk in an office from 9 to 5 is no longer the default, and the rise of flexible working is gaining more attention. A recent YouGov survey has revealed that only 6% of working Britons now put in those hours. Instead, 73% work either part-time or with some form of flexible working arrangement (Deloitte and Timewise study).

Flexible working is no longer just a special condition for some people in work. Essentially it’s a way of working that suits the needs of employees of all kinds. This could mean starting and leaving the office earlier or working from home a few days a week. But as Anna Whitehouse of Mother Pukka Flex Appeal campaign explained: “Flexible working doesn’t mean working less or slacking off, it means finding hours that suit your life and how you best work. And it’s not just an issue for parents, either – it’s one of the few issues that both the unionists of the TUC and the employers at the CBI agree on: flexible working is better for staff, and it’s better for profits.”

The benefits are indeed tangible and wide ranging. Vodafone conducted a global survey about flexible working back in 2016, revealing that companies who had implemented agile strategies:

  • Increased company profits (according to 61% of respondents);
  • Improved productivity (83%);
  • Positively impacted company reputation (58%); and
  • Improved staff morale (76%).

Flexi-work also has a knock-on effect on recruitment. As Clare Butler, recruitment expert and Global Managing Director of Lawrence Simmons Recruitment, revealed to Catherine Gleave in our recent piece on “The Future’s Flexi”, employers need to be open-minded about their approach to flexible working going forward because it can make all the difference when it comes to talent acquisition, with many contracts won and lost over this very issue. There is a push towards respecting the work-life balance across the legal profession and if companies push back, they risk losing out on some serious talent. This is especially true regarding working parents and millennials for whom workplace culture, of which this plays a part, is often more important than traditional status indicators, like salary.

Rights to Flexible Working

Companies may not actively offer it as part of recruitment, but after six months in a job, every employee in the UK has the right to request flexible working. While companies aren’t obliged to acquiesce to a request, they are obliged to consider it “in a reasonable manner”. Are you thinking of pitching the case for flexi working to your boss or trying negotiate (or even lay the groundwork for the future) on accepting a new position? Read the LexisNexis piece on the Flex Appeal and #BeBoldforChange here. It’s got the answers to two of the most common – and increasingly outdated – objections: “If we did it for you, we’d have to do it for everyone!” and “You’ll be less productive.”

Even though some companies might dig in their heels, relying on the predictable old arguments for not implementing agile working policies, flexible working is on the rise – both in the country, and in the legal profession, marking a significant turning point for the industry in 2019. As more companies are working agile policies into their contracts, the legal market as a whole is thriving, with even more talented individuals either entering or returning to the workforce. As Catherine Gleave notes: “Not only do women feel more empowered to return to the workplace on their own terms, the rising popularity of flexible working means that a varied work structure is the standard rather than a special requirement, thus preventing any bias against candidates who require a more flexible work schedule.”

Working Smarter

In addition to injecting even more talent into the marketplace, flexible working is just one of the ways the modern legal workforce can work smarter, rather than harder. And it’s being facilitated largely by the advance of technology. Taken at its most basic, laptops and smartphones mean that lawyers can be online and contactable 24/7, no matter where they are in the world. But add to that the plethora of cutting-edge legal tools, such as case management software, and it’s clear that legal professionals can remain connected to both their clients and colleagues without being physically present in the office. They can execute tasks, securely access shared files, issue and review contracts, send out invoices, and much more.

There’s no more putting it off: the legal market is evolving and the traditional working model is going to diminish. As the market changes, different, more agile working models are on the rise, from portfolio careers to flexible working. These models can benefit both employee and employer, as companies are beginning to realise and act upon, and as seen in the continued success of organisations such as Obelisk Support, which recently joined the FT Future 100 UK list as a diversity leader – the only legal company to do so.

But for those considering taking a flexible approach to work, there are undoubtedly challenges, from the risk of succumbing to procrastination to figuring out how to engender trust at work and stay on top of client care. But at its core there are certain things to do in the run up to taking the leap:

  • Be realistic about what you can do on a flexible schedule and take the time to figure out how and where.
  • Find a forward-looking company with a positive work culture.
  • Research the right tools and technology to facilitate working efficiently out of the office.
  • Discuss it with your team, both full-time in-house and other flexible workers, to make sure there’s buy-in and understanding.
  • Stay flexible and carry out reviews of your arrangement. Be prepared to adjust and change as you go.

