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Law360 (February 10, 2021, 4:45 PM EST) --
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| Kevin Clem |
Going digital creates operational efficiencies, automating slow and error-prone manual processes while streamlining and simplifying workflows. But beyond that, it also allows organizations to tap into the rich information hiding within their data, mining it for insights.
In the legal industry, that has enormous potential value, not just to reveal how a law firm can improve its inner workings but also to shed light on its customers' needs and concerns. Yet, for years, the legal industry dragged its feet, sticking to tried-and-true methods and resisting many forms of technology.
Then along came 2020.
The coronavirus crisis forced the legal profession to have a digital reckoning that most industries had already weathered. As scholar Richard Susskind put it in a September 2020 Financial Times report, "The first 60 years of legal technology [were] devoted to automation rather than transformation … It [was] not about changing, [but] about grafting technology on to traditional legal practice."[1]
And the legal industry rose to the challenge.
Practically overnight, law offices transitioned from primarily in-person operations to entirely remote workforces. Lawyers and courts learned how to use videoconferencing technology, switched to paperless workflows and mastered digital signatures. Information technology departments worked around the clock to provide hardware for everyone and to transfer locally held data and program access to cloud-based options.
Through it all, legal professionals showed up to guide their clients through unprecedented challenges with poise, grace and confidence, allowing clients to maintain a semblance of normalcy in an increasingly uncertain world.
At this point, there is no going back. There is no "normal" to return to; the old ways of doing business have been permanently left behind.
Remote work is here to stay, as are many technological innovations. Now is the time to prepare for whatever the next phase may bring, using the momentum that we have found through a year of ever-shifting crisis to springboard into the future.
Regardless of whether your law firm or corporate legal department was a technological leader before COVID-19, you can emerge from this dark period as a digital innovator. There are three things that will guide you along the journey:
- A constant focus on the client and the client's goals and needs;
- A culture of agility, experimentation and continuous growth; and
- A plan for systematic, purposeful growth in an intentional direction.
This article points out the journey we have already undertaken in 2020 and shines a light on the path ahead.
The Remarkable Digital Transformation Launched in Early 2020
Looking back, we should all be impressed — even a bit awestruck — at how successfully organizations transitioned to remote work, despite many challenges and uncertainties.
An October 2020 McKinsey & Co. global survey of executives across a range of industries found that customers had "accelerated the digitization of their customer ... interactions and of their internal operations by three to four years."[2]
Companies transitioned to remote working a shocking "40 times more quickly than [respondents] thought possible," adopting workable solutions in an average of 11 days instead of over a year, as would have been expected under ordinary circumstances.
The legal industry was no exception. In 2020, law leaders embraced massive changes, including:
- Widespread remote work;
- Transition to cloud computing;
- Videoconferencing with clients and courts;
- Adoption of secure digital client portals; and
- Digital signatures and digitally managed transactions.
Individual practices took this even further. At a recent legal industry conference held by my firm, one presenter described how their organization had — thanks to digitized contracts — quickly developed scripts to search 24,000 contracts for terms related to force majeure, partial shipments and other concerns.[3] The law department was able to complete the process in a short period by using automation to narrow the document field tremendously.
The COVID-19 crisis proved that speed and agility are possible. What did it take to unlock the wheels of change?
First, we were, as an industry, highly motivated. Remote work was not optional in the early days of the pandemic, when state and local leaders implemented strict workplace limitations.
Second, we were, in a very real sense, all in this together. This was not a single law firm trying to buck the system; this was everyone adapting to abrupt change. Law firms' clients were on the same journey, leading to widespread acceptance of new tools and approaches.
Third, that solidarity allowed everyone involved in legal practice to give these changes their full focus and attention.
It is, quite simply, astonishing what we can achieve when we put the full force of our collective minds to it.
Of course, if the last year has taught us anything, it is that the only constant is change. How can we harness the momentum we have acquired over the last year to get ahead of the curve so we are ready for whatever comes next?
Emerging From the Pandemic as a Digital Innovator
No one can say with certainty where we are headed next. The pandemic will almost certainly continue to worsen before it improves; a lingering economic downturn and a bumpy recovery both seem likely.
Yet, the crises we have weathered thus far have created novel opportunities to reinvent the way we deliver legal services.
We have mastered working remotely and meeting with clients without traveling. The next level might involve reworking fee structures to include approaches like alternative fee arrangements, deciphering the inner workings of clients' businesses without being there in person, and designing creative new solutions around service delivery.
We are heading into a world when organizations rethink everything they do from the ground up. That starts with remembering the core purpose of the legal group: serving its clients or, in the case of a corporate law department, client.
An Unwavering Focus on the Client's Needs
Clients are also navigating uncharted territory and undergoing their own transformations. They need their lawyers to think fast and move fast — to see what is headed their way and help them prepare before it arrives. This demands that lawyers understand their clients' worldview and align themselves with their current circumstances.
