Introduction
As the law touches every corner of the business world it also struggles to regulate social and economic impacts of transformational technology developments. This is certainly one of the biggest challenges we face as a society operating in a new digital economy, created by the fourth industrial revolution.
Day to day, whether we recognize it or not, everyone operates under areas that have been legally captured by laws and regulations, but more than ever, we also operate and are confronted with new realities caused by the fast evolution of new technologies which creates uncertainties but also great opportunities.
Current reality
A 2020 Legal vision, meaning a revamped analysis of the trends and circumstances that are altering the way we operate in reaction to global changes, is thus twofold scenario, first the need to focus on what legal technical challenges are created by the transformative power of technology, and second, the need to also react to the new legal disruption scenarios created by technology tools that can transform the way legal services are designed, processed, measured, operated and reported. This dual vision is a requirement for lawyers to remain relevant and a source of competitive differentiation.
At close to one trillion dollar global legal services market, the sector is confronting a big evolution (or revolution), while facing the reality that it remains profoundly under digitized. For better or worse, the legal sector has been notoriously slow to adopt new technologies and tools, and currently faces a clear transformational demand.
There is no doubt that Information technology is coming to the law from many different angles. We are reaching a point where there is a tremendous amount of new information on why changes finally arrived to the legal industry (the last bastion of manual repetitive work).
By now it is clear and widely accepted that legal technology facilitates and accelerates legal search, it enables lawyers to process large amounts of information in new ways and make predictions around legal outcomes, it helps lawyers remain competitive by responding to client´s demands with more efficiency, it streamlines and automates legal processes, it facilitates law practice management, and it provides new ways to resolve disputes online, just to mention a few.
Now, the key question is not why, but how. How to truly innovate, how to transform a legal business model, how to react to tons of technology solutions, how to prioritize, how to change the mindset, and how to be prepared as we start a new decade which promises to generate the deepest change on how we practice law, how legal services are operated and how people access justice.
Evolving reality
The legal industry has dramatically changed during the past decade, and this transformation requires some further analysis to better understand what the real implications are, and what the key effects and expectations are.
Just over a decade ago it was easy to pick winners in the legal services field, it was still a sector focused on lawyers, built by lawyers and developed by lawyers; but then it all began to change. In particular, clients changed, because the economic factors also changed putting more pressure on the overall service value equation. The effect of a global financial crisis made the customers of legal services more cost-conscious, more value orientated, more metrics oriented and more sophisticated in the legal procurement areas. Where once they were satisfied with lawyers who understood the law, today they want more service innovation, they demand more for less, and they expect a more technologically enable legal resource that can produce better service outcomes. Law firms and legal departments are under increasing pressure to deliver faster, better, and to offer better value service while becoming more efficient, predictable and agile. Legal advisors are now expected to think like business people and to be business partners who understand the drivers of the commercial world and the tools of a digital economy.
This past decade created significant Legal Tech developments. It was a decade of tumult and upheaval, bringing changes that will forever transform the practice of law and the delivery of legal services.
Legal Start up started to flourish and to expand their influence and reach; the cloud transformed operations into a new reality. Clients demanded efficiency and transparency precisely derived from the natural adoption of better tools.
Over the past decade, the tables have turned, with clients wielding more power than ever before in the delivery of legal services. As it has been described by industry experts, Law is a Buyer’s Market, as empowered clients have begun dictating the terms of their relationships to law firms.
The rise of the client has been a defining trend of this decade. It is a trend driven by the demand for efficiency, relevance, better access to legal services, better service from legal providers, greater accountability from legal providers, and fairer and more-transparent pricing.
One place we have seen this trend play out dramatically over the past decade is within corporate legal departments. Seeking greater value and more control over their spending, corporate counsel have taken more work in-house and demanded greater accountability from their outside counsel. This trend is directly responsible for the growth in the use of alternative legal services providers over the decade and for the expanding influence and importance of legal operations professionals.
This has been a decade in which we have come to accept that technology is an essential ingredient to the legal industry at large.
In a changing industry, the old models are no
longer the future. That is why the new Legal Vision, has to have a strategic business component.
The firms and legal department teams that will see the greatest success in the future, are those that adopt a client-centered mindset and consistently create client-centered experiences.
There is nothing new about the proposition that providing better client service is a key element of law firm success. Others have told us this for generations. But the key new element is the need to recognize the fundamental way in which technology has upended this equation. It is that clients have come to expect an effortless experience that delivers good value. This is the challenging learning experience for lawyers.
Looking ahead
In this new decade, we will witness a paradigm shift, very hard to swallow for some, I capsule these scenarios in a three linear stage:
New key players. More diverse professional players will enter the legal industry, and they will not be lawyers. Their sought added value will be their expertise on how to better design the legal service practice, both for law firms and for in house departments. So, Legal Design will be one of the answers to the How question.
