Liquid legal transforming legal into a business savvy

Management for Professionals

Kai Jacob
Dierk Schindler
Roger Strathausen Editors

Liquid Legal
Transforming Legal into a
Business Savvy,
Information Enabled and
Performance Driven Industry


Management for Professionals


More information about this series at />

Kai Jacob • Dierk Schindler •
Roger Strathausen
Editors

Liquid Legal
Transforming Legal into a Business
Savvy, Information Enabled and
Performance Driven Industry


Editors
Kai Jacob
SAP SE

Walldorf, Germany

Dierk Schindler
NetApp B.V.
Schiphol-Rijk, The Netherlands

Roger Strathausen
Dr. Strathausen Consultancy
Berlin, Germany

ISSN 2192-8096
ISSN 2192-810X (electronic)
Management for Professionals
ISBN 978-3-319-45867-0
ISBN 978-3-319-45868-7 (eBook)
DOI 10.1007/978-3-319-45868-7
Library of Congress Control Number: 2016956208
# Springer International Publishing AG 2017
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Foreword: Bridging the Gap—The New Legal

At the beginning of my career, I became a lawyer. A key reason for taking that
direction was that I have always believed that this profession along with the other
functions in legal systems plays a key role in the cohesion, balancing, and evolution
of societies. Even though I am today a CFO by heart, due to both my past and
present occupations, the nature of the legal function within corporations and beyond
is of high interest to me, especially because I see them changing. That is why I
count myself as part of the legal community as I share my thoughts here.
Yes, lawyers pursue the particular objectives of their clients, and yes, there are
many legal and professional boundary conditions—both for good reasons—but I
still believe there is quite some room for lawyers to actively shape how we serve our
clients and society at large. Much of that potential is still to be realized in particular
when it comes to the legal function in enterprises and organizations.
I therefore applaud how this book purports to lure legal professionals out of their
comfort zone. For me, the concept of liquid legal means dissolving the rigid
demarcation lines of what legal is and does. It is about bridging the gap between
on the one hand the legal, compliance, and risk management departments1 and on
the other hand all the adjacent functions in corporations, especially the customerfacing ones.
Compliance and protecting our organizations against risk, as true stewards do,
have always been and will remain the core tasks of legal, and we have to keep
delivering these services against the regulatory backdrop, in the most effective and
efficient way possible. The law is the law, and we have to observe it. Period. That
core remains stable.

But there are ways to better bridge what legal is doing and the efforts of the rest
of the enterprise, without compromising the steward role. For many this may sound
like a vision far away from today’s corporate reality, but the shift of mind-set has
started, one reason being that there is pressure on us to increase our relevance, or
else we risk being viewed as cost factors.
We are able to and are increasingly called upon to enlarge our contributions to
the organization we work in and for. We must go the extra mile, cross the bridge,

1

I will refer to these functions collectively as legal for simplicity’s sake.
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Foreword: Bridging the Gap—The New Legal

and fully understand both the business and the culture we serve in. If we manage to
do that, the traditional corporate lines of defense can turn into enablers that add
more value than ever before and even become sources of competitive edge. And we
are not the only so-called enabling function that is hearing that call.
If we look at corporate culture as an expression of who we are and what we
believe—often codified in purposes, values, missions—then it becomes clear that
legal does not have to remain a reactive defender of the law, but can turn into a
proactive leader that drives not only financial performance but corporate reputation
as well, simply by “enacting” corporate culture.
I believe there is an inherent potential in the role of the legal function, of general
counsels and lawyers in a company, as well as of the legal firms working for them:
Every move we make in these functions has both a business side (which easily

translates into money to be earned or saved) and a reputational side. That latter
aspect deserves much more attention than it is currently receiving.
For too long we have neglected the influence of legal on how the companies they
serve are perceived. The way a company deals with legal issues, the language it uses
in legal contexts, in contracts and clauses tells a story that we are often not aware
of. So do our legal decisions: when and how we negotiate, litigate, settle, and appeal
and when we “interpret” the rules—all of that constantly produces context that
employees and the outside world read as indicators of our corporate culture. Legal
decisions and discourse clearly have strong ramifications in what the external
codified law requires and what financial gains or losses may come with them for
our companies, but they also have a lot to do with what a company stands for or
rather would like to stand for, that is, with its purpose and its values.
Hence, legal is an actor not just in court rooms, but on the stage of corporate
culture and reputation. Culture is about what people think and do, and so is legal.
The link is evident. When we see large corporations in legal trouble today, often
enough their corporate culture is pulled into the limelight, and their reputations
incur severe damages. Corporate culture can easily become the accused these days,
especially when a single human culprit cannot be identified. Especially in such
highly public scenarios, the question is not just whether a company will be
sentenced or acquitted in court but also what will either do to its reputation. And
to make things worse, the correlation is not clear-cut—on the contrary: It is highly
ambiguous.
Looking at legal in seemingly nonfinancial terms as I am suggesting here is in
line with a fast-spreading trend to look at business holistically. Many companies
today have started to do that. They report not just on financial KPIs, but also look at
factors relating to people and corporate culture and reputation. The financial
communities have an increasing interest in this full story. Investing in such KPIs
is a win-win proposition. Metrics such as employee retention and employee
engagement come into the focus, all of them very much related to corporate values
and culture. How legal speaks, acts, and decides can be viewed as contributing to

