28 August 2017

Financial Review: L’Oreal, Flinders Ports lawyers push innovation

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Written by: Katie Walsh

When L’Oreal’s lead lawyer in Australia Anna Lozynski worked at a top-tier firm a decade ago, a dictaphone-obsessed partner in a nearby office kept his Blackberry in the bottom drawer and thought emails were a “fad” that would disappear.

Ms Lozynski is among a growing body of innovative general counsel pushing firms to embrace technology as they try to do more with less. Flinders Ports general counsel Adam Cooper is another. Both favour firms not only open to trying technology solutions, but actively driving them.

“It isn’t hype; efficiency in any function is never going to go out of fashion,” Ms Lozynski said on Wednesday at a legal procurement forum co-hosted by Lawcadia and global trade organisation Buying Legal Council at KPMG’s Sydney office.

“If change is the only constant in business, why is the legal profession in denial that they need to be at the forefront in the same way that our CEOS, executive teams, law firm management teams, and regulators are?”

 Churn work gone

It is a trend seen at other in-house legal teams. Ms Lozynski said lawyers had to view legal technology providers as an opportunity to bring synergies, not as a threat; but either way they had to understand what they were doing.

Integreon director Wells Church admitted his legal services outsourcing company with its high-volume lower-complexity work was “probably on the frontline” in terms of the automation that is both here and fast approaching. While there was plenty of hype, document review technology was vastly more accurate than five years ago, he said, and there was no telling what might come.

“Our business model has to change,” he said. “The best teams are looking at all three options –technology, capturing data and using it to drive continuous improvements, and getting the right people in the right place.”

“Lawyers often want to hold onto work because they think they can do it better than everyone else.

“It’s about changing the mindset. At some stage you’ve just got to do it. The forces that have kept the legal industry somewhat safeguarded or protected in terms of this disruptive change are breaking down.”

But Mr Church said as the world changes, lawyers would become more important, as “ethical stewards”.

Jason Ryan, principal at contract lawyer provider and technology consultant Lexvoco, said there was a lot of innovation in operational efficiency (or “no tech”) inspired by advances in manufacturing, and the best in-house counsel took cues from beyond the legal world. But he said automation could push efficiency “through the roof”.

 Flinders Ports’ Mr Cooper said as the relatively small business grew, the plethora of legal service options were going to be increasingly necessary. He expected firms would drive a lot of the change, particularly in artificial intelligence.

“I think the firms will bring it to the clients rather than the other way around. They’ll see the efficiency gain over time.”

Personal relationships were still a factor in firm choice, and those involved in historical matters had a “strong foothold”, but Mr Cooper said it was not as critical as it was a decade ago.

He had his own anecdote to highlight how far the profession has come already.

“When I started as a law clerk in 1989, there was no screen on my desk, the mail came around twice a day, as did the tea lady. The most rapid way of communicating was fax.

“So I don’t want to start with the premise that lawyers and law firms aren’t open to change.”

The challenge now was more around charging and pricing, he said.

Avoiding open cheques

 Lawcadia CEO Warwick Walsh said procurement arms did not like hourly rates, including because of the risk of an “open cheque”. Even if bills were capped or fees discounted, that still incentivisedinefficiency.

Another challenge for firms is around talent attraction and retention. Deloitte has estimated 75 per cent of the global workforce will be milliennials by 2025; a trend Ms Lozynski said meant it meant “change or die” for the profession.

“They’ll be entrepreneurial, they’ll do their own thing, they’ll start their own start up.”

She championed the need for a broad cross-section of the profession to support each other rather than segregate into categories such as in house counsel and law firms.

“We’re part of a community, let’s lean on each other rather than always being quoted as the profession that’s 20 years behind.”

Read more: http://www.afr.com/business/legal/no-blackberries-in-bottom-drawer-for-loreal-flinders-ports-innovative-lawyers-20170821-gy0ylb
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