Law firms are increasingly under pressure from clients to reduce fees and improve efficiency. As more data becomes available, and technologies muscle in to offer alternatives to various legal processes, how are lawyers adapting to stay relevant and retain clients?
PlaceTech spoke to:
- James Boreham, head of sales at Leverton, an AI-powered data abstraction company
- Dominic Hordern, head of asset management at Mills & Reeve, national law firm
- Andy Sommerville, director of Search Acumen, data insight firm
What are the new skills that lawyers will have to learn?
Mills & Reeve: Lawyers will have to learn about data handling and analysis. More data capture and data tools will mean lawyers have to be better at seeing, sifting and using it. Much of what lawyers do at the beginning of a transaction is looking at data and making sense of it, making it structured, so we can add the value, and provide expert judgement. However, the act of finding does not always need to be done by a lawyer, the use of data extraction tools and expert systems to structure the data so it can be interpreted and analysed are changing the skills needed. Whilst the ‘machine’ might not give us the answer to a client’s legal issue, but it will get us further much quicker and with greater accuracy.
Leverton: Whilst I’ve read in a number of places recently that lawyers will have to start learning coding, I don’t see this being a skillset that’s required for quite some time. My general view is basic coding skills will be an essential requirement for nearly all roles in 15-20 years’ time. For the foreseeable future, lawyers should have a good understanding of key technology areas such as blockchain, Internet of Things, Artificial Intelligence, with some understanding of different technology vendors in these areas, and ultimately a technology consulting type mindset.
Search Acumen: Digital savviness is the key to unlocking the opportunities that digitalisation is bringing to the property sector. Getting up to speed with the latest tools available will enable lawyers to be more efficient, putting time intensive administration aside and spending more time advising, not trench digging.
What does a lawyer’s daily routine look like in 2040?
Mills & Reeve: Most of what it does now. We will still need to interact with our clients, and humans will still want to do that by telephone or in person. Those running client teams or project managing transactions are likely to be spending more time interacting with different disciplines outside of the current lawyer role, for example data scientists, legal engineers, risk analysis experts, and valuers. New activities might include checking client interactive services for documents to review, instructions to process or questions to answer. Business development will not be based purely around advisory services, it will also include a wide range of alternative legal services, data science, data management, and content management systems for clients.
Leverton: Less basic contract reading and interpreting, and much more experience-based, high value additive work.
Search Acumen: By 2040, legal paperwork and pen and paper due diligence will cease to exist. We are already seeing this happen with property lawyers using our Foresite platform. It didn’t exist three years ago, but lawyers have been able to forego the analogue approach to due diligence, and instead they can use an integrated platform with instant access to commercial property data sets and the ability to conduct and manage a portfolio of property searches in one place. We can expect full automation of property law by 2040, either as a result of blockchain or a technology not yet in existence. This will allow lawyers to jump straight into an advisory role as all the admin and paperwork will have already been done for them, with the full automated technology underwriting everything so the purchaser has recourse. They’ll consult interactive digital maps with deep layers of data embedded into them and will be able to offer their clients a full assessment of an opportunity before a penny is spent or a brick is laid.
Are there examples of tech already impacting the role?
Search Acumen: Lawyers that are harnessing technology are already shifting away from administrators to becoming active players in the transformation of the property market. Instead of trawling through reams of data and contracts, property lawyers will increasingly use AI tools to analyse data. Discovery will be done at the click of a button, leaving a machine overnight to assess terabytes of data. Another example is using distributed ledger technology, which underpins blockchain, to speed up property transactions. We saw this first-hand in the recent Instant Property Network trial that we participated in, where lawyers were charged with creating and sharing digital documentation onto a ledger. This was a big shift as not one party is the hub for information in the property transaction process. The lawyer, the developer, the architect, the broker, and the lender, worked together to create a more seamless, decentralised and transparent process.
Mills & Reeve: Screen sharing for telephone conferences means all party meetings can happen without everyone in the room with documents, plans, ideas being shared on screens. Virtual desktop environments mean lawyers can have their desk wherever they are, at home or in a different office or just agile working in their own office. Machine learning and expert systems have reduced the manpower needed for the simple due diligence tasks, and intelligent document automation has enabled production of multiple different documents by only inputting the data once and answering questions not selecting text. This is saving lawyers time and making them more accurate by using the most up-to-date precedents and not just the last one they personally used. Cloud based transaction management tools, for example Legatics, have also impacted the role.
