There aren’t many people who can articulate the realities of the radical, technology-powered upheaval currently going on in the legal market better than Lucy Bassli. But then, Bassli has the advantage of being assistant general counsel at Microsoft.

Lucy Bassli

For one thing, Bassli knows that much of the current chat about artificial intelligence is just that: chat.

“AI is such a hot topic, it comes up in every interview I do,” she admits. “My job is to distinguish between what is hype and what isn’t. And I do have the luxury of having AI experts across the hallway and across the floor and in the next office. It’s an over-used term, much of it is just good old general computing. Real AI is on the cusp in legal but it’s not as nearly as available or impactful as the hype suggests. But we’re watching it closely and experimenting in-house quite a bit. The real key thing is that without good, underlying data, no amount of AI can be successful.”

This is where law firms really come into their own, Bassli suggests. Indeed, she goes as far as to call this “the secret”.

“Law firms sit on a pile of data, they know more about their clients than the clients know themselves,” she says. “Data is one of the best ways to forge a relationship. Telling your client ‘did you know X,Y or Z’? That nugget is like a stepping stone into building that deeper bridge. The greater the trust, the bigger the dependency and longer the relationship.”

Bassli believes that the global legal industry is now at “an inflection point” which, she adds, “is quite a bit overdue but it’s certainly happening”.

“They need to know that it’s now ok to take risks”

This inflection point is evidenced by a range of factors, she argues, none more important than the “explosion” of legal technology providers.

“It’s truly an explosion,” she adds. “And it’s causing an energy in the air that is creating an opportunity for those law firms that are willing to take a bit a risk and be thought leaders. Those that are willing to grab the surfboard and take a risk.”

Specifically, Bassli means firms who are willing to take risks developing the relationship with their clients in this new and evolving world. Her experience working with the firms Microsoft turns to, as well as her time in private practice, has convinced her that there are a number of lawyers who, as she puts it, “have been sitting dormantly with an itch to do something new”.

“They need to know that it’s now ok to take risks, for that handful of lawyers in a firm of 300 to take those ideas to management,” she says. “They now have plenty of examples of what’s happening in the wider market that lends them and their ideas credibility. There’s enough movement and rumblings within many, many firms.”

The “rumblings” in which Bassli is most interested are those surrounding the relationship between in-house and private practice. In particular, she considers how that relationship is changing and the role technology is playing in this evolution.

For Microsoft and the firms it works with in particular, this is a hot topic. Last month David Howard, Microsoft’s deputy general counsel for litigation, unveiled the company’s ‘New Strategic Partners Program’, which confirmed the tech giant’s policy shift away from billable hours to 90 per cent alternative fee arrangements. Indeed, this development was highlighted by The Lawyer as far back as 2013 in the Global Litigation 50 report, which that year surveyed the world’s leading in-house lawyers to find out what they were looking for from their external lawyers in terms of fees.

In the report, Howard noted a similar AFA target, stating: “For the past several years we’ve met our goal of using some type of AFA in 90 per cent of our new cases. Discounted rates are more or less a given, so we wouldn’t consider them an AFA. We’d look for a ‘not to exceed by’ phase; or fixed fees; or fixed fee with some uplift potential. We’ve done straight contingency in some cases. The most prevalent is the ‘not to exceed by’ phase or fixed fees. Also, package deals for a group of cases.”.

Bassli is adamant that the key to the use of AFAs by Microsoft’s external law firms (which include Covington & Burling, Greenberg Traurig, K&L Gates, Latham & Watkins, Paul Weiss, Sidley Austin and Simpson Thacher & Bartlett) is technology.

“It’s not just how we pay, it’s what we get for what we pay,” adds Bassli. “And, absolutely, technology will play a critical role.”

But it’s not only the new tech that will play a critical role in the future. Bassli is equally adamant that a new breed of business services professionals will, or at least should, be playing as central a role in the law firm of the future as the partners and lawyers themselves.

“This is absolutely my favourite topic,” confirms Bassli. “Absolutely everything we just talked about will be impossible if law firms don’t bring in other professionals. I’m not a data analyst or a specialist in pricing or programming or legal project management. As a practising attorney I wasn’t trained with those skills. So the faster I embrace all these other disciplines that enable the legal profession to change the faster we’ll be able to change. We need them. We know we need them. It’s already started to happen, but law firms didn’t know how to move to AFAs without these people. We need to remove them from the bucket named ‘non attorneys’ and bring them to the table properly.”

Bassli’s keynote address, titled “Client Expectations of the Modern Law Firm”, will open this year’s Business Leadership Summit in association with Propero on 26 September at the Grange St. Paul’s, London.

To book your place please contact Kenan Balli on 0207 970 4017.