This week the VQ Knowledge and Strategy Forum took place at Grand Hôtel in Stockholm. As last year the conference featured inspiring and innovative speakers and the possibility to meet knowledge managers, lawyers, information specialists, visionaries and all other professionals working within the legal services sector.
The conference day started with keynote speaker Richard Susskind who is considered one of the gurus of legal technology and the future of legal services. Susskind started off by mentioning the example of Black & Decker who are not in the business of selling drills but in the business of selling holes because this is what their clients want. Comparably, clients of lawyers want to avoid problems rather than solve them. “A fence at the top of a cliff, not an ambulance at the bottom”. (see also Twitter) Clients do not want dispute resolution, they want dispute avoidance. They do not want legal solutions but legal risk management. Unfortunately, however, law firms and the legal industry have focused on making the ambulance more powerful instead of better securing the cliff.
Speaking about automation vs innovation, Susskind commented on the automation approach which applies technology on pre-existing manual processes thereby making them quicker. Automation is, however, not equal to innovation, which is what is really needed in the legal market. Innovation means to use IT in order to do things that previously had not been possible, not to automate existing manual processes.
Susskind emphasised that clients want “more for less”. In order to achieve this, law firms have two possibilities:
- efficiency strategy (cutting costs, moving along the path towards commoditisation, multi-sourcing)
- collaboration strategy (sharing costs, harnessing the collaborative power of IT, online community)
- As the costs of lawyering itself is too expensive, the question is raised how to cut them. Large layers of work are repetitive and involve mostly administration. Clients are willing to pay for genuine expertise, but not for low-end tasks.
- Commoditisation involves moving from bespoke legal service models to standardised, systematised, packaged and eventualy commoditised work. Bespoke work reminds of tailor made suits. This is the way legal services are done today. The bespoke model is conveyed both in legal education and in the media and involves crafting a legal solution for a specific client. Interestingly enough, clients chose law firms because they have done similar work before. Standardisation is commonly used today, and clients want access to electronic forms that the lawyers themselves are using. This can lead to packaging of legal knowledge. Eventually, clients want to move towards commoditisation, as the prices go down, become more certain, and quality often goes up (250 people’s common knowledge will almost always outperform bespoke expertise of single lawyer).
- Multi-sourcing involves relieving lawyers from certain tasks in different ways. Possible forms include in-sourcing, de-lawyering, relocating, off-shoring (example: British Telecom), outsourcing (Rio Tinto outsourced to CPA Global, see also Susskind’s interview with Lea Cooper), sub-contracting, co-sourcing, near-shoring (example: Allen Overy near-shored to Northern Ireland), leasing (example: Axiom and Voxius), home-sourcing (Lawyers on demand from Berwin Leighton Paisner), open-sourcing, crowd-sourcing, computerising, no-sourcing (from a risk point of view it does not have to be done it at all).
Recommending Ray Kurzweil’s book The singularity is near, Susskind emphasised lawyers’ hesitation to adapt emerging technology. He mentioned a few examples where technology has or can be used to improve or innovate legal services:
- Legalzoom offers online documents
- Legal On Ramp (cross between Wikipedia & LinkedIn)
- e-bay settles its 16 million disputes through online mediation
- Yammer is used by 75 % of the Fortune 500
- Exari and Kiiac allow comparison of legal documents and find inconsistencies
- Affinitext is a project management tool and Contractexpress is a document assembly solution.
Referring to Clayton M Christensen’s book The Innovator’s Dilemma –
When New Technologies Cause Great Firms to Fail, Susskind identified 10 disruptive technologies which include:
- closed client communities (clients come together, even if lawyers don’t)
- online dispute resolution
- automated drafting
- electronic legal marketplace: auctions for legal services
Closing off, Susskind suggested four models for the future legal business:
- target model: expert trusted adviser, enhanced practitioner, routine worker
- doughnut model: expert trusted adviser, enhanced practitioner, outsourcing of other stuff
- glazed doughnut model: expert trusted adviser, enhanced practitioner, and process manager (legal process analysis: taking apart a legal process and looking at it, decomposition and identification are the best way to multi-source.)
- cog model: expert trusted adviser, enhanced practitioner, process manager, routine worker
The keynote was followed by a panel discussion which included Anne Ramberg, Secretary General of the Swedish Bar Association, Joakim Edoff, CEO and Executive Partner at Setterwalls, Stefan Erhag, Executive Partner at Delphi, Björn Kristiansson, Partner at Hannes Snellman Attorneys, moderated by Christer Danielsson.
KM’s role in new business models
After lunch, Chris Bull, Partner at Edge International, spoke about emerging business models in the legal sector.
Emerging B2C business models
- branded chains, e.g. Quality Solicitors
- comparison websites, e.g. CompareLegalCosts
- service websites, e.g. RocketLawyer
- retail: The recently enacted Tesco Law allows private companies such as Tesco, and other retail and banking companies, to set up their own legal services. These organisations have had experience in the online market for the past years, have offered financial services and learned from their mistakes. In addition, they carry a large amount of trust from their customers already which could be an incentive for the latter to choose a retail company over a law firm.
