How Tech Firms Work: What You Need to Know About the Agile Methodology

What is the similarity between Google, Spotify, IBM, the Lonely Planet and the National Art Museum of the Netherlands? Apart from the fact that they are all successful enough for most of us to know about, they also employ the same project management method called the “Agile methodology”. It is not the same thing as agile or remote working which became increasingly popular with the Covid-19 pandemic. In this article, I will explain what the Agile methodology is, why it matters to lawyers and law students and some legal issues this methodology presents.

First things first: Why should you know more about the Agile methodology?

Agile is a software development methodology which is used primarily in the technology sector and increasingly in other sectors.[1] The success of the companies that use Agile is often argued to demonstrate the methodology’s transformative impact on efficiency and making companies customer      orientated.[2]

It is not immediately clear why law students (and lawyers) should know more about the Agile methodology. However, the reason is, in fact, quite simple: your future clients will almost certainly be using this method and it is a lawyer’s job to understand their client’s business in order to advise them as best they can. Furthermore, as I will detail below, in-house teams have been faster in adopting this approach, whilst law firms are lagging behind. This creates a tension between the working methods of the two complimentary parts of the commercial legal system and decreases the efficiency of their cooperation. Therefore, it is crucial for law firms to understand and adapt to this methodology to remain competitive.

So, what is the Agile methodology exactly?

There are two widely accepted methods of managing projects: Waterfall and Agile.

Figure 1: Waterfall vs Agile Approaches.[3]

The traditional Waterfall model divides tasks into different sequences, such as planning, designing etc. Tasks in the previous sequences must be completed before the project can move on to the next sequence.[4]

Although this model has clear milestones and works well for projects with pre-determined requirements, it can fall short in uncertain projects where neither the vision nor the required time and effort can be pre-determined.[5] Additionally, this model presumes that the client’s intentions can be crystallised at the beginning, never to change again until deployment.[6] However, in reality, client’s expectations change very often and by the time all sequences are completed, it would be too late to change the vision about the product and satisfy the client.[7]

This weakness of the Waterfall method led to some software developers introducing the Agile Manifesto in 2001[8] to transform their software development model. Today, there are several Agile sub-methodologies, but we will focus on the most popular one.

The Scrum sub-methodology recommended using multiple, mostly two-week, iterations called “sprints” where all of the sequences mentioned above would be performed at once in shorter periods.[9] After each sprint a minimally viable version of the client’s vision will be produced, and this continues until the client believes that their vision is fulfilled.

Figure 2: Mona Lisa example demonstrating development through incremental iterations.[10]

Why does it matter to lawyers and law students?

Firstly, software companies who use this approach are the most valuable companies in the world[11] and advising them is a privilege for law firms because they generate profits for virtually all of their departments. Software companies constantly innovate their products and whilst they innovate, they raise equity or debt, engage in M&A and create new Intellectual Property. These companies are also increasingly scrutinised by regulators because of data privacy and competition concerns, generating work for the dispute resolution and regulatory departments. In short, they represent the top tier of valuable clients and they have high expectations from law firms. One of those expectations is for their lawyers to understand how their processes work and for their lawyers’ working rhythm to fit their own. Therefore, top commercial law firms must understand the Agile methodology to serve their clients well and adapt traditional project management contracts according to their client’s needs. I will mention some legal challenges this presents at the last section.

Secondly, the Agile methodology is increasingly used by non-software companies such as Siemens and Proctor & Gamble. This is because almost all complex projects benefit from iterative working. Therefore, the Agile approach may be employed in projects such as M&A, changing working methods (e.g. remote working) or changing systems (e.g. supply chain, financial, marketing systems). There are studies demonstrating that industrial products, banking and insurance sectors are increasingly employing the Agile methodology.[12]

Moreover, law students should recognise that the use of the Agile methodology is an important difference between in-house firms, which increasingly utilise this, and law firms, which have hitherto been resistant. Agile teams are being built across different spheres of business to increase efficiency, even in legal departments, such as at the Financial Times.[13] This is especially important for law firms because they cooperate with in-house legal teams much more than they co-operate with project management teams. Adversely, Big Law firms mostly use a linear Waterfall approach to manage their work: junior lawyers draft or review documents, senior lawyers approve and the client only gets involved at the end.[14] Agile in-house legal teams would naturally dislike this process since it would not fit well within their iterative approach.  Therefore, law firms need to change their Waterfall-based and rigid processes to satisfy the expectations of their clients. Although this transformation has been unwelcomed at the legal sector thus far, with the widespread adoption of legal-tech and changing working models, law firms may become more accepting.[15]

What are the legal challenges the Agile methodology presents?

