For Episode 6, we sat down with D. Casey Flaherty at the Legal Tech conference in New York City.
Casey talked about a few things: how many lawyers struggle to master everyday technology, his experience as corporate counsel and the efforts he took in that role to improve the way company lawyers did their jobs. But, a good chunk of the conversation focused on Casey’s belief that inefficiencies in legal service delivery will not change until clients demand change.
Casey is a legal operations consultant and the founder of Procertas, a legal tech assessment and training tool that helps lawyers and their staff master the basic technology tools they use every day such as Word, Excel and the like.
Prior to launching Procertas and his legal ops consulting practice, Casey was corporate counsel for Kia Motors and got his start as a law firm associate with Holland and Knight.
Casey is also an excellent and prolific writer. He writes frequently for 3 Geeks and a Law Blog and is the author of “Unless you Ask” A Guide for Law Departments to Get More from External Relationships.
You can find Casey on Twitter @dcaseyf
In Episode 6, we also talk to Haley Altman, the founder of Doxly. A legal transaction management platform used by transactional and M&A lawyers to stay organized when they are working on and closing deals.
Theme Music: Home Base (Instrumental Version) by TA2MI
Photo above by Seth Schwiet on Unsplash
Chad Main: I’m Chad Main, and this is Technically Legal, a podcast about the intersection of technology and the practice of law. Each week we’ll talk to a mover and shaker from the legal and technology fields, we’ll learn a little bit about them, what they’ve been up to, and hopefully get a couple real world tips that lawyers can use to integrate technology into their legal practices.
For this episode, I sit down with Casey Flaherty. He’s a legal operations consultant and the founder of Procertas, that’s a technology assessment tool that helps lawyers and their staff master commonly used technology products.
Before Casey started his consulting practice and launched Procertas, he worked in-house in the legal department at Kia Motors. It was there at Kia where Casey got his inspiration to create his technology assessment tool after he figured out that some of the lawyers he hired may not be that great with technology.
But even before that, Casey had figured out that law firms weren’t bastions of technological and business efficiency, because right out of law school he worked as an associate at big law.
Casey Flaherty: Took me about a week maybe, less, to look around this big law firm and say, “This is nuts.” And the, “This is nuts,” there’s cognitive dissonance because the people were amazing. The partners in particular were brilliant and hardworking and clearly provided tremendous value to their clients. But the support system, the apparatus, the way that expertise was leveraged through process and technology seemed fundamentally broken to me. And I couldn’t believe that clients were paying for it. And then I became a client.
Chad Main: After a few years at big law, Casey landed his job at Kia Motors. But based on his experience at the law firm, he had some ideas about how to tweak the way legal work was done for the company. He looked for places to cut out waste out of the way legal work was done and make it more lean. He also wanted to leverage his position as client to influence the way outside counsel for Kia did its work or, as he explains it, he knew what he wasn’t going to pay for.
Casey Flaherty: And I took with me this idea that there were lots of things that I didn’t want to pay for, but I also didn’t want to throw the baby out with the bathwater. I don’t think lawyers are completely fungible. I don’t think that everything lawyers do can be commoditized. I don’t think that they’re going to be placed by robots any time soon.
And so the question became how do you get what’s valuable without the waste? How do you make it more lean, and how do you drive changes and behavior as a client? And so I brought in a lot of concepts from supply-chain management and particular site visits. I would go out to my law firms and watch them work and talked to them about how they could work differently and should work differently on my projects. And then of course I would go back because that kind of approach requires sustained attention.
Casey Develops a Technology Assessment for Lawyers
Chad Main: One of the things Casey did to create efficiency and drive change into the behavior of Kia’s outside counsel was to develop a technology assessment that he required Kia lawyers to take and pass.
Casey Flaherty: And I got some publicity for that. And the publicity focused on one important, but controversial aspect, and that is that lawyers suck at Word, Excel, and PDF, that they spend most of their time in these core technologies, and they’re not good at using them. And again, not because they’re lazy or stupid, but because they’ve never learned. And people were incredulous when I said that. In particular, relationship partners were incredulous when I said that. And so it wasn’t enough for me to say it, I had to prove it. So I created an assessment, a bunch of tasks that we had paid for that I could complete in 20 minutes. And it took the average lawyer or paralegal over two and a half hours.