For more practical, easy-to-implement solutions and suggestions, read the LexisNexis article on the Future of Law – “Flexible Working for Lawyers: How Far Can You Flex?

Making Work, Work

We are delighted to have Louisa Van Eeden of Lexis Nexis UK join us as a guest blogger on The Attic. Her first post takes a look at how millennials are shaping the future of the legal industry.

Millennials. They’re the generation that everybody loves to blame for, well, pretty much anything. They are branded as “snowflakes”, and written off as a problem that either needs to be overcome, or ignored until they ‘grow up’ and become more like the older generations. But who are they really, and what impact are they having on the legal industry?

Much like Generation X back in the 1990s, the term millennial is often used in the media to refer to anything related to a youth culture that other generations generally don’t understand that well. Unlike Generation X, the Millennial Generation was typically born between the early 1980s and the late 1990s, and grew up in a dramatically different landscape to their forebears. The world has changed: the internet dominates our lives, job security and home ownership are not a certainty; the future of the planet is at risk through climate change; and it’s becoming rapidly apparent that continuing with a business as usual attitude, just because that’s the way it’s always been, is untenable.

Consequently, millennials simply aren’t as compelled by traditional practices as previous generations, both in life and work. They are who they are. Where previous high achievers would chase salary, millennials now typically look for a company that aligns with their values. For the millennial, culture reigns supreme. In fact, a study recently conducted by Fidelity showed that millennials are willing to give up (up to) £7,600 in salary every year for a job that gave them a better environment and culture.

The Millennial Takeover

Considering that millennials now form the backbone of staff and client bases, making up to 35% of our current workforce, with that set to increase to 50% of the workforce by 2020, this is not a demographic to underestimate. Millennials are not just a vague notion of youth culture, they are real people progressing into management positions, and are shaping the technological and cultural landscape of every industry, including the law.

The “The Millennial Takeover”, identifies three key areas where the legal industry is seeing the impact of millennials:

#1 Talent Acquisition

This is a key battleground for law firms and one which millennials are well-positioned to approach and understand, especially because, as the Financial Times continues to report, firms are struggling to source and retain talent in today’s rapidly changing marketplace. Attracting the best and brightest young talent is more important than ever before, and harder than ever before, with this generation taking a markedly different approach to their careers. Millennials are key to helping law firms communicate their vision of the future, enabling firms to modernise with an eye to the demands of new talent and driving a competitive edge.

#2 The Ability to Drive the Profession Forward

Law firms are already changing with the millennial worker in mind. As the Law Journal Newsletter reports: “A number of firms have moved, remodelled or completely overhauled their physical workplaces with millennials in mind, favouring common areas, for example, over large corner offices.” But it’s not just physical changes, but more fundamental ones as well. As one of the co-founders of the Legal A-Team asserts, the partnership model – one of the traditional prestige markers in law firms – is no longer the aim: “Millennials want what they want and they want it now. The patience factor is not one of their fortes — they’re not going to stand around for 12 years.” In order to retain and attract millennial talent (and not lose them to agile, tech-forward start-ups), law firms will need to significantly adapt their culture and perhaps even their company structure.

#3 A Creative Approach to Business Practices

Law firms and lawyers need to think more creatively about their working practices in light of the rise of consumerism in today’s legal market. Client power is increasingly dominant, with billing and efficiency becoming ever more important. New and agile practices, from social media to technology, are areas where millennials excel. They also prefer to work collaboratively rather than as a silo, which may well serve firms well moving forwards. Being open to change and engaging in a dialogue with junior members of the team may be beneficial here, in order to ensure that the firm remains stimulated and doesn’t fall behind.

Millennials and Legal Tech

While all three areas are important to understand, technology is the one that underpins them all. The agile working practices and lateral knowledge-sharing solutions favoured by millennial legal professionals and legal start-ups are all enabled by technology. Indeed, there are already reports that legal tools are being used with increasing regularity. A recent LexisNexis In-house Insights report, ‘Legal Technology – Looking Past the Hype’ found that 85% of in-house legal teams surveyed have introduced multiple technology types and almost three quarters (73%) of respondents who have already introduced legal technology tools are making plans to expand their implementation. It is very likely that the next generation of lawyers will practise law in very different ways.

