The business of law is changing rapidly.
Business structures, billing models, and even client expectations are very different than they were just a few short years ago.
So what can firms do to stay competitive in this ever-changing marketplace?
In this podcast, HighQ's Ryan McClead, Stuart Barr and Ben Wightwick are joined by Ron Friedmann of Prism Legal and Fireman & Company, to discuss why adopting SmartLaw is so important to the survival of law firms in the coming decades.
SmartLaw is about mastering the fundamentals to make sure you stay competitive in the future, focussing on four keys to success: clients, culture, process, and the intelligent use of technology.
Listen to the podcast or read the full transcript below.
Click here to listen to video.
Ryan McClead: What do you think of SmartLaw? Is it relevant to firms?
Ron Friedmann: It absolutely is relevant. To me, it speaks to a new mindset. 25 years ago the common mindset was the most important thing was “I deliver the right answer, a good answer to my clients”.
Today, we’re in a dramatically different, more competitive market, and the mindset today has to be to understand that, in most cases, 90% of matters, clients will assume that most lawyers they go to will come up with the right answer.
So they’re looking for the empathy for better service delivery, better service experience, lawyers who return phone calls and emails, and lawyers who are able to understand turnaround time, budgets and the pressure the client faces in the client’s industry, and what those dynamics are. It’s not enough to just have the answers anymore.
Similarly with the culture, lawyers didn’t have to think about how they delivered the answers - they were working in silos - and unfortunately that’s still true today, but I’m a big proponent of bringing down the caste system so that lawyers will work with other professionals both in their firm and with other professional services organisations to deliver better quality output by tapping marketing professionals, IT professionals, accountants, consultants, whoever it is, they don’t have the only answers so they have to think about who they work with.
And similarly, with technology, it’s a different mindset. It didn’t used to matter how you produce the work, and 25 years ago most lawyers would do fine with a quill pen (and I’m not really exaggerating that much, because the clients didn’t measure how the output was done just that it existed). Today, there’s a big push for efficiency, from scoping matters, project managing them, for applying technology to deliver the work more quickly, so it’s not just about providing the right answers, it’s providing them cost effectively.
So I absolutely think the three pillars are very important, and I like the point that SmartLaw means anyone can do it, and can do it today, don’t get distracted by artificial intelligence - there’s a lot of things that glitter and you don’t have to do them, don’t let that distract you from doing the more concrete things today. So I’m on board.
Ryan: I’m glad to hear it. Alright, so of these three concepts that we’ve thrown out there, we’ve talked about focus on clients, culture, intelligent use of technology and how they work together. You can’t do them all at once - should one take priority over another? Where should firms begin?
Stuart Barr: It’s an interesting question because it might be different for every firm. Some firms might be more evolved in some aspect, might be better at leveraging technology, or they might have a better cultural starting point, or they may have a powerful client relationship.
For me as a rule, the culture piece is at the centre of everything. Without the right movement in culture, without moving in the right direction, potentially you could take many years to get there, it could be difficult. Without the right culture to leverage that technology and identify how technology can be applied via legal engineers to those process problems and engagement problems, it could be very difficult to make progress.
I’d start with trying to give people a cultural direction and identity of focussing on client engagement, productivity and efficiency and weave in that technical thinking into how they approach delivering legal services, because that’s at the crux of everything.
Ben Wightwick: I agree - culture is the key component. Without cultural direction and moving forward as one entity, firms will struggle. You can do things in piecemeal sections, department by department, different technology solutions, engaging with clients, but you have to have the same outlook and the same objectives. The culture side of things is key.
Delivering legal services isn’t just about being a lawyer anymore. It isn’t purely about delivery of legal service. You do have to understand clients. And a big part of what I think about, read about and speak about is that client component part. You’ve got to get to know your clients.
Every client is different. And there are different ways of delivering those things. Really just taking that understanding as if you’re part of that business, rather than thinking of yourself as an outlying vendor, you have to think of yourself as part of that team, part of your service, part of that solution. Getting to understand the client themselves.
Ryan: Ron, you work with a lot of firms at Fireman & Company. What challenges do you think firms are going to have in implementing these keys to success?
Ron: Many. We’re at a stage of the market where the mindset is shifting. At Fireman & Company we work with AmLaw 200 and Canadian equivalents. In larger firms, the mindset is beginning to shifts but it’s happening in pockets and it takes a lot of time.
