We love a good movie. Better still, we love a movie that makes us think. Ford vs Ferrari (or Le Mans ’66 in its European release) is both. It teaches valuable, but often ignored, lessons in legal innovation. BigLaw can learn lots from Ford vs Ferari. So too can any legal organisation embarking on digital transformation or business transformation. Let’s find out why!
Ford vs Ferrari
The 2019 film “Ford v. Ferrari,” recreates Henry Ford II’s moonshot to reinvent the Ford Motor Company while simultaneously avenging a bitter rivalry between himself and Enzo Ferrari.
The movie chronicles Ford’s pursuit of designing, building, and racing a car to beat Ferrari at the 24 Hours of Le Mans, the most prestigious and brutal race in the world (a 24 hour non-stop motor race that tests endurance of man, machine and teams).
The gauntlet
Ford’s UK based Advanced Vehicles Group was initially put to task. That team struggled to build a winning car. After consecutive losses to Ferrari at Le Mans in 1964 and 1965, Ford hired legendary Los Angeles car designer Carroll Shelby to lead operations. As one of the only Americans to win at Le Mans, Shelby brought unrivalled outside expertise.
Rather than starting from scratch, Shelby made a hire of his own: his go-to test driver and engineering specialist Ken Miles (a Brit). Together they quickly made some big leaps.
Collaborating with Ford’s Advanced Vehicle Group Shelby and Miles reinvented the Ford GTO…
SPOILER ALERT
… not only winning Le Mans 1966 but winning again in 1967, 1968!
So how did they do it and what can legal innovators learn from Ford vs Ferrari?
Lesson 1: problems first, solutions later
Racecars are about understanding, testing and mastering aerodynamics. The cleaner a car cuts through the air, the less power is required, meaning higher performance and better endurance. Optimizing aerodynamics also prevents undesired side effects of going fast, i.e. cars being pinned to, or lifted from, the ground at high speed.
Seduced by a recent engineering marvel – the computer – the original engineers eagerly installed one into the GT40. They aimed to record car performance data, creating computer models of the firm’s aerodynamic performance.
They were fixated on the solution, forgetting first to understand the problem: direct observations of the car’s airflow.
Faced with this legacy, the first thing Shelby and team do is tear out the computers. Not only were the computers adding unnecessary weight, distorting the car’s performance data, they were also overkill.
The original engineers had rushed to a solution – shiny new tech – and had forgotten to focus first on the problem.
With echoes of the #bringbackboring movement in legaltech, Shelby and team went back to basics. Rather than tech, they preferred direct feedback between builders (engineers) and users (drivers). Eschewing the computers they instead tape strings to the car’s body. This process (known as tuft flow visualization) makes it easy to directly observe airflow over the car in real-time and iterate improvements.
Legal similarly suffers from the shiny object syndrome of the initial Ford engineers. The legal innovation sector is constantly chasing the latest new legaltech product, often overshooting the problem. For instance:
- In 2017 and 2018 it was AI and blockchain.
In each of those years much legal innovation chatter, conferences, legaltech events, PR releases and media coverage has focused on solutions (and the providers):
The latest product for X or Y, or worse still the latest product “leveraging” A or B technology.
In each case, only cursory lip-service is given to the problem identification and in many cases, this part of the innovation process is seemingly absent from the discussion.
Legal innovation should focus squarely on the problem identification and favour direct feedback between end-users and the problem statement and solution development. Fall in love with the problem and not the solution! Gather data, and as much of it as you can, but do it as simply and directly as possible.
Takeaway
Focus on the problem (not shiny tech) and seek direct and immediate feedback loops between users and builders.
Lesson 2: learn from others (including your competition)
At Daytona (another famous race event), Shelby bets his company to the Ford Motor Company on his driver, Ken Miles, winning. Shelby did so even though he knew Ford had a further 2 Ford teams in the race lineup. Instead of believing his team had nothing to learn from his competitors, Shelby and team took time to study how and why the rival Ford teams were achieving much faster pit stops, giving them an overall edge.
Humble enough to learn from others, Shelby discovered Ford’s rival teams were utilizing NASCAR pit crew members. Those pit crews had used continuous improvement to iteratively reduce their pit times.
Likewise, legal innovation can learn the following:
- Legal Innovation teams should look beyond their own team, learning from and collaborating with the best in their business. Innovation is not an island!
