Different angles: lawyers suggest law school programmes or even nudge theory will help develop new approaches to problem solving
Different angles: lawyers suggest law school programmes or even nudge theory will help develop new approaches to problem solving © Getty Images/iStockphoto

In-house lawyer Dan Kayne was discussing potential recruits for his team at Network Rail when he came up with an idea that became the O Shaped Lawyer. His vision was for an initiative to give lawyers more rounded skills via new forms of professional development.

“The human element and the ability to connect is so important in our profession, and yet law firms have traditionally struggled with this,” says Mr Kayne, general counsel for regions at Network Rail, which manages the UK’s rail infrastructure. “It is all too common for law firm partners to become partners — and therefore role models — because of their technical expertise and not their leadership qualities.”

The need for this to change is driven partly by the digital transformation under way in the legal sector. While artificial intelligence and machine learning are enabling automation of many legal processes, and the jobs that went with them, there is also demand for the human capabilities that then add value to legal services.

Michael Davison, Hogan Lovells’ deputy chief executive, argues that lawyers will need to have the ability to question the data. “People will need to think, ‘Does this answer from the data look right?’” he says. “That depends in turn on judgment and making the call.”

In addition, says Patricia Manca, partner at PwC Tax & Legal Services Spain, the growth of legal tech means lawyers need broader capabilities. No one coming out of law school now can avoid the need for digital skills, she says. “But they also need other skills such as design thinking, legal management, innovation and empathy.”

Today’s shifting geoeconomics demand broader legal skills, says James Anderson, partner at Skadden, Arps, Slate, Meagher & Flom. Since the end of the cold war armed conflict has often been replaced with targeted use of economic tools: “Most of them have legal dimensions, like trade and investment policy, economic and financial sanctions, financial and monetary policy, energy and commodities, and cyber.”

As in many other industries, the pandemic has required lawyers to show greater flexibility and the ability to collaborate online while blurring the boundaries between work and life. Mr Anderson says this means lawyers, particularly those with management responsibility, must take on the role of coach and address obstacles that might prevent their colleagues achieving their potential.

“We have to tune in to a broader range of issues that could affect our team of lawyers — whether that’s their location, their family situation, or their physical and mental health — and eliminate any issues where we can, as soon as we can,” he says.

One of the most powerful potential forces for change in the legal profession is the evolving role of the general counsel. As in-house lawyers move beyond contracting and compliance to become strategic business advisers, they want their external lawyers to have a different set of skills.

In a recent report, the O Shaped Lawyer project identified three categories of non-legal skills that general counsel look for in the lawyers they work with: adaptability, willingness to build relationships and ability to create value through legal initiatives.

The new demands of in-house teams call for private practice lawyers to think in new ways, says Ms Manca. “If you want to be a value-added law firm for your clients, you need to understand complex problems and find flexible solutions,” she says.

Meanwhile, as more companies emphasise sustainability, general counsel want this to be reflected in their suppliers, whether of raw materials or legal services. “Like every other function in their organisations, general counsel are saying they need their supply chains to do the same,” says Mr Kayne.

If the legal sector has recognised the need to equip people with new skills and ways of thinking, the question now is how to achieve that.

It could start with academia. The O Shaped Lawyer worked with the University of Law, one of the largest law schools in the UK, to develop a programme focused on communications and building relationships delivered via ULaw’s online learning platform

“We work closely with the main law schools that feed our intake,” says Clare Francis, commercial law partner at Pinsent Masons. “And the more they can do to make [their courses] less academic in focus and more ready for real life practice, the better.”

Law firms also need to work internally on developing the right skills. To promote collaboration, for example, Pinsent Masons assigns an innovation manager to each practice group to ensure teams from different parts of the firm are working together.

Another approach is to use behavioural science or “nudge theory”, to influence people’s behaviour. Hogan Lovells solicits detailed client feedback on its services so that it can present its lawyers with hard evidence of why working collaboratively is valued.

“As lawyers, we went into the law because we like the structure of the argument and the process, and we instinctively push back against change,” says Mr Davison. “So it’s about nudging people to do things differently, think in a broader way and collaborate more effectively.”

