The Disruptive Law firm

Paul Forrest.

A primer for those seeking strategic inspiration or direction, I take a high level look at the otherwise exhaustive subjects of innovation (and disruptive innovation), corporate agility and Big Data for legal services.

Let me start with a brief health warning…

Clearly there are many different size law firms and many different areas of law that occupy their focus and strategic attention. High street family lawyers and large-scale commercial litigators might be regarded as poles apart, and so with this in mind, I have presented a set of personal observations that focus on law firm DNA. I have attempted to make my observations valid for all by discussing disruptive approaches to the delivery of legal services.


Innovation, Corporate Agility and Big Data are not necessarily regarded as terms widely or readily used within the legal profession, at least not in the UK, perhaps the time has come for the legal profession to fully embrace stratagems in these areas to help build a competitive moat and occupy a leadership position in the market? I am not suggesting that firms are failing their partners and shareholders entirely in these areas, it is more an observation as to the lack of courage many firms have in respect of such opportunities, perhaps based on a painful past.

Once upon a time, when BPR was ‘en vogue’ there was a scramble by many to ‘blow the business to bits’ and rebuild a radical and dramatic new order out of the pieces. Many suffered, many realised that what they actually needed wasn’t a revolution, it was merely finessed evolution and to an extent, playing catch up with where many others were with their use of technology and information systems. However, many others failed to see any need to change and embrace technology and the net result was a profession regarded as trailing behind many of their clients.

If we started with the notion that ‘if it ain’t broke, don’t fix it’ was order of the day then this lack of historical desire to change was well founded and should not be criticised. However, this simply should never be the case. For the brave, many have experienced dramatic improvements in business performance, client retention and partner earnings. Add into the mix that these days, apprentices and graduates entering the profession are using the attitude and willingness to innovate and embrace the data driven culture as a barometer of the quality of the employment proposition. As such, it can be seen that there are many benefits for those firms prepared to make the effort.

So, in this brief article, I aim to explore whether or not innovation, corporate agility and big data initiatives are being fully embraced by law firms or the extent to which the time is right to make more of such initiatives?

Some definitions and some examples

Starting with innovation.

Innovation is a new idea, device or process. Innovation can be viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society. The term innovation can be defined as something original and, as a consequence, new, that “breaks into” the market or society.

Many tiers or levels of maturity exist in innovation in any business and it is fair to say that much progress has been made in the legal profession that would be truly regarded as innovation at work. However, in an era when people are looking for step changes in business performance with new product and service design, many are looking towards disruptive innovation as their strategic goal. A disruptive innovation is widely accepted as an innovation that helps establish a new market or value network. With time, the innovation eventually disrupts an existing market and value network (although this could be over a few years or decades), displacing an earlier technology or innovation. Think, Walkman, or iPod, both are good examples of disruptive innovation at work.

Closer to home for law firms, we might regard the use of document image processing (DIP) as a disruptive innovation at play, albeit that was some twenty years ago for many (or even twenty-five for early adopters). In such circumstances, firms embracing DIP made a step change in their ability to process client matters more efficiently and many more were empowered with the prospect of enhancing their workflow and even automating it to the benefit of the staff, partners and clients alike.

As a word of caution, based on my own observations, whilst it might be easy to assume that disruption comes from the industry, firms themselves, reform in legal services or even by the availability of new technologies as exemplified above, in reality the real driver is the imperative created by client led disruption. That is, responding to what our clients and customers tell us they want and the way they want it. This demand profile places an increased pressure on the modern law firm as clients may not be consistent in approach and so signals may be difficult to read. This introduces a further challenge for the leadership of any law firm in respect of working out where to make tangible changes.

On to agility

Whilst innovation is a key component to any business’ strategy it is also a key ally of corporate agility.

Corporate Agility is the “ability of a business to rapidly respond to change by adapting its initial stable configuration”. As such, agility is the ability of an organisation to rapidly adapt to market and environmental changes in productive and cost-effective ways. The agile enterprise is an extension of this concept, referring to an organisation that utilises key principles of complex adaptive systems and complexity science to achieve success.

