Technology can help law firms do more with lower risk and higher certainty in less time. The question is: how do you create the right environment to let it flourish?
The UK is the second largest legal services market in the world. Two years ago, the annual value of the UK legal system was over £26 billion (equivalent to 1.5% of UK GDP). It employed over 380,000 people. Also two years ago JPMorgan Chase replaced 360,000 billable hours of legal work with AI. If the business of law is being reinvented, what are law firms doing about it?
“From where I sit the market is stratified,” says Patrick Sarch, a Partner with White & Case. “The more commoditised end is being disrupted by technology. The big law firms are evolving technology to suit what they’re doing [which is] providing more value-added services.”
Do not underestimate technology…
In 2018, in her inaugural speech as President of the Law Society of England and Wales, Christina Blacklaws addressed this hard choice – ‘disrupt or evolve’ – head on: “We should not underestimate the significance of the role that technology will play in the delivery of modern legal services. It is essential that we stay ahead of the game.”
Sarch, for one, is keen to stay ahead: “I used to have, outside my office in a former firm, 30 to 40 graduates and paralegals listening to the tapes of FX traders, LIBOR traders. Ninety percent of that has now been done by technology.
“We are planning minute-by-minute what is the quickest way from A to B? How many billable hours can I fit it in my day? How many clients can I satisfy? So being able to do more things with lower risk, higher certainty in less time is absolutely what we do. And any technological tool that will help us with that, we will buy.”
But things are never straightforward. Ma Jnana Settle, a US-based lawyer and self-proclaimed legal-tech nerd, says: “Lawyers and law firms have traditionally had powerful incentives to resist new technology. As just one example, the entire notion of the billable hour means that efficiency for a lawyer is not always a lucrative proposition.”
Tony McKenna is Director of IT with Gowling WLG (UK) LLP. He says lawyers absolutely prioritise delivering the best service and advice to the client over efficiency: “They don’t think ‘let’s be inefficient.’ Let’s be clear, lawyers don’t think like that. However, do they sit down and think, ‘let’s be efficient?’ Probably not.”
What must change to drive change?
My view is that law firms need to challenge themselves and their IT providers to be better for every customer. As McKenna states, “A lot of it is about innovation in terms of what they offer internal and external users. How are you automating the way you do things to benefit the end user? How are you providing access to the data they need when they need it in a better, quicker, smarter way that feels like the sort of experience they get at home?”
“The whole industry is changing and adapting every day,” says McKenna. “The appetite is in the business, there is no doubt about it. Getting face time with the lawyers is much better now than it was five years ago – and that natural level of curiosity in the legal teams to think about innovative solutions for their clients is definitely there. The biggest challenge we’ve got is the talent.”
For firms at the high end, today’s clients want more than the law explained, they want risk management solutions and strategic advice. They want the answer, immediately, and on one screen. For firms at the commoditised end, technology is completely reshaping the provision and cost of legal services. Any way you look at it, the business of law is being disrupted. This sector may have been slow to embrace it, but the race to change is now very much on.