LOS ANGELES — What would it take for Big Law to fully embrace the legal technology innovations large law firms will need to remain competitive in today’s quickly evolving marketplace? Numerous legal tech innovators offered their perspective on the issue at The Next Big Innovation in Big Law: 12 Darwin Talks from Legal Tech Innovators, an Evolve Law-sponsored legal innovation event held May 24 in Los Angeles.
David Curle: What did you have in mind for this particular audience? And how did it compare to some of the other events you’ve been doing across the country lately?
Mary Juetten: The Los Angeles event was our first Darwin Talk-only event, and our objective was to continue the conversation around innovation or the need for change in Big Law. It seems that there are a few firms embracing change, but the majority of larger firms are adopting the classic “wait and see” approach. Our goal was to present some different areas of the law that need innovation for continued success — change management, hiring, practicing, marketing and measurement.
Curle: What’s interesting is that the areas in need of innovation you mention above are not specific to law at all — they are things that any business needs to tend to. I think that was a strong undertone of many of the Darwin Talks. Things that seem novel to legal practitioners are actually old hat to most other industries.
One of those fields that is new to legal is design, and one of my favorite talks was Emil Stefanutti’s on Design Thinking and Entrepreneurship. The presentation wasn’t about his company, ContractRoom, specifically, but he said something that I thought made a lot of sense as a design principle for legal: He wanted to “redesign how people agree.”
In this perspective, the value is not about the physical manifestation that results from an agreement, such as the document or the contract. Rather, it’s about the process of getting to agreement. It reminded me that the buyers of legal services aren’t really looking for the things that lawyers think they are selling — their time, their expertise or a drafted document — but rather the client wants their specific problem or need to be solved.
Juetten: If you take a step back from the whole profession, any business is about solving a problem. When you start a company, your pitch is that you are solving X problem for Y market in a way that is better than Z existing solutions. The law is now forced into adopting this approach for delivering value to clients.
For legaltech companies that sell solutions that are not client-facing, lawyers are their true clients and these same design principles still hold true. Legaltech companies need to design for the pain points of lawyers and law firms. It’s bringing consultative sales to a whole new level.
Without that “pain bucket” as Stefanutti stated, there is no reason for your law practice to exist. Clients, particularly consumers, just want someone to fix their situation. Stefanutti’s perspective makes sense for all businesses and product development.
What did you think of the prediction by Eva Hibnick, of ONE400, that only five to ten of Big Law firms today will be left standing in about 15 years?
Curle: I’m not sure about the specific number, but certainly a consolidation in legal seems likely. Law is one of the most fragmented industries out there. The largest 100 US law firms have about $90 billion in revenues — out of industry revenues of about $275 billion. That means there is an incredibly long tail of smaller firms.
In those top 100 firms there is a lot of redundancy and not a lot of differentiation. It seems ripe for consolidation and scale-building. And if you look ahead a few years — and if all the investments in technology and process redesign that many of us feel need to happen actually do happen — then it certainly seems likely that more consolidation will be needed to achieve the right scale.
Mark Lassiter [of Evolve Law’s Lex Projex] also predicted “The End of Big Law Firms” right in the title of his talk! His vision is that lawyers will cease to operate in traditional firms and will instead operate out of just-in-time teams of lawyers and various support services put together on an ad-hoc basis. What did you think of that vision?
Juetten: My belief is that we have reached a tipping point with consumer demand for affordable access to justice that has become possible through different business models, including legal plans and subscription models for smaller law firms. I think that will spill over into the same demands being put on Big Law by their clients, who of course are using technology and subscription models in their personal lives.
If you had to pick one takeaway from your own Darwin Talk, what would it be?
Curle: My main point was that I think people should stop seeing the changes we are seeing in the legal market as a big-bang revolution that’s going to change everything overnight and bring down the legal services industry. That’s the sort of revolution and disruption narrative that was pretty prevalent a few years ago.
Instead, I think what we have is a rapidly evolving set of changes within the industry. There are dozens of groups working on legal tech, access to justice, open data, legal entrepreneurship, etc. It’s all very diverse and evolutionary, not at all the “legal tech as disruptor” narrative we’ve gotten used to. That diversity and openness to new ideas is what makes the legal industry so interesting and exciting right now.
Juetten: My main takeaways from my talk about the need for new metrics in legal were consistent with some of the themes above: First, that law is a business, particularly Big Law, and all businesses should put clients first and measure what matters. Big Law clients could not care less about utilization; they want their problems solved or prevented in an affordable manner. So, a Key Performance Metric (KPI) framework should be geared to client measurements.
However, law is late to the KPI party, but the good news is that so much work has been done on robust frameworks. And we can just borrow from other professions. It does not have to be fancy or comprehensive, it’s most important to get started and JFDI.