Chad Main: Not surprisingly, Casey got some pushback from his attorneys about his technology competence assessment. “We’re lawyers,” they said. “We’re not clerical workers. We’ve got assistants to do this work. These software skills you want us to learn, that’s not real lawyering.”
Casey Flaherty: If it affects quality, speed, cost, or consistency, it’s real enough to me or, more glibly, if it shows up on the bill, it’s real enough. What you’re really saying is that’s not where the lawyers add the most value. On this, we completely agree, which is why it’s so tragic that they waste so much time doing it.
And then you get to the next objection, “Oh, well, that’s what we have secretaries for.” There are a few problems there. Number one, law firms, even the biggest law firms, have been laying off secretaries for years. I collect press releases from law firms where they cite the fact that lawyers are using technology as the reason for their layoffs, that, oh, the lawyers are using technology. But to say that, it’s true, but it doesn’t mean they’re using it well.
Number two, that assumes that the secretaries know what they’re doing. They don’t. I test them. They haven’t had the training either. And this isn’t just about cost, it’s about overall speed, quality, and consistency. And you, as a lawyer, are responsible, 5.1 and 5.3 over work you delegate. It still has to be done competently. And using technology properly is not just about cost. It’s about competence. It’s about getting the right work product out in the right amount of time. And so the delegation dodge, and I’ve written about the delegation dodge, didn’t work with me, still doesn’t, and it’s becoming less and less true over time.
Procertas Legal Consulting is Born
Chad Main: As mentioned at the beginning of the podcast, Casey ultimately left Kia Motors and watched his legal ops consulting practice. He also decided to make his technology assessment tool available to everyone and launch Procertas. If you want to learn more about Procertas, you can go to procertas.com or just Google Casey Flaherty, and information about it will come up. I’ll also post a link to it in the show notes for Casey’s episode page, and you can check that out at tlpodcast.com.
Casey Flaherty: What I expect my legacy to be in the legal space is integrating basic tech training into our core curriculum. At law schools, in CLE, in law firm training programs, law department training programs, government organizations, I think we need to take seriously the fact that to be proficient with modern technology, you still need to train. And it doesn’t matter how smart you are
Our technology is not intuitive once you get past the basics, and to do what we do, you have to get past the basics. And so that’s one thing we did. I’ve automated the assessment. I’ve also automated the training around it to create a competence-based learning platform. The idea being that you take a test that identifies what you know and what you don’t. Both matter. What you know means that you test out of training you do not need because we don’t want to waste your time. And then what you don’t is probably more important because people don’t know what they don’t know. Then we have to move in to fill their gaps, the now identified gaps in their knowledge. And so I’ve created that competence-based learning platform.
I don’t want to say it’s my passion because, frankly, I get very bored talking about Word. I feel like I’ve gotten all this credit for a statement of the blindingly obvious. And yet persistence matters to perception. You have to repeat over and over for the message to penetrate. And so I’m willing to do that, and so that’s my evangelism.
Chad Main: As you can tell, Casey’s pretty passionate about Procertas and its aim of helping lawyers master the software they use every day. But Casey’s real expertise lies in his legal operations consulting practice. It’s there where he helps law firms and corporate legal departments improve the way they deliver legal services.
Casey Flaherty: What puts food on the table and where I get excited is I also do legal operations consulting because again, the legal tech assessment was small piece of what I was looking at. I think holistically about legal service delivery. So the use of data and analytics, automation, knowledge management, project management, process re-engineering, and that is something I’m really passionate about. And so I do legal operations consulting for large corporations and law firms.
Chad Main: And what type of tasks … Let’s say, multinational corporation hires you. What kind of consulting, what kind of work do you do for them specifically?
Casey Flaherty: Well, I’ve created legal operations departments, so gone in and help them set up an actual legal ops function. Or I’ll take on a very specific task like a convergence initiative.
Chad Main: Convergence is?
