There is massive hype and conjecture about where technology is taking legal services but I think we need to remind ourselves that technology alone isn’t going to make the difference. Technology has the capacity to be an enabler of change, but the technology itself is not a differentiator, nor does it create a strategic advantage by itself.
Gaining a strategic advantage by its nature must be hard to replicate. If it was as easy as just buying technology, anyone could do it. A strategic advantage is carved out by the effective combination of people, process and technology. We’re loving the debate and discussion around technology at Hall & Wilcox, and we enjoyed participating in the recent Chilli IQ Managing Partners Forum around the “Agent of Change” theme.
Discussions led us to ponder six key themes or questions, currently occupying legal and professional services firms (and their clients).
How is AI being used? Is it real or hype?
There’s much excitement and angst about AI. How much will it change the way we work?
If you have the time, I recommend looking over this insightful, levelheaded paper from Deloitte (thanks to Hall & Wilcox board member and Chief Edge Officer of Deloitte Edge, Pete Williams, for putting us onto this): Cognitive collaboration: Why humans and computers think better together.
AI will change the way we work and take parts of work away from traditional lawyers, but its likely predictions of widespread job losses are exaggerated.
The key with any emerging technology is in how we use it. In some circumstances like contract review, AI could possibly deliver a 20% to 60% improvement rather than be a replacement to anyone’s job. It’s not as simple as computers becoming smarter than people. Getting results and efficiencies from AI is more about humans and technology working together, and most importantly the processes which enable the best use of each.
We are reviewing a few AI based contract review systems at the moment. AI does a great job of doing the grunt work of extraction and classification (there are spectacular advances in this space alone), but the process still needs a lawyers insight and knowledge. The best tools we have seen then present a fantastic review interface with tagging and notation tools. They then present the information in an engaging way using analytics and data visualisation through dashboards and scatter diagrams.
‘Digesting’ a whole portfolio of contracts is far easier now than it was using a room full of paralegals working 24 hours a day doing a big review, but it still needs lawyers to play a key part. The most interesting part for me is that with the extra technology around review and visualisation, not only is the process more efficient, but the end result and commercial value derived is dramatically improved as well
Should lawyers learn how to code?
Learning to code might be useful as it could expand lawyers’ minds to what might be possible. That said, it’s hard to justify coding skills for lawyers really being necessary. It seems an extreme allocation of brainpower just to get lawyers to better understand a process where we can use people that can specialise in that area to do that work.
We’ve seen lawyers develop creative technological solutions to problems without coding. Last year Hall & Wilcox Senior Associate Vanessa Porter and recoveries expert Krisha Bennett worked together with tech specialists Neotalogic to develop RecoverEase, a program which automates the identification of claims with recovery potential for insurance firms. They did this without any knowledge of coding.
There are bound to be more people coming through the ranks that do know how to code or at least have an appreciation of it too. In the Client Solutions team here at Hall & Wilcox, we have a workflow developer who has almost finished their law degree. We find that the combined knowledge and approach is beneficial as they have a deeper appreciation of both sides of a legal service solution.
These ‘legal technologists’ are an important bridge between the lawyers and the business to deliver new and better solutions. We will always need more of these people. Lawyers increasingly need technological proficiency but do not necessarily need to be coders.
How well served are we by the technology vendors in the legal space?
The legal industry is well served by vendors in the marketplace, but we should acknowledge that legal tech vendors are also being challenged by the fast pace of technology developments. They face similar issues as the rest of us, such as: Which technology will differentiate our firm from others? Should we be leading edge? Or thoughtful followers?
The cloud is making things interesting. Lawyers and clients want everything web based, secure, responsive, fast. The big industry players with their large legacy code bases and service models are being disrupted by smaller ‘cloud’ providers who are entering the market with more cost effective, web based, mobile solutions. People are getting used to just downloading an ‘App’ to do a specific function so they are experimenting now more than ever. In some cases, the ‘Apps’ are easier to engage with than the big systems available today.
Innovation in this space could mean vendors will need to cannibalise some of their existing revenue streams and products in order to stay relevant in the longer term. That must be a difficult call to make.
I also think that as clients (and the businesses they serve) increase expectations, the very nature of what the legal market has to deliver is changing. Gone are the days of practice management and billing being the most important systems. They are important, but making them better will not necessarily deliver a good return on investment. I believe the work and investment needs to go into customer engagement systems, workflow, AI, web based collaboration etc.
Do all the big legal IT vendors really understand that yet? I have seen some great initiatives but I don’t think that enough of them are really making this fundamental shift.
How do we keep ahead of technology?
