Nov 30 2016

Legal IT vendors you’re not Uber, you’re just cost cutters

Jason

If there is one company that gets thrown into conference presentations on “disruption” in law firms more than any other it’s Uber. So is Uber really disruptive or is it just innovative?

“A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances.”

In my city it hasn’t displaced established firms or products, I suspect in some cities it has started to put existing firms out of business. But anyway that’s not the point of the article, what I often thought when hearing these talks was what actually are the key aspects to Uber’s popularity? The things that make us use them above other taxi firms? And then how would you achieve the same in a law firm?

For me personally Uber does the following:

  1. Fixes the “the driver is just round the corner” or “the driver is 10mins away” excuses when you asked a dispatcher where the taxi was. You now know exactly where the taxi is and how long you have to wait for it to arrive.
  2. Convenience of booking. No remembering numbers or what the local taxi is. It works how we work, online. A phone is now a computer and no longer a, well a phone.
  3. Lack of taxis during busy periods. Surge pricing is a big incentive to get drivers on the roads, meaning more taxis and less waiting.
  4. Lower cost. But, and it’s a big but, I think is the least important. It’s great it’s a bit cheaper but the above three would encourage me to continue using Uber regardless of a cheaper price.

And it was that last one that got me thinking that the focus in a lot of legal conferences is all about reducing the cost. Using AI to do due diligence to reduce cost, using document automation to churn through documents faster to reduce cost, automating processes to reduce cost, use legal delivery centres to reduce cost.

What we need to do is find the equivalent of the first three, what are the niggles that clients feel everytime they use a law firm? It’s not necessarily an IT solution that a Legal IT vendor can sell. It is more likely to be a simple niggle that every client is facing when dealing with law firms.

In a competitive market keeping costs low and building your market share is important, but the disruptive firm is going to find that problem to solve that’s not about cost saving but getting rid of that annoyance that many clients are facing.

And Legal IT vendors, stop advertising your tech, however innovative it is, as something that’ll disrupt and simply point out it’ll cut costs! This isn’t a bad thing in itself.

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Dec 31 2015

That was the year that was – A review of 2015 in Legal and Legal IT

Jason

To wrap up 2015 I thought I’d post a review of the Legal and Legal IT news throughout the year.

One of the big trends across law firms this year has been mergers, I touched on this trend back in 2009 and the number or mergers and consolidation in the industry continued throughout 2015.

Dentons has been the major news story as its huge growth continued through the year, we had the Dacheng merger in January, talk of McKenna Long & Aldridge joining in April, discussions with Singapore’s Rodyk & Davidson and Australia’s Gadens about tie-ups in November leaving a firm at the end of the year with a possible headcount of around a massive 7000 lawyers. Other large firms continued to grow this year with DLA Piper entering Canada in March and White & Case planning to boost City lawyer count by over 40% as it put London and New York at heart of new strategy in November. BigLaw doesn’t seem to cover these firms anymore, MegaLaw? No probably a bit too Judge Dredd that one!

Some mergers don’t come off though, in November Eversheds and Foley & Lardner broke off merger talks that could have created a £815m ($1.25bn) revenue transatlantic firm. And there were growing pains in others, in November at Norton Rose Fulbright the firm’s management looked to reconnect with City partners after years of rapid overseas expansion. But still this didn’t stop the merger talk and in November Irwin Mitchell and Thomas Eggar unveiled merger plans.

It seems the final shackles of the financial crisis had been thrown off in 2015 as growth was back on the cards or at least in the published figures, so although still an industry under pressure from clients it doesn’t seem to have affected the bottom line. Growth numbers look pretty good against most of the western economies, with 4%, 6% and even out at 7% rises in revenue across law firms according to a Deloitte survey in March. By December the Deloitte survey was still predicting firm fee income rises of nearly 5% in Q2 of 2015-16. Impressive numbers.

PEP was also on the up and into the double figures in some firms with 11% and 12% rises coming through in March figures. BLP posted PEP 22% in June! But not everywhere was rosy, some markets clearly still are ultra-competitive and this saw Hill Dickinson and Holman Fenwick both take revenue and PEP hits. As did DWF as their PEP slid 21% and revenue stayed broadly flat in August figures.

The good times though saw the top firms battle for the best associate pay rise around April/May time with 7% at Linklaters, 8% at Ashurst and 10% at Slaughter and May. White & Case then trumped them all in June with a 20% rise in London associate pay! Not to be outcome in December Slaughter and May associates were in line for bonuses of up to 16% as firms also bumped up rewards.

