Liquid Legal: Towards a Common Legal Platform

By Roger Strathausen

Three years ago, the first Liquid Legal book compelled the legal profession to reassess its identity and to aspire to become a strategic partner for corporate executives as well as for clients. It also led to the foundation of the Liquid Legal Institute (LLI) – an association that sparks innovation and drives collaboration in the legal industry.  This second Liquid Legal book builds on the LLI’s progress and on the lessons learned by a legal community that has moved beyond focusing purely on LegalTech. It not only presents an outlook on how legal professionals will operate in the future, but also allows readers to develop a genuine understanding of the value of digitalization, standardization and new methodologies. Further, the book outlines a Common Legal Platform (CLP) and makes it the common point of departure for every author, offering inspiring insights from a wide range of forward-thinking experts who are all invested in driving new thinking within the legal ecosystem. The book also features “Liquid Legal Waves,” which provide links between the various articles, connecting concrete ideas, practical solutions and specific topics and putting them into perspective, and so creating a true network of ideas for readers. A must read, this book is vibrant proof of the power of sharing, collaboration and coopetition, helping the legal profession to shape its digital future and revitalize its relevance while retaining a focus on the human lawyer.

• Language: English
• Publisher: Springer
• Release date: Aug 27, 2020
• ISBN: 9783030482664

Book preview

© Springer Nature Switzerland AG 2020

K. Jacob et al. (eds.)Liquid LegalLaw for Professionalshttps://doi.org/10.1007/978-3-030-48266-4_1

Let Me Have Men About Me That Are Fat. Using a Common Legal Platform to Expand the Legal Services Providers’ Pie

Barbara Chomicka¹ 

(1)

Arcadis US, Inc., New York, NY, USA

Let me have men about me that are fat, sleek-headed men and such as sleep a-nights, yon Cassius has a lean and hungry look. He thinks too much. Such men are dangerous [Let me be around people who are fat and satisfied. Cassius looks lean, hungry and ambitious. Such men are dangerous] is a frequently referenced line from William Shakespeare’s play Julius Caesar, believed to have been written in 1599.

1 Introduction

2 A Common Legal Platform as a Public Utility

3 Creating Value and Capturing Value. The Winner Does Not Take It All

4 Cui Bono? [Who Benefits?]

5 Conclusion

References

Abstract

There is currently a robust debate among progressive lawyers and contract and commercial managers about how to deploy a relatively new economic actor, the online platform, to create a one-stop legal shop: a shared source of legal knowledge, including templates, clauses and commentaries on new legislation, as well as offering a neutral place for contract negotiations, professional discussions, exchange and learning. One area of debate involves questioning how legal knowledge is created, stored, updated and shared. Another is more fundamental and controversial. It questions access to, and the cost of obtaining, legal services. Legal service providers across all sectors, in both the public and the private domains, are engaging in this debate, from the restructuring and rationalisation of old ways of working to a transformation in the way that legal expertise is made available within both organisations and society. One of these efforts revolves around the fine-tuning of a vision for a free online Common Legal Platform (CLP). The opportunity offered by the free online CLP is about changing not just the way legal services providers participate in the market, or play the business game, but the game they play.

Barbara Chomicka

is a creative thinker and problem solver: a registered architect and certified project, contact and commercial manager, she has been combining the design and management disciplines for over 20 years, optimizing the delivery of projects and programmes. She has received two doctorate degrees from British universities and has produced a body of published work endorsed by the leading global professional associations. She is a recognized thought leader in the areas of complex projects delivery, social value and ethics in contracting, recognized with fellowships for significant contribution to project, contract and commercial management professions. Her professional, academic and voluntary work has been recognized with APM Herbert Walton Award, Women in Construction Project Manager of the Year Award and Communitas Making the Difference Award. Her approach to life exemplifies her belief that everything we face is a project—a collaborative enterprise requiring the right methods to resolve it. In her thought-provoking writing and presentations, she promotes a 360-degree duty of care inside and outside of work.

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1 Introduction

The Internet is arguably the most powerful force in the global economy, and is reorganising the world’s economic activity. The positive effects of this reorganisation are apparent, and the rapid pace of innovation has prompted the legal profession to fundamentally rethink the future of the law and the future of their work.

In the non-profit sector, the Florida Bar Foundation has rolled out a product, Florida Pro Bono Matters, designed with the potential to move the access to justice needle nationwide (Kostal 2018). This simple, elegant and easy to navigate platform, searchable by location and type of law, that matches attorneys to existing cases is designed to make it easy for attorneys to find appropriate pro bono cases. Florida Pro Bono Matters reports 250 interest forms filled out by attorneys and 120 cases available on the site at any given time (Kostal 2018). In the United States, most state bar associations offer free legal research, either through Casemaker or Fastcase (Cogburn 2017). In 2013, the legal research service Casetext was launched, its founders’ goal being to democratise access to the law by providing free access to legal research enhanced through crowdsourced annotations (Ambrogi 2018).

On the commercial side, the number of Legal Tech initiatives is obviously much greater. For example, LexisNexis’ product for next gen-lawyers, Lexis Advance, has superior AI analytics, visualization tools and training (LexisNexis 2019). Another example is Thomson Reuters’ Westlaw, an online legal research service for lawyers and legal professionals in the United States and the United Kingdom, which also provides proprietary database services. There is Bloomberg Law. There is a plethora of template management and contract management applications. There are clause libraries in the majority of large enterprises across all industries and common clause libraries, such as the IACCM Conformed Clause Standards library, a partnership between IACCM and Contract Standards to develop conformed clause standards that reflect an amalgamation of mass data analytics of standard agreements, the IACCM Contracting Principles, and the IACCM Contract Design Pattern Library (IACCM undated). Online platforms are also in use at an organisational level—for example, A&O Idea Spotlight, a collaboration between the idea management platform Wazoku and the global law firm Allen & Overy. This platform has made it possible to cultivate and embed innovation across the entire firm, enabling participation and the sharing of individual insights and suggestions for new approaches to solving legal and client challenges through technology (Winsor 2019).

