Recorded by Corporate Counsel Business Journal - November, 2021

Eric Wangler, president, North America with BigHand, chats with host Kristin Calve about two of BigHand’s recent surveys; The Legal Workflow Management Survey and The Resource Management Survey. With regard to both surveys, Mr. Wangler makes specific note of the main challenges firms are facing amidst this ongoing pandemic and what research says about how to optimize productivity in the next normal.

Hybrid working is here to stay and law firms are finding ways to embrace it. Nearly half of the firms we surveyed told us that includes implementing a workflow platform in the next two years

Podcast Transcript:

Speaker #1
Hello and welcome to CC BJ Perspectives podcast, providing access to leaders and influencers within the ever-evolving ecosystem of lawyers and legal professionals. Today's guest is Eric Wangler, President of North America at BigHand. With over 17 years of experience in the legal industry, Eric previously served as Vice President of Ricoh's legal vertical segment.

Since joining BigHand, Eric has grown the North American business and the BigHand customer base significantly. In addition, Eric led the acquisition of Esquire Innovations, now BigHand Produce in Temecula, California, a leading provider of Microsoft Office, integrated practice management software services, and applications for the legal.

We're excited to have Eric with us today to discuss current challenges facing companies, his research on law firms' plans for flexibility, the obstacles in recruiting and retaining staff, and more. 

Kristin Calve 
Hi there, Eric. We're so excited to have you here with us today to discuss the current challenges facing companies, the research on law firms, plans for flexibility, the obstacles in recruiting and retaining staff, and more.

We understand that BigHand, the organization that you lead has done a very significant survey among law firms with 50 lawyers or more. To start us off, could you just tell us a little bit about that, and then we can get into our regular questions.

Eric Wangler
Yeah, thanks and it's great to talk to you again, Kristen, regarding the surveys themselves. We actually set out to, this was a bit of a journey, it started a couple of years ago when we did a survey through ALA looking at recruiting and retirement challenges in the back office of law firms. So we'd gathered a good bit of data that was all kind of pre-pandemic. We set out with that data to kind of get a deeper and more thorough understanding of some of the challenges that were facing law firms post-pandemic. 

So, the first bit of work we did was what we call the Legal Workflow Management Survey, which we published just in July of 2021. This was focused primarily on the challenges in the back office, so in the support organizations. And then we also published an additional report in August of 2021 that we call the Legal Resource Management Report, and that is more focused on how firms are engaging with their lawyer staff, particularly how they're engaging their associate and deploying them or trying to deploy them more effectively. So, again, the surveys were very comprehensive, we had 900 respondents globally, and as you said, in firms of greater than 50 lawyers. To our knowledge, these are the largest pieces of research that have ever been done in the areas that we're going to talk about today and there were 400-plus respondents specific to North America, which is what we're going to be chatting about today. For anybody who's interested the data's all available. It's very detailed on our website, and they're welcome to go there and take a look. 

Kristin Calve
Terrific. Thank you. Well, it sounds like an enormous undertaking. I certainly haven't seen research that broad. Can you talk to us a little bit more about the main challenges that were identified with the firms you spoke with during the pandemic? 

Eric Wangler
You know I think it starts with demands that their clients are placing on them. So there's increased pressure from their clients to control costs and to look for ways to find efficiency. A lot of challenges around cost transparency. And as more and more firms move to fixed fee engagements with their clients, if you want to think about it, every dollar that's spent in additive cost is a, is a loss of a dollar in profit. So, it makes some of these challenges really, really acute. 75% of firms said they've seen increased pressure from clients to make sure work is completed by the most cost-effective resource that is primarily focused on engaging their associates in better ways, but also in how they're kind of engaging their back office staff. 56% of those firms said that the pressure has increased since the pandemic. Surely that's not going to go away anytime soon and then most of the firms we work with have put real teeth into attempting to better deliver on their diversity, equity, and inclusion initiatives. We find that that kind of backing up with technology can put real teeth into those commitments and have them better delivered on.

Kristin Calve
So now that we see so many firms and corporate organizations focusing on returning to work in the real-life phase, what can you research? Tell us about how law firms are planning for more flexible and hybrid working situations.