Innovation in the practice of law
RankLaw firm
STANDOUTWINNER: Freshfields Bruckhaus Deringer — As part of the UK government's preparations for a no-deal Brexit, it agreed £100m worth of contracts with three ferry operators to secure freight capacity for importing goods to the UK. The firm represented Eurotunnel, a subsidiary of Getlink, which sued the UK's Department for Transport for excluding it from the deal. The firm brought a combined public procurement, state aid and judicial review challenge, securing an expedited trial before the Brexit deadline, and achieved a £30m settlement for the client in February 2019.
STANDOUTAllen & Overy — The firm made it possible for Goldman Sachs to offer a single asset commercial mortgage backed securitisation for a group of investors to acquire a property in France, the first successful CMBS in France since the 2008 financial crisis. By holding the shares in a fiduciary trust (normally used in restructurings), the lawyers were able to reassure the rating agencies that the CMBS would work in the event of Goldman Sachs going bankrupt as many lenders did during the financial crisis.
STANDOUTWhite & Case — The Emirates Water and Electricity Company relies increasingly on foreign rather than government investment to ensure a reliable supply of water and power to Abu Dhabi. In order to attract more competitive financing bids for projects, the lawyers advised the EWEC on improving the documentation process. They designed a centralised source of document templates for bidders to submit their bids, and templates for other documents. This created higher legal costs upfront, but should be cheaper in the long term and reduces risk of transactions falling through.
HIGHLY COMMENDEDCMS — Helped vehicle traders Auto Trader and Cox Automotive UK establish Digital Auction, a joint venture online platform. Despite the two companies' combined online market share of more than 60 per cent, the legal team successfully argued that the venture did not contradict competition law as the platform would be competing with physical trading spaces. Acting as sole competition counsel for both clients, the firm used data analytics software Brainspace and expertise from CMS Evidence, the firm's forensic data team, to select documents to defend the joint venture to the Competition and Markets Authority, allowing the platform to be brought to market faster.
HIGHLY COMMENDEDDWF — In an unusual combination, DWF offers its insurance clients multidisciplinary teams of lawyers, claims managers and forensic accountants. The firm created a telematics tool that uses GPS data and accelerometers in vehicles to help identify fraudulent claims, saving insurers 25 per cent of their compensation spending in 2019. It also developed a product that helps detect fraudulent credit hire claims, saving insurers an estimated £10m in 2019. Collaboration between DWF's insurance lawyers, accountants and claims adjusters enabled the firm to provide a fast, joined-up service to insurance clients facing a sudden increase in business interruption claims during the Covid-19 pandemic. This enabled insurers to respond to claims faster, incentivising customers to renew their coverage.
HIGHLY COMMENDEDGómez-Acebo & Pombo — Helped a vehicle manufacturer respond to hundreds of claims for damages after the European Commission decided that the company had broken antitrust rules. A team of competition lawyers and digital transformation experts repurposed a tool used by the firm for invoicing and time management to process and report on claims across 50 local Spanish jurisdictions. The tool has saved the client an estimated €500,000 in legal fees.
HIGHLY COMMENDEDMills & Reeve — Advised a property developer in the negotiation of planning permission for former Ministry of Defence land in Cambridgeshire to be developed into a residential area with 6,500 houses. The firm used principles and protocols in the contracts that allow for decisions to be made throughout the development process, which will take place over many years, rather than the prescriptive clauses common in property development contracts, which often lead to renegotiations and disputes. This will allow decisions that are appropriate in the context of each stage of the development. It will also enable developers to account for unanticipated factors, such as the views of the new residents, without the need for lawyers’ input at all stages of the development.
HIGHLY COMMENDEDMorgan, Lewis & Bockius — In 2019, the Russian government was considering legislation to prevent search engine Yandex, the country's biggest tech company, ever having a majority of foreign shareholders, because of their potential influence in a strategically important sector. To try to address these concerns while maintaining the company’s shareholder base and ability to operate autonomously, the law firm advised on a new governance structure, which includes a “public interest foundation”. After negotiations with the Kremlin, the foundation holds a golden share in the company, which gives it powers to veto decisions that concern national security, and two board seats. Commended: Tim Corbett.
HIGHLY COMMENDEDPaul Hastings — The firm's real estate team developed a process incorporating artificial intelligence software for document review to help loan management company Mount Street with the transition from Libor-based interest rates to other so-called risk-free rates. Subsequently, Paul Hastings and Mount Street decided to offer a joint service to their clients, combining the law firm’s legal advice on the Libor transition with Mount Street’s expertise on the operational and commercial requirements of clients in the lending market. Commended: Miles Flynn.
COMMENDEDAddleshaw Goddard — The innovation and legal technology team developed a platform for private equity group Terra Firma to auction 147 Wyevale garden centre sites in the UK over the course of 18 months. More than 1,000 bidders worked through a step-by-step process to submit bids on the platform, and the client was able to compare bids and view documentation through a virtual data room. The platform also used Land Registry data to assist in due diligence checks.
COMMENDEDGarrigues — In collaboration with Deutsche Bank, the firm designed a securitisation structure for Banco Sabadell to help the Spanish bank obtain capital relief without selling assets or raising equity. This allows Banco Sabadell to sell excess interest cash flow to investors, generating a capital gain of €80m. Since new EU regulations on how issuers can offer debt or equity securities to the public were implemented in 2019, the transaction sets a precedent for future securitisation and debt deals in Spain.
COMMENDEDMacfarlanes — After UK regulators decided in December 2019 to limit the advisory services of the Big Four accountancy firms, KPMG opted to sell its pensions practice to private equity firm Exponent, former owner of meat-free food brand Quorn and whisky producer Loch Lomond Distillery. This was the first significant sale of an advisory division by a Big Four firm. The team devised a structure to allow the division to continue operating under KPMG on an interim basis until Exponent was able to run the business.
COMMENDEDMorais Leitão, Galvão Teles, Soares da Silva & Associados — Advised on the Portuguese central bank's issuance of so-called Panda bonds, a renminbi-denominated bond sold in China by a non-Chinese issuer. This offering, the first time these bonds have been issued by an issuer in the eurozone, could pave the way for increased Chinese investment in Europe.
COMMENDEDTGS Baltic — When the Lithuanian government decided to implement new regulations to bring the energy sector under the control of domestically-owned businesses rather than Russian energy suppliers, the lawyers provided strategic and regulatory advice, such as a new system for competitors to share terminals used in natural gas production. They fended off lobbying and arbitration attempts by private companies against the new legislation and also made a successful counterarbitration on behalf of the government. These reforms have led the way for increased competition in the sector, resulting in a substantial reduction in electricity and gas prices for customers.
COMMENDEDVdA — The firm advised Trofa Saúde hospitals in Portugal on the incorporation of health insurer Planicare to provide access to health insurance within hospitals. The legal solution connects hospital professionals with Planicare, removing the need to register the hospitals as insurance mediators with Portugal's insurance regulator. The team designed the structure to be available through the Trofa Saúde app, using e-signatures to make the entire process of signing up for health insurance paperless.
*Note: 'winner' indicates the organisation won the FT Innovative Lawyers: Europe 2020 award for 'innovation in the practice of law'; other organisations are ranked alphabetically within bands
Innovation as strategic advisers
Rank
In-house legal team