The bottom line is that a twenty-first-century lawyer has a plethora of free and paid options to choose from when it comes to doing legal work, which might be beneficial on an individual level; however, this is not necessarily a good thing when it comes to shaping the broader legal services market. What current initiatives have in common is that they compete within their narrow areas of focus and expertise. This approach worked well in the past, when the game of business was all about competition, when business was war. In An Inquiry into the Nature and Causes of the Wealth of Nations (1776), economist Adam Smith developed the idea that individuals make rational choices on their own behalf, which ultimately benefit society. Someone who intends only his own gain, Smith argued, is led by an invisible hand to promote […] the public interest. According to Smith, competition forces individuals and businesses to continually make their products more attractive in price or function. It creates winners and losers. As a result, products keep improving. Society benefits and the economy grows.

According to Nalebuff and Brandenburger (1996), the win-lose view of the world is attributed to the author Gore Vidal, who apparently said: It is not enough to succeed. Others must fail (Irvine 1976). The traditional language of business revolved around outsmarting the competition, fighting brands, locking in customers. Fighting over a fixed pie was an established way of doing business. While in many industries the pie is expanding, the legal services market pie is shrinking. Changes in the law are making it easier for accounting practices, estate agents, building societies, banks and others to offer legal services on the side, and companies are cutting back their in-house legal departments or deciding they no longer want to maintain one. Legal work is increasingly benefiting from automation, and society is increasingly turning to various self-help options (Chomicka 2016). The obvious solution to this business challenge for legal service providers is a quest for economic growth and efficiency: a pursuit of the expansion of the legal services providers’ pie.

How do you make the pie bigger? Where might the additional value come from? An alternative approach to Gore Vidal’s worldview was famously espoused by Bernard Baruch, a leading twentieth-century banker and financier: You don’t have to blow out the other fellow’s light to let your own shine (Nalebuff and Brandenburger 1996, p. 4). Baruch’s approach draws attention to the fact that business is different from other games, because it allows more than one winner. It enables the achievement of win-win outcomes by avoiding mutually destructive competition. Today, most businesses succeed only if others also succeed. Today’s game is a non-zero-sum game. Also, today’s game doesn’t stand still. Legal service providers are free to change the game of business to their benefit. But how?

The Common Legal Platform (CLP) is often presented as a necessary game-changer in the legal services industry. Why should legal service providers change the game, one might ask? As Nalebuff and Brandenburger (1996) pointed out, real success comes from actively shaping the game you play—from making the game you want, not taking the game you find. The biggest opportunities—and the biggest profits—do not come from playing the game differently. They come from changing the game itself. How can a CLP change the game for legal services providers? In business, a driving force is customer needs. It is about providing customers with a solution. When it comes to solving customers’ problems, the industry perspective is becoming increasingly irrelevant. Customers care about the end result, not about whether the company that gives them what they need happens to belong to one industry or another (Nalebuff and Brandenburger 1996). For example, a person needing transport from Boston, Massachusetts, to New York City can drive, fly, take a train or bus or use an online car-pooling app. Consumers decide by evaluating the price, quality and speed of those offerings, and will choose between these options accordingly. Buses, trains and airlines are traditionally fierce competitors in the transportation industry. A ride-sharing platform does not look or operate anything like bus, train or air services.

Since the lines between markets are often drawn based on how companies compete, rather than to whom customers can turn for alternatives, visualising a shift from reliance on the current fragmented, specialised and exclusively legal nature of services provided by law firms to their transformation into providers of virtually everything creates an obvious pushback. A law firm making a profit on referring their customers to wellness retreats, or being an intermediary in the sale of garden fences? It sounds like a big stretch of the imagination, but it will not seem such a major one when you finish reading this chapter.

2 A Common Legal Platform as a Public Utility

According to Susskind and Susskind (2015), the legal profession as we know it today is an artefact built to meet a particular set of needs in a print-based industrial society. As we progress towards a technology-based digital society, the legal profession, or any profession in its current form, will no longer be able to satisfy the needs of society: professional services are unaffordable and often antiquated, the expertise of the best is enjoyed only by a few, and their work is not transparent. For these and many other reasons, today’s lawyers should be, and will be, displaced by feasible alternatives (Chomicka 2016), and one of the currently available alternatives is the online platform. While there is often a lack of clarity about exactly what is considered to be an online platform (O’Connor 2016), the term generally refers to any online service that can function as an intermediary between two or more clearly identified groups (Ivanovas 2015). The fundamental characteristics of the Internet cause online platforms to become global information monopolies, meaning that they are frequently compared with public utilities, with regulators and competition enforcers treating them as essential facilities (Kucharczyk 2015). Examples of online platforms that can be seen as public utilities include Google, Amazon, Uber and Facebook.

How might a free CLP become a public utility? Online platforms exhibit a significant self-perpetuating network effect, where the value of the platform increases each time a new user is added. Greater usage leads to better data and increased confidence in the service, which reinforces—by design—its propensity for future use. When a network gets large enough, it hits a tipping point, at which point competition against the market leader is futile. The effects of these networks are then compounded by the extensive user data they possess. Since Internet companies use data to refine and improve their offerings, having access to more data reinforces and accelerates this unbreakable positive feedback loop (Atlantic Council 2016). How big is the Internet game? There is still plenty of talk about a national economy or an industry, but the world’s economies are so highly interdependent that industry boundaries are largely artificial. A free CLP would, by default, be a global public utility.

