‘When the tide rises, all boats rise’

By Jerome Doraisamy|08 May 2019

In the same way that ‘disruption’ has, for some, become a buzzword for environmental and professional change, ‘innovation’ too tends to encapsulate a degree of hype around the advent and development of new technologies and practice management methodologies. But, for numerous BigLaw firms, the focus is not so much on an upending of the status quo, but rather an assimilation of new and different ways of thinking and practising while upholding fundamental duties – particularly those to clients.

In a recent Lawyers Weekly podcast, the CEO of tech company Smarter Drafter, Adam Long, commented that all law firms need to be technology companies that practice law moving forward, rather than legal practices that incorporate technology. With so much hype around innovative technologies, initiatives and programs across the profession, including student-run hackathons, it is important to consider the extent to which the legal profession is modernising.

This feature will explore how three BigLaw firms are incorporating innovation, how the legal profession in Australia is faring on innovation compared to other professional services industries, whether BigLaw needs to stay ahead of, or keep up with, the emerging NewLaw space, the role of those coming through the ranks, and – ultimately – how the client experience must remain front and centre for those in legal practice.

To break down these issues, Lawyers Weekly spoke with Herbert Smith Freehills regional managing partner Andrew Pike, King & Wood Mallesons executive director of innovation Michelle Mahoney, and Clayton Utz’s head of innovation and market development Bernadette Stirling and director of innovation Brad Vann.

Do law firms need to become technology companies that practice law?

“Law firms absolutely need to be technology companies”, proclaimed Mr Long, speaking on The Lawyers Weekly Show about the embedding of technology into day-to-day legal practice.

It is necessary to reposition as such, he posited, because it is what people expect from their customer journey and user interface.

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“We expect our pizza place to be able to track down to the meat of where our pizza is, on the way in, and we expect a similar level of service, ultimately, from every provider we have, and that includes lawyers,” he said.

“What customers are demanding, what clients are demanding, and what the new wave of new law firms are providing, is Uber levels of transparency on where their matters are at, on what's happening with that, with the system.”

“What we're seeing is, there's a broad spectrum of law firms from those understand that the experience from putting down the Uber app, and going to a law firm, needs to be the same, through to law firms at the other end of the spectrum, who still don't return phone calls for a couple of days. Because they'll get to it when they'll get to it.”

Perplexed, this writer asked whether law firms would therefore have to be more like Uber and Dominos, by way of allowing clients to track the progress of their matter on a smartphone app, in the same way that a consumer can track the arrival status of a pizza or rideshare driver? Potentially, Mr Long responded.

“What it comes down to is understanding the journey that the client is going on.”

HSF, KWM and CU all agree that incorporation of innovation, in its myriad forms, including better and more efficient technologies, is necessary for the productivity and success of legal practices such as theirs moving forward.

Where a divergence of opinion happens, however, is in how firms can and should achieve this.

There is no doubt that “law firms need to be more technologically enabled”, Mr Pike muses, but he doesn’t agree that law firms are, or should be, tech companies, for reason of understanding and appreciating the underlying purposes of such a professional services environment.

Ms Mahoney reflects that the sentiment of law firms being tech companies means that technology is an enabler of legal services, without necessarily condoning the argument of a shift in business structure.

“I deeply agree that law firms should be powered by and then enabled by technology, there's no doubt about that,” she responds.

“Law firms should actively be embracing technology because they're a part of the knowledge economy and as knowledge workers the amount of enabling technology that is available that can assist in knowledge creation packaging and delivery is increasing, and so I absolutely agree with the sentiment that big law should be actively engaging in and getting foundation technology in place. Totally agree with that.”

For Mr Vann, those in the legal profession must bear in mind that, like any services provider, technology is simply part of doing business. It is central to the operations and service delivery of a BigLaw firm, “but it's not about being a 'tech' company”.

“We're still selling legal services and the specific knowledge and expertise of our people. It's about how you use technology to deliver those services differently or more efficiently, and also make your own internal business processes more efficient,” he explains.

