The future of in-house: embrace technology and service delivery

Referring to the tremendous growth of the in-house bar, Headon said the number of in-house positions will likely plateau at some point and that could be a result of law firms adjusting the way they deliver services — something many are already doing.

“We are going to reach that plateau when the firms find a better way to deliver things that are not core functions — none of us are a core function for the organizations we serve. Much of the growth has been driven by the fact it was cheaper to bring us in-house and do the work,” said Headon. “Another pressure butting up against that, though, is the increasing recognition of the specialization we have in-house. That’s going to continue to drive some growth in the profession, but as the firms start to respond, we’re going to find ourselves at a bit of a plateau.”

One area in which Headon does expect additional growth is the compliance function in-house.

“For too long we have left to the auditors the things we should really be doing as lawyers — things that speak to our skillset much more than theirs. Not that we need to push them aside, but we need to work with them much more closely. It is a related kind of function, but there is a real difference,” he said. “When we’re looking at compliance with a legal standard or moral standard, we can’t just rely on those skilled in the accounting and auditing profession to help us out with it. They have, however, developed some really great methodologies to extract the kind of information we need to see how we’re doing on the compliance front.”

Headon said the in-house community can play a big role on the compliance side in companies because it has a proximity to the business that those in private practice don’t have, and proximity provides that instinct to “probe a little deeper” and has an understanding of what the business is trying to do to get to a more robust approach to the compliance function.

He acknowledged that compliance issues aren’t on most law school curriculum but that in-house lawyers need those kinds of credentials.

“Business units need legal to bring the same tools and methods that other business groups do to better serve them on the legal side,” he said.

Headon said lawyers need to reflect on the fact that while lawyers tend to hold much of what they do and how they do it to be sacred, most other professions have moved on with the times to embrace technology and other service providers in an effort to get things done more efficiently.

He quoted McCarthy Tétrault LLP’s national innovation leader Matthew Peters who once said that “lawyers missed the industrial revolution.”

“What really struck me was that it was the industrial revolution when the art and science of management really came into its own and that’s really what was missing here — bringing that skillset to what we’re doing and in a way that becomes very familiar to all the people we are serving,” he said.

Most importantly, Headon said, lawyers need to leverage what others have learned about service delivery, how to meet client expectations, how to connect with them and how to understand what’s motivating them to ask for something more.

“We also need to think about how we serve all of the interests that expect something from us. It’s not enough to say ‘I have my code of conduct and I know who my client is.’ As complex as that can be for some of us in the structures we work in, a whole lot of other people out there expect a lot from the legal profession and we need to step up and meet those expectations. And if we can, we can get to a place where we can regain the kind of relevance in their lives where they are going to want to work with us,” he said.

He also predicted that there would be an emergence of a new kind of legal professional in-house including those who specialize in data analytics and process engineers — those who may help develop new interfaces for dealing with clients.

In-house counsel will also lead the push to online dispute resolution, and arguing a case in an online environment will require lawyers to adapt to that reality.

“It will be one of those things those of us in a B2C business need to rely on because our customers won’t wait for things to get sorted out in a court system that takes years to render a decision,” he said. “I know the attorneys general are trying to speed things up, but it’s still a process and I’m not sure most of the disputes need to be in the courts that way.”

Lawyers will also have to embrace technology and not fear it but see it for the benefit it will have for clients.

“When we pair up with the machine, we can do so much better than the machine alone or human alone. This is the kind of model we need to get comfortable with. There will be mistakes. Lawyers get stressed when we say the business model might fail; some of these business models may fail as we experiment, but just like an airline that goes into CCAA, the business model fails but you can still safely carry the passenger from A to B,” he said. “We need to safely get our clients through this while we bring that technology in and take advantage of the power it has to do the kinds of things that are expected of us. Here is where we have a bigger role to play — the power of the technology our businesses are looking at is so unusual and powerful compared to what we have seen before and that is where we have a big role to play in getting it right. We’re the moral compass. To properly play that role, we need to be involved in the discussions around the right use of the technology.”

Headon also mused that in-house could also one day be seen as the profit centre.

“With the emergence of the liberalization of the regulations around the legal profession, we have an opportunity for alternative business structures where our businesses could offer our legal services in the market. British Telecom is doing that and bringing in millions of pounds of revenue every year,” he said.