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Smaller firms are ‘where real innovation is happening’

As COVID-19 has led to the rapid adoption of technology and disruptive practice methods among law firms across the globe, many firms now consider themselves as NewLaw firms. But what does that actually mean? These panellists discussed recently.

user iconLauren Croft 23 February 2023 SME Law
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The emergence of technological innovation within the legal profession has created a massive shift in the way law firms now operate.

At the Smokeball Spark conference recently, the panel: Technological Innovation & Disruption to the Legal Practice discussed the continually evolving client expectations and the demand for modern service delivery in the face of these emerging technologies, as well as how firms can use it to become more profitable.

The panel included Karen Finch, ALTA president and founder and chief executive of Legally Yours; John Ahern, global head of property at InfoTrack; and Tom Dreyfus, CEO of Josef.


Moderated by Fiona Kirkman, CEO and co-founder of FamilyProperty, the discussion delved into the characteristics of a NewLaw firm as well as the increased uptake in technology and innovation in recent years.

Originally, NewLaw firms were established to differentiate flexible, alternative pricing models and early adopters of technology, according to Ms Finch.

“What’s happened now in terms of the trends COVID made every single law firm to be a NewLaw firm in some regard because it really just does. After the way they had to do so, those lawyers who perhaps were really stuck in that old traditional way of practising, they were forced to innovate,” she said.

“So, for me now, I think that you know, NewLaw, I would like to coin progressive law, or particularly lawyers in small law, I think you aren’t trying to take this market; you are where real innovation is happening.”

Small firms make up 82 per cent of the Australian legal industry — and Ms Finch said for those who are innovative, this will work in their favour in 2023.

“As we go into this economic downturn that we’re experiencing this year, all businesses and individuals being will be reviewing where they spend their legal spend, if you can be there, open waiting, you’ve got the technology and you’re efficient, you’re delivering it in a really great way, in line with your target client, you have the opportunity to take that market share. Now more than ever, it’s really vital that you appreciate what you’re doing,” she added.

“The pandemic was five years’ worth of technology adoption compressed into a very small period of time. And as a result, you know, we’re a service industry, we’ve got to meet the needs and expectations of our clients, but now our client expectations have shifted quite rapidly. And that puts pressure on us.

“So, within a very small, short period of time, our clients’ expectations have changed. They’re less inclined to just walk into a firm; they are more impatient now that there are certain aspects of the way you engage with them that need to be digital. There are certain times they want to come in and see you and sit down and talk about a serious matter, and there are other items where the expectation is now more digital.”

Mr Dreyfus echoed a similar sentiment — and said that the way clients expect to engage with their lawyers has “definitely changed” post-pandemic.

“It’s about access to your services on demand. So, we’re focused on the front end of your law firm, the way in which clients can access your services using online digital solutions. And increasingly, what we’re seeing in small law firms is them coming to us saying more, and more of our clients expect to be able to access our services 24/7 on the spot, you know, Netflix, Spotify style,” he explained.

“They might not expect to pay a subscription. But they certainly expect to be able to generate a document or submit a request for help or come to you and say, ‘I’ve got this new matter, can you assist me’, and they don’t want to have to wait for a call back 24 hours later, 48 hours later, [or] a week later. They want to be able to do it on the spot. And I think that is something that’s definitely changed in the way that we deliver services as small law firms from pre-pandemic to now. It’s a trend that I definitely see continuing.”

To keep up with these changing client demands, Ms Kirkman said that lawyers will now need “technical skills, emotional skills, technology skills, and the business skills to really succeed”.

This is something that Ms Finch agreed with — and she insisted that “this is the future” for the legal profession.

“I’m inundated with lawyers that are leaving or wanting to leave mid-tier and big-tier. They don’t see that as their pathway. And they would like to start up their own practices and do it in a way that they are serving the clients they want to serve,” she said.

“They’re making an impact. They’re doing it for purpose with profit. And they’re creating, you know, great holistic lives.”

This panel discussion also followed the release of a recent Thomson Reuters survey, which showed that one in three legal professionals who don’t feel that their law firm is innovative would be prepared to leave to work somewhere more innovative.

Despite this, Mr Ahern emphasised that “anyone at any level” can use quality technology — and anything else is “crap”.

“What we have to do is just try technology out. And I always say lean on your technology vendors. If you don’t know how to use something, and you think you need to learn to use it, then tell the vendor they need to come in and show you how to use it. And if it doesn’t work for your firm, don’t use it. I joke that many lawyers are the most discerning of technology adopters,” he explained.

“Because if the technology is rubbish, they don’t use it. Right. If it doesn’t save them time [and money], then they shouldn’t use it. That’s not good technology, that’s just technology. Don’t leave it up to digital natives, these graduates, to come into your business to modernise it; you can do that, you just need good tech.”

Therefore, law firms should take what they are currently doing — and simply do it better with technology, something which Mr Dreyfus has talked a number of his customers through.

“We shouldn’t be adopting technology for technology’s sake. We spend a lot of time with our customers, talking to them about the problems that they’re actually setting out to solve with technology. One of the things that we see is that we’re focused on service delivery, so kind of the pointy end of running a law firm, how you actually get your services to clients, is it about the economic drivers, how am I going to open up new revenue streams?

“Or how am I going to increase the margins in existing revenue streams by doing the work, either more quickly or more efficiently or in a way that means my clients are willing to pay more for it,” he added.

“But that is certainly one of the key drivers that we see for automation in the legal industry in Australia. It’s the ability to take what you’re already doing, and do it better with technology so that you can make more money more efficiently. It’s OK for that to be the reason that you’re adopting new technologies.”

This profit, however, has to be balanced with “delighting” your clients, Mr Ahern explained.

“The fact is that we need to be able to run a profitable matter. The fact is people, the people working in these firms, cost more today than they did a year ago. And when the economy stabilises again, do you think your employees have got to put their hand up and say, ‘I’m OK with a pay cut now’? No. The profitability is important,” he said.

“What does that mean? That means you need to use technology to take away mundane administrative tasks for your people so that they can use their skills to deal with your clients where it matters. In such a way that your clients come back to you and say, ‘wow, that was a great service’. Because, again, this industry is a lot of referrals, right? And so, getting efficiency out of your people by using technology to take away mundane administrative tasks not only pleases your people, it enables you to run a more profitable matter.”