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CIO Podcast: Innovation in major law firms

Written by Mark Chillingworth

UK legal powerhouses Bird & Bird, Eversheds Sutherland and Weightmans discuss legal innovation in large full service law firms with CIO Editor Mark Chillingworth

Bird & Bird, Eversheds Sutherland and Weightmans represent three of the most significant law firms in the UK.  Business technology leaders from all three law firms entered the Horizon Business Innovation podcast studio to debate innovation in major law firms. One of the topics under discussion was the growing adoption of standard enterprise technologies into the legal sector, so we also invited Jamie Gilbert from Deltek to share his insights.

Bird & Bird is an international law firm with 28 offices and 1100 lawyers with a specialisation in intellectual property (IP) and is well known in the technology community. Howard Rubin has 30 years of legal experience and is a partner with Bird & Bird “providing commercial advice for clients in the IT industry”. Andrew McManus is a journeyman CIO with experience in facilities management, vendors and is now IT Director for Eversheds Sutherland: “We are now a global law firm with 3000 lawyers stretching from Sacramento to Shanghai,” he says of his role.

“I am a recovering lawyer although as far as my firm is concerned I haven’t done any real work for the last three or four years since I became involved in the IT and I am currently business services director responsible for property, HR, risk and IT for Weightmans a full service firm,” says Stuart Whittle, who is both a CIO and a qualified lawyer.

The popular image of the legal industry is that of books and TV show Rumpole of the Bailey, oak panelled rooms, wigs and steeped in tradition. The panel of legal experts dismiss the media perpetuated image though and tell the Horizon CIO podcast about the changing shape of the legal industry.

“I have only been in the legal industry for three years and I had that perception,” McManus says. “It is the opposite, there is a huge amount of speed and focus on client service and like any industry the client is driving a certain behaviour and we need to use technology to respond, so I certainly see our industry become more innovative and certainly see our lawyers running frantic around delivering great service.”

“It is a long time since lawyers sat in oak panelled offices and wore wigs. Largely today it is open plan offices glass, dress down, you name it and very similar to financial services,” Whittle adds. “The demands on our lawyers for speed of response means that the days of the clients being subservient to lawyers are long gone as the client realises they have the buying power. So for our lawyers it is about understanding what the value is and how that is defined and delivered whether through technology or traditional face to face.”

“I still wear a wig and stockings,” jokes Rubin. “It is all very well talking about lawyers in this environment, the breadth of law is enormous from sole practitioner to Clifford Chance and we each have different challenges and different ways of doing that.”

Having used a new entrant in the legal market for advice I was keen to know if the legal sector is being disrupted in the way retail, travel and media sectors have been. There is a lot of hype that the legal sector is about to be swept away by digital services, but on the surface the sector looks as secure as ever.

“I don’t think you can separate internal drivers from external drivers, yes we are getting pushed by our partners to deliver more to our client base but that is usually a result of opportunities that they have identified for a client or from push from a client.

“One of our largest corporate clients we are integrating directly into their systems to exchange all information system to system and it varies for different clients and it comes back to trying to understand the needs of each individual client,” Whittle says of how technology is part of the changing shape of law firms, providing operational change to meet the needs of customers.  “For me there is a bit of a myth about millennial driving technology in law firms, just because you can use WhatsApp and Facebook and can type with two thumbs isn’t terribly useful when get into a business and have to use complex and detailed business technology to do the things you need to do for the clients,” Whittle says of how the customer is driving technology change, not the new recruits.  It is a story that reflects that of the retailer and media CIO, customer behaviour changes the technology strategy more powerfully than new staff members.

“The legal industry has had a narrow set of technologies they have used up until now and there are some new technologies that are driving people to do things very differently and the most common conversation I have had is with clients and our lawyers is for advice on how to do things more effectively and there is a wake up call from our lawyers and clients on just what technology can do,” McManus of Eversheds Sutherland agrees.

Vendors too are seeing the same need for increased interoperability and business process improvement driving the legal technology change. “ I think there is an increasing challenge from the client side in legal that is driving the firms to differentiate and innovate and that is a look to other industries whether on pricing methodologies or resourcing,” Jamie Gilbert at Deltek says.

Acting lawyer Howard Rubin disagrees though: “Funnily enough I think it is hard to get clients to embrace new technology and new ways of working and they are highly resistant to change. The change is coming from within. There are the partners that understand new technology, there are the partners that want to understand technology and there are the partners that think they understand technology but really really don’t and there are the partners that can’t see that there are any different ways of doing things.”

I haven’t seen anything revolutionary. There is no Uber out there yet, I think the way the business operates will change. It is a good point about the clients not knowing the way they want to operate, they need the startups to stimulate some new ideas,” McManus says. Whilst Whittle at Weightmans sees disruption as a wider trend: “It’s not a new trend, those things have been happening in over the last five, 10 and 15 years. If you think of Lawbite (a digital challenger) as a form of outsourcing. In the time when I was a lawyer you could outsource your e-disclosure to a cheap outfit that would do it more quickly by throwing resource at it.”

