In 2017, BDO released a fascinating report based on data collected from law firm leaders. Over 50 unique law firms were involved, making the report one of the most comprehensive to date. Topics ranged from the disruptive power of legal tech to law firm structure and everything in between.
Here, KBE Legal Hub presents its own take on the data: Have attitudes changed in 2 years since its collection? Is the data just as applicable in Western Australia’s and Perth’s strong legal market? What can the savvy law firm partner or General Counsel do to stay on top?
Here we present part one: leveraging the power of legal tech to drive your firm (and in-house team) to the top.
The obvious insight first: 88% of law firm leaders considered technological change to be one of the strategic priorities for their firm – and 6% considered it to be the top strategic priority for the firm.
This comes as no surprise. With the rate of change increasing so rapidly, any law firm that does not prioritise adaptation will fall behind. The data represents cognisance of this fact.
It’s the specifics where things get interesting. 20% of those surveyed identified artificial intelligence as the most influential development – whereas 18% answered greater productivity and efficiency to the same question.
There’s a split in views. While all agree that technology must be a strategic priority, there’s a debate over whether the nature of technology will be outright disruption (via, for example, artificial intelligence) or more incremental improvement.
We think it’s a matter of degree. We’ve made no secret of the fact that we believe bigger changes are on their way and will have particularly sharp consequences for the legal professional and organisations. The fact of the matter is that whether legal matters are progressed via artificial intelligence or in a more efficient manner, as BDO points out new technologies are likely to replace some of the routine work which are currently undertaken by junior lawyers. This in turn will have an impact on the shape of the law firm of the future. Firms that experiment with technology and make innovation part of their culture will emerge as market leaders. What works today from an operation/client service perspective almost certainly will not work in 10 years.
As an example, one law firm leader wrote that “the increasing cost of a transaction is in harnessing data. It’s now about 90% of the cost. Technology will bring that down to 45%.” This kind of efficiency is a major opportunity for savvy law firms to distinguish themselves. It also elevates lawyers up the value chain, freeing up time for interesting and bespoke work. As more routine work is commoditised and can be performed by technology, it will free up junior lawyers to concentrate on higher value work. Technology is not about simply replacing the work of the lawyers, but enabling them to offer a wider range of services to clients, and provide better and deeper legal analysis.
As the shape of the law firm pyramid changes, leaders will need to rethink not only the financial model, but also the way they utilise and train junior lawyers as well as upskilling the lawyers in data mining and analytics.
In part two of this series, we identify some of the other pressures coming to bear on the “pyramid” structure.
Have a read of the full article here.