“We see the continued development of technology as a good thing for the legal industry and lawyers. It means freeing up lawyers from having to do labour-intensive, manual tasks and giving them more capacity to be strategic. Clients will always need and value the specialist expertise that comes from lawyers having worked on complex projects and litigation. It's how that is delivered that will change.”

What is of most benefit to the client is, ultimately, how these BigLaw firms are framing their embrace of innovation across the board, illuminating a sense that the conversation is less about the evolution of the legal workplace and more about modernisation of one’s adherence to fundamental principles of client service delivery.

Inextricable importance of client experience

What such adherence means, Ms Stirling outlines, is that firms such as CU are “not just focused on a new app”.

“Working with our clients, our goal is to understand the challenge or frustration that they're facing and then work with them to come up with solutions that solve a particular problem. This may be a joint solution or one that our clients can implement themselves,” she says.

Mr Vann supports this, noting that innovation simply means change that has a real impact, and that adds value to the firm’s clients or to the firm itself.

“It's not just about technology. We see a lot of media reports about various tech-based products and 'disruptive' technology that firms have adopted or are trialling, and this being conflated with being innovative. That's not our approach,” he explains.

“We've had a dedicated Innovation team and program for several years now, and we've taken a structured approach to embedding 'innovation' as a mindset – how we train our people to identify actual problems to be solved and using a repeatable process to come up with solutions, test them, and then move on to implementation. Implementation and execution is where the rubber hits the road.”

For Mr Pike, the embrace of innovation and technology occurs through the lens of how best can clients be served, and how can HSF put itself in the best position for its practitioners to serve those clients.

“Our focus is a lot more on what do our clients want, and what do our people want, and how do we transform and innovate the business to respond to those two needs. So, it's very much about focusing on the end game, and using market information including what new law participants are doing to inform the end game.”

Being wholly observant of those client needs, by way of understanding and appreciating the broader marketplace, is a necessary aspect of being able to meet those needs, remarks Ms Mahoney.

“I think when the tide rises all boats rise,” she asserts.

“So, if your client has a number of law firms servicing them and they're receiving a different client experience then of course that impact will be felt. So, if someone does something in a new way and the client loves it, they will naturally seek that from others.”

Observations of the evolving legal marketplace

Taking a holistic view of the Australian legal profession as a whole, one may wonder: is the onboarding of innovation by BigLaw firms a proactive or reactive strategy, or both?

The idea that boats will rise with the tide certainly gives rise to an impression that legal practices are, to some extent, influenced by the movements of the individuals and institutions around them.

Ms Mahoney supports this thought, observing that “regardless of what kind of law firm you are”, legal institutions cannot escape the competition around client experience and delivery, and how it’s being done across the spectrum.

Specifically, it is interesting to ponder the extent to which those firms – which can crudely be lumped together as having delivered more ‘traditional’ service offerings over the years – are responding to the emergence of the NewLaw space and the diverse practice methodologies being employed by those firms, most notably a disregard for time-based billing.

“The market demands that as soon as someone does something different, or in a new way and a client enjoys it, then you've got the issue of you absolutely have to match the market,” she posits.

“So, I think that's the driver, I think the client driver is probably the bigger one as opposed to what's happening by new law or anything else. I think it's very driven by solving the problem of the client. Because if you're solving those problems then you actually solving real pain points and the real pain points are where the value is. So, I think it's more around identifying what really counts and working on those things.”

CU takes a different approach, stating that the firm intends to focus its attention more on client needs, rather than what might be happening in another sector of the legal market.

“Of course, clients may see something that NewLaw claims to be doing and will ask us to meet the market, and occasionally we'll look at partnering with NewLaw if it suits the client need,” Mr Vann and Ms Stirling say.

Mr Pike agrees with this, saying that he would “certainly not characterise” HSF’s embrace of innovation in its myriad forms as being underwritten by a desire to keep pace with the market.

“We certainly keep an eye on a lot of those organisations and try and understand what they are doing and to the extent how they are doing it different, to learn from that,” he says.