Casey Flaherty: Yeah, so let’s say they have 300 law firms, and that’s way too many, it’s an administrative burden. Their spend is too diffused for them to leverage it. They’re not getting any kinds of economies of scale. I will help them winnow down the number of firms they use, and then negotiate the arrangements with those firms and also setup an outside counsel management program.
Chad Main: Based on his experience both as a law firm lawyer and in-house as corporate counsel, Casey has developed a philosophy on which much of his consulting practice is based. As alluded to earlier, Casey’s a firm believer that improvement into the way legal work is done ultimately must be driven by the client. In fact, he believes it’s the responsibility of legal clients to push for this change. And if they don’t, they’re not doing their job.
Casey Flaherty: One of the big questions I have when it comes to external resources is how do we weave continuous improvement into the fabric of the relationship. And a lot of that comes from the clients. Clients are urgency-drivers and in many ways have abdicated their responsibilities to channel captains and have decided not to concern themselves with how work gets done. Just what is the work and how much are we going to pay for it? And you lose a lot of the incentives to change when you abdicate that responsibility. And so I want to reinsert the client into active management of how work gets done.
Clients Must Drive Change in the Legal Industry
Chad Main: So if Casey is right, if it really is a corporate legal client’s responsibility to push for change in the way legal services are delivered, how does he suggest they do this? He says they do by becoming more sophisticated in the way they purchase legal services, and that starts with understanding how supply chains work. However, he is also very quick to point out that just hiring more lawyers and throwing more bodies at the problem is not the answer.
Casey Flaherty: As much as we want to fight it, corporate law departments need to become sophisticated consumers of legal services. And to do that, they really need to understand how supply chains work, how to manage one, and how to put together a true legal value chain. And we haven’t done that. Instead, faced with the more for less conundrum, which in-house departments do face, we’ve been on a two-decade long hiring binge. It’s very simple math. It’s cheaper to bring a lawyer in-house than to pay them through a law firm. But it’s also just labor market arbitrage. You’re now paying the same lawyers to do the same work the same way. And you end up replicating many of the pathologies of law firms. And yes, it’s at a lower cost per capita, but it’s not sustainable. You can’t keep throwing bodies at the problem forever. Not only that, it’s much harder to fire an in-house lawyer than it is to switch law firms.
And so I am at a high level of proponent of insourcing, at least from the perspective of the mid-’90s and later. We needed to achieve a certain amount of scale so that we could have specialization and sophistication within law departments. It’s not that all insourcing is bad, but I think in many respects it’s gone too far. At this point, there are more in-house counsel in the United States than there are in the domestic offices of the Am Law 200. Law departments, one lawyer or more, are responsible for the purchase of 55% of all legal services in the United States. And law departments have grown at seven and half times the rate of law firms since the late ’90s.
Chad Main: When you say you think insourcing has gone too far, do you mean just the sheer numbers or is it issue with the work that’s being done maybe would be better suited for the law firm or some other legal service provider?
Casey Flaherty: So the answer is yes to both. So I think that there are other organizations that should be better suited to it, organizations that specialize in it, organizations that can achieve economies of scale, organization that can focus on that kind of work. But I also just think there are too many bodies, period. What we like to frame as a cost problem in legal, and I have to credit Professor Bill Henderson for this insight, in fact many insights, but what we frame as a cost problem in legal is truly a productivity problem. And we haven’t spent enough time thinking about and working on productivity. Again, how do we leverage expertise through process and technology? Almost everything has been how do we find cheaper labor, but the demand for legal services is going to continue to increase, and by the way, as it should.
Lawyers are very valuable and as the economy becomes more complex, legal insight becomes more important. So lawyers are complexity engineers. You can look up Dan Katz on that one. Some create complexity, the rest of us solve for complexity. And as the world economy grows larger and more intertwined, it becomes more complex. And so legal services become more important, but you can’t just keep adding lawyers forever. There is still this more-for-less conundrum, and that’s not a cost conundrum. It’s a productivity conundrum.
Legal Founder Segment: Haley Altman of Doxly
Chad Main: Let’s hit the pause button for a minute on our talk with Casey. It’s now time for our segment where I sit down a legal tech founder. Today we talked to Haley Altman, she’s the founder at Doxly. That’s a SaaS-based platform that deal lawyers can use to stay organized when they’re working on and closing deals. It’s a great tool for M&A lawyers.
