Legal tech has brought an unprecedented rate of change to the legal industry that the traditional partnership model of law firms is not able to cope with. Even if they want to change, I have found there is no definite direction, guidance or high-level concepts that empower them to start making those changes. Some of the existing concepts are just patches that temporarily fix the issue.
The legal industry needs a new, more dynamic and flexible framework for legal practice. In the coming weeks, I will publish a series of articles introducing the Future Framework for Legal Practice which is a systemic change to equip the legal industry to better handle change. But before we get to that, let’s explore and build some context around the need for a new way of thinking.
The radical growth and maturation of the legal tech ecosystem
The rate of change in the legal world is unprecedented. Much of this change is attributed to the increased energy, investment, momentum and growth around legal tech. Legal tech has many definitions. To some extent, it is a growing definition as developments and exploration create more and more implications and capacities, expanding what legal tech is and therefore the possibilities of what it can be. For the context of this series of articles, Legal tech is broadly defined as the application of technology to the practice and structure of law.
Some of these technologies relate to managing databases, others to workflows and triage. Some to extending more nuanced and complex systems for the lawyer and their practice, others created for the clients of lawyers to produce exceptional interfaces. Not to mention Court systems and their administration, in-house needs, managing legal service delivery and the list goes on.
Taking a step back, however, we can see the all-pervasive power of technology is influencing the legal sector in every way it manifests. It brings massive opportunity and in that same movement, it requires new capabilities from us. Some incarnations will do it better, some will grow faster, some will be specific and some will offer value across various applications. The reality is, legal tech has had - from its most basic and niche problem-solving - a decade or more to build momentum from within the legal profession. Importantly, legal tech has equally benefited from those not practising the law who interact with the legal profession and dedicate time and energy to producing new and creative solutions.
As the pace of change increases, it becomes clear that legal tech has grown its own ecosystem. It begins to show early signs of maturity; from the number of startups and ideas that now define their solution within legal tech, to more developed companies offering more complex applications for difficult areas of law and legal process. In between we have collaborative efforts between companies and exchange environments allowing different applications to interact with each other. The growing list of API’s that add to the infrastructure for others to build on is an example. The Tech giants themselves are getting involved - providing access to their document analytics capability (Google) or developing IP management solutions (Amazon).
Pace has also increased in terms of spend, where in the last few years we have seen exponential increases in capital flowing to legal tech; whether from funding legal tech startups or acquisitions of companies and their tech, to the increased size and growth of once nascent companies with a big vision.
The challenge of applying new tech to the traditional partnership model
With all of this increase in pace, one thing is clear: Legal tech once operated in a small sphere within the traditional model, solving niche problems for lawyers in legal practice. Now it has become a robust ecosystem of its own, redefining the way we can practice, efficiently achieving what traditionally involved manual labour with scalable accuracy and speed, expanding the scope of what a legal service provider can offer. That is not to say all solutions are perfect and achieve their desired outcome (at least not yet). The point is that momentum and growth is significant: many brilliant minds and inspired people are dedicating their energies towards this expanding ecosystem and this movement is well underway.
What we are witnessing in this springtime of legal tech is a layered and pervasive growth that permeates beyond the traditional legal practice model. For centuries we have adopted in most if not all parts of the world, across firms large and small, a time-based leverage model managed by partnership. The growth of technology and the solutions it continues to produce lead us to significant questions:
1. Can new technologies that diverge from the traditional model to produce powerful and efficient solutions for delivering legal services continue to be applied to the existing environment we operate in?
2. Can we make sense of these technologies in our current environment when the implications for their design and use relate less and less to the “way it has always been”?
3. Even if we can use them in our current system, how long can we last until the outdated way in which other aspects of the traditional model slows us down? How long can we continue to compete with our “one to one” system against the emerging “one to many” systems?
The need for a new framework for Legal Practice.
With an industry as complex and socially fundamental as the Legal sector and with so many capable and talented people globally who contribute to the profession, a solution to this challenge must be dynamic and responsive. First of all, it should apply to as many people who work in law in as many circumstances as possible and provide clarity about how to operate within a changing environment. Secondly, it should anticipate these fundamental shifts in our environment and be a framework that is conceptually simple yet powerful in practice, and above all: It should open our minds to a future of possibility and a new way of thinking.
The current technology shift has several opportunities which require this new way of thinking.
One of the pertinent changes is the movement away from all-in-one solutions developed in-house. The growth of the SaaS (Software as a Service) industry means that someone who wants to develop a solution for a future-facing firm is actually involved in systems architecture and design with many more choices than previously available. The ability to link one service to another has also flourished alongside the SaaS ecosystem, typically done via API (Application Programming Interface) and even the connection service is itself offered by the likes of Zapier.
This also feeds another fundamental change: movement away from traditional CAPEX expenditures associated with legal practice and using a more agile OPEX model. The smorgasbord of technologies that are available to lawyers is for the most part subscription-based. This availability means it is becoming possible to build more robust solutions that are affordable as the market competes on value. It also means that you are able to switch your technology stacks as better solutions are developed, or if there is a strategic change in direction of the firm. This capability for dynamism becomes invaluable as the changes will demand significant adaptation from lawyers. It also has the potential to drastically lower overheads and provides greater oversight across business performance.
Another significant change is the need for having a physical location, or whether large expenses need to be spent in maintaining many physical locations. This is also now up for debate as leaner technology-based models mean accessibility to your practice, team and tools anywhere, any time.
Finally, consumers access to products and services has seen a fundamental shift as well. People reach for their phones to not only research, communicate and understand what they want - but to purchase it, interact with it and in the context of Information and Professional services, receive it. Of course, consumers will always expect to have value-based fixed fee services available to them and there is always a human element.
These are a few of the environmental shifts that have greatly impacted the future direction of legal practice. It is clear that there is no simple transition from the legacy partnership model.
The Future Framework for Legal Practice
The divergence of legal tech, once supporting niche areas of legal practice is now maturing into its own sub-industry. Not wholly belonging to the Law, it is a marriage of the Legal and Technology industries which brings fundamentally different thinking and approaches. If we ask ourselves how we can make sense of legal tech in our traditional models, we will struggle to answer in a sustainable way. This is why a new framework is needed.
The Future Framework for Legal Practice developed by FutureLab.Legal is a conceptual framework, simply designed to provide a base from which you can build (or grow) a Law Firm that can adapt and thrive now and into the future. This framework is a new way to envision the Firm or Legal Practice, allowing you to best navigate the opportunities that exist now and make decisions about how you want your firm to be in the future.
Premiering exclusively here at LegalTech Weekly, the next two articles will go into the details of the Framework, breaking down each of the three environments and exploring the thinking behind it. Additional resources to get started with the framework will be released in an eBook later this year.