Eric Wangler
Yeah, it's interesting and maybe not a complete surprise, but the survey said that 80% of lawyers are working more often out of hours, so not the typical nine to five, although I'm not sure if lawyers work that way very, very much anyway. What we also found is that 58% are saying that support staff is also embracing flexible hours. So you think about the way support staff and legal secretaries were traditionally engaged when everybody was in the office and that's almost unheard of or unimaginable 18 months ago, it just wouldn't have looked the same. As far as how firms are going to be moving forward. 93% of the firms, so they expect support staff to continue to work away from the office, two or more days a week. If you see anything in the legal press, which I'm sure you have recently, there's an awful lot of information out, very specific on how firms are moving back to hybrid working and or some level of returning to the office. I think everybody's been challenged with the delta variant and everything else and making sure they're keeping their employees safe, but also being able to manage the business. So I know a lot of the feedback that we get from our clients and our prospects is that recruiting in an environment where you're going to expect your staff in the office 100% of the time is getting to be very, very difficult because so many firms are offering more flexible work and more flexible schedules. So our perspective is, and based on the survey data, hybrid working is here to stay. I think, again, most firms are finding a way to embrace it. When you do see an occasional story about a firm that's really kind of compelling their staff to get back to the office. Very often you'll see some follow-up information that says either the associates are not fans of it or the support staff feel the same way. So I think everybody's kind of gotten used to working in this way and they've done it effectively, so most firms are going to embrace it. 

Kristin Calve
Thank you. That's so interesting because we've always had a work-from-home element in our small company and the conversation that I had at Thomson Reuters Marketing Partner Forum last month was really around the idea of so many firms losing that mentoring capability if people were working from home, either exclusively or too much that they just wouldn't have that personal friction. I've been talking to lots of folks, many of them at AmLaw 100 firms, about the idea of just cultivating culture and best work practices. 

Eric Wangler
You know, frankly, BigHand is the same. We've always set a component of remote work. Greater than half of our employees in North America work remotely every day. We've always been able to kind of embrace it. You know, technology has certainly helped bridge the gap over the last 18 months, but that human factor is real. Obviously, we're technology companies, so we're advocates of bridging some of that gap on the engagement side and just on work processes with technology. But I think a big part of what firms are trying to solve is exactly that. What is the right mix of in-person mentoring, and how effective can you be remotely with mentoring? And you know, in a lot of cases traditional ways of working in a law firm are changing dramatically and this is just a massive amount of change for the industry.

Kristin Calve
For sure and part of our discussion was basically around the water cooler effect of, you know, people my age, there was a water cooler and you would walk out of a meeting and you would go to the water cooler or the coffee machine and talk about whatever happened at soccer over the weekend and really being able to bring some harmony to your work-life balance in terms of relating with people. That kind of leads into my next question, which is hybrid working has many benefits for staff, like the much better work-life balance but what is the impact of the business and how are law firm leaders going to make a long-term flexible working success? And I say, I asked that question in the context of, so there are different measures of success, right? There's financial success for the firm. There is professional development for the executives, like we were just talking about, and there's just a joy factor of enjoying where you work and being able to appreciate that and not assume that you're entitled to two days from home or three days from home and, and elements like that.

Eric Wangler
Yeah, I think just on a pure kind of business perspective, the real challenge I think is around having transparency and visibility to the work, which hasn't always been great in law firms, and not just that but the people available to do it. So again, when we think about engaging with back office staff, you know, most firms would tell you prior to the pandemics, when everybody was in the office, this was a struggle, right? 

Understanding who was busy, who had the capacity, and who had the skills to do the work, that the lawyers were generating. And again, in the survey, and I'll talk a lot about the data in the survey and then we can touch on a little bit of what we're kind of seeing, but 55% of the firms said hybrid work requires better visibility, kind of what I just touched on. Their concerns were around a lack of knowledge transfer, which is a little bit of what you referred to, and the kind of cultural shift. So 30% said they're concerned about that lack of knowledge transfer. Another 30% said they're worried about the lack of visibility of work volume and staff capacity when they're not kinda live and in person, and then 32% lack understanding of how to find the right resource to complete the work. 