In the oversimplified view of internet competition, public utility providers are seen as virtually untouchable, and therefore are believed to be free to act in a non-competitive manner without the usual disciplinary threats posed by competition. However, the CLP can coexist with traditional and other channels of provision of legal services in the same way that Facebook coexists with a wide array of other services in the market for social networks, such as blogs and microblogs, professional networks, online forums, photo- and video-sharing services, news aggregators, messaging services, product review sites, social gaming apps and virtual worlds (European Union Law 2011). Most of the customers of social networks, though, prefer one-stop shops to having to drive around town to have their needs fulfilled. They choose Facebook.

The direct network effect offers the opportunity for quick, widespread CLP adoption, and has an obvious benefit: more customers mean a bigger pie. Having more customers leads to better content, which in turn leads to more revenue. There is another benefit, as well: with more customers, no one customer is essential. Bringing in new customers lowers the added value of all the existing ones. That puts the legal services provider in a stronger bargaining position with respect to its customers. For the legal services provider, it is a double win: the pie grows, and the provider gets a bigger share. However, with the free online platform, when you bring more players into the game they do not necessarily belong to you. It is expensive to develop the market and stimulate demand, so why do it, if your competitor might be the beneficiary? Why should one invest in a CLP to make one’s competitors prosper, one may ask? Because it is better to make the pie bigger than to fight with competitors over a fixed pie. Business is different from other games because it allows more than one winner. Today, most businesses succeed only if others also succeed. There is also another issue at play: the use of a CLP would be free, which prevents consumer lock in. Furthermore, consumers can participate in several online networks at once, a practice called multihoming. For example, many Facebook users also use Twitter, Instagram, LinkedIn or YouTube. Online dating platform users frequently keep profiles on multiple services (O’Connor 2016). Why share one’s lunch with competitors, then? Because a prosperous competitor is often less dangerous than a desperate one.

Apart from direct network effects, online platforms often exhibit indirect network effects. The English language perfectly exemplifies the direct network effect of a global tongue: the more people use it, the more useful it is (Anon 2019). An Xbox One X gaming console becomes more valuable as the range of available games increases, and this range increases as the total number of Xbox One X users increases. In addition to the range of game titles, depending on how a user likes to play they have the option of purchasing games on disc, purchasing a digital download copy, renting a game for a limited amount of time, a monthly subscription to dozens of games, or buying a used game (Velazquez 2019). Having more users leads to better online services by providers, enabling, for example, the development and improvement of free content, which in turn brings even more users, many of whom become paid customers.

What would be the best starting point for a free CLP? Successful online platforms came about in various ways: some started as free, crowdsourced sources of legal information, and were converted into a fee-paying service as a result of their own success (Casetext); some were devised as an additional product on an already existing platform (Bloomberg Law); some were purpose built (Florida Pro Bono Matters), and some developed over the years in line with technology and market evolution (Lexis Advanced).

Perhaps the most efficient way of starting a free CLP would be for a large legal firm to make their current online platform free and open to all and enhance it through crowdsourcing. Large legal firms already rely on expensive services to build and maintain their online platforms. These platforms usually already have the basic set-up for most, if not all, the functionalities sought by a free CLP: a repository of templates, clause libraries and commentaries on new legislation, as well as a place for internal contract negotiations, internal discussions, internal exchange and learning. All that is needed is a shift from an internal to an open to all mode of operation. One of the very large firms would have to take a dive, then. And the more time that passes with such platforms being shielded from free public use, the more the likelihood of platforms such as Amazon taking advantage of the need for a CLP increases. This sounds quite revolutionary—a seller-of-virtually-everything becoming the leading legal knowledge and services broker; but, as already discussed, when it comes to solving customers’ problems, the industry perspective is becoming increasingly irrelevant. Customers care about the result, not about whether the company that gives them what they need happens to belong to one industry or another. The boundaries of the legal services market were drawn over a century ago and are incompatible with twenty-first-century customer behaviour, that typically involves turning to a one-stop shop for virtually everything. The advantage of established legal businesses’ platforms over Amazon, though, is that the largest legal practices are already established users of paid-for versions of a CLP, and, to ensure demand and achieve scale, they can be their own customers. In large legal firms, different departments are often each other’s customers, with exchange facilitated by the online platforms on which they operate. Becoming your own customer is a recognised way to develop the market. It is no coincidence that automobile manufacturers are used to owning rental agencies: for example, the Ford Motor Company purchased Hertz in 1987, and by the second quarter of 2005 Hertz was producing about ten per cent of Ford’s overall pre-tax profit (Sorkin 2005).

Another conventional way to start a new product is to pay people to play. Starting a network is not that different from starting a party. No one wants to go to an empty nightclub, so nightclubs often start out with free admission, even free drinks, early in the evening. With the self-perpetuating network effect, getting the party started for an online platform sounds much easier than for the nightclub, however. Sometimes paying customers, especially early adopters, to play is essential: a good example is Virgin Media, a cable company, that subsidised broadband subscription during expansion of its cable network to cover 100,000 homes in east London, UK. Elsewhere the company was focused on selling faster, more expensive broadband to existing customers (Williams 2014). The good news is that one does not have to pay everyone to play—once there’s a critical mass of users, others will follow of their own accord.

Yet another way to bring in more users is to identify and promote complementary products. Developing complements naturally attracts more customers to the game. It can allow the CLP platform to deliver what it is intended to provide: a free platform to foster transparency and excellence in legal services and secure revenue from sources that often have nothing to do with legal. Think of Pinterest, a free social network that allows users to share and discover new interests visually by posting images or videos to their own or others’ boards, or browsing what other users have pinned (Meng 2019). Today it contains images of everything, from kitchen designs to every imaginable type of skin rash. Pinterest saw incredible growth, and in 2013 surpassed email as a sharing medium, even outpacing Facebook. Pinterest is one the fastest-growing platforms for online content sharing, according to a new report from online content distribution service ShareThis (2017), and the company sits on piles of cash. One might wonder how a free online resource could become so commercially successful. Revenue from advertising might be one of the ways. What this online platform really does is to rely on free content to drive businesses behind this content and monetise complements. Researching kitchen design images? It’s most likely that you need a new kitchen. Pinterest says: here is what 100,000 of other people who searched for the solution to a narrow dark kitchen did: here are designers, suppliers and contractors who can help. Although it doesn’t yet go as far as putting you in touch with people who can organise the housewarming party for the neighbours, complete with childcare choices, but give them time and they will get there. We will talk more about complements below.

