Transformation is a staple in legal industry articles, conferences and parlance. What is it, and what is the gauge for law’s progress? Short answer: transformation is an omnibus term to describe powerful macro socio-economic forces impacting all industries. Those same drivers—notably digital transformation—are reshaping the legal buy-sell dynamic. Legal delivery is being reimagined from the consumer perspective, and the legal function is, likewise, undergoing a makeover. The truest measures of legal transformation involve consumers— increased accessibility/democratization of legal services to support the rule of law; the impact of those services/products on consumers; and heightened consumer and societal confidence in the legal system.
Spoiler alert: we are not there yet. Transformation is tough yards.
Law’s Culture War: Profession and Industry
The legal profession’s inward focus— on lawyers, not clients and society— has contributed to consumer restlessness and reconsideration of the legal function. Profit-per-partner (PPP) has supplanted net promoter score (NPS) among most partnership model law firms. This is an ingredient of disruption, especially in the digital age where the consumer is king and profit derives from customer access, satisfaction, and brand building.
The legal industry–in contrast to the profession– is focused on the consumer and is restoring the service element to legal delivery. Its objective is to refashion legal delivery—and transform the legal function—to provide enhanced access, efficiency, predictability, efficiency, value, and impact to legal consumers.
There is a cultural conflict playing out between the profession and the industry. Many lawyers believe the root of legal change is about cost cutting. The exorbitant cost of legal services is certainly an issue, but the change drivers extend far beyond that. Law’s culture war is being waged to liberate consumers and society from the profession’s stranglehold over legal candidate selection, education, licensure, self-regulation, training, delivery, ambivalent embrace of technology, and the myth of lawyer exceptionalism. A growing number of corporate consumers, big money, tech and process-enabled service providers, among others, are standing up to the intransigence of the legal guild and functionally recasting the definition of “legal” services.
Law is no longer solely about lawyers and law firms. This challenges the profession’s “lawyer and ‘non-lawyer’” worldview and its role as arbiter of what is “legal,” when lawyers are required, the delivery model from which they are deployed, their self-serving undifferentiated assessment of task value, dearth of data analytics, fiscal lack of accountability, and high cost. There is an important caveat to the cost issue: differentiated practice skill, judgment, and experience still commands premium rates. But that is a narrow segment of legal work. All other “legal “ tasks are now cost-competitive, increasingly segmented, and sometimes performed by other professionals, paraprofessionals and/or by machines .
The legal establishment (e.g. lawyers, voluntary Bar Associations, regulators, the legal Academy) is clinging to stasis. The industry (legal consumers, allied legal professionals, progressive regulators like the UK’s SRA, and investors) is driving change. This internal struggle has escalated in recent years because new delivery models, technology, enterprise solutions, and capital exists to transform the legal function at scale. It has taken a while to get here, but the consumer-centric, multi-disciplinary, tech and process-enabled, scaled providers are gaining market share, performing higher-value work, and drawing diverse, multidisciplinary talent essential to address consumer needs in the digital age. Practice activities are narrowing in an emerging global legal marketplace where consumers now have “safe,” scalable provider choices with proven track records, diverse workforces with broad expertise, and DNA that resembles business.
Law’s culture war has paved the way for consolidation of the fragmented legal industry. The industry has no Goliaths—yet. This is attributable to the profession’s provincialism and its antiquated self-regulatory rules designed to maintain the legal guild. There is huge opportunity to expand the consumer base of the retail legal segment—individuals, small, and mid-sized businesses— via platforms that provide a wide range of self-help tools and “light-touch” legal services. LegalZoom is the first provider to achieve this at scale. It has millions of customers, a sky-high net promoter score, and $800M of investment capital. It has reimagined the delivery of retail legal services.
The Big Four and UnitedLex are reimagining corporate legal services by providing consumers enterprise legal services. . Dentons, a uni-branded global law firm network, tech incubator, and marketplace, is the industry’s first legal conglomerate. Platform-based talent management companies like Axiom that provide agile, on-demand legal practice expertise at scale are also reshaping the industry. On-demand delivery capability–business of law expertise–will certainly be available on an agile, platform basis soon.
Legal Transformation Is The Byproduct of Systemic Changes
Legal transformation is often referred to as “legal tech.” This moniker has created a widespread, misguided impression that transformation is solely about the impact of technology on legal delivery. It is far broader than that. Legal transformation involves a confluence of market forces driving law’s shift from an insular, hierarchical, pedigreed, static, provincial-by-design lawyer-centric profession to a multidisciplinary, egalitarian, competency-based, dynamic customer-centric industry. Technology is enabling and accelerating change, but it is not, by itself, driving it. People and new delivery models are.