We think a lot about the fact that the way the law firms engage with their lawyers, they literally track their work in six or eight-minute increments, but many firms don't have any real visibility to the productivity or the engagement of their back office. Survey says that less than it was 48%, less than 50% of firms are manually tracking work done by their support staff, which means more than half don't track it at all and if these folks are going to be in or out of the office fairly regularly, there's likely a better way. What we found is, and again the data proved this out, when lawyers are struggling to find the right people to help them with the work they tend to do it themselves, which is certainly not a great solution. So again, the data tells us that 76% of firms say they're encouraging their lawyers to delegate work to the most cost-effective resource. Another 61% say that their support staff was utilized less during the pandemic. So you've kind of got two numbers that don't necessarily work together, and the piece that I found really kind of astounding is 47% of the North American firms say their billable hours actually dropped or were reduced in the face of increased demand. Everything you read about in the industry is that there's a massive amount of demand. Now, lawyers are working crazy hours, but half the firms that we spoke to, and again there were 900 of 'em, 400 in the US are saying that their billable hours actually dropped year over year during the pandemic. So, we found that to be a real challenge for these firms.

Kristin Calve
So, Eric, it's been well documented that recruiting and retaining staff is increasingly difficult in today's climate. What did your research find in this area? 

Eric Wangler
Yeah, so really Kristen, this was a big part of what drove the additional piece of research that we completed recently. So, as I mentioned at the start of our conversation, you know, we did a survey through ALA back in, in late 2019, the results of which we published in 2020. So again, that was, it was March, so it would've been pre-pandemic. As we were out talking to customers and prospects we kept hearing this notion, that we've got a large or a high percentage of our legal assistants, very tenured legal assistants, who are going to be leaving the business. So we are big believers in making data-driven decisions, so we said, well, let's, let's find out kind of what the facts are. So again, this is back in, in early 2020, firms expected to lose 58% of their legal secretaries to attrition and retirement within the next five years. And they were telling us that one of the key challenges was recruiting, for like to replace these folks. So about three-quarters of the firm said the difficulty was a seven or more out of 10, and that it was affecting how they were going to staff their back office moving forward. The other thing I found really interesting is that 60% of firms said it's really difficult to structure your support staff to meet the needs of different generations of lawyers. So, you know, your more tenured kind of 25-year-in, in tenure partner has expectations of kind of concierge or, or kid-glove service, white glove service where your younger and maybe more tech-savvy associates really don't necessarily need to kind of have a relationship with somebody in their back office, support staff. So that was kind of the benchmark that was set a little over two years ago. As we flash forward to the most recent survey, firms are expecting to lose 80% of their support staff, up to 80%, in the next five years due to retirement and natural attrition. So the numbers have gotten even more stark since the pandemic, even on the low end of the scale, firms said they expect to lose at least 40%. And I think, when you think about those numbers, I don't know of another industry that's going to be challenged this way in the coming five years. It's really unprecedented. So that's going to put a tremendous strain on the support teams because there, again, the same kind of data, they're really struggling to replace these folks, like, for like, so still deemed about a seven or a 10 or kind of degree of difficult difficulty. You could probably argue that the younger generation expects more specialist roles, with greater growth opportunities, and maybe doesn't want to work in the traditional way that the legal secretaries have been engaged. So, since the pandemic what the research tells us is, 80% of firms have made changes to their support teams, either by restructuring them or introducing teams since the pandemic and another 50%, again, intend to make further changes moving forward. So clearly firms have made a change. Again, you see a lot of press about firms that have made substantial changes to their back office. But again, there's another 50% that intend to make further changes. So some of those folks are going to go through more than one kind of change in structure. 

Kristin Calve
Wow, that's amazing and alarming at the same. 

Eric Wangler
Well, it's, it's a real challenge. It really is.

Kristin Calve
So tell us, what tips or opportunities can you offer to the firms as they're planning out for the next few years or phases of their growth?

Eric Wangler 
Yeah, great question. Again, you know what the data tells us from the research, and we kind of focus this on what are firms looking to accomplish over the next 24 months. More than half said better facilitation of hybrid work is a priority, probably not a massive surprise. As we said it's here to stay, that's clear. 40% are focused on upskilling or retraining their support staff in the next 24 months. And if you've seen the legal press recently, Reed Smith and Fox Rothschild are both great examples of firms that are really redefining the role of a legal secretary. I think a lot of firms are moving and a lot of firms that we work with are going is, they want to take the knowledge that these tenured legal secretaries have and have built up over the last 25 years and give them a role that it almost makes them the air traffic controller on behalf of their lawyers. So more customer-facing, engaging more often with other people in the business to complete the work. So again, I think that's a direction travel for a lot of firms, right now. In the survey, 39% said that they'd increased their reliance on outsourcing and another 40% say that outsourcing is a priority objective over the next 24 months. And then finally, you know, which was kind of, uh, music to our ears, 45% of law firms said they intend to implement workflow technology in the next 24 months. So, you know, we've certainly been very, very busy since the outset of the pandemic as firms are trying to work with remote and hybrid working. As I mentioned we think technology can bridge some of that and certainly make them more efficient, giving them greater transparency. So all areas of focus over the next 24 months according to the survey.

