Think Tank: 20+ Legal Tech and Business of Law Predictions for 2018 – Part 1Aderant
By Craig Dekshenieks, Director, Content & Marketing Operations, Aderant
As the Nobel Laureate in Physics Niels Bohr once said, “Prediction is very difficult, especially if it’s about the future.” But that doesn’t mean we should not try.
Predictions cause us to think differently – a bit of exercise for our minds – that can be insightful and fun. It is in that spirit that we invited a number of big thinkers from around the legal market to make a prediction.
We received a considerable volume of ideas – so many in fact that we had to split them up into two parts! These predictions come in various shapes, sizes and matching personalities. Some are long. Some are short. We believe they are all thoughtful and we’ve done our best to group these into three broad categories for readability:
- Business of law predictions
- Legal technology predictions
- Law firm marketing predictions
For Part 1, we will be sharing the Business of Law Predictions. Here we go…
Business of Law Predictions
1) “Let’s go with some stretch predictions and see if the industry follows.
First, I predict that a legal services organization somewhere in the world will “make the move.” Using design thinking, it will change the basic paradigm for systematized legal services. To increase the ante, it will use only the usual suspects (e.g., process improvement, project management) and disruptive technologies available today (including blockchain and AI). For law departments, the gauntlet will have been thrown – reduce spending on most of your routine work to 25% or less of today’s cost (dropping to less than 10% over five years) and free lawyer time for more creative challenges. Or, allow other companies to get a huge competitive edge on your department. Will CEOs and CFOs force CLOs to adopt this different approach (my prediction – probably not)?
Second, I predict that one law school will study the market for lawyers, survey competing law schools, and (also using design thinking) re-write its curriculum from the ground up. Its single constraint will be staying within the ABA’s accreditation requirements. Classes will integrate technology, project management, process improvement, and data from day one. Students will take online quizzes designed to test their knowledge of bar exam topics applicable to their studies. These quizzes will start during the first semester of the first year and continue until graduation. Students will have to maintain a high average pass rate for quizzes (e.g., above 85%) to stay graduation eligible. Students will have to research, write, and publish at least one substantial paper as a pre-condition to receiving their degree. Papers will be evaluated on a double-blind basis (both reviewer and author identities are concealed).
2) “A Big 4 accounting firm will test the American legal profession’s ban against non-lawyer ownership by opening a law firm in the US practicing US law. This is going to happen eventually; might as well be 2018 as any other year.” – Jordan Furlong, Law21
4) “In 2018, we will see more lawyers actively engaged in supporting access to justice efforts in their area. There will be more non-profit law firms created and even for-profit law firms will provide more unbundled services and adopt sliding scale pricing strategies. This will be lucrative to lawyers who embrace more efficient practices such as the use of technology that enables document drafting and automation.” – Sheila M. Blackford, Oregon State Bar Professional Liability Fund
5) “One of the big global ‘roll up’ firms will unravel, with over 100 partners leaving. Fifteen Chambers ranked partners at the Magic Circle in London will move to a combination of Kirkland & Ellis, Latham & Watkins, and Gibson Dunn. Three AmLaw100 firms will shutter their operations in Greater China (i.e. Hong Kong, Beijing, Shanghai).” – Hugh A. Simons, Simons Advisors LLC
6) “Progressive small and mid-sized firms will continue to gain an advantage over their lesser or unprepared counterparts. Smart partners with portable business will seek out these firms because of their visibility and quality of their platforms. Progressive firms will continue to spend on modern marketing systems, cloud-based technologies, and applications that help deliver services more efficiently. Lesser prepared firms will continue to struggle with inefficient overhead structures, below market compensation, and inefficient service delivery. Some firms will catch up, and some will disappear.” – Brian Kennel, PerformLaw
7) “2018 will be a year that includes: 1. Continued pressure from corporations for change in the law firm model; 2. Increased percentage of outside spend with alternative service providers; 3. Legal operations professionals hit the mainstream; 4. Service delivery models are heavily informed by data analytics; and 5. All strategy discussions are guaranteed to include two letters, AI!” – David Galbenski, LumenLegal