As Head of the Global Cyber Security Practice at Herbert Smith Freehills Andrew Moir suggests, lawyers have an obligation to stay up to date with legal developments and new technologies: ‘There have always been areas where an understanding of both the law and technology is helpful, such as patents, IT contractual disputes or cyber security. But now we’re increasingly being instructed on the legal aspects of cutting edge technology such as blockchain, electronic signatures, artificial intelligence, and data analytics, to name a few. Before we can advise on these sorts of developments, we really need as lawyers to understand the technology behind them.’

The Flexible Generation

Technology is undoubtedly changing the legal profession, and it’s likely that the next generation of lawyers will practise law in very different ways. Indeed, there is already a growing section of the workplace – populated by those who have different life demands and values – who no longer fit the traditional working model. This has led to an increase in portfolio careers as well as flexible working models designed to benefit both employee and employer. This can be seen in the continued success of organisations such as Obelisk Support, which recently joined the FT Future 100 UK list as a diversity leader – the only legal company to do so.

This trend is likely to continue to increase and evolve as more millennials dominate the workforce, bringing with them their approach to work-life balance, their use of technology as a natural enabler, the importance they place on purposeful business (one which looks beyond the profit line), their desire for flexibility, and their alternative definitions of success.

We are entering an exciting era for the legal industry, one in which we wait in watchful anticipation to see who will accept and accelerate this new approach to working culture, and what impact it will have across the legal profession and wider society.

For more insights on how young lawyers are best positioning themselves to weather the upcoming changes, check out our post on “The Legal Profession for Millennials”. 

Women in Law

How do we deal with upheaval as individuals? We have to adapt, be open to the changes ahead and listen to advice. In the legal profession, it is no different – as the world in which we practice law changes rapidly, lawyers need to be ready to rethink how they work.

That is the premise of a new book by Michele DeStefano, law professor and founder of LawWithoutWalls and MoveLaw. Legal Upheaval: A Guide To Creativity, Collaboration and Innovation in Law introduces readers to 7 essential experiences that lawyers must master to achieve innovation, transform their collaboration with clients, and create solutions at the intersection of law, technology and business.

With some urgency, the author encourages lawyers to think and behave differently in order to drive the innovation that so many in the industry are calling for. We were lucky enough to chat to Michele, and she is just as infectiously passionate in person as she tells us about the process of writing the book and the need for lawyers to be more ‘open’…

You are recognised as a ‘legal rebel’ by the American Bar Association – what does that mean to you?

To me a legal rebel means someone who isn’t just talking about what needs to be fixed in legal practice, both in training and practice, but is actively taking risks to do things that are different. Ironically, since the law is slower to change than other industries it’s not that hard to be considered a rebel!

There certainly is a lot of talk about innovation at the moment – in the book you define it as ‘lasting incremental change that adds value’, how much of that are we seeing right now?

There are various ways to define innovation, and it can be a hackneyed word. But there is some consensus in law that innovation is still about small steps – small change is difficult but is easier than asking for ‘big bang’ innovation, especially in a world of people that like the status quo.

However, lawyers and Heads of Innovation I think still inaccurately focus on the technology side of innovating, and it’s starting to frustrate in house teams and clients. Not every innovative solution has to be a technology. Will tech be involved in improvement? Yes probably, but we need to first change the view of the way legal services are provided. The focus needs to shift from what lawyers do, to how we do it; how we are utilising and leverage tech in order to improve our service and provide better legal products. If we look at design thinking, there was a similar trajectory that law is now learning from: there is lots of literature on the design thinker perspective on improving service, and we’re starting to see people from a design thinking method background being hired to work with lawyers to help them work through pain points and affect change in their service.

You put great emphasis on encouraging lawyers to be more collaborative and well-rounded in order to drive the changes needed in the industry…

Yes, that is something we typically struggle with. It’s a chicken-egg scenario: is the law attracting a certain type of person – those who are more introverted, more risk averse, more sceptical, but are great at complex problem solving – or is it that through the way training and practice churns and burns us that we create them?

That’s not to say being risk averse and sceptical are bad things, because in so many ways it’s our job to be those things to protect clients. We need those qualities, but it’s important to not be that all the time in the way we approach everything we do. Be a human! Use that fantastic lawyer mind but let’s work together and build on each other’s ideas to create a better service for those we work with.

