7 Leaders Share Their Thoughts on the Future of Legal Services
The way that legal services are delivered is fast changing due to advances in technology and business model innovation. This is resulting in a gradual shift towards affordable, standardised services and efficiencies in how law firms deliver services. At Collective Campus we have been supporting law firms across the globe embark on their own innovation journeys. For this blog, I have collated insights from several innovation leaders on what the future law firms looks like.
Law firms of the future will have a different make-up with lawyers, legal engineers, legal technologists and legal project managers all working together to provide legal services to clients. We are already starting to see more roles like mine emerge as traditional service delivery models evolve and solutions are provided utilising both labour and capital/technology. I think we will witness a more aggressive move towards the unbundling of legal services where legal work will be performed by a combination of traditional law firms, alternative service providers and technology.
Over the last few years, we have seen new types of AI emerge to help solve pain points for lawyers within legal processes. While many of the newer AI products are still in their infancy, there is potential for this AI to help lawyers deliver more efficient and timely services to clients in the future. Rapid developments in AI over the next few years will lead the next stage of transformation within legal service delivery.
To ensure law firms survive in this era of rapid disruption, they need to be developing and nurturing a clear innovation strategy and change agenda. It is clear that clients are increasingly focused on working with external advisers that are committed to providing cost-effective, innovative legal solutions. Improvements in legal productivity will be fundamental to the ongoing success of any law firm, particularly in a highly competitive market, like Australia. Taking steps now to understand the landscape and think creatively about legal service delivery is paramount.
It is also critical to the legal industry that educational organisations, professional bodies, in-house teams and law firms collaborate with one another to ensure we provide technical skills and capability development that will enable lawyers to thrive in the disrupted legal environment.
In order to survive disruption and change it is necessary to try new things, and to try something new you need to be prepared for the fact that it may not work. Like other risk averse sectors, this is quite different to the way in which law firms think about their key product, which of course needs to be right the first time it is delivered.
Two things are important: one is to put a boundary around the things where it is not safe or appropriate to experiment, and then the other is a mindset shift so that outside that boundary people are permitted and encouraged to try new things, but reducing risk by starting with small experiments, learning from what does (and doesn't!) work and taking incremental steps. This is the key to diffusing risk averseness inherent in the law firms. We think it is important for to set up frameworks that support iterative development, and help lawyers to move through the framework. One example of this is our upcoming coding for lawyers training, which we are piloting this month. What we learn from the pilot will help us ensure we have a good return on the invested time and that lawyers are really benefiting from the new skills.
What everyone can agree upon is that change is coming for the legal industry. However, what is driving that change depends on many factors that don’t have a natural and easy answer as they rely on one key element that is not often discussed in the many articles I have read on this topic over the last 10 years. Basically, what do clients of the future need from a legal services business?
The second part of that question is as important as the first. Law Firms are just one construct of for how legal services are delivered. Clients are now buying services from a range of businesses that more typically have a corporate entity at its heart. This is a trend that I expect will continue to gather speed over the coming years as the financial and structural benefits allow for significantly different investment models - both from an equity ownership perspective and from a business model and technology perspective. All of which will contribute to what law firms look like in the future and how rapidly they change.
As to what clients need from a future law firm also depends on the type of clients, the industries they operate in and whether the client is a corporate business or individual. For the purposes of this piece, I will focus on corporations where the vision for law firms is clear – find a way to deliver legal services faster, cheaper and with a compelling customer experience.
The difficulty is how to interpret that vision appropriately and focus your investment on what will make the most difference. Those that get it right will continue to grow and evolve. The others will slowly fade out of the market.
Talented lawyers with good judgement and creative problem solving will survive and those that are successful will be more entrepreneurial and will embrace technology for business operations and client solutions.
Change will happen. The pace of change and adoption is what will be unpredictable.
