In the last few weeks we have seen a number of people leave Big Law tech and innovation roles, an innovation leadership job at one firm folded into a broader less tech-focused management role, and figures in the legal innovation world jumping ship for new locations.
This has led to some people asking: is something going on? I.e. is there some kind of pushback on legal innovation within Big Law, especially in the UK’s version of it, the City of London-based firms?
On face value it would seem that the moves are not directly related. But, it raises the fascinating theoretical discussion point: what would happen if Big Law pulled the plug on legal innovation?
I.e. could we ever get to a point where law firms – which are owned by the equity partners who work there everyday and not in most cases external shareholders who can force through change regardless of what the lawyers want – decide they’ve ‘reached their limit’ with this drive to change the means of production?
Would the partners ever say: ‘Stop the train! This has gone too far! This use of tech all started off as an effort to make our lives a little easier and things a bit more convenient. Then it became useful to have it around where there was some cost pressure on more basic tasks.
‘But now……now, it’s all getting out of hand. It’s finding its way into every aspect of the firm and our relationships with our clients. It’s changing the way we work, the way we price things. It’s starting to unsettle a business model that has worked perfectly for decades. No….it’s got to stop.’
And if they did ever say that, not just one or two partners, but whole firms, what would happen? Here’s some thoughts.
First, the idea that an industry might decide to put on the brakes is not unprecedented. Look at the fossil fuels industry. BP famously once said that its name now stood for ‘Beyond Petrol’, and that it would invest heavily in solar and wind. That didn’t work out. The oil industry does pay lip service to renewables, but it’s mostly greenwashing with the vast majority of investment still going into finding new wells and building new refineries.
Could law do the same? In theory, yes. If the owners of a business say ‘stop’, then they can stop. Who’s going to make them change? The head of innovation? The associates? Not likely. Those who own a business via their equity stakes, run the business.
Which raises the next question: could they stop things? Is that even possible now? Has the legal innovation genie escaped the confines of the old business model and now there is no way of putting it back?
Artificial Lawyer is minded to pick the last point: that things have moved too far now to be returned to the old ways. Clients have got wise to what’s possible now, their perceptions have changed – at least at the larger banks, corporates and insurance companies.
While a certain amount of ‘innovation washing’ might keep the clients hoodwinked for a while, eventually some firms will break rank and do something substantive that changes the calculus of competitive advantage.
I.e. it’s simply not sustainable – short of a massive co-ordinated effort – to stop firms moving ahead with change. If three or four large firms stop and scale back change projects, others will carry straight on and scoop up the opportunities in the market that are left on the table.
This site’s view is that there is no turning back now, even if from time to time a firm may decide to pause things while they think through their business strategy.
So, what will we see then? This all seems inevitable:
- Greater use of automation for routine tasks, whether via no code workflow systems, or NLP/ML review platforms, and other tech, including now in litigation work via NLG.
- Greater crystallisation and availability of legal data and KM – which in turn helps to feed efficiency and automation of process tasks.
- The need to refigure legal labour and create your own process centres, or work closely with ALSPs.
- More focus on fixed fees and the removal of the billable hour. And more focus on standardisation of work ‘products’.
- And, at least with inhouse legal teams, more focus on creating standard docs/templates/clause banks and bringing in associated tech to support their use.
- And also, clients increasingly looking for a tech component to a solution from law firms, to drive efficiency and reduce costs, in every major piece of work.
All in all, even if some firms want to calm things down, it’s too late. Stopping may look like an option, but it would almost certainly place such firms on the wrong side of history.
The great thing about good business is regardless of whether companies jump on board or not, it always finds a way through.
A legal matter can now be disaggregated into its component parts, a good proportion of which can be carried out just as well (even better?) by other professionals or increasingly capable technology, supported by good process and project management. While I agree the market has moved forever, Big Law has a choice whether or not to engage with this operating model innovation. It could simply focus on the parts of the matter that are purely legal.* The consequence of this would be that it becomes smaller (although not necessarily less profitable), working with others to deliver the ‘less legal’ elements of the matter. The problem is that much of Big Law does not necessarily want to take this route (eg, they have long lease commitments to fund). Doing this properly cannot be a sideshow, it has to lie at the heart of the strategy as it requires serious investment and commitment. The strategic opportunity is there: many clients do not want to assemble a bunch of solutions themselves and so there is an opportunity to be the one-stop shop for re-bundled services. Will Big Law seize the opportunity, or will others get there first?
* It is, of course, conceivable that technology will impact the ‘trusted advisor’ role of a lawyer in due course (cf. image interpretation in medicine) but this tends not to be the focus of much current legal innovation (for a start, the data sets are not there to train the algorithms).