3 Creating Value and Capturing Value. The Winner Does Not Take It All

¹

There is a fundamental duality in business: whereas creating value is an inherently cooperative process, capturing value is inherently competitive. To create value, legal services providers cannot act in isolation. They must recognise their interdependence. But along with creating the pie, there’s the issue of dividing it up. This is competition. Just as businesses compete with one another for market share and customers, suppliers are also looking out for their slice of the pie (Nalebuff and Brandenburger 1996). Value creation and capturing value are both huge topics, so the discussion will focus on the first of these: value creation.

To realise the vision for a free public utility that acts as a one-stop legal store, a CLP must create value. Value is a very broad term, and the broadly understood value of a free CLP for both the legal community and society is fairly undebatable. However, for the businesses supporting it, and participating in the CLP, it must deliver a very specific type of value: revenue. How can one make money from a free resource? Think of the Pinterest phenomenon again.

The fundamental commercial principle of a free CLP could revolve around the concept of coopetition—a business strategy that uses insights gained from game theory to understand when it is better for competitors to work together. Coopetition (also spelled co-opetition) is a portmanteau term combining the words cooperation and competition. Coopetition games are statistical models that consider the ways in which synergy can be created by partnering with competitors. This tactic is thought to be good practice between two businesses because it can lead to the expansion of the market and the formation of new business relationships. In this capacity, agreements on standards and developing products across an industry or between two competitors is necessary to implement coopetition, and a CLP offers a perfect platform for this to happen, in the literal sense of the word. It is widely recognised today that the fate of not just the company or industry, but often that of the whole country, depends on coopetition and complements.

It is hard to get used to the idea that sometimes the best way to succeed is to let others do well, including your competitors. Businesspeople normally assume that when customers buy someone else’s product or service, they are less likely to buy theirs. Perhaps this mindset stems from the view that life is all about making trade-offs. No one can have it all. With only so much money, so much time, so many resources, people have to make choices. Customers and suppliers have to choose between you and the competition. It’s either/or, not both. But, as Nalebuff and Brandenburger (1996) have noted, that’s not always true. The trade-off mindset fails to take account of complements. When a customer buys a complementary product, that makes him more likely to buy yours. It’s both, not one or the other. Or when a supplier provides resources to a complementor, that makes it easier for him to supply you as well. Again, it’s both, not one or the other.

Though the idea of coopetition and complements may be most apparent in the context of hardware and software, the principle is universal. A complement to one product or service is any other product or service that makes the first one more attractive, like hot dogs and ketchup. In the new economy, the problem of missing complements is multiplied a hundred times over. If you approach a legal services provider to buy a house, in most cases you get exactly what you asked for—a legal service revolving around agreeing, drafting and managing the execution of the contract for the transfer of the ownership of a property. Some legal practices provide a limited number of complements: if you are buying a house you may have received, via e-mail from your legal provider, a complementary discount with a cooperating surveyor or mortgage or insurance broker. But then there is so much more you need. Architect, landscaper, moving company, cleaner… Pause and think about CLP more broadly. Why leave all this value to other online platforms, such as handy.​com? When you buy a house, the real need is not the creation and execution of a legal document, but the creation of a new home. The contract is just one element of the undertaking, and having it drafted and managed is rather minor and cheap. When your marriage does not work, what you need is not a divorce, but a new life, and divorce is just one of the many elements of fulfilling this need. To highlight this again, when it comes to solving customers’ problems, the industry perspective is becoming increasingly irrelevant. Customers care about the result, not about whether the company that gives them what they want happens to belong to one industry or another. It is possible that a wellness retreat business may sell more divorce services as the complement to booking a vacation than a focused legal firm specialising in divorce through all their traditional marketing campaigns. While the idea of a legal firm making more revenue on wellness retreat referral fees than on providing their core legal services may seem like a significant stretch of the imagination, in many industries such a shift occurred decades ago. Think cars and car loans. Ford is an example: better and cheaper access to credit enables people to buy more cars, and that helps Ford. The flip side is also true: selling cars helps Ford sell loans. In 2018, more than $1 in $3 of Ford’s profit was coming not from car or truck sales but from the finance entity that makes loans to more than 5000 car dealers and four million customers, mostly in the United States and Canada. That's up from $1 in $4 in 2017, according to regulatory documents. A couple of months ago, Ford announced the purchase of the electric scooter company Spin, an acquisition that brings with it a new trove of data about how people travel. The value of the acquired company may lie less in the hardware than in the tracking that goes along with use of the scooters: When do people travel? What are the key travel routes? Which days of week are the busiest? (Howard 2018). Ford’s next highly lucrative revenue stream might come from data mining.

Various design professionals benefit from established schemes rewarding them for bringing business to suppliers. Your kitchen designer might be enjoying a two-week free trip to Bali right now, complete with a day of product training by one of the leading brands of kitchen appliance manufacturers whose products you purchased on the back of their design. If you helped your customer convince the planning authority to allow them to build a $1 million extension to their house, why shouldn’t you benefit from the reward? By securing a building permit, a legal professional created a value which at present they leave for others to divide between them.

