How to get law firm stakeholders to invest in legal technology
In association with Thomson Reuters: evidencing to decision makers that investment will improve business outcomes is crucial
For some time now, "tech startups" have been making deep inroads into the legal market, and disrupting the status quo. This emergence of new innovative legal technology is helping pave the way to rapid change in the legal industry. It’s what everyone is talking about and no one wants to fall behind the pack.
As the "buy versus build" debate grows, some law firms are electing to beef up their practice and buy off-the-shelf legal tech solutions, and some organisations are expanding their internal IT expertise and investing in their own technology development for a more customised outcome. On the far end of the legal tech strategy debate, there are a few firms offering tech startup incubator programmes to support the development of new legal technology.
It is now far more than just hype: new, innovative – largely efficiency driven – legal technology is already changing the delivery of legal services, and it is showing no sign of abating.
However, for many firms the process of adopting technology is not straightforward. Identifying the appropriate solution is often half the battle, and its implementation can be complicated. Additionally, at most firms there are invariably barriers that may preclude even the notion of investing in technology: for example, resources, time – and cost, especially, being a critical factor.
Senior stakeholders must be convinced that there is a strategic rationale to invest in any technology. Key factors are often that it will enhance client services, be more cost efficient, bring in new business, or be the solution to a problem. Moreover, as the legal industry continues to evolve, so too does client demand. Our daily lives are constantly improved by technological efficiencies, whether it be a smartphone, digital wallets, or a virtual assistant. Increasingly, legal clients also want and expect greater efficiencies in legal services through the use of innovative technology.
With that in mind, "senior leadership in most law firms already understands how important innovative legal technology is to clients", says Jane Bradbury, director of Knowledge and Information at Slaughter & May.
"The challenge isn’t convincing leadership to invest in technology, but rather selecting the right technology in what is a crowded and rapidly changing marketplace and making a compelling case for it to senior stakeholders", says Bradbury. "So, the appetite among senior leadership for adopting new technology is already there: it is about providing the necessary evidence to them, so they can make informed decisions for the ultimate benefit of the client."
As Bradbury explains, evidencing that the chosen technology solution is the right option and will improve business outcomes is essential to getting stakeholder buy-in. Further, there is now generally a greater willingness from stakeholders to invest in legal technology, and any previous apprehension around the subject is perhaps less prevalent in firms than it once was – largely due to a shift in client demand.
Still, though, stakeholders holding the purse strings will expect to be presented with a comprehensive business case for any new technology proposal. Key criteria will initially, at the very least, need to be met, including how the technology solution can advance the firm forward, drive efficiency and how it will be effective in eliminating existent problems.
Proving that the technology solution meets these key criteria is one of the biggest challenges, according to Jana Blount, legal innovation manager at DLA Piper. "The main challenge is proving that the new tech will be more cost efficient, more beneficial, or will bring in new business when it is an unproven way of working and/or a new market."
However, Blount adds that once a problem at the firm has been identified or a new service has been scoped, the rationale for investing in technology becomes the "logical solution".
"Instead of asking what technology we should be investing in, we should be asking what are the problems we are trying to solve or what are the new services and products we want to create?", says Blount. "Once you know the answers to those questions the investment in the tech solutions becomes the logical conclusion. We aren’t investing in tech for the sake of saying we have new tech; we are investing in a solution to a defined problem."
Top of the agenda
In the last year alone, many of the largest firms have significantly ramped up their tech innovation agenda. Other firms have set up or expanded their innovation teams, and some are vying to build their own tech products.
The tech incubator MRD labs was launched in November 2017, by Mishcon de Reya. As the firm makes further headway into the technology sphere, it recently appointed Dr Alastair Moore into a newly created role of head of Data Analytics and Machine Learning. Meanwhile, Freshfields Bruckhaus Deringer has announced plans to set up a new legal support and technology hub at its office in Berlin to create 100 new legal and tech jobs, in an expansion of its existing Manchester support base.
Earlier in the year, Barclays stepped into the legal market after it unveiled its new "law-tech incubator", in partnership with the Law Society of England & Wales. The new venture, dubbed the Eagle Lab, has been backed by a number of large law firms and Barclays hopes it will turbo-charge the UK’s law tech sector and help companies to start up and scale up.
One of the firms partnering with the initiative is Allen & Overy (A&O), which also – like several other top firms – has launched its own innovation space called Fuse, where its lawyers, clients, tech team, and tech companies can collaborate to develop and test new technology.
Saran Kaur, legal technology engagement manager at A&O, says its tech innovation space can be integral to getting buy-in for new legal technology. "With the introduction of Fuse, the tech innovation space A&O established in our London office, our lawyers have direct access to some of the latest technologies available in the market today", Kaur adds.
"Fuse has played host to two cohorts of eight legal technology companies each and we have learned that being able to trial innovative legal technology and discuss features or requirements with tech providers, with the support of the legal tech team, allows our lawyers the freedom to explore and come up with ideas of where technology can be applied in legal practice."
The user experience and application of any legal technology is paramount. A tool may be able to sift through vast quantities of data at a fast rate, but if it’s difficult to use it is going to be an issue.
Kaur adds that exposing lawyers to potential new legal technology and allowing them to engage with it can be fundamental in getting stakeholder buy-in. "Having lawyers engaging directly in new legal technologies through Fuse coming up with innovative ideas and knowing that they have a dedicated legal tech team to support those ideas through to the delivery stage can help overcome some of the potential barriers to getting buy-in."
The argument for investing large sums of money in legal technology is becoming more and more one sided. As legal tech is rapidly adopted, it could mark the end of a firm by not staying ahead of the pack. The main challenge, however, is finding the best solutions amongst a jampacked legal technology market – and then articulating to stakeholders why and how it will benefit the firm.
Thomson Reuters Legal Insights