Kristin Calve
So, Eric, I know that BigHand works with firms as they restructure the back office and their legal support. Can you please tell us more about how you support them through this transition? 

Eric Wangler
Obviously, we're a software development business, so we focus primarily on technology solutions. We focus actually exclusively on technology solutions for law firms. So we've developed a workflow platform over the last, I guess, six or seven years now that helps connect lawyers to their support staff and the folks in the back office. And it's been very, very popular over the last 18 months as firms again try to kind of come to grips with remote and hybrid working. And really I think what underpins it is, is just getting the work into a system whereby it can be managed and monitored. Giving firms transparency around what was traditionally a very opaque process, right? So a lawyer would hand work or, or email work to, an assistant who's responsible for their work, and again, it was really hard to understand who was busy, who had capacity, who had skills, and what work was being done by, by which employee. So again, what we're seeing is there's a pretty significant drive within our customers to move away from relationship-based support, where, you know, a legal secretary does all the work for three lawyers, regardless of what it is because, quote-unquote, their lawyers generated it. Again, trying to break that traditional model where somebody knows everything that these three folks need and takes care of them. And it's interesting because some firms are almost doubling down on that approach where they're taking their most tenured legal secretaries and spreading them across a broader group of lawyers to help them manage their work, but not necessarily complete it. 

So what the technology allows you to do is get the work into a system that gives you vision to it. Helps you understand, you know, how much of what type of work there is and really gives firms data to drive future staffing and modeling decisions. So understanding who's generating what type of work, who's completing it, and if that doesn't make sense, how do we change it? So, you know, a bit of our mantra is, is giving the right work to the right teams with the right skills, at the right costs. Inevitably, or invariably what we find when we engage with law firms is that if they're working in a traditional model, once they understand the data underneath the process, they very quickly realize that their most valuable and typically highest compensated legal secretaries are doing a massive amount of very clerical work that could be completed more efficiently with somebody with different skills, who again, doesn't necessarily have 25 years of legal experience because those folks, the more senior folks, can add a lot more value to the business by being engaged in different ways. 

Kristin Calve
Oh, I really like that point because I think it's one of the things that law firm executives can often lose sight of scale and I think that is what you're pointing to is that there's a lot that can be scaled. 

Eric Wangler
No, I think you're right and again, I think the other thing to think about is, as the data has shown us there's going to be a fairly significant exodus of, of tenured legal secretaries from the legal community over the next five years. And quite frankly, there are not a lot of folks who want to move into that type of role and nobody sets out, I'm sure, assuming they're going to do the same role forever. But again, I think what we're finding is that the younger generation of workers would rather deal with technology, would rather do the work that's put in front of them, do the work that they're good at, and have interested in, with an opportunity for growth. Even if firms wanted to maintain a traditional support structure, their ability to recruit folks to move into those roles is becoming very, very difficult. The firms that we deal with at times, it's difficult from a change management perspective because, you know, lawyers are used to working the way they work. But at the end of the day, when you can't replace those folks the way you would like to, you're going to have to change your structure and have to change the way you engage with these staff, to keep the lawyers happy and quite honestly, to keep the law firms clients happy, and that's really what it's all. 

Kristin Calve
For sure. So Eric, from your conversations with law firm executives and leadership and your base knowledge of the industry overall, what do you see the direction of travel being over the next 24 months? 

