Law Technology Today From the ABA Legal Technology Resource Center
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A few years ago, George Beaton published an influential e-book, NewLaw New Rules: A Conversation About the Future of the Legal Services Industry, that pulled together comments and responses he received from numerous legal thought leaders and experts about his NewLaw-focused blog post.
The publication compared BigLaw, the traditional partnership-and-hourly-rates model, with NewLaw, an emerging model of new staffing, pricing and legal service delivery firms. The concluding sentiment was that BigLaw was doomed to fail spectacularly in the near future, and the NewLaw concept would emerge from the ashes, forging a new, gilded age of legal service delivery.
The truth is, BigLaw has yet to collapse. Instead, the industry has entered a somewhat uneasy state in which BigLaw and NewLaw compete for the same work, and in some cases, even collaborate.
Perhaps this is just a transition period from old to new. Maybe it will settle into a sustainable collection of diverging legal service delivery models—each catering to a different type of client, segment or industry. We may only truly understand the shifts currently underway once we can look back in hindsight.
Regardless of where your firm is now—BigLaw or SmallLaw, OldLaw or NewLaw—if you are still around in 2050, it’s likely you will be practicing SmartLaw.
What is SmartLaw?
Legal service delivery models, client expectations and business structures are very different than they were even just a few years ago. The way firms compete and who they compete with, the staff they employ or outsource, where they’re located, and the importance of artificial intelligence (AI), business analytics, automation and big data also are growing concerns in law.
When you add these shifts to the rapid rate of technological change, the legal industry continues to evolve faster than ever—and the status quo is just not an option if firms want to stay relevant. The key to success for firms today and in the future is SmartLaw, a concept that combines client relationships, culture, data, process and technology.
Client Relationships
Nearly every firm markets their rock-solid focus on clients, but in reality, most have a fragile relationship with clients. The conventional wisdom is that clients hire the lawyer, not the firm. This thinking has led to a merry-go-round of high-profile rainmakers using their clients as leverage against their own firms to get a better deal for themselves. While this practice has been lucrative for individual lawyers, that hasn’t necessarily been the case for their firms and definitely not for their clients.
Firms that engage in the SmartLaw approach maintain positive relationships with their clients at every level, from partner to secretary to IT staff. SmartLaw firms are empathetic, agile and responsive to clients’ needs, providing tools and resources for the client to easily manage, communicate and collaborate with their outside counsel. When a high-profile partner leaves a SmartLaw firm, clients will have to seriously consider whether they go with the lawyer or stay with the firm, because the firm-client relationship is strong.
Culture
Traditionally, a named partner in the corner office dictated a firm’s culture. Everyone looked to that partner as the standard-bearer for the firm’s way of working, presenting themselves, and being a good lawyer. And most people in the firm were lawyers, secretaries or paralegals, each of whom worked very closely with lawyers daily.
Today, firms are complex businesses with multiple departments and different mandates often competing for the same resources. Almost 50 percent of firm employees are not lawyers. These intelligent, highly-educated and serious business people are responsible for things like the firm’s brand, IT infrastructure, information management, and profitability. Some rarely work directly with lawyers at all. And most firm leaders still seek consensus among a senior group of “non-business people” to make important business decisions.
SmartLaw-guided firms have real business leadership that consults regularly and directly with business group heads and senior partners to make informed and intelligent business decisions. More importantly, SmartLaw leadership can define, articulate and effectively communicate a vision for the firm, so that everyone shares in a singular purpose, confident that their work is valued.
Data
Any serious legal sector forecast includes artificial intelligence (AI) as a key driver of innovation. While it’s tough to say what the ultimate impact of AI will be this early in its evolution, one thing is clear—AI puts an even bigger burden on law firms to take command of their data. Until recently, many firms have been sitting on volumes of it. Not just financial, billing and quote information, but untapped legal data that surrounds contracts, litigation outcomes, cases, and negotiations.
When firms adopt SmartLaw principles, they’re able to unlock the treasure trove of unstructured data that exists in their organization, combine it with new data they’re capturing continually, and then use it in a structured, purposeful way. They become truly intelligent because they’re able to make better decisions and predictions based on an analysis of what’s happened in the past. For example, if you were to develop a pricing model for a matter based on meaningful data, you would know exactly what’s required and establish a price that’s more accurate, competitive and profitable.
Process
With all of the new challenges and opportunities facing firms, it’s essential that they put a premium on efficiency. And where firms can experience the biggest efficiency gains in the shortest term is through process improvements that are driven in large part by data. When speaking to multiple partners in the same firm, you’ll likely find that they currently accomplish things in completely different ways, even in the same practice areas. Not only are inconsistent processes inefficient, they also introduce risk.
SmartLaw firms actively systematize and standardize processes so that they can truly transform their legal service delivery model. They also put structured data to work inside of those routines, not only for analysis purposes but to trigger and automate workflow steps that typically would have been performed manually by people in the firm. Consistency, accuracy, repeatability, predictability, and efficiency—combined with varying degrees of automation—are crucial to becoming a smarter, more successful organization.
Technology
When people discuss the “future,” technology seems to lead the conversation. While SmartLaw firms are identified by their intelligent and appropriate use of technology, they also recognize that technology is not the universal answer. Some problems are best solved by culture or process improvements. SmartLaw encourages firms to automate what makes sense to automate, productize work that can be commoditized, and to collaborate between lawyers and technologists.
SmartLaw firms don’t build software in-house. They have a toolkit of platforms and technologies from which their legal engineers can create new products and services for clients and internal users. The culture of the SmartLaw firm encourages innovative experimentation, is tolerant of fast failure, and applies design-thinking principles to deliver rapid prototypes and iteratively designed solutions.
SmartLaw: The Future of Law
The five areas described above are not independent pillars holding up the SmartLaw firm. They overlap, intertwine and work together.
Multipoint client relationships require intelligent technology, a supportive and open culture, and efficient processes. A vision-driven culture should focus on clients’ needs and use technology and data appropriately to exceed them. Intelligently using technology directly supports an inclusive and client-focused culture.
Whether your firm is 20 people or 20,000, you focus on complex litigation or transactional work, prefer mahogany desks or glass cubicles, BigLaw, NewLaw, or something in-between, we believe the intelligent move is to embrace SmartLaw.
What do you believe lawyers and law firms need to do to prepare for the future of legal services?
