The successful application of technology to a law firm’s business ultimately hinges on one key question: is it technology that drives the business or business that drives the technology? Most of the main IT decision makers argue that it must be the latter, while questioning whether technology should even be the main consideration.
‘Technology is an enabler, but being innovative isn’t just about bringing in technology,’ says Bryant Isbell, managing director of Baker McKenzie’s global e-discovery and data advisory group. ‘It can also be about redesigning a process and looking at different ways to reimagine a solution’.
Often technology is brought in to solve a problem, without consideration as to whether that solution already exists somewhere else in-house. And, as the legal technology industry expands, law firms will become exposed to a proliferation of suppliers vying for business. A glance at the explosion in venture capital funding demonstrates the direction of travel. According to a report by Investec, a company that monitors start-up investment, funding towards the legal technology industry reached around $1bn in 2018. It remains to be seen whether all of this new technology will be fit for purpose, but law firms with a sensible strategy can take advantage of what is already a buyer’s market.
‘There are pockets of law where technology is adopted well, such as e-discovery, but in certain areas it’s still the Wild West,’ says Haig Tyler, chief information officer at Herbert Smith Freehills. ‘We’re all bombarded daily with standard auto-generating emails and press releases from various tech suppliers. We’re trying to break through this phase of law tech that’s very much about the technology. We’re getting increasingly a number of suppliers now who are more focused on the business value.’
Managed solutions
Getting a handle on the technology is not only important for the client experience, it’s also necessary for internal management – particularly for large-scale international law firms that would ultimately prefer to rationalise their suppliers and find more bespoke solutions.
‘All firms face the tension of wanting to consolidate our tech into the smallest number of suppliers, versus the need to have the right tools for the job with each case,’ says Stuart Hopper, director of practice development and innovation at Dentons. ‘We need a willingness to collaborate with suppliers and tailor their out-of-the-box products to our needs.’
‘From the outside having so many applications may look very complicated,’ adds Jeroen Plink, chief executive of Clifford Chance (CC) Applied Solutions, a technology subsidiary wholly owned by CC. ‘But if you’re a litigator you only have the need for Relativity, your practice management system and a few other tools, so then it isn’t so bad. For the most part, as a litigator, you’re not interested in a tool like Kira, which is particularly well equipped for due diligence in M&A transactions. To reduce the noise within Clifford Chance we have focused our delivery programme on eight or nine core products.’
For the most part, the professional services industry remains a fairly conservative buyer of technology and for some of the larger entities, the focus is more on building solutions in-house, or at least partnering up with developers to produce bespoke solutions. ‘For the past few years, we’ve run an internal innovation programme through which we surface and invest in technology ideas from across the breadth of our business and across all levels of experience,’ says Roshana Gammampila, a director of tech and innovation at PwC UK. ‘It’s an exciting time because today we see clients relying on PwC technologies that two years ago were just an idea in someone’s mind.’
Internal buy-in among the fee-earners, particularly partners, is essential. The ownership dynamic of a typical partnership makes selling to a law firm a different proposition for suppliers. ‘IT technically has the remit over technology, but they don’t typically have the user case for it,’ says Ben Wynne-Simmons, head of growth at the B2B app developer, Fliplet. ‘With law firms being partner driven, if the partner says something, then something happens. IT in that relationship is more of an implementer.’
For the successful adoption of new technology, many firms will ensure that they have innovation ambassadors from both the fee-earning and the tech sides working together to drive things through. ‘One of the most important things we’ve done is make sure we’ve got a senior-level sponsor, so that it’s not seen as technology for technology’s sake,’ says Tyler. ‘If you’ve got an advocate for that change, the change will be more effective. People will follow a business leader rather than someone from IT.’
Horses for courses
The tech that firms choose to adopt depends very much on their size and client demand. For smaller and mid-market players, an off-the-shelf solution is usually most appropriate.
‘From our perspective, the smaller firms will go for a one-stop shop that allows them to do everything,’ says Alex Williams, a product manager at Tikit, which develops a broad range of practice development software. ‘They don’t have the capacity and resource to manage those products internally, so they are looking for one single solutions that allows them to manage the whole process effectively.’
At the higher end of the legal food chain, the solutions tend to become more bespoke and collaborative, with some firms developing high-profile innovation hubs and incubators, such as Fuse at Allen & Overy and Applied Solutions at CC. In these cases, it is typically an external tech developer that will provide the underlying software, which is then adapted to meet the needs of the law firm, either for internal use or for the law firm to then repackage on to another client.
‘One of the most important things we’ve done is get a senior-level sponsor. People will follow a business leader rather than someone from IT.’
Haig Tyler, HSF
For suppliers such as ThoughtRiver, which recently joined forces with PwC on a new product to assist with pre-screening in document review, such partnering arrangements bring clear advantages and opportunities. ‘The circumstances in which someone is going to buy the underlying functionality of our software through the broader service that PwC is offering is different to when a client might buy something from us direct,’ says Tim Pullan, ThoughtRiver’s chief executive. ‘You need both options out there for clients. Clients might want to do it all themselves. Some clients just want it to fulfil a function and they want PwC behind that integrated offering.’
Universal access
For those firms and corporations wishing to develop more bespoke solutions, the growing uptake of the cloud and software as a service (SaaS) generally, has helped significantly reduce the barrier to entry. ‘What we are seeing is the power of the cloud computing infrastructures and the tools they are putting in the hands of developers using their technology,’ says Gammampila. ‘This is democratising machine-learning technology, which was previously only really understood by a small group of specialists.’
The flexibility offered by cloud service providers, as well as the ability to integrate different applications across the platform, is proving a boon for those seeking to tailor different products to their own needs. ‘One of the things that has been emerging in the UK over the last 18 months is managed services,’ says Adrian White, senior director for EMEA business and markets at Inventus, a global e-disclosure consultancy. ‘This is effectively where a company will provide things like Relativity and other applications exclusively for a law firm and a corporate, so that they can take control of driving that technology themselves, and not necessarily keep tendering projects out to the market.’
By harnessing this technology and tailoring it for their client’s needs, larger law firms can genuinely reimagine the way in which they service their clients. Whether the commodifiable product will take over from the more traditional forms of legal advice remains to be seen, but the change is already happening. For a smaller client seeking Magic Circle legal advice, a tailored Magic Circle legal product might be a much more affordable solution. ‘One of the things we’re doing is selling a SaaS product, based on a subscription model rather than hourly billing,’ says Plink. ‘It allows some of our clients to get within reach of that legal expertise at a price that wasn’t available before.’ LB