Reimagining the Operating Model

Inevitable Change

Prior to the COVID-19 pandemic the legal sector, in common with every other industry, had stuttered along a journey to begin to embrace the digital agenda. However the inherent conservatism from the legal profession meant that this was generally token in nature. In many cases, this was simply tinkering at the edges. Adding a little bit of machine learning here; outsourcing to cheap third party service providers there. Worryingly, there's been no fundamental switch to the underlying operating model. And just no standards that we may use to build technology solutions – for instance with respect to legal agreement data models. We cannot build smart contracts from the bespoke approaches we currently see! Automation of is not the aim – rather it's to add more business value – and that we certainly do not want to automate the company processes in position which have a 70s feel for them.

Not only performs this neglect to reflect the client driven business models inspired by Uber, Amazon and also the transformation set for example retail banking, additionally, it misses the opportunity to provide firms using the reason for value driven business logistics that will be the key to success in a post COVID-19 world.

The trends that were slowly, if inexorably, coalescing over the past decade have been accelerated enough where every facet of the company plan must now be under review. The way we work will change. Where we work will change. Businesses have to be “antifragile” ; people wish to operate in different locations. New workspaces will morph from solely physical constructs to increasingly virtual and data driven.

Most importantly, the manner in which we work and just how we work will change. Firms will have to relearn the fundamental business principle: they exist to serve clients. How can firms reconsider the operating model to better service clients while also offer the new demands from employees regarding how where they work?

Value Principle

When considering every facet of the how, where and why operating model, the focus must be on the have to deliver value at each stage of the business supply chain. How, for instance, can an attorney deliver legal advice to financial institutions in a way that enables it to be immediately consumed and drive value throughout the business – rather than taking weeks of expensive and intensive review through the internal legal function? Why not automatically generate drafts of trading agreements, firing off the necessary internal approvals – when the client onboarding team and credit save down the relevant client details?

Systems and data have been in the centre from the scaling of these financial institutions since the 90s, however the inputs from legal departments and retained external law firms continue to be just words – analogue anyway – and much more words. Legal advice needs to be provided in a manner that is cognisant of those downstream data-driven systems and processes.

This requires a new way of thinking along with a new method of innovation. Obviously, there is a have to streamline processes. It comes with an chance to embrace innovative technology; essential to allow secure, effective working remotely like a globally distributed team; along with a chance to explore a raft of third-party service options. But to provide success inside a value driven supply chain, the goal should be automation by design, not default – and also the focus must be on optimising the client experience, not merely cutting costs or improving internal efficiency.

Adding some clever technology to hurry up processes in some places isn't enough. Legal functions have to consider how to use that technology to enable a new way of working that delivers tangible value to clients while meeting employee expectations.

Standard Foundation

Operating models need resilience. They ought to be able to better accommodate change without continual work arounds. Why use OCR signed documents whenever you could simply save them in a machine-readable form? They have to enable truly effective collaboration, not just between internal and external teams but also with intelligent technology. Is the legal provider of the future be a part human, part virtual, part machine? The challenge is to maximise each element and play to each of our strengths. It was the way forward for AI that Kasparov saw on his defeat by Dark blue – not just one of being replacement by machine but seeing the dream team combining the two.

The foundation for this transformation by design is industry-wide standards. These critical foundations, including common agreement and clause taxonomies, allow consistent representation of the real life. They let the rapid development of different, interconnected business outcomes and provide the opportunity to take advantage of start up business requirements, global or market events, tooling and technologies.

For example, with industry-wide standards, internal legal expertise is based on collaboration with 3rd party providers measured on value, not cost. Lawyers can leverage deep digital information resources. They are able to mine all the contractual obligations and business connection between all lines of economic staying with you. Essentially, plug together diverse skills and knowledge resources in a manner that permits the legal function to rapidly and effectively deliver more downstream value to clients.

Conclusion

This re-imagination from the legal operating model is possible through really quite simple technology The bottom line is to alter the approach, to move from no or simply the most recent, must have, shiny tool – to meaningful technology and process improvement – through a close look at what we should do and the modular and foundational foundations to make these repeatable and automatable – delivering around the commitment of digitisation.

This is not an operating model to be feared; it's one which refocuses the legal function and enables intelligent individuals to focus on higher value problems that modify the P&L. And that's the foundation – value at every stage. Value of skills, worth of clients and value of service delivery.