And finally we come to our third proposed leg of SmartLaw: technology.
You would be forgiven for expecting a marketing pitch for HighQ here. We are after all a tech company and we are quite proud of the products we build, and the various ways our clients are using them.
But this leg is not about buying, building, or implementing any particular technology. It’s about changing the firm’s relationship to technology at a more fundamental level.
By this Andreessen meant that the most successful companies in each industry are increasingly software companies. His argument is compelling and the evidence that has continued to pile up since he wrote the essay seems to confirm his hypothesis.
Amazon (books/shopping), Netflix (movies/TV), iTunes, Spotify, and Pandora (Music), Uber (transportation), AirBnB (lodging), and on and on… All of these companies are software companies.
Andreessen doesn’t mention legal services or law firms specifically, but there is no good reason to believe that legal services are immune to this tsunami of software.
In fact, we can see evidence that the industry is taking clear steps in that direction. Services like Avvo, LegalZoom, and Shake Law are tackling consumer and small business legal needs, each with very different approaches, but all driven by software.
Large law firms like Dentons are openly investing in legal tech startups and AI technologies like ROSS Intelligence.
Littler Mendelson has entered into a joint venture with Neota Logic to deliver ComplianceHR. And countless firms around the world are using software products and platforms (including HighQ) to automate their services and to innovate the practice of law.
While I take no ‘sides’ in the BigLaw vs. NewLaw debate, I am going to go out on a limb and say that within 7 and a half years* the most successful ‘law firm’ in the world will largely be a software company.
That ‘firm’ might be one of the large global Swiss vereins or a Big 4 accounting firm, or it might be a relatively small player in the industry today, or it may well be a company that doesn’t even exist yet, but software will undoubtedly be at its core and key to its success.
What does this mean for firms?
With the introduction of first-order legal technologies, like the personal computer or digital word processing, technology ceased to be the responsibility of ‘facilities’ personnel and became its own department, Information Technology.
Over the years, the IT department grew to become one of the largest business units in the firm, both in terms of people and budget.
IT has become, in many cases, a semi-autonomous, wholly-owned subsidiary of the firm, existing to support the practice of law, but separate and almost entirely removed from the practice of law.
Many IT personnel have spent their entire career in legal tech, with only a vague notion of what the lawyers they support actually do on a daily basis, how they make money, or why they need the technology that IT provides.
Conversely, many lawyers have little interest in the technology that their firm provides and their primary concern is that the technology ‘stay out of their way’.
Smart law firms understand that technology will never be less important to the practice of law than it is today, and they will begin to integrate software and technologists directly into their legal matter teams.
The focus of the IT department will undergo a clear shift from the traditional ‘keep the lights on’ tech, which will increasingly be outsourced like any other utility, to the more strategic ‘augment and improve the lawyers’ tech, which will provide smart firms with a real competitive advantage.
This more strategic IT approach will require legal technologists to be educated about the law and the practice of law and it will require lawyers with technical training or ability to step up to lead the creation of new tools, products, and services.
These people, whether techies with legal training or lawyers with technical training, will take on an increasingly important role in the firm, that of Legal Engineer.
Legal engineers will design and build the expert systems, train the machine learning algorithms, and create the products and services that set law firms apart from their competitors.
They will breakdown legal processes and automate everything that can be automated, in such a way that they highlight specific areas requiring human intervention or custom legal analysis.
These automated legal engines will make firms more efficient and profitable, allowing some lawyers to focus exclusively on that higher value bespoke work, while others build, maintain, and update the software engines.
Buy, build, or bricolage
Some firms will choose to purchase wholesale software solutions, likely buying up entire legal tech companies in order to maintain a unique competitive advantage, saving the best and most valuable software for themselves and licensing lesser solutions to their competitors.
Some will hire teams of agile developers and set them loose solving legal problems through custom brand new software development. But my money is on those firms that engage in a ‘bricolage’ approach to legal software creation.
Bricolage means creating something new using the tools and resources that you have readily available.
In a legal technology context that means, purchasing a variety of best of breed tools and platforms for your legal engineers to build with and upon.
This is the technique I described in my 3 Boxes of Innovation blog post and it provides the best of both the buy and the build options.
The purchased tools and platforms continue to be updated and maintained by dedicated software companies and the firm is then free to focus its energies on creating custom solutions for its clients based on unique firm knowledge and expertise.
Bricolage also works well with design thinking techniques and allows for rapid prototyping and iterative development. Any missing pieces, in terms of technological capability or knowledge, quickly bubble to the surface and can be immediately addressed.
And in those cases where it’s probably better to just go buy a wholesale solution that should become fairly obvious in short order, whereas it can take quite a long time for custom software developers to ‘give up’ on developing their own solution.
The SmartLaw relationship with IT
If law firms become software companies, then IT becomes a core element of legal practice. No longer the nerd that crawls under the lawyer’s desk to plug in her Ethernet cable, but the nerd that shares a desk with that lawyer and works side by side creating solutions for the firm’s clients.