Was this all driven by a growth in client demand? Possibly as in London, for example, back in February TfL announced a rise in legal spend this year, the first in four years. And the Greater London Authority doubled its spend. But also I suspect a hard look at costs also help the profits in firms in 2015. Freshfields started consultation on a low-cost base in Manchester in February and announced further centres in June to create a global network of centres. White & Case mulled opening European support centres in November. And DLA Piper launched a low cost services centre in Warsaw this November, its third such centre alongside one in the US and one in Leeds.

Law firms were also looking at growing their business in other ways, putting pay to a few speakers talks in 2016? Dentons launched a tech investment arm (NextLaw Labs) in May. There were moves into the contract lawyer space in June as DLA Piper and Addleshaws moved into contract lawyer market with new ventures. DWF also launched contract lawyer, support centre and consulting offerings in June. And finally to top off a changing market KPMG boosted its UK legal capability with a Birmingham launch in September.

Quite an eventful year for law firms in general, what about the Legal IT side of things?

Starting with the stalwarts of Legal IT, Document Management (DMS) and Finance systems.

Back in January SharePoint was on the agenda again as a possible DMS in law firms with Microsoft pushing Matter Centre, by the end of the year though it was open source product. HP Worksite became iManage again with a management buyout and we saw energy back in the firm after many years of being part of a monolith. And Netdocuments continued to grow market share and cloud coverage with Europe and Australian datacentres.

In the finance arena the column inches were mainly full of Elite v Aderant, but in September Baker & McKenzie became the first global law firm to go live with the latest version of the SAP ERP system.

Elsewhere legal project management (LPM) is clearly on the move with a number of products offering support for this discipline, Umbria and Cael as examples. Strange that in the Legal press itself LPM wasn’t hitting the headlines despite strong take up by law firms and interest by clients! Proof again perhaps that contrary to the press and conferences, law firms are quietly getting on with new ways to grow the business?

I couldn’t review this year without mentioning AI (Artificial Intelligence), a marketing teams dream with a whole new “disruptive” technology campaign. 2015 was definitely hello AI, goodbye cloud in the Legal IT zeitgeist. The start of summer saw Ravn launch ACE and by mid-September, Berwin Leighton Paisner confirmed that it had become the first law firm to sign up to RAVN’s Applied Cognitive Engine. We also had US legal tech start up eBrevia has just launched its own AI offering, IBM Watson with Clifford Chance joining the growing number of City firms that work with IBM’s offering. September saw the BBC focus on Intelligent Machines, Riverview Law acquire US tech business to advance use of AI in legal market and AI goes mainstream as LexisNexis acquires Lex Machina in November and December.

The fact that cloud is now out of the news could be that finally its maturing and starting to take off, Netdocuments saw growth and Hill Dickinson kicked off a three-to-five-year IT strategy review that is expected to see a significant further shift towards the cloud.

Document automation was back in the news. Becoming more commonplace across the UK, Ashurst in September became the latest City law firm to sign up with Business Integrity’s ContractExpress solution to automate its legal precedents globally and across all practice areas. And at Clifford Chance in March, two finance lawyers were hired with coding expertise to design a template to allow banking clients to generate their own documents.

Social Media in law firms was in the news in summer as DLA Piper discussed the launch of their internal platform Grapevine.

Dentons appointed a new CIO tasked with integrating their IT after their whirlwind expansion. And we couldn’t finish the write up of 2015 without mention of the debacle at the Law Society. The start of year saw the Law Society of England & Wales endorse Eclipse Legal Systems as the one and only supplier. By end The Law Society of England and Wales’ latest foray into the role of technology supplier ended in disaster after it was forced to disband online conveyancing portal Veyo with losses upwards of £3m. Does it still have sway in Legal IT?

My final thought though for the Legal IT world in 2015 is where is the big push into mobility, business support workflow and “standard IT” that supports lawyers? Law firms are definitely looking at this, but what about the Legal IT vendors? Some show hints of the above and that they’re starting to get it. Will this be the real news in 2016 or will the marketing teams win and continue to sell us the promise of a disruptive world and robots replacing lawyers?

 

A big thank you to Legal Week , Legal IT Insider and Legal IT Professionals invaluable resources in researching the news from 2015 for this blog post!

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Jan 6 2014

Looking back on 5 years of blogging part 2 – Recession and Legal

Jason

Looking back the trigger for me starting a blog was the credit crunch and global financial crisis that hit at the end of 2008. Because of this timing I’ve followed the impact of the financial crisis on Legal through the last five years and posted a number of entries along the way.

