Google’s legal department may not be the
benchmark everyone is ready to hold themselves to, but it’s one many are
watching closely as its legal operations team makes headlines about how it
manages how legal work is approached internally at the tech giant.
So it’s perhaps a little comforting to know that
even its head of legal operations, technology and strategy and part of the
Corporate Legal Operations Consortium executive leadership team finds that the
number of tools available to aid in the development of a more efficient and
effective legal department can be overwhelming.
“Just walking the floor at LegalTech, I can’t keep
track of the legal providers and I try very hard to keep up with what’s out
there — that’s an example of how quickly the times are changing,” said Mary
Shen O’Carroll, head of legal operations, technology and strategy with Google
Inc., speaking as part of a panel during LegalWeek in New York in January
called “Evolution of the Legal Services Delivery Model.”
Her role is an
emerging one. Legal operations used to be one that existed only in large
departments focused on efficiencies and effectiveness. It’s now often the first
hire after the general counsel in a new legal department. “The value and impact
of this role is being recognized and the voice of the client has really started
to come together and demanding we change the legal industry,” she said.
Now, when the legal department at Google has a
piece of work that needs to go external, a series of questions are asked: Does
it need to go to a law firm? Can it go to an alternative services provider? Can
it be done in-house? Can it be automated? Can technology satisfy the problem?
“There’s just a whole plethora of options now where
10 years ago there weren’t,” she said.
The main question is whether the work is matched
with the right resource — Google looks at what is needed, the value provided
and the options out there and they then match the type of work with the right
“Whether it’s working with an alternative service
provider or managing internal processes or whether leveraging knowledge
management and artificial intelligence to do work on contracts or patents
— everything we do in the legal department now . . . we’re starting to
break it down and see if we’re getting the best value,” she said.
And while for the last 20 years or more in-house
legal departments have been steadily building, for the first time it seems
there is a hint some may be ripe for replacement by an outsourced model.
On the same panel at LegalWeek, Dan Reed, chief
executive officer of UnitedLex, spoke
about a recent initiative it announced in December 2017 with DXC Technology, a
global IT services company. DXC announced it had chosen UnitedLex to support
its global law function “transformation.”
The announcement followed the April 2017 formation
of DXC, which brought together Computer Sciences Corp. and the Enterprise
Services business of Hewlett Packard Enterprise. Under the five-year agreement,
UnitedLex will help create one unified, strategic legal team to support DXC.
closely with DXC’s general counsel Bill Deckelman, UnitedLex established a
platform of technologies, lawyers, contract and commercial professionals, as
well as subject matter experts to support DXC’s business strategy and provide
“greater accountability across the entire legal ecosystem.”
Primary focus areas will include client
transactions of all sizes, litigation, immigration and legal operations. The
UnitedLex team supporting DXC is comprised of more than 250 “senior
It’s indeed a transformational deal, not just for
DXC but for the legal profession as a whole — one not accustomed to seeing
an outsourcing model for legal services, especially in an age when many
in-house departments rival the size of some law firms in Canada. Reed is a
tough one to convince that real change is happening in the profession.
change, to me, in legal has been largely irrelevant,” he said. “There’s a lot of
noise in legal, but when you peel it back, it’s generally completely
However, he noted that in the last 18 months
UnitedLex has signed up deals that are “dial moving” for the organizations they
support. “To me, that’s been the biggest change — procurement/strategic
sourcing is getting more active,” he said, noting the deals are getting larger.
It is, in fact, says Mark Cohen, CEO of Legal
Mosaic and chief strategy officer of Elevate Services, the biggest obstacle to
change in legal culture. “As long as lawyers believe they control the legal
industry, there’s going to be massive resistance.
“When lawyers are no longer controlling the buy
and sell sides of legal, I think you will begin to see a real change and people
will focus more on law as a business,” he said. “I was a bet-the-company trial
lawyer for 30 years, so I know a bit about the practice of law, but let’s not
pretend anymore . . . the profession is being subsumed within the industry and
For Mark Smolik, vice president, general counsel,
secretary and compliance officer with DHL Supply Chain Americas, the biggest
change he has seen in the 28 years he has been in-house is a discussion that
takes place between him and his CEO.
Smolik pointed out that DHL is an eight-per-cent
margin business — in order for him to have $1 to spend in legal, the sales
people have to sell $30 worth of DHL services.
“I cannot continue to pay $800 an hour when it
comes to hourly rates with law firms,” he said.
Smolik pointed out that CEOs today are hiring
in-house lawyers with an eye to retaining the “Mosaics, the Elevates” and
working with legal operations to make sure they bring efficiencies into the
He noted the average age of a general counsel in a
Fortune 500 company is 45 years old and the average age of a CEO is not that
much older. “These are the ladies and men thinking even more progressively than
we are and looking at the Marys [Shen O’Carroll] of the world and saying ‘How
could you not have had that in place? They’re looking for the most efficient
way of doing things,” he said.
Smolik said he is now included in the overall
business analysis — not the legal team — when it comes to his performance.
“Many of my peers are telling me the same thing. I have seven people in my
legal ops team — they run the whole team — they don’t come to me with a
decision whether to buy technology.”
Shen O’Carroll said the “elephant in the room” is
the law firm business model. “If it doesn’t fundamentally change everything
around it will change and eventually it will have to. What we’re really seeing
more of is the demand for change than the actual change. We’re not at the
tipping point yet — we are getting there — everyone is pushing towards that and
at some point something is going to break. We keep dancing around the idea of
hiring new roles in law firms and thinking about innovation — putting
technology in place — but we’re missing the meaty part of the conversation,
which is who is going to uproot this entire model?”
O’Carroll, who is not a lawyer, says it’s still up to the lawyers in the legal
department to agree on what is recommended. “I can beat the drum at Google, but
we have 600 attorneys who make decisions on who we hire — not all of it is up
As new in-house leaders choose legal services with
a mind to a model other than the billable hour, Reed predicts there will be
more mergers of the different types of alternative service providers aligned
with main providers of legal services — such as large law firms, which may
require some regulatory change.
Shen O’Carroll said she has been watching a law
firm in the San Francisco area called Atrium LLP that is half technology
company/half law firm. “They have no billable hour rates and focus on
efficiency. All the lawyers were happy and talking to each other — it was
this wonderful, happy, joyous law firm environment I have not seen elsewhere.”
Smolik’s advice to legal services providers? Be
proactive. “If you wait for the call from me, it may be too late. You operate
in a hyper-competitive environment. Even though I have panel law firms, there
are people among that panel competing with each other for work. You have to
find a way to differentiate yourself from the competition — you have to be able
to demonstrate meaningful and demonstrative value to the organization. Make
your client look like a hero.”
Cohen encouraged law firms to work with the likes
of Axiom, Elevate and UnitedLex. “Don’t
wait for your client to do so.”