How to Deal
with Disruptive Innovation and Technology
Our
challenge is
to use innovative information technology to deliver services to clients
in new
ways.
In
1996, when he
wrote the book The Future of Law, he foretold about the ubiquity of email in the
profession and
that the world wide web would be the first port of call for legal
research (not
the law library).
“I
predicted
that e-mail would become the dominant way in which lawyers and their
clients
would communicate with one another. In today’s environment, you will
probably not
think much about it,” Susskind retorts. “But at the time I had people
saying
that... I was dangerous to the legal profession and I didn’t understand
confidentiality and security and that e-mail would only have a
peripheral
impact.” Today, emails are a way of life.
He
asked his
audience to keep an open mind as much of what he is saying will take
time and
the best thing they can do is to begin adjusting. Now.
“Our
clients
expect us to take advantage of our experience and standardise our work.
In some
cases, the better firms systematise and they go to the extent of
leveraging
knowledge management. Our internal processes should take advantage of
technology: firms should use a digital on-line assembly to allow a good
first
draft. It will then be left to the lawyer to complete the review.”
Corporate
Clients
Have Moved to Outsourcing
Of
the twelve
ways to source legal services he singled out one: outsourcing because
corporate
clients are already taking the lead in doing it. Readers will recall
that this
trend was raised in Briefly!‘s September
2008 issue.
On January 26,
2006, the New York Times reported that the reason for the shift echoes the reason
companies are sending other work abroad: they save substantial amounts
of
money. Some companies say they can reduce certain legal costs by as much
as 50
percent, and receive work that rivals what they can obtain in the United
States.
Rio
Tinto began
sending off legal work to CPA Global’s facilities in India last June
2009. To
date, the routine work has saved Rio TInto 14 million dollars in 6
months.
In
February
2010, Microsoft announced that it too was sending its work to CPA
Global. More
recently, on March 30, BT announced its intent to outsource its work to
UnitedLex’s facilities in India.
“Globally,
if a
client wanted to lease lawyers, all they have to do is to work with a
temp
agency, like these two: Voxius [www.voxius.com] and Axiom
[www.axiomlegal.com].
The lawyers who work there get paid only when they want to work, they
get full
benefits and there is little overhead - no mahogany paneled board rooms
or
fancy views.”
The
message is
clear: the routine portion of legal work has to be outsourced; however
clients
expect to pay for excellent bespoke work.
How
Technology
Impacts the Profession
Market
leaders
who ignore disruptive technologies do so at their peril. Using the tale
of two
giant firms as an analogy: Kodak who moved to offer its clients digital
cameras
and Polaroid who did not and as a consequence, is no longer around, he
asked
his audience: will your firm be a Kodak or a Polaroid?
If
by 2050, the
desktop computer will have the same processing power as the human race,
why
should lawyers be unaffected by this inevitable development?
“Where
is your
first port to find intelligence: Britannica or Wikipedia? Hard as it is
to
believe, independent studies have shown that Wikipedia does provide
precise
information. So why do we need to buy Britannica when Wikipedia is free?
“
In
Canada, the
strong support of the Federation of Law Societies for CANLII means the
days of
fee for access to case law are numbered. Will the cost of legal research
soon
be close to free?
Susskind
pointed
out that the pace by which technology is moving is fast, consider
instant
messaging, blogs, social media like Linkedin or the ubiquitous FaceBook.
Communications used to be one way now
everything is two way. And faster. In his research, he found that most
of the
lawyers in FB are not the partners but the juniors. Why do lawyers think
they
do not have to share information in the same way as others. The reality
of
course is that the clients of the law firms will share information more
so now
than before. Because the rapid innovations brought about social media
entrepreneurs will enable clients to do so. Interestingly enough, the
day after
Susskind’s lecture, the F8 Facebook conference introduced "Community
Pages" which will now make it easier for the public to share (legal)
information
before seeking legal advice, something which the former Chief Justice
Brenner
spoke about in the October 2009 issue of Briefly!.
Is
the end
really near?
So
if the
decline is inevitable, is it really the end of lawyers? Of course not, in fact there
are many opportunities that
have begun to arise, consider these six which he delves in detail at the
conclusion
of his book: expert trusted adviser, legal knowledge engineer, hybrids,
legal
process analyst, project manager, legal risk manager.
For
law students
who are the most skeptical who still think that the practice is still
like the
old days. He encouraged them to get mainstream legal training but they
need to
immerse themselves in it. They have to put aside their arrogance in
thinking
lawyers can over a weekend become experts, by putting sticky notes on
their
course materials.
He
admonished
managing partners not to confuse exploitation with training. Further,
law firms
should pay their juniors to learn at their expense (and not at their clients’ expense).
On
how to
train lawyers
Susskind
describes
how their PLTC providers are committing to e-learning (www.bpplawschool.com). But it is at the
University of
Strathclyde that the most ambitious legal e-learning is found. There,
students
benefit from the work of Paul Maharg, a pioneer of simulation-based
training (www.ggsl.strath.ac.uk/courses). In an online fictional
town,
Ardcalloch, students play the part of solicitors in virtual law firms,
and
tutors take on the roles of clients and judges. Students learn by
working
together on simulated deals and disputes.
Notwithstanding
his
lamentation in his recent January 2010 Times article , “that it would
be
regrettable, of course, if law students were never to experience the
thrill of
assembling with peers in a fine hall and listening to an outstanding
live
performance. But we should not preserve the old ways in the delusion
that such
performances are commonplace. Unless the lecture is genuinely
outstanding (a
rarity, students say), the convenience and flexibility of e-learning
will trump
the benefits of the communal learning experience.” To prove his point,
Susskind
flew across the Atlantic through the Straight of Georgia to deliver an
impressive and thought-provoking lecture
at the University of Victoria, undeterred by the disruption in
flight
services last week. Of course, the delivery of his lecture was
supplemented by
a webcast.
The
Future of
Law Has Arrived
It
may be
instructive to bear in mind one of his last quotes by William Gibson:
“The
future has arrived, it is just not evenly distributed yet.” And while
his
research has a distinct European and American flavour to it, it is not
really a
big stretch to expect Canadian firms will soon be forced to dance to the
same
tune. And with the March 19, 2010
adoption by the Canadian law societies of its National Mobility
Agreement, the
implication is quite clear: the changes that the big national firms
(even if they
are mostly in Ontario) will adopt in order to remain globally
competitive will
affect even those who practice in the many rural towns in BC.
He
is optimistic
about the future of law and how it will improve access to justice and
encouraged his audience: “The future is very much in your own hands." In
the next 3 to 6 years, the smart law firms will create new innovative
ways to
serve its clients that will spread like wildfire. From the global legal
market,
Canada cannot avoid ignoring this development.
He
will be back
again in the Fall to continue his lectures. The members of the
profession
should take the next few months to discuss his ideas with their
colleagues, or
at the very least reflect on how some of his predictions may affect how
they practice.