How blockchain will assist advisors to become more strategic in their advisory roles
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Many have observed that technology will free up time for lawyers to engage in more strategic and higher value activities. To be better problem-solvers, more commercial and more creative. What do these concepts mean? What kinds of skills are involved?
You often hear clients describe a good lawyer as someone who is commercial, practical, creative, strategic, etc. But based on academic research and surveys of clients, what clients want in a lawyer is a strategic problem solver, especially in ambiguous scenarios and situations. These terms such as “commercial” and “creative” are proxies for problem solving and reflect observations of when lawyers solve a problem, e.g., “He was very creative and strategic in that deal.” If the deal didn’t get done, the lawyer would not be described as creative. Or, the lawyer is described as “commercial” and “practical.” Again, if the overall problem was not fixed, the lawyer wouldn’t likely be described as “commercial.”
What the client is looking for lawyers to do is solve a problem. These problems invariably have a legal component, but there are likely other elements wrapped up in it—financial, interpersonal, lack of information, etc. Clients need an advisor who can navigate the linkages and interdependencies among these elements and make recommendations. Excellent lawyers, from the client’s perspective, help clients make better decisions in complex scenarios that are ambiguous or unclear by mapping out the various considerations in a matter, only a portion of which may be legal.
The challenge is that unlike the technology field, the profession has not invested much effort into deconstructing what good judgment or complex problem-solving looks like. If we as a profession do not break down the the different components that make up complex problem solving, then it’s difficult to train people for it. That’s the landscape we face today if you look at how we educate and train law students and lawyers.
Technology will get information to lawyers more quickly, which will improve their ability to rapidly respond. It may also be cheaper for clients, since it won’t take teams of lawyers to do low-level or repeatable work. However, it’s what lawyers do with that information that is going to define the value for lawyering, now and in the future. Technology won’t take away the most valued role of lawyers as a strategic problem solver.
Why is it that lawyers are not already playing a strategic role?
There are a couple reasons. First, our law schools and law firms are good at teaching lawyers subject matter (legal) expertise, but not problem solving in complex environments. We leave the latter to experience and natural abilities, which from a cognitive science perspective is inefficient and not an effective way to train and teach.
Second, many lawyers complain that they don’t have time to be strategic and solve difficult business problems, in large part because they spend too much time on mundane grunt work. I think that’s partially true. And one of the promises of technology is that technology will take much of that drudgework away and free up time for lawyers to spend on higher value, strategic work.
That said, while many lawyers say they want to be strategic advisors, I question whether some actually want to play that role. Doing so requires certain skills and a different mindset. It’s easy for lawyers to hide under the shield of legal expertise and even the drudgework, because we’re generally good at being legal experts; then anything that’s not “legal” is for someone else—it’s a “commercial” decision. But for most clients, every problem that needs to be solved is a business issue; from a client’s perspective, there’s little distinction between legal and non-legal problems.
One of the silver linings of technology is that it will refine the different career paths in the legal profession. Those who want to stick with providing legal expertise can do so but will generally face a flattening career path. Those willing to play a strategic role will be even more valuable. But this requires a change of mindset from being just a technical expert to a problem solver. Being a problem solver requires deep legal expertise and other skills, and the courage to step outside the comfort zone of technical expertise to take positions of informed judgment.
A change of mindset is required, but it is not enough. Lawyers also need to be equipped with the right skills. Do our law schools and law firms train people to do so? The answer is no. We do a good job teaching technical expertise and what I call individualized problem-solving (e.g., answering a technical question on whether an activity violates a law). But we don’t do a good job of providing the commercial or business-based problem-solving skills that clients seek. Much of the investments by law firms and in-house departments in training is in the areas of subject matter expertise and practice skills (e.g., drafting, negotiating, etc). But these do not necessarily develop business acumen or problem solving skills. For example, firms and companies send their lawyers to be trained in financial literacy. While that is important, knowing how to read a balance sheet does not teach the commercial context or acumen to know when to strategically apply that knowledge to obtain the desired business result for the client. We need to develop new theories to arm lawyers with the foundation to help them decide when and how to exercise those skills. That’s where I’ve been dabbling as I described earlier—providing lawyers with pattern-based tools or algorithms in analyzing the business context so they can apply their legal skills strategically.
Except for really complex, unique legal issues, most clients want their lawyers to play a strategic role. Clients do not want just a legal analysis or to be told that non-legal issues are “commercial” issues for them to decide. If we don’t make lawyers better at strategically exercising their legal and other skills, then having access to better structured information more quickly due to technological advancement won’t necessarily make lawyers more valuable to their clients. Additional investments in doing the same thing (e.g., more training in financial literacy, etc.) also won’t solve this problem. This area of learning and development cries out for deeper collaboration between law schools and the practicing profession.