In the author’s main industry, construction, professionals are perhaps overly fixated on comparing their processes and outcomes to making cars, so let’s carry on with examples from the automotive industry. Since you can’t add a fifth wheel to a car, one way for French tyre manufacturer Michelin to boost sales is to sharpen people’s appetite to drive. This is why since 1900, when both cars and food tourism were novel luxuries (Mayyasi 2016), it has produced the Michelin guidebooks (the Red Guides, authoritative listings of restaurant recommendations, and the Green Guides, a series of general guides to cities, regions, and countries). The focus of these guidebooks is not just on providing the shortest route, but also on offering longer, more scenic routes, making getting there at least half the fun. The guide books encourage travellers to keep moving, to keep wearing down their tyres. There is always another town to see, another interesting detour to make. Michelin’s guidebook publishing has not only helped sell more tyres; it is also a profitable business in its own right. This example shows the value that can be created by the development of free content on the CLP by very commercially driven law firms. Such free content can create a need or an appetite that can be fulfilled by a paid-for legal service.

And here is an example that has changed the way used cars are sold in France, Poland, the United States and other countries. John McBain founded Trader Classified Media (TMC) during the late 1980s, publishing La Centrale des Particuliers, a Paris weekly specialising in advertisements for used cars. TMC found people who would provide the complementary services their readers wanted—car insurance, financing, and mechanical warranties. TMC had pre-negotiated very favourable rates for their readers by giving the providers a prominent listing in the magazine and the use of the La Centrale brand name. TMC went even further, selling some of the complements themselves. Both readers and advertisers wanted to know average transaction prices and the average time on the market for each make, model and year. TMC also gave away some complements for free: for example, free legal services to readers who discover that an advertiser has misrepresented a car. By paying attention to complements, TMC ensured that there is no competition for La Centrale. Today, La Centrale (www.​lacentrale.​fr) is still one of the largest specialist classified car advertising portals in France.

This example explains how complements can help to make a free CLP commercially successful. A free CLP is about excellence in legal. It is about free legal content and a neutral space for legal market. To maintain neutrality and impartiality, a great part of the revenue should come from elsewhere, through a network of complementors who do not necessarily belong to the legal industry. A player is your complementor if customers value your product more when they also have the other player’s product, rather than just yours. A person looking to spend $5000 on a new garden fence might be nervous about local planning and building codes. Do I need a permit to put this up? Why not ask this question on the relevant forum on a free CLP? A small legal firm may answer your question within 25 s, for $30, giving you a link to a range of fence options that do not require a permit application. Think about this example from a customer outcome perspective. A customer needs a garden fence, not a legal letter, which is the typical output offered by a legal services provider in such cases. This legal firm would normally be able to charge $300 an hour to deal with customer’s query, and keeping in mind the common practice in law firms of recording and invoicing in 6-min increments, the instant response on a platform has a value of 6 min, or $30, for the law firm. By giving the customer what the customer needs: garden fence options hyperlinked to the Home Depot website, they also could make—say—5% of the value of the customer’s $5000 fence order for the referral: that is, $250. If a customer also bought the installation for $2000, then the total income for the law firm would be $380. The legal services provider would collect $380 for 25 s of work. Not bad.

Although one might feel uncomfortable about the idea of a law firm being the intermediary for buying a garden fence, this situation is already happening, via ads tracing you across the web. If your lawyer e-mailed you their advice in a pdf letter, the keyword fence in the document opened with your Google Docs, combined with your probable previous fence searches, results in a plethora of fencing advertisements wherever there is a spare inch of white space left on your computer screen. Today companies try to track your every browsing move, from whitehouse.​gov to perezhilton.​com. Once your lawyer advises you that a fence up to six feet (180 cm) high does not require a permit in your specific geographical location, you either search for fence on other online platforms, or just click on the banner which, conveniently, shows six-foot tall panels, giving the referral value created by your lawyer to somebody else, usually an IT company that, as far as its core business is concerned, has little practical knowledge of garden fences. What it has, though, is a good complementor who does it for them and pays them a fee for this privilege.

4 Cui Bono? [Who Benefits?]

²

This question is the single most important one to ask when evaluating any new investment. After all, humans are inclined to support, if not cause, actions that benefit them. A free CLP is envisaged to benefit both the legal profession and their bottom line, as well as society.

There is currently a rather negative public attitude towards lawyers, which reveals itself in the battle for increased legal aid funds, competition for work with paralegals, competition for work with other professionals such as surveyors, or potential employment outside traditional legal positions. Many of these battles are ultimately decided in the court of public opinion, where perceptions aren’t just part of the game—they are the whole game. The public perception of lawyers as self-interested fat cats (Bedlow 2006) has proved difficult to shift. In the United Kingdom, in a survey of the most trusted professions, it emerged that more people would trust hairdressers (69%) to tell the truth than lawyers (51%) (Ipsos MORI 2016). Similar studies in the United States have indicated that people rate the honesty and ethical standards of a building contractor higher than those of a lawyer (25% and 21% respectively (Gallup 2015)). According to research by Which? The Consumers’ Association, based in the United Kingdom (2005), one in six consumers of legal services considered the service they had received to be poor. The main causes for complaint were unexpectedly high bills and the failure of many lawyers to listen to customers’ opinions, while other common grievances included rudeness, arrogance and poor communication about the progress of the case (Bedlow 2006). In this context, the Common Legal Platform (CLP) might be a much-needed perception-changer in the legal services industry. Changing the game comes with a shift in people’s perceptions. Moving to a free CLP—a public, transparent, neutral source and space for the legal industry, its complementors and its customers—sends a signal. This signal shapes people’s perceptions of the legal industry. And what people collectively perceive to be the game is the game. What the legal service providers need is a perception of a fair, transparent game by the public, and a free online platform lends itself well to the fulfilment of this goal.