The law firm of the future will not be a law firm. Instead, it will be a highly evolved business delivering superior legal services through a collaborative mix of lawyers, knowledge engineers, innovation specialists, LegalTech, and marketing and business professionals. Hourly billing and a timesheet ‘cost’ mentality will be replaced by a value creation and delivery ideology. The partnership model will reluctantly acquiesce to a profit generating corporate structure. Agile multidisciplinary teams will partner with clients to help them achieve their corporate goals by delivering empathetic user-centric legal solutions.
To get there, and survive in today’s tech disrupted market, traditional law firms will need to employ people with a range of different skillsets, particularly specialist change and innovation managers. Carefully considered strategic plans should be formed to navigate the architectural innovation required to deliver future legal services and more comprehensive client solutions for a new market.
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There are many legal services providers that already look nothing like a traditional law firm and that number will continue to increase. The law firm of the future will have many different guises depending on the services offered, as long as they continue to evolve. Standing still is not an option if you want to survive.
The traditional law firm will continue to exist in some way for a quite a few years yet, particularly in areas where specialist expertise is required. To use a consumer analogy, the traditional greengrocer still exists in some High Streets but most people get their fruit and vegetables by other means (supermarkets, farmers markets, home deliveries, etc.).
For law firms to stay relevant, people will need a key element of strategy, working in conjunction with both technology and process improvement. While it is well understood that all of these three pillars will require investment, too often the people aspect is overlooked both from an investment and capability building perspective - whether it is developing or acquiring the expertise.
As well as an investment in people, firms need to focus on what they do best in times of disruption (just like the traditional greengrocer) - whatever it is that provides a point of difference for your firm.
All industries, the legal sector included, are facing disruption. Embracing this change is critical and firms need to be committed to evolve to provide the best service to clients. It is also important to collaborate with the public sector and the wider industry to drive innovation where possible.
We expect legal tech solutions to impact the more commoditised areas of services and will thus free up lawyers to focus on higher value, strategic advice for clients. In Singapore, we were presented with a unique opportunity to establish an Innovation and Best Delivery Hub for Asia Pacific. The hub establishes teams of cross functional professional including legal project managers, legal tech experts, resource managers, pricing specialists and Continuous Improvement practitioners and an opportunity for lawyers and technologists to collaborate. We also have best delivery hubs in London, New York and Continental Europe.
We are already seeing success: the firm's investment in innovation and legal technology has resulted in a number of advancements in client service delivery. This includes the launches of CC Dr@ft, a contract automation tool for clients; an online MiFID2 client regulation toolkit, powered through Neota Logic; SMCR Manager tool, which will be launched in December this year, which helps managers of companies regulated by the Financial Conduct Authority comply with the new Senior Managers and Certification Regime (SMRC) and a cloud-based transaction management solution, delivered through Workshare. We are also adopting AI tools to improve the speed and efficiency of large scale due diligence exercises.
More information about the SMRC tool can be found here.
I think it’s difficult at the moment to know what the law firm of the future looks like – we’re at the beginning of the journey, and it may take us in a number of directions. We can certainly identify some of the key features of the law firm of the future though. It will make greater use of technology, particularly to capture and analyse data and give better information to clients. It will bring in a far broader range of non-legal skills than law firms have traditionally used. It will be more closely connected to clients, again through technology, and it will definitely work with clients in a different way from todays’ law firms – we’re already starting to see that change in how we work with clients.
Law firms can prepare for the disruption that’s already happening in our market by being open to change, and confronting the challenge of disruption. However, I think the greatest tool to ensure survival is to be client-centric. We’ve seen in other industries how consumers have driven change, and the businesses that have disrupted markets have done so by responding to untapped customer demand. The story will be the same for law firms.
The legal industry is currently in the midst of a transformation. Law firms have long held a monopoly when it comes to providing legal services but changes in technology and just as importantly, client expectations, are transforming both the consumption and practice of law. It is great to see leaders at law firms view this disruption as an opportunity and investing in driving both internal and external innovation. Richard Susskind said it best, “If you are a conventional lawyer and you’re not prepared to adapt to the 2020’s you’ll struggle to survive, but if you are entrepreneurial and enthusiastic, forward looking, open minded, then there’s probably never been a more exciting time to be in the law.”
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