Expectations For the Legal Industry Moving Forward

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Expectations For the Legal Industry Moving Forward

Jonah Paransky, executive vice president and general manager of Wolters Kluwer’s ELM Solutions, reflects on the effects COVID-19 will have on the legal industry moving forward, as it relates to diversity, alternative legal service providers, and what he’s both concerned and excited for looking ahead.

CCBJ: At a high level, what effects do you expect COVID-19 to have on the legal industry in the near term and moving forward?

Jonah Paransky: I expect to see acceleration of all the trends we were already seeing before the pandemic. In particular, on the professionalization of the legal department, I think there will be an increased focus on cost optimization. All the major trends related to spend control will continue, and many will become more important under the pressure of our current and near-term environment. Those leveraging technology in these efforts, and who have a comfort with using technology, will clearly be in a good position coming out of the COVID-19 pandemic.

The willingness for corporate law departments to adopt technology certainly has increased in this environment. Before early 2020, if you had told corporate legal departments that they could relocate all of their employees to work from home using technology, they would have full on laughed at you. Now that organizations have proven they can drive acceptance of technology and don’t need to be technology laggards, I think the biggest question that will come out of this time is whether that can accelerate.

On the law firm side, there may be a remix of roles within the firm. They have always relied upon significant staffing support for practicing attorneys. Suddenly, they're working remotely and attorneys are managing to do more of the work themselves, so we may see a shift in investment

inside of law firms between prior staff roles and other functions. I think law firms may also be more comfortable with the idea of investing in technology than they were in the past because they've seen the benefits during this time.

I don’t expect that one day, all of a sudden, COVID-19 disappears and six months later we're back to exactly where we were before. For corporate law departments, how they are doing depends partly on how the company is doing overall. Certainly, there are corporations that are in big trouble. However, legal is largely a white-collar profession that can be done from home. It's weathered the crisis significantly better than some other functions or sectors of the economy, broadly speaking.

During this last year, what has changed about the role of the legal function?

Certain kinds of lawsuits are down, others are up, depending largely on the industry you're in and what's going on in your environment. And so, to me, it’s more useful to think about the bigger trends. Any time there's a strong economic crisis, corporations push legal to be more efficient. Legal's influence on managing risk has become more prominent through this because legal teams have been incredibly involved in managing reopening risk and backto-office activities. So legal's seat at the corporate table may have become more influential through this crisis.

What do you think it the future of the distributed, remote workforce in legal?

Technology adoption has proven that you can keep the lights running. Has it proven that you can take first year associates and turn them into second and then third year associates in this environment, with the right level of learning and management on the law firm side? I don't think anyone knows yet. Nor do we know whether it’s possible to grow good corporate attorneys when everyone is remote. At this point we haven’t re-imagined legal to be a fully distributed enterprise. As we all start going back to offices, it will be fascinating to see how that shakes out.

However, much of the legal profession assumes a significant amount of in-person interaction, and I'm not sure we will get away from that when the culture flips back to having some set of people in the office. We'll see. I do think the model where employees work a couple of days each week remotely and a couple in the office will be popular for a while as people start thinking about how to run teams that are more remote.

What about diversity in the legal industry?

We’ll see an increase in the focus on diversity in legal, driven in large part by corporate diversity programs. In particular, corporate programs that look at vendor diversity in addition to their own internal team’s diversity, will have lasting and meaningful continued impacts on law departments. I see that pressure increasing. Sometimes this work is done in conjunction with procurement, sometimes it's done separately. As these programs continue, corporations put out corporate diversity reports, and there's additional focus on the subject, outside counsel spend will fortunately be a part of that.

There is continued realization that diverse voices at the table drive better outcomes. I would make the argument that this is no different in the legal function than anywhere else. There is radical under-representation of many demographics, particularly in senior legal circles, and that needs to change.

Will the changes in legal be likely to make alternative legal service providers (ALSPs) more popular with corporate legal departments?

I think there are a couple of possibilities for how that could go. One is that corporate legal departments recognize

the efficiency of employees working remotely from their headquarters, but they may still want teams together in an office. So, there could be a continuation of the trend to hire attorneys in lower cost markets. ALSPs are one possible version of that, but there's also an in-house version of that paradigm, where companies can save on costs by putting a big percentage of the corporate legal offices in less expensive communities. We will likely see continued acceleration of these options to optimize legal costs, but which method wins depends on the organization. I think there is likely to be a broad mix.

How will expectations of the legal function be different in a post-COVID-19 industry?

In 2020, you could be a hero just by keeping the lights on. In 2021, though, you need to have a plan. This year, you really should have taken the learnings from 2020 and built a plan to meet your corporation’s needs in 2021 and beyond. So, if the company is uncertain about its profitability, what's your plan to save money? If your corporation needs to prepare for major litigation, how are you staffing up? For 2021, your plan has to be more than to keep doing what we're already doing.

The reality is, while we're seeing light at the end of the tunnel, we are not likely to be back to normal in the first half of the year, and economic conditions will continue to be incredibly uncertain. In a time of uncertainty, what companies want is options about where they place their bets. The question for the law department is how do you, as a department, help provide more options and manage the risk profile better?

What can law departments do to prepare for future unknown risks or disasters?

Every corporation has run exercises for years around the unexpected stuff that can throw your company into chaos. Many organizations didn’t take this particularly seriously with respect to the types of big, unexpected risks that we've seen in this last year. So, at least for a period of time, people will start taking that work more seriously. In my experience, the reality is that organizations quickly forget and stop preparing. So, the key is ensuring that we do not forget and do not stop.

What are you most concerned about for the legal community?

The most difficult thing is the continued uncertainty of the environment we're working in, combined with a desire for an accelerated return to normalcy. It adds execution risk for everyone. We have to both keep going in our current mode and figure out how to get back to normal at the same time, which is a genuine challenge. We also don't know what will happen to the economy after the pandemic. Legal is a broad industry that tracks broad economic trends, so continued economic contraction isn't great for legal, just as it isn't great for anybody else.

What are you most excited about for the legal community?

I’m excited for the continued realization that attorneys, and organizations with many attorneys, can figure out and embrace technology. So many of the goals of law departments and their parent organizations can be met through adoption and smart use of the right technologies. As comfort with tech grows among all of the team members in the legal function, they are positioned to make strides and accelerate the progress they’ve been making. 

Jonah Paransky is executive vice president and general manager of ELM Solutions. In this role, he is responsible for leading the overall performance and growth strategy of the business unit globally. Reach him at jonah.paransky@wolterskluwer.com.