Going digital: Give your legal practice an innovation boost

From moving to paperless to rethinking talent strategies, digital transformation will be different for every legal practice.

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There’s no question that the business of law is changing, with clients and courts demanding the adoption of new technology and practices. But a collaborative approach can turn this challenge into an opportunity, according to Melissa Lyon.

Lyon is Executive Director and Experience Designer at Hive Legal, an innovative law firm that’s been pushing the boundaries in legal practice for almost a decade.

The firm has an office footprint in Melbourne, but the entire Hive team has had the option of working remotely since it was founded eight years ago – long before COVID-19 mandated working-from-home for the entire industry. As a paperless practice, it’s also been using cloud-based document storage and management solutions since inception.

Hive’s innovation is enabled by technology, but the software systems it uses are aimed, ultimately, at making the practice more human. The firm’s philosophy is to focus on designing processes that put people at the centre, breaking down silos and making work more efficient, productive and enjoyable for the team and its clients.

“I have seen real opportunity when you actually bring those multidisciplinary teams together to help solve problems or pain points, either internally within your firm or for your clients,” Lyon says. “It’s about taking much more of a holistic approach to the way that you deliver services and manage your firm.”

And despite building an intentionally digitally enabled legal practice, Hive’s strategy places software in the background rather than front-and-centre. The firm begins by looking for clients’ pain points, conceptualising them as areas to improve, and then fitting the technology to the situation.

“The strategy should be: know what [technology] is out there, see the opportunities, and experiment,” Lyon explains.

“And be ready to change course if you need to.”

Hive uses specialised solutions including legal chatbots, a contract review tool and a client-focused matter management software system for retainer clients. However, Lyon advises that every firm needs to find the right tools to fit its own methods and goals.

In Hive’s case, the firm uses technology to underpin its offer of a value pricing business model, rather than the time-based billing model much more common among legal practitioners.

In simple terms, according to Lyon, “the client knows what the price is going to be, and what we deliver, which is a much more pleasant experience”.

She adds: “It’s about the value you create, both for your team and your clients, from that use of tech – not just ‘let’s do things quicker’.”

The benefits are also felt internally, with practitioners less focused on accounting for their day in six-minute blocks and instead on aligning their goals, expectations and outcomes with those of their clients.

“There are efficiencies that you get [from technology], there’s no doubt about that,” Lyon says. “But it’s also about the people’s experience in using it, how it makes their lives easier.”

She adds that there’s no single tech strategy that will work for every company. But she advises that law firms begin by “talking to other people who have been through the experiences, and learn from the things they’ve done”.

“Those discussions are really helpful, and there are organisations out there that will help within the community.

I think what you find, especially in the innovation spaces, is that people can be really generous with their time.”

 A new era for legal practice

Terri Mottershead, Executive Director of the Centre for Legal Innovation at The College of Law, and a lawyer of more than 30 years’ experience, is another at the forefront of legaltech and innovation in Australia. She believes the legal industry has seen a greater uptick in the use of technology as a result of COVID than other professional services sectors.

“Some people say it’s put the industry five years ahead,” she says. “In terms of technology, I think it could be a decade ahead.”

COVID-19 has been the catalyst for a huge and rapid evolution in the legal profession. Shifting courtroom processes to virtual hearings is the most visible change, but digital innovation has reshaped the way legal firms manage their businesses, practice their work and facilitate their clients’ success.

“We’re taught the law based on precedent,” Mottershead explains. “What happened before should influence and inform what happens afterwards.

“And we’re also trained to look for the problem, to identify the risk and the liabilities that lie in everything. So if you think about that mindset, that’s really different from challenging the norm, being willing to experiment and try things differently.

“But I also want to say, happily, that folks are getting that, and making that shift.”

However, there’s more to digital innovation than just purchasing the shiniest new software. In order to take advantage of tech-enabled legal opportunities, firms will need to start by rethinking their talent strategy.

“There’s going to be a shortage of talent, I think, particularly around the emerging professions,” Mottershead says. “The legal technologists, the data analysts, the legal ops people. That’s going to become acute if we don’t develop that as a career path within the profession.”

Recruitment, re-skilling and continuing professional development will have to incorporate an awareness of the evolving demands on practitioners.

Legal practices “across the board”, from large multi-nationals to sole trading barristers, are innovating differently, depending on the size and nature of the company.

“The smaller to mid-sized firm is probably the most agile,” Mottershead explains.

“In smaller firms, if you want to go and do something, you can just make the decision and go and do it today. Whereas in larger firms, there’s a lot of people that you’ve got to get on board. Having said that, the larger firms can sometimes afford to be more strategic, as they have the funds to invest in significant change. We see people like innovation managers and directors being appointed to lead those functions, to coordinate them.”

The bigger firms, for example, are bringing data scientists in-house, while smaller firms are using data visualisation software, to help lawyers parse and understand large and complex datasets.

“We are no longer operating in a kind of guild,” Mottershead argues.

“We are operating sophisticated, complex businesses, and we need to have the information to be able to help us make those decisions. If there’s one skill set that people should be focusing on at the moment, particularly if you’re managing a legal practice, it has to be data.

“You’ve got to upskill in data analytics. It’s just critical, absolutely critical.”