by Pete Nussey, Director of Innovation, The Law Society of England and Wales
The late comedian Bill Hicks accused marketing of being ‘the ruiner of all things good’. In fact, he went much further but we’ll leave the reference at that. Suffice it to say that there are some out there, whose views on ‘innovation in legal services’ have not been too dissimilar.
My view is, naturally, more optimistic. Indeed, I would like to cut through the hyperbole around robots and artificial intelligence to propose that we have finally reached an important tipping point. One where technology is now genuinely enabling quicker (and possibly ‘smarter’) decision-making, to the benefit of legal solicitors and their clients.
Happily, there is an abundance of support for my view of the world in the Law Society’s recent ‘Capturing technological innovation in legal services’ report.
The report highlights examples and insights from scores of firms which are adapting to multiple drivers of change and taking advantage of new technology to evolve their operating model, the services they offer, and the way they engage with clients. It paints a picture of a dynamic sector embracing tech and the enormous potential it holds.
Powerful forces continue to drive changes in our industry, for example:
Buyers of legal services have significantly altered their behaviour
One estimate suggests 25-38% of consumers find their solicitor online. In-house solicitors have for some time been demanding ‘more for less’ from outside firms they use, and this is increasingly moving beyond simply insisting on fixed fee work.
Panel firms are increasingly being called upon to show evidence of an innovative approach towards things such as the adoption of technology and service delivery / operating models. GCs are also increasingly seeking to purchase legal services ‘on demand’ and from a greater number of specialist providers.
New forms of competition have emerged
These are coming both from within the legal profession (e.g. with solicitors and barristers taking on areas of work previously reserved for the other), as well as from ‘outside’ players such as accountancy and consultancy firms and ‘alternative business structures’.
The macro-economic environment also affects the legal sector as much as any other.
The global financial crisis. Brexit. The drama of the recent US election. Such events all show how volatile the environment we work in can be, and this volatility is itself driving significant changes in how businesses and consumers behave.
With new or improved technology such as machine learning now offering the ability to automate significant elements of legal work it is no surprise that our sector is starting to embrace the potential. While some predictions of robots replacing lawyers start to sound a little panicked, more measured studies have suggested between 13% and 39% of legal sector jobs will automated within the next two decades. In the face of such forces for change doing nothing is no longer an option, even for the most reluctant professional and whether for growth or simply survival, innovation is key. Looking beyond the deployment of technology, our report identifies three key types of innovation:
Innovation in service and service delivery. Our report presents examples such as the way crypto-currency such as Bitcoin creates a whole new set of legal issues as existing law adapts to an entirely novel concept. By building an expertise in this emerging area, one UK law firm has both served an emerging need for their clients and set themselves apart as a subject expert in a new niche.
Innovation around business process and resourcing. For example, our report highlights that Robotic Process Automation (RPA) not only can cut costs by 20% to 40% compared to manual processes, but also reduce human error and processing times. With advances in Natural Language Processing they can also take on increasingly complex or client-facing task. While AI may be some way from pronouncing what is “just” or “reasonable”, software is increasingly able to analyse in minutes what a legal team would pore over for weeks, at huge cost to the client.
Innovation in strategy and pricing. We also look at the concept of “lawyers on demand” able to offer a rapid increase in capacity and expertise when a firm or in-house team need it most, without the overhead of a larger permanent staff or an external firm is becoming more real and General Counsel are already looking for.
A July 2015 report by the Enterprise research Centre at Warwick Business School evidenced that 28% of the 1,500 legal professionals surveyed were innovating by providing new – and significantly improved – services to clients. A larger proportion – almost 37% – were implementing innovative changes to marketing strategies or channels. In terms of the adoption curve, we believe this now places innovation in legal services the ‘early majority’ category. Put simply, legal innovation is finally going ‘mainstream’.
This offers immense opportunities for solicitors, their clients, and those from outside the legal sector who can work with them. At the Law Society, we will look to use our unique perspective across the entire legal sector to support solicitors to find these opportunities, overcome the challenges, and find the technology and partners they need