One area we focus on is adoption planning and change management, because people change very slowly. Firms have to find those pockets of lawyers who either face enough pressure to change to preserve clients and income, or the other handful that see the opportunity to gain a share of wallet, share of market, share of mind.
The good news is, the opportunity is big. The bad news is, we won’t get there very quickly.
Ryan: As a technologist, I have zero input on how we compensate partners. Intellectually, it’s interesting to have that conversation, but realistically I can do nothing about it. The same with whether we insource or outsource… These are not things that the average person, even the average lawyer, makes in a law firm.
With SmartLaw, at least as we’ve defined it so far, anyone could begin to implement aspects of this. I’m curious, even if firms themselves don’t pick up on the concept or actively start pursuing SmartLaw, what do you think individuals within a firm, not in positions of power or able to make broader decisions about the philosophy of the firm should be, what could anyone begin to do on their own?
Stuart: Anyone can change their mindset for a start. What you as an individual choose to focus on, how you choose to go about you work, what kind of principles you have, whether that’s taking a non-traditional view to the way you record your time, or don’t go on the billable hour.
It’s about really changing your approach to how you deliver services, having that very client centric approach to everything that you do, the way you work, the way you deliver information to them, increasing transparency about what you’re doing and how you’re working for that client.
On a personal basis, the way you work and interact with your clients is something you can start doing today. Obviously you can’t start making purchasing decisions about technology and you can’t affect the entire culture of the firm. But you can start the shift, you can start setting the agenda and start talking about it with your colleagues.
Starting the journey, living by some of the principles of efficiency and agility, and trying to make smart use of technology, at least on a personal level, would be a great place to start.
Ryan: Maybe take someone to lunch from a different department and find out what they do!
Stuart: Or maybe invite a senior partner out to lunch and find out what they do. Maybe blog about it internally. Start a dialogue, start engaging with the rest of the firm about how it’s engaging with its clients and start asking questions of senior partners and senior managers - start getting it on the radar.
Ron: I would have those conversations with clients as well. Short term it’s a partner discussion, long term it should be open to more people in the firm, some firms are having pricing and project management professionals engaged.
But find out from clients! What do they really want? What’s most important to them? Spend time understanding their business and start scoping matters and trying to lift the budgets. Whether or not you communicate that to clients, you don’t need a huge amount of infrastructure support to do that.
Likewise, I believe that individual lawyers can begin to look to technology to practice more efficiently and that’s changing individual mindset even if the firm isn’t necessarily on board with that. So there’s a lot an individual can do even in the largest firms.
Ben: All of this is about change. Change is constant. That’s the one thing we all know and we’re all getting used to. The key part of that is that openness to change at an individual level. The key thing there is you may have a colleague or a client that wants to do something slightly different, and you may look back and say, “well actually I’ve been doing it that way for 2 years or 5 years or 10 years”, but it’s all about efficiency and understanding.
That openness to think about things slightly differently from that perspective, meaning that you’re not the instigator of that change but you become part of that movement of openness and acceptance of doing things differently and moving forward in a slightly different channel or way.
Ryan: Ron, you were talking about interacting with clients. As a technologist for 13 years in a law firm, it was only very late in my career that I was allowed to speak to a client. I think that’s changing, once upon a time that was taboo - you didn’t want IT talking to a client, or a paralegal talking to a client - but I think it’s beneficial, it shows that the firm has a more holistic approach.
If you’re someone who’s not in a position to speak to clients, is there a way to talk to your management about the value that you could provide actually working directly with clients?
Ron: I think you can, I think it takes a certain type of personality and it is difficult for partners to see the light and they would need your conversation to do that. If you’re not in the client relationship, you can’t just go and call on the client without coordinating. Some partners can be persuaded.
There are any number of blogs and articles about pricing professionals, technology professionals, or KM professionals, where they’re attending client meetings on their own or with partners, and where the client side, which is not always in house lawyers but also in house staff law department directors of operation, law department IT folks, they’re thrilled that other people from the firm are in the room and have a seat at the proverbial table, because the client understands that the delivery of services they want takes more than just the lawyers.
But I’m not sure how hard it is to initiate that conversation. It depends on where you are in the staff and your personality. It’s doable, but it requires thought and probably a thick skin!
Ryan: We’ve got a couple of questions from our attendees. The first one: The culture of a law firm goes 100 years behind technology. It’s an enormous wall to climb. Any tips about changing culture?