these. Hence efforts to simplify and humanize legal can be expected to make a real
difference, particularly when it comes to integrity, trust, fairness, equality, and


Foreword: Bridging the Gap—The New Legal

vii

sustainability as core values. Living up to them takes more than abiding by the
rules.
Again, when I say legal I of course mean any function that is somehow part of a
company’s set of lines of defense, including compliance offices and stewards of
integrity of any ilk. My call is for these functions to pass two tests whenever they
act or speak: the legal boundary conditions, of course, but also the cultural boundary conditions within a company.
In the end—you probably guessed it—we can safely close the loop, because
culture, corporate values, and employee engagement are linked to business
performance.
What in the beginning looked like a dichotomy or conflict really is not. Business
is culture and culture is business. And legal is both. We need to run legal as a
business, founded in a distinct corporate culture and purpose.
We have an incredible opportunity in front of us to open up and reach the next
level of our profession and of the value we deliver by breaking down the walls
around that very profession. I am convinced we will win that case. It is our own.
Chief Financial Officer, SAP SE
Walldorf, Germany

Luka Mucic

Luka Mucic is a member of the Executive Board and
chief financial officer of SAP SE and has served in this

function since July 2014. He is responsible for finance and
administration as well as for IT and processes of the company. He began his career at SAP in 1996 as a member of
SAP’s Corporate Legal department, where he focused on
corporate and commercial law. Mucic holds a joint executive MBA from ESSEC, France, and Mannheim Business
School, Germany, and a master’s degree in law from the
University of Heidelberg, Germany. He has completed the
second legal state examination in Germany.


Foreword: Creating Your Path—Building
Towards Liquid Legal

Finally—a book not only telling us that legal teams must change to be relevant in a
data-driven digital world, but also offering us a blueprint on how to do it. The
authors of Liquid Legal are all accomplished and innovative leaders who are
making their clients more efficient, agile, and competitive. This book challenges
traditional views of the role and purpose of lawyers. It promises new levels of
innovation, service, and efficiency to businesses willing to ignore historical biases
and demand that their law departments stretch and grow.
I believe deeply in this vision and have dedicated years to realizing it. Proving
this simple but powerful concept—that “legal” can be just as effective and innovative as any other part of the company—has been a huge element of my life and
career. I have taken on sacred cows and deeply held biases about lawyers and
“legal” and seen our team go from barely tolerated to openly valued. This is not a
quixotic journey; it is a chance to make a real contribution to the success of the
enterprise.
I had a special opportunity to put my ideas into practice in 2010 and try them “at
scale,” when I left my position of General Counsel at JDS Uniphase to take the
same role at NetApp. I had many reasons for leaving after 11 years at JDSU, but a
big motivation was the opportunity to take on the challenge of delivering a worldclass organization to a company that already had a strong corporate culture and, as
such, was a hard place for outside executives to come and flourish.

I learned two key things in my first stint as a general counsel. First, I learned how
important company culture was to me. As I looked for my next professional
opportunity, I realized that would be an absolutely critical factor. I hoped to find
a company where culture was viewed as fundamental to the company’s success, not
something that lazy people griped about because they wanted excuses for poor
performance. As the chief lawyer—and chief compliance officer—I also knew that
companies with great cultures also tended to have fewer episodes of misconduct
and violations, and I wanted to be part of one of those companies.
Second, I discovered that I was no longer satisfied with the traditional limits and
role of corporate legal teams. There was a certain way that legal teams were
“supposed” to run, and that way seemed to be defined more by tradition than

