I’m in Las Vegas this week for the annual CLOC conference at the Bellagio Hotel. CLOC (which stands for the Corporate Legal Operations Consortium) is a network of businesses devoted to advancing in house legal operations. As its name implies, it’s membership and benefits have traditional been open only to corporations. Not law firms. And that may be about to change. Maybe. Well maybe sort of.

CLOC and its conference have grown substantially over the past 4 years; the conference is rapidly becoming a “must go” not only for legal ops people but for anyone in legal tech and innovation space. But with growth and notoriety comes new and thorny issues that CLOC is now grappling with, issues that are bubbling up just as CLOC has named a new President, Mary O’Carroll. O’Carroll is the head of legal ops at Google and a real mover and shaker in the legal ops community. She brings real and new energy to the group and has a stature and presence virtually no one else in the industry I know of can match. I thought when she was named it was a perfect choice. CLOC has brought in new board members as well.

And unlike other legal tech Conferences where Board members and leadership try their best to hide from any substantive media inquiry, CLOC makes its entire Board available for a full blown briefing. (Kudos to CLOC for doing what has to be a pain during a busy week). I attended this briefing yesterday.

Outside Law Firms: the Fox in the Henhouse?

One of the major and perhaps most controversial issues facing CLOC and its growth is what to do about the participation of outside law firms. (Leaving aside for the moment, what really is a “law firm”, see below). Nothing raises more passionate discussion among CLOC members and conference attendees than the idea that law firms should be allowed into the CLOC tent.

Some think it would add a richness of thought and energy to allow outside counsel in the organization as full fledged members (outside lawyers can come to the conference and participate, they just have to pay more. They cannot participate as members or or be part of CLOC communities such as the CLOC forum). It is also argued by O’Carroll and others that allowing greater participation would bring about a better understanding between outside firms and their clients.

Others strongly contend that allowing law firms in would destroy what makes CLOC unique: a group of in house people who can freely talk and learn from one another without being hit on by outside lawyers angling for business or pursuing other agendas.

At this year’s conference, CLOC announced that it will at least tip its toe in the water with outside counsel and may ultimately grant them some sort of a membership.

At this year’s conference, CLOC announced that it will at least tip its toe in the water with outside counsel and may ultimately grant them some sort of a membership. O’Carroll announced in yesterday’s keynote that CLOC plans to soon beta a concept by which law firms could become members of sorts and participate as a separate group or community within CLOC. Under the plan, CLOC would basically provide law firm members with a forum in which they could participate, interact amongst themselves and be able to brainstorm, share and collaborate. The corporate members could voluntarily opt in to participate with the law firms but the law firms would not generally have access to any of the regular corporate groups or forums. CLOC has selected a small group of firms to participate in this beta.

The CLOC board is proceeding deliberately and is particularly concerned with the type of law firm participants it wants. According to O’Carroll, CLOC wants to avoid encouraging law firm rainmakers who might see CLOC as another marketing opportunity as opposed to wanting to contribute meaningfully to the conversation and driving change.

And there is some reason to think some firms are starting to get the message. Last year, I recall seeing one maybe two law firms with booths on the exhibit floor. This year there are maybe 10 to 15.

I have a mixed mind about the idea. Yes, allowing the fox in the hen house is risky. It would change the culture. But maybe that’s not bad. Outside lawyers are big players in the legal ecosystem and could contribute meaningfully to the conversation. They could also benefit from learning more what clients really want. They could certainly learn a lot more about legal ops.

And there is some reason to think some firms are starting to get the message. Last year, I recall seeing one or two law firms booths on the exhibit floor. This year there are maybe ten to fifteen. They all claim to offer new and innovative solutions; whether they really are is another question. But they do see the need to be part of the legal ops movement and conversation. That would suggest that there is an opportunity at least for meaningful dialogue.

I also am not sure there is a real immediate threat of rainmakers crashing the party and making the organization a gauntlet of sales pitches. That certainly could happen in the future but now the number of lawyers actually attending the CLOC conferance, for example, remains relatively few.  (To me as a former practicing lawyer and rainmaker, this has always struck me as remarkable since it’s a golden marketing opportunity).

But here’s the real rub: even if law firms become members, unless and until law firm management decides to participate as opposed to offering up those who can’t make fundamental strategic decisions, I’m not sure that CLOC and its conference will be able to drive the kind of changes or meaningful dialogue it wants. Talk to any legal/tech vendor and they will tell you the hardest thing about marketing to law firms is that the decision maker is rarely in the room for the pitch and will only get a summary from someone else two or three times removed. Too many law firms still manage themselves with lawyers and either don’t invite the other legal personal that don’t happen to be lawyers (to avoid using the “non” word) to the strategic table or don’t listen to them if they do. It’s all well and good for legal ops people in firms to get to participate and dialogue with corporate CLOC members but until they can actually drive change in their firms, progress will be slow.

Its a sad fact that change in law will still have to be fundamentally driven and dictated by the clients, the legal departments

Its a sad fact that change in law will still have to be fundamentally driven and dictated by the client and their legal departments. The people in these departments are already members and are having real conversations about what needs to change and how to do achieve these changes.  So adding law firm members who often are dragging their feet and reluctant at best to change may lead to little more than frustration.

The best solution may be for CLOC to turn its law firm membership into a selective one: you have to be invited in and meet certain criteria and make certain commitments to participate. While O’Carroll and the CLOC Board didn’t say that this was the plan, it appears to me at least to be where CLOC is headed. Such a plan would insure CLOC would get the kind of law firm participants and leaders it wants and needs without getting the kind that add nothing but heartburn.

Growing Pains Part II: The Big 4

Another growing pain facing O’Carroll and her Board: what to do about the Big 4 accounting firms.  O’Carroll and the Board are concerned about the membership of the Big 4 in CLOC and how they fit in the overall picture. On the one hand, the Big 4 are not law firms and are thus eligible to be meaningful and full participants. And they certainly have a lot to offer.

On the other hand, they are vendors (each of the Big 4 have a booth on the exhibit floor) and frankly they are moving more and more into the law firm space. So it could be said that the Big 4 has an advantage that non CLOC member law firm competitors don’t have.

The good news is that O’Carroll and CLOC’s board appear to be sensitive to this issue and are committed to look meaningfully into this question as well. And the question becomes even thornier when you throw in other ALSPs many of whom are out in force at the conference. Most of these ALSPs are considered vendors right now but could demand equal rights as the Big 4.

The Cost of Success

So by being so successful, innovative and change driving in the industry, CLOC is now grappling with new problems. But that’s exactly the kind of problems every organization wants. New and energized leadership (and for the first time a full time paid CLOC staff, another symptom of good growth) may have come at just the right time.