Below are some of the posts I’ve picked out:

In February 2009 I was clearly a little optimistic on when the upturn would appear! Looking back we didn’t realise just how long it would take to start the road back to economic recovery. Are we prepared now? – Are you ready for the upturn?

I still stand by my post from March 2009, though I don’t see the type of Legal shakeup favoured by Susskind etc. I see more of a long haul change of a saturated market. Lots more consolidation, shrinking supply, lower fees = lower lawyer take home. It’ll be the next generation of lawyers, the ones still in primary school now, that will be the ones to shake it up as they won’t have any expectation of the salaries currently in BigLaw – Last time it was manufacturing, this time it’s white collars turn! I also took a look at this consolidation of law firms in a post from July of 2009 – Consolidation within the UK 200?

I then revisited the above thinking in February 2010 as well, looking at the whether the good times would ever return to Legal – Law Firms, the good times are gone for ever! and yet again in November  of that year – “A company from here doing rather well over there” and vice versa

By 2011 outsourcing was on the radar in a big way in Legal as many firms continued to look at ways of cutting costs. I looked at this in a post in February 2011 – Outsourced!

By 2012 the long talked about ABS structure started appearing more and more. I took a look at this in February 2012 – ABS on ABS (or another blummin’ story on alternative business structures!) and looked at how it could be interesting for Legal IT. Looking back and hearing some stories from within IT depts within ABS firms I’m not quite as optimistic now.

By the end of 2012 the economy was clearly on the verge of turning the corner, but consolidation and cost cutting was still going on in Legal. This led to a slightly topical Olympics title in October – London 2012 – the rise of the regional upstarts?

2013 saw only one topic on this subject after reading Richard Susskinds latest book, I wavered a little on my thinking for a “revolution” in Legal but I think the post roughly follows the thinking I’ve had since 2009! – Tomorrow’s Lawyers – still waiting for tomorrow!

And finally there were a number of posts where I looked specifically at Legal IT depts. Echoing a recent post in the wake of the NatWest IT issues I took a look at the impact of the recession on the IT depts in law firms in July 2009. – Does IT matter in law firms?. Then in January 2011 took a look at whether the Legal IT dept had a future when the rapid technology change combined with the recession. – RIP Legal IT?

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Feb 28 2013

Tomorrow’s Lawyers – still waiting for tomorrow!

Jason

This last week I’ve just started reading “Tomorrow’s Lawyers: An Introduction to Your Future” by Richard Susskind. It’ll take me a while as I tend to have a few books on the go at once and this one will only get a look in on my commute in between reading the Metro and re-watching the WestWing on my phone! But as I’ve just finished part one I thought I’d write up some thoughts.

For those that are unfamiliar with Richard Susskinds works, he basically points to radical changes in the legal market and has been future gazing in this way for some years. In fact I recently bought his 1996 book “The Future of Law” off eBay, this was the year I started in Legal IT and I’m intrigued to look back to what he predicted then and compare it to the journey I’ve been through within Legal IT over the last 17 years, but that’s a post for another day.

The first part of this latest book really sets the scene of what is to come in the later two parts. The first five chapters that make up part one are as follows:

  • Three drivers of change
  • Strategies for success
  • Commoditizing the law
  • Working differently
  • Disruptive legal technologies

The “three drivers of change” are the drive to cut costs, the changing legal model (ABS etc) and IT. It’s hard to argue against any of these, it’s just what will be the rate of change and how big a change will it be. The second chapter I thought was very interesting, low costs and alternative fees were discussed as “no brainers” and the chapter moved to how firms will need to work very differently. The final three chapters expand on what he sees as the options; to build an efficiency and collaboration strategy, the only viable strategies that he sees for law firms to remain competitive.

It’s interesting reading the first part how far from this vision a lot of law firms are, seemingly concentrating on cost cutting and alternative fees alone as they strive to keep profits high (example, “Eversheds set to cut up to 166 jobs in latest redundancy round“).

Although I don’t necessarily agree with everything Richard Susskind predicts for law firms, I do agree that the winds of change are blowing through the industry. And the more stories like the front page on today’s Metro paper (see below) hit the mainstream media, the more outsiders will see a huge opportunity to deliver legal services in new, customer benefiting ways!

Metro Front Page - Thu 28 Feb 2013

Metro Front Page – Thu 28 Feb 2013
Click picture to enlarge

 Metro newspaper

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Oct 1 2012

London 2012 – the rise of the regional upstarts?

