Breaking Strategic Groups Out of IT [#ILTA11]

The speakers in this session: (i) John Alber (Bryan Cave), (ii) Timothy Corcoran (HubbardOne), (iii) Gerard Neiditsch (Mallesons) and (iv) Jeffrey Rovner (O’Melveny).

[These are my notes from the International Legal Technology Association’s Conference 2011.  Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

  • Why is this Issue Important? Changes in the marketplace, in how infrastructure and applications are managed, changes in staffing models, changes in pricing and client expectations — all of these factors cause firms to consider new ways to achieve a competitive advantage.
  • Consider Two Extremes for Discussion Purposes. One extreme is an enormous IT department that handles everything that has any technology function. The other extreme is an extremely lean IT operation, that keeps the basic operations in order, is reponsible for architecture and basic apps, but many of the specialized functions (e.g., client-facing technology, marketing technology, litigation support, practice support, etc.) are distributed throughout the firm. Which is the better approach, or should your firm aim for a hybrid? The answer lies in the problem you’re trying to solve. Are you trying to achieve the lowest possible cost? For example, a distributed model may lead to overlaps, duplication and inefficiencies. Alternatively, a consolidated group may be monolithic and sluggish. Mallesons is optimizing for agility. This has implications for how they approach legal practice AND technology.They are doing this in order to be able to respond rapidly to changes in their clients and in the environment. As a result, they are focused on specialized initiatives that are technology-enabled. The IT department then imposes discipline to ensure that there is no duplication of effort across the firm.
  • Considerations Applicable to Both Scenarios. Nimbleness, creating/supporting and R&D function, duplicative technology, duplicative personnel, career paths, IT discipline and project management. Gerard Neiditsch reminded the audience that even if you create separate “tiger teams” or skunkworks, be sure to recognize the contributions from the rest of the IT organization (the “performance engine”). Otherwise, you run the risk of losing the best people from your performance engine operations. In a similar vein, Jeffrey Rovner reminded the audience that whether you’re dealing with a skunkworks project or a performance engine project, be sure to recognize every single member of the team who made that possible. Just like the credits at the end of a movie, it’s important to acknowledge everyone who contributed to the success of the project.
  • The Importance of Reintegration. John Alber and Constance Hoffman at Bryan Cave frequently consider whether a group that has been broken out of the IT department should be reintegrated with the main IT department to ensure the overall benefits accrue to the firm and to avoid unnecessary duplication or silos of capability.
  • Consider the Extent to Which a Group is Tied to Revenue.Timothy Cororan noted that being tied to revenue can preserve a group (and give it legitimacy within the firm), but it also changes the expectations of the group. (One panelist noted that fee-earners can go to the golf course because meeting clients on the golf course is supposed to contribute to the top line.) Gerard Neiditsch also observed that if you have a group that you intended to spin out of the firm altogether (perhaps even to sell the technology and the team to another company) you should keep that in mind when you first start planning to create the group.
  • Consider Visibility. Creating a separate team can be a means of providing viability inside and outside the firm with respect to that team and its projects. John Alber noted that when they created a group focused on alternative fee structures, members of those teams started attending client meetings and internal client meetings. Jeffrey Rovner includes IT and library personnel in his KM meetings to ensure transparency of projects across functions. Gerard Neiditsch’s project managers are involved in every project in order to promote efficiency across the firm.
  • Career Path.Gerard noted that it can be hard to attract top specialist talent if they are concerned that they are buried in a large department and won’t have appropriate visibility. Tim suggested that by encouraging personnel to work across teams and departments, you can foster a cross-pollination of good ideas and best practices. John said that when you spin groups out of IT, you create additional opportunities for people to learn how to be better managers. However, Gerard said that you most likely will have to pay more to personnel who assume additional management responsibilities. Jeff and Tim both cautioned against creating new groups just to separate personnel who are having trouble getting along. This is an issue that requires better management. Separating them just perpetuates the problem, but on an inter-departmental basis.
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