Tell us a little bit about Doxly.
Haley Altman: Well, thank you for having me, Chad. Doxly is a legal transaction management platform. We are looking to help attorneys close deals in an efficient, streamlined process that gives them extra control and visibility into these very key and important transactions.
Chad Main: And what motivated you to create Doxly?
Haley Altman: Yeah. So I’ve been a transactional attorney for over 10 years. I was an attorney at Wilson Sonsini in Palo Alto and at Ice Miller in Indianapolis. And I started a summer clerk, was an associate working with all these different, complicated transactions, and then trying to kind of develop my own business as well. How do you bring on clients, how do you effectively work with them? And as I worked on really kind of generating this new business and managing all the transactions that I was already on, it just really kind of came to light that we all practice in a very similar way. We all use these closing checklists as the roadmap for the transactions, all the items, documents that need to be negotiated and signed, and tasks that need to be completed. And they’re kept in Word documents and Excel checklists. And so what I wanted to do was give attorneys more visibility into what they’re doing, take away some of those administrative challenges, and really help you focus on doing the high-value legal work that I enjoyed doing.
So I just started looking into what technology was out there, what could we do to improve the transaction process. And after spending about a year and a half looking into it, not finding anything that I thought really met the needs of the market, I really wanted to kind of jump in and build company that gave attorneys the ability to practice and do what they love.
Chad Main: Now when you say you wanted to create a tool that helps attorneys practice and do what they love, how specifically does Doxly do that? Does it free up time? Does it help them remind the tasks?
Haley Altman: Yeah, so with Doxly what we’ve really done is take a kind of a fresh look at kind of managing the transaction process, so taking these checklists that are in Word document that have to be constantly updated throughout the transaction process, we wanted to give people greater visibility. So finding ways to get them the information they needed in a way that didn’t require the administrative side of keeping everything up to date. Then on the closing process, we wanted to take all those pieces that are incredibly tedious, yet insanely important: drafting the signature pages, making sure that the blocks look perfect, that you’ve got pages created for every signer. We wanted to do that for you so that you can focus on the key issues that need to be resolved. You know, the signature process is incredibly important. You don’t want to close a deal and be missing a signature page. You don’t want to take too long getting the signature pages out and collected, that the deal doesn’t close on-time. The value that we bring to the transactions is all of the key negotiating that we do.
We advocate for our client, we think of all the different ways that we can help them achieve their position through this transaction. These are usually incredibly important transactions. You’re helping a company get money so that they can hire employees and bring a vision to life, or you’re helping a company that has grown, secure an exit, or add on another piece that they need to kind of continue to grow their business. And these are all very time-sensitive. And so the administrative side of it can be an incredible burden, but it’s critical at the end of a deal to have every document, the exact form of document that’s been approved by the parties with every single signature page, so that when everyone moves forward, they can do so with the confidence and security that everything has been done correctly.
Chad Main: Well, Haley, it’s a cool product. Thanks for your time today, and how can people find you?
Haley Altman: They can go to our website, www.doxly.com.
Change Starts at the General Counsel’s Office
Chad Main: Okay. Let’s get back to our talk with with Casey. From the first part of the interview, it should be pretty clear that Casey doesn’t believe much is going to change in the way legal work is handled, unless the buying habits of clients change. So I asked Casey if the consumption of legal services has to change, where does this change have to start? He answered very quickly. He said, “At the top, at the general counsel’s office.” He also says it starts with improving the processes behind the legal work and the training of those involved.
Casey Flaherty: I would start in the General Counsel’s office with the people who are in charge of now large groups of lawyers delivering legal services internally and externally, and get them to stop subscribing to the lawyer theory of value, which posits that we solve problems one smart lawyer at a time. And if that one smart lawyer can’t do it, then we add another one. And then we keep adding lawyers until we have enough lawyers to solve the problem. And it’s not just about saying, “Oh, technology will solve it.” Technology’s nice, technology is a piece of the puzzle, but you really need to have an integrated view of people, process, and technology, and the way that you can embed expertise into your systems. We have to stop believing in magic, because everyone says that they’re pro-technology, and, “Oh, we’ll just throw some technology at it.” And then the technology doesn’t perform. And then they blame the technology and decide that, “You know what, we should have bought different technology.”