Legal transformation is creating a global marketplace where lawyers, allied legal professionals, and technology collaborate seamlessly to provide accessible, efficient, cost-effective, data-driven, predictable, transparent, competitive, scaled, and impactful legal services/products to customers and society. That requires profound cultural change among all legal ecosystem stakeholders: law schools, legal service providers, regulators, consumers, financiers, allied professionals and paraprofessionals, and other industries. Culture change involves altering ingrained human behavior and requires change management. It does not come naturally, quickly, or easily.
To achieve customer-centric transformation, the industry must work to modernize the vestiges of the profession’s guild mentality. It must reimagine the demographics of its workforce, skillsets, and backgrounds. It must prioritize and foster emotional intelligence, overhaul legal education and training, encourage and provide learning for life—not simply earning a degree/license– and provide ongoing upskilling. It must engage in legal re-regulation designed to serve and protect consumers, and cultivate a customer-service orientation. It must encourage utilization of technology and process, data, and metrics that benefit consumers. The industry must also foster collaboration, multidisciplinary problem solving, and the primacy of net promoter score. That process is underway, though unequally distributed.
Galvanizing The Faithful
LegalGeek- Law’s Woodstock- drew more than two thousand legal change faithful to its 2019 London conference. The energy, diversity, egalitarianism, and alignment of participants personified the restless energy of a growing segment of the industry bent on effecting legal transformation. Speakers from across the legal ecosystem shared the stage(s) and enthusiastically exchanged perspectives on transformation. My admonition to the audience was, “I think we are all here today for the right reason—to make things better. Never lose sight of our primary mission: to serve clients, customers and society.”
LegalGeek, The Corporate Legal Operations Consortium (CLOC), Legal Hackers, the Global Legal Hackathon, and other organizations with burgeoning global followings are tapping into the industry need for outlets to collaborate, consolidate, and create a platform that expands access, improves service, promotes efficiency, reduces cost, and drives value to legal consumers. Their energy is contagious. But so too is the temptation to attach too much faith and focus on technology as a transformational panacea.
The Myth of Legal Tech’s Magic Bullet
Law has many myths. Some have been debunked; “all legal work is bespoke,” and “law is immune from fiscal accountability and business performance metrics” are notable examples. They have been replaced by others including “the myth of legal tech’s magic bullet”—that tech alone will “disrupt” the legal industry by the flip of a switch. That’s not going to happen. It’s important that technology’s outsized role in legal transformation is tempered and regarded as part of a broader, inter-related process. “Legal tech” is more than tech. and so too is legal transformation more that an IT solution.
Technology is a catalyst for legal delivery transformation and a foundational element for new delivery models, but a tech tool alone will not disrupt the industry. What will? New delivery models that are customer-centric, agile, align providers with the clients/customers they serve, leverage data, invest in (re)training their workforce on an ongoing basis, and derive profit from performance and customer satisfaction. Technology is a means, not an end, for providers that fit this profile.
Technology has been a key driver of legal delivery’s paradigm shift from brute force labor to automation and value maximization of resources. It has replaced repetition (“reinventing the wheel”) with routinization, automation, and institutional knowledge. IT has accelerated globalization, collaboration, and, a host of other operational and cultural changes in legal delivery. It has eroded the effects of legal hubris, anti-competitive regulation, and practice rules by exposing the absurdity of the profession’s “lawyer and ‘non-lawyer’” classification.
Technology alone does not effect transformation. People do. Tech is a change enabler and accelerant. Its transcendent potential can only be realized when people create new delivery models that respond to unmet customer demand at scale. Tech is a tool that, when applied to material and unmet customer needs, has the potential to recast incumbent providers and reshape industries. In the legal industry, it can democratize access to legal services, increase efficiency and cut cost, automate many labor-intensive tasks, reduce cost, provide consumers with a wider range of choice, and enhance the consumer experience (a low threshold).
Law can learn a great deal from the transformation of other industries. Retail is an example. Amazon’s technology did not transform retail; its ability to combine tech and process to reimagine the customer buying experience did. Amazon’s success did not come overnight. It bled billions in red ink before it turned a profit. Nor did its market acceptance transform the retail industry at a single moment in time. Why should law be any different? It’s not. Transformation takes time.
Conclusion
Legal transformation is accelerating for a variety of reasons: the complexity, speed, and new risk factors confronting business, changing consumer sentiment towards providers with new models and scaled capabilities, remarkable advances in technology, artificial intelligence, and capital. Law’s transformation light has changed from red to yellow and will soon be green. The legal profession would be wise to follow the flow of industry transformation lest it be left isolated at an abandoned crossing.