Tell us about how you try to encourage openness with Law Without Walls?

With Law Without Walls, we have created a learning programme that is multidisciplinary in every way – people of all ages experience levels and type of discipline: academics, public servants, law firms and law schools from across the world come together into teams to co-create a Project of Worth – a practical solution to a real business problem designed to bring value. It’s extremely rewarding to watch the teams, especially the lawyers, change and grow in the way they ask questions, think about problems, approach meetings etc.  Especially when you hear that their teams back home notice the difference too, so much so they are asking them ‘who are you and what have you done with Craig?!’ That impact is exactly what we aim to achieve.

How was the process of writing Legal Upheaval? What did you learn from it and was there anything that surprised you in the conversations you had?

It wasn’t so hard to write but it was hard to edit! It took two years of interviews and I had enough for three books but had to edit it all down to one.  Interviewing is really a tough field – it requires listening beyond listening, there is no ‘I’ or ‘me’! We should be doing more interviewing training in law school.

Obviously I knew going in that the topic of innovation was being pushed, GC and in-house counsels are constantly saying ‘innovate or die’ but they don’t exactly know what it is or what they are asking for. Can you really measure it if you only know it when you see it? There’s an analogy to be made there with the diversity movement – calls for diversity initially were very vague, so firms would say ‘oh we have a female working with us’ – no mention of what level they were at, but okay!

It was only over time that the questions became more focused: what % of minorities are in our organisation, what % on my senior team are diverse etc. Now, clients are asking for your flexi-time policies, because without that you cannot support diversity – diversity doesn’t truly exist without creating an inclusive culture and environment.

It’s the same with innovation – who is going to lead it? What are you hoping to achieve? If you don’t want the same thing to happen as diversity, where you are racing to  meet client demand instead of forward thinking and define innovation for yourself, now is the time to be asking serious questions. Part of being a great innovator  is self awareness.

Another thing I was surprised by was the amount of in-house counsel complaints on simple matters – particularly over advising. There is a disconnect there, and I don’t know why or what is happening. Perhaps it’s because we are taught to see the trees not the forest, so many lawyers are missing the bigger picture of how their documents are used in day to day business practices. In-house counsel can read the law, they don’t want to receive reams of information that they have to filter and rewrite. We need to spend more time sitting back listening and asking ‘why’ in what we are doing. Of course, that makes people uncomfortable, especially the more senior we get, as we think we know the answers and we are taught to find answers for ourselves.

From your experience as a professor of law, is there a change in approach to teaching? Are students coming in with different expectations now? 

It is a bit like moving the Titanic. I don’t know if students are all that different – for hundreds of years they have come in with bright eyes and big hearted missions, that won’t change, but the next generation may have different expectations of the culture of law. Unfortunately law schools are much slower to move and the tenure systems that are in place very much encourage status quo and professors keep on teaching the same things they have taught for years. So, though there are some great things being done in law schools across the world in terms of bespoke programmes being created, it’s not reaching every student that it should. But it’s not just up to the schools, it’s going to take the whole village to move and change way we train and retrain lawyers.

What do you hope people will take from the book overall?

My hope is that people will leave with hope. Lots of articles about law as an industry are negative, but we should realise that some of the traditional habits that have made us successful so far are also characteristics that we can utilise to get over hurdles. The mission of the book is to get every lawyer to try a problem solving group project with the mindset of an innovator and try to adopt some of those skill sets and characteristics.

My three rules of engagement are Open Heart, Open Mind and Open Door – it does sound corny, but they are essential. Yes, effective people are good at editing out the nonsense and saying no to things, but innovators are different. They let go of preconceptions and allow themselves to be more open to accept seemingly silly ideas. That’s something that those in the legal industry can adopt and build on, and take that brilliant lawyer brain to fine tune and turn them into the really good ideas. We can approach creative problem solving collaboratively through just a small shift in thinking.

Michele’s efforts to encourage collaboration struck a real chord with us here at Obelisk. While this change in mindset is a challenge for all lawyers given their traditional education, DeStefano concludes it is overall good news for women lawyers, because on balance they are better at the necessary skills: having an Open Mind, Open Heart and Open Door. It certainly gave us hope that we are on a real cusp of change in the legal industry, and that small actions being taken today are laying the groundwork for a more open and inclusive future.