- In the same way Shelby and Ford brought in outside specialists (the NASCAR pit crews), law firms and in-house legal innovation teams must get outside the legal bubble and acquire talent, tech, methodologies and other disciplines complementary to innovation and legal operations (e.g. project and product management, data scientists, developers, process and systems design / improvement, consultancy, supply chain experts and so on). Law really isn’t special – its service delivery and some product. Ideally, work with experts vs trying to be master of the universe or believing non-legal skills and experiences are unworthy.
- Don’t envy, but get to know your competitors – especially if they are moving faster than you. Too often in BigLaw innovation ideas suffer death by a thousand cuts. Traditional “run the business” structures are not set up to support or enable legal innovation without leadership buy-in. In many cases, this means new structures and change management, both of which are full-time roles requiring non-legal expertise. In many cases, faster-moving competitors will have engineered new structures to allow innovation to succeed, of which, see Lesson 3 below. So get to know your competitors and find out how and why they move faster than you!
Learn from, and work with, the best in your business. Understand, but don’t envy or disregard, your competition, whether that’s other legal providers or other market participants.
Lesson 3: flatten decision-making
In the movie, Ford’s decision to continue the Shelby program after some initial setbacks passes through “15 middle managers.” This is powerfully visualized by a red folder circulating back and forth around Ford’s headquarters (see the below Youtube clip).
It is also foreshadowed earlier in the movie when Shelby tries to hire Ken Miles for his team at Ford:
“Alright. So, you think that Ford are going to let you build the car that you want, the way you want it? The Ford Motor Company? Those guys? Have you ever been to Detroit? I mean, they have floors and floors of lawyers, and millions of marketing guys. And they’re all going to want to meet you, or they’re going to want to get their photo taken with the great Carroll Shelby. And they’re going to kiss your a**, and they’re going to go back to their lovely offices, and they’re going to work out new ways to screw you. Why? Because they can’t help it. Because they just want to please their boss. Who wants to please his boss, who wants to please his boss. And they hate themselves for it, but deep down, who they hate even more, are guys like you. Because you’re not like them, because you don’t think like them, because you’re different.“
Ken Miles in reply to Caroll Shelby’s offer to join his GT40 team
The red folder is the perfect analogy for the “hidden factory” of middle management.
The Hidden Factory is an activity (or set of activities) in a process resulting in reduced quality or efficiency of a business process, and is not known to managers or others seeking to improve the process. Examples include creating multiple versions of a status update presentation or meetings about meetings (meta meetings) and unnecessary layers of decision making and approvals.
Shelby uses the red folder to persuade Henry Ford II that middle management is crushing his ability to get sh*t done. To solve this Shelby insists he report directly to Henry Ford II.
Shortening the feedback loop immediately improves communication, reducing the amount of re-work (and miscommunication, deliberate or otherwise) between each layer of middle management and removing wasted time reporting up and down layers of management. It similarly starts to remove the inevitable politicking, toadying and CYA strategies commonplace in large organisations where multiple layers of management are constantly vying to climb the next rung.
As Shelby concludes:
“With all due respect, sir, you can’t win a race by committee.“
Caroll Shelby to Henry Ford II
Like the Ford management layers portrayed in the movie, many legal organisations have the following characteristics:
- Hierarchical, risk-averse and incrementalist / precedential.
- Rife with politics given the lockstep climb from associate to partner and then to equity partner tied to the partnership model itself essentially being a collection of individual and sometimes competing business owners.
- Decision making is often heavily consensus-driven.
- Decision makers and decision-making processes can be opaque and / or ill-defined, encouraging further risk mitigation, e.g. seeking more rather than fewer approvals / approvers if in doubt.
- Because of the above, decision-makers are often equally unsure of their own approving authority and themselves lean toward including yet more decision-makers to “weigh-in” on even the most trivial of matters.
- Finally, it’s almost (if not entirely) a cliche to highlight the many silos in law firms which greedily hoard knowledge, clients and other relationships.
Any one of the above makes it hard to get sh*t done. But more commonly these facets combine, compounding the negative effects on getting sh*t done.
Legal teams should critically assess and prune away all but the absolutely necessary layers of decision-making. Better still, make these clear, communicated and connected across the firm, breaking down silos and encouraging collaboration cross-functionally whilst making it simple and easy to understand who makes decisions.
Lesson 4: constructive conflict is healthy
At various points in the movie the principal protagonists, Shelby, Ken Miles, Henry Ford II, and Henry Ford II’s number 2 clash. A constant battle wages between the “old way” (represented by Henry Ford II’s number 2) and the “new way” (Shelby / Miles). The struggle is between playing it safe and taking some educated risks and daring to think differently.