5 Conclusion

To succeed in twenty-first-century business, the free CLP that is envisaged must expand the boundaries of legal and seamlessly weave itself into the net of virtually everything needed to fulfil customer needs. As discussed, customers care about the result, not the highly abstract and often antiquated legal process. To benefit from this insight, legal services providers should look at ways of expanding the pie by embracing coopetition and complementarity, developing new legal service complements for virtually everything and making existing complements more affordable. The legal industry needs a common platform and complementary industries so it can grow.

The creation and implementation of a successful CLP offers potential economic growth and efficiency for many, including the competitors of the organisation undertaking an effort to create such a platform or making such a platform widely available. What makes sharing your lunch with your competitors worthwhile is the fact that it is better to make the pie bigger than to fight with competitors over a fixed pie. Because a prosperous competitor is often less dangerous than a desperate one.

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References

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Footnotes

1

The Winner Takes It All is a song recorded by the Swedish pop group ABBA. Released as the first single from the group’s Super Trouper album on 21 July 1980, it is a ballad reflecting on the end of a romance (Andersson and Ulvaeus 1980).

2

Lucius Cassius, whom the people of ancient Rome regarded as a most honest and most wise judge, was in the habit of asking time and again in lawsuits: to whom might it be a benefit? Cicero: Pro Roscio Amerino, §§ 84, 86.

© Springer Nature Switzerland AG 2020

K. Jacob et al. (eds.)Liquid LegalLaw for Professionalshttps://doi.org/10.1007/978-3-030-48266-4_2

What Digital Legal Can Learn from Industrie 4.0 Collaborations

Tobias Broda¹  

(1)

PTC, Munich, Germany

Tobias Broda

Email: [e-mail]

1 Introduction

2 The StreetScooter Experience

3 e.GO, Demonstration Factories, McKinsey Partnerships – And How I Became a Business Development Guy for a While

4 The Characteristics of Early Industrie 4.0 Collaborations

4.1 Technology Is a Trigger

4.2 Hubs Are Key

4.3 The Right Mix

4.4 Raising a Baby with Multiple Parents

4.5 Self-Enhancing Effects Through Physical Grounding

4.6 Eagerness to Learn from Each Other

4.7 Equality and Democratization

4.8 Organizational Agility and Design Thinking

4.9 A Feast for Multi- and Interdisciplinarity

4.10 Reaching Out to the Ones That Stayed at Home

5 Now: What Can Traditional Legal Learn from Industrie 4.0 Collaborations?

5.1 Resources, i.e. Capability Building: Go Out and Learn

5.2 Culture: Building a Legal 4.0 Mindset to Support and Enable Digital Transformation

5.3 Organization: Transforming Your Role, Your Department and the Way You Work

5.4 Technology: A Trigger, Again

6 How Digital Legal Can Learn from Industrie 4.0 Collaborations – Without Having a Production Line

Abstract

The digital transformation as a matter of fact is having a strong impact on the evolution of the Legal profession itself. It spans over how we organize ourselves cross-functionally, what capabilities and resources we need, how we leverage new means of technology and what shifts in culture and mindset this creates and demands. Having worked for more than 1.5 decades in a company that creates software solutions and services which enable the digital transformation of our industrial customers, this article is to share my respective experiences and observations, in particular as it relates to my involvement in building so called Transformation Centers. These are real-production environments which are demonstrating real-world industrial use cases, with that reduce complexities in understanding digital transformation and instead do provide for a tangible experience on the prerequisites and impacts of such transformation. Moreover, such centers evoke new collaboration models in the ecosystem that I had the pleasure to help enabling, both within and outside my classic Legal role, including creating a global collaboration with McKinsey on so called Digital Capability Centers, all of which provided me with valuable insights and tons of inspiration. Given that digital transformation on the one hand requires building new and holistic expertise as it relates to how the Legal profession advises its internal and external customers and clients throughout their journey of transformation, and on the other hand enables and calls for transforming the Legal profession itself, with this article I would like to suggest new methodologies and settings of capability building through collaboration that do support both of the aforementioned aspects in a comprehensive and interdisciplinary way. After all, this article is meant to provide inspiration and insights into what a Digital Legal profession on the rise can learn from trailblazers in the Industrie 4.0 space, how such learnings translate to our profession and the ecosystem we are operating in—and what limitations would have to be taken into account and dealt with on such exploration. By giving concrete examples and making specific suggestions on how Digital Legal can embark on a journey that other disciplines have already advanced on, I would like to contribute to triggering ideas and actions that make us embrace and actively shape our very own digital transformation.

This article has been written mainly during the summer of 2019, i.e. before Corona. One of the core theses is that the complexities of digital transformation can best be dealt with by making it tangible, i.e. materializing and exemplifying it on real world objects; coming together to collaborate at a common physical place; sparking inspiration and creativity by engaging in face-to-face interactions... all of which is not overly en vogue anymore during this summer of 2020. Instead we are experiencing, how former engagements in the physical world are being digitized and virtualized—and how surprisingly well this works in quite a few areas. At the same time, I feel we are just starting to understand also the limitations of such broadly virtual engagements. In a year from now, I hope, we will have learned a lot on that involuntary journey—and how to find the best mix of physical and virtual collaboration forms, depending on context and subject matter. And this will both confirm and at the same time augment the thesis set forth in this article, is my true believe. How exactly these mixed forms of collaboration will look like, however, is something that is still to be found out. The proposals given in this article will certainly be a part of that.

Tobias Broda

is heading the EMEA Legal department of PTC, a Boston based software company that enables digital transformation in the industrial space through its market leading CAD, PLM and in particular Industrial IoT and Augmented Reality solutions. ../images/486803_1_En_2_Chapter/486803_1_En_2_Figa_HTML.jpg

1 Introduction

Digital transformation, Industrie 4.0 and many other of these currently inflationary buzz words are describing a universe of opportunity, threat, change pressure and literally hundreds of further connotations that, due to their abstractness and complexity, quite often create feelings of intellectual or even emotional overload and subsequent frustration. What is this all about? Where should I start? What should I do? What does this actually mean for me as an individual or an organization?