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Foreword: Creating Your Path—Building Towards Liquid Legal

reason, by conservatism than creativity, and by the biases of others than the
ambition and potential of the team itself. I wanted to break the traditional game
plan and try to remake corporate legal in a fundamental new way.
When I joined NetApp, I became part of a company deeply focused on its people
and values. I felt the difference in the conversations I had with the executive team
during the interview process. Culture really seemed to matter; they talked about it,
tracked it, guarded it, and considered it essential to the future of the company. It was
fresh and exciting, and I heard “the click.”
Another thing I heard early on during my very first conversations with NetApp
was that the legal team had lost its way. NetApp had grown from a Silicon Valley
startup to a global enterprise quickly, powered by the two drive trains of sales and

engineering, knitted together by an empowering culture. The company’s legal
function, however, had failed to keep up. Service had dropped off and the group
had become internally dysfunctional and disconnected from the enterprise, which
viewed it as an obstacle to doing business. I will never forget my last interview at
NetApp. Taking a chance, I told my future boss, “NetApp deserves a world-class
legal team. I do not think you have one today, but I think I could help create one.”
Once I joined the company, the work began in earnest. I inherited a large global
team. Most of the organization was cynical and untrusting after years of working in
a dysfunctional environment. The team was generally skeptical, and some people
were openly hostile to my leadership and direction.
The first step was to move the legal department, which had reported into the
CFO, to report directly to the CEO. I saw this as a critical change that would help
ensure visibility and drive accountability. No more hiding behind a strong and
highly respected CFO.
My next move was to get a clear picture of our effectiveness and impact. This
involved “100 interviews in 100 days,” with clients in every geography of our
business, designed to give us a real sense of how the team was performing. I flew
around the world twice in the first few months, meeting with key customers. I asked
simple questions. What are your expectations from this team? Your experiences?
How big is the gap between those? And finally: are you willing to give us another
chance?
This discovery period also included a survey of a broader client group as well as
the legal team itself. Our clients rated us low across a few dozen metrics. I heard
feedback like “you act like the ‘department of no,’” “you tell me what I can’t do but
never tell me what I can do,” and so on. Revealingly, the legal team also scored its
own effectiveness and impact very low. There was virtually no spirit of partnership
or service towards other groups, just a sense of “that’s not my job.” The attitude of
the team—in sharp contrast to the engaging, collaborative culture of NetApp
overall—was to take the most limited interpretation of their role.
So everyone knew there was a problem but no one was taking ownership

over it. How will we turn it around?


Foreword: Creating Your Path—Building Towards Liquid Legal

xi

I have never worked as hard as my first 12 months at NetApp. Our change began
in late 2010, and it started with a new mindset. “We will be lawyers who do
windows,” I first told my team at one of those early all-hands meetings and then
declared to all 13,000 employees at the corporate all-hands that introduced me to
the company. What I meant was that we would do the hard, thankless work that
needed to be done. We would change our mentality from that of experts in ivory
towers to that of partners willing to do anything to support our business
stakeholders in their success, just like the rest of the company.
Over the next several years, we restructured the global team, hired or promoted
new leaders to my leadership team, and introduced technologies that automated
manual processes and sped up the velocity of the business. It was not easy and it did
not happen overnight. Institutional resistance remained strong in pockets of the
department. By the end of the first year, a quarter of the team—including all of the
13 direct reports that I inherited—either left or were asked to leave.
As a renewed leadership team, we changed the culture of the group from what it
had been—a loosely organized collection of lawyers—to a true team of business
partners and counselors. We found new ways to work with outside counsel, getting
better returns and accountability by using data in powerful new ways. We
implemented a new “legal ecosystem” that integrated legal operations professionals
alongside traditional legal experts into a single, coherent global team.
And the results came. Our restructured team quickly gained traction internally.
People were bringing us to the table. We were actually being invited to strategic
meetings and into key projects that we had to watch from the sidelines in the past.

We improved our relationships, built trust, and scored some major wins leveraging
new technology and processes.
I knew we were making progress when Tom Mendoza, a longtime leader and
executive at NetApp, acknowledged our team onstage during a company all-hands.
“Something good is happening over there,” he said. “In 20 years of being here, not
once did I ever give a shout out to anyone in the legal department. And now I’ve
done it for four quarters in a row.” That comment was pure gold.
When I look back nearly 6 years at all the hard work, I am so grateful to the
NetApp legal senior team: Connie Brenton (Operations), Tim O’Leary (Field), Beth
OCallahan (Corporate), Valerie Velasco (APAC), and Dr. Dierk Schindler
(EMEA). They each brought intense personal commitment with the trust and vision
that our team can achieve so much together. Thank you!
I also extend a big “thank you and congratulations” to Dierk, Kai Jacob, and
Roger Strathausen, the driving forces behind this book and the inspiration for much
of the content. Dierk challenges all of us to strive to be our best and has built a loyal
team and grateful clients who value his energy, vision, and leadership.
I am grateful to the entire NetApp legal team for giving so much of themselves
every day for the company and our clients. Even today, our journey continues. At
NetApp, we like everything we have achieved, but still see plenty of areas to
develop and improve. We are still in the beginning stages of defining what we
can become as a legal team.


