News

Law Firm CIOs And Digital Transformation

Zeiniz Virani
Digital Transformation Specialist
October 5 2019

For generations law firms have operated the same way, but the rigidity of the traditional model is being exposed in the wake of changes in their client markets. Smart working cultures, expectations of more pace, flexibility, and better value, mean that law firms are looking to transform for survival and relevance, in their quest to be trusted partners to their clients.

Next generation digital technology (LegalTech) creates the opportunities that law firms need to transform legal services. There is now an evolving legal ecosystem and it is disaggregating the traditional monolith. But for true transformation the culture and mindset is key. The sector is increasingly moving out of the era of ‘lawyer & non-lawyer’ silos and accepting that digital transformation will redefine what ‘lawyers do’. Once the primary and the dominant resource, lawyers are adapting to a new model for the 21st century, where roles are blending. Collaboration with other professionals and ‘machines’ will be the new norm, if client expectations of improved access, customer service, pace and value are to be met.

Technology has already changed the face of law firms with mobile devices, a few ‘legal apps’ and some on-line services. But these steps are not to be confused with digital transformation. They are the bare minimum in keeping up with the rest of industry and commerce. LegalTech lies beyond these rudimentary steps, offering opportunities to radically shift the business model.

Meeting the Needs of Tomorrow

But is law firm digital transformation really crucial now? We say yes, it is. The macro conditions of globalisation, advances in technology, demands across all sectors for increased capital productivity (i.e. to do more, with less) and the emergence of a new generation of well-funded tech-first, process orientated law firms, means that digital transformation is now as much about survival, as it is about growth & profitability.

The Ecosystem Unravelled

Client expectations are now fuelled by the ‘Amazon Prime effect’ – a pervasive culture of immediacy, personalisation and the ability to consume, interact and transact on their own terms. In an equally dramatic shift, talent emerging from Millennials & Generation Z are truly digital natives, having been exposed to social networks and mobility from early ages. The impact is an emerging workforce that also expects immediacy & interaction on their terms, but more than this, it is a talent pool that is very comfortable in harnessing and cross-referencing multiple sources of information across digital and analogue interactions, and indeed expects to be able to work this way, as the basis of their contribution. Also emerging in the eco-system are new, progressive partnerships and joint-ventures with external businesses at a rapid rate of acceleration.

These relationships are with overseas firms and with tech start-ups, for example Taylor Vinters collaboration with Pekama, a LegalTech start-up which aims to revolutionise the way lawyers collaborate with their clients. Taylor Vinters also partner with ThoughtRiver, again a LegalTech start-up, this time building an AI capability, to deliver contract intelligence software, where the AI scans and interprets information from written contracts used in commercial risk assessments and produces visualisations of the potential risks and other issues. These incubation, stake-based partnerships, accelerate value-creation for both parties, and are often preferred to full mergers. In short, delivery models, pricing & the legal supply chain are being redefined and there is an opportunity to drive and shape this shift, for law firms who choose to lead.

Debunking the Hype with Three Themes of Value

It’s equally crucial that we debunk LegalTech hype and get to the reality of where tangible value can be realised. The market is flooded with myths like the emergence of the robot lawyer any day now, with tales of Artificial Intelligence (AI), Machine Learning (ML) & Robotic Process Automation (RPA) rendering an entire human profession redundant overnight. So, is this the seismic shift of digital transformation? We say no, it’s not; and it’s more critical than ever, not to get pulled into the hype cycle, as a distraction to law firm efforts to extract value.  We see real opportunities in three themes:

1. Friction:

On-line access, communication, collaboration & workflow must be a smooth, location agnostic, digital first experience. Eradicating friction is now essential to meeting the most basic expectations of clients and the modern workforce.  We think law firm staff productivity and engagement, and client retention and satisfaction, are now contingent on these foundations.

2. Automation:

AI & ML can deliver efficiency gains from the administrative work of lawyers, paralegals and support staff, however, in the legal sector we think transformation come from data orientated tasks rather than just physical tasks (the default assumption for a lot of AI and RPA solutions). Areas such as eDiscovery and workloads that require search and analysis of high volumes of diverse documents quickly, to provide answers to complex legal problems, are likely to offer larger gains. An example of this is the ROSS Intelligence solution, built on the IBM Watson cognitive computing platform. The ROSS application accelerates research by allowing lawyers to ask questions in natural language, just as they would with each other. Because it’s built on a cognitive computing system, ROSS can sift through over a billion text documents a second and return the exact passage the user needs. A radical shift from manually combing through internet and database search results. It’s clear from this example the power of automation is helping the lawyer go faster and with more accuracy. An emerging term for these types of scenarios is Intelligence Augmentation (IA) which seeks to combine the strengths of humans and robots, rather than completely mimic or replace human activity. We think this is where value can be extracted. This means embracing the era of big data, and focusing efforts on data veracity, which is about ensuring the quality and accuracy of that data.

