Susan Hackett is truly one of a kind and a powerful voice within the legal profession especially with regards to change and transformation within the legal industry. She currently is CEO of Legal Executive Leadership, LLC, which is a recognized leader in building smarter legal practices, with more than 3 decades of experience helping law departments (and those who serve them) deliver distinguishing value and improve the way they work. She helps her clients change behaviors, improve operational processes, drive demonstrable client results, and move confidently from traditional practice toward legal executive leadership.
Tell me a little about your start within the legal innovation space. What inspired you to get involved? What continues to inspire you?
I got really lucky one day in 1988, when I accompanied my husband to the George Washington Law School placement office – he was a GW grad and finishing his clerkship; he wanted to review the NALP binders (okay, I’ve just dated myself and everyone else reading this who knows what I’m talking about). I was staring at the jobs bulletin board and zero’ed in on this torn off scrap of paper advertising an opening for a lawyer to help a newly formed bar association for in-house lawyers – the American Corporate Counsel Association (ACCA) – to develop their product and service lines. [ACCA would later be renamed the Association of Corporate Counsel, or ACC, in recognition of its increasingly international membership and reach.] I was a 2nd year lawyer who just run (read: was pushed) out the door with my hair on fire from a law firm associate position where I was a miserable failure. I was devastated and rudderless. I figured: well, maybe sitting for a few months or a year in a bar job might allow me the time to figure out what I really wanted to do, now that I wasn’t interested in joining BigLaw, like I’d thought. I figured, I’m good at bars, :-), so why not?
I was with ACC for 22 years. Turns out that not only was I good at it, but the bar presented an unsurpassed opportunity for me to follow what became my passion … the then-rare concept of thinking about the client’s perspective when defining value and delivering service. While ACC is a bar association for in-house lawyers, it is fundamentally a network and a resource for a segment of the legal profession whose proximity to their clients makes it impossible for them not to prioritize things that their clients expect. Unlike lawyers in law firms who are in their own business and therefore can choose to work as they wish, in-house lawyers are a tiny minority of workers in their employer-companies and must become a part of the DNA of the company and its processes, culture, and goals – so what drives their workplaces is determined by their client’s preferences and business models, not by the priorities that rule operations and outputs in law firms. Lawyers have to learn to speak the language of business, and not vice versa.
So I began to see law and legal services from the client’s perspective, and not with a lens that is firmly fixed on replicating professional traditions or operating on principles of law as its own business. I began to see how lawyers who fixate on what they want to do and how they want to deliver service are often at odds with (or at least dis-connected from) what clients want them to do, how they wish to be served, and what results they want the legal team to deliver. So I began to see the dysfunction of lawyers focusing on legal problems rather than business solutions; or on hours billed based on lawyer activity and experience, rather than results delivered in the most efficient and effective fashion. Most in-house lawyers, as products of outside law firm experiences, recognized the dis-connect between how they were trained and what they have to strive to improve (but haven’t a clue how to deliver either), and so ACC was the perfect petri dish to experiment in as leaders in the in-house community struggled to understand and implement practices that would drive change.
So I’m responding to your “innovation” question with an answer that focuses on “change” because I don’t think of most of what we’re all still working on in law as “innovative”: it may be new and exciting to lawyers, but it’s not new, and indeed, its exasperating for our clients when we suggest that our remedial plans to catch up to standard business practices in the companies we serve is innovation. Most of what we’re still working on involves well-established principles such as automating document processes, or establishing reliable budgets that reflect the true cost of service, or implementing project management tactics into our workflow. There’s the prospect for innovation going forward, but we’ve got some crawling and walking to do before we’re ready to run with true innovators, eh?
So it was not only easy, but natural for me to be inspired to take what I was observing at ACC, and then look at ways to leverage the ACC platform to drive change: I made my passion my job – to give these newly defined value or change projects shape, process, and meaning for members, as well as for others in the legal ecosystem.
