The Power of Digital Design Thinking for Law.
In this episode, Brian Kuhn, Vice President & General Manager of Elevate’s Digital Strategy & Solutions Business, joins host Nicole Giantonio to discuss digital design thinking, digital transformation – which represents one-third of all IT spend globally, – and that today’s organizations are using digital to get closer to end-users by accessing know-me insights.
Brian said – “The machine will be a blunt instrument unless it incorporates the understanding of human beings who know those processes the best.”
Listen to hear his insights and experiences using technology and design thinking to digitally transform the legal operations and showing “know-me” insights to the end-user.
Click on the links below to hear what we covered in this episode:
- [00:44] – How digital transformation Impacts the legal industry?
- [01:54] – Is the falling cost of technology, creating a risk?
- [02:35] – Law Firms in Transition 2019: An Altman Weil Flash Survey
- [03:21] – An Example where Brian explained how he is transforming the digital strategy at Elevate and why choosing the best technology is the critical element to drive the value.
- [05:26] – Dichotomy between machine learning and human learning – How Elevate has taken advantage of both to develop a scalable process for a customer?
- [07:41] – Does embedding the design thinking into the business processes yielding better results?
– According to a McKinsey study, design-led companies had 32% more revenue and 56% higher total returns to shareholders compared with other companies.
- [08:54] – Is technology becoming more configurable and less expensive?
– Businesses spent $1.2 Trillion in 2019 on Digital Transformation to grow, and in 2020, the worldwide IT spending is projected to total $3.9 trillion.
- [11:22] – The reason why the Fortune 500 CEOs are investing in AI.
- [12:48] – How can we persuade the stakeholders to embrace digital transformation for growth?
- [13:43] – How is Elevate using the Design thinking and User-Story Mapping tool to identify issues in the customer’s business processes?
Nicole: Hello, this is Nicole Giantonio, the Head of Global Marketing at Elevate. I recently met with Brian Kuhn, Vice President and General Manager of Elevate’s Digital Strategy and Solutions Business. Our conversation focused on Digital Design Thinking, Digital Transformation, which represents one-third of all IT spend globally, and that today’s organizations are using Digital to get closer to end-users by accessing know-me insights.
Your role at Elevate is leading Digital Strategy and Solutions. How would you describe the impact the proper execution of Digital has on a business, specifically, the Law Department of an organization or a Law Firm?
Brian: The biggest driving force behind Digital and Digital Transformation is the accelerated rate of change in the Legal industry, in society in general, caused by advances in technology. And as law firms and law departments become more software-driven, as companies generally have, and the rate of the change increases, so does the complexity. And many law firms and law departments are optimized to execute and solve a stated problem, their client’s problem whether the client is the business, or the client is the clients of the law firm.
The creativity is about finding a problem worth solving and one that you can afford to solve. And Design Thinking and Digital Strategy focus on identifying not just the problem but the ‘Why’ so that you can solve the problem in a way that you can afford to solve, you’re likely to succeed, and you can understand what will look like before making an investment in technology.
Nicole: Intellectually, we understand that explanation, but can you describe an experience to help build that bridge of where you’ve worked with a customer to achieve measurable advancement when it comes to Digital and what that looked like?
Brian: Sure. I should also say, by the way, I know we’ll get to Design Thinking, but when it comes to Digital, I would also add, and I think it’s important to add that the cost of technology is falling. So, you see all these start-ups, and in 2017, we had $280 million spent in US legal tech investment in venture capital. In 2018, that was $1.1 billion, and in 2019, $1.2 billion. So, the legal tech space has been discovered. And as the cost of technology falls, it becomes easier and cheaper to experiment, which creates risk for those who don’t.
And that means that it becomes cheap to explore ideas and test them in the marketplace. It’s not about having Technology, It’s about choosing the right ideas, and that’s what we focus on and help our customers focus on. To give you a concrete example, if you look at the Altman Weil Survey, and other industry surveys going back 10 years, one of the key problems is systemically, that law departments, the GCs mention over again, over and over again, is outside counsel spend management and control. And there are a number of solutions that have been developed, there are some great E-billing platforms, but yet, this is still a problem. It’s still listed almost every year as the No. 1 problem, despite the solutions. When I was with IBM, I invented a capability that used artificial intelligence to understand legal language; legal language within legal invoices. And a lawyer can explain something in a thousand different ways, mapping it back to a common meaning, really was the way to identify value.