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Foreword: Creating Your Path—Building Towards Liquid Legal

This book is about your journey and finding your path. It is about understanding
and embracing the challenge of remaking our industry in a substantial way. I hope
you embrace the journey, and I hope you will let me know how it goes.

Matt.
General Counsel, Chief Compliance Officer,
and Secretary for NetApp Sunnyvale, CA, USA

Matthew Fawcett

Matthew Fawcett is responsible for all legal affairs worldwide, including corporate governance and securities law
compliance, intellectual property matters, contracts, and
mergers and acquisitions. He has overseen the development
of NetApp Legal into a global high-performance organization with a unique commitment to innovation and
transformation.
One of the leading voices on the intersection of law, technology, and business, he was named “One of America’s
Top 50 General Counsels” by the National Law Journal
and is widely recognized for redefining the role of legal
counsel in the modern corporation. He speaks at international and national legal and technology trade conferences
and writes regularly on innovation in the legal industry,
managing data governance in the cloud era, and defending
against patent trolls.
Before joining NetApp, Matthew was the senior vice president and general counsel of JDS Uniphase Corporation, where he built a worldwide legal organization, managed dozens of acquisitions and strategic transactions, and oversaw a patent program
with thousands of issued and pending patents.


Foreword: Need a Lawyer? Use a Robot
Instead!

The rule of law is fundamental to human society. Today, we see apparently endless
growth in law and regulation. Surely this must mean the role of the lawyer is safe.
The answer to that is yes, but only if lawyers adjust and adapt. Legal and
regulatory complexity is challenging the ability of business and society to function.
Traditional court systems, forms of contract, and methods of risk evaluation and

dispute resolution are too slow and too expensive. A global economy demands new
approaches.
There will be many changes in the near future. Examples may include online
courts, industry standard agreements, and digital contracts. But fundamental to
social progress is the readiness and ability of the legal profession itself to lead the
change agenda. Ultimately, human and social progress will not be held back by the
reluctance of lawyers to adapt.

A Revolution in the Making
At a conference last year, someone posed the question “Should the general counsel
of the future be a lawyer?” A lively debate followed, with about 50 % concluding
that they should not. This might not be surprising—except that the audience
consisted of general counsel and their immediate deputies.
So what is going on? Why would senior in-house lawyers suggest that the
current top job should go to the non-lawyer?
The answer, in part, may rest in the term “non-lawyer.” As one speaker
observed, “We are the only profession to see the world in such simple terms—
you are either a lawyer or a non-lawyer.” And in this simple depiction, he perhaps
highlighted the big challenge that the legal profession faces today and which
threatens its future. Lawyers have a tendency to see themselves as “special,” as
an elite with unique and valuable knowledge on which business and society
depends.
Even if this belief could ever be justified (and I believe it could), technology is
transforming the situation. Knowledge is rapidly becoming an easily accessed

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Foreword: Need a Lawyer? Use a Robot Instead!

commodity. It is the application of knowledge that increasingly has value, which
differentiates the “trusted counselor” from the “mere specialist.” Here we have the
explanation for that question about the general counsel; should he or she be the most
senior specialist, or perhaps the intermediary who links legal opinion with business
context?

Responding to the Needs of Our Clients
A fundamental principle in the digital age is that society increasingly expects “ease
of use.” The technology in our hands is simplifying so much that used to be
complex, including instant access to advice or information. It is fundamentally
different from the formality and discipline associated with the typical “legal
consultation.”
Several years ago, I was preparing a conference presentation and wanted to offer
the audience a sense of the changes that technology introduces. I focused on a
previous age, the shift from medieval to early modern, when the world was being
stirred by the printing press and the earliest automation. While undertaking
research, I came across the origins of the word “mystery.” It was apparently used
in the Middle Ages in its plural form, to describe the craft unions. “The mysteries”
were the ways that they retained their stranglehold on the craft professions—jobs
that had survived for centuries, yet rapidly disappeared as new technologies
changed what was needed and how work was performed.
For the majority of the world’s population (those vast numbers of “nonlawyers”), the legal profession remains a mystery, shrouded in complexity of
tradition, wording, and procedure. This may make us necessary, but do we really
believe it makes us popular? Instead, the common view is that we slow things down
and we are expensive. Too often, we thrive on fear—the fear of an expensive
mistake.
The clients for our services want to avoid problems, but legal work is typically
more about containing or controlling them. In other words, we fight to limit the

consequences if things go wrong. As one business executive recently observed:
“My legal team is very good at explaining and managing consequences, but if I ask
them to assess the probabilities (of something going wrong), they are reluctant to
comment.”
And in this digital age, that comment summarizes the problem. Business and
society is focused on how we achieve favorable results or outcomes, not just about
protecting against events that may never occur. Technology is changing the environment due to its increasing ability to capture and analyze data, to provide
predictions.


