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Digital Transformation for Law Firms

by Charles Nwabueze
Reading Time: 5 minutes

It is no longer a secret that when recruiting for various positions such as training contracts legal firms place great emphasis on candidates’ possession of commercial awareness. For example, one question which a legal recruiter may use to establish the commercial aptitude of the client is to ask: what is a current issue affecting law firms? Or what are the main challenges facing City firms? Or how can we expand to stay profitable? Another is what recent legal stories have caught your attention.

In each of these questions, you’ll notice that your abilities to stay up-to-date with legal news and present a great answer are up in the air. Thus your response needs to convince them that you have an understanding of the legal industry – regulatory, economic and technological issues. Essentially you need to be commercially aware.

To tackle questions surrounding commercial awareness concerning law firms and the legal sector watch the news and read newspapers. More importantly, in this article, we’ll be discussing the aspect of digitalization as it relates to law firms.

When asked a question concerning the subject topic, it’s always a good idea to start up with a definition of the concept.

What is Digital Transformation?

Digital transformation is the integration of digital technology into all areas of an organization, fundamentally changing how the organization operates and delivers value to stakeholders. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

Digital Transformation for Law Firms

Applying the above definition to the legal sector, digital transformation for law firms means the incorporation of computer-based technologies into a law firm’s products, services, processes and strategies. A law firm will be taking on digital transformation to better engage and serve their stakeholders which include their clients, and legal and non-legal staff, and thus improve their ability to stay in the competition with their peers.

What Drives Digital Transformation for Law Firms? 

When asked about the drivers of digital transformation consider using this information.

Technology’s ability to rapidly collect, generate, analyze and transmit data is the principal driver of digital transformation in the legal sector. Artificial intelligence (AI), cloud computing, mobile technologies, social media platforms and next-generation technologies, such as the internet of things (IoT), edge computing and robotic process automation (RPA), have dramatically changed how quickly people get information.

In today’s world access to information are at the tips of people’s fingers, and as such people expect companies to respond quickly. These people will advertently include law firms’ clients. Law firms’ clients not only expect to be responded to quickly but also to receive legal solutions and services tailored to their needs. They have also come to expect intuitive, easy-to-use interfaces, and generally prefer digital interactions that can happen anytime from any device. Thus law firms need to keep up with the times so that a good chunk of their businesses is not taken away.

Technology has come so far that there are legal applications that successfully undertake some aspects of the work of a lawyer. For example, the accounting firm EY has software, EY Lease Reviewer, which is promoted as a smart assistant that leverages AI to help their teams to identify and extract information from leases, such as the lease commencement date, and payment amounts, renewal and termination clauses. 

Furthermore, you can argue that in the quest to capture the best talent, law firms will need to be digitally transformed. 

How Can A Law Firm Get Started On Digital Transformation?

If you as an interviewee have told a firm that an area of improvement is them making better use of digitalization then it’s germane that you have ideas or steps that you think that they should take. 

The first step to take is for the firm to discover what their clients expect from them. This is an important question because it requires firms to look at three major areas concerning their firm. The first is the type of clients that employ the services of the firm. A corporate law firm’s clients will be different from that of a personal injury law firm. Second, what is the value that those clients provide? The third area is will the firm’s life (profit margin) be sustained if the current types of clients are retained. 

The second step is for the firm to ask itself if it is an analogue, digital or hybrid firm? This question shows the firm whether it is focused on tradition, change or insecurity. With the answer then it can decide the best course of action to take. Firms focused on tradition are far more likely to resist the changes dictated by digital transformation. And it appears that in the legal sector, the majority of the firms can be viewed as traditional firms, this is no surprise considering that lawyers still carry out the 17th Century practices of wearing a wig and bowing to the crown. Meanwhile, change-oriented firms tend to align with early adopters. These firms are willing to adjust and adapt to change. Hybrid firms are firms that have either resisted, then initiated change, or initiated, then suspended change. 

The third step is to highlight the kind of service that they offer to their clients. You’ll be touting the value of this metric for its ability to provide the firm with a clear indication of its performance/standing, something that is essential to determining how stakeholders view the firm. You’ll be suggesting that upon the conclusion of this assessment, the firm will know if their clients are satisfied with their service/experience, what needs to change and the approach to employ to commence the change.

The firm should also consider what a digital law firm looks like, and what services will a law firm with digital transformation provide to their clients? This framework can be developed by collecting and using data from the clients of the firm. Such data will also help to establish clear goals and important metrics to follow. 

The last and probably the most important action you can suggest to the law firms is for them to take action. While it looks simple, taking action is the one thing that separates the leading firms from the laggards; it is what will keep them ahead of the curve. This is the place to suggest the various smart assistants that they can create to help propel them to success. 

If you can state half of the above information when given questions that demand such answers coupled with other factors you’ll be doing yourself a great favour in your quest for the role.

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Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)

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