Nathan Cemenska, Wolters Kluwer ELM Solutions’ new director of legal operations and industry insights, wants to help our clients embrace new technologies. Here, he talks about the problems tech can help solve—and how to get more people to embrace how legal processes are being redefined by technology.
In your opinion, what are the biggest challenges facing legal operations professionals today?
The biggest challenge for legal operations professionals is to control costs. But most aren’t certain about how much they ought to be paying for legal matters. Leading-edge companies are using benchmarking tools to better understand how their operations compare to industry averages and are better informed and confident about their cost structures. However, most legal departments are still focused on getting their arms around their own data and metrics. This “internal” view is certainly needed, but without the “outside” view, doesn’t help with validation of cost. Thus, professionals are struggling to nail down costs and to demonstrate the value of work that’s being done.
In the future, I think the main challenge will shift to improving outcomes so that the value is evident. A piece of that will be helping legal departments find the appropriate resources to deal with particular legal matters, especially when it comes to non-traditional resources like alternative legal service providers. But right now, many legal operations teams unfortunately don’t have the capacity to perfect those components, so the immediate focus remains on costs.
What does the future look like? What types of opportunities can technology provide legal ops teams not only now but also in the next few years?
AI and machine learning technologies are going to be more powerful and be applied in an increasing number of value-driven situations. They’re going to predict the amount of spend that should be associated with a particular matter and when spend is likely to exceed that limit. They’ll be used to predict the likely outcome of litigation matters. And for non-litigation matters, for which outcomes are murkier, they will be used to estimate appropriate staffing ratios and other performance targets.
I also think there is going to be a movement to create online legal marketplaces — tools that allow people to identify legal talent. UpCounsel is an example of something like this that exists today, but it is aimed more at individual legal consumers and small businesses rather than large corporate law departments. A corporate version of this service could really shift the legal ecosystem. I think these marketplaces will emerge first in the form of technology-assisted legal procurement consulting services, and slowly evolve into something that requires less direct human involvement.
Legal is an industry that isn't necessarily known for risk-taking. But should legal ops organizations take a leap of faith when it comes to embracing new technologies for a potentially larger payoff in the end?
There is definitely a benefit to being a first mover, the biggest one being that you get to help define what a product or service is going to look like. When companies come out with a new product, they’re eager to work with anybody willing to give it a shot. Thus, that user gets input and is, in a sense, co-creating the offering. If you come around five years later, you’re late to the party and won’t have that opportunity.
It’s also important to get as much experience as possible as early as possible — regarding not just how to work with tools but the underlying issues that the tools are made to deal with. Tools, especially any involving AI or machine learning, offer a great way to improve your understanding of an issue’s nuances. That’s important, because the issue has to be dealt with even if software isn’t the only solution.
Any tips on how legal teams can overcome cultural obstacles when embracing new technologies and ways of doing business?
There’s a wide variety of obstacles, one being the status quo. For example, there is an effort to get more work done via alternative fee arrangements (AFAs). But many law firms are built on hourly fees. It’s their go-to pricing structure, they know how to make money off it, and there’s no incentive to change. As a result, we’ve seen that the people most eager to try new arrangements are new market entrants that do not have pre-existing structures or barriers to trying new things. This gives them a distinct competitive advantage.
Also, attorneys are taught to not make mistakes. We should always be right and should never look incompetent. But if you try new things, not everything is going to work. We need to accept that.
How can technology companies like Wolters Kluwer’s ELM Solutions help them address and overcome their challenges?
Wolters Kluwer uses bleeding-edge technology like artificial intelligence and machine learning to address these challenges, but we apply it in an easy-to-use way that addresses very specific pain points for legal ops professionals and improves common workflows. We power this intelligence with the largest body of legal performance data in the world. At our most recent count, we had approximately $120 billion of actual invoice data that our customers can use for accurate benchmarking against real-world billings.
For example, our LegalVIEW® BillAnalyzer combs invoices to ensure that all charges are appropriate. It’s a straightforward AI-assisted human review of invoices that quickly and accurately tackles a very important task and drives tremendous savings. We also have many tools built into TyMetrix® 360° and Passport® that help clients price matters, negotiate rates, and create alternative fee arrangements. Our products that leverage AI and machine learning are always improving because that is how machine learning works. But we are also always upgrading all of our products and are particularly focused on implementing additional ways to leverage AI.