Jason

I read an article in The Lawyer at the start of August that I’ve been meaning to blog about for a while. The article was about mid-sized regional firms opening small London offices. Not in the Millennium style of wanting to join the big law firms with a plush London office, but in the “let’s nick their work” mantra of a competitive market. The idea being the London office would be more a sales office to drive work to their regional offices where the work could be done more cheaply. Thus undercutting the costs of their London based mid-tier rivals.

I posted back in early 2010 how I thought that the mid-tier would be where the real competition and innovation would start to take place. I can’t believe how little we take advantage of geography in our own country, I recall working for a utility in Yorkshire who eventually got taken over by a southern rival. Rather than locate the head office with associated costs to the cheaper northern headquarters they kept the more expensive southern base. Same goes in legal, how many London law firms still locate their IT functions in the capital? I blogged about this too in 2011 and still no major shift has happened.

The Legal IT revolution and innovation in business process within law firms in my view will remain a talking point in conferences whilst there is no movement in simple innovative cost savings. However maybe these regional upstart neighbours  shaking up the London mid-tier will finally be the start of the revolution we’ve talked about since 2008?

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Mar 30 2012

LawTech Futures 2012 – UK’s answer to the annual ILTA event?

Jason

 

Well it’s a couple of weeks now since LawTechFutures 2012 and I have to say it was a good event for Legal IT in the UK. I’ve not been to a any general Legal IT events in the UK for a number of years. I’ve been to some good specific events (Interwoven’s old Gear Up events were usually very good and Tikit’s Word Excellence days have been good too), but the old Legal IT shows were more “trade shows” that allowed vendors to show and talk about their wares. They certainly weren’t the kind of show that allowed you to both see products and also hear about key topics affecting the industry. I attended ILTA in 2010 and there was an example of how good a Legal IT event can be!

So what about LawTechFutures? Well it isn’t quite ILTA yet, but it’s certainly a great start in the right direction (it is after all only lawtechfutures event number one!). A few more tracks of speakers with better platforms for those tracks off the main track (the lounge and demo stages weren’t perfect for either speaker or audience really) and it could be an excellent regular annual event. This is just a minor point though and should not detract from the fact that the event was a huge success both in numbers attending and the quality.

For a good write up of the event have a read at the post on the excellent “The Time Blawg”.

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Nov 3 2011

Hamburgers needlessly uniform and fast or coffee annoyingly complex and slow?

Jason

I read an article in The Spectator a couple of months back that I’ve been meaning to tie into a Legal or Legal IT post for a while.

There were two areas of Law that I was thinking about when I first read it. First off this paragraph.

These changes happen because there are two kind of business competition. The first is where you try to be better at doing what the business next door is doing already. The second is where you create a ‘paradigm shift’, pursuing some entirely new ideal no one has focused on before.

This one got me thinking of the crossroads that a lot of law firms are reaching in these tough economic times. Do they try and do things better than their close competitors? Or do they create the “paradigm shift”? The majority of the press and many legal commentators would suggest that “Tesco Law” will usher in a new kind of law firm and the old firms that stick to the current model will wither and die. Is there room for the old style law firm anymore or will law pump out agreements “needlessly uniform and fast”? I suspect there’ll be room for both, after all the two businesses sited in the article (McDonalds and Starbucks) haven’t totally wiped out the “old diners” or the “old style cafés”.

The second area I thought of was after I read this.

I sometimes wonder whether it’s time for government to try a paradigm shift. If, instead of devoting all its energies towards huge, intractable problems such as wholesale NHS reform, our government were to establish a Ministry for Eradicating Trivial Irritations, some degree of success would be assured.

And this got me thinking of a few Legal IT vendors. How the clamber for larger firms through mergers and takeovers have led to a chase the next big thing. Whether it be the cloud, the latest in eDiscovery or Legal Hold or another big technology to sell to the law firms. My thoughts usually are that I wish they’d just look at what they do/did well and make it better. Ironing out those trivial but annoying “features” that drive the lawyers nuts.

Anyway, take a look at the article it’s worth a read in its entirety and perhaps read through some of the other articles by “The Wiki Man”.

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May 5 2011

Balotelli or Giggs?

Jason

The period of austerity seems to be over in football. The lateral hire is on the rise as players are swapping teams at a steadily increasing rate. It starts with the star players and the big teams, but soon enough the pay rates across the market will be pushed up and mediocre players will start costing the smaller teams big money.