Foreword: Need a Lawyer? Use a Robot Instead!

xv

The Challenge for Lawyers
The legal profession is perhaps more challenged than many because of its past
reluctance to adopt and use technology to streamline operations and to increase the
value of its contribution. To illustrate this point, I was speaking recently with the
general counsel of a major corporation who observed that top management today
has limited respect for opinions—they want facts. And in many cases, lawyers lack
facts, which explains their reluctance to offer clear advice. In the world of contracts,
a lawyer will be confident when talking about potential consequences of a particular
action or inaction. They are knowledgeable about precedent and the precise wording that should be used in a contract or a letter. But when it comes to probabilities,
they are reluctant to be drawn. And as for the impact that their contracts (and
wordings) may have on behavior or acceptability, that is often outside their realm of
expertise or training.
Yet these are the functions that are increasingly demanded in a world where
success is judged on outcomes. Business—and society at large—is wanting more
than simply to be protected if things go wrong. As the many contributors to this
book explain, today’s technologies are enabling new capabilities, such as predictive

analytics and wide-ranging portfolio review that transcend the experience of any
one individual, legal department, or law firm.
Lawyers have been trained in a way that makes them risk averse, because their
trade is essentially to protect their client’s interests and assets. As one law school
dean observed: “We don’t teach win-win.” They have flourished because they
protect their clients from the uncertainty, unpredictability, and ambiguity of our
world. But as with medicine, artificial intelligence will increasingly offer far more
insight than any lawyer. Indeed, law firms are already starting to employ artificial
intelligence to undertake document analysis and review on an unprecedented scale,
offering transformations in speed and affordability.
So what remains? Can lawyers still be “special”? Interpreting data, formulating
new approaches, and creating alignment between the law and other disciplines or
perspectives—these will remain as fundamental issues. For those who embrace
technology, high-value service offerings are emerging. In many cases these are
simply providing traditional services far more cheaply through combining technology with low-cost labor resources. Yet as this book describes, others are working on
issues such as contract standards and automated data extraction—the sort of
initiatives that make contracts and legal advice faster, more affordable, and of
direct relevance to today’s business challenges.

Case Study: Reduced Cycle Times and Increased Compliance
Some lawyers and legal teams are focused on the real business risks and are
transforming their approach. Contract design is a good example. The in-house
legal group at one global corporation was challenged to reduce the cycle time for
on-boarding new suppliers. They discovered that it was taking on average more


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Foreword: Need a Lawyer? Use a Robot Instead!

than 3 months to sign agreements—even after a traditional “simplification” exercise
(e.g., shorter agreement and simpler language). In addition, the growth of regulation
in their industry was resulting in increased business risk—and suppliers were
showing poor compliance levels.
Hiring more staff to deal with these problems was not an acceptable option. The
general counsel realized that the issue was one of understanding. The suppliers
were mostly medium-sized companies, with staff who spoke limited English and
where there was no in-house lawyer. The main reason they did not sign or comply
with the contract terms was because they could not understand them. She therefore
commissioned a contract redesign project, including restructuring of the agreement
(it actually became longer) and use of supporting guidance documents and videos.
Time to signature reduced from 3 months to 3 weeks; compliance rates have risen
by over 60 %.

Case Study: Designing for Users in a Global Economy
In today’s global economy, economic prosperity depends on the ability to offer
reliable and high-quality services. For companies in Africa, new technologies have
enabled them to compete internationally, especially in areas such as food supply.
But it is challenging to find workers who meet the standards required and meet the
demands of growing international regulation.
In southern Africa, farmers were struggling to manage the performance of their
labor force. Punctuality, hygiene standards, and safety procedures—these were
among the problems they needed to fix. Workers were asked to sign comprehensive
employment agreements with all the rules and procedures spelt out, as well as the
consequences of failure to perform. This made no difference.
A local lawyer decided to investigate. He quickly realized that many of the
workers were semiliterate—it didn’t matter how many words went into the contract; they could not read them. He drafted the employment terms as a comic strip.
His colleagues were worried—what will the courts say? So he consulted leading
barristers and asked for their review. The result? A comic-strip contract, gauged to
be far more enforceable than the previous traditional contract. And of course, a

much more productive workforce.

Conclusion
The digital age requires a readiness to adjust, to embrace the potential that technology offers, rather than to resist it. Of course there are risks—but not as great as the
risks of failing to think and act differently. Lawyers survived the elimination of the
craft guilds; now they must adapt again and embrace the concepts of “liquid legal.”