For many law firms looking at embracing corporate agility, they are targeting benefits such as being able to bring new products or services to market quicker than the competition. New variations on Industrial Diseases are a good example where taking a core product and rapidly reengineering it with agile business processes allows the exploitation of a first mover advantage. This alone may be enough for a firm to gain a foothold in an otherwise fast crowded market. In essence, it’s about delivering more client value in a transparent way, quickly (and with minimal risk to the business).

What we are seeing now is that in other sectors, the attribute of being an agile business is actually being used as part of the employment proposition and as such, may actually support the recruitment of the very best talent available where the staff are attracted to/excited about the characteristics of working in an agile, fast moving business.

How about being data driven?

Perhaps we should consider the prospects of a law firm being empowered by structured and functional use of all data as a ‘Big Data’ initiative?

Love or loathe the term, Big Data is an expression widely used for any collection of data sets so large and complex that it becomes difficult to process them using traditional data processing and business intelligence applications. Many challenges exist including include analysis, capture, curation, search, sharing, storage, transfer, visualisation, governance, trust, privacy and security.

Big Data seems to be touching almost all business sectors these days. At the heart of Big Data, amongst a range of drivers, are the velocity, volume, veracity, variety, variability and value of your data. Many others throw in a few more for good measure but in essence, these keywords link very effectively with the topics of innovation and agility already discussed. A close look at these ‘V’ words should start you thinking of opportunity but in the context of a law firm, I suspect it is more likely to start you thinking about how much of a challenge deriving value here would be.

However, law firms are increasingly looking to exploit Big Data to extract more value from the thousands of matters, briefs, memos and legal records they produce every day, allowing them to develop a more connected approach between all aspects of their service delivery. This in turn has delivered some substantial benefits to the firms concerned. One barrier often cited is that becoming more efficient in this way may reduce billable hours to the extent that overall revenues are impacted (which brings with it an inevitable reflux action in the throats of many partners). This may be why some law firms are slow adopters to such initiatives.

Link this back to disruptive innovation and agility, one would hope that the efficiency gained would lead to a fundamentally different service proposition and possibly redeployment of resource to support development and delivery of new services etc. If nothing else, the goal must surely be to explore ways to reduce costs and increase efficiency through technology, streamline workflow, and implement alternative staffing models?

So to the future…

If you think I have conveniently missed a case study here… you’re right. I started to draft a case study based my work with a UK law firm but realised in the process that I was perhaps sharing a little too much about what has allowed them to build one of the fastest growing legal service businesses in the UK.

So… instead, I’ll share a carefully disclosed description of why they are a real challenger brand and a fast moving business embodying many of the attributes, set out above. The business concerned is LM Costs and they are a dedicated business providing a complete legal costs service. They specialise in advising and drafting for various legal sectors including personal injury, clinical negligence, industrial disease, legal aid and commercial litigation. Similar perhaps to an in house costs team or even any number of external service providers.

However, having fully embraced a data driven approach to service delivery, they are able to create a unique service for each of their clients based on individual client KPIs and value indicators which means a bespoke pricing model and schedule of outcomes. The agility enabled by their use of data for algorithmic analysis is only the start. The business operates a truly agile strategy enabling them to bring new services and products to the market in a fraction of the time normally achieved. Add in to this the business’ use of technology to continue to innovate and disrupt the competition and you’ll get the picture. Low cost, efficient and with a recovery success rate others can only aspire to, they have already proven that one of the oldest professions can benefit from fresh thinking and strong leadership.

With this in mind, my prediction is that the winners in the legal services marketplace are likely to be those who embrace and join up their approach to Big Data with Corporate Agility and (Disruptive) Innovation. Those who seek to bring new offerings and new approaches to service delivery to challenge the status quo are the businesses I’d back. Even if this is the same offering delivered in a fundamentally different way, the opportunity is there and will become greater with the prospect of ever-intensifying competition as:

  • Big Data commoditises legal work;
  • Disruptive Innovation facilitates digital transformation of business models; and
  • Corporate Agility empowers a fail fast mantra allowing the business to evolve much more quickly whilst managing risk.

If nothing else, all of this should raise questions about the business models of even the most established firms. .If you have any queries regarding this article then please contact me here.


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