Legal Upheaval is available on Kindle and in Hardcover Edition from 1st October

 

Making Work, Work

When discussing the future of work, technology always comes up as the main element or facilitator, humans coming in as an afterthought. What the gig economy has done for our current work landscape, so far, is normalise cheap labour on demand and the work precarity that comes with it.

Lawyers of course are no strangers to the gig economy, with cheap labour platforms offering unregulated legal services from freelance lawyers. And both a lawyers and as members of wider society, it is our duty to question any situation that worsens workers’ rights. At Obelisk Support, we believe in “Human First” and a new book, Humans As A Service: The Promise and Perils of Work in the Gig Economy, made us reflect in the gig economy’s impact on innovation and employment in the modern age. In the book and during a chat with The Attic, Jeremias Prassl analyses the gig economy with a focus on the workers who actually labour in the gig workforce.

Disruptive Innovation

An Eversheds survey which focused on young lawyers and their views on the legal sector highlighted that these up-and-coming professionals are looking for a better work-life balance and concluded that they feel the traditional career path in law is now out of step with the 21st century.

Proponents of the sharing economy argue that society reaps major benefits from growth driven by platform’s innovative disruption of existing business models. Instead of boring 9-to-5 lives, gig workers enjoy the exhilarating challenges and vast financial rewards of entrepreneurship.

That may be true but the danger lies in platforms denying workers’ employment status even if their gig lawyers aren’t de facto independent. Jeremias agrees: ” A level playing field in employment massively supports innovation, they inherently go hand in hand. A world where there is no protection for employees stifles innovation. And this is where historical examples come into play – there is the fascinating example of Yorkshire mill owners in the 19th century who were complaining to the House of Lords that they could not get a return on investment on new spinning technology, because competitors were still using children in home for cheap labour. There actually needs to be a level playing level playing field for industries to move forward and innovation to thrive.”

Autonomy

In explaining how gig economy enterprises work, Jeremias Prassl shows that the companies running the platforms do retain control, often in a subtle manner. What is presented as the business of matching is in fact, a unilateral subjective view of a curated platform in the interest of the company.

“Gig-economy operators accurately shape the entire transaction by means of close control over their workforce, from setting terms and conditions and checking relevant qualifications, to insuring proper performance and payment… User ratings also provide quality control and feedback, and digital payment systems render the entire transaction cashless.”

The anonymous rating system ensures tight control over every aspect of work and service delivery, as well as algorithms disclosing only part of the job descriptions, hence distorting the pretence of true entrepreneurship. If you don’t know what you are signing up for, how can you be independent? That’s where the problems we have started to see in terms of the gig economy and flexible working lie, says Jeremias. “We should recognise that flexibility can be extremely useful for life and being able to choose when and how much we work, but also bear in mind that flexibility in some circumstances can be very one sided. Where flexibility is one sided, and people don’t have the choice of the work they want, that becomes insecurity. A successful plumber growing their independent business will have a very different experience to someone signed up to a platform who is struggling to put together a living.”

Why It Matters

Cheap work and using idle assets should be in everybody’s interests but as seen before, it also creates a peculiar precarity that makes workers work longer hours for less money, therefore making them shoulder the economic risk of a multilateral task.

Is this fair?

No.

Is this bad?

Not necessarily.

It all depends on the regulatory framework. What are the challenges of applying regulation to such a global and heterogenic employment model? “The long term challenges that exist are in social security systems of different countries, and in general legal protections that are still designed round stable permanent employment relationships”, says Jeremias. “That will need to be rethought. Just as important are tax laws and consumer protection care and liability: all these things are designed around employment relationships that we are moving away from, and that will be a challenge for different regulatory models.”

Sustainable Gig Working Solutions

Everybody should have the right to work differently, at unconventional hours or from non-office places. That’s the very definition of flexible work, one of a few directions the gig economy could take if done right.

To become a sustainable work model for society, the gig economy would also benefit from legislations recognising employment rights for gig workers, even in odd situations with multiple employers. Assuming that this status is recognised, gig workers would still have to contend with non-transparent rating algorithms from the platforms they work with. In his book, Prassl suggests a concept of “portable ratings” that would “empower workers to follow up on grievances and negotiate for better conditions -or to move on to a different platform.”

Last but not least, without collective representation, gig workers cannot attain the level of bargaining power they are due, and cannot negotiate their work conditions. Effectively, the lack of a united voice weakens their position.

