Guest post: Do Large Law Firms Have to Start from Scratch to Automate?
A recent article about aircraft production observed that automation requires starting from scratch. Wow. It made me wonder if that’s so for law firms?
Airplane Makers Automate to Meet Surging Demand in the Wall Street Journal (9 July 2016) reports that Boeing and Airbus “are digging deep into the technology toolbox to deliver what they have promised will be an unprecedented boost in airliner production.” They are deploying robots, drones, and powered exoskeletons to produce jets faster. One line jumped out:
“Starting from scratch turns out to be easier than adapting the new automation to existing facilities.”
Might this also be true for large law firms? They rely on lawyers and generic computers to produce legal work. Surely re-tooling this cannot be as complex as for jet factories.
To answer this, remember that the legal market notion of productivity – hours worked per year per lawyer – is exactly wrong. Everywhere else, productivity means output per unit of time. Measuring jets produced per month and person-hours required per jet is easy. But how do we quantify legal output? I don’t know, so we have to work from anecdotes and impressions.
I see more automation in Big Law boutique spin-offs and in New Law than I do in large firms. If true, big firms that want to automate more should be able to do so? After all, they don’t have the equivalent of Boeing’s factories and installed machinery.
The only installed base or law firms is lawyers. And the business model, which is the real constraint. Boutiques and New Law, unlike Big Law, work under fixed fees so they can deploy automation profitability.
Large law firms could, as a matter of production means, easily adopt the same tools as New Law. A business model to maximize hours stymies such efforts.
Happily, I see signs of change. More large law firms now take automation seriously. Several have spun-up R&D initiatives. Others have deployed contract analytics software to accelerate due diligence. Some invest more in knowledge management, which increases output per hour by enabling lawyers to work faster to produce the same outputs.
While law firms don’t face the aggressive delivery schedules of airframe makers, they do need to deliver more and better client value. To automate, they do not need to re-build from scratch. The main required ingredient is client pressure. If GCs keep pushing for value, pay attention to production means, and choose firms based on real productivity – and publicly say why – then large firms will be motivated to automate.
Ron Friedmann is a consultant with Fireman & Company and a respected legal market commentator. This article first appeared in his Strategic Legal Technology blog