Leverton: We regularly work with law firms to augment their processes around contract review. A really powerful trend we’ve seen is law firms adjusting the way they work with clients to reflect technology advancement. For example, in real estate, knowing key data is critical for effective asset and estate management, the structured data format AI-based tech gives you is, in our experience, a really well received deliverable for clients rather than the more widely used written lease report.
What will be the benefits of going digital?
Mills & Reeve: Clients will be able to do more themselves, such as document automation if they choose to, and will be able to have a more hands-on insight into their transactions – for example live status reporting in Legatics. New technology should also help reduce errors, create more consistent results and provide better depth to due diligence or understanding of risk. For example, machine learning tools gives us the ability to remove sampling in major due diligence exercises. If you can review the whole data set rather than a sample, you build a better understanding of the risks for the client. Costs will not necessarily go down because technology is not free. However, time impact on clients should improve so that they can do transactions quicker, manage risks better and deliver better cost certainty. Going digital will also lead to more engaged lawyers as they will be better equipped to understand and interrogate the information in front of them, and encourage creativity amongst lawyers, which will mean innovation and importantly retention.
Leverton: Law firms, like any professional services, are under pressure from clients to reduce fees and improve efficiency. Technology is a great way to remove these pressures. We typically find our clients save between 30-70% both in terms of time and cost. One clear example of where this works well is for transaction due diligence, we can reduce times significantly which ultimately increases the likelihood of transaction success. We’ve worked on 1,000+ lease contract transactions multiple times this year and showcased 3x ROI on this type of work.
Search Acumen: Time efficiency is a priority for the property sector and the verification process and requirement for trust in the current system can be a major roadblock in the legal process and a cause of delays. Legal technologies being implemented today can and will solve a lot of these issues, particularly as understanding around the technology continues to grow and data becomes available. The digitalisation of data is no mean feat, but it can be made easier through the adoption and upskilling around technologies that will cut down a currently resource intensive and costly process. The digital revolution will allow lawyers to shift their model to one where all the fee is taken up by more senior partners offering bespoke advice.
When do you expect to see the tipping point for adoption?
Search Acumen:The tipping point is here right now. The best and brightest commercial real estate law firms are spending huge amounts of money on innovation and technology. We are already seeing technologies that tap into digital data being used as part of the due diligence process. The improved availability of data sets, and further proof points of the benefits of leveraging them, will only serve to fuel the current momentum in the sector. We’re already working on an AI tool that will take a lot of the hassle out of some of the most basic aspects of due diligence best practice. It’s a small step, but indicative of the changes that are underway.
Mills & Reeve: As generational change in law firms and changes to ownership structures of law firms occurs, adoption of more modern approaches will accelerate. Like the adoption of email, it will be difficult to point out the tipping point and instead it will be a slow change taking 10-20 years. New technologies with be augmenting the lawyer role not replacing it, and as more layers of technology are created or ideas adapted for their use then those holding the purse strings within the legal industry will release more money to spend on the new technology.
Leverton: As soon as law firms start to see clients moving away from using their services by choosing to go straight to technology vendors, this is already happening.
Who will be the winners + losers?
Leverton: The winners will be those who buy and invest in technology, this is a common view but how this is done is rarely referenced. I’m a big advocate of innovation committees that contain not only technology but senior business staff as well. It’s rare that we see this combination but it’s very effective. Business staff know the day-to-day challenges when servicing their clients, innovation staff are used to implementing new technology, combining those together enables a powerful way to decision make on technology subjects.
Search Acumen: Our most recent Conveyancing Market Tracker report found that fewer than 4,000 conveyancers are active in the market in 2019, an all-time low as smaller law firms struggle to compete and the market consolidates. Technology is playing a big part in this growing trend as the biggest and most forward-thinking firms work fast to embrace and implement cost and labour-saving practices. Those law firms that are embracing digital innovation hold the keys to the property market of the future and will ultimately come out on top.
Mills & Reeve: Those that deliver client centric services will continue to be winners, there’s no change there. Those who assume technology is for someone else to worry about with fail because they will not be able to meet tender criteria or deliver services to the levels clients require. The accepted market standard will change and if you can’t deliver you will be excluded. Buying technology for technology’s sake will still be a mistake and probably be a significant cause of failure. Firms will need to identify the technologies and changes in working practices that suit their specific client base and staff structures. Those that misunderstand what their employees really want will also be doomed to fail by seeing them walk somewhere else.
The article was originally published on PlaceTech.
Author: Nicola Byrne