Generation change. Today probably for the first time in history we are witnessing the co-existence of four very distinct generations working under the same roof, representing completely different professional DNAs. Not only they communicate differently but they also work under different expectations and general basic understandings. What will happen is that we will see more of a leadership role transition into more technology minded professionals. The next 5 to 10 years are crucial for the legal services industry. As one group of lawyers is leaving the profession and looking to matters of succession, another is revolutionizing the practice of law and pushing it in new and unheralded directions.
Management. Historically, it has been awkward to look at legal services and legal practice as a business, the reasons are many, some fundamentally right and some fundamentally wrong. The fact is that we will reach a point where maybe surprisingly we will start noticing that the future of the legal profession will be decided by business leaders, not lawyers.
Law firms and corporations harnessing the adequate technologies stand to gain a significant competitive advantage. The peril of the technology revolution comes in two forms. First, it will apply new pressures on traditional pricing models for legal services. Second, it poses new obstacles for junior associates and paralegals, whose role in a firm may be jeopardized, but promises opportunity for lawyers and legal professionals incorporating technology into their skill portfolios.
The transformational opportunities provided by new technology and innovative approaches to the legal profession go far beyond the benefits of cost savings, and their proper use can enable in-house counsel and Law Firms to faster react to business trends and needs, while focusing on core business activities and working to the best of their abilities in a more efficient manner.
There is a different DNA to legal services today and we can no longer provide the same responses to issues that we did in the past. So unless we bring a new element, something that focuses on evolving client needs, which in this case everyone is calling innovation, more cost effective and comprehensive legal coverage will not be possible.
With these possible realities coming into play, it seems that the expansion of legal tech will no longer face the denial phase thus getting a more important push, on a three rational levels, 1. Better understanding of the existing possibilities, 2. More adoption rates, 3. More investment. It is precisely these elements that will warranty that the scope, depth and speed of legal transformation will happen in the coming years, so that ten years from now, we will be immerse in a very different legal industry than the one we have today. That is why the 2020 Legal Vision analysis is so important as a way to re-start or re-position legal formulas, structures, tools and careers for success.
The 2020 Report on the State of the Legal Market recently released by Georgetown Law’s Center on Ethics and the Legal Profession and Thomson Reuters Legal Executive Institute confirms that clients are rapidly driving all legal service providers, not just law firms, into a new model that is more collaborative and multidisciplinary, built around integrated technology platforms and delivered with value-based pricing.
In response to the changes, law firms increasingly rely on non-legal professionals for expertise on topics such as pricing, project management and technology adoption, the report says. Firms are also turning more often to alternative legal services providers for e-discovery, research, litigation support and document review.
We’re seeing a trend towards more law firms launching their own software development businesses, investing in legal tech startups and establishing technology incubators. These firms understand they can not only benefit from, but can help lead, this technology-based disruption of legal services as a means to improve efficiency and expand their business by creating new products and services for clients.
Conclusion
The pace of transformation and innovation is increasing in every area around the globe and in all sectors and professions. The legal practice took more time to start experiencing profound changes, but we already see an increase of solutions, technologies and more importantly, a new mindset that combined make the perfect opportunity for big and deep transformations.
The main impact on the legal profession is the change on the current day-to-day business as there is a growing potential for the lawyers freeing themselves of manual, bureaucratic and repetitive tasks, and devoting more time to the complex cases that require logical reasoning and sensibility. At the same time lawyers receive support and guidance from various Legal Tech solutions that are built. Once this transformation process is in place, the lawyers will be free to develop and rely even more on their emotional intelligence. It will enable them to use their full human capacity to execute their business with expanded quality and more efficiency. It will improve their services provided to the clients and the community as a whole.
To continue to compete, law firms will have to invest more money in technology, in new types of professionals and new business lines, but event before that they will need to reassess their strategic approach to a disrupted world…lawyers change because societies change, because the rules of the economic, political, business…and technological games, change. This is what is happening now. It is not a nice to have approach; legal innovation and legal transformation are today a key part of the success formula for any legal operation.
In time of turbulence the biggest danger is to act with yesterday's logic.
About the Author
Juan Carlos Luna is managing director of Lawgistic, an international legal consulting firm. And co-founder of LAWIT, a legal innovation and technology consulting firm, focusing on the transformation of the Business of law, supporting both legal departments and lawfirms to enhance their value added through legal operations efficiencies.
Drawing from 20+ years’ experience as an accomplished attorney at Fortune-class, global corporations and international law firms. He served as director of legal projects – Europe and Global Regions for Hewlett Packard Corporation, where he transformed HP’s legal infrastructure to establish a more efficient, business-driven organization.
Mr. Luna began his career at Barrera, Siqueiros & Torres Landa in Mexico City and Bracewell & Patterson in Washington, D.C. He earned a Juris Doctor from Universidad Panamericana in Mexico City, a Master of Law (LL.M) from Georgetown University Law Center in Washington, D.C. and a Legal Management certification from Instituto de Empresa in Madrid
He teaches the course of legal Innovation at the Business Law Master Degree at Universidad Panamericana.