LMA is committed to sharing "the voice of the client" with our members to help you influence and lead change in your firms to better serve your clients. As part of that commitment, the LMA Board of Directors is inviting a representative from a variety of client communities — from in-house counsel, to legal operations, to legal procurement — to share their insights at our 2017 quarterly board meetings. The "voice of the client" will help to inform our organization's mission, vision and strategy going forward. In addition, we want to share key insights from these presentations with all of our members.

At our January board meeting, we were joined by Steve Harmon, vice president and deputy general counsel at Cisco, and a member of the Cisco legal executive management team. Steve is also a founding member of the Corporate Legal Operations Consortium (CLOC), where he serves on CLOC's Board of Directors and has been a leader and advocate for legal operations.

...legal departments exist to help their companies sell products in a legally appropriate way.

Steve shared with our board the ways in which he measures success, how law firms can better serve clients and four trends to watch. Key takeaways from his presentation are as follows:

• The number one metric Steve tracks is total legal expense as a percentage of revenue. He benchmarks Cisco's metric against the competition on an annual basis.

• He reminded us that legal departments exist to help their companies sell products in a legally appropriate way. He noted that corporate annual reports never identify "extraordinary legal compliance" as a competitive advantage.

• Eighty percent of Cisco's outside legal spend uses flat or alternative fees. He noted that while most lawyers seek out "bet-the-company litigation," this type of work is very limited. Instead, he encouraged our lawyers to identify routine transactions and leverage alternative staffing, technology and processes to become "incredibly efficient and make a ton of money."

• He observed that one of the biggest skill gaps they see in law firms is the lack of lawyers' project management expertise. While a dedicated project management function within a law firm is beneficial, "every lawyer needs a foundation level of competency in project management." He noted every lawyer at Cisco receives project management training.

...every lawyer needs a foundation level of competency in project management.

Steve presented a four-quadrant matrix to demonstrate how Cisco evaluates where to invest in-house and outside legal resources:

1. Core/Mission Critical: These activites that contribute to competitive advantage and, if performed poorly, pose immediate risk to the organization. These matters are handled primarily with in-house resources. 
2. Core/Non-mission Critical: These activities contribute to competitive advantage; however, if they are handled poorly, they would not pose a risk to the organization. These matters are handled using internal legal staff and self-service tools and processes. 
3. Context/Mission Critical: These activities are necessary but not tied to competitive advantage: however, if they were performed poorly, they pose a risk to the organization. Many of these activities are handled using outside resources.
4. Context/Non-mission Critical: These activities are necessary, but present limited risk to the organization if performed poory. Most of these activities are outsourced.

Steve identified four trends to watch: 

1. Transparency: All the world's information is being organized. Big Data analytics will rule over rule-based systems. Clients will demand access. Those firms that share data via technology/knowledge management integration will cement their relationships with clients.
2. It Won't Be That Hard: The new self-driving cars use a rules-based system. For law firms, will real-time systems be more complex than the law?
3. Machine Learning, AI and the Role of Big Data: AI will continue to gain traction and generate efficiencies for key legal processes. Steve noted machine learning doesn't have to be perfect to replace human processes, as humans aren't perfect either.
4. Metrics Are Everywhere: Steve recommended the book "How to Measure Anything" by Douglas Hubbard.

In conclusion, Steve advised LMA and its members to shift legal services from an hours-based model to an outcome-based model. Start every matter by asking your client to define the desired outcome — "what does it mean to win?" From there, build a cost-effective, efficient plan to deliver the desired results.

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[Jill Weber, the 2017 LMA President, is chief marketing and business development officer for Stinson Leonard Street, where she is responsible for creating and executing marketing and business development strategies, including Fast Forward®, a nationally recognized integrated business development initiative. This post appeared originally on the LMA's Strategies+ blog.]

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