Cutting through the hype: predictions for innovation in law in 2019
From data analytics to the rise of legal ops, innovation leaders pick out the key trends for the year ahead
December 24, 2018 at 05:23 AM
11 minute read
The pressure on law firms to burnish their innovation credentials has only increased during 2018, as market forces push them to adopt new ways of working. But what will be the key trends on the agenda in 2019? Here, seven innovation and tech leaders offer their predictions on what's in store for the year ahead.
Isabel Parker, chief legal innovation officer, Freshfields Bruckhaus Deringer
"If you look at all successful and innovative companies, they have a laser focus on what the customer wants. The same should apply to the legal industry, and mapping the client experience is a core part of our strategy for the coming year.
"In the past the legal sector in general has been reluctant, or at least not very good, at seeing the client as a customer. They've tended to go in and say: 'this is your problem, this is how you fix it, and this is the price'. We want to interact with our clients in a new way, to have really much more focused conversations: How is their business changing? How is technology changing them? What solutions can we create to support that?
"We've also been making some structural changes to support our own digital transformation. We have been importing some of the structural concepts from more mature digital industries into the firm. For example, we have introduced the concept of product ownership, whereby our associates work very closely with our global technology and innovation teams and with clients to create client-facing products. This ensures that any technology development has the voice of the lawyers and the client at its heart.
"The use of data analytics to drive more personalised client insight will be another key theme. In every other industry that's what's happening, and it allows businesses to tailor their approach to the customer. As we're using AI more and more, we'll have more and more structured data to tailor those insights to individual clients more effectively. In the last two and a half years, we've been doing a lot of the heavy lifting, the foundational work, to really digitalise what we do. We can now start capitalising on that."
Jonathan Brayne, chair of innovation panel Fuse and global banking group at Allen & Overy
"One thing which was notable about last year is that the Big Four accounting firms broke cover and started to talk more openly about their ambitions in the legal sector. From what we can see, they don't really aspire to compete in the heartland of the premium law firms, but what they do want to do is tackle some of the other challenges that are part of what law firms do.
"Certainly we, and I imagine other firms, are extending out somewhat from the events (ie deals and disputes) and advisory side of things toward what you'd call implementation and operations. We've set up our Markets Innovation Group, and also A&O Consulting, aimed at that point where law firms typically leave off and other providers tend to come in. In A&O Consulting, we're bringing in management consulting techniques, and combining that with A&O's regulatory and legal expertise, tackling some of the operational and implementation challenges that companies and institutions have.
The Big Four broke cover and started to talk more openly about their ambitions in the legal sector
"For the last three or four years, in-house legal functions have also been changing, and creating new operations roles which are all about streamlining and enhancing the legal services they provide to their internal clients. With any change like that, it takes a little while for those people to get their feet under the table and to get some traction.
"My sense, after hundreds of conversations with clients in Fuse, is that those functions are now maturing and beginning to deliver on the original promise they had. What I've noticed with Fuse, is that a section of clients is moving past the stage where they are coming in to learn about the technology and what it can deliver in their business. They're now increasingly informed, understand the landscape, have taken the trouble to identify their specific challenges and want to discuss how to solve them."
"One of the real positive trends in legal innovation is that we're cutting through some of the hype and getting very practical. I think that's a very encouraging stage of development in our industry.
"We're an industry that continues to have pressure on price, and we're still seeing a lot of new alternative legal service companies growing and gathering market share. That puts pressure on firms to drive their own performance. Digitalisation and data analytics is an increasingly important way to efficiently engage with clients.
We're cutting through the hype and getting very practical
"It might not be the headline-making work, but firms are increasingly adopting better business analytics, and law firms will be increasingly very focused on getting their data better organised and accessible. It will help to better strategically resource and price work, and will make us more effective as a business. I think we'll see a continued emphasis on data hygiene and analytics.
"There's great opportunity to deploy different kinds of predictive analytics, so having proper datasets and data hygiene in place is critical. We're putting a lot of work in at Dentons to do just that.