This article is not meant to add further layers of abstraction by which orientation and guidance for walking the universe of digital transformation sometimes is rather becoming more obscure than clearer. Instead, I would like to lay out my own experiences deriving from a number of years dealing with this subject, breaking them down into individual observations and insights in order to illustrate what impact they have on my Legal work - and could generally have on transforming the Legal profession. Having said this, my intention is not only to share my individual experiences and learnings but first and foremost to spread a certain level of inspiration for innovation and sparking some ideas of how your individual transformation journey could look like.

2 The StreetScooter Experience

My personal journey into Industrie 4.0 started on a Thursday 10 years ago. Our VP of Business Development entered my office and asked me for some type of marketing or sponsoring Agreement for Germany’s elite engineering university, the Rheinisch-Westfälische Technische Hochschule Aachen aka RWTH Aachen.¹ Still unable to read minds I asked what purpose this should serve. He replied that the professors of the university would develop and build an electric vehicle. Not only prototype stuff and scientific trial and error plays—a real car, series production, and of course completely disruptive, not like the very few pseudo e-cars German OEMs were offering at the time where more or less a combustion engine was replaced by an electric drive and the rest mainly stayed as is. No—conceptually new, revolutionary, ready to conquer the market.

Sure, I thought. Certainly, a handful of professors, post-docs and students will be able to cope with the complexities of building a series car that our world class automobile manufacturers couldn’t. Certainly, we should be wasting our company’s resources to support such a seemingly pointless activity, including my valuable time. And when it turned out that we should be granting a considerable number of software licenses for free plus some resources to implement them, and ideally also support this weird project with some marketing budget because of the priceless return on investment we would be getting through PR and elevated thought leadership recognition, I was ready to close the books.

Basically, I was doing what I assumed would be my job as a Legal counsel: assessing the facts with a critical mind, analyzing risks, weighing the pros and cons, protecting the interests of the company, transforming this into thought through, detailed and diligent contracts that should anticipate and mitigate any potential uncertainties. And, of course, I was intellectually skeptical towards wishful thinking, unicorn fairy tales and overexcitement of the business; instead I felt it was required to curb the usual suspects’ enthusiasm appropriately to avoid that we were losing track, focus and money. And there is nothing really fundamentally wrong about such job description and role perception.

Discussing with me and receiving my well-set concerns, our VP of Business Development realized that this would not be a quick-fix-scenario. And if I would be having strong concerns, Finance and other departments would be relying on my judgement, and the whole story could be put to bed. Not that I would have had the exclusive power to just stop such project, if, at the same time, it would have had very strong support by the business. But I could make it difficult and could work towards a slow and long death. Culture eats business development for breakfast, even if such breakfast might take some time.

What happened instead was that he changed his approach. He switched from throwing some enthusiasm propelled pieces of information at me to making me onboard his journey through a much more holistic deep dive. I understood that the former German Post, now DHL, had urged German auto OEMs since quite some time to develop and produce an e-vehicle that would be tailored to the needs of their delivery services. E-drives would be completely outperforming combustion engines for DHL’s use cases: urban environment, endless stop-and-go/on-and-off usage profiles, short range drives, easy recharge overnight, no emission, easy to maintain etc. The diesel driven delivery vehicles at the time did not match any of these requirements—instead, DHL had to get them on the autobahn during the weekends to blow the unburned carbon out of the particle filters in order to avoid their early death.

Also, I then understood that approx. 80 mostly Small and Medium Businesses were supposed to participate in the project: some supplying the chassis, others the battery, axles, suspensions, headlights, interior parts etc. So, after all this was more a development and orchestration effort, integrating product development with the requirements of a modularized manufacturing process, instead of the university staff literally hammering out a fully blown car by themselves. And this was in fact a superb show case for our Product Lifecycle Management (PLM) solutions: if we could show that 80 different companies could seamlessly collaborate on our PLM platform—how could an integrated corporation with decentralized product development around the globe resist such a solution creating indispensable value? And, finally, after I had visited Aachen, had received some firsthand impressions and had seen the early signs of what today more and more is becoming known as the Engineering Silicon Valley, I was infected. Infected by the spirit I found there, infected by the enthusiasm, infected by the vision and the fun of doing something completely new—together. Cross-functional. Cross-enterprise. Cross-boundaries.

The rest is history: Within roughly 1.5 years, this conglomerate of agility, driven by a completely new collaboration culture and the technology enabling it, released the first StreetScooter prototype. On the International Automobile Fair in Frankfurt 2011, Angela Merkel was taking a seat while praising the innovation embedded therein and shining throughout. The test cycles with 50 cars exceeded expectations, and so in 2014, DHL simply acquired the StreetScooter GmbH. We suddenly had a new customer, and this customer soon was becoming Europe’s largest manufacturer of utility e-vehicles. And ever since, we received tons of kudos and enthusiastic PR for its innovative, disruptive entrepreneurial mindset. Today, DHL is producing StreetScooters not only for their own use cases, but for the potentially several hundred thousands of craftsmen, bakeries, gardeners and various service delivery businesses in the urban space that were longing for such low cost, no emission, short range best in class type of transportation concept. In the meanwhile, we are working on how StreetScooters can autonomously follow the postman like a robo-dog over short distances when it is more efficient for him to walk by a number of houses in order to deliver the mail instead of hopping on and off the car …—To be continued.

3 e.GO, Demonstration Factories, McKinsey Partnerships – And How I Became a Business Development Guy for a While

Fueled by the tremendous success of the StreetScooter story, RWTH Aachen was on for the next coup: after a commercial e-vehicle, now a series-production e-car for the private consumer market was on the list, the e.GO. Sure, I thought. Sure we are on for that as well!

