If economic pressures drive the current reshaping of the legal market, technology undergirds and facilitates much of the disruption facing law firms.
Businesses had to adjust to a new economic reality following the recession of 2007-2009. Confronted with pressures to do more with less, law firm clients became smarter about reducing their legal spend and placing greater focus on demonstrable value than ever before. As a result, firms spent much of the last decade finding new ways to be responsive to clients' demands for efficiency, economy, predictability and value.
Technology has often enabled much of this dynamic, presenting both problems and solutions for law firms. It has enabled clients to demand more of the outside firms they hire, but it has also provided those firms with the tools to respond.
In-house legal departments in particular have become more independent of the firms they hire. Rather than hiring firms for a full suite of services, companies’ in-house lawyers are performing much of their own legal work or outsourcing to alternative legal service providers (ALSPs). Law firms are no longer the gatekeepers of legal know-how, and they are no longer the “general contractors” of legal services. Clients are better equipped than ever to evaluate firms, shop for ALSPs, keep work in-house, identify solutions independently, or even forgo services altogether, primarily because of two factors: the mass of legal information available online and the technologies available to leverage that information.
It’s too late for law firms to grudgingly acknowledge that they need to “keep up” with new innovations. To be competitive, firms need to sprint ahead. That requires understanding (and accepting) the ways in which clients use technological disruptors and adopting carefully considered innovations that add value to legal services.
Some firms deployed artificial intelligence (AI) solutions to perform document review and e-discovery, saving time and reducing costs for clients. Some are using data analysis, which powers decision-making through the mining of data from disparate sources, such as client matters, case notes, court opinions and others to produce better outcomes for clients. When we add online legal communities, consumer-targeted DIY services, robo-lawyers and 24/7 connectivity to this list, it becomes clear that technology not only underpins the way we do business today, but it will continue to be a major player in shaping the legal industry for years to come.
Market disruptors are the first heralds of change. There is no reason to think we will return to a traditional law firm model. Law firms that proactively move to understand, adopt and fully leverage technology will be better positioned to confront these disruptors.
By Gina Eliadis, Content Manager, Baker Donelson, for the Second Quarter 2018 LMA Mid-Atlantic Region Newsletter