Independent law firms are facing a rapidly changing landscape and myriad challenges. This extended version of the author's magazine contribution discusses the best approach to investing in IT.

We often hear of emerging threats to the legal sector – the rise of alternative legal service providers and law companies, the increased use of in-house teams, and the Big Four accounting firms, not to mention the robots coming to take all the jobs…

Client expectations are also changing. Firms can no longer rely on brand and loyalty to retain clients; consumers of legal services are better informed, and more likely to shop around in the search for transparency of cost, value and better service; and clients are demanding to understand how law firms are “innovating”.

In the age of Trip Advisor, reputation is often based on ratings on Trust Pilot and Google reviews and, as a result of our digital environment, clients are starting to expect immediacy of information and access to advice outside traditional working hours.

Recruiting and retaining talent also pose more of a challenge. A workforce of newly qualified millennials have expectations of flexible working, and meaningful and rewarding work, and base their expectations of technology on consumer tools such as their iPhone and Alexa – an experience often far removed from that in the workplace.

We are starting to hear about the “rise of the platform”: in the same way that Uber, Amazon and Paypal have disrupted their markets, we are seeing the emergence of LegalZoom, Clio and Lexoo, and more recently the introduction of – and significant investment in – Reynan Court, an “app store” for legal technology solutions.

Technology is the answer, but what is the question?

Firms recognising these challenges will often look for a magic bullet in technology, believing that if they spend significant sums replacing their practice management system, or investing in a shiny new artificial intelligence product, they are innovating. However the tech in itself has no inherent value – the benefits will only arise when technology enables people to do things differently.

Currently, it's easy to be swayed by the hype surrounding legal technology. More has happened in the last few years than in the previous 20, with well over 750 startups attracting attention and funding, and professing to be the “next big thing”. Most firms will struggle to identify a starting point, and some of the larger firms are creating whole frameworks such as incubators and accelerators in order to engage with this growing ecosystem. Many firms have trumpeted the introduction of AI products which have, to date, failed to be widely adopted.

Beyond the hype and the press releases, though, there are technologies being used which are genuinely transformative. Machine learning and natural language processing algorithms applied to contract review and due diligence allow volumes of documents to be assessed in a fraction of the time a human would take. When applied in narrow and specific use cases, these systems augment the human effort involved rather than replace it. And therein lies some of the challenge of adoption – unrealistic expectations mean many pilots fall at the first hurdle. Quite often the data required are either not available or incorrect, and training is required before any level of accuracy should be expected.

So what can firms do to meet these challenges, navigate their way through the startup map, and identify real opportunities for “innovation”?

Start with the problem

Before starting to talk about technology, firms need to understand the problem they are trying to solve. They need to start with the old adage of people, process, then technology. They must talk to their clients and colleagues about their needs and challenges, and think about the process of delivering legal services. They should liaise with legal technology providers about their solutions and start to understand what the systems can – and cannot – do. They need to map out processes for different types of transactions in order to identify areas where technology can be used to augment the human effort involved and remove some of the dull, repetitive work.

This year at Thorntons we have introduced #TechHub, an initiative to consider opportunities for the use of technology. But the first rule of #TechHub is to #startwiththeproblem and not the solution. We are educating colleagues on the growing capabilities and use cases of legal technology, but more importantly collaborating both internally  with our clients and the wider legal technology community to look at the challenges and opportunities affecting the way we deliver legal services today. We are piloting solutions where we have already identified how technology will deliver more value for the firm and our clients, and considering how we package and deliver that service.

In Scotland we have recently seen the introduction of the Law Society of Scotland's LawscotTech initiative. At its very simplest, LawscotTech wants to “bring relevant people together to consider the challenges facing the legal profession to try to identify potential technological solutions. By bringing people together with different experiences and expertise and working collaboratively, we hope to spark some creative and innovative thinking”. This is a great opportunity for firms of all sizes to look at education, collaboration, and problem solving for legal services and legal technology.

Get the tech foundations right

Most firms will already have invested in core line of business products with capabilities which are underused or not widely adopted “shelfware”. Lots of firms have implemented practice, document or case management systems without consistent processes or buy in. If firms can map out the process of a transaction and standardise, quite often these systems in themselves may offer significant opportunities for document automation, or for collection of data, or to save time, reduce risk and derive insights.

Data are one of the cornerstones on which automation can be built, and their accuracy is absolutely key in being able to leverage technologies such as machine learning. Even tools like Power BI, used effectively, can offer powerful insights when data are available and accurate.

At Thorntons Law we are lucky to have been working with the Data Lab in recent years and have now taken on our second data science student. We have a universally adopted and highly developed case management system delivering volumes of data which the team mines for insights and predictions. These are now being used to influence how we price work, assess risk, and evaluate cases across a number of work types.

Consider the team of the future

Legal teams of the future are likely to look very different. While I do not consider there is value in getting lawyers to write code, I do believe that teams of the future may be made up of a combination of skilled experts – data scientists and legal technologists working directly alongside subject matter experts, using a variety of tools and platforms to deliver legal products and services.

Many of the universities have now introduced legal technology modules or electives, covering a range of legal technology subjects, and this year Thorntons Law participated in the teaching of one such elective at the University of Dundee. Its success and popularity highlights a clear appetite for such programmes from future lawyers.

We are also seeing a rise in recruitment of legal technologists, and the introduction of the legal technology accreditation by the Law Society of Scotland. This helps to equip lawyers of the future with not only a depth of expertise in their field of law, but also a breadth of understanding in collaboration, process, technology, design thinking, and change.

The human element

One of the latest terms heard frequently alongside legal technology and innovation, is “legal design”. Legal design is a focus on the “users of the system”, according to Margaret Hagan – “whether it be people who are 'lay' outsiders trying to use it to solve problems, or the 'professionals' who work inside it. A legal design approach has us talk to these people, observe them, co-create with them, and test with them – so that we can make a system that actually solves problems, and does so in the most usable, useful and engaging way possible.

“A legal design approach can help us create small changes or huge overhauls. You can use it to make better documents, products, services, organisations, or policies. It is about using creative, human-centered strategies to find better ways forward, to serve people better”.

Many innovation teams in firms are now using this approach to define products and services with clients through listening, prototyping, and working closely together through an iterative process. Legal technology startups are basing their developments around this process and it is being used in collaboration, conferences, hackathons, and to develop systems such as HMCTS and at Registers of Scotland.

Considering that law could be defined as the business of human relationships, this approach could deliver enormous benefits to those within the profession and our clients.

The Author
Sarah Blair is director of IT at Thorntons Law LLP
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