What is the value movement within the practice of law?
ACC provided me not only the networks, volunteer leaders, and the platform for designing practical tactics that drove better results, but also and all-importantly, ACC trusted me with a license to work on projects that would move the market – at a time when most people in the bar community, in the legal press, and in the communities of practice leaders all laughed at the ideas we were putting forward: AFAs, knowledge management, right-sourcing, process and project management, technology and automation, empowering and collaborating with professionals beyond the legal team to drive better legal/business results, etc. ACC wasn’t just pushing the boundaries of what most lawyers understood about practice, we were also pushing changing to the regulation of the profession that would complement what we saw as the future of legal practice: multi-disciplinary practices, multi-jursidictional practices, expanded roles for lawyer leadership, and more.
While everyone likes to call themselves a champion of these concepts today, ACC and our value movement projects were scoffed at as everything from unprofessional to wildly unrealistic in the marketplace of the 2000’s. I can’t tell you how many times and how many people told me “it will never happen; law will never change; save yourself the trouble.” But slowly, over the course of years, and with a strong push from the great recession of 2008, people began to take note or to see the need to change, and the movement our projects were aimed at gained traction and the profession began to shift its perspective (even if not all of its practices yet): moving from a seller’s market, to a buyer’s.
We focused the value movement on the following:
• challenging and changing certain professional regulations or norms, especially Model Rules 5.4 (prohibiting multidisciplinary practice) and 5.5 (defining the unauthorized practice of law);
• establishing the ACC Value Challenge to re-invent the inside/outside relationship with law firms and help re-connect the cost of service to the value provided;
* instituting (in the late 1990s and early 2000’s) the first regular network, leadership, and benchmarking meetings in small discussion groups for legal ops specialists (then called “legal executives”), and general counsel (CLO ThinkTanks): both groups were convened to collaborate and drive thinking and momentum to push forward better practices, standards, and technology to get the work done;
• we documented and created vast practice resource libraries (online, which was unusual then), focused on teaching and sharing value principles and benchmarks, and open to both inside and outside counsel;
• we developed executive management, business/financial, tech, and operations competency seminars that focused on the skills that support legal leadership beyond CLE topics: to help lawyers to re-define their value in alignment with client interests;
• we co-founded (with the Pro Bono Institute) the first corporate legal pro bono project (CPBO.org), because the clients the ACC membership recognized it needed to serve were not just those who paid their salaries, but also those who would otherwise be denied access to justice: we could see that the same change and practice improvements we were preaching in the corporate context had application and value in the pro bono context, as well.
• And finally, we created networks and lauded achievements to support change in the legal profession, rather than chiding it.
Throughout the process of creating a movement, I was struck by the ever-present and ever–unanswerable question: what is value? I was regularly asked to articulate what constitutes value, as if I could define value in a neat 10-word sentence. Simply put, while there are millions of possible value practices out there, assessing value for real-life application can only be defined by the beholder (or client).
So when I left ACC in 2011, I founded Legal Executive Leadership, LLC to take what I had driven at the ACC bully pulpit on behalf of the thousands of members, and apply it to designing value strategy and implementation in individual law departments and legal teams: I went from talking at 30,000 feet, to designing strategy and practical applications at 6 feet, directly with legal teams in companies (and sometimes in firms), to help them align their work with practices that will create a valued relationship with their client. This is otherwise known as doing the right work, the right way, to deliver the right results, and it’s a lot deeper and harder than it sounds.
How would you define and explain legal innovation?
As stated, I’m not a fan of using the word “innovation” in my practice, or in describing the movement going on today. I think that what we’re working on, and what it’s appropriate for us to scope, is the application of better, usually already existing business and operational practices that will improve our business model, our operations, and our service delivery. I think that maybe the better focus is on leadership as a distinguishing trait we wish to promote, and not innovation. I also value the concept of inclusiveness and collaboration on legal teams above the concept of innovation: far too often, lawyers have overlooked, dis-respected, or discounted the value of other experiences and disciplines in the better delivery of client services and results: since clients have real-life business problems, not “legal” problems, they need real-life teams who can collaborate to provide business solutions, not an insular legal analysis of the issue.
