I had the pleasure of speaking with Bjarne Tellmann, the general counsel of Pearson PLC, the world’s leading learning company. Pearson is a very large company and is active in more then 70 countries around the world. Mr. Tellmann also recently published Building an Outstanding Legal Team: Battle-Tested Strategies from a General Counsel. We had an insightful and expansive discussion about managing limited legal resources, legal technology, and innovation. What follows is part of the discussion.
Every in-house department these days is faced with the same challenge of balancing a heavier workload with dwindling resources. How do you find a balance?
If you think about the ongoing disruption of the profession, at the heart of it you have the more for less challenge. It is a bit ironic in that usually a surge in demand means an increase in supply. Yet, within the legal field, it’s just the opposite. One can think of the reason why being tied to three big causes. First, there has been an explosion in regulatory growth. Legislative rules have increased and each rule has been accompanied by increases in penalties. Second, our world and the rules governing it have become increasingly complex as have the issues arising from the rules. Moreover, those issues tend to flow freely across borders and across jurisdictions. Third, there is what I call risk convergence. Legal risks are now much more than just legal risks, they can also be reputational risks, risks related to HR, finance etc. They can take on lots of different dimensions and travel at the speed of twitter. There is also the fact that companies have faced increased pressure on their bottom lines. In many cases there has been a decline in a company’s profit. Accompanying this decline in profit has been a decline in resources. So, how do you address this problem? You address it through tools and processes that have emerged in the face of these numerous forces and pressures. Technology has been a large driver of these new tools and processes. Broadly speaking, this means that the one stop shop of law firm solution is no longer the only game in town. The value chain is becoming undone and general counsels are now able to unbundle and package pieces of the value chain to other providers, e.g. outsourcing, near-shoring solutions, staffing, the rise of the “super-temp” who does substantive work but does so on a contract basis. There also are law firms now who subcontract some of their work to smaller firms. As for technology, there are the basics, e.g. email tools and video-conferencing. There is also now a vast array of self-help tools, such as ones allowing you to pull templates off of the cloud allowing you to create standard form agreements you previously had to go to a firm for. Then there is the technology piece, e.g. email tools, video-conferencing, self-help tools allowing you to pull templates off the cloud and create standard form agreements you previously had to go to a firm for. Moreover, there are now contract management systems that allow for more efficient administration of contract processes, e-billing systems, etc. Not to mention AI and machine-learning applications. The rise of these new tools now requires our people to be trained in new skills and possess new abilities. That is the challenge for the next decade. Producing a workforce for today’s world. At the same time this has required our people to have new skills and new abilities. One piece of this, I think, is having law schools bring more business-school courses into their curriculum such as finance, leadership, even marketing.
A lot continues to be said about the need for legal innovation; not just change, but for finding truly novel ways of performing legal work and/or providing value to clients. How do you define innovation? Do you see innovation occurring within your own department?
Innovation is such an interesting area. Fundamentally it is about when two ideas come together and create a new idea. I think of innovation as being when different ideas bump up against one another. I once met this archaeologist who has been doing work using imagery from space to view archaeological sites from above. You get a completely different understanding of what was there when you see it from that different perspective. This is a microcosm of what is happening across the board. Bringing ideas from across the business. There is also the idea of T-shaped people, those who possess deep expertise, but also have the ability to be connectors across disciplines. Lawyers are well positioned to be these connecters. Lawyers should redefine their strengths and think about how they can be those connectors to boost innovation within their companies.
What is your view of legal technology? How do you view it in the context of your team?
I think that first there are some critical rules you need to follow when thinking about how technology can solve a problem. First, focus on what the problem is before focusing on the technology. Many just are seduced by technology and deploy it, but then realize it is not solving the problem. The solution is usually process optimization. Therefore, it is crucial to focus on the process that has the problem that you want to solve. Once, you understand how each part of the process works, then and only then can you can determine how technology can solve that problem. Second, consider the simple technologies we have already. We too easily can get captivated by fancy new technology and forget the power that our more basic technology has to offer. For example, with video-conferencing, team members can work remotely and not be bound by needing to be where their main office may be located. Third, one needs to remember that there is a gap between the theoretical value of technology and the actual true benefits that technology can yield. Put a different way, we too often overlook or discount the fact that when you are putting a new technology in place you are asking them to change their behavior. That, in turn, is an emotional request. You need to factor this in to any decision regarding implementing a new piece of technology.
How do you view artificial intelligence as it relates to the law?
AI has the potential to radically change the way we practice law. I don’t think that we are there quite yet, but we are seeing the stirrings of it, especially in the finance sector where the tremendous volume supports its use. For example, JP Morgan developed COIN, a contract analytics tool used to analyze commercial loan agreements. It has replaced human analysis and the 360,000 hours of human work required to analyze those agreements. That is massively powerful. In the law firm space, there is ROSS. Within the next 20 years we will see the massive impact of it as it moves up the food chain. The speed and the processing power of AI will increase exponentially and that cannot do anything but radically transform the practice of law. Pearson did a study with the Oxford Martin School about jobs of the future and we found that lawyers will be the third most in demand job between now and 2030. This is because of some skills that lawyers possess that are not easily replaced by machines like originality, creativity, and empathy. Another thing to keep me in mind is that a lot of what lawyers do, broadly speaking, have a big impact on human beings. For example, if you were facing the death penalty would you want a machine to tell you that? There are limits to what we want from machines and limits to what technology will do in the medium-term, e.g. the next 20 years. As for the long-term, e.g. the next 100 years, who knows?