Legal industry insights: The irony in the desire for innovation
By Sophie Oxley
As we perch at our laptops with next day deliveries dropping through our letterboxes and the world’s smorgasbord of fast food at our fingertips, it is natural to wonder what the future holds for industries which, let’s be honest, are not quite at the leading edge of innovation… yet. The legal industry has historically fallen under this category. However, in measure twice and cut once fashion, it is cautiously approaching the danger tape that wraps buzzwords like ‘digital transformation’, ‘digital disruption’, and ‘AI – for better or for worse’. To the industry’s credit, it is far closer than many others.
We can only predict that law firms will pick up the pace as the ‘new decade fever’ sets in. It is a fair prediction given that in Briefing Magazine’s survey Legal IT Landscapes 2020, UK firms reported a growing appetite to stand out from competition through investments in legal technology. Moreover, firms saw the greatest threat to their business as practices just like theirs. But the latter is not an observation necessarily shared across industries. A survey conducted by Microsoft in 20171 revealed that in the finance industry, tech start-ups had big banks shaking in their boots. In legal, however, perhaps what makes the result unique, is the irony in the revelation.
Despite the hunger and the fears of law firms, when it comes to considering a new system – particularly for practice management – IT decision makers from likeminded firms tend to link arms (whether they intend to or not) as they navigate the software jungle, chanting lions and tigers and bears, OH MY! in synchrony. This is symptomatic of a tendency for firms to lean towards practice management solutions with historic prevalence, as opposed to the best solution for future strategies, which often are unique to them. As ambitious as many firms are to differentiate through technology, more often than not, they do not want to be the first or alone, in trying something new.
This is even more problematic for an industry that craves a main course of Uberfication and some AI on the side. Inevitably, to this end, there need to be leaders and followers if legal is going to see its first unicorn. In the same survey, 52%2 of UK law firms claimed that innovation initiatives will be focused on creating client-facing products and services, followed by 34% focusing on improving service delivery through automation, process, and so on. When you throw all these numbers into a melting pot to carve out the strategy of the majority, it becomes clear quickly that deviation, albeit unnerving, is necessary in the fight for law firms to differentiate.
We cannot deny that there is a comfort to be found in grabbing some popcorn and waiting to see how a project pans out for someone else, just to do the same thing, but a smidge differently. But a smidge is not a differentiation and it certainly is not the groundwork for an industry breakthrough. At the risk of sounding like a yoga instructor, the key to success for the law firm of the future is to 'look inward'. sa.global (legal360) CEO Stephen James puts this well in his recent commentary of the Legal IT Landscapes 2020 publication, stating, “It will be the firms that understand the connections between the systems they have, and the importance of data and context, that will derive competitive advantage and ultimately separate the future winners from the future losers.”
Without a strategy set in a context that is distinct to each firm, it is impossible to carve a path for innovation through the adoption of technology. So, to that whopping 74% of law firms in the UK with an innovation budget heading into 2020, we ask you to look at your firm's software blueprint as you consider how you invest in technology. Think about the systems you already use and consider the benefit of having them connected, as opposed to clambering onto a bandwagon to be left trying to fit a square peg in a round hole or doubling up on data management efforts (note the shameless promotion in this one, as legal360 by sa.global works alongside the standard Microsoft applications you already use). Realize the importance of data in context when embarking on your AI expedition. And finally, whilst it may be safer to watch from the side lines, beware, the starting gun in the race for innovation in legal has already been triggered.
2 Briefing Frontiers 2020: Legal IT Landscapes, Briefing December 2019/ January 2020