Lawyers – let’s be honest – often avoid and even despise innovation; they like to do what they know, the way they’ve always done it, and they want to be recognized as both competent and excellent at whatever they’re doing, so they aren’t terribly interested in exploring new ideas and often lack the resilience to try, fail, and try again. So when it comes to innovation, they don’t like to be the first to try things. (One of my consulting practice mantras is that lawyers like to be first to be second. While they don’t want to lag, they want to see how other lawyers in marquis-status firms or departments have done it, and whether it succeeded before they’ll agree that something is worth trying, nonetheless doing.). I tend to focus on preaching change, not innovation, since every one of us knows in our hearts that the way we’ve (very lucratively!) worked for the last 100 years is not the way that we’ll be successful working in the next 5 years, nonetheless the more distant future. While they know change is hard, they can get on board with the idea that change is inevitable: the trick is to help them figure out how to let go of what they’re doing now by offering well-defined and desirable descriptions for what they’ll be doing instead if they change. You can’t just say “change” without telling them where they’re going or what they’re supposed to do instead (as opposed to what we often do which is talk about all the things they’re not supposed to do anymore). Change is scary enough without the threat hanging over your head that your reward at the end of the change cycle is the loss of your job.
I see two concurrent types of change taking place in the profession: there is sustaining change, and transformational change. Sustaining changes are important, but not revolutionary: it’s automating or improving the efficiency or output of what you’ve always done as a lawyer. Sustaining changes allow you to you continue to perform the same work you’ve always done, but better, faster, or cheaper. Transformational change is much harder and more aggressive: it involves change practices that force you out of the roles you know and the work you’ve always done to do something else entirely. When the entire IP team moves from portfolio management to a managed service provider that uses trained employees, technology, and automation to handle the operational IP needs of the company, and those lawyers are then embedded in the company’s product development group, where they think about new ways to push forward ideas, inventions and regulation that will allow the company to lead the market, that’s transformational change. Transformational changes allow legal departments to push contract formation and daily contract management back to clients via a DIY contract system: there is no role for a whole team of in-house contract lawyers on staff anymore (just a few to handle outlier deals and manage the system) – so the question is what will those lawyers do instead or where will they go? Transformational change requires lawyers and legal teams to understand how to do less law (at least as we are used to defining it) and do more leading … it aligns them with roles and work product that help advance the company’s business or that anticipate problems and avoid them, rather roles that focus on responding remedially when/if trouble arises.
How would you evaluate the current state of the practice of law? A lot continues to be said and written about legal technology, but how do you separate the hype from reality?
Jeff Carr likes to say that AFAs are a lot like teenage sex; every teen likes to talk about it, but very few actually engage in the practice or do it well. 🙂 I think the same is true in terms of how much real “change” is going on … mindfully improved practices are still not the norm for most lawyers’ daily work. And for all the talk, executive leaders in law firms and law departments aren’t really demanding the change, since they aren’t supporting or rewarding those who lead change initiatives or provide operational improvements by hiring, promoting and bonus-compensating them, and they aren’t firing or penalizing the pay of those who don’t step up. Indeed, most legal leaders still invest the bulk of their spend and honor on the most expensive, least innovative, most change-resistant lawyers and firms. But I think that change practices, while progressing slowly, are nonetheless gaining a footing and even accelerating. They are no longer seen as an exception or alternative, but a series of intriguing and practical solutions that many are considering and some are adopting. Once you get beyond the “outlier” stage in most anything, adoption over time tends to rise.