Foreword: Need a Lawyer? Use a Robot Instead!

xvii

Technology is transforming what lawyers do, how and where they do it, and how
much they are paid. In many cases, it is challenging whether a physical lawyer is
needed at all or whether Robert the lawyer becomes Robot the lawyer.
And that is why, for those who love their profession, fundamental change is not
an option; it is a necessity.
President and CEO of IACCM
(International Association for Contract
and Commercial Management)
Ridgefield, CT
USA

Tim Cummins

As CEO of IACCM, Tim Cummins leads global research
on the future of contracts and trading relationships. He
works with major corporations and advises the government
on commercial trends and policies. His prior career
included management and executive positions in technology, aerospace, automotive, and banking sectors. A native

of the UK, Tim has worked in more than 60 countries and
lived in France and the USA.


Preface

Much has been said about the digital transformation, disruption, machine learning,
and artificial intelligence, about the flat world. But what does that mean to us, the
legal professionals—working in an in-house legal department (LD), for an international or small law firm (LF) or for a legal process outsourcer (LPO) in 2016?
Will we still have job in 2020? Likely. But what will this job look like? Will we be
surrounded by the same people, doing the same work the same old way, or will we
perform tasks like legal research, legal drafting, collaboration, etc., significantly
differently from today? If so, in what way? Is this something we can influence or
will we be “moved” into this future without much influence? And will we have the
right skills to do the “new job”? And beyond, what is the role of the legal ecosystem
surrounding those legal professionals? Will law schools of the future adjust their
legal education? Will there be the war for talents and, if so, how is legal recruitment
changing? What is the state of the legal associations and what is going on the world
of legal academia?
When the three coeditors of this volume met in Walldorf in February 2015 for a
conference, we started to exchange on the questions above and observed: The
picture portrayed on stage, supported by fancy power points, and shared eloquently
in panel discussions looked innovative, attractive, and almost too perfect. The
arguments made sense, everything flowed nicely, and in the end, even though the
presentations or speeches were criticizing one or the other aspect, or argued for
innovation or change, the audience was left with the overall feeling: “We are doing
ok. Legal is fine, everything is under control, and we know what to do.”
But when one starts asking the same questions to colleagues around the world in
direct and personal conversations, the picture suddenly looks very different: At
least the lawyers we talked to are actually very concerned about the state of the

industry, and not few of them wonder if they will still have a job in a couple of
years, and if so, what this job will look like.
One friend working for an international law firm stated: “We hear all these bold
statements about the disruption and the necessity to change, followed by very little
tangible actions. It seems everyone is carefully watching his peers—and as long as
they don’t change, why should we?”
An in-house lawyer claimed: “Getting things done in the most efficient and
effective way is the aim—but the reality looks quite different! We have all this
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Preface

simplification programs and initiatives, which seem to result only in greater complexity. Projects claim ‘massive savings’ and ‘huge efficiency gains’ and they may
do so on paper—but then they too often result in insular simplification here, while
adding complexity there—while the calculated head-count cuts still happen. I’m
open to new technology, as long as it truly positively impacts my work!”
A colleague working for a world leading LPO, however, has a very different
perspective: “We wouldn’t exist without the change you described: The flattened
world, the rise of the Internet, the new technology are the foundation on which
LPOs are built, today. Data extraction, data analytics, machine learning, and even
AI are not only buzzwords—I’m dealing with new technology every day! We
always adopt, learn, take on new services, and constantly challenge ourselves and
the status quo. So instead of hunting for the best law graduates in terms of high
marks, we are looking for a specific mindset: ‘some problem-solving-techies’ with
legal background.”
When sharing all of our findings, conversations, and observations, the three of us
concluded that legal reality is quite different from the way it is being portrayed

officially and that we should take the initiative to create a platform for these strong
voices to be heard and to create an initial holistic picture of the change that is
coming towards the legal industry.
So we sent out a call for paper, presenting our view of the status quo of the legal
profession, and invited friends and colleagues from our legal network to share with
us an abstract with their ideas for book articles. The “by invite” approach and the
assessment of the received abstracts allowed us to carefully steer and maneuver in
the direction which we considered as most beneficial for the book intent: provide a
platform for strong and future oriented leaders and their views concerning our legal
profession.
Based on all abstracts we received, we carefully developed the book outline, and
upon passing the critical mass in terms on consents to publish, we gave it a go! A
publisher was soon found and all formalities with Springer cleared.
Right from the beginning we considered law firms, in-house legal, and LPOs as
the basis—with academia, legal HR, and the associations being added to ensure a
holistic representation of the legal ecosystem. A few months into our journey, we
noticed that we had forgotten to include voices from the legal tech scene—a huge
omission, as Legal Tech is far more than solution providers; they are rather change
agents of their own kind! So we did a second round of call for papers to fill the gaps.
With that addition, we also reconsidered the title of our book: Run Legal as a
Business was a catchy header, but did not quite cover our intent, because it seemed
to focus exclusively on in-house-legal departments. We explained to our authors the
new book title: “Liquid Legal—Transforming legal into a business-savvy, information-enabled and performance-driven industry,” and we got the feedback that it
resonates. We intend to establish the term “liquid legal” as a brand for our joint
idea—a kind of meme that evokes open and dynamic interfaces, holistic resource
views, and a nonhierarchical and process-oriented culture of collaboration across
departmental and organizational borders.