The best studies we have come out of MIT, suggest for every dollar you’re spending on technology acquisition, you should be spending up to 10 on personnel, process redesign, and training. And we fail to make that investment, and so the technology doesn’t yield what it should. And again, we blame the technology, which doesn’t make us anti-technology. It just makes us think, “Oh, there’s some other technological solution out there.” And we have to banish that thinking. And so we banish the thinking that all I need are more lawyers or more budget for more lawyers or, oh, all we need is some technology. And you have to, again, think holistically about legal service delivery, about your process, about what problems you’re trying to solve, and what the best combination of people, process, and technology is available to you to solve those problems.
How to Get Law Firms to Embrace Change
Chad Main: Changing internal legal processes is just one piece of the puzzle. The other puzzle pieces are law firms, and it’s no secret that change at law firms moves at a glacial pace, and that’s probably being generous. So what’s it take to get law firm buy-in?
Casey Flaherty: You demand that they change too. And you don’t just say some words. You actually go onsite and understand how they’re delivering legal services. Talk to them about ways that they can change, put together measurable improvement projects, and then you actually measure it. You come back three months later, six months later to see how they’re doing. And you make sure that not only are you continuously improving, but they’re continuously improving. And so you have to extend both the mindset and your attention to your entire supply chain. And I think when you do that, you’re going to find a lot of legal services both internally and externally that can be unbundled, and you’ll start to have a more diversified supply chain where you’re bringing in law companies where you do find technology that’s the right fit. And so you are replacing labor with technology. You’re also replacing labor with process and less expensive labor. And you’re doing this all the time. There is not finish line. There is no perfect end-state because even if you were to get there today, two years from now you’d be two years behind. And so it is a continuous process.
Chad Main: So it’s all good and well to talk about pushing law firms to change. But if you talk to lawyers at law firms, they’ll point out that despite clients complaining about high billing rates and waste in the process, they really aren’t pushing the lawyers to change. What does Casey say about that? He says if you’re in-house at a company and you’re not pushing law firms to do better, you really aren’t doing your job. In fact, Casey wrote a book about it called Unless You Ask. If you’re interested in checking that book out, I’ll put a link to it on the show notes on the episode page on tlpodcast.com.
Casey Flaherty: So you have to stop being vague. Any in-house counsel can say, “I wish my law firms were more efficient and innovative and cost-conscious.” You’re an in-house counsel. You are the purchaser. You can make the do that. It will require effort on your part. It might even require some uncomfortable conversations, and every now and then you might actually have to switch firms. But these, “I wish outside council did X,” … No, no. It is literally your job to make them do X. That doesn’t make me super popular to say it. And I wrote an entire guidebook for the association of corporate counsel entitled Unless You Ask: How to Get More From Your External Relationships. There’s a primer that I wrote for the buying legal council on service delivery reviews, much shorter than the guidebook, that outlines precisely how I would go about it. But it’s a menu, it’s not prescribed. It doesn’t say, “You have to do X.” Figure out what work you’re doing, figure out how it’s being done, figure out how it can be done better. Here’s the current state, there’s the future state, now how do we get from here to there? And if you’re not paying sustained attention and making progress towards that end-state, then you’re not doing your job.
Chad Main: But at the end of the day, Casey admits that the practice of law really is changing. It’s just not changing as fast as the way some people would want it.
Casey Flaherty: I would say it’s slower than most of us who think about it would expect, let alone like. So it’s slow and uneven. You might have a couple of corporate counsels who do something really interesting in one area, let’s say outside counsel management or information government or use of analytics or whatever it is. And then no one else does it.
And so you have all these outliers, and people look at the outliers and they start to tell themselves a story about change based on the outliers, not realizing that it’s not spreading beyond the outliers. And so the diffusion of innovations and legal is not what at least I expected. And from talking to people here at the conference and all the other conferences I go to, I know I’m not alone in that assessment. Anyone who’s been around for more than 10 years would have expected the world to change much more than it has in the last 10 years.