3. Prediction:

Building on the data concepts outlined above, we see further value in legal predictive analytics. The digital transformation opportunities are in analysing and learning from past legal reference data, to provide insight and prediction into future outcomes.  Gains can be made that help lawyer assess the likely outcome based on key indicators. Similarly, this information can enable firms to take on cases with higher chances of success.  An example of this can be seen in the Lex Machina solution, created by LexisNexis, which tries to predict outcome probabilities, using data aggregated from prior cases, but also analyses the language patterns of judges to help lawyers anticipate the arguments that might be most persuasive in their specific context. We think law firm chiefs that start to prepare for machine learning case predictions and judgements solutions, will have competitive advantage and improved operational performance ratios.

Activation - The CIOs Three Track Strategy

For IT Chiefs to make progress on these themes, there must be great levels of engagement across the whole of the firm. Chief Information Officers face the challenge of a legacy where technology has not been the leading problem solver, and for some, it has been the cause of problems.  Winning confidence and having a real connection to solving people’s problems will now be more important than ever, if CIOs are to truly activate digital transformation.  We see three tracks for you to activate:

1: Co-Create the Future - Don’t Go It Alone!

  • The key to improving technology engagement across the firm is simply in speaking directly to people throughout the business, to understand the challenges they face, and identify how technology can help eliminate those issues. This will give you the true pulse on the firm’s receptivity to adopting digital transformation. Many CIOs fall short in executing their plans when they don’t consider communication & engagement as vital components from the very start. Mobilise an engagement & communications drumbeat across the business, driving transparency, addressing concerns, solving problems together and creating ownership & buy-in.
  • Of equal importance is to find co-sponsorship from another key leader so you co-own the digital transformation strategy – this can’t be just an “IT thing”!
  • In parallel with this, look to the outside world and engage LegalTech companies. Bring together lawyers, managers, your IT teams and LegalTech people. This will bring a level of modernity to proceedings and open everyone up to the opportunities of innovating and collaborating.

2: Technology Transition - Not Everything Needs to Wait!

  • Get your foundations in place i.e. your move to cloud, mobility, collaboration, smart working and seamless workflows. Relentlessly seek to digitise all things analogue! Examine everything through the lens of friction eradication so you deliver value by enabling the way Millennials and Gen Z’s need to work, and the way clients expect to interact and transact with your firm on their own terms (The Amazon Prime effect).
  • Pick an underpinning platform for success, this will stop the spending time and money on simply making things work together and shift to adding value and leveraging the capabilities being built on that platform. Examples of this are clear for all to see; IBM’s investment into Watson, allowing solutions to be built on its framework, Microsoft’s O365 Modern Workplace and Microsoft Azure IoT Services, Cognitive Services, Bot & Machine Learning. Leveraging a platform will bring architectural coherence and acceleration to your delivery.
  • Kick-start the LegalTech aligned workstreams. Some of these will be preparatory e.g. data readiness for AI & ML & predictive analytics, whereas others will be innovation streams based on the priorities and roadmaps flowing from your co-creation track!

3: IT Capability Transition - Create the Future Tech Team Now!

  • A digitally transformed law firm needs a technology & digital team that looks different to the one you have right now. Start re-shaping the incumbent IT team capabilities to include modernised professions, practices & skills (including collaborating with suppliers & start-ups).
  • Embrace the required modernity and begin upskilling so that your ways-of-working are agile, iterative & based on product-technology models. Within this, create the competence and investment for ITs own modern engineering skills so that you have a team that can work with continuous integration/continuous delivery (CI/CD) methods.
  • Crucially, get innovation & experimentation going with the business, to create buy-in, participation and deliver value.

Law Firm Digital Transformation - Our Five Top-Tips for CIOs

As a law firm Chief Information Officer, grasp the of nettle of digital transformation, engaging and educating your executive colleagues and legal partners in what the future holds, and why the time to start adapting is now. Not all benefits will arrive quickly, so it’s important to deliver new digital capabilities for the whole firm that give visible value, whilst progressing the wider innovative streams in parallel.

Here are our five top tips:

Co-sponsor, co-create & collaborate.

Co-sponsor, co-create & collaborate.

Accelerate the foundations & win confidence.

Accelerate the foundations & win confidence.

Pick your platform for success.

Pick your platform for success.

Pivot to agility methods and product/technology delivery models.

Pivot to agility methods and product/technology delivery models.

Mobilise LegalTech preparatory and innovation workstreams.

Mobilise LegalTech preparatory and innovation workstreams.