- legal insurance, e.g. DAS (German insurance company)
- niche specialists, such as Maurice Turnor Gardner
Emerging B2B business model
- multi-disciplinary firms, e.g. PWC
- consolidators, e.g. Greenberg Traurig
- managed legal, e.g. BLP/Thames Water; large cooperations handing their in-house legal work to law firms.
- outsourcing (LPO), e.g. (Rio Tinto/ CPA Global
- Mexican Wave, e.g. Freshfields outsources smaller cases to a TLT in Cardiff; other law firms create hubs where cases are distributed according to difficulty or size, e.g. smaller errands are referred to smaller local law firms, while larger cases are referred to the law firms in the city.
- Niche specialists, e.g. Kemp Little
- Virtual Firms, e.g. Axiom, Keystone ; represent a massive untapped source of talent that do not want to work at big law firms.
- Alliances, e.g. Lex Mundi, law firms that want to stay independent
Chris Bull underlined that KM is not longer “nice to have”, but it starts becoming “must have”. He concluded his presentation by defining 5 knowledge priorities:
5 Knowledge priorities
1 analyse and document workflow and process
Law firms should agree to new ways of working with their key clients. Work can be transferred to a 3rd party and remote or virtual workers should be enabled. Firms can also share best practices with alliance partners and/or maximise benefits through mergers or acquisition.
2 convert know-how into product
Law firms compete with online “Do It Yourself” providers. Therefore they have to deliver value-added service to key clients. A 24 / 7 / 365 service should be provided to clients.
3 develop true thought leadership in your specialism
Law firms have to compete as leading specialists. They have to convince their clients of that, however, and market their expertise. Other measures include supporting technical training and feeding the on-line information “beast”.
4 leverage client knowledge to create value (what do we know about client?)
Law firms should tailor packages to retain key clients, and create attractive and ‘sticky’ on-line channels. There is also a lot of unlocked value in CRM contact data which could be analysed more and not just used as a contact information database.
5 seamless collaboration
Law firms should provide their clients with access and flexibility, emphasise “know who” via social media and video, and share client information with firms and collaborators.
Client perspective on KM
Martin Salomon, Regi, spoke about the survey Swedish Law Firm of the Year that his company conducted in cooperation with the Swedish In-house Counsel Association (Bolagsjuristernas förening/BJF). According to the survey, clients are asking for more proactivity, alternative fee arrangements and follow-ups. Apparently only 37 % of law firms perform regular follow-ups at the moment.
Law firms and social media
Rob Ameerun, Legal IT consultant and founder of Legal IT Professionals, spoke about how law firms could best benefit from social media. He started by showing a YouTube video on the Social Media Revolution 2011.
Though many law firms claim that every hour they use on social media they cannot use on clients, they forget that they could get more business from it. Potential clients search on Google and find the law firm’s LinkedIn, Twitter and Facebook account.
When it comes to blogging, it is important that law firms invite comments on their blogs and also comment regularly on other blogs and build networks. Ameerun mentioned a Fellsoft Study that investigated the LinkedIn usage of large law firms in the UK and USA.
The success of law firms on social media can be easily measured by the number of followers, the statistics of their blog, and third party tools such as Klout.
Constant change and innovation
Mikael Arborelius, Engagement Manager at Acando, spoke on how to improve information management and design solutions in areas where change is constant and innovation difficult, but necessary.
In order to cope with change it is important to
Arborelius suggested to create a storehouse of rejected ideas & concepts and revisit it regularly. This can be done by using light weight tools, such as Yammer.
Visualisation, such as Google Analytics, allows companies to find out what they know about a subject and what people have looked at most.
Slicing the elephant is the most effective way to cope with change. Small parts and simple are the leading words here. One should use simple tools dedicated for the task and measure so one can improve.
Using your business data to drive change
Björn Immerstrand, Key Account Manager at Millnet BI, spoke on how understanding, communicating and using business data operatively can drive change. By collecting and analysing facts, human resources in a law firm can be used and distributed more efficiently. Business intelligence can help in order to better understand the data, e.g. who is working in which areas of law.
Interestingly enough, facts in a legal context can be misunderstood, in my opinion. Though data about expertise areas and time actual spent on cases is an important and sometimes maybe overseen factor in managing law firms, use of legal knowledge should not be forgotten either.
The digital associate
- PolicyTool allows online drafting of policies
- VQ Legal – intelligent legal document solution
- Term Sheet Generator by Wilson Sonsini Goodrich & Rosati
- Out-Law – a blog by the UK law firm Pinsent Masons on legal news and guidance within IT-law and other legal areas
Hallgarn and Björk suggested a new profession for creating intelligent legal document solutions – the Legal Knowledge Engineer.
Though lawyers and law firms have generally been considered conservative, the economic and financial situation today will lead to more changes within the legal business sector. The solutions not only lie within technology but even more in innovation in legal education and workflow of lawyers.
Swedish legal information providers have started launching apps for iPhone and iPad, e.g. InfoTorg, Norstedts. This is just the beginning of innovation not only from a technological perspective but even more from a user-focused approach.
If you have any examples of Swedish online legal services or legal cloud services, please leave a comment below or e-mail me at firstname.lastname@example.org.