Chad Main: Do you think the pace of change will increase if people like you keep talking about it?
Casey Flaherty: I have no idea. I had coffee with the great Bruce MacEwen last night. Anyone who hasn’t read Tomorrowland, Bruce is so insightful. And Bruce, he lays out different scenarios for the future, all of them really well-drawn, very provocative. And he doesn’t predict. He has this great line about the future might be unknowable, but it isn’t unthinkable, and so let’s think about it, let’s talk about it. And I said to Bruce, that I have a particular view of the future, but I kind of lost any sense of time. I don’t have any strong predictions about how long it will take. And I will be so happy if it happens quickly, but I’m also prepared to be patient and have it be trench warfare and measure progress in inches. It’d be great to capture huge chunks of territory, but even if that doesn’t happen, it doesn’t make change any less worthwhile.
And so I know I didn’t answer your question because I don’t have an answer. Five years ago I would have been very confident. Very confident. I would have put a marker in the ground. And it’s not that I’m afraid to bet. I’d bet my career on change. I’m not just pontificating from some position of security. I work in this space. My family eats based on whether or not I am right to a certain degree. But I don’t have a crystal ball. I don’t know if it’s going to pick up. But I know it’s happening, and I know it’s happening enough to keep me employed.
“Non-Lawyers” Are Very Important Change Agents
Chad Main: Most of the talk on today’s podcast has been focused on change within corporate legal departments or within a law firm. But no small portion of this change, even if it’s to be positive, will involve players without law degrees, people with expertise in technology, business, and project management. It’s also going to take a change in the way lawyers look at these people. They can’t be viewed as, “non-lawyers,” or lesser-thans, but they must be recognized as people important to the process because in fact they are.
Casey Flaherty: Again, I talked about the mindset shift with the supply chain. I think part and parcel with that is the mindset shift around what I call ally professionals, but with the rules we’ll called them non-lawyers. There’s a lot of different expertise that isn’t strictly legal, substantive expertise that can make a valuable contribution to the delivery of legal services. And so I think shifting your mindset about not just what is valued, but who is valued, and getting past our silly cast system where these other experts are treated like second-class citizens. I think that’s a great place to start. Now, that’s not a concrete step in a particular direction where, oh, you’ve installed this system. But I do think as a general mindset shift, it’s very important.
Chad Main: The last thing I talked about with Casey was a quote that I read in an article he had published that day. And by the way, if you don’t read Casey’s stuff, start today. It’s great work. There’s no question that he is one of the best writers out there on the changes to the practice of law and just the legal industry in general. You can find most of his stuff on Three Geeks in the Law Blog. At any rate, the quote I read that day that was so cool was that system amplifies talent.
Casey Flaherty: Well, it goes back to this idea of how do we leverage expertise through process and technology, because the argument I often get is about real lawyering, and that’s where the value is. And it’s essentially talent trumps system. That what’s important is that I’m a really smart lawyer, and what I do is valuable. So it might be true that I’m a little inefficient, but why don’t you just sit back and let me lawyer, let me do what I do because that’s where the value is. And I don’t completely discount that because talent matters and because lawyers do bring true value. But we can only afford so much lawyering. And so to get the maximum out of the lawyering we can afford, we need to situate them in systems that we properly leverage that talent, that we amplify that talent, that we augment that talent, that we have forced multipliers so that we can truly, truly extract full value from talent that is genuinely valuable.
And so I focus a lot on the system side because the talent’s already there. And the talent is in many ways enduring. We had talented lawyers in the ’80s. We have talented lawyers now. Lack of talent isn’t the problem that we’re trying to solve, how to leverage that talent is. And so I’ll often say that good lawyers aren’t scarce, good systems are. And so that’s where we should be focusing our efforts, on building those systems.
Chad Main: Well, that’s today’s episode, hope you enjoyed it. If you want to subscribe, you can check us out on pretty much any major podcast platform like iTunes, Google Play, Stitcher, and SoundCloud. If you want to get ahold of me, please shoot me an email. My email address is firstname.lastname@example.org, that’s C-M-A-I-N-@-P-E-R-C-I-P-I-E-N-T.CO. Until next time, this has been Technically Legal.