As global general counsel of Ernst & Young, Trevor Faure saw how in-house lawyers and firms could work together better.
In 2010, when he was still at EY, Faure published ”The Smarter Legal Model: More from Less,” which Avis Budget Group Inc. and other companies’ legal departments used to design law firm panels. Faure left EY in 2014 and began advising in-house departments and firms as chief executive officer of consultancy Smarter Law Solutions.
He’s now released another book, “Smarter Law: Transforming Busy Lawyers into Business Leaders.” Corporate Counsel spoke with Faure about his latest release. This conversation has been edited for clarity and length.
Why did you decide to write this book right now?
It’s intended to be empowering. In other words, you can read it as Freakonomics, as an interesting read, but it’s intended to be used. In other words, you could do it yourself. It’s a tremendously high demand consulting business, it’s true. But I’ve specifically written a book that any law firm partner, any general counsel, legal operations manager, procurement head, student and client can pick up and read and use themselves and apply. And that’s another one of the purposes of the book.
What are some of the ways you have seen lawyers get into that business role and keep that trusted role?
Well, they’re listed in the book, the “magnificent seven.” Overall, it’s a range. It starts from emotional intelligence to artificial intelligence. The range of using world-class business processes to translate the practice of law into business. We’re very categorical about in the book, we show all seven. They combine using sorts of world-class business processes—agile design, Six Sigma—applying them to law to translate how law can be more effective for business. Because once you’re beginning to apply and craft the practice of law like a business, the business becomes immediately empathetic. They say, “Well, you’re acting with skin in the game, you’re holding yourself to, for example, metrics, APIs, targets. You’re talking my language.”
The right brain side, mainly emotional intelligence, communication skills, marketing skills, which lawyers pride themselves on being great communicators but don’t necessarily know the codes of communication. Or don’t even employ the typical marketing communication skills that businesses do. These are very approachable, usable methods. Taking your core legal skills and translating them into a business, just as the way the businesses do with their product.
One example you gave was being able to show your value. How much of that is measuring what you do as a legal department? What are some ways in-house departments can be measuring things to demonstrate value?
Well, it’s process, and the key about Smarter Law is, it’s not giving you the answers. It gives you the process to provide and define your own answer. And I said that very carefully, because if you say it very casually, ‘Oh, contract turnaround time,’ for example, there are any number of legal departments, the one I ran at EY, for example, which, that doesn’t really apply. So we’re very careful to not say, “Well, look, this is the answer.” There’s a journalistic temptation to reduce it to one answer, but that’s not how businesses work. The process—define what the objective is, measure, analyze and improve—that process is universal. So if you accept that, that all businesses run on the same basis, each legal department has to define with its stakeholders its key mission. And then the measurements fall out of that.
You also discuss AI. Are there ways you’ve seen lawyers use AI well, and let go and trust enough to use the new technology?
It’s about process. And this is what Smarter Lawyer is. What it does is, it explains to you how to define and analyze when you need AI and when you don’t. Ten or 20 percent of the issues you see might be amenable to improvements based on technology. But 70 percent of people behaving in a way that they shouldn’t or should do better—it’s entirely human. That’s why we in Smarter Law describe EI to AI.
So when you come to a situation at a law firm, with sinking margins or discontented partners who are losing their client base, you go through the process and you see that actually 20 percent of that issue is amenable to technology. It’s not the silver bullet. There are seven things you should be doing, and one part is AI. But the rest of it is about the behaviors toward change, the product itself, selling it, the clients, making it user friendly and making sure it has a [return on investment].
How can in-house counsel develop a strong relationship with firms while also cutting outside counsel spend?
It’s something we don’t talk about enough. The real-life examples you can see. I did the first convergence program in 2007 at Tyco. I reduced 282 law firm panel to one. The powerful thing about that is that 10, 12 years later, they’re still going. I’m gone. The law firm partners change. But the relationship itself is so mutually profitable they’re still going.
And more recently you’ll see the Avis Budget example, which won another award the other week. That’s another Smarter Law client where the law firms are embedded into Avis Budget. It’s a win-win relationship. Same mutual success. Client saves money, improves service. Law firms are more profitable and have greater client loyalty and that is a result of very meticulous process of selection, of analysis of the work.
What is “law firm short termism” and how does it impact in-house counsel?
In the short-term example, there’s a remarkable 40-page chapter written by Jonathan Molot of Georgetown Law, where he absolutely dismantles the short-term nature of the law firm partnership. So I want to give him credit for his analysis.
The behavioral incentive is obvious, as a law firm partner you will leave with what you have. Once you’re done, you’re done. At Apple or Dell you have stock options so once I’m done I’ve still got stock. I have a huge interest in that company being viable and profitable and successful after I finish because I’ve got stock. As a law firm partner that does not exist.
In this case, what the incentive is, what you earn for the next 30 years of your career every week is all you will have for your golden years in retirement. There is no capital value in your work. If that’s your incentive, you’re going to maximize your take today. You’re not going to build the long-term value.
Law firms’ incentive, what qualifies you as a star is bill today, bill today, bill today. A client’s incentive, what qualifies you as a star is intelligent, commercial, efficient answers that get rid of the problem, cause it to not re-occur or to minimize it over a period. Solutions.
The process of working yourself towards redundancy. Lawyers never get redundant but the activity of trying to make processes so transparent, easy to use, you effectively are trying to make yourself redundant. Clients love it. They’ll pay more for that, which is genuinely valuable.