Preface

xxi

Although supported by our senior management, such a private engagement
comes on top of an already busy workday—so smooth collaboration was key: We
three co-editors conducted weekly update calls to monitor the progress of article
submissions, and we held in person editorial board meetings in different venues to
set the golden thread, go through all articles over and over again, discuss timing and
marketing options, and make adjustments in the book structure and positioning,
where required.
What started as a formal commitment to jointly go the extra mile for the better of
our profession turned into a remarkable experience. First of all, the editor onsite
meetings were an intense, creative, and joyful exercise; we often forgot the hour,
skipped lunch, and spent even the whole dinner to discuss our authors’ thoughts and
ideas and the bigger picture that this could create.
For each author, one editor was appointed the main point of contact, and the
work started: 30+ authors (some single writers, some teams) had to be managed.
We edited the articles and provided detailed comments to the authors, making sure
the article included a new message or line of thought that propels the development
of our legal profession and that it was also easy, ideally even fun, and entertaining
to read . . . And the authors followed us: With fantastic drive and commitment, they
thought through our comments and provided new drafts. We developed an esprit de
corps that motivated them as much as they motivated us!
True to the motto divide et impera, we also shared responsibilities on the
constitutive elements of the book, but selected one main author: The preface was
written by Kai, Roger contributed the Call for Papers,2 and finally Dierk created the
bridges between the articles.3
Although all three of us invested private time and money to realize this book,
Dierk and I want to thank our NetApp and SAP chain of commands for their support
of the book, especially Luka Mucic, Matthew Fawcett, and of course also Tim

Cummins from IACCM who open the book with their forewords. This executive
support provides proof to our initial agenda: Our collective strong voices have been
heard!
We thank all authors for their hard work and dedication and would like to end
with the words of a student that supports us in driving the messaging in social media
on this book. After spending only an hour in a restaurant in Rome with her,
explaining to her the vision that we want to spread with this book and the great
panel of authors, this is what we got back:
. . . I assume we all agree, that liquid legal is not just supposed to be a book title. [. . .].
Liquid legal will become the common noun for ‘future legal’, encompassing its digitalization, transformation, and more. It will be known as the one source of accumulated
knowledge and information people worldwide will think of and reach out to. Liquid legal
will indicate trends and thus give guidance regarding future legal for companies, industries,

2
The original Call for Papers is included in this volume as Introduction: “Run Legal as a
Business!”.
3
These bridges between articles are referred to in the book as “Liquid Legal Context.”


xxii

Preface
for millions of people. [. . .] Establishing the brand LL is the first step to create value and
more value around it. [. . .] Liquid legal will be a leader of change.

She reflected back what we did not dare to state. Well, if this is what a young talent
in our industry has taken from Liquid Legal, we are eager to hear what you will take
from this book. We hope that we encourage the readers to be leaders of change
towards “liquid legal.”

It’s time to lead!
Walldorf, Germany
Munich, Germany
Berlin, Germany
July 2016

Kai Jacob
Dierk Schindler
Roger Strathausen


Liquid Legal Acknowledgments

First and foremost I would like to thank you, my teammates at SAP. Fighting the
“urgent” distracts many people from the “important”—that’s why I shared my “Q2
goals,” the top 5 personal priorities with you. I wrote: “transformation cannot be
imposed from the outside, it has to come from us: we have to find new ways to
operate, to engage with people, to organize ourselves, to get the work done. . ..” And
you delivered! You have pushed forward the transformation; we will come out
stronger. Your dedication, creativity, and endurance really make the difference. I’m
honored to lead such an amazing team!
Many thanks as well to my wife Eva for having my back and to my kids Elli and
Justus for giving me the extra space for finishing this book project!
Kai
Moving into the unknown requires creativity, trust, and a lot of work. I am
humbled and grateful to my team members—in Europe and the USA—for giving
me plenty of all three. Without them, I would have had no story to tell.
My team knows how much inspiration I take from my “coach”—I quote her very
often. I believe that kids can see through things, and that is what my 12-year-old
Emily Joy does for me, often triggering new thoughts and always a smile!

