5 questions with Spark’s Rod Morris on digital disruption in the legal profession

Rod Morris, Assistant General Counsel at Spark New Zealand, leads a team of senior lawyers who provide legal services to Spark’s technology and network businesses. He sheds some light on how he sees the evolving technology landscape changing the nature of the legal profession.

 

1. How do you think a law firm should be servicing its clients today compared with 10 or 20 years ago? What do you expect to see done differently?

There is a lot that could be mentioned here if we compare how firms and in-house counsel should be doing things now compared with 10 years ago, but two initial thoughts come to mind:

Engagement:  Firms need to be servicing clients differently today than they did in the past.  Companies are now moving faster, there is more competition in most industries than days gone and digital disruption is forcing companies to change how they operate to stay competitive.  As such firms need to be more efficient as well. They need to be more responsive.  This doesn’t mean turning around advice or transactional documentation faster, but addressing how they are processing instructions and in what form they are providing their services.  As a starting point, firms need to consider looking at the form of engagement they have with clients. For example, do they have engagement methodologies that allow for real time collaboration with clients to better assist understanding of commercial issues and solve for these in adaptive ways?

A new approach to charging: If firms truly want to partner with their clients then they need to support their clients in managing this aspect of the relationship.  This doesn’t necessary mean deeper discounts to rates but for firms to be more inventive in how they charge.  In my view, firms who have been slow to understand this are creating an opening in the market for alternative legal providers and ultimately technology (in time) – so by not addressing this issue effectively now they could be actually creating competition for themselves in the longer term.

 

2. Do you think the challenge with legal tech uptake is that the development of tech for the industry is slow or the profession is reluctant to change?

I think there are three ways to look at this:

Understanding the impact of technology:  At this point in time it’s unclear as to the exact direction technology might take legal services delivery and the respective impact across the legal services industry. In my experience, there are practitioners currently feeling that any impact is remote, if there is any at all, while others may be feeling exposed but are unsure of the steps they should take.  Wherever we individually sit on that continuum, my view is we need to be proactive about getting to understand technology, and how we can take advantage of it in our practices. Do nothing and we risk ending up in a reactive position during the market transformation.  Being curious now will undoubtedly give rise to benefits later.

Fit for purpose technology:  I don’t think the legal profession is necessarily reluctant to change – it’s simply a matter of working through how technology can assist us.  It’s not just a matter of adopting technology for technology sake, but that technology must either solve a client problem or add value to the client’s organisation.

Scale:  Lastly, I think the smaller scale of legal practices in New Zealand means there is not a lot of low-hanging fruit to target with early stage automation technologies.  The most successful legal technologies in overseas markets so far have generally provided cost savings realised over large volumes of litigation, due diligence or large numbers of standardised contracts. The significantly smaller amount of legal work in these areas in New Zealand corporates can make it difficult to satisfy business case requirements for these technologies at present. That’s where the firms can come in and leverage their relationships with multiple businesses to get adequate scale.  As these technologies get smarter too economic justifications may present more easily.

 

3. What, if any, innovation have you seen the legal profession adopt that paints an encouraging picture?

There are recent examples of legal firms partnering with technology companies to develop new digital capability to assist clients.  There are also examples of firms developing their own digital capability to create digital service offerings for clients.  These initiatives all show the growing acknowledgement that technology will play in legal service delivery.  We are only at the start of what will be a very interesting, and rewarding, time in the evolution of our profession.

 

4. How can lawyers take advantage of the opportunities, and respond to challenges, that digital disruption presents?

Firstly, accept that technology will change our profession whether your role is in a firm or an organisation. The impact on businesses created by digital disruption, and what is recognised by many companies in New Zealand and around the world, is that we are moving from a knowledge based market to a market driven by customer experience. When you look at many of the digital companies you notice that either (i) transactions are either generated directly by the individual or (ii) the individual is interacting directly with the service platform and thus the customer is at the centre of the service offering.  In a disrupted world it is now the customers, or individual users, influencing products and shaping new markets.

Second, accepting that certain areas of the profession will be impacted by technology but also new opportunities will present in different ways than in the past. We as a profession need to be curious of these opportunities. There is no doubt many legal services will become commoditised (and impacted by technology) so it is important we are proactive in adapting to stay ahead of the technology wave.  We should all consider moving to higher ground and repositioning ourselves further up the value chain.  To do this we need to find new ways of adding value to our clients by taking opportunities to leverage digital to drive greater efficiencies for organisations and also re-orienting our services in a way that technology will find hard to replicate.

There are many ways practitioners can do this with many factors influencing how it could be done (e.g., the area of law, nature of firm/in-house team, financial resources etc…). From a general perspective, a few points people could start thinking about are:

  • Take a strategic view: Get close to your client’s/organisation’s strategic plan and understand how it’s been executed. If you are not close enough it will be difficult to position yourself in a manner most effective to help the organisation achieve its commercial objectives and you will remain seen simply as transactional support – so, if you need to, adjust your engagement model.
  • Governance: Assist the organisation to revisit its governance frameworks. Does the current framework deal with these new issues presented by digital disruption? For example, how do you ensure the well-meaning person in an organisation who “clicks to accept” a software program doesn’t expose your client/organisation to unacceptable commercial or contractual risk – potentially damaging your client’s brand, cost or risk profile?
  • Simplify: Look for legal processes that don’t operate effectively and simplify. Structure your teams to move quickly – pool resources to assist sharing of knowledge and to gain efficiencies. Move away from providing services that are (or will become) commoditised and use technology to deliver this work.  Look to simplify not only legal processes but also business processes.  Legal advisers are in a unique position to “see across the organisation” and assist its operational and commercial initiatives.

The above are only a few ideas and again depending on the circumstances there will be many more that will prove beneficial over the longer term.

 

5. If a law firm could do just one thing to demonstrate to its clients it’s moving in the right direction with innovation, what would it be?

Innovation does not necessarily need to be through technology. Collaborating more closely with clients and solving commercial objectives, including, the cost question would in some instances be all that a client might need or want.  On the technology aspect, there are many ways firms could look to assist their client’s technology journey. Examples could include the firm sharing its IT platform(s), document management functionality, precedent documents in digital formats etc… with clients as a no cost value add offering.  Again, this will provide opportunities for firms to better understand their clients and assist them in less traditional ways.

 

Rod Morris is the opening speaker at LawFest 2017, New Zealand’s premier innovation and technology event for legal professionals. His session ‘Digital Disruption – the impact on lawyers and the legal profession’ explores how technology can disrupt the way the legal profession thinks and operates. Find out more at www.lawfest.nz

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