Disruption driven by a strong startup culture and clients demanding more for less is seeing firms increasingly adopt technology to improve productivity across practice management.
Along with the offshoring and cloud computing we have started to see from firms over the past few years, the big predictions for 2016 are big data and the ‘Internet-of-Things’ – where interconnected devices, from fridges to phones, cars and homes, link up to the internet to create an estimated $3.9 trillion to $11.1 trillion in value by 2025.
“By 2020, information will be used to reinvent, digitise or eliminate 80% of business processes and products from a decade earlier,” predicts Doug Laney of Gartner Inc.
The Upshot: Any aspect of legal work that can be automated will be. Lawyers who consider their role to be one of strategic advisor, rather than contract writer, are more likely to benefit as clients grow more comfortable with pro forma work and lower-cost, automated legal solutions.
Legal research is also likely to be expedited as technology powering mainstream search engines like Google filters into law. ‘Big data’ may also impact on the collection of evidence and research generally as technology improvements drive more meaningful connections between existing information. Artificial intelligence, already making an impact in due diligence and contract review via startups like Kira Systems and Lawgeex, is likely to exert a stronger influence in the legal profession.
Rise of law startups and legal marketplaces
Law startups aimed at changing how legal work is completed have been making their presence felt for a few years now, with ventures like Cleardocs, LawPath and Legal Vision looking to automate and streamline legal processes.
In 2016, we can expect further growth in law startups. One sub-category to watch are online marketplaces for legal services. Pioneered by American startup, UpCounsel, legal marketplaces essentially act as ‘Freelancer’ for lawyers. Clients may detail their legal projects and have lawyers place bids regarding fees and time required to complete each project. LawTendr, which launched in Australia about a year ago, offers a similar service. In other versions of legal marketplaces, including RocketLawyer from the U.S. and LawPath in Australia, clients can pose simple legal questions and have these answered for a lower fee.
The Upshot: Mixed success in the U.S. (UpCounsel has raised $2.4 million in seed funding and has 5,000 registered attorneys, while Shpoonkle is now defunct) is unlikely to stop the steady march of legal marketplaces and law startups attempting to disrupt Australia’s already competitive legal landscape.
Law firms and lawyers can benefit from legal marketplaces if they see them as an alternative marketing channel to pick up new clients, though legal consultant, Colin Jasper, advises caution.
“If you’re a lawyer serving a market like this, the only way to make money is to treat it like a commodity, to look for high leverage work, to look at work that can be done in a fairly process-oriented manner,” Jasper told Lawyers Weekly.
Clients demanding low-cost lawyers may not always grasp the complexity of a legal matter, and indeed, it may be difficult to scope out unforeseen aspects of work.
Old boys club no more, increased competition for savvy clients
As the Australian legal market enters a mature phase of growth, competition is increasing while savvy, informed clients are putting downward pressure on fees.
“In the past, a combination of high demand, naïve clients and old boys club competition meant even mediocre firms could thrive,” noted the Thomson Reuters White Paper on the State of the Australian Legal Market. “Clients want more for less and it appears they are getting it…It is clear the market will no longer tolerate mediocrity. The war for top talent will intensify…Firms that don’t make the grade will simply fragment or fold.”
The Upshot: To the winners, the spoils. A maturing legal market demands firms and lawyers willing to embrace technology that boosts productivity, reduces costs and improve clarity for clients in terms of work done. Strong relationships based on providing ongoing value to clients will be critical. Given the potential for so much of legal work to be automated by technology, this may not mean lawyers will need to slog at longer hours at the office. Rather, it may mean lawyers who can clearly communicate their value to clients while automating more of their workflow prevail.
* story written and presented by the College of Law www.collaw.edu.au