Power shift away from supply side in legal services

14 Nov 2018 / technology Print

Tech start-ups are 'Amazon of law' says Susskind

If you really want to stay in business as a lawyer, then watching your direct inferior competition is pointless. 

“The competition that is likely to kill you won’t look like you,” Oxford professor Richard Susskind (pictured above) warned.

“A whole lot of new providers are much more likely to eat your lunch.”

Worry

What lawyers really need to worry about is the wave of technological change that will throw them out of a job, Susskind told a Law Society Cluster event at Dublin’s Mansion House on 9 November.

He said that there are now 2,000-3,000 legal tech start-ups and they are all out to do to the law what Amazon did to book-selling.

All these start-ups won’t survive but the ones that do will bring about fundamental transformation, he warned.

Reflect deeply

The best way to predict the future is to build it, Susskind said, urging the lawyers present to reflect deeply on the fundamental value that they bring to their clients. Why is it that clients pay for lawyers’ services, he asked?

As public legal funding reduces, Susskind declared that everyone has concerns about the cost of legal services. And despite the fact that we live in an increasingly regulated society, people can find it harder to afford a lawyer.

Much legal work is routine and process-based but this is a routine source of revenue, he said.

Challenge to business model

This challenges the business model of many law firms since some of these tasks don’t require highly trained lawyers.

Some routine legal processes can be outsourced to India for a fraction of the cost, said Susskind.

He said that instead of thinking about how we can do things, cheaper, quicker or better we should think of creative, imaginative and competitive ways to give our customers what they want.

We must dismantle the model of a one-to-one consultative, advisory service, charged by the hour. 

Unbundle legal work

The answer is to unbundle legal work into its constituent parts, he believes. Rather than thinking of dispute resolution as one mammoth task, why not break it down, he asked.

“Why can’t we decompose, disaggregate, break down, unbundle, legal work into its component parts, and ask of each of these component parts, what is the most efficient way of doing this work,” he said, because this is an appropriate way of dealing with the challenge of delivering more services for less cost.

Rather than thinking of dispute resolution as one monolithic task that has to be done by one provider alone, why can’t we break it down into disparate tasks such as strategy and tactics, negotiation, advocacy, document review, legal research, litigation support, electronic disclosure and so on, he asked.

Some of this work is complex, but a lot of it isn’t, he declared. Many legal projects are project management tasks, he said, despite little detailed training among lawyers in this specialist field.

Either cheaper people or new technology can each take the costs out of these various legal services, Susskind said.

Susskind warned that more demanding and discerning in-house lawyers are now driving traditional law firms harder.

He said it is interesting that at the commercial end in larger legal departments, there is a strong trend towards appointing chief operating officers as well as general counsel.

Chiefs of staff

These are chiefs of staff, who are seeking innovation through technology as well as brand new business models for procurement.

These are the people who are going to disrupt and transform legal departments, he said. And they are clubbing together as a movement that signifies a shift in power from the supply side to the buy side, in terms of buying legal services.

The power is moving to the clients and recipients of legal services who have an appetite for alternative providers, and are fonder of technology than many traditional law firms, Susskind says.

This is a unique time to be alive and the pace of technological change will not slow as machines become increasingly capable. 

There is no finishing line for technology says Susskind, and innovation will not plateau. In fact the pace of change is accelerating.

Objective data

With enough objective data, technology can make accurate predictions about the outcome of cases based on datasets about past cases.

If over time it’s demonstrable that these systems out-perform lawyers, then the market will prefer them, Susskind says. Routine legal questions will be answered by technology in the future, he says.

The key point for Susskind is that clients don’t want lawyers so much as they want they outcomes that trained professionals can bring. Clients want empathetic advisors who can stand in their shoes.

To what problems is good judgment a solution, he asked. People come to professional advisors because they are in situations of uncertainty.

Moral reasoning

But for Dr Rachael Hession of the Law Society law school, an engagement in moral reasoning and a striving for excellence is at the core of professionalism. 

She questions whether technology can ever match this unique combination as well as fiduciary duty to a client. The core characteristics of professionalism are an integrative force for the good of society, Dr Hession believes.

Future-proof

Susskind concluded his speech by urging the lawyers present to future proof, by delivering the value that no one else brings.  

“Think more deeply and widely about what business you are in,” he advised the gathering of Dublin’s legal advisors, and commit to becoming a lawyer for tomorrow, he told them. 

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