Law firms across Europe that want to be taken seriously by clients and prospective employees now accept the need to become digital businesses. Indeed, many are well on the way.

What is surprising is the rate of change. For the first decade that the Financial Times published the Innovative Lawyers special report for Europe, change in the legal profession was incremental. Since 2016, it has become exponential.

A good example of the rapid pace is this year’s top-ranking law firm, Freshfields Bruckhaus Deringer (see table below).

Its serious focus on innovation began in early 2017 with the establishment of a programme that seconded associates on six-month stints to clients, where they were charged with coming up with better ways to deliver services.

Initially 14 associates were on the programme, which has grown rapidly to become an important part of the firm’s innovation efforts.

Although marvellous things were happening, we needed to implement the ideas. This was hard

“At the beginning it was exciting and new. Bringing in the associates gave us optimism about the future,” says Julian Long, former managing partner and the programme’s initial internal sponsor at Freshfields. “But the following year, although marvellous things were happening, we needed to implement the ideas. This was hard.”

However, helped by the recruitment of digital specialists with experience in other industries, such as Charlotte Baldwin (ex-Pearson and Thomson Reuters), who is profiled in this report’s new “Intrapreneurs” section, the firm has progressed swiftly.

Power to the ‘product owners’

One idea she introduced was the concept of “product owners”. Although this role is common in software companies, it is relatively new for the legal profession. Essentially, the role at Freshfields is for a technologist to work alongside the lawyer associate in an agile development team — one more likely to have short cycles of development and cross-functional working — on initiatives for clients.

Both lawyer and technologist have responsibility for the project. The result has been to shorten the time in which the firm can develop and deliver new tools. For example, its Antitrust 101 app was ready for a client within weeks.

There were instances where it felt like we were struggling to bring the two sides together

Nevertheless, the introduction of another professional who works with clients and who has equivalent status to a lawyer fee-earner, challenges entrenched law firm hierarchies. The Freshfields team responsible for implementing the initiative say that although most people accepted the idea intellectually, there was some initial cultural dissonance.

“There were instances where it felt like we were struggling to bring the two sides together,” admits Matthias Koch, a partner and chair of the firm’s digital advisory board. The classic perfectionist lawyer mindset is not so compatible with that of technologists, who emphasise viability over perfection. But the idea of cross-disciplinary teams working collaboratively to design and develop new products and bring them to the market has taken root in the profession.

Not all fee-earners are lawyers

Several other firms, in recognition of the fact that fee-earners today are not just lawyers, are creating new career tracks for people who want more involvement in the technology side of delivering legal advice.

Insurance specialist law firm Kennedys — the best-performing firm across the “Business of Law” categories in the report — instituted an internal incubator that allows employees to become the chief executives of their own client-oriented product ideas. Employees are responsible for taking the products to market, and if they are successful, the promotions they earn allow for another route into the partnership.

More and more law firms are employing legal technologists or opening up their ranks to Stem (science, technology, engineering and maths) graduates, who can bring a different set of skills to providing legal advice. Allen & Overy has overhauled its graduate recruitment and launched a non-legal training contract for those who want to work on important client matters but on the delivery side rather than as lawyers.

In a sign of the legal profession’s growing digital maturity, some law firms are taking the lead in training clients to become more technologically competent. Hogan Lovells has crafted a training programme for lawyers at French bank BNP Paribas, which enabled more than 50 intellectual property and information technology practitioners to become digital experts.

The programme focused on regulatory challenges, cyber security and the implications of new technologies such as artificial intelligence and blockchain for the bank’s business. It was both theoretical and practical. This initial cohort are now key to the bank’s own digital transformation.

More information on the methodology for all the rankings is available here

Details of the submission process for all rankings are available here