“New law” is a catchall industry term popularized in the aftermath of the global financial crisis. It is often linked to “legal tech,” “legal ops,” “ALSP’s,” and “legal innovation.”Each is usually considered discretely, not as part of a larger change process. That begs the question: Has new law produced change that is impactful to legal consumers and society-at-large? That is what matters.
Internal Efficiency and Profit Preservation, Not Innovation
The past fifteen years have produced changes in legal delivery. Legal operations has introduced established business processes, technology, and multidisciplinary expertise (“non-lawyers”) to the industry. This is good delivery hygiene but not innovation. Legal ops is internally focused, not client-facing. It is tactical, not strategic. Internal efficiency is a building block for paradigm change that drives customer impact and enhanced experience. That is new law.
Legal technology has proliferated during the past fifteen years. Many formerly “legal” positions and tasks have been automated. “The office” has begun to morph from a place to a platform. “Plug and play” solutions are becoming more common, and artificial intelligence is finding its way into the legal space. So too are an expanding library of on-demand educational (upskilling) tools now a part of the marketplace. Still, the legal function lags business and other professional services in tech utilization, budget, and understanding that tech is an enabler of change, not its designer.
Legal tech has become an end unto itself for many “legal techies.” To be impactful, technology must have a use case that addresses a material challenge. Fit-for-purposetechnology investment and design should be part of a larger strategic plan whose end game is to improve customer/end-user experience and outcomes. This is a multidisciplinary team sport that includes legal practitioners, “techies,” process/project managers, data analysts, and other allied legal professionals. New law will not lead with technology; it will be an element of a customer-centric delivery plan reverse-engineered from the end-user perspective.
Law companies (a/k/a “ALSP’s”) have become mainstream, especially in the corporate legal market segment. They have steadily gained market share, secured investment capital to scale, and recruited allied legal talent from other industries. They are neither “alternative” nor presumptively relegated to high-volume, low-value tasks. They are multidisciplinary professional service companies that have demonstrated that practice skills diverge from delivery expertise. What remains is for the two to be culturally, functionally, and synergistically linked with each other and with customers.
Law firms and in-house legal departments remain the industry’s dominant provider sources. While they routinely collaborate, they operate from different economic models, cultures, remits, technology platforms, data, and end-user expectations. New law will have an an integrated platform-based delivery structure from which agile, fluid, and on-demand resources with verifiable, material expertise and experience can be sourced. Profit will not be derived by adherence to a legacy economic model built on input but by a purpose-driven, customer-centric, data-backed, tech-enabled model fueled by output and net promoter score.
The legal industry, unlike many of its customers, has yet to undergo a paradigm change from provider to customer-centricity. When that occurs, law’s purpose will revert to better serving legal consumers and society-at-large, not preserving its legacy delivery models outdated legal education, self-regulation, and dispute resolution mechanisms. Legal providers will focus on customer impact that produces high net promoter scores, not self-congratulatory awards and profit preservation. Innovation is the end result of this paradigm-shifting, human adaptation process. It is enabled by technology and data; it is driven by human beings and their ability to adapt to a rapidly changing world.
The Pandemic Accelerated Legal Automation, Not Transformation
The legal industry has convinced itself that it has been highly innovative during the pandemic. It has quickly and successfully transitioned to a predominantly remote workforce, online learning, and electronic court proceedings. This transition affirmed the latent potential of existing technology and exposed that when the economic need arises, the legal industry can adapt. But this was automation—using tech to preserve existing models, not creating new, customer-centric delivery models enabled by technology. My good friend Richard Susskind explores this important distinction in Online Courts and the Future of Justice, concluding that law is at the foothills of transformative change, not well into the ascent.
Business is well along its paradigm-shifting journey (a/k/a digital transformation) to a customer-centric model. It is also recasting the purpose of a corporation and redefining its role in a digital world. The narrow corporate focus on profit and shareholder value has expanded to a wider stakeholder group. This includes its workforce, supply chain, customers, communities it touches, society, and the environment (ESG). Corporations have also committed to diversity, equity, and inclusion (DEI)—not just for themselves but also for their supply chain with whom they expect cultural alignment. The legal function will make this transformation, not only because business demands it but also because it’s good for business.
MicrosoftMSFT +1.4% CEO Satya Nadella famously noted that he witnessed two years of digital transformation in two months of the pandemic. The legal function has yet to make the digital leap, though a growing number of companies are pressuring it to join in their journeys. Change management and human adaptation are the biggest obstacles in the digital journey.
What Will New Law Look Like?
The speed of business and the breadth of social change make it difficult to render an accurate portrait of what new law will look like. Some of its defining characteristics are taking shape.
1. Diverse, Agile, And Collaborative Workforce
The legal industry will more closely resemble its corporate customers and society at large. It will be more holistically diverse—cognitively, demographically, culturally, and experientially. Its workforce will be more creative, tech and data-proficient, empathetic, and collaborative. A diverse, team-oriented, customer-centric, integrated workforce will be united by a common purpose: to provide accessible, affordable, on-demand, scalable, data-sharing, legal products and services that help solve challenges and capture opportunities at the speed of business and society. The legal function will be internally integrated and will work cross-functionally with other enterprise business units as well as across industries.
