Even as millennials, we find it difficult to stay on top of technological advances. By ‘technological advances’, we don’t mean the newest Snapchat filter trends, but rather topics such as AI and FinTech whose frequency of appearance in press betray our own familiarity with them. Fortunately or unfortunately, we are not alone. According to a study done by the Law Society in 2016, a low level of awareness regarding emerging technologies is more than prevalent among the general population.
Source: CAPTURING TECHNOLOGICAL INNOVATION IN LEGAL SERVICES by Dr Tara ChittendenWhile it may be easy to dismiss the importance of knowing or even being aware of such technologies, recent history is filled with cautionary tales of being left behind. Blockbuster, for instance, has dominated the home movie and video game rental industry both in the US and internationally throughout the 1990s. At its peak in 2004, it boasted a market value of $5 billion and revenues of $5.9 billion. But six years later in 2010, Blockbuster filed for bankruptcy and closed its last store in 2013. (“THE SAD END OF BLOCKBUSTER VIDEO” by Christopher Harress) The untimely demise of the iconic brand, however, is not so untimely in retrospect. Attuned to technological advances such as the introduction of streaming media, Netflix expanded its business from simple DVD sales and rental to DVD rental by mail and Blu-ray rental service. Eventually, in tandem with the development of streaming technology, Netflix’s streaming service has since attracted over 100 million subscribers around the world bringing $2.7 billion from Q2 alone (+35.8% Y/Y growth). The dichotomy between Blockbuster and Netflix illustrates a cruel reality where early adoption of technology is rewarded while failure to implement is severely punished. And it is this reality that haunts the business world today – to be, or not to be. Law firms, like any other business institutions, are also grappling with the question of technology and innovation. The Law Society president Robert Bourns notes that over 71% of law firms interviewed agree innovation is ‘critical’ in exploiting opportunities and differentiating their firm, but more than half are simultaneously waiting for others to pioneer new technologies rather than taking a leap. Insiders and outsiders of the legal profession blame the backdrop of its long tradition for this regrettable gap between knowing and doing. But research indicates that such prejudice does not go deep enough. In fact, the Law Society’s Firm Survey (2015-2016) reveals that a quarter of both small (1-4 partners) and large (26+ partners) firms spend more than 90% and 75%, respectively, of their annual IT budget on maintaining existing systems instead of transitioning into new ones. It may appear that, rather than being a question of attitude, the inability to innovate is surprisingly a strategic one. So, how can law firms innovate? According to Jeffrey Baumgartner, an innovation consultant, innovation comes naturally once a strategic vision has been defined, and he urges law firms to ask another question: what strategic vision should they embrace? (“DEFINE YOUR STRATEGIC VISION AND INNOVATION COMES NATURALLY” by Jeffrey Baumgartner) In our opinion, the fact that the legal industry is essentially a service industry should serve as an obvious starting point. While technology can enable law firms to become more efficient, it should never be a replacement for the ‘human touch’ in delivering quality service to clients, especially since according to the Law Society’s Future of Legal Services published in 2015, innovation in services and service delivery will become a key differentiating factor for success in future markets. In a way, such a strategic approach simplifies many of the problems law firms face when tasked with innovation. In focusing on how innovation can create value for clients, law firms simply have to ask what clients want. And it is this simple yet manageable question of prioritising the needs of clients that can make a big difference for law firms in the end. For one, in a study conducted by The Link App that allows law firms to interact with clients instantaneously through a mobile app, it became obvious that clients are demanding increased visibility where clients can enjoy closer working relationships with lawyers through better and innovative communications channels. 67% of the people who participated in the study reported that they would use an app to communicate with their law firm if offered, and almost half of them also said that they would choose a law firm offering a communications app over one without. In other words, the obvious advantage of having a mobile app for clients, who are already spending on average 6 hours a day on their mobile phones, is that technology brings efficiency and simplification to a process traditionally associated with delayed response via e-mail, letters and phone calls. Additionally, The Link App offers a platform where clients can access their case updates and important information 24/7. With such transparency available as main features of The Link App, clients feel less anxiety over the progress of their respective cases. That is, a simple reorientation in thinking from the client perspective not only fuels customer satisfaction, but also increases work efficiency for lawyers who are no longer weighed down by volumes of incoming communications. In conclusion, it is true that the effects of technology can be difficult to predict. But just as the Blockbuster-Netflix scenario becomes obvious when considering the consumer demand for more accessible entertainment, we believe that the same principle should apply to law firms seeking to embrace technology. Namely, go back to the basics - the needs of clients.
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