It’s not often that a law firm hears what’s expected directly from the client’s CEO. That’s what occurred at the recent DXC Strategic Partner Law Firm Summit. Bill Deckelman, DXC’s Executive Vice President and General Counsel ensured there was no hearsay when he invited DXC’s CEO and two other senior executives to address outside counsel. Summit attendees included Strategic Partner law firms, senior members of DXC’s legal department, UnitedLex, AdvanceLaw, and the author.
The Summit’s key objectives were to: (1) build stronger relationships between DXC legal leadership and Strategic Partners; (2) educate Strategic Partners on DXC’s mission, business strategy, and operational plans; and (3) promote collaboration between DXC’s in-house team and Strategic Partners as well as to foster collaboration between/among the partner firms. The candor from all sides was noteworthy. So too was their willingness to cooperate with each—and to speak openly with the DXC legal team—to share actionable ideas to advance client objectives. Transparency and collaboration are new to law. That’s because legal delivery has morphed from a lawyer and practice-centric profession where confidentiality and a zero-sum ethos prevailed to a multidisciplinary industry where “the business of law” is collaborative and “best practices” are shared.
Direct from the CEO
Mike Lawrie, DXC’s plain-spoken, dynamic CEO, laid out the company’s vision and plans for navigating key challenges and opportunities in a fast-changing marketplace. He provided a vivid snapshot of the warp speed pace of business in the age of digital transformation, the impact on employment –replacing old jobs and creating new ones, agile workforces, new skills, collaboration, the impact of fluid relationships with business partners on IP ownership, data, streamlining contracts, and legal professionals helping to formulate enterprise strategy, not react to it.
Lawrie admonished attendees to “do more with less” and to integrate with the business. He expects the company’s legal providers—in-house, Strategic Partner law firms, law companies, and others– to “get out in front” of business challenges, not “clean up the mess.” Lawrie laid out a roadmap of requirements, expectations, and execution challenges necessary to provide effective legal services to modern enterprises. His expectations of what lawyers do and what it means to provide effective legal services diverges markedly from incumbent law school curricula and firm practice. Lawrie sees legal professionals as business and tech-knowledgeable resources with legal expertise. This is very different from how lawyers are presently trained and how they regard their role.
The Prototype of the Modern GC
Bill Deckelman is clearly up to the challenges outlined by his CEO and has taken several bold steps to align his integrated legal delivery team with the enterprise. Deckelman is agnostic where the resources required for the solution come from; his goal is to identify the “right” resource to address the client’s business challenge. He has reshuffled the law firms he uses and has embraced “alternative legal service providers” (an anachronistic, though commonly used industry term) for many key functions, notably contract management. He has also blurred the lines separating his in-house team from outside providers and has redefined how DXC’s legal supply chain operates, creating a seamless, fluid network. Deckelman has laid the foundation for a client-centric legal delivery team.
Bill Deckelman is the prototype of the digital era GC. He took the helm of DXC’s legal department, the product of a 2017 merger of CSX and the Enterprise Services business of Hewlett Packard Enterprise that created a Fortune 500 company. Deckelman had a full plate—he was charged with melding two large legal departments, overseeing other acquisitions, and continuing to serve as an active business partner. The demands of the job—and his willingness to take “calculated risk” — propelled him to make several bold, unorthodox moves.
Deckelman entered into a blockbuster managed services agreement with UnitedLex and its customer lifecycle platform (CLM), the largest such agreement in legal industry history. It worked. Deckelman says DXC has “reduced internal contracting costs by over 35% in the first year and increased speed to final contract.” He foresees many other benefits resulting from the implementation of the company’s Digital Transformation Plan, including “training ‘digitally-minded’ professionals that produce higher quality work product, increased speed-to-market, even lower cost to deliver, and data and metrics-driven management capabilities.” This is a different language than most lawyers speak. It will soon become the legal lingua franca.
Deckelman has also defied industry practice in the firms he engages. In an article entitled “Why This GC Has Migrated Work from the Largest, Most Elite Firms,” Deckelman describes how he overcame his predisposition—and common industry practice– to retain “elite” AmLaw 20 and Magic Circle firms. He acknowledges the excellence of many lawyers in those firms but notes their structure, migration of talent to other firms, and client leverage have diluted their competitive edge. These factors—and the eagerness of other firms to innovate—caused him to reconsider counsel selection. Deckelman was one of a group of 25 GC’s of leading companies to endorse the controversial finding of AdvanceLaw’s GC Global Thought Leaders Experiment. The study found that “elite” firms underperformed lower-ranked ones based on a analysis of 1,400 matters. This is the backstory to the firm participants at the DXC Summit. It is also indicative of the impact of customer-centric data substituting for “reputation.” That data is driving changes in the buy/sell dynamic across multiple industries, and its use in the legal industry will promote competition, transparency, and enhanced client-satisfaction.
What This Portends
DXC is not the lone legal team on law’s road to digital transformation. Bill Henderson and Jae Um reported on the most recent Microsoft Trusted Advisor Forum. It featured 12 key Microsoft law firms and one of the Big Four, each of whom was called upon to address two key issues: (1) one thing they did during the past year to improve; and (2) what they will try to do next year to get better. “Improvement” was defined as “an innovation that demonstrably improves legal service delivery to Microsoft.” Microsoft upped the stakes for participants even higher by encouraging them to invite other in-house professionals. According to Henderson’s account, Adobe, Amazon, American Airlines, Fedex, Glaxo-Smith-Kline, Intel, Liberty Mutual, Starbucks, T-Mobile were among those also in attendance. This is further evidence of law’s shift towards transparency and collaboration.
What does this say about the future of legal services? It indicates that: (1) sophisticated legal buyers are serious about improving process and results, not simply reducing cost; (2) buyers are collaborating to share best practices (as further evidenced by the 200 GC’s who are part of the AdvanceLaw membership); (3) buyers expect providers to be collaborative, too; (4) legal providers must be differentiated; (5) providers are expected to engage in constant improvement internally and for their clients; (6) the legal industry is becoming more transparent; (7) legal buyers are not only making incremental changes (AFA’s, compression, cost reduction, etc.) but also systemic ones; (8) a growing number of in-house legal departments realize they must operate more like the enterprises they work for—law is not “special;” (9) all providers must know their client/customer and tailor services/products to advancing customer objectives; and (10) legal providers will have fluid relationships with their “partners”—sometimes they will collaborate and other times go head-to-head for business. These are some of the characteristics of law’s entry into the age of digital transformation.
The DXC and Microsoft Summits tell us that legal industry change is about to accelerate. Legal buyers are under increasing pressure to effect it; a significant uptick in legal investment indicates the “smart money” sees a big opportunity for consolidation in a huge, disaggregated market; technological advances have created tools that enable disruption of the traditional model; and powerful global brands from adjacent industries—notably the Big Four—are already leading legal service providers.
Law’s winners will be providers that are measurably client-centric. They will be fluid, data and metric driven, diverse, efficient, timely, scalable, multidisciplinary, collaborative, customer-friendly, constantly improving, innovative, tech-savvy, and provide holistic, integrated solutions that advance client/customer objectives. They will be proactive, not reactive, and invest in training for new skills required in a rapidly changing employment landscape. They will not separate the world into “lawyers and ‘non-lawyers,’” nor will they elevate legal expertise over other competencies required to drive efficient legal delivery
Law firms, law schools, legal providers, legal professionals, the ABA, regulators and the entire legal ecosystem should take a closer look at what “client-centricity” means and prepare for how to achieve it. The exercise starts with knowing what clients expect, not what lawyers are trained to sell. Don’t wait for the CEO to tell you.