We’re doing something different here at Elevate by focusing on identifying the root causes of legal spent. What are the activities that produce the cost-effective outcomes that you want? One customer that I worked with had a $1.3 billion per year outside council spent. They were a large PNC auto carrier, and so, about 60% of their spend was clustered in automobile bodily injury negligence as a matter type. And we were able to show them a benefit, $362 million.
We were able to show them that benefit, which realized over time, over a period of years, we were able to show them that benefit by using artificial intelligence to understand the language associated with automobile bodily injury negligence. In other words, we could’ve cast a broad net and looked at keywords; We looked instead at legal concepts specific to the matter types that this customer spent the most amount of money in when they hired outside counsel. So, it was strategic in that sense.
And we also trained it to understand their interpretation of reasonable spend. It was one thing just to understand what words mean and what weight they have, but it’s quite another to understand what they mean in the context of you, the customer. There’s another key element of Digital Transformation – is making these insights more actionable and trustworthy because they’re based upon your data, and they’re based upon what, in this case, outside counsel did for you that worked, not for a customer like you. And you’re not going to make strategic decisions about council selection and budget based upon generic data. It was really the fact that, yes, we used AI, but it was the business case around choosing what to apply the technology to – that really drove the value.
Nicole: $362 million, it’s quite a benefit, and then also the fact that it was a custom solution, very specific to their need. That said, as you pursued that project with that customer, what was surprising? What there something that came out, results that you weren’t expecting, or a result that the customer wasn’t expecting from that initiative?
Brian: So, what came out was that we could only get so far with technology. A lot of customers in the legal industry, and I say with this with great respect, are used to but have been abused by the concept of plug-and-play; Plug-and-play will give you generic insights. Now, there’s a lot you can do with those insights if they represent industry information that’s important because common legal concepts are discussed. But it’s not strategic; it’s not about you. It’s not going to use machine learning to learn and improve based upon your data, and the decisions that you make as a more custom or inward-focused solution will. So, there’s definitely a dichotomy there.
Now, Data Science using statistical analytics, without getting too technical, to surface insights, but there’s a limit to that. If a subject matter expert has an understanding about the way that a company does something and the way that a company interprets data, the machine’s never going to apply that. The machine will be a blunt instrument unless it incorporates the understanding of human beings who know those processes the best. And a lot of start-ups, a lot of Legal Tech companies, they struggle to get data; It’s a famous problem. They struggle to get data to bring their tools to market, and the data that they get may not be representative of the customer’s data. So, why not use the customer’s own data?
“The machine will be a blunt instrument unless it incorporates the understanding of human beings who know those processes the best.”
– Brian Kuhn
We’re working with a customer at Elevate, and with pure Data Science, we were able to predict what task codes to apply by reading the narrative, unstructured outside council task descriptions within invoices, and using AI and automation to apply the right task code. With pure data science, we were able to get 80% accuracy, and this was a while ago, we were just testing it. When we worked with subject matter experts, we were able to get to about 90% accuracy. And again, this is a capability that’s just using test data before it went to market.
We’ve developed a scalable process to embed subject matter expertise, truly people and technology, not just lip service because the people know best and wrapped the technology around that. So, what surprised us was how clear the advantage was when you applied business subject matter expertise to processes and data to, basically, when something could be interpreted one of two ways, and a subject matter expert knows best, you embed that understanding in your tool, and it performs better.
Nicole: Is that the calibration we hear about? It sounds like it’s larger than that.
Brian: It’s more than that. One of the most useful things about design thinking, for example, companies that use it, generates over 50% more revenue, according to McKinsey. By design thinking, I mean designing processes, designing software, designing services, designing products. One of the things we always want to avoid is digitizing the cow path. We don’t want to digitize bad processes. So, the ability to work with customers to understand what a day in the life looks like today, understand everything that goes into it from the end-user’s perspective.
