Technology as a strategic differentiator in today’s legal profession

15
Mar
2011

Richard Cohen

‘The past is a foreign country, they do things differently there’, so the saying goes. But is this really true of the legal profession? Let’s suspend our disbelief for a moment and imagine – like the plot of the hit show ‘Life on Mars’ – that a young solicitor of today has been transported back through time into a law firm of the 1970s. Our time traveller would notice a whole host of differences; the presence of IBM Golfball typewriters (if he was lucky, otherwise manual or crude electric typewriters) instead of PCs, reel to reel Dictaphones and the lack of modern communication devices other than a fixed phone line and for the very large firm a telex machine (a very large typewriter connected to a phone line).

Yet these differences cannot mask the fact that the underlying business model has remained unchanged for decades.  For example legal documents are still being drafted on a bespoke basis by solicitors via an expensive model of hourly billing; this despite the long-standing opinion of experts and commentators that these methods of delivery are inefficient and outdated.

Where have the technological changes occurred since the seventies? They have nearly all come in the back office of the firm; in functionality such as case management, document management and the outsourcing of perfunctory tasks. This has had the effect of streamlining processes but it has not radically altered the way legal services are provided. Aside from perhaps the coffee machine in the reception area, very little change has occurred in the ‘front office’ where the solicitor and client relationship is established and where the legal service is delivered to clients.

All this is now changing with the arrival of disruptive market technologies; document assembly systems and similar tools that can be deployed through a firm’s website. Formerly, solicitors would have to take instructions from clients in person, pull up a precedent and cut and paste the relevant clauses into a suitable document. Now systems have been developed that can present users with an interactive online question and answer session, which is linked to an automated document. A complex document such as a Will can be drafted in many different ways depending on the client’s circumstances; thus making the delivery of a systematised service difficult. However - with the application of automation technology and the input of a specialised legal team - a document can be programmed which contains nearly every possible iteration of a Will.  This system can then capture data from the client and determine the right language and clauses to make up the final draft through pre-programmed logic ready for final review by a solicitor.

What this form of document automation provides is a ‘document that can think’; one which can produce a highly detailed first draft of a legal document which has been individually tailored for the client. This method of automated drafting allows firms to be effectively instructed online, but also results in internal cost savings by anticipating the elements of routine drafting.  Valuable lawyer time can be freed up in order to concentrate on the more highly bespoke elements and delivering the individual expertise which is critical to a high street firm’s market credibility.

Why does the profession need to move in this direction? Aside perhaps from a few grumblings about the loss of tax work to accountants in the 50’s and 60s, our time travelling lawyer would have noted the complete absence of competition. Since those days we have seen a creeping advance of work sucked out of the profession in some cases sold back to us at increasingly lower rates or through payment of referral fees by new entrants to the legal services market something which has now culminated in the imminent arrival of Alternative Business Structures.

Firms can weather this change by continuing to be the client’s trusted advisers, but using new tools to do the job quickly and efficiently, delivering their service in whichever way the client wants. Provided law firms can offer price flexibility, packaged services, reduce the cost to serve and above all offer more accessible and innovative engagement and delivery methods, I believe that law firms will survive in great numbers. This requires a cultural change which I believe we can make as a profession over the next 3-5 years. If we don’t, a new generation which has grown up with the internet, digital media and social networks won’t engage with us; and there are a whole host of providers they will engage with and that are eager for their business.