As the number of software and non-software clients using the Agile methodology increases, so does the scope of the legal challenges it presents and the need for lawyers to know more about the methodology.

The main problem stems from the documentation-averse nature of the Agile methodology. The Agile Manifesto values “working software over comprehensive documentation” and “customer collaboration over contract negotiation”.[16] Hence, for the non-lawyer Agile practitioners, Agile is a mindset and not a “process capable of being documented”.[17] However, De Beers UK Ltd v Atos Origin IT Services UK Ltd[18] demonstrated the need to carefully draft the use of the Agile methodology into the contract although this may not fit the Agile “spirit”. In order to do this effectively, lawyers must both know the main characteristics of the Agile methodology and the changes the client may require.[19]

Other problems include the uncertainty of the project duration, the role of a Scrum Master who basically acts as a mentor to both the supplier and the customer, the need to possibly amend the contract after the findings of each sprint, and whether compliance with the main features of the Scrum methodology should be binding or not.[20]

Conclusion

Lawyers (or future lawyers) who work with clients in the Technology sector or with clients that are being transformed by technology must be familiar with the Agile methodology to draft satisfactory contracts and keep up with their clients’ needs. It remains to be seen whether law firms will follow in-house legal teams in moving one step further and implementing the Agile methodology to their own operations.

Lal is a final year Politics, Philosophy and Law LLB student at King’s College London. She is interested in corporate digital transformation, fintech and emerging technologies.

[1]Dinnie Muslihat, ‘Agile Methodology: An Overview’ ( Zenkit, 2018) <https://zenkit.com/en/blog/agile-methodology-an-overview/#:~:text=Agile%20methodology%20is%20a%20type,functional%20teams%20and%20their%20customers.>

[2]ibid

[3]Richard Gathercole, ‘How to Apply Agile Project Management’ (SPF Consulting, 2018) <https://www.spf-consulting.ch/2018/09/13/how-to-apply-agile-project-management/>

[4]Ian Edwards et al, ‘Contracting for Agile Software Development’ (Bird & Bird) <https://www.twobirds.com/en/sectors/technology-and-communications/cloud-software-and-services/contracting-for-agile-software-development-projects>

[5]ibid

[6]ibid

[7]ibid

[8]Claire Drumond, ‘Is the Agile Manifesto Still A Thing?’ (Atlassian Agile Coach) <https://www.atlassian.com/agile/manifesto>

[9]Dinnie Muslihat, ‘Agile Methodology: An Overview’ (Zenkit, 2018) <https://zenkit.com/en/blog/agile-methodology-an-overview/#:~:text=Agile%20methodology%20is%20a%20type,functional%20teams%20and%20their%20customers.>

[10]Steven Thomas, ‘Revisiting the Iterative Incremental Mona Lisa’ (IT’s a Delivery Thing, 2021) < https://itsadeliverything.com/revisiting-the-iterative-incremental-mona-lisa>

[11]Amritha Thiyagarajan, ‘How Agile Project Management Can Revolutionise the Legal Industry’ (LegalVision, 2019) < https://legalvision.com.au/legal-agile-project-management/>

[12]Olha Mikhieieva and Klaus Stephan, ‘How agile are companies in Germany?’ ( PMI, 2019) <https://www.pmi.org/-/media/pmi/documents/public/pdf/white-papers/cologne-germany-chapter.pdf?v=e2de2a42-6bd3-466a-af97-f9586c5e20ac>

[13]John Halton, ‘From marshmallows to Post-it notes: agile working methods for in-house lawyers’ ( Thomson Reuters, 2017) <https://uk.practicallaw.thomsonreuters.com/w-008 6723?transitionType=Default&contextData=(sc.Default)&firstPage=true>

[14]  https://legalvision.com.au/legal-agile-project-management/

[15]Exigent, ‘Time to get Agile: why legal needs to take a page from the project management book’ (Exigent-Group, 2019) <https://www.exigent-group.com/blog/why-legal-needs-to-take-a-page-from-the-book-of-project-management/>

[16]Kent Beck et al, ‘Agile Manifesto’ (Agile Manifesto, 2001) <https://agilemanifesto.org/>

[17]Norton Rose Fulbright, ‘The art of the agile deal’ (Norton Rose Fulbright, 2018) <https://nortonrosefulbright.com/en-tr/knowledge/publications/82c726cc/the-art-of-the-agile-deal>

[18][2010] EWHC 3276 (TCC)

[19]Ian Edwards et al, ‘Contracting for Agile Software Development’ (Bird & Bird) <https://www.twobirds.com/en/sectors/technology-and-communications/cloud-software-and-services/contracting-for-agile-software-development-projects>

[20]ibid