The legal profession globally is facing considerable change as growing pressures are forcing law firms to innovate in how they deliver their legal services.
Law firms are only starting to take advantage of the opportunities that technology brings – opportunities that many other industries have embraced for many years.
Globally law firms are ahead of where most New Zealand law firms are in innovation and utilising technology, not in all cases, but on average we’re much slower to move. Many firms here are still using outdated systems that put them at a heightened security risk, slow them down and cost them more money in the long run.
Those that are prepared to innovate have the best chance to adapt and thrive in a changing market.
What’s driving legal innovation globally?
Historically, the legal profession has been slow to adopt change, but they are now starting to innovate to better meet the changing demands of their clients.
Most law firms are facing greater pressures from their clients to reduce costs, whilst delivering a faster and more accurate legal service.
They’re also facing greater competition from other firms that are already leveraging technology to provide a more cost effective offering to their clients. To put the pressure on even more, there are now new sources of competition, where professional services firms are moving into the legal market. These firms are equipped with innovative practices and an abundance of technology solutions.
These pressures are driving more law firms to explore ways that they can innovate to drive efficiency and increase productivity.
For many, legal innovation is simply exploring new ways to deliver legal services.
This involves developing new business models and skill sets. The fundamental practice of law will remain the same, although it’ll be enhanced by innovation and use of technology to deliver legal services faster and more accurately.
For example, we may see the billable hour become a thing of the past as clients look for more innovative cost structures, where the goal is to improve value for clients – so firms will be expected to produce more for less, but with the technology now available this transition is manageable.
One recent study shows innovative firms in Australia are increasingly utilising ‘Legal Process Outsourcing’ as an effective means of controlling costs, managing and scaling resources, and improving their overall service delivery.
Internationally, firms are now placing greater emphasis on implementing digital strategies. Many law firms are appointing innovation roles within their firms, and some have ventured further into developing new products and services, including building software, or working with technology experts to assist this process.
Impact of global trends on the NZ legal profession
Globally there are many examples of how law firms are responding to these increasing pressures, and turned them into opportunities.
Artificial Intelligence, automation, blockchain, smart contracts and the general automation of repeatable tasks is becoming more mainstream. Whilst a focus of innovation and leveraging technology is to drive profitability, there is now greater emphasis to reduce digital risk, with cyber security being an increasing priority for law firms and their clients.
These global issues and trends are now starting to impact New Zealand law firms.
We face many of the same issues, although at present many global firms are ahead of where New Zealand firms need to be. This is starting to change with a number of exciting developments by New Zealand firms. As time progresses, we hope to see more law firms here placing greater importance on innovation and leveraging technology.
However, many in New Zealand are just starting this journey, and need to learn more about how they can innovate and adopt technology into their practice.
These opportunities will provide New Zealand legal professionals with the opportunity to adapt and thrive.