Insight

Law Firms Are Seeing the Light when It Comes to Innovation

Globalization and technology are converging in a way that challenges orthodoxy.

Corrs John Denton
John W.H. Denton AO

John W.H. Denton AO

February 24, 2017 12:19 PM

“Every man,” Voltaire once said, “is a creature of the age in which he lives.” Few, he believed, are able to raise themselves above the ideas of the time. And herein lies the challenge for the legal profession in the age of disruption.

Lawyers are meant to deal in certainty. We don’t like ambiguity.

So let’s consider what we can be absolutely sure about right now before considering the future: It’s tough out there.

As the Australian economy transitions from its reliance on resources to broader-based growth, uncertainty abounds.

Throughout the ages, however, the legal industry has negotiated short-term cyclical challenges. Pressures associated with economic transformation will pass.

But structural forces are shifting the landscape, too. And adapting requires a new, pioneering mindset.

Globalization and technology are converging in a way that challenges orthodoxy. Just as fintechs have challenged the way the banks operate, NewLaw is asking questions of BigLaw.

This calls for a different kind of thinking—“design thinking” perhaps, which law firms around the world are experimenting with to creatively solve some of the challenges they’re facing. Our greatest weapon is our embrace of diversity: a monoculture kills.

Innovation isn’t a word typically associated with the legal profession, yet in this changing landscape, failing to adapt is the riskiest strategy of all. New players are demonstrating that technology is not only changing the way legal services can be delivered but how it can improve decision-making for clients. And it’s not just NewLaw challenging the models.

McKinsey recently analyzed the work activities in more than 750 occupations to estimate the percentage of time that could be automated by adapting technology currently available.

Lawyers had an “automation potential” of 23 percent—one of the lowest scores. Pity the bakers; 98 percent of their work can now be done by machines. Yet our profession does have something to aim for.

Allied to structural changes is the transparency that comes with greater connectedness. Clients expect quality legal services with ¬increased value for money.

They have greater access to information, allowing them to compare options more easily. Most research done before a business-to-business transaction occurs online. It’s a buyer’s market.

Law firms at the forefront of change are harnessing technology and adapting to these demands. Australia’s leading independent law firm, Corrs, is using artificial intelligence to help businesses make smarter decisions.

Our new joint venture Beagle Asia Pacific is a case in point. Its software provides a new way of analyzing contracts in a fraction of the time usually invested, freeing us and our clients to truly focus on greater insight, shaping strategy.

This technology can digest and identify important elements of text at about a page per second. That’s faster than any lawyer I know. And rather than being confined to use within legal departments, the platform can create benefits right across a company’s infrastructure.

Will a robot ever be the CEO of a law firm?

Of course, it is not technology itself that is causing disruption but technologically enabled clients, and technology will never be able to usurp human connectedness.

This is a universal truth for all professional services organizations. Those firms that ally client empathy with the right tools will be the ones that deliver true value.

This requires a human approach to disruption. The two must work in concert, enabling clients to make better decisions. Adapting existing technology to improve an enterprise beyond immediate legal considerations will prove fertile ground. The legal profession can spend more time focusing on the economic and social issues that will inform the way Australia negotiates these uncertain times.

The steam engine was designed to remove water from mines. Humans saw its potential to transform shipping and railways. Some of the world’s most innovative companies from Apple to Disney have sprung from challenging environments and economies. These companies challenged Voltaire’s assumption—seeing beyond the horizon.

Some futurists say we’re approaching a tipping point in which cognitive platforms will outperform humans in the not too distant future. Will a robot ever be the CEO of a law firm? While singularity may arrive one day, all the evidence suggests we’re some way from it. I suspect I’m safe for now.

By John W.H. Denton AO, Partner and CEO of Corrs Chambers Westgarth

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