On Tuesday night the General Assembly held an expert panel on entrepreneurship and technology disrupting the legal industry, looking at the challenges and opportunities arising from the ongoing disruption hitting the traditional legal industry, including technology startups, new and emerging career paths in the industry, and the knowledge and skills required to stay ahead in the new law game.
The expert panel included and illustrious group of professionals:
- Kurt Falkenstein, Founder and Principal Lawyer at General Standards;
- Dom Woolwich, Legal Product Manager at LawPath;
- Paul Hugh-Jones, Partner at Beaton Capital;
- Lachlan McKnight CEO of Legal Vision;
- Sarah Lynch, CEO of Bucket Orange Magazine; and
- Tom Denehy, Business Development Specialist at LawAdvisor.
You can tell a subject is ‘hot’ when there is only standing room, and even that’s in short supply. This expert panel really brought out the crowds.
Paul Hugh-Jones acted as the moderator for the panel. After a brief introduction noting how technology can enable efficiencies and open the way for new business models, he posed a range of questions on innovation and technology.
Where will the biggest technological disruptions to the law come from?
One of Tom Denehy’s responses to this question was particularly interesting. He talked about changing career paths, and an increasing number of bright young lawyers joining the bar straight out of university, or only after a few years in practice with a law firm. These young lawyers represent a new generation of ‘baby barristers who are excellent and hungry for work,’ and are breaking down traditional models, cutting out the middleman, and encouraging direct briefing.
Tom Denehy noted LawAdvisor is working with the bar in NSW and Victoria, developing an online platform to facilitate this new model.
Sarah Lynch noted Generation Y, and the Millennials generally, are likely to be a great disrupting force to traditional industries and work styles, by virtue of their attitude to life and work and their entrepreneurial spirit.
Kurt Falkenstein sees significant disruption coming from governments over the next two decades as they streamline policy and regulation, to reduce red-tape and increase efficiency, with the technology flowing behind it offering document automation and self-service legal solutions.
Perhaps the most ‘controversial’ speaker of the night was Lachlan McKnight, CEO of Legal Vision. He was frank with his opinions, and thought mid-tier firms were facing the most significant disruption from challengers, because ‘a great deal of the work they do is actually not that difficult, and they charge quite a lot of money for it.’ In his view this opens up the door for new law challengers to come in, and offer those services at a much lower price and at the same quality, posing a risk to a large number of lawyers employed by those firms.
Dom Woolwich talked about the law as an ‘information monopoly’ coming to an end, and going straight to the clients through platforms enabling them to perform some of their own legal work through document automation and similar tools.
What are the opportunities for big law in the current environment?
The panel members acknowledged a space remains for top-tier firms in the market, and their capital and resources make them formidable players. Lachlan McKnight wondered out loud how long before a large law firm takes the plunge and incorporates. He believes this would offer an opportunity to take a longer-term view of the business than the traditional partner model, leading to better business outcomes.
It was noted traditional law firms are adapting to the new environment. Some are even adopting new law techniques, from Allens’ Accelerate program, aimed at supporting start-ups with a range of free and cost-effective legal documentation and services, to Corrs Chambers Westgarth’s Orbit Legal, billed as a ‘new model’ to deliver legal services through flexible contract lawyers.
Sarah Lynch noted the content marketing and business development opportunities offered by social media and blogging, and the ‘goodwill’ such interactions can create.
It was also suggested law firms should look at the transformation of professional services firms over the last decade or so, such as accounting firms, and even large media organisation, and observe how they managed the transition, and in some cases embraced the disruptors. Large firms can decide whether to innovate or disrupt. To innovate means becoming merely more efficient, but to truly disrupt they must undergo fundamental changes to their business models and that means time-based billing must go, among other things.
Kurt Falkenstein thought large firms are still falling behind on utilising data to identify client life-cycle trigger-points for legal service needs and monetise those opportunities, which is a critical tool in his business.
Technology, collaboration and connections
In response to an audience questions, the panel was enthusiastic about the role technology can play in creating, building and maintaining client relationships. Technology is largely seen as an enabler for communication and collaboration both between lawyers, and with clients.
However, Kurt Falkenstein warned that just because the technology exists doesn’t mean clients will want to use it. Looking at you Skype – apparently some clients just don’t want to be seen by their lawyers in their PJs, or vice versa.
At the end of the day you must use the communication tools preferred by your client, even if it’s just picking up the … phone.
How about the human cost of the disruption?
An audience member expressed a concern about the human cost of the disruption to the industry, and the potential resulting job losses.
The panel’s response was two-prone.
First, they noted a good proportion of the services provided by disruptors go to a segment of clients who were previously priced out of the market, with disruptors opening up the legal services market to clients who traditionally would have gone without a lawyer or legal assistance of any kind.
Second, they drew attention to the fact that as disruptors grow, they hire lawyers, or provide the platforms that enable lawyers to offer their services directly to the market, potentially making more money and working better hours and more flexibly than before.
What about the quality of the materials created using the zero service options?
Another audience member asked about the quality of documents created through automated, zero service platforms and the effect such documents may have on the legal position of the relevant parties and the court system.
The presumption of the audience member asking the question was that such documents are likely to be of low quality, and riddled with errors.
The panel took the position that having a low quality legal document that may contain errors is still better than a handshake deal.
They also noted that the clients who use those platforms either couldn’t afford a lawyer, so it’s either the self-constructed document or nothing, or do not want to speak to a lawyer, and even when offered the option to do so by the platform they refuse.