The question is will our slow progress toward better practices be fast enough: for clients or to stay competitive and relevant in the marketplace of service providers? And what will be interesting is to see which kinds of changes just become the norm naturally: like the adoption of email simply became the norm even after its introduction was pilloried by horrified lawyers who swore that using it would be the end of privileged communication. I assume that some of those time-simply-normalized practices might include project management, value-based fee arrangements and more transparent / predictable pricing, standardized metrics and performance evaluation tactics, and the application of data to improve law practice management, to name a few. But I think there are other change practices that may remain “heavy lifting” deemed suitable only for the rare adopters, who apply it in the corners of their workload. And thus, I fear that many of us will risk irrelevance in a few years (as more old-school lawyers are replaced by more efficient and effective systems and providers in law companies, for instance). We still think that applying data analytics to legal (not practice management) problems is too hard or fraught with dangers; we buy legal tech and half-heartedly train workers, of whom only some will use 20% of the tech’s capacity to perform a few easy functions and the rest is just too hard for us to have to use (don’t get me started on moving work over to collaboration platforms); we can’t imagine prioritizing or eliminating entire tranches of work that don’t justify our full-bore attention because we’re addicted to the urgent or what we understand as our current workload at the expense of the important or the emerging gaps or problems we haven’t take the time to identify and address; we’d rather invest ever more in managing litigation than figure out how to avoid it.
Here’s what I think we need to drive this change: General counsel have to stand up and demand what their clients deserve, and not what their legal teams want to provide them (which is often defined as a good result because we got a 5% discount). They have to drive the complete re-engineering of their own internal department structure and operations before they can truly demand and leverage improved services from outside providers: from firms to ALSPs. They need to realize that their lawyers will be lumped into the same pile of irrelevant, overly-expensive, and/or inefficient workers as their similarly trained and practicing outside brethren. The fact that law departments are increasingly likely to insource work because it costs less than outside firms, doesn’t mean that in-house practitioners drove the right work, the right way, and got the right results, nor does it mean that there isn’t someone else outside the company and their firms who can deliver the client’s preferred results better, faster and cheaper than either their law firms or their inhouse team.
GCs have got to stop running legal departments like they’re mini- or institutionally-specialized law firms. There are lots of law firms out there for clients to hire if that’s what they want. GCs need to re-think service delivery at the next level, just like they were doing when I joined ACC and folks started talking about how they might better leverage their teams to drive value they couldn’t rely on getting from their outside firms in the first rounds of the value movement. The next level requires them to deploy data analytics to inform legal and executive decision-making; it requires them to eliminate, not just better manage corporate fails or disputes; it requires lawyers to provide astute judgment that helps address and solve complicated problems, not just apply their legal acumen to the interpretation of the regulations governing the industry; it requires them to think about how big-brained lawyers can help their clients advance the business, not just defend it when it’s sued. And they need a department team that can drive those results, not just talk about them at innovation conferences. Only then will they successfully drive the law firm market to put up or get out of the way. People do what they’re paid to do: in departments and in firms. Until general counsel make it clear what they are paying their teams – inside and out – to do and to not do, nothing will change fast enough to save us all from being replaced by other more effective providers.
Many lawyers are resistant to the idea of changing how they practice law. How do you make a compelling case for the need to change?
In conclusion, I’ll be brief since we’ve really covered this subject throughout the conversation already, I’ll simply repeat the words of a great military leader: if you don’t like change, you’ll like irrelevance even less. There are a million ways you can change the legal workplace or output; the hard part is getting lawyers to do it. I go back to my statement about the importance of helping them define the better role they’ll move to in an improved workplace, before you talk about changing what they do now and that they’ve always connected to their defining value. Change requires a willingness to move toward new practices; it’s not about simply moving away from existing ones. I’m confident that leaders in our profession have that vision. I’m worried that they’re slow to articulate it, reward it, and risk it themselves. The pace of change is accelerating, and lawyers who get too far behind won’t be able to catch up to sophisticated alternatives or keep up with clients who have higher expectations (that others have proven they can meet and exceed).