Stuart: It’s a tricky one. Taking someone out to lunch is a good place to start, but the inertia is a difficult one to deal with. Law firms have a lot of history and there’s probably a generational gap between those that have been practicing for a long time and those that haven’t. They’ll have very different approaches to practicing law and engaging with clients.
One thing I would stress is to start that dialogue internally, so perhaps set up some kind of interest group, or some way of pulling together the people internally that are likeminded so you can start having a dialogue and building momentum inside the firm. Once you’ve got that, you can start approaching some of the senior partners or the managing partner to try and spread that thinking throughout the organisation.
And often, big change starts with just a few key people who are really motivated to make that change effective across the organisation. Start with the seed, start with some fellow enthusiasts and start having that dialogue, and try to bring together the likeminded people inside the organisation.
Ben: What is going to change a law firm’s approach is survival - clients will drive that change inside law firms. It’ll be a reluctant change to begin with but it will accelerate, and clients are the key components of that. The key thing, from an internal perspective, is getting the culture right, but the key driver will come from the clients. The clients' desire to get cheaper, better, more rounded advice. Not just legal advice, but expertise from the knowledge workers, the IT people, so it will change the dynamic of what’s going on.
Stuart: You say, "will" - I think “is”. It’s already happening - that client pressure is having an effect on many firms and the way they deliver services and how they approach work through fixed fee deals and alternative fee arrangements, forcing firms to react and adapt to market pressure. It’s imperative that firms do that because they’ve got to be agile, productive, efficient and change the way they practice. Because otherwise, as Ben said, it could be a case of survival.
Ron: Let me synthesise what Stuart and Ben said - Ryan, the question you posed was “what can you do from the inside?”
What I would say is, the pressure will come from the outside but if you’re on the inside you look for those partners who either are feeling the pressure, so they’re in pain because their realisation rate is down, their profitability is down, depending on how that firm measures it, but they realise they’re at risk of losing clients or compensation because of that pressure. They might not want to change, but realise they have to because they have a problem. That’s one end of the spectrum.
The other end of the spectrum is those who see the market changing and who want to grow their business and want to do a better job. It may only be a small percent but there’s some who say "I don’t feel the threat, I can see it coming and I want to make what could be a threat an opportunity and I want to get ahead of it."
So if we work at both ends of the spectrum, understanding how those partners are being driven, you can make some headway with those partners. It’s hard to connect the inside and the outside depending on where you sit in the organisation, but that’s where I would start.
Ryan: I’ve got a question I want to throw to Ron, because I think I know what his answer is! SmartLaw is not prescriptive, this is a conversation, these are our suggestions, based on what we think you should focus on. But - what did we miss? What else is out there that we haven’t included Ron?
Ron: As I commented on the SmartLaw website, process is another leg. There’s something very elegant about threes, but there’s a whole other leg of process both running the business and the practice of law, that is independent of the others but overlaps on the other three.
Everything from inside the firm - how do you open a new matter, to how do you send out bills - to the practice of law, and this doesn’t necessarily mean detailed process mapping, but how can you improve how you do your work. Not just with technology, but figuring out how much do I need to do, how much can be skipped, what can I do in a team, and start moving towards much more formal process analysis and improvement.
That conversation lags behind other conversations in the legal market - and if the conversation is there, the action is lacking.
Ryan: Threes are very enticing. I like to have three. Here’s a suggestion - how about we make one of them people - that way you have client focus and your internal culture - process, and technology, which is a fairly common triptych to have in this type of conversation. One last question: Do you think that competition among firms can help at all in order to improve technology, and will being first in having new technology make a difference?
Stuart: That’s something that we get asked a lot, about technology as a differentiator, as a competitive advantage. My answer is in two parts: one is maybe, it can be. Sometimes if you think you’re using a piece of technology first, you get a window to demonstrate how you’re leading the pack and you’re innovative, but ultimately people catch you up, because that same technology is most likely available to everybody else.
At the end of the day it’s about how you use that technology and the legal service that you deliver utilising that technology that actually makes the difference. I always use the examples that all lawyers use Word and Outlook, but their output is not equal in quality.
So I see technology as a way of delivering a legal service. It can in the short term give a competitive advantage. But in the long term it doesn’t, and in my view, firms cannot rely on technology to give them a competitive advantage - they will all need to rely on the same technology ultimately, so it’s just a matter of how quickly they adopt it.