Hall & Wilcox is an excellent example of an organisation which has built a culture around innovation. Our very deep and visible strategy and commitment to Smarter Law not only gives us all permission, but also encouragement to participate. This brings ideas from all levels of the organisation. You can’t put one person (or department) in charge of innovation. By doing that you risk excluding everyone else.
At Hall & Wilcox in the Client Solutions team, we are charged with fostering and directing the innovation effort. We help curate the ideas from everyone and work out how to get them moving and implemented. It’s a very action oriented approach. That means we run a lot of small initiatives, harvesting the small wins and scaling them up. There is a major benefit in having innovation guru Pete Williams on the board. He has helped educate the partners of our firm that it’s alright to try and fail. That’s not a concept that lawyers naturally warm to at first. He’s taught the firm that it’s about action and being free to try new things. Make a lot of small bets, see them grow or move on quickly if they don’t work.
We also draw on many twitter feeds, blogs and newsletters. Resources like ILTA (International Legal Technology Association), ACC (Association of Corporate Counsel) and CLOC (Corporate Legal Operations Consortium) are useful too – these provide insight into what clients and other firms are wanting, trying and doing. Sometimes we are ahead of technology or on the leading edge, other times for less strategic initiatives we are happy to be a thoughtful follower.
In the day to day, tools such as Yammer are useful to generate and harvest ideas from the whole Hall & Wilcox community. That’s much more powerful than some boffins doing a lot of research in the back room. There are many active threads in the firm discussing clients, smarter law, industries etc. People interested in smarter law use these communications channels to draw threads between different ideas to pull them together into a solution for our clients. The diversity of thought that a tool like Yammer helps us leverage is very useful.
Why is ‘process improvement’ important?
All legal work has some process elements so it can be deconstructed. If you don’t understand deeply how you deliver your work and how to improve it, then your clients (or competitors) will do it for you. It isn’t a onetime exercise, it’s about continuous improvement. Continuous improvement was adopted by many other industries along time ago. The legal sector has been slow to take it on.
When you review a process, it’s important to consider the client and the client’s outcomes as part of that review. When we talk about the client, we mean the businesses that are served by the in-house counsel, the law firms and the ecosystem of process vendors, legal tech etc. By looking at what we deliver (and how) in this context we find it easier to focus on the value we create and the efficiencies we are aiming to drive.
Deconstructing your work helps you stay competitive by carving out and highlighting the differentiating elements of your work. You need to do it, not just to improve the efficiency of work on a particular service, but to build that capability in terms of understanding processes, systems implementation and process compliance. Getting better at being more efficient and constantly evolving is the only way to keep up with the pace of change in this sector.
Where technology comes in, and how that translates to value, is not always clear cut. Does the process improvement benefit your lawyers or your clients? Technology will automate some processes, make some more efficient, reduce the cost, effort and risk around a matter, however ultimately, who banks the savings is less clear.
It’s a bit too simplistic (and unfair) to build a business case around something that has the law firm banking all the savings of process efficiency projects. Usually, you can (and should) share the savings. If clients see you are improving the overall efficiency and improving outcomes, continuously, then that will lead to increased satisfaction and ultimately getting more work.
How can legal leaders help with implementing technology and process improvement?
The best thing you can do is to ignore how successful you are now and keep pursuing process and service improvement (whether your clients are explicitly asking for it or not). Technology is changing fast but will always be expensive, and improving your service and processes is not easy, so there needs to be a long term investment mindset.
To recap – when implementing technology and process improvement you need to:
- Deconstruct how you work and properly understand it. Consider all the actors in a process – including your clients.
- Deeply connect with your clients, and your clients’ clients, about what they need in terms of outcomes, data and efficiency.
- Promote diversity of experience in service delivery: value the lawyers, the technology people and the process people equally.
- Foster a culture where the business of law is as important as the practice of law.
- Optimise and make your work more efficient, but prioritise client benefit.
I would encourage you to find your IT people, your process people, your project people. Dig them out of the back room and HUG them because you need them now more than ever. Put those people in front of your clients. Build and foster a culture that acknowledges and embraces lawyers and business people working together. That has been one of the biggest contributors to our success here at Hall & Wilcox. It promotes ownership, diversity and collaboration for the clients’ benefit.
Remember that everyone in the legal sector (GCs and law firms) are serving business’. The more you can learn about tailoring how you work and communicating with the businesses you serve the better. Here’s a tip, analytics and dashboards are very popular. Try and communicate with them and drive value in terms they understand.
The technology discussion often involves more questions than answers. Law firms and clients need to have the courage to ask the right questions. We need to have the vision, drive and agility to do something about the answers so we can become an agent of change rather than a victim of change.