Lawyers are finally converts to technology

This year’s FT Innovative Lawyers report reveals a profession that has reached a tipping point: lawyers have embraced developing their own technology, such as artificial intelligence, and realised that becoming efficient is not commoditising their services.

Such changes have been a long time coming. When the FT launched this series in 2006, few big commercial law firms saw the need to streamline the way they delivered services. They wanted to do things the way they had always been done. Today, offering data or discovery centres, flexible resourcing or technology products to clients has become widespread. The legal innovation lies in how firms adopt these methods and adapt to them — with an emphasis on an integrated, flexible service.

Despite uncertain market conditions, law firms appear to be thriving. For the top four UK-founded Magic Circle firms by revenues, the average increase in turnover was 3.9 per cent, bringing their income to more than £1.3bn each, according to the Law Society Gazette. Lawyers ascribe at least some of this success to adoption of technology. Linklaters, top of this year’s FT 50, has embedded efficiency so firmly into its business that it is changing the culture of the organisation and the way its lawyers think about their work and clients. “The work is less about using big armies of lawyers and more about taking advantage of legal technologies and other innovations to be more efficient,” says Laurence Muscat, Linklaters’ head of business improvement.

Some firms can reasonably claim to be known as digital law firms. Gowling WLG, a UK-Canadian firm, second in the FT 50 this year, plans to digitise all its practices.

Law firms and in-house legal departments are experimenting with “design thinking”, which encourages creative problem-solving. Until recently this would have been anathema to lawyers as it involves starting small, taking products to market that are not fully formed, making mistakes quickly and learning from them. Usually, lawyers would aim to release products that are perfect, but many believe this is no longer an option. “The days of law firm five-year plans are moribund,” says Gideon Moore, managing partner at Linklaters.

One firm using design thinking to speed up the development and adoption of technology is DWF. It involved its lawyers in the design process alongside tech experts when developing DWF Draft, a contract-writing and management product for lawyers and clients.

Business shapes are changing too. Nearly a decade on from the Legal Services Act, which allowed UK law firms to diversify into alternative business structures (ABSs), lawyer-entrepreneurs are finally exploiting the opportunities it affords. New-model businesses such as Fulcrum Chambers and Three Crowns, which combine solicitors, barristers and other professionals to service a particular legal area, are emerging. Media boutique Schillings has used its ABS licence to become a privacy and reputation consultancy. Gateley, the first law firm to list in the UK, says its first-year results were on-target for its shareholders.

A strong theme to emerge from the research is the importance of collaboration — and not just with colleagues and clients. Some of the most fruitful joint efforts can be with rivals or other professionals who have different ways of working. Microsoft’s outsourcing of its non-routine procurement contracts work to Addleshaw Goddard involves the firm working closely with a Seattle-based firm, Davis Wright Tremaine. Both firms work for a fixed fee, submit one bill and provide business analytics alongside legal advice. The firms have had to work hard to smooth out the cultural differences between UK and US law firms.

The need for lawyers to collaborate extends beyond the business of law. This year’s report shows complex business challenges, requiring the services of different private practice specialists, other professional disciplines and, critically, the in-house legal team. Legal solutions are less purely legal. There are lessons for lawyers in the unusual strategic alliances, emerging in business and new sectors such as fintech, which they are already supporting. For users of legal services, the array of suppliers has probably never been more diverse or innovative.