“It depends on what you are looking at, technology can really help drive down costs in certain parts and in other parts it may never do. Uber is very succesfully, but most of the traffic in London is still black cabs and if I was going to Newcastle I wouldn’t go by Uber, I’d still go by train. So it is expanding the way we do things,” Rubin says of what digital is really doing to market sectors – increasing choice. Of course increased choice does erode margins for organisation.

“There was not an appetite for disruption in businesses until they were disrupted. It will broaden the range of what a lawyer does and more clients are asking a law firm to do more in terms of analytics, so it is more than legal advice,” McManus says of how choice means the consumer demands more of a law firm.

Howard doesn’t believe the legal sector will undergo the level of digital disruption seen in other sectors: “You have to look at how you would disrupt the legal profession, we are so heavily regulated and I don’t just mean our own guidelines, we operate within a legal framework and that framework governs the way everybody behaves.”

“If you look at the time post Legal Services Act and there were a number of firms that tried to run law firms in a different way and they found it harder than expected,” Whittle adds to Rubin’s point. “I can see what attracted them as when you look at the margins you can see high margins and high levels of inefficiency and lots of individuals trying to reinvent the wheel, but you are dealing with very bright, very wilful and very individualistic individuals, then trying to make those changes is harder than you think.”

“You are dealing with set rules, if you are a litigation lawyer it doesn’t matter what process changes to discovery come about;  until the court services changes the way it operates the way a law firm operates cannot change drastically,” Rubin observes. But what has driven technology change is technology and the vast amounts of information it has enabled. Whittle describes litigation cases being “driven by huge volumes of documents and emails”.

“When I qualified we sent 30 letters a day, now I can’t remember the last time I sent anyone a letter but I receive three figures worth of emails a day one or two of which are relevant or useful,” Rubin adds. “The volumes of data that moves from me to you and from me to 40 other people is just enormous, it is not a legal requirement, it is just a requirement to deal with big data, the requirement to deal with litigation and for due diligence.”

“Email initially made life easier, but because it is easier people do more of it and it becomes burdensome and the cost of sending a memo and so low that everyone gets copied in on,” Whittle adds.

Standard versus specific

“It is one of the frustrations I have with the legal sector, there is a close knit set of providers who have done really well out of the legal sector and charged good sums and made good margins as they see it as a good sector to trade with,” McManus says of his analysis of the sector he joined in 2014. “But there are more and more new entrants and large organisations that haven’t been in the legal sector are moving in. Equally a lot of legal CIOs are realising we are not that special, it is a need to manage a lot of data, a lot of emails and manage clients and there are many systems out there and there has been a reluctance to be innovative.

“The most common question I get asked when I suggest a new method or product by the board is what are other law firms doing?  So if I suggest a system that no one has heard of, it could be the best thing ever used, but if it hasn’t been used elsewhere there is a reluctance but that is changing with the new entrants out there that are not targeting the legal sector,” McManus says.

“The core platform that is applicable to professional services will be equally applicable to the legal sector. Suppliers that are focused on legal are slower to change and they are reliant on their customers then that strategy means they are slower to adapt. That reluctance to change is a challenge,” Gilbert agrees with McManus.

“I think there are two reasons: it is much easier to deliver those platforms now and it is much easier for us as a firm to adopt standard technologies. I have been qualified 36 years and things are more relaxed and we are less formal as a profession and that means it is easier for us to adopt standard technologies,” Rubin of Bird & Bird adds.

“I think a lot of it is driven by our lawyers wanting to do the basics well; make sure email is better managed for example, Office 365 and using the cloud and Sharepoint much more effectively,” McManus adds of the move to standard technology tools and away from bespoke.

“That is right, but fundamentally for our clients they are driven data sits in the practice management and document management systems and the line of business applications like, accounts, document management, workflow, CRM and HR and you can buy them from one supplier, but they are all separate. What you end up doing with the platforms and solutions is displaying the data in one platform but on the back end it is quite hard to manage on a day to day basis,”

“Yes we are more relaxed as a profession, yes people are more accepting of stuff, but the cost of changing this stuff in terms of cash outlay and the time involved in getting the thing in and the time involved in getting everyone over themselves and there is a reluctance to change as you don’t want to be the first person to fail, but also a reluctance is the cost of change is pretty high,” says Whittle of why law firms have been perceived as taciturn in their adoption.

For McManus he sees the change coming in the form a series of applications for distinct tasks that sit on top of the core platforms major law firms need. “So the practice management and document management solutions are at the core things you buy, but the systems that serve our clients are broken down and there is more of an appetite for agile development to break down some of the purchase for certain solutions,” he says. Adding that his view is that the technology tools lawyers used are akin the range of Apps they have on their smartphones and their user experience being similar in they shift from one App to another to complete a task, just as a traveller switches between a ride hailing App and City Mapper.

