The Legal Industry in Flux
As we are all aware the legal industry is experiencing a period of great change, in the main due to technological advancements but also an increasingly informed, tech-aware client base and new non-traditional market entrants.
Firms must understand the nature of these changes in the legal marketplace in order to stay ahead of the game, looking at how the industry is changing and whether it is evolving organically or re-actively in response to disruption.
Disruption in the industry is a symptom of a lack of attention to the factors that drive change. Conversely, proactive organisations look for factors signalling change and adapt accordingly. Reactive organisations do not heed the signals in their marketplace, or disregard them until it is too late, and as a consequence become disrupted.
The principal factor affecting the market composition of the industry currently is the advent of online influence. The rise of new market entrants, like online dispute resolution services and high street legal outfits, could be considered a disruptive event and such outfits will only grow by disrupting the traditional legal model.
Advances in technology can indeed feel disruptive without adequate support and training. But it has been widely noted that a mindset shift is needed; lawyers need to be the architects of smart processes, rather than trying to reinvent the wheel every time. It could be argued then that perhaps the best way to adapt to technological innovation is instead to work smarter, start small if necessary, and keep advancing.
Professions like banking, medicine and teaching have been and continue to be disrupted, but they are surviving, the legal industry should not be immune. The signs point only one way, to heed the signals that are denoting change, and evolve to accommodate them.
There is an argument that the public perception of lawyers could actually benefit from a disruptive shock to the system to dislodge the criticisms of lack of advancement within the sector. Client demand and expectation have changed, clients want faster, better service, so the model may already be in the process of evolving.
Whether the legal industry is experiencing disruption or evolution, change is coming, and firms need to prepare themselves for the future. The firms that stand the best chance will be those with a clear strategy for innovation; one that involves real action, not mere lip service to ideas.
Innovation doesn’t need to be trans formative to be successful; incremental changes can also deliver efficiencies for law firms and offer enhanced value to clients, without causing financial upheaval in the short term. Innovating involves challenging the status quo, which can be daunting for existing members of the team. It may be helpful to have new members of staff to pioneer the efforts.
Law firm leaders need to adapt their business model to suit innovation, rather than scale back their innovation ambitions to fit their current business model. Consider the possibility of involving clients early on in the development of new service offerings, and identifying the right strategic partnership to take innovations to the market.
It is important to keep advancing, whether that means making small, incremental changes to working practices, or opting for a large-scale, firm-wide shift. Ultimately, however, whatever the approach, getting technology right is vital to ensure that the future is successful and meets both your firm’s needs, and those of your clients.