Eric Wangler
Yeah, I think it's going to be a bit more of the same, right? There is if you think about the last 18 months and very early on, firms were just trying to deal with, can we get everybody up and working remotely? Fortunately, most firms had mature IT groups that were able to get that solved pretty quickly. But there are still an awful lot of firms that are dealing with the returned office and that's obviously been a moving target. What we're seeing generally is, as I mentioned earlier, many firms are moving away from relationship-based support just because it can't continue the way that it has because of the challenges, we spoke about, the pending retirements, and the difficulty in recruiting. So what that leads to is a lot of firms are hiring junior staff to kind of fill the ranks and do the more clerical or technical work at times and then using their more senior staff to focus on the type of work that requires the legal knowledge that they've been able to accumulate over all these years. In addition, taking those more senior folks and giving them more customer-facing work because frankly, they're pretty good at it. And firms want to take advantage of those relationships to relieve a little of the burden from the lawyers. So we see a lot of firms creating specialists within the support staff, kind of centralized teams that specialize in a very specific type of work. Again, as we mentioned, with the system to get the work to the right teams you are putting the work in front of the people that are most efficient at it, frankly, like to do it more than probably others. And again, we're seeing a lot of movement towards kind of centralized or virtualized production centers. Really, where that engagement is seamless to the attorneys, it's seamless to the law firm's clients, but that work may be getting done in a low-cost center in Louisville, Kentucky, or it may be being done by an outsource. And we're seeing a lot of movement toward making better utilization of outsourcing legal word processing, among other solutions, as firms just really start to come to grips with, is this a business we want to continue to be in, or should we engage with a provider who's better suited to do this work, and not facing some of the same challenges that the law firms do. We talked a lot about engagement and how to keep your employees happy and I think we see a lot of firms as real estate needs have changed dramatically, with fewer people in the office, and that's likely here to stay. A lot of firms are focused to make the office a bit of a showplace, right? A place where people want to come and want to spend more time with their peers. Because frankly, people have gotten pretty comfortable working from home. So all of that, I think is on the horizon and we're working with a lot of firms who are undertaking significant change processes around their support staff. And I guess it's important to note that it really isn't often it's about headcount reductions. I mean, that does happen from time to time, but I think more often than not, it's more about utilizing the resources you have in a smarter and better way. Wrapping that with technology that makes it seamless for lawyers and makes it easy for them and then also gives you data to help you make future decisions around recruiting and training and structuring.

Kristin Calve
Thank you. That makes a lot of sense and it's a lot easier to explain than it is to execute for a lot of organizations, right? The tactics that you need to be able to make those decisions and get folks to embrace them culturally, is the bigger challenge than being able to give a nod to, yes, we're going to be more efficient and we're going to use our people or other assets that we have more strategically. So I think it's, I think it's great that you were able to do the survey. I think the survey is a lot of proof about sentiment in the industry. Eric, is there anything else that you think that our audience should know? 

Eric Wangler
You know as you just mentioned really, you made a good point, it's that the change aspect of all of this can be difficult, right? So, you know, we've done, geez, 60 or 70 of these projects and we've learned a lot along the way. We've actually got some of our, what we call solutions consultants, who have actually come from law firms, where they've successfully implemented change processes like these and implemented our technology. So again, although we're a technology company, we don't kind of ignore the fact that change management is such a big part of the journey. Let's face it, law firms aren't traditionally known for their embracing of new ways of working, but in the last 18 months, we have all proven to ourselves, I guess, that firms can change. And again, we've been on that journey with the firms. We're always advocates of having a champion for these changes. Somebody who's really, really focused on the success of the project, and very often that needs to come from the very top of the firm. Right? So we're engaging with COOs and Chief HR Officer. To make sure that the right level of support is there within the business. Because, you know, let's face it, lawyers are busy, they're worried about their billable hours, they're worried about their customers. They just want to make sure that the work they send to the back office is going to come back quickly, efficiently, and correctly. To the extent, you know, we can help firms do that more efficiently. Great. But it all begins and ends with, we're here to help satisfy the lawyers and ultimately their clients. We want to do that in a smart way that makes it easy for them. And frankly, in most firms that we work with, the level of service that is returned upon the implementation of the technology and the change is typically much, much better. So there's efficiency to be gained, but there's also the human element that can't be ignored. 

Kristin Calve
Eric, thank you so much for joining us today. I really appreciate your time and all of your insights from you and your organization. Eric, I hope you can join us again next year and you can continue to share your insights. It's really been our pleasure to have you on the podcast today.

Eric Wangler
It's my pleasure to be here. Thanks, Kristen, for a fun conversation. 

Speaker #1
To find the reports that Eric referenced, please visit www.bighand.com and check under the resources section.