Again, the subject matter expert who knows better than we do, and we can bring supporting subject matter expertise, but you, the customer, know you best; you’re the use case. And, we’re embedding that process and making it scalable, getting expertise out of someone’s head and into a tool is actually a fundamental problem of AI across industries.
And if that can be accomplished through understanding your processes and understanding your data and mapping them back to clear business results, I can tell you what I think you need. But we’re getting to the point where technology is so configurable that you can tell me what you actually need, and I can adjust accordingly.
Nicole: Where do you see either the most commonplace that you could implement digital design thinking, or what is the one that has the biggest return?
Brian: So, if you look at $1.2 trillion that was spent on digital transformation last year, $1.2 trillion, we wonder if this is coming to the legal industry. It’s a third of all IT spending globally, Yet Digital Transformation is broadly construed, and it’s not just using technology. It is, again, not digitizing the cow path. You have to reinvent the processes that you want to digitize. The value of design thinking and where to apply to it, you know you need to invest in technology if you’re a law firm because your customers can buy the same tools you can and serve themselves with them increasingly.
Forty-eight percent or more of all legal spend is moved in-house at this point. If you’re a law department, you bought, paid for, own, and store work product that you created in the past. But you spend seven hours a week, approximately 20% of your time per lawyer per year, looking for information. Why not find information that is out there, and repurpose it in the context of your current need? Well, what does that mean? What information should you start with?
If you could automate something or reuse your data, those are the two big picture use cases for Digital Transformation across industries; it’s process automation and data reuse. And, you know, 78% of all data in the legal industry that law firms have, that law firms possess, go unused, and we can argue about how useful that data is. But usually, if it’s not directly useful, it’s useful as a data point to tell a story or support something because there’s more data. Well, you know you have to do something, or you want to do something, but it can be very difficult to identify a starting place. Even if you have a specific pain point, it can be difficult to identify the size and shape of that starting place.
Design Thinking is a structured process for identifying a starting place in the same way that lawyers use a structured process for preparing for trial, for M&A transactions, for drafting contracts, etc. This is a structured process for ideation, one that allows for the identification and prioritization of use cases that are technically feasible, not Star Wars, that are economically viable, what can you afford to do, what do you want to spend money on doing, and that people will want to use. Which, in a roundabout way, brings me back to probably the greatest driving change behind everything that we call Digital Transformation.
So, yeah, okay, technology’s becoming more configurable and less expensive. Well, people are using it to get closer to the end-user. In fact, 70% of Fortune 500 CEOs, the reason they invested in AI, broadly speaking, is to get closer to the end-user. Because again, technology prices fall, it’s about how can I show my end-user, my client, my customer, “know-me” insights in air quotes. Well, identifying where to start involves a lot. If you’re dealing with a toolkit full of Legos, how do you configure those Legos so that you achieve your business case, and it’s not a random walk or experiment at the edge of the enterprise?
Design Thinking allows you to identify a practical starting place with digital technologies, whether they’re products or whether they’re capabilities that can be assembled in a custom way around you to create your own custom solutions. Put little AI and analytics and robotic process automation in, stir and see what happens. So, identifying a practical, testable starting place before you make an investment in technology, reducing the risks and costs associated with buying or building technology, improving adoption through better business and end-user fit, and then building a road map for transformation, So maybe it is one project, and that’s all you want to do. But maybe it also involves taking the so-called data exhaust from your ELM platform, seeing what you can do with it to create that new insight.
Nicole: That is a great explanation; it’s actually a good lead into this next question. How do I get our Leadership, how do I get our Board depending on the type of organization, how I do I get the Partners if it’s a law firm, to buy-in to the idea that we need to progress with digital? And then my second part of that question, if you could, Brian, how do you and your team help those leaders in these organizations gain that buy-in from those decision-makers?
Brian: Across industries to date, 70% of all Digital Transformation initiatives have failed, and there’s one leading reason for that – lack of end-user stakeholder, that is, business executive buy-in. If it’s treated as a project or an experiment, it will almost certainly, fail. It has to be, what you choose to do with digital technology shouldn’t be a hammer looking for a nail. Take your existing business challenges, are they competition? Do you need to generate new revenue? Do you need to take out cost? Go with that, and let that lead what you decide to do.