2. Synergistic And Standardized
Standardization is anathema to most lawyers because it undermines the myths of legal exceptionalism and bespoke legal work. These fictions have sustained the legacy legal delivery economic model. Other industries regard standardization as a way to share investment costs, speed time to market, simplify processes, create uniform quality standards, and share data. They leverage economies of scale and create impactful synergies by targeted cooperation and collaboration with like-minded companies. This is the path new law will take. (See www.dlex.org).
3. Data Agility And Sharing
The legal industry is sitting on a gold mine of data that can enhance its internal performance as well as positively impact the enterprise and its customers. Legal has barely begun to harvest data’s enormous potential because it lacks data agilityand a compelling business case for budget.
Data Agility is mastery of data’s prime value elements: capture, unification, applied human and artificial intelligence, visualization, real-time refresh, decision driving, and global business integration. New law will possess this; it will harness and share data internally and throughout the enterprise. This will enable the legal function and its cross-functional enterprise colleagues to be proactive in identifying, eradicating, mitigating, and extinguishing risk. It will also help them identify and capture business opportunities. This will drive significant value to business and its customers, avoid significant lost opportunity costs of protracted disputes, free-up management to focus on core objectives, and produce better-informed risk assessment and business decisions. Data agility will help transform the legal function from a cost-center and deal-blocker to value creator and commerce facilitator.
Large-scale legal consumers should require their law firms to share their matter-relevant data with other panel counsel and with them— subject to confidentiality considerations. A law firm’s data is a significant untapped component of its expertise and should, therefore, be made available to clients. This can be addressed in the engagement letter. Blanket assertions of data confidentiality by prospective providers should be carefully evaluated by legal buyers before retaining a firm. Appropriately curated data sharing is an ethical issue for legal providers (competent and zealous representation) in the digital world.
4. Platform Driven
Platforms enable people and organizations to interact and work within a basic collective framework conducive to address multiple use cases and common challenges. Holistic platform solutions are well-established across multiple industries and provide a secure environment for tackling complex challenges affecting multiple organizations, geographies, and constituencies.
The World Economic Forum recently announced it is embarking on an ambitious initiative to harness the potential of the metaverse as a platform for collaborative, inclusive and effective international action. The Forum, in collaboration with AccentureACN +0.6% and Microsoft, is building a Global Collaboration Village as the virtual future of public-private cooperation. It will provide immersive spaces where stakeholders can convene, create and take action on the world’s most pressing challenges. This “big picture,” collaborative approach (in which legal will play a role) provides a roadmap for a new legal paradigm whose purpose is problem solving, facilitating commerce, dispute avoidance/rapid resolution, and ensuring that legal rights and obligations are democratized.
Platforms will play an important role in shaping a new law environment that is more collaborative, transparent, accessible, affordable, efficient, data-backed, and solutions-based. They will be a secure repository of data and collective experience to provide faster, practical, and predictable solutions to once “bespoke” legal matters.
Collaboration is essential to surviving and thriving in the digital age. The speed, complexity, and fluidity of business, the accelerating pace of change, and significant global challenges that cannot be mastered by a single person, function, enterprise, stakeholder group, or nation require it. The legal function can—and sometimes has—played an important role in the broader collaborative process. Pharmaceutical company collaboration in the research and development of the Covid-19 vaccine is a notable example.
The automotive industry offers another example of collaboration. Competitors like GM, Ford, and Honda collaborate on a range of development initiatives. These companies and their peers also routinely collaborate with joint venture partners from other industries. This is emblematic of the different forms of collaboration and fluidity of business in the digital world. Why not legal delivery?
New law will consolidate the industry by horizontal and vertical integration, joint ventures, managed services, and other collaborative mechanisms. Large law firms like Dentons, DLA, and others have expanded by horizontal and, less frequently, vertical integration. Large legal departments are beginning to explore integration that leverages infrastructure, shares data, pools expertise, shares risk, reduces the cost of legal services, and meets growing cost takeout targets.
As the legal industry integrates with the businesses and societies it serves, it will adopt a more fluid, collaborative approach to delivery and problem solving. This will be multi-dimensional and include: (1) increased collaboration between legal practitioners and allied legal professionals on the business of law side; (2) collaboration between and among firms and in-house legal functions as well as with law companies; (3) collaboration among corporate legal departments, especially data sharing, risk mitigation, and synergies that create economies of scale and facilitate business opportunities; (4) integration of the legal supply chain, erasing artificial, lawyer-created distinctions between provider sources; and (5) collaboration between legal and other professions and industries.
The “new law” moniker was coined by lawyers, not customers and society. It is fresh icing on law’s stale cake. Don’t expect legacy legal stakeholders—especially those nearing retirement— to reverse-engineer existing paradigms that continue to reward them.
New law will be shaped by two principal sources: (1) large-scale legal buyer activism; (2) corporate Goliaths that have the brand, capital, know-how, customer-centricity, data mastery, tech platforms, agile, multidisciplinary workforces, and footprint in/familiarity with the legal industry. Microsoft, AmazonAMZN -1.4%, and GoogleGOOG +0.2% are among those that come to mind. Speculation is enticing, but what’s more important is understanding why “new law” is not here but will be soon.
Legal industry: you ain’t seen nothin’ yet.
Article originally posted in Forbes