Mary Shen O'Carroll, head of legal operations, Google (Photo by Timothy Archibald). Mary Shen O'Carroll, head of legal operations, Google. Photo: Timothy Archibald.

To a room packed with ABA TechShow attendees, Google's director of legal operations and Corporate Legal Operations Consortium (CLOC) president Mary Shen O'Carroll warned that the cultural and technological disruption reshaping the legal industry may leave some complacent law firms behind.

O'Carroll, who was awarded Legal Department Operations Director of the Year by Legaltech News in 2016, said you can categorize a law firm's attitude toward innovation into three buckets: deniers, experimenters and committed.

O'Carroll described "deniers" as firms that see the advancements of legal technology and the emergence of alternative legal service providers (ALSP) as fads and point to their firm's recent wildly profitable year as evidence. O'Carroll said law firms with that outlook are sadly mistaken.

"Remember, for the first time ever you have a new set of competitors who are attacking this problem from every angle," she said. "You have growing corporate legal departments, you have the Big Four, new tech and who knows what will emerge in the years to come. The wave coming at you is very real."

She noted those new delivery models can mirror a firm's speed and price, and "as soon as they can deliver and prove the quality is as good, I would say there's something to worry about."

While O'Carroll said she sees a lot of firms fall into the deniers classification, she also encounters "experimenters" who are "dipping their toe" into innovation and "treating innovation as a project."

Those law firms are acknowledging innovation can't be ignored by the firm, but their innovation is siloed from the practice of law at the firm. "It's small incremental changes in the face of big disruptive changes," she explained.

The corporate clients of experimenter firms are demanding efficient, new legal service delivery models while their outside counsel is largely offering symbolic, superficial innovation, O'Carroll said.

O'Carroll described "committed" firms as the law firms who aren't threatened by the evolution of legal services. Instead, those firms are taking on the challenge of understanding and profiting from the expanding menu of legal tech and service providers. On these firms, she noted, "They do exist, and I embrace them."

Committed firms' attributes include focusing their strategy on technology by investing or even developing legal tech and harnessing data and gaining analytics. Forward-thinking firms are also most likely to focus on scalability and partner with ALSPs and hire technologists, legal ops and other new roles to power enhanced legal services, she added.

Law firms are likely to change and embrace innovation when they aren't afraid to fail when exploring new solutions.

It's likely once a large law firm adopts major innovation and succeeds, other law firms will follow that model, O'Carroll said. If not, clients have a plethora of options to turn to.

"There is a shift in the model where the law firm used to be the dominant, undisputed leader in the [legal] space," she explained. "Now the law firm is one player in what can be called an ecosystem."