‘It is quite obvious law firms will have to change their business model and innovate their products’
For me innovation is a word that tries to capture the steps lawyers and law firms are taking to anticipate and respond to the more general changes happening in the marketplace. When we speak about innovation, I think we need to look at how the market is changing. Technology is probably the most important driver of this change, but I would say the business environment is also changing.
Look at the law itself: we’re used to having national laws that people learn about at law school, but all of a sudden we are dealing with transactions that are borderless. So when we look at a bitcoin or blockchain-based transaction, what is the applicable law? Which jurisdiction governs the transaction? How do you litigate around that? I don’t pretend to know all the answers, but clearly there are new areas in substantive law that need to be adapted.
There has also been a huge change in how clients value legal services. Following the financial crisis, clients have seen their budgets shrink and this has changed their approach. Many are looking at what legal work they can bring in-house, and how they can better budget for and manage their legal service providers.
For some time the legal profession has largely been viewed as “fat cats” and there’s some appetite among others to start competing in our marketplace. There are new entrants, with startups and the big four getting involved in many aspects of legal services, and there will be more. As I have read in one report on innovation in legal services: “You do not have a seat at the table because you are probably on the menu.”
The definition of legal services has also changed. If you close your eyes and think about all the things being produced by machines at the push of a button, it makes you wonder where lawyers fit in. We used to have many young lawyers doing basic drafting in basement offices. They will probably not be needed in the future, at least not as much.
What then is the lawyer of the future? Machines are never going to be able to deal with emotions, negotiation strategies, or work with people more generally. We will probably see lawyers focusing more on guiding the client. However, unless we are able to visualise what the law firm of the future looks like, it is very difficult to do meaningful innovations that are also substantive.
In the face of these challenges, I’ve set up two task forces at the International Bar Association (IBA). The first focuses on the future of legal services where we have done some initial research and now we are identifying individual projects where the IBA believes it can add value. The IBA is uniquely placed in the legal marketplace to add that global perspective. The other task force centres on cybersecurity issues. As technology plays an increasing role in what lawyers are doing, cybersecurity is gaining in importance and needs to be considered in the context of any innovation project.
No one’s crystal ball is better than anyone else’s, but it is quite obvious law firms will have to change their business model and innovate their products. Some believe new technologies will broaden access to justice. Many more lawyers will be required to deal with the impact of this. I’m not sure if this is what will happen, but I can see the logic and hopefully they’re right. If innovation was to have a positive impact on access to justice, then that would be great news for all of us.