Consumer Protection

While most of Prassl’s book discusses the fate of gig workers, consumers are not left out either. The rights of clients are not protected in cases of grievances as platforms often treat customers no differently from their workers, “refusing to step in and take responsibility.”

Regulating the gig economy by granting employment status to workers would work in favour of clients as they would be covered by the responsibility an employer incurs for the actions of its employees in the course of business.

Is the Gig Economy the Way Forward?

Based on the book’s premises, one wouldn’t quickly assume that Prassl agrees with the very concept of gig economy and platforms. However at the end of the day, Jeremias Prassl is a socially-minded liberal. “Ensuring the full application of employment law is crucial if we want to make the gig economy work for all,” he writes.

Touted as a great innovation for workers, the gig economy has enriched platforms and spread precarious work to a population that doesn’t have much choice. If indeed the gig economy is a transitional phase before these jobs are automated or taken over by AI, including legal discovery and due diligence in the legal world, the gig economy should benefit to all involved until then.

“We are certainly seeing [the gig economy] becoming a larger part of industries like transport, healthcare, and law” says Jeremias. “I think it is and will continue to be an important component in employment but to what extent it is the way of the future, for now I can’t say.”

The Case of Freelance Lawyers

As providers of legal services at Obelisk Support, we only work with freelance lawyers. Are they part of the gig economy? No, as experienced professionals, they carry out complex tasks independently for our clients and choose to work as freelance lawyers for personal reasons. Rare are the lawyers who, once they’ve carved out a successful freelance lawyering career, want to go back to a traditional 9-to-5. In that respect, what we bring to the industry is real positive change in the way these lawyers work.

Much positive change still needs to happen in the legal profession but if one thing is sure, it’s that the gig economy, as described in Humans as a Service… is not a concern. Irreversibly, legal tech has already changed the legal landscape for low-skilled legal tasks. All we need to do – and it’s a big ask – is to learn how to work with technology while growing our economy and protecting rights and liberties. This is a wider discussion on the ethics of artificial intelligence that we welcome with open minds.

 

Whether you are an employment lawyer interested in the legal context, if you are or are thinking of taking on flexible gig employment, or are someone who is simply fascinated by the future of work, there is plenty of insight in Humans As A Service to pique your interest. Print copies of the book are available from Oxford University Press.

 

The Legal Update

Japan is known for its bright city lights, tall buildings and weird and wonderful technological innovations. However, behind the scenes the country’s innovation, especially in the legal sector, is suffering due to its conservative culture and demographic problems. Ken Onda, business intern at Obelisk Support, takes a look at these conflicting elements and what needs to be done to sustain legal innovation in Japan.

The Status of Women in Law

A recent domestic scandal, where one of the most prestigious medical universities in the country admitted to manipulating entrance exam scores of female candidates to keep their pass rate under 1 out of 3, drew attention to Japan’s ingrained conservative outlook on gender roles and the lack of progress being made on equality across professional and technological industries. The fixing was allegedly done due to the belief that women had a higher chance of leaving the medical profession after conceiving children, causing “an intolerable burden for already overworked doctors”.

It is no surprise on hearing this news that Japan is ranked 114th out of 144 countries in gender equality, one of the worst for a developed country. In the legal sector, female attorneys make up merely 18.2% of Japan’s lawyer population, according to the Japan Federation of Bar Associations. Of that 18.2%, only 11% are partners. This is a quite unbelievable disparity between men and women. Despite its shrinking demographic with 30% of its population 65 or over, Japan continues to discriminate against half of its population. This lack of representation is one of the reasons why Japan is suffering economically, and is increasingly unable to deal with international legal matters and lacking innovation in the legal sector.

Conservatism vs Legal Innovation

As far as the structure of its legal system, Japan has fewer per capita lawyers compared to other industrialised nations such as the US and EU countries. There are fears that at the current state, Japan will face a major problem in an ever-globalising world. Japan has adopted a Western legal system to settle legal disputes in courts despite significant cultural mismatch. Japanese people tend to resolve issues privately through negotiation without the involvement of lawyers. If there is no resolution, the conflicting parties will often go directly to court and litigate without private/commercial mediation. However, as lawyers are often not taught about mediation during university, they are not well equipped to solve problems in non-litigious ways.