Gradually both sides make concessions to one another, mostly the Ford team aligning more closely with the Shelby / Miles way of working. Ford realises that to reinvent Ford they have to reinvent their means and teams.
Many of these breakthroughs result from heated arguments.
Too often in businesses conflict is avoided at all cost. In its place, people-pleasing and politics find a home. As the saying goes (attributed to Steve Jobs, but possibly apocryphal):
“In weak companies politics wins. In strong companies best ideas do.”
Steve Jobs
Despite lawyers loving a good argument, when it comes to legal innovation the teams tasked with changing the business can struggle to influence their ideas.
Conflict is avoided. Most legal innovation teams are “non-fee earners”, either non-lawyers or former practising lawyers.
They are not the business owners. The partners are. And there are many partners.
Consciously or not, the de facto modus operandi for legal innovation teams fearful of their own position and influence can be to play it safe, preferring not to challenge their lawyers.
A simple but illustrative example in legaltech is the lawyer who has been bamboozled by the latest vendor demo, which then dictates that the software must be bought and rolled out PDQ.
Protestations that it might make better sense to sense check whether there is a problem, a problem-solution fit or even working tech as opposed to vapourware are hard to make and trickier still to forcibly influence from within legal innovation teams.
If you hadn’t realised already, this is a cultural and structural problem.
It needs leadership from the ownership, i.e. the partners.
The best firms are getting this right, creating radical candour between their teams whether lawyers or not. Doing so is what enables legal innovation, creating a safe space for healthy conflict to let the best ideas win.
The best firm leadership encourages radical candour and equality of standing to enable constructive conflict as a means to let the best ideas flourish and avoid politics and hierarchy dictating strategy.
Lesson 5: retreating to high-value work isn’t always enough
In this article, you may be thinking Ford is BigLaw and Ferrari is the competition. But is it?
When we began writing this article that’s how we felt.
Indeed that’s how we felt after seeing the movie.
However, by the end of this article, we realised Ferrari is BigLaw and Ford the competition. In this tale, Ford is perhaps better understood as the alternative legal service providers, the Big Four and other firms more apt to radically modernise and disrupt their own business model or that of others.
OK, so how exactly?
In the movie, as in real life, Ferrari is renowned as the superlative race car manufacturer. Ferrari is about artistry. Every scene featuring Ferrari oozes style, craftsmanship and a guild like dedication to their art. Their focus is only the highest quality output. Only the best, none of that mucky mass production car stuff. No thank you!
But Ferrari also exhibits a less attractive quality. Ferrari’s superior attitude and disdain for his stack it high sell it cheap rival and their mass production methods comes at a cost. Ferrari’s bankruptcy.
“He said Ford makes ugly little cars, and we make them in an ugly factory. He said our executives are sons of wh*res”
Ford’s Lee Iacocca, recounting to Henry Ford II his exchange with Enzo Ferrari regarding Ford’s bid to buy Ferrari
Despite being the most famous car manufacturer, oozing cool, Ferrari was almost bankrupt in the 1960s. Ford tries to buy Ferrari but is knocked back, the sale ultimately going to Italian mass manufacturer, Fiat.
BigLaw is similarly, and increasingly (although not universally), fixated in retreating to high-value work as alternative service providers and middle pack law firms find new ways to deliver lower value services more effectively, or at least more cheaply.
Whilst there is an obvious place for the artisanal, it can be hard to scale and maintain if the market moves toward cheaper and more commoditised consumption. This was the case with cars. Once the preserve of the rich, bespoke and luxury items they became – via Henry Ford I – a mass-produced commodity. The latter market became, and remains, far larger than the original market. In 2020, compare Ford’s revenues of USD 160bn to Ferrari’s EUR 3.4bn.
BigLaw firms focussed too intently on high-value work may find themselves cut off from a much larger and faster-growing market for commoditised legal services. You might be the Ferrari of law, but you might end up missing being the Ford of legal. Similarly, don’t assume that the commodity players can’t or won’t catch-up and find ways to climb the value chain and deliver high value via alternative and potentially more effective, or dare we say it, cheaper means.
At that point, what is left for those who don’t innovate their high-value business model? Possibly a much smaller pie.
But all that said, whether you’re the Ford or Ferrari of legal, don’t get complacent. Keep an eye out for the next big thing, the Tesla of law perhaps. Business paradigms change all the time, what works today might be extinct tomorrow unless you start investing and innovating today.
High value work is potentially vulnerable to commoditisation should the market shift from one to the other. Don’t assume today and tomorrow will be the same. Invest and innovate for what comes next vs the here and now.
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