Canadian Lawyer InHouse

41 CANADIANLAWYERMAG.COM/INHOUSE MARCH 2018 L a w D e p a r t m e n t M a n a g e m e n t 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 the business." 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 organization. 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?" Shen O'Carroll, who is not a lawyer, says it's still up to the lawyers in the legal depart - ment 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 to me." 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." IH 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. MARK SMOLIK, DHL Supply Chain

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