Last but not least I want to thank my wife Christina, my soul mate, in daring to
question anything in order to see, if it can be made a little bit better for the benefit
of all.
Dierk
I want to thank my lawyer friends Thorsten, Thomas, and Stefan who, from
different angles, introduced me to the world of legal. Also, many thanks to my
coeditors Kai and Dierk who turned this book project into a fascinating collaboration which was as educational as it was fun!
Roger

xxiii


Contents

Introduction: “Run Legal as a Business!” . . . . . . . . . . . . . . . . . . . . . . .
Roger Strathausen, Kai Jacob, and Dierk Schindler

1

Masters of Ambiguity: How Legal Can Lead the Business . . . . . . . . . . .
Roger Strathausen

9

Globalization and the Changing Role of General Counsel:
Current Trends and Future Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . .
Mari Sako

33

Legal Advisor–Service Provider–Business Partner:
Shifting the Mindset of Corporate Lawyers . . . . . . . . . . . . . . . . . . . . . .
Rainer Markfort

47

Shifting Client Expectations of Law Firms: Morphing Law Firms
into Managed Services Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lucy Endel Bassli

59

Legal Process Outsourcing: Redefining the Legal Services Delivery
Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mark Ross

77

LegalTech on the Rise: Technology Changes Legal Work Behaviours,
But Does Not Replace Its Profession . . . . . . . . . . . . . . . . . . . . . . . . . . .
Micha-Manuel Bues and Emilio Matthaei

89

Key Performance Indicators (KPIs): Run Legal with Business Metrics:
Will the Legal of the Future Measure Everything It Does? . . . . . . . . . . 111
Christine Pauleau, Christophe Collard, and Christophe Roquilly
The Legal Entrepreneur: When Do Corporate Lawyers Act
Entrepreneurially? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Andranik Tumasjan and Isabell M. Welpe

A Rose by Any Other Name Would Smell as Sweet: The New Legal
Pro-Occupations in the Construction Sector . . . . . . . . . . . . . . . . . . . . . 141
Barbara Chomicka
xxv


xxvi

Contents

Liquid Legal: Organization 4.0: Using Legal Competency for Building
Fluid & Innovation-Driven Structures . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Gerrit Mauch
Change Management for Lawyers: What Legal Management
Can Learn from Business Management . . . . . . . . . . . . . . . . . . . . . . . . . 175
Arne Byberg
The Legal Department: From Business Enabler to Business Creator . . . 191
Isabelle Roux-Chenu and Elisa de Rocca-Serra
Legal Tech Will Radically Change the Way SMEs Handle Legal:
How SMEs Can Run Legal as Effectively and Professionally as
Large Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Sven von Alemann
The Value of Everything: How to Measure and Deliver Legal Value? . . . 227
Jan Geert Meents and Stephen Allen
The Value Add of Legal Departments in Disputes: Making a Business
Case Rather Than Providing Pure Legal Advise . . . . . . . . . . . . . . . . . . 237
Ulrich Hagel
The Future of In-House Legal Departments and Their Impact
on the Legal Market: Four Theses for General Counsels,
and One for Law Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

Markus Hartung and Arne Ga¨rtner
Procurement of Legal Services: How Customers Professionally
Procure Legal Services Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
Bruno Mascello
CLOC: Joining Forces to Drive Transformation in Legal: Bringing
Together the Legal Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Connie Brenton
Legal Information Management (LIM) Strategy: How
to Transform a Legal Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311
Kai Jacob
Technology Is Changing the Way Legal Works: A Look at How
Technology Is Driving Better Business Practices in Legal . . . . . . . . . . . 325
Ulf Zetterberg and Christina Wojcik
Look to the Moon: Managing and Monitoring the Legal Function . . . . . 341
Ivar Timmer


Contents

xxvii

Building a Legal Department in a Metrics-Driven World:
A Guide to Finding the Best Candidates for the Legal Departments
of the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361
W. Jon Escher
Business-Friendly Contracting: How Simplification and Visualization
Can Help Bring It to Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371
Helena Haapio and Thomas D. Barton
Running the Legal Department with Business Discipline: Applying
Business Best Practices to the Corporate Legal Function . . . . . . . . . . . . 397

Liam Brown, Kunoor Chopra, Pratik Patel, Jack Diggle, Peter Eilhauer,
Suzanne Ganier, and Ron Dappen
LIQUID LEGAL Manifesto: Changing the State of Aggregation
in Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Dierk Schindler