Radiant In Tomorrowland: Scenarios for law firms beyond the horizonPosted on May 4, 2017
Bruce MacEwen aka Adam Smith, Esq’s excellent latest book, Tomorrowland: Scenarios for law firms beyond the horizon starts off with ‘The future may be unknowable, but it’s not unthinkable’. We are delighted to be part of that unknown, but thinkable future, alongside Riverview and the Big 4! #thealtshaveit
Alex Hamilton, a former Latham & Watkins partner in London, where he co-chaired the firm’s global technology transactions group, founded Radiant Law there on January 4, 2011. Entrepreneurs tend to have an itch they need to scratch, and with Alex it was the almost insuperable obstacles the billable hour posed to any serious re-examination of how to deliver legal services in the 21st Century. When one’s world, and that of all of one’s colleagues, revolves around recording chargeable time, not a moment is left over to rethink things.
So Radiant began with Alex and his colleagues trying to answer the question, “what would a client want in a law firm?” The billable hour would definitely not be on that list, and accordingly Radiant never has and vows it never will keep time sheets-not even internally. Their work is fixed-fee and fixed-fee only.
A logical and obvious place to start the new venture was essentially to permit clients to use Radiant as a platform for outsourcing, or what Alex calls, properly, labor market arbitrage. But since that is intrinsically at risk to better/cheaper entrants in the long run, in the five years since then Radiant has been engage in a constant process of iteratively discovering what the market actually is willing to engage it to do, and pivoting in those directions.
This may sound opportunistic and provisional, so I asked Alex what’s enduring and intrinsic. “At the core of Radiant - and a constant from its inception - is the triad of ‘people, process, and technology.’” Taking them in reverse order:
- “Technology is always a means to an end,” employed only where it makes business and commercial sense for Radiant and the client. Radiant uses third party products in mature sectors (e.g., document creation) but also invests heavily in developing their own proprietary software. Perhaps foremost is what Radiant calls its “Remarkable” suite of add-on tools for Word, which automates many activities lawyers normally perform in the traditional Word environment. Among other things, Remarkable can rebuild documents that were broken up during negotiations, find missing definitions, and check for common errors.
- Process means running every engagement through a disciplined project management workflow beginning with on-boarding and using metrics heavily to track progress against client needs. Learning from each engagement is fed back into the process to enhance it in future.
- Finally; the “people” component, the only one of these three that conventional law claims distinction in, struck me as distinctive at Radiant because they emphasize their expertise in IT, technology, and business process optimization-not just the lawyers lawyering. Indeed, they state unequivocally: “Above all, we understand our clients need a contract to deliver their business objectives, not that the contract is an objective in itself.” In other words, business in the driver’s seat, law in the back seat.
Almost immediately after its founding, Radiant began moving into managed services; their first client was the London Stock Exchange. The market was already moving from outside law firms doing everything or almost everything, to a strong tum in the direction of in-house insourcing. Radiant was and is the logical next step, happening in parallel with the growth in in-house legal capability.
Now, the phrase “managed legal services” can seem jargonish, but Radiant has laid out what it means and how it helps address the typical law department’s fundamental challenge of being asked to do more with fewer resources and at the same time deliver unquestioned business value. The core components of Radiant’s managed services (here using the example of contract management for the client):
- Needs analysis and design. Rather than Radiant assuming, as law firms are wont to do, that they know best what the client needs or worse, that whatever the lawyers and the law firm are most comfortable doing must be what the client needs-Radiant delves into such details as the complexity and type of the contracts, the client’s desired service level, and touch points with the business.
- Next, a pilot is often undertaken at the client to test the delivery model and begin to build reporting and tracking dashboards customized to the client’s business needs.
- A triage and intake system is then set up with an online portal Radiant provides or using structured forms; it all includes documentation, training videos, and expert system applications to help standardize matters.
- Finally, the system is run using a playbook of pre-agreed clauses, negotiating points, and fall-back positions to ensure consistency and speed time to dosing of deals.
- But they’re not done: Continuous improvement using reporting against pre-agreed metrics is used to feed back into and refine the system going forward.
All of this may strike you as simply good managerial hygiene, and across most of the business world it would be recognized simply as that. But we all know Law Land is different; I would challenge you to find a conventional law firm operating with systems as rigorous, comprehensive, and transparent as those of Radiant. And there’s good reason to expect law firms to continue to operate without their equivalent: Lawyers don’t perceive this discipline as valuable-they’re all artisans-and the business professionals who might understand its value and have the actual skills to implement it are second class citizens, an inferior caste: “Non-lawyers.”
So where is Radiant as a business?
“We’re starting to break through from early adopters to the early majority’, Alex reported, using Crossing the Chasm terminology.
We’ve all seen various ways to conceptually segment legal services according to their risk and frequency - and to infer the optimal source for getting those services performed - but here’s Alex’s version:
To Radiant, the top left is the most interesting quadrant; the top right and lower left stay within the corporation’s four walls, and the lower right still defaults, understandably, to Big Law.
I ask Alex, as I have every one of the new entrants we’re discussing, what types of clients tend to adopt what his firm is offering and where he encounters entrenched resistance.
“We decided law firms were a lost cause,” he says with a laugh. “We tried to deal with law firms but there was always one partner somewhere who’d say they prefer not to; basically, law firms talked a lot and never went anywhere. We came to the fundamental realization that it would be most fruitful for us to be working with big companies because offering the kind of managed services we do is a volume play. It makes most sense to clients facing the classic pressure of budgets being cut and headcounts frozen, and who have lots of matters they simply have to deal with.
Within that world, you have to be smart about the type of company you’re dealing with. Obviously there’s a very wide range of companies that have very different margins: Thinking in terms of the BCG matrix, companies that are mature and in market share battles care a lot about doing things more smartly. Companies on a rocket ride up don’t care.
Also, you clearly find very different individuals at each company; General Counsel who are very conservative want everything to be done by Skadden or Latham. Other GC’s are more laissez-faire and just want the work to get done, and so are willing to let the team try things differently. This is very hard to see from the outside.
“Are the Big Four accounting firms a genuine threat to Big Law?,” I ask. “Yes, they’re very much for real; the reason I’m sure of that is that they keep going out of their way to say they’re not going to be a big deal:”
“What about machine learning and AI?”
“We don’t use expert systems, we use document automation; but it’s amazing how much expertise is built into document automation.” It’s low level, and not being talked about, but every time you add an if then statement to a document generating system you’ve replaced a human decision point.
In Alex’s own training, he went from being completely at sea to being able to walk into a room and declare that at the end of the day we’re going to be negotiating these five points. He believes the same thing is beginning to happen with expertise embedded in systems.
“And the single most salient thing about Radiant?”
“When you’re working in a world where everything revolves around the billable hour, it’s a harsh master indeed. Not because you have to ‘hit your numbers,’ although that’s bad enough; but because it’s relentless and tyrannical in its demands. You can never just sit back and think.
Supposedly that’s why clients hire top-flight lawyers but at least until you’re at the very top of the pyramid it’s swimming upstream to spend time reflecting hard and trying to be creative for your client. Eliminating billable hours frees us to do that.”
 Geoffrey Moore, Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers (HarperCollins: New York), 1st d. 1991, 3rd ed. 2014. Chasm introduced the concept of the Technology Adoption Lifecycle, which begins with innovators and moves to early adopters, early majority, late majority, and laggards.
To get a copy of the book Tomorrowland: Scenarios for law firms beyond the horizon click here