We asked Legal Value Network member Casey Flaherty, Co-Founder & Chief Strategy Officer at LexFusion, to tell us more about his career path and what he loves most about what he does. Connect with Casey on LinkedIn.
Tell us how you got into your field.
I was in Beijing when SARS hit (Covid was not my first rodeo). The city shut down. I grew bored. I decided to return to the US to attend law school. Because that is what verbose nerd types did back then when they had no earthly idea what they wanted to be when they grew up.
I started as a litigator at a large law firm. Loved it. Went in-house after my first child was born. Loved it. Naturally drifted over to legal operations right before it became a buzzword. Really loved it. Ended up writing and speaking on the subject (again, verbose nerd type). This resulted in a career in consulting, as well as founding a legal tech startup (still going strong).
I consulted primarily for law departments but also some law firms. A client law firm brought me in full time to help them build out the biggest (and best) legal project management team in the world. That was extraordinarily rewarding.
When the build was done, I realized how much I missed being an active member of the ecosystem. In the interim, my friends Joe and Paul had founded LexFusion, which is an ecosystem play. I joined them to help advance the collective conversation.
What do you love most about what you do?
Making connections that matter. I spend the majority of my day speaking to decision-makers from law departments and law firms about their plans—and their pain. Whether it is a catch-up call or a virtual whiteboarding session, I strive to deliver value in every interaction. Sometimes, I add value simply by sharing what I know, from my own experience, and from what we’re learning through active market listening. But more often, it is about sharing who I know. I frequently connect stakeholders to offerings and consultants with problem/solution fit. But I derive maximum joy from connecting peers who are working on the same problem—though often at different stages of their journey. My go-to phrase is, “you are two people who should know each other.”
What do you think are some of the biggest challenges facing law firms today and the major changes in the legal industry?
We’re all in this together. The modern practice of law is a team sport.
Law departments and law firms face a common challenge. The demand for legal services is increasing (as the likes of Jae Um, Dan Katz, and Bill Henderson have all documented so well). The budgets for legal services are not even close to keeping pace.
While we tend to think of the Great Recession as a turning point, this is a longer-term trend. The explosion in demand dates back to the 1970s. Large law firms really emerged in the 1980s. The in-house hiring boom started in the 1990s. As a result of work moving in-house, in the middle of the 2000s, before the GFC, the growth in revenue per lawyer at even the most profitable firms fell below the general growth in GDP. And stayed there. Despite the headlines, law firm growth remained anemic all of last decade while in-house departments continued to explode.
Since the middle of the 1990s, in-house legal departments have grown at 7.5x the rate of law firms. There are more in-house lawyers in the United States than there are lawyers in the domestic offices of the AmLaw 200. Now, however, in-house departments are starting to hit their own headcount ceilings. Which raises the challenge for us all: how do we satisfy the ever-growing demand for legal services?
Digital transformation is imperative to meet the needs of business at scale and pace. We need to stop devoting so much energy to cutting spending by 10%. Rather, we must focus on increasing productivity 5x to 10x. Indeed, what we so often characterized as a cost problem is better framed as a productivity problem, of which cost is merely a symptom.
But the digital transformation will not be sufficient. There are explicable, exogenous reasons why the total demand for legal services is increasing. If we do not collectively improve at value storytelling, we will not secure requisite resources to do vital work, resulting in operational risks for the clients we serve. Relative reductions in legal spending—i.e., lower unit costs—are achievable and necessary. But the all-too-common emphasis on raw spend reduction is frequently harmful. Sometimes, you really just do need to ask for more money (as painful as that is to admit, let alone actually do).
What are you looking forward to most at the 2021 LVN Conference Experience?
Seeing people, in person. As I write this, I am celebrating two weeks since my second dose of the vaccine. I went to the gym this morning for the first time in forever. I cannot wait to break bread with my fellow travelers IRL.
Candidly, video conferencing has pleasantly surprised me. I not only maintained existing relationships throughout the pandemic, I forged new ones. I did not expect that. Still, I am more convinced than ever of the importance of connecting in person when schedules (and safety) permit.
Tell us a fun or surprising fact about yourself.
Before SARS hit (callback to the first question), I was on a TV show in China that taught English to middle schoolers.