8) “Who can predict accurately without a reliable crystal ball? In lieu of a prediction, here’s my advice to law firms for 2018: Stop competing with your clients for legal work. Instead, start collaborating with them in creative ways. What does this mean? Find nonbillable efficiency and learning projects that bring value to both your client and your firm, then pursue those projects together. Doing this strengthens each individual party and their shared relationship. On this foundation, it will be easier for the participating firm to bid for and win more billable work in 2018.” – V. Mary Abraham, Above and Beyond KM
9) “Fixed fee arrangements will continue to grow as the dominant choice among alternative fee arrangements (AFAs). Clients and law firms are increasingly frustrated with the creation and management of performance- and value-based AFAs.” – Patrick Johansen, CPP, PatrickonPricing.com
10) “Clients will increasingly share law firm performance feedback with one another. This will result in law firms winning or losing significant market share based on actual performance (vs. pedigree). This market transformation opens the door to other positive change in the profession, since market imperfections (such as poor information flow) are what decrease the return to law firms of client-service improvements and innovation. Put another way, a “loss leader” in a market that doesn’t adequately reward stellar client service is not really a loss leader – it’s often simply a loss.” – Firoz Dattu, AdvanceLaw
11) “Competition among large law firms will continue to heat up. Why? Corporate demand for legal services continues to grow. But the share going to law firms keeps shrinking. GCs meet the growing demand by hiring internally and sending work to alternative service providers. In-house hiring may have peaked (one recent survey so suggests) but the Big 4 and smaller law firms are alternatives with room to grow.
That means law firms face flat demand and price pressure. Large firms must, therefore, battle for market share while taking steps to protect profits. The only way to accomplish both is by delivering more value. To deliver more value, firms must improve service and reduce delivery cost. That means lawyers and firms must change the way they work. Anything else is just window dressing.
Two recent prominent trends – artificial intelligence and law firm innovation initiatives – are promising but may not deliver enough new value short term. The legal market buzzes about AI but the proven uses cases are limited. In 2017, we saw machine learning tools for due diligence go mainstream. And advanced text analytics for e-discovery document review has been mainstream for years. Likewise, data analytics and AI for legal research is pretty much mainstream. It’s not obvious that there is a break-out use of AI beyond these but smart firms will continue to explore its potential.
We seem to be in a large law firm innovation race. Or maybe it’s just a PR war. But innovation has to translate to changes in how firms and lawyers work or there is no new value. It’s not clear how much this has happened to date. But innovation always takes time to translate to real chance. I expect to see firms of all sizes continue to tout their innovation initiatives in 2018. And I am optimistic that some of these initiatives will begin to change how lawyers work. Absent reducing the labor effort required to deliver advice, improving legal outcomes, or improving client service, innovation has little benefit for clients.
AI and innovation take up a lot of mindshare. But approaches with less PR sizzle arguably can have more impact short term. Specifically, firms can do more and better knowledge management, legal project management, practice technologies, and process improvement. In my consulting, I see more firms, even some in the top 20, investing in all of these and I expect to see more of each in 2018. It may be less sexy than AI or innovation, but done right, we know all can deliver value to clients quickly. So, I expect those firms feeling the pressure the most to focus on changing how their lawyers work with these and other proven approaches in 2018.” – Ron Friedmann, Fireman & Company
12) “We are in a period of transition in the legal marketplace. I predict that 2018 will see lawyers more open to collaboration. Traditionally, lawyers view the world as those with J.D.s and those without. Collaboration is a value of 21st-century clients and legal professionals, including millennial lawyers. When lawyers collaborate, they will find they are better able to communicate with their clients, offer transparency and finally embrace the skills of all those professionals who can help grow their legal practices including paralegals, marketing professionals and business professionals.” – Camille Stell, Lawyers Mutual Liability Insurance Company of NC
If you’d like to be invited to make a prediction next year, please click here to add your name and contact information to the business of law predictions invitation list.
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