While the StreetScooter—besides representing groundbreaking innovations—for us had been a great PLM showcase, the e.GO was meant to be a perfect example for the power of Industrie 4.0 processes and technologies. And the disruptive price tag actually called for some completely new manufacturing intelligence in order to be realized. Fortunately, at the same time, we were transforming from a CAD and PLM into an IoT (and subsequently also: Augmented Reality) company.

So again, I found myself shaping, drafting and negotiating a collaboration agreement with RWTH Aachen. This time with the European 4.0 Transformation Center GmbH (E4TC)—one of the newly founded cluster representatives on the RWTH campus that was emerging through public private partnerships and an increasing number of genuine startups as well as global corporation-outsourced innovation hubs to the envisaged Engineering Silicon Valley. Once again, this engagement was not out-of-the-box and we had to take it through our internal vetting processes. This time, however, I was an evangelist right from the start. I did my best to support this initiative, selling it and convincing our cross-functional stakeholders to work new ways of making this happen, including going the extra mile to cope with the complexities of such a non-standard undertaking and supporting it pragmatically, while creating a mindset of openness, curiosity and innovation. Moreover, I was taking every opportunity to use my company-internal network in order to promote these activities also across the ocean. Awareness in our headquarters was in the very early stages, to say the least, and so the readiness to approve funds and allocate resources left room for improvement, too.

One crucial leverage for awareness creation and growth in this case was the demonstration factory: the first prototypes, that actually were e-Karts, had to be built somewhere, and the same was true for the first rolling e.GO chassis that were being produced. The brand-new E4TC building therefore was designed in a way that, directly adjacent to the office spaces, a shop floor was accessible, equipped with some welding, laser cutting and other industrial machinery. This is where we implemented our Industrial IoT platform and other Industrie 4.0 technology in order to visualize and digitally track the movement of parts throughout the shop floor, monitor overall equipment efficiency, support quality assurance processes and implement the first AR based digital work instructions. With that you had the start-ups and innovation hub office spaces, where visitors were educated on a more theoretical and conceptual level, in direct neighborhood to a real production environment fully equipped with real Industrie 4.0 technology. To see. To touch. To understand. To be inspired and to get excited.

This integrated environment was the magic formula. More and more visitors came to see Industrie 4.0 live at work, among them high ranking delegations from Toyota and other industry giants from all parts of the world. As a result, more and more both industrial machinery as well as high tech companies were attracted by the unmatched opportunities to showcase their solutions. And, even more importantly: to build up an ecosystem of partners that forms the indispensable backbone for any serious Industrie 4.0 activity. All accompanied and framed by the scientific, yet very strongly practice oriented research activities of the RWTH Aachen and its predominantly young and ambitious staff. This led to the lines between industry and academia starting to blur, as well as between companies that were competing in several areas of the real world.

In such a vibrant, innovative, cross-fertilizing and inspiring environment, one day McKinsey knocked on our door. They had a tradition since the 90s of taking their clients through workshops held in real production environments in order to visualize and elaborate on management strategies like Lean Production and others. Such facilities—that obviously also served the purpose of creating follow on consulting business—were called Capability Centers. Now McKinsey was looking to build Digital Capability Centers (DCCs²), taking a—in the light of the firm’s self-conception—revolutionary new approach, i.e. not alone but with the help of partners. A strategic step that resulted from the pure necessity that Industrie 4.0 complexities do call for. Since McKinsey was impressed by what we had done in Aachen, they asked us if we were interested to jointly create the first McKinsey Digital Capability Center in the world, also based in Aachen,³ together with a further RWTH faculty.

So once again, I found myself shaping, drafting and negotiating a collaboration agreement—now with McKinsey and the Institute for Textile Technologies (ITA⁴) of the RWTH Aachen, which is the second largest institute after the Laboratory for Machine Tools and Production Engineering (Werkzeugmaschinenlabor, WZL⁵) that we were dealing with already since years on StreetScooter, e.GO and other fancy stuff. Leveraging my previous experiences in the Aachen ecosystems as it relates to enabling so far unprecedented Industrie 4.0 collaboration initiatives, together we established a very cooperative and pragmatic approach throughout the negotiation process. Inspired by sharing the same mindset and enthusiasm for innovation, and creating something completely new, a very trustful personal relationship emerged with the two McKinsey representatives, and I was gradually becoming their main point of contact, clearly beyond legal affairs.

Two or three months after we had started working together, they reached out to me, asking if PTC as a company would be interested in becoming a partner to the Singapore DCC as well, that was intended to open shortly after the Aachen DCC. I was thrilled by the prospect of establishing a global partnership with McKinsey, given that there were in total five DCCs in the planning stage, and so I was strongly trying to make myself heard in our corporate headquarters. Now it paid off that, over the years, I had incrementally established local and international networks, promoting our activities in the RWTH context. At the time, we did not have the organizational structures ready to deal with a global partnership of such specific nature; however, with the aforementioned help from PTC internal networks, within three weeks, we had gained executive attention and approval to move ahead with respective investments.

This unforeseen impact now gave me the ultimate kick: while we were cross-functionally working against a very challenging timeline to get the Aachen DCC up and running by March 2017, i.e. within roundabout 4–5 months since we had seriously started our joint undertaking, my role completely changed from being the Legal counsel to becoming a project and partner manager and somewhat business development guy: together with our Sales team, I was pushing for inviting customers to the Grand Opening; I was identifying joint marketing opportunities with my two trusted friends that positioned us as the key McKinsey partner and handed these over to our Marketing and PR department; I was thinking about joint go to market opportunities following the Grand Opening and onboarded our Business Development and Strategy folks accordingly. And so on. I was really on fire and I have enjoyed every second of it (unless something