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Smiths Group: ‘People then tech’ transformation

Added on the 12th Apr 2017 at 7:56 am
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FTSE 100 giant Smiths Group has appointed a first time legal operations director in order to help deliver a wholesale restructure of the legal team, with innovation and digitisation at its core.

Jamie Fraser was appointed at the tail end of 2016 to the newly-created legal ops role. The former IBM lawyer, who trained at Freshfields Bruckhaus Deringer and before joining IBM in 2007 was an associate of almost seven years at Arnold & Porter, is being tasked with delivering Project 3.0 – a centralisation and digitisation of the legal team in line with the overall business.

Smiths Group, which employs over 23,000 people across 50 countries, is, under new chief executive Andrew Reynolds Smith, ushering a change of direction in which five very separate and autonomous businesses are introducing a degree of centralisation.

Through its five divisions: John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect, and Flex-Tek, Smiths Group covers the energy, medical devices, threat and contraband detection, communications and engineered components market worldwide. The key thrust now is to apply technology and big data analytics to drive efficiencies and innovation across all of its businesses.

The legal team, headed by group general counsel Michael Herlihy is mirroring this centralisation, moving from five federated units that each report to its president, to all reporting in a straight line to Herlihy. Fraser says: “I have had the finger pointed at me to execute on the idea of an integrated legal function.  It was the General Counsel’s idea, so it’s not like I have had to build a business case to convince anyone – this clearly has his full support.”

Whereas pockets of the legal team have used different software, Fraser is now in discussions with companies including iManage and Riverview Law with a view to developing a more comprehensive approach. While bits of the business use automation and eSignatures, those are areas that will also be revisited on a more holistic scale. Fraser says: “The immediate temptation is to go out and buy lots of tech toys but I’ve realised it’s not about that – the more important thing is getting the people part right.  Having said that, the legal function in Smiths Group has done some really interesting things with technology over the years, but these have generally been fairly isolated – we’re now looking at pilots across the whole group and are in discussions with various suppliers.  I can certainly see a future where machine learning or AI will play a part, although perhaps not immediately.”

Getting the people part right includes working on a new model of resourcing work and Fraser said: “Our model is to break free from the old fashioned in-house/ external model – we’re looking at a third way.” That third way is under wraps until it is finalised.

Meanwhile, Herlihy and his senior team are creating centres of excellence or virtual hubs in areas such as compliance and M&A. In line with Tim Harfords concept of Messy economics, whereby people work best when not confined to tidy boxes or tramlines, the legal team is being encouraged to undertake work outside of their natural practice areas.

The idea is to encourage the team to become entirely dynamic, working on cases that don’t necessarily fall within their division or area of expertise. Under Herlihy there is a layer of divisional GCs, associate GCs and junior lawyers and new recruits, the more senior of which will need to embrace this new, more challenging model in order for it to work well.

Herlihy said: “We think we have an unusual opportunity. We’re not too small and not too big. If this was a 600-strong department we would have to have boxes and line. You need boxes in a department that size. But we’re 60 people: we’re big enough to have flexibility but small enough to be agile.”

This article first appeared in the March Legal IT Insider. You can sign up for your free digital monthly copy here: https://www.legaltechnology.com/latest-newsletter/

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