As teams fight for survival in a competitive environment they start to lose focus on what their key purpose is (to please the fans) and chase the big annual prize at any cost. Soon costs spiral and the fan is squeezed of more and more money to pay for the increased cost of players and the need to get the big annual prize. Worse happens as the teams lose focus on what the fans want and start to employ different approaches that get them closer to the annual prize, but by reducing the quality of the end product they alienate their fans.

But at the end of the day shouldn’t it be about pleasing the fans and keeping the costs for them down? After all wasn’t that the reason all these teams started in the first place?

Don’t panic! I haven’t turned this blog into a sports blog, just re-read the above and substitute the words in italic. Replace football with legal, player with lawyer, team with firm and fan with client.

There seems to be a lot of movement in legal at the moment (examples here, here and here), combine this with an increasingly competitive market and there’s a lot lawyers could take from the modern football market.

Maybe rather than chasing the Balotelli’s the teams should look at their development programmes and start bringing on the next Giggs?  And on the United theme, don’t assume that just because you’re a BigLaw “Manchester United” that your fans will be happy regardless!

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Feb 7 2011

Everything clients want from a law firm….

Jason

Have you ever thought that everything clients want from a law firm are things that our fee earner want from the Legal IT dept.?

I hadn’t thought of it this way until a colleague raised a number of points that were raised by some senior people from large global organisations at a recent conference.

"We want consistent service from a global service provider, even if it isn’t in the home market, we still want the same good service in a distant geography"

"We want a legal services team that really knows our business"

"Don’t do what we tell you, do what we need"

“We don’t want academic legal answers, we want relevant business explanations and solutions”

Change the wording slightly.

"We want consistent service from the central IT dept., even if it isn’t in our office, we still want the same good service in a distant geography"

"We want a legal IT team that really knows our business"

"Don’t do what we tell you, do what we need"

“We don’t want technical answers, we want relevant business explanations and solutions”

Makes sense doesn’t it!

Now I’ve been pondering how to sum this post up. Is there an answer to all the problems of delivering a great service in those points raised? I couldn’t come up with a nice black and white answer, but then maybe this is a case of a problem shared is a problem solved?

p.s. thanks must go to my colleague in Asia for this post, the points are plagiarised from him. cheers Andy!

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Nov 29 2010

“A company from here doing rather well over there” and vice versa

Jason

No I didn’t stop blogging over the last three weeks to spend the time on the campaign trail for the Computer Weekly blog awards! I’ve just had too much on in and out of work to come up with something to blog about (which reminds me of a previous post!)

I’ve had in mind a post about the mergers in legal this year. A follow up to the post I put up in July 2009 titled “Consolidation within the UK 200?” in which I predicted a series of mergers outside the top 20. I thought at the time that the competition in the legal market due to the downturn would force a squeeze in the mid-sized firms, but it looks like the consolidation has been nearer the top. There have been a number of transatlantic mergers within the top 20 (well top 25), not the “magic circle” but in those firms just below (in fact those below the transatlantic trailblazer DLA Piper).

We’ve had Denton Wilde Sapte and Sonnenschein Nath & Rosenthal, Hammonds and Squire Sanders & Dempsey, Lovells and Hogan & Hartson and SJ Berwin in talks with Orrick Herrington & Sutcliffe and then Proskauer Rose.

Norton Rose has taken a slightly different route into North America with it’s merger with Canadian firm Ogilvy Renault. It’s almost a shame UK law firms aren’t listed on the stock exchange as I’d be hedging a bet and buying up some shares in Herbert Smith!

So the consolidation is happening at a pace, but rather than on a national level it’s the globalisation of the larger law firms that’s leading the way.  I don’t think it’s over, there is still a mixed market out there. Some firms are now posting a rise in turnover, yet there are others that are posting an equal percentage drop.

I therefore stand by my earlier post. The consolidation at the top will only strengthen the brands of the large law firms, allowing them to hoover up more of the big (and medium) plc work. The mid sized firms will be subject to a pincer movement from the “big brand firms” above and also from the new firms that will emerge on the back of the Legal Services Act 2007.

What will the mid sized law firm look like in 5 years time? Will the £75m turnover “Jones, Jones and Smith” still exist or will they be background engine rooms for “Tesco” and “Sainsbury’s” in a legal world that has a few global big brand firms and household name branded legal services?

Whilst writing this post I came across a great document on the upcoming “Big Bang” for legal, it’s called “The Big Bang Report – Opportunities and threats in the new legal services market”.

Oh and no I didn’t win the IT professional (male) blogger award unfortunately, but it was great to be recognised by Computer Weekly and short-listed. Maybe next year!

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