“That is right, but fundamentally for our clients they are driven data sits in the practice management and document management systems and the line of business applications like, accounts, document management, workflow, CRM and HR and you can buy them from one supplier, but they are all separate. What you end up doing with the platforms and solutions is displaying the data in one platform but on the back end it is quite hard to manage on a day to day basis,” Whittle says.  

“The wonderful thing about technology today is that you get lots of patches, you get the little things that allow you to use technology that you thought of as out of date, it revives it all and we are allowing people to integrate closer and we don’t have to make the big changes and the fee owner and moved away the big things as they are,” Howard says of how integration ensures law firms can sweat their major assets.

Artificial Intelligence in law

“AI is the first thing for a long time that I have got excited about and it has real potential, largely because of the computing power available to it now,” former lawyer Whittle says. “There have been a lot of false dawns for AI, this is the 30th year of the legal AI conference, but now there is something in it and there is a lot of hype and there are a lot of things that already existed that are being rebadged as AI as a sales and marketing tool.

“If you think of all those paralegals who tag the documents to help a lawyer get access to the information, can you get a computer to do that? Probably. So at some level it is clearly possible to do, to take large volumes of unstructured information and turn it into useful data to assist in decision making, whether the cost of doing that is worth it, at the moment it is uneconomic as the number of man hours to create a domain ontology is massive,” Whittle says.

“It is being used, in the recent Rolls Royce prosecution the Serious Fraud Office used AI to do the prosecution and the judge said it would not have been possible without AI,” Rubin says. “In 99% of cases I agree with you but AI will come in and we will have to adopt is and embrace it. It will happen for certain things, the key thing it will come in for is to manage the monster we have created in email.”

“That would be helpful, here are the emails you need to read,” Whittle says with a laugh. “There is a larger law firm in the US that specialises in bankruptcy and they are getting rid of 50 paralegals and replacing them with IBM Watson that will do legal research and that is how I think we will see AI come along.  I was talking to AI vendor about discovery and disclosure and they said the accuracy rate of a paralegal is 68% for AI it is 91%, Rubin replies.

“That is part of it, they just have to be better not perfect, it is the same with self driving cars,” Whittle responds: “Having done those tasks, when you spend all day in front of a computer reading documents it is really really boring and it is no wonder that you miss things and make mistakes.

“AI is certainly being used in many different flavours and people think of AI as one thing when it is clearly not, so it is about trying different things,” McManus says.

“We are so used to providers coming up with the next product and telling it so much better than what came before this, naturally the thing about AI is it is really clever but it is really boring so the technologists must understand the problem to be fixed,” Rubin adds

But CIO Whittle has a concern: “The thing that worries me is how I learned to be lawyer. It was from doing some of this stuff and seeing what the associate did with it. If the AI is taking some of that stuff away and allowing a lawyer to support the decision making process, how do you get to those expertise? You can augment it with some data analytics on settlement time and costs, but they have got their experience the hard way.”

But Howard disagrees that the introduction of AI will decrease the ability for the next generation to develop the skills they need: “What was the hard way when I qualified is a monster now, I qualified as a litigate, a big case was one may be two lever arch files of paper, now a small case is 30 to 40 files of paper and the monster is all that communications, which obscures what you are really looking for. So AI will take us back to where we were,  so you are looking at the needle in the haystack. At the moment we are employing a lot of people to pick away the hay.”

Market consolidation

As with many sectors the legal industry has seen a great deal of consolidation from mergers and acquisitions in recent years.   

“The sector is constantly undergoing change and I suppose in many cases the merger is not a merger it is usually a tie up,” McManus says.

“If I go back to my experience of dealing with suppliers; I have a finite amount of time, from a client’s perspective it is the same,” he says of clients wanting a single law firm to deal with, one that can offer a wide range of services.  “The regulatory burden that requires a level of infrastructure and resource means that every client asks and audits us to ISO 27001 and that requires a process and you have to be a certain size to deal with that burden.”

Despite the market consolidation, which none of the panel feel will end soon, all believe it is a great vertical market for technologists looking for a challenge.

“I think if you are the sort of technologist that is developing applications then there is loads of scope, if you like networks and plumbing that will be done by others. I think all industries will become information business where the information they hold is more important than the service they provide so there is a huge career opportunity for data scientists,” says Whittle at Weightmans.

“The amount of opportunity around the use and value of data is tremendous, but there is a level of resilience and that means it is not always an easy sector to work in,” adds McManus of Eversheds Sutherland and Rubin agrees: “The real scope moving forward is for technology to add to the business.”

Produced in Association with Altius
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