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Jan 15, 2018
Legal Tech and the Changing Legal Industry – An Upcoming Series on Technology and Changes to the Legal Services Industry from the BigLaw Perspective
While lawyers have long had a monopoly on the provision of legal services, there is no disputing that the legal industry is undergoing rapid change. It is less certain, however, what form this change will take. Most writing on legal technology is either from the point of view of the legal technology companies themselves or from third party commentators. The point of view of law firms who are using and affected by legal technology is less commonly available. This series of legal technology articles is an attempt to fill that gap.
In February, I’ll be seconded to Diligen – a Toronto-based legal tech company that provides an AI-solution for the contract review process. This secondment will be the first time that a lawyer from a leading law firm has been seconded to a legal tech company. A secondment of this type would have been unthinkable a few years ago, so it was little surprise that the secondment generated widespread coverage in the legal tech community.
Each week, I’ll provide news and commentary on developments in legal tech and the changing legal industry. Updates will be of interest to in-house counsel, lawyers focused on legal tech, and law firm leaders. Most updates will take the following form:
- 1 quote of the week
- 3 recent articles worth reading
- 1 legal tech/legal market analyst worth following
- 1 legal tech company worth learning more about
For those who are new to the space, here are just a few factors creating challenges and opportunities for traditional legal service providers:
- Technology: technologies like artificial intelligence are allowing machines to perform certain tasks much more rapidly than humans possibly could. While artificial intelligence will augment the services performed by lawyers, there is little doubt that certain discrete legal tasks that are currently performed predominately by lawyers will cease to involve substantive human input.
- Competitors: traditionally, if clients needed legal services, they sought the expertise of lawyers. As a result, the leading competitors of large law firms were other large firms (most of which provided largely fungible outputs). Most large firms operated in the same manner: making little change to their service offerings; billing clients by the hour for work performed, regardless of value delivered; and paying little attention to potential efficiencies. Clients who needed top-notch legal expertise had few alternatives – the only question was which law firm to retain.
Now, however, these law firms are under threat from a number of directions:
- expanding in-house legal departments that are performing legal work that would have traditionally been sent to external legal counsel;
- “NewLaw” firms and legal service providers that embrace modern practices (an emphasis on technology and process; data-driven decision making; and the proactive use of fixed fees) and have the potential to offer clients a different value proposition, including greater cost certainty;
- and new entrants to the legal field who have embraced modern practices in other areas (e.g. the Big 4 accounting firms) and are traditional referral sources to large law firms.
And, of course, who could forget the LegalZooms and Rocket Lawyers of the world, who – despite being overlooked by large firm lawyers – are being embraced by consumers who may not have otherwise retained lawyers.
- Client Expectations: client expectations are changing. The days of responding to a relatively-simple, real time business issue in the form of a lengthy, carefully-hedged memo are coming to an end. In-house legal departments are becoming metric based (who knew there could be other KPIs for lawyers other than billable hours?), are expected to provide more for less, and expect cost certainty and predictability from their external legal providers.
As Aird & Berlis is based in Toronto – one of the world’s leading AI and legal tech hubs – these updates will have a Canadian spin, but the updates will still focus on developments and companies from all over the world.
In the meantime, if you’re interested in learning more about how to adopt artificial intelligence at your law firm, you can read a recent article here.