The good news is it’s not the complexity of digital transformation that leads to all that failure. It really is lack of alignment; that’s a relatively easy problem to solve. Generally, the way that we start is by seeking to understand our customer’s business problems. They don’t need a contract management solution as much as they need to reduce risk. Why do they need to reduce risk?
Read more about – Digital Transformation is not about Technology
Harvard Business Review | Article
To really dig into that, we use Design Thinking and everything from user story mapping, which is a tool that we use to defining their current state and ideating around a future state, once we understand where the roadblocks are in their processes. Defining conceptual prototypes and defining business cases, what is the benefit? Can we link it to a clear business value?
I gave an example – about seven hours per lawyer, 20% of their time per year; it should be that clear, a good business case, and a good digital solution. There should be a clear ROI opportunity. Well, we need to make sure that the business leaders within an organization, with great respect to them, understand that technology has become much more configurable. And we help them understand that, and we help them identify where they should point us if they should point us. We work with them and only them, not technologists, not IT, not yet, to identify where they should point us. Maybe we’ll identify three or four ideas, and we’ll prioritize them out of any number of 10s, 20s, 100s of ideas. And then for each idea, we’ll then do design thinking workshops in those process areas, the people that understand those processes to really understand what causes the pain.
If they have a risk problem, we can throw a contract review solution at it, or we can understand wherein their contracting process or their client’s contracting process is their friction. And that’s where we reduce it and give them the most value. And really that’s the process that we use. We invest in the first session with the business leaders because we don’t believe that our customers should be charged to explore an idea; anything after that is their IP, and we have a proprietary process. When it comes to helping them identify if there’s a “there” there, and if they want to invest and continue to explore with us, great. If they want to build themselves, great. If they want to hire someone else, great. We want to be the evangelists and the guides, and we hope to earn that right to help the legal industry navigate complexity to get the results that it wants out of technology.
Nicole: Why wouldn’t an organization do this? I would love to hear the feedback you’re receiving on both sides. People are excited right out of the bat, or does it take convincing to get people to get on board?
Brian: So, Design Thinking is used by fully 100% of the Fortune 500. Either they use it internally, or Deloittes and McKenzies and Bains and Accentures of the world and PWCs of the world, use it as a common consulting tool. But it hasn’t really been used that much other than academically where it’s certainly seen success. But it hasn’t been commercialized as an offering at scale yet within the legal industry.
So, one, it’s just lack of availability and lack of access to organizations. Hopefully, like we, again, hope to earn the right to be, that take a legal spin on it – It’s not just Design Thinking, It’s legal Design Thinking, and it’s Legal Design Thinking to develop Digital Solutions. And there’s also the fact that Design Thinking is an iterative process. You get a bunch of people in the room, and here are these executives that they’re connected to different business processes within an organization. They might not speak to each other day-to-day. And just by virtue of getting in a room together, they understand their problems better because they’re discussing them and netting them out better, in a way that, through nobody’s fault, they just never did in a day-to-day way. Or you get the people that do the functions, do the processes, review the invoices in front of the executives – that’s very powerful, especially when it’s done in a structured way in terms of problem-solving. You really get to the core of the problem and don’t have to hypothesize about it, and you can test it.
Now, that’s all goodness, I think another challenge is that lawyers often before they opine about something or share an idea – I’m a lawyer, we’re trained that we have to be right, that we have to have evidence. And so, ideation and brainstorming can be a bit difficult and a bit uncomfortable because we don’t want to offer an idea before it’s fully formed. But this is an area where we don’t want to let perfect be the enemy of good. It’s important to share ideas midstream. It’s important to as a group between Elevate and our customers cocreate ideas organically, and you don’t have to take my word for it.
But look at various studies across the other, across industries around Design Thinking and that it does work as a tool to identify what to do and why, and will it be successful. Again, before you spend a lot of money, especially right now, in an uncertain period of time, on technology. We know we have to invest, we hear we have to go digital, but doing that in a thoughtful way and reducing risk is where Design Thinking can really help right now.