Legal professionals who wish to lead the way as digital innovators should always be asking what their clients need. What are their goals? How can you help them meet those goals?
Expand your focus — and theirs — beyond the legal box. Your role is not merely to keep them out of trouble or make deals happen; you can further their business goals as well.
After all, lawyers are skilled at identifying ways around problems. You may find it worthwhile to ally yourself with a liaison or a business leader who can help you understand the day-to-day pressures of the business and to translate your legal advice into actionable business plans.
If legal professionals are to stay one step ahead of their clients' evolving needs, they need to strategically use data. What data do you have about your organization or clientele? How can that data be deployed to measure results, detect patterns or identify coming trends? What lessons are lurking within that data, waiting to be unpacked?
But seeing the future only helps if you are then prepared to move forward to greet it. Lawyers also need to innovate proactively and fearlessly — which typically requires a cultural shift.
A Culture of Change, Growth and Experimentation
Companies that were willing to experiment and take swift action had a stark advantage in adapting to the changes of early 2020, according to the McKinsey survey.[4] Nearly three-quarters — 72% — of those that were "first in their industries to experiment with new technologies" reported that their COVID-19 responses had been "very effective," as opposed to 33% of later adopters.
The legal industry needs to adopt that same culture of agility and continuous improvement if it is to keep up with the challenges to come. But agility and the traditional practice of law call for completely different sets of skills.
Agile individuals are willing to act with incomplete information, test out different approaches, learn from their mistakes and adjust their approach iteratively.
Lawyers generally engage in painstaking research, careful thought and in-depth analysis. The practice of law is more akin to a game of chess: searching thoroughly for both text and context, choosing moves carefully and assessing which options will remain open and which will be closed off.
Lawyers also need to, as the saying goes, get comfortable being uncomfortable. Working through the discomfort of change — and the change fatigue that follows constant adaptation — is a new muscle that lawyers should intentionally develop and learn to flex.
Fortunately, a culture of experimentation can be built with small steps. Legal leaders should not hesitate to test out small changes and pilot projects. Rather than making huge investments of money or time, these incremental test runs can build into quick wins that add up over time, while the unsuccessful projects can be abandoned or retooled with a minimal loss.
Agile law firms and law departments are the ones that will lead the next phase of digital transformation — but only if they also keep their eyes on the end goal of all this innovation.
Systematic Change Toward a Purposefully Chosen Destination
With the rapid-fire twists and turns of 2020, law leaders have done their best to adapt quickly. When my firm surveyed legal leaders in April last year about their most pressing priorities, people and talent took the top spot. Just two months later, costs were the first concern,[5] while talent had fallen to fourth.
Keeping up with those shifting needs and priorities has often meant onboarding tools and technology quickly to enable vital, time-sensitive work to continue.
Now that some of the dust has settled, it is worth taking a step back to ask whether those stopgap solutions are serving your long-term goals. Instead of blindly grasping for change or following disparate threads wherever they may lead, legal professionals should ensure that they are following a systematic process that will lead to sustainable change. This means taking care not to optimize processes that lawyers should discontinue entirely.
Writer and theologian Thomas Merton famously said, "People may spend their whole lives climbing the ladder of success only to find, once they reach the top, that the ladder is leaning against the wrong wall."
Where is your ladder leaning? What is the destination for the incremental changes you have implemented thus far?
Ask yourself what you see as the law department or law firm of the future.[6]
Are you on a path to reach that goal? Are you value-centric — guided by the highest-value work? Are you using metrics and data to identify and drill down on that high-value work? Are you deploying automation to expedite and streamline low-value work? How are you leveraging technology to maximize your operational efficiency?
Ending up where you want to, with sustainable change that serves your practice and your clients well, requires that you periodically adopt a 50,000-foot view of your operations, your goals and your processes.
We have weathered the first crises, but we cannot afford to be lulled back into complacency as we see light at the end of the pandemic tunnel. Now is the time to keep the momentum we have built rather than squandering it.
To lead the way as digital innovators, law leaders need to maintain a relentless focus on their clients' needs, develop a culture of agility and experimentation, and design a strategy for sustainable, purposeful change.
Kevin Clem is chief commercial officer at HBR Consulting LLC.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] https://www.ft.com/content/4b5ad372-050a-4ab3-b2b9-4ac032cf8725.
[2] https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever.
[3] https://info.hbrconsulting.com/2020-legal-lab-executive-summary.
[4] https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever.
[5] http://blog.hbrconsulting.com/how-law-industry-leaders-can-lead-change-now-and-after-the-covid-19-pandemic.
[6] http://info.hbrconsulting.com/law-firm-of-the-future-white-paper.
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