The beginning of the beginning

“Hasta la vista baby – the termination of the legal profession” is the provocative title of Mark Smith’s recent blog post at The Intelligent Challenge. In this post Mark concludes that “once you start really looking at what lawyers do, and begin to grasp what technology is already capable of, a real threat to the profession as we know it doesn’t seem so far fetched” and that “my belief is that the fundamental changes now facing the profession are only the beginning of the beginning, and that technology will shape the end game far more than any of us can probably predict”.

Many others, however not quite so dramatically in their views of the future for the legal profession, have also talked about the new legal marketplace where technology is reshaping the practice profoundly. There has also been talk about the new beginning of an era where technology will come to determine the winners and the losers amongst the legal players.

As Arlene Adams of Peppermint Technology puts it in her Legal Futures blog post “Using technology to compete with new entrants”: “While the technology is not the answer itself, it is the enabler to make it possible. Some of the largest companies on the planet didn’t exist 10 years ago. Facebook, Twitter, Google, Skype, eBay, Trip Advisor, Expedia and Amazon are all new entrants growing rapidly to displace traditional businesses. They have all one thing in common. They focus on transforming the customer experience and they use technology to make it happen. The legal market is not immune to this trend, as we have seen from the recent revelations that US companies LegalZoom and Rocket Lawyer are to enter the UK market next year.” She continues with “If you cut through the hype of technology suppliers, there are only two things that really matter. The first is the use of technology to transform your customer experience and the second is the use of technology to streamline your business and cut cost. Many firms mistake technology with commoditization. I often hear firms state that technology will eradicate the personal experience upon which they differentiate their service. The reality is very different. High-value service industries, of which legal is one, have combined technology and legal services to deliver a far greater personalized service. The idea that technology will de-personalise the service is at best a myth and in many instances just an excuse to do nothing.”

This point is also made by Steven Harrick of Institutional Venture Partners, who has invested in newcomers on the legal market like LegalZoom, in the article “Silicon Valley Sees Gold in Internet Legal Services”: “The vast majority of the industry is still practicing law the old-fashioned way and overcharging customers.”

Mark Smith believes that technology will be the single biggest driver of change for the legal sector in the long term and that it will even come to take over the business end of the legal value chain, i.e. the area of law where lawyers believe they add most value, the high-end complex work that needs a specialist. When looking at the recent developments and hearing leading technology thinkers describe what is coming, it “promises paradigm shift in speed, accuracy and cost reduction that goes far beyond what an LPO could offer with a human based process. Of course it’s not that simple. Apart from very real time, effort and money required to build the technology, aside from the judgment required to apply the law, there is of course a truly human element in providing legal service. This service wrapper is likely to keep large chunks of the profession safe for a while, and of course as one work type is automated the opportunity for the profession is to find a new, higher value area of law to explore.” Regardless of which actors that will be the first to use these new generations of tools, “the early adopters will become the Terminators and the firms that resist will be the Sarah Connor.”

Is this the new beginning where firms that can use technology to compete will survive and be prosperous, but firms that will resist will have to fight for their survival or risk being eaten by new entrants?

Arlene Adams predicts in line herewith, when she concludes that “I believe that the UK legal market will change significally over the next three years. I expect some big brands, that don’t exist now, to be major players of the future. I also believe existing firms, that really focus on customer experience and new ways of delivering a streamlined legal process, stand to be the biggest winners.”