In my last article I briefly discussed the pace of technological change in the legal profession, and how firms should embrace it. It is apparent that the focus of today’s law firms is to streamline their businesses to weather the storm of uncertainty, but what happens when the sky clears and there’s blue sky again? Where is legal technology leading us?

The lawyer of the future will still be required but their role will change. Their work is unlikely to be charged by the hour but on a fixed fee, and technology will aid them in making that work as profitable as possible. With the millennial generation making their way to the top of their professional fields, the clients of tomorrow will have different needs to those of today.

Susskind in Tomorrow’s Lawyers presented a vision that legal work would be commoditised in fixed fee matters, which if it happens is likely to bring about the demise of the hourly rate model. The hourly rate model is not conducive to efficient working as the lawyer has little incentive to complete work quickly. The longer the lawyer takes on an hourly rate the more profitable the work, so hourly rates benefit the lawyer that slowly completes their work rather than the one that does it diligently. If the future is a move to a fixed fee model then automation will undoubtedly become important in making each fixed fee matter efficient and profitable.

The primary use of automation within law firms is to make internal efficiencies across all types of work, but is most beneficial in relieving fixed fee pressure. They have the opportunity to become more competitive in areas where standard documentation is used and variations are limited. Those internal processes can now be streamlined so that drafting is quicker, cheaper and more consistent. Documents that originally required junior or senior lawyers to draft can now be done by more junior resource e.g. paralegals or support staff, thus making the work more cost effective.

Automating your client

While the focus for automation will be on internal efficiency, very few firms are using automation with clients. The functionality now exists for clients to be given access to questionnaires which generate documents via a link, portal or through an extranet. Firms like Cooley (UK) LLP provide a portal so that clients are able to create their own documents just by visiting a webpage. Others like Clifford Chance provide their clients with access to financial document templates so the client is able to generate documents safe in the knowledge that is fully up to date with the latest legal developments.

Client-facing automation will be a growth area for the future although for most firms it will require a significant change in mentality. This change is likely to come from clients themselves who continue to pummel firms on rates while simultaneously expecting a gold standard service. Perhaps in the future the process of drafting will change and documents will be partially or fully completed by the clients themselves. Legal documents such as Wills can already be bought off the shelf these days and it shows that documents that were previously drafted by lawyers can now be done by lay people instead. The off-the-shelf Wills are simple, and will still require advice if more complex, but it isn’t a massive leap to consider that a more complex automated version could exist in the near future.

Do we still require the same personal service?

In other sectors, such as retail, technology has significantly changed how we shop in a very short space of time. Nowadays we use self-service tills while human cashiers diminish by the day. The service provided to customers at supermarkets, for example, isn’t as personal as it once was but it is quicker, faster and more efficient. The pace of change has not stopped there though as soon Amazon will be creating an entirely cashier-less supermarket. There is no reason why law firms can’t embrace technology in a similar way to fulfil the needs of the tech savvy millennial generation.

Those in the millennial generation have the ability to acquire almost anything at a click of a button and have been brought up on technology from the outset. They have a greater understanding about how technology can benefit them and are happy to use online interfaces rather than seek help in person or via telephone. So it is not a stretch to consider that the clients of the future may want to draft documents themselves, or if not will want them significantly quicker than they do today, even if it is at the expense of a personalised service.

More efficient and cost effective drafting

Here is an example of how that could happen. For more simple legal documents the law firm could provide the client with an up to date template for them to use in their own time. The firm would receive a fee for creating the template and would benefit on a per document basis. This template does not necessarily need to be a legal document. For example, Employment teams could draft HR documents and keep them up to date with the latest changes.

For more complex documents the client will enter relevant details into a questionnaire (e.g. parties, addresses, etc) to begin the drafting process. The lawyer will receive the generated document with details already added, saving expensive lawyer time entering data on a hefty hourly rate and greatly reducing the time taken to gather details. A junior lawyer will then cast their eye over the first draft to add to it or amend it before a senior lawyer approves it. The contract is then sent back to the client for approval. The process would be much quicker as the junior lawyer doesn’t have to create a first draft as the client has essentially done it for him. All that is required is the tailoring to a particular client, matter or transaction, which is possible to automate based on prior preferences or type of transaction.

Changing role of the lawyer

Thomson Reuters recently carried out a poll to understand what in-house legal departments consider is important when outsourcing to law firms. The poll result showed that service and innovation are key considerations when looking to outsource their work. It is now oft stated that law firms need to become more innovative and that is certainly no longer in doubt. However, to use it to their advantage the service they provide their clients must remain paramount. The service of tomorrow is likely to be different to the service of today, especially in relation to legal document creation. Clients will want legal documents instantly, either by doing it themselves or by outsourcing it to law firms who are required to draft documents to even tighter timescales.

The lawyer of the future will still be required but their role will change. They may no longer be the person who drafts the documents, but they will still be required to advise on which documents are necessary based on their own extensive legal knowledge. The client will then figure out how they want them drafted; either they do it themselves via a portal, or they compare the legal market for the best rates.

Technology will change the way lawyers interact with clients and draft their documents. Some may consider this to be a threat while others will perceive opportunities. The millennial mentality is different to previous generations and law firms will have to adapt to their needs. The prospect of clients partially or fully drafting their own documents will fill some with fear but profit can still be made albeit in a different way. Using technology properly will allow lawyers to build even stronger relationships with clients, and it should be embraced rather than feared.

Clients of the future will expect, and perhaps even demand, that lawyers use technology to make legal work cost effective. So now is the time to get ahead of the curve.

Marc May – 27/05/2017

*article written in personal capacity