“I'll probably come back to it's about continuing to be able to meet the needs of your clients, and the needs of your people. And so, innovation or change of which technology adaptation is part is essential to that. So, you need to continue to evolve your business to the changing needs and if you don't you'll become less competitive.”

Onboarding of innovative thinking and practices in law

Casual observation of the workplace strategies, initiatives and programs being implemented by these three firms lends credence to the assertion that BigLaw firms do not need to be directly influenced by the happenings of other firms across the legal spectrum.

Largely, this may simply come down to the capacity of such firms to undertake innovation on a scale that smaller firms cannot.

HSF recently rolled out a new global workplace policy whereby staff, across its many offices, can take up to 10 days per annum whereby that staff member can work on projects – such as app design or document automation – that purport to find innovative solutions to the challenges faced by the firm and its clients.

Earlier this year, CU ran innovation workshops with its “future stars” – its summer clerks – whereby those graduate hopefuls were “tasked with improving the summer clerk application process to make it less of a grind”, and coming up with suggestions to improve the experience and journey for clerks of the future.

And at KWM, artificial intelligence has been in use since 2015, Ms Mahoney states, and the firm is “all in on machine learning”. A whole-hearted embrace is the only avenue forward for the global firm, she notes, as “we’ve got data from the last 188 years, so it’s a huge about of information we’re dealing with. You have to be embracing technology, there’s no other way to deal with it”.

Consideration of the necessity for BigLaw firms such as these three conveys the argument against evolution into technology companies in another, perhaps more important light: while newer, boutique and certainly smaller firms may have been founded on supposed freedom of autonomy and flexibility, allowing them to try to be tech companies that practice law rather than the other way around, the BigLaw end of town has vastly different environmental needs and challenges.

And while all lawyers, at either end of the spectrum, are charged with serving the client’s best interests, the obligations upon BigLaw are such that that service involves an appreciation for a delivery methodology that has proven productive and successful and a simultaneous eye to how that methodology can modernise and continuously improve. This way of thinking, clearly, does not require an upending of the status quo.

Looming challenges and opportunities

For Ms Mahoney, the greatest challenge with increasing the quantum and range of innovative practices and initiatives depends on whether a firm has cultivated, or is cultivating, an environment where individuals, and the institution surrounding them, are encouraged to take risks and try new things.

“Because that's what innovation is about, innovation is about trying new ways of working, trying new things and feeling safe and able to do that. So, I think culturally, it's about creating an environment that supports that and that recognises that what the learning and insights coming out is part of the net reward not just the impact of the innovation,” she explains.

“So, I think as long as you've got environments that support and understand that insights and learning is key outcome not just the impact, I think that you'll have success.”

A crucial arm of this challenge, Mr Pike notes, is striking the right balance between competing interests.

“It's getting the balance right between making [innovation] everybody's job, which is the cultural piece and also bringing in some of the most systemic changes that might impact the entirety of the business…it's a combination of getting the balance right between having some initiatives being drawn from the centre, but in a lot of cases, having the energy that is flowing out of the business and capturing that energy.”

But CU points out that the challenges that firms ponder with regard to innovation are not necessarily new hurdles.

“Law firms have been innovating for many years, although previously it didn't receive that badge. Probably the emphasis has arisen now because of the advent of technology which has allowed the creation of business models which didn't previously exist,” Mr Vann and Ms Stirling argue.

Conclusion

Legal practice, and service delivery to clients, looks vastly different today compared to years gone by. The advent of various technologies, as well as the introduction of modern, flexible working practices, are contributing to professional services environment oft-labelled disruptive or innovative.

But while corners of the legal marketplace are looking to turn over the traditionally-set table – perhaps as competitive differentiators or on philosophical grounds for best practice – the BigLaw experience in Australia appears, from conversation with three of our so-called ‘big six’, to be founded more in ensuring continuity of established principles, with an adjacent but ongoing foot in the waters of professional modernisation.

BigLaw firms may never become tech companies, and perhaps they do not need to be.

This feature originally appeared in the April 2019 edition of the Lawyers Weekly magazine. To subscribe, please click here

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‘When the tide rises, all boats rise’
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