Chart source: Wall Street Journal

This is a problem as when foreign entities – especially those in the West – try to do business with Japan, they are often caught off guard by the norms within the Japanese legal industry. This makes them less willing to work with Japanese entities, which is a significant barrier to collaborative innovation.

Moreover, the driving force of innovation – start-ups – are the most under-supported sector in Japan. Japan embodies a vertical collectivism, where bureaucracy, group-thinking and strict regulation dominate. It is a country where people are generally less inclined to take risks. For instance, Japanese landlords often want to see at least 2 years of profits before renting space to a company. It is therefore no surprise that venture capitalists often do not invest on high-risk ventures such as emerging technologies in the legal sector.

Although Japan invests heavily in R&D and is known for its technological advancement, it lacks entrepreneurship and application and capitalisation of its research due to its culture and regulation. Japan is still at its core a highly conservative country that does not embrace change readily as other developed nations, especially concerning new technologies. Japanese corporations such as Fujitsu, Hitachi and Sony are too slow and bureaucratic to keep up with agile foreign competitors in countries such as the US, Germany and South Korea.

Japan’s Missing In-House Lawyers

Japan is facing a major demographic problem involving shrinking population, going below the replacement rate. Subsequently, its market is also shrinking. For this reason, many Japanese companies are being more inclined to enter foreign markets, such as by conducting outbound M&A. However, due to the lack of experience in M&A and human resources, especially for SMEs, most of these deals fail according to the Asia Business Law Journal. This is exacerbated by the fact that Japanese firms tend to not employ in-house lawyers, but instead, make their departments deal with their own respective legal issues (e.g. a finance department deals with finance-related legal issues). This means that senior management is not given legal guidance when going through an M&A deal that is often full of legal issues. This increases the likelihood of the M&A deal not going through. Even when there is a legal department present, they often take traditional roles such as reviewing contracts and dealing with litigation. According to the Association of Corporate Legal Departments in Japan, only 6% of in-house lawyers felt that senior management frequently implemented the advice of in-house legal counsel.

Illustrating this trend, only 5% of qualified lawyers in Japan work as a legal counsel. One of the main reason for this is because the Japanese Bar Exam has been deliberately designed to be one of the hardest in the country to pass. On average, people take the exam 6 times before finally passing to qualify as a lawyer. For this reason, a lot of Japanese law students go on to work after graduation as in-house counsels without being qualified. Could foreign-qualified lawyers be the answer to Japan’s lack of qualified lawyers?

Not so. The barrier for foreign lawyers to work in Japan is high, as it requires extensive documentation and in-person visits to the Japanese Bar and Ministry of Justice, taking at least 5 months. Conversely, hiring foreign-qualified lawyers for matters such as international arbitration is seen as a strenuous process for firms in Japan and in practice, not common. The resulting short supply of lawyers stunts the demand for innovation and change in the Japanese legal industry.

The Bottom Line

There is a serious need for legal innovation in Japan. To do this, the country first needs to address the core issue regarding gender discrimination. There needs to be progressive reforms and auditing of university admission process by the government to break entry barriers for women in male-dominated professions such as law and STEM. Additionally, university teaching of law should include the concept of mediation, as often practiced internationally, and the general practice of law around the world, especially in Western cultures. This is essential to keep Japan in the global stage.  

Then there is the lack of supply of qualified lawyers, especially in-house counsels. This will be a major problem in the coming years for Japan due to the rapid pace of globalisation, and increasing importance of IP and technology. The scarcity of in-house counsels means that Japan is increasingly unable to deal with international disputes, especially for SMEs. Despite the efforts to increase number of lawyers in Japan, little progress has been made. Japan needs to encourage not only domestic lawyers, but also foreign lawyers. On the one hand, the Japanese Bar Exam should ease its examination requirements while not losing its quality in order to encourage fresh law graduates to take the exam. On the other and, work barriers for foreign-qualified lawyers should be loosened to also increase the global availability of lawyers.

Finally, Japan needs to change its approach to business. In the age of rapid technological advancements, Japan needs to move to a more agile approach to business and loosen regulations to enable startups and entrepreneurship to thrive. Japan needs to place as much emphasis on commercialisation of technologies as it does on R&D. It will be interesting to watch progress over the next decade to see how the country can reconcile its contradictions to perform to its full potential on the global stage.