STANDOUT

WINNER: Veon — In 2010, telecommunications company Veon acquired a 57 per cent stake in Global Telecom Holding, an international company listed on the Egyptian Stock Exchange. To simplify the structure and governance of the group, Veon obtained the remaining 43 per cent holding in GTH and delisted the company, a process that took two years in negotiation with the Egyptian Tax Authority. The delisting and acquisition has allowed Veon to transfer assets in Bangladesh, Pakistan and, pending regulatory approval, Algeria to a holding company in the Netherlands with a simpler corporate structure.

HIGHLY COMMENDED

Just Eat — The legal team from the online food ordering company supported the business through its £6.2bn merger with Takeaway.com, completed in April 2020. They simultaneously managed a hostile takeover bid for Just Eat by ecommerce group Naspers’ international dealmaking unit, Prosus, persuading 80 per cent of shareholders to stay invested in the company instead of accepting a cash offer. The hostile bid caused Just Eat's directors' and officers' insurance to expire before completion and the legal team led on procuring coverage by reassuring insurers through an insurer day.

HIGHLY COMMENDED

Kambi — Following the legalisation of sports betting on a state-by-state basis in the US in 2018, Kambi Group, a multinational sports betting technology company, expanded to the US, taking the first legal online bet in New Jersey. The company is now active in 10 states, eight of which were market firsts for online betting. The UK-based legal team interpreted the new laws and regulations, allowing the business to expand quickly following liberalisation of the market.

HIGHLY COMMENDED

Nokia — The in-house team helped secure Germany's first anti-anti suit injunction, a court ruling to stop a party from pursuing an application for an anti-suit injunction. The action was against a US subsidiary of Continental, the German automotive parts maker. Continental is a major supplier to automotive company Daimler and the 2019 judgment allows Nokia to continue to pursue several infringement cases against Daimler in an ongoing intellectual property dispute between the two companies.

HIGHLY COMMENDED

Volkswagen — The legal team at Volkswagen facilitated an industrial alliance with fellow automotive manufacturer Ford to produce millions of vehicles and components for one another without cross-ownership. Acting as supplier and buyer at different stages in the workstream requires the lawyers to take a view of reciprocity, with a risk that pushing on a particular point in one transaction will affect the next when the positions switch. The alliance will reduce development costs for the companies, leveraging each company’s strengths while remaining competitors in the market. Commended: Maler James.

COMMENDED
Bankinter & Sonae Sierra — The legal teams at Portugal-based real estate company Sonae Sierra and Spanish bank Bankinter collaborated on the first Real Estate Investment Trust in Portugal. Despite a delay to the project because of the pandemic, the Reit acquired its first portfolio of five supermarkets in July 2020, having listed on the Lisbon Stock Exchange in June.

COMMENDED

GlaxoSmithKline — The pharmaceutical company’s legal team supported the business through its joint venture with Pfizer last year. Using feedback from colleagues on previous M&A transactions, the team redesigned the process. That included rolling out a technology platform for overall project management, scenario modelling to identify potential risks and automated signature mechanisms to sign off on the final versions of agreements.

COMMENDED

Vodafone — As part of a collaboration between four competing network operators, Vodafone led on a project with the UK government to connect rural areas of the UK to the mobile network under the Shared Rural Network scheme. The legal team co-ordinated with network specialists at the other providers to deliver a contract to supply phone coverage to 280,000 premises. Vodafone’s legal team in Ireland is working with the Irish government and National Broadband Ireland to connect the country with high-speed internet access.

Note: 'winner' indicates the organisation that won the FT Innovative Lawyers: Europe 2020 award for 'innovation as strategic advisers'; other organisations are ranked alphabetically within bands
 

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