Digitalization creates new business models. Uber provides mobility services without owning cars, thus displacing classical taxis. In the same vein, Airbnb offers private apartments for rent and thus creates competition for long-established hotel chains. All industry leaders must ask themselves if their traditional value propositions are still intact or if innovative players can use disruptive and networked technologies to push them out of the market. We explore this topic in our LLI digitalization guide, in relation to the legal industry.
For decades, the legal industry appeared to be immune to substantial changes caused by technology. The core of legal services, that is to say the assessment of facts in relation to the law, in most practice areas and cases is still too complex for machines to execute. However, this assessment of facts remains supported and surrounded by many operational activities such as document analysis, contracting and project management. Importantly, clients are no longer willing to pay high hourly lawyer rates for this.
What does this mean for legal services?
The deconstruction of legal work has led to the standardization of high-volume and low-value tasks and the emergence of legal process outsourcers (LPO). In essence, corporate legal services today are in a situation similar to that of corporate IT services 30 years ago. In other words, chief financial officers now similarly expect inhouse legal departments and law firms to use technology to deliver legal services faster and more cheaply.
At the LLI, we regularly encounter many colleagues in law firms and legal in-house departments who realise the need for change. However, they simply don’t know where and how to start digitalization projects for legal. Often, they are asking themselves questions. What differentiates legal technology projects from classical IT projects? Are legal department per se a special / different audience? Moreover, do legal departments have the necessary funding? Finally, can legal departments work / carry out the project in isolation?
For more information, see the LLI digitalization guide and our digitalization working group.