"Then of course there's a lot of investment that will continue to happen in cybersecurity-related innovations. Those issues touch every one of us. One of our most important obligations as a firm is to protect the privacy and data of our clients. We're increasingly working in collaborative, cloud-based environments and, as firms grapple with these issues, there are real opportunities to deliver value through better security to clients."
"There are a number of emerging themes, one of which is collaborative working – not just between clients and their law firms, but joint projects with consortiums of law firms and standard-setting organisations, like the Accord Project. These types of platforms are contributing to legal market transformation, and opening up the industry to these new ways of working will become increasingly common.
Clients want to see all our experts, and many of these will be non-legal
"A really good example of harnessing collaboration is Barclays' Eagle Labs, which was originally client-driven. To have those conversations working as part of a collaborative group has allowed law firms to address shared pain points, in order to find new and better ways to deliver opportunities and solutions. We've seen this in other industries and although the legal sector is traditionally risk averse, it's experiencing fundamental changes and catching up very quickly.
"Diversifying the skillset within a law firm to deliver successful projects is increasingly valuable. Most law firms now have an innovation function as part of their legal business solutions, and for the solutions that we're building with our clients we look for input from multiple experts from within the firm (IT, pricing, project management, legal). Increasingly, clients want to see all our experts, and many of these will be non-legal – I think that will continue to grow."
"In 2019, I expect to see a growing realisation that a lot of the legal tools on the market cannot offer seamless services across the globe. There will be a real push on the existing providers to offer better solutions to this challenge, which is made more difficult as a result of GDPR and similar regulation around the world.
"It's also inevitable that law firms will need to use more tools, technology and applications, rather than fewer. But as this happens, there'll be a crucial need to join these tools up. Again, providers will be looked at to offer solutions to this.
"I'd also say that in this agile, fast-moving environment, big IT projects with long lead times are dead. The legal market is changing fast and technology needs to be able to support this pace of change in an agile way.
"Finally, the genie is out of the bottle when it comes to law firms treating data as a strategic asset. IT will have a key role to play in helping firms collate and manage the data they hold and set up systems to make this process as efficient as possible."
"There's an increasing realism around AI and blockchain. There was a lot of nonsense and hot air the year before, and that's not just true in the legal sector, but there is now an increasingly realistic view about what these technologies are really capable of. There are still some really interesting capabilities, but it's nowhere near what was being positioned the year before.
"There's also a whole AI and ethics piece, which I think will be a massive thing next year. Everyone has seen the big tech companies on the back foot, with the investigations surrounding the US elections and Brexit, and companies like Amazon stopping their use of AI in certain cases because of ethical concerns. These are legal questions as well as ethical concerns, which in turn will generate a lot of the work for lawyers in the future. There's also issues around 'explainability' – questioning your AI blackboxes and how it reaches conclusions.
There's an increasing realism around AI and blockchain. There was a lot of nonsense and hot air the year before
"Technologies like AI and blockchain have been about removing the sorts of frictions that lawyers were serving previously, but what we're seeing now is the next wave of questions that lawyers will need to answer.
"There's also a big piece around augmented intelligence and analytics. In many ways, I think it's an indication about how people's thinking around AI is maturing. The reality is that machines best serve alongside people. We're working with Manchester University around claim fraud and analytics – using machine learning to augment, and not replace, the experience of lawyers – and it's been really productive so far."
Kerry Westland, head of innovation and legal technology, Addleshaw Goddard
"I think there will be a big piece around integration next year. Lots of legaltech companies are solving one particular problem – e-billing, document automation, e-signature systems – but the demand increasingly is for all of these to be integrated. I imagine there will be discussions between vendors about how to do this. Some of the bigger vendors might take over smaller players and bring them into their platforms, or they might create partnerships or develop advanced APIs. Law firms and their clients will drive the demand, and will be working with them to determine the requirements.
"There's real demand for integrated solutions, because there's nothing that does everything at the moment. I think the big players like LexisNexis and HighQ will be looking at that, and are in a position to come up with something new and different that really addresses the sector's needs and demands.
"Firms are increasingly using online forms and AI for their documents, which is creating more and more usable data. Hopefully this will allow us to give us more insight into the firm and create insight for our clients – although I think possibly 2019 will be too early for data science to make a big impact in law."
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