Law Office Technology

How IT Is Transforming Legal Services

David Curle
Law Technology News
June 24, 2008

Access to information is a dangerous thing — to the people who have previously benefited from controlling the information. Just ask former travel agents driven out of business by passengers who now have access to the fares, schedules and booking systems they need to book their own travel. Or the car dealers whose customers know, before setting foot into the showroom, exactly how much the dealers paid for a vehicle. Or the real estate agents whose clients run their own comparables and begin to wonder why they need an agent at all.

Every law firm knows that IT helps it to do more, better, faster. While sometimes slow to catch on to some technologies, successful firms have learned how to increase the efficiency of their practices with practice management, case management, client relationships management and other technology tools. A new generation of marketers is effectively using technology to reach new clients and new markets.

Not enough people in the legal industry, however, are thinking about how IT is changing the whole game. What makes them think that legal services will always be delivered in their current packaging, the personal, high-level, consultative, lawyer-client relationship?
A number of change drivers are moving the legal environment toward fundamental transformation. Most of the drivers have to do with bringing the practice of law further in line with the way most other industries operate:

• The increasing professionalization of law firm management. Firm managers who may not be lawyers, and who definitely aren’t married to the traditional delivery of legal services, will inevitably move from using technology to wring costs out of the system and improving efficiency to seeing technology as a platform for new product development.
• New funding structures and deregulation. Look to the U.K. for the biggest changes here. Private equity firm Lyceum Capital has a fund of about $510 million that will be used to invest in law firms under new provisions of the U.K’s Legal Services Act that will go into effect in 2011. Much of the money will almost certainly be used to purchase new IT systems that will be part of the ongoing revolution in the delivery of legal services. The new rules will also allow related practices such as accounting, insurance and banking to get into the game.
• Younger associates and their content-sharing mentality. Much legal work consists of paying young associates to reinvent wheels, and a younger generation of tech-savvy lawyers has no interest in reinvention. This generation practically invented wide-scale information sharing and reuse on MySpace and Facebook; they’ll want to use technology to leverage existing technologies.
• The self-service and peer-to-peer mentalities. Clients will use technology to arm themselves with better information about a legal matter (a la WebMD) before engaging outside help. When they do reach out for help, the first stop is likely to be with peers who have been down the road, rather than a one-on-one engagement with a lawyer. Personalized legal service will increasingly be a last resort.
• Embedding law in processes. In the financial services industry, Complinet uses technology to help banks and other companies embed regulatory compliance in everyday work processes, and automatically updates those processes as regulations change. The Complinet model will spread to other regulatory fields, particularly as globalization begins to standardize regulatory approaches and make large-scale automation of regulation-related work processes possible.
• Open access to primary legal information. AltLaw, Justia, Fastcase, PreCYdent and a number of other companies are throwing open the gates to fundamental legal information that has been locked away behind pricey Westlaw and LexisNexis passwords.

Companies like JD Supra and Practice Technologies are opening the Pandora’s box of lawyer work-product — not just to other lawyers for knowledge sharing purposes, but also to legal services consumers. These open information sources are starting to take some of the mystery out of the law for nonlawyers and are making them better consumers.

Many law firms are tracking these changes and market forces as they refine their approaches to serving current stables of large commercial clients. Legal publishers, in turn, have built multibillion dollar businesses based largely on serving Big Law clients and their current delivery models, by adding technology offerings to their core research products. In doing so, both law firms and publishers risk leaving money on the table.

Technology will create the most change for people who have been shut out of legal information sources and services — small business and individuals. These clients don’t offer enough scale to be of interest to existing legal services providers, but technology-based information and service providers are in a position to begin serving that “long tail” of the legal market.
Firms will compete with new players from outside the legal industry who have a razor-sharp focus on the needs found in those latent markets and attention to innovative, scalable ways to serve them.
Lawyers who doubt that their businesses are subject to the same pressures as the travel agent, the car dealer or the real estate agent are whistling past the graveyard.

Monitoring technology is no longer about considering which document management system to choose for the firm, but rather taking an honest look at the parts of a practice and client base that are better served by technology-based tools.
If firms don’t provide those services, somebody will.

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