There is an undisputable tension in the legal ecosystem. How do you explain it? Is it a natural tension that flares up every other decade? Is this the last industry to finally embrace technology? Is it a perfectly normal cycle that occurs from a macroeconomic perspective when innovation forces change? Or a combination of them all? There is obvious change evident in the pace of legal technology advancements, but that is only one part of the broader ecosystem. Here’s where that evolution is happening.
Though many legal innovators claim law schools are severely behind in their curricula, graduating ill-prepared lawyers, there is encouraging evidence that many schools are trying to keep up with the market’s changing demands. Well over two dozen schools now have robust programs teaching such skills as project management, data analytics, and even coding and developing partnerships with legal services providers to provide hands-on training in something other than mock trial. As with any other market, though, the demand must force this change and the resisters (i.e., some traditional tenured professors) will have to be engaged effectively or risk becoming irrelevant as admissions continue to decline and students have more choices in their second- and third-year courses.
Pressure from their corporate in-house counterparts to add more value, reduce costs and increase efficiencies has inspired many firms to change how they deliver services and rethink their pricing and staffing models. Those that are serious about both innovating and leading are investing heavily not only in technology but also in alternative skill sets and functions and hiring highly paid professionals to handle aspects that don’t require a lawyer. They are beginning to experiment with creative fee structures and offering services beyond the traditional legal work, which add greater client value.
In-House Legal Departments
The roles of in-house lawyers have changed dramatically in the past few decades. Departments are growing. GCs are becoming critical business partners for their companies. Dependency on law firms is rising for strategic critical thinking and analysis, while falling for more predictable or repetitive type work. Work is being brought in-house, and in-house teams are developing skills in technology, project management and data analytics faster than firms, which can’t keep up. While innovation is a necessary means for in-house teams, it is optimization of resources that is the real end goal.
Alternative Legal Service Providers
Legal process outsourcing has matured to a point where great convergences have happened and only the best are still standing. The ones remaining are serious about moving up the value chain beyond e-discovery and back office “support.” They want to add value to the actual lawyering work by handling repeatable contract review and negotiation, merger and acquisition document review and other high-volume work. With players like PwC opening law firms, this space will come under increased pressure, as service providers with deep expertise in process improvement and data analytics enter the legal industry.
Nipping at the heels of the alternative providers and some of the junior lawyers in the firms are the legal technology solutions that are popping up at an unprecedented rate. Except for some examples in the area of consumer legal services, I’m not convinced that there is a deep desire to transform commercial legal services with technology for the sake of better delivery, as much as there is a capitalistic thirst to penetrate a market that had been largely left alone by technology. As legal tech quickly evolves, the providers offering real value to customers who are ready to consume such solutions will enable legal services to leap frog other less impactful innovations.
Industry Groups for Legal Ops
Legal operations is an inclusive set of functions and skills that are quickly growing inside law firms and legal departments. Operationalizing the back office of law firms to act more like other businesses, creating efficiencies in the delivery of the legal services by establishing metrics from data that was previously largely ignored, and controlling legal spend are the key drivers for increased awareness of legal operations. Industry groups are forming and giving effective platforms for discussions about the need for change in legal services. As the benefits of legal operations in the back office of legal departments become mainstream, we can expect even more tension to operationalize the “front office” or the actual legal work performed by attorneys today.
The unauthorized practice of law is a sword and shield for the legal profession. All of the above aspects of the ecosystem are forcing a quiet re-examination of this self-regulated body of professionals. Some progress has been made in the state of Washington with limited license technicians, opening the door for professionals without a law license to handle some steps of the family law legal process. Similarly, there is little on the books requiring attorneys to have basic capabilities with technology, and nothing about data analytics, process engineering or project management. Lack of progress on this front will hinder progress by the other participants as they try to challenge the status quo.