LegalTech in 2016 – Excitement, Panic & Hype.
News in the LegalTech space for the past decade has been pretty barren. Articles written about analytics, legal project management, or the death of the billable hour written in 2008 are almost indistinguishable from those written in 2016. All the things that seemed like great ideas then, seem like great ideas still, but very few have gained any real traction for one reason – Law firms still own the customer interface.
The moment someone instructs a lawyer to deal with their legal pain, that lawyer, and their partnership mandated systems and processes will usually see that matter through to its completion, with any innovation that interferes with time recording locked out of the transaction.
The point is, most of the excitement, panic and hysteria around recent innovations – most notably smart contracts and A.I, is being driven by legal journalists desperate to ‘change the record’, rather than anything that’s happening on the ground. For example, if you believed all the hype, you’d think the legal industry had transitioned to a transparent “Fixed Fee” model in which hourly billing was scorned upon and firms that had re-engineered their model around fixed fee’s were decimating the luddite led firms of old. The fact is, 93% of all legal matters are still based on the billable hour, and a big chunk of the work that isn’t, is based on cleverly disguised variations.
I’m not suggesting firms do nothing, however I would warn against panicked reactions and rushed investments in proprietary technology hoping to best the looming threats as some consultants are suggesting. It’s like saying that we need force field technology right now, in order to defend against the threat of laser cannons – Neither the offensive or defensive technology actually exists so why waste time imagining it does. The same can be said for usable smart contract technology or impactful legal A.I. There is an ocean of water to pass under the bridge (reliability, education, legislation and a desirable user experience) before either reach the mainstream.
The only actionable advice (for what it’s worth) I can give is for firms to acknowledge that change is inevitable. In fact, embrace it. Go all-in with Office 365 (it’s the only component in any potential technology stack that you can guarantee will be relevant in 5 years time), switch focus from raw fees to profit, gather and respond to real client feedback, try to beat your direct competitors to market with exciting new initiatives that differentiate your offering and improve market share (in the markets you want to be in – this is probably the real forward thinking bit) and simply focus on being the best version of yourselves possible.
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