There is not a lot new in this piece if you stay current, but it’s a good summary nonetheless.
By:
Eric De Grasse
Chief Technology Officer
24 September 2020 (New York, New York) – The Financial Times has started a new series on the legal sector’s response to digitalization. The series will run through next month. The first piece (below) looks at how the pandemic is driving change. One piece in the series will be an attempt at an in-depth look at legal technology.
NOTE: parts of the series will be behind the FT’s pay wall, and some freely available. At the time of this writing the following introductory piece was behind the pay wall but is expected to be freely available. We have received permission to repost the entire series which we will do once all parts have published.
I suspect none of the following information will be knew to those of you who subscribe to the BONG! report put out by Jonathan Maas, or read the two excellent blogs put out by Ron Friedmann and Doug Austin. All three of those sources have become “must reads” for the legal industry as a whole, and the legal technology sector in particular. And, frankly, the FT piece it is a bit of a non-story given law firms are embracing AI and other tech to keeps costs low. And Big Law and the Main Circle certainly have some state-of-the-art telecommunications tech in place.
But still … I think this FT piece does a fine job of “summing up” and you’ll find some nuggets.
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Corona virus forces lawyers to face their digital future
The legal sector has escaped radical change by new technology — so far. Is that about to change?
Source:
Financial Times
24 September 2020
The pandemic has altered the way we live and work for ever and forced industries to interact with consumers online wherever possible. That has brought companies into contact with their own digital futures far sooner than they imagined – and hastened change for lawyers too. The initial impact was associated with lockdowns, working from home and video conferencing via websites such as Zoom.
But the pandemic also accelerated at an unprecedented pace the use of online technologies in industries and sectors as varied as healthcare, retail and beauty. Where their corporate clients are going already, lawyers are finally set to follow. Over the summer, Microsoft issued a report and noted “we have witnessed two years’ worth of digital transformation in two months.” In sectors such as groceries, the pandemic has hastened the adoption of online shopping; in medicine, it shifted face-to-face consultations to remote appointments.
And Wolfgang Münchau, Financial Times European commentator, recently dubbed Covid-19 the “end of the analogue era”, to explain the shift from technology as a support function to the use of, say, mobile phones as producers of real-time data.
Digital revolutions come in waves, and until now professionals such as lawyers and accountants have been largely immune to drastic change. Those groups deal mainly in knowledge rather than products, according to author David Moschella, and that focus – and healthy profit margins – has in many cases protected them from being forced to overhaul their business models entirely. Unlike goods and services, such as taxi hailing or retail, the legal industry has so far escaped serious disruption. But the incursion of machine learning and artificial intelligence into legal departments puts lawyers in the “foothills” of profound change, says author and government adviser Richard Susskind, who has spent some 40 years writing about the impact of technology on professions including the law.
The big digital shift that took place between 2006 and 2016 concerned moving from ownership models to sharing and streaming, cloud-based computing and the development of apps using location services such as taxi-hailing service Uber and food delivery services online. But the current phase is more drastic, according to Mr Moschella, and will have a more radical effect on the business of law. In a report he chaired in 2017 he said:
The first two waves of disruptive innovation haven’t been strong enough to reshape the professions, but we think the third most likely will.
Since then the Big Four accountancy firms have triggered a growing commoditisation of legal services using technology, and law firms have been forced to engage with clients using software and technology, in a shake-up of traditional ways of working. Said Susskind:
The first 60 years of legal technology were devoted to automation rather than transformation — using technology to streamline and improve the way you already work. It is not about changing, it’s about grafting technology on to traditional legal practice.
If you look at other sectors, what we’re seeing is something different, where technology fundamentally changes the nature of the service there you would be talking less about the transformation of lawyers and more about the transformation of their business models. We’re a traditional lot and cultural change — which is so important if we want our lawyers to adopt the use of innovative tech — is exceptionally difficult.
Robert Shooter, head of technology for Fieldfisher, noted:
A plethora of legal technology companies has emerged, many of which use an element of machine learning or artificial intelligence to make lawyers’ lives easier. Those include Ravel Law, which predicts outcomes based on case law, contract analysis specialists such as Kira Systems to speed up due diligence, and Virtual Pricing Director, which helps price deals using algorithms.
Yet plenty of barriers remain to the technological disruption of law. In its most recent annual law firm report, PwC found that the adoption of digital and emerging technologies had advanced again, with a greater proportion of top firms establishing some form of mobile apps, automated document production, data visualisation, AI, and smart contracts.
The PwC report also found that
other emerging technologies remain less mature, with approximately 40 to 50 per cent of firms still only at research stage with robotic process automation (RPA), big data and predictive analytics and blockchain.
Robert Shooter again:
We’re a traditional lot and cultural change — which is so important if we want our lawyers to adopt the use of innovative tech — is exceptionally difficult. People like doing things the way they’ve been doing them for generations.
Our clients are squeezing margins, demanding faster turnround times, and greater use of innovation. If law firms don’t change culturally, clients will go elsewhere.
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The image of the lawyer as a Luddite, rather than an early adopter, persists and the FT series will return to it. And if you have read Austin, Friedmann and Maas as referenced above you know that while it is relatively universal to be resistant to change, the legal profession has been particularly resistant.
But the economic distress of the past decade, combined with the rise of new technologies and a generation of millennial lawyers who grew up using technology, are transforming the practice of law. I am looking forward as the series continues to explore the influx of millennials into the workplace to the use of artificial intelligence, legal process outsourcers and alternative providers, and other new market drivers shaping the legal profession and forcing change.
