Page 208 - Leaders in Legal Business - PDF - Final 2018
P. 208
and Daniel Susskind). But what is this one: “Robots in Law: How Artificial Intelligence is
Transforming Legal Services”?3 So, what does the future hold?
The crystal ball contains a startling premonition as legal market intelligence such as The
Lawyer and Legal Week ask: “When will artificial intelligence replace lawyers?” Not “if,” but
“when” and “to what extent” will artificial intelligence replace lawyers? The crystal ball also
contains a murky picture of a shifting legal market, with new businesses emerging and
potentially stealing work from traditional, brick-and-mortar law firms. Who are these
“alternative” service providers? They don’t appear in the U.K. or AmLaw Top 100, so nothing
for John Doe to worry about. Or is there? As Richard Susskind says, “the competition that kills
you, doesn’t look like you.”
So, how will John Doe find out? Who has the answer to today’s questions? To know the
right questions would be a good start. There are many John Does out there who valiantly
navigate their firm through heavy weather and turbulence. We at the Bucerius Center on the
Legal Profession, a think tank at Bucerius Law School in Hamburg, have spoken to many of
them. Our Center does research and analyzes legal markets in order to provide market
participants with knowhow and knowledge regarding the best practices of law firms and in-house
legal departments. Here is what we talk about when we spend time with the John Does:
Law firms should focus on three core areas when it comes to setting up a plan for the next
three-plus years. Such an approach may be timeless, but it must constantly be updated as the
changing market environment leads to different conclusions. Law firms have to:
1. Deal with their strategic positioning;
2. Focus on client service (the what and how of legal service delivery); and
3. Make sure that their partnership structure is well aligned with the strategic goals of the
firm.
Focusing on these three core areas is sufficient, but what about legal technology?
Innovation? Profit sharing? Governance? Mergers? Each of these is important, but first things
have to be put in perspective. Just grabbing a buzzword — e.g., “innovation” or “profit sharing”
or buying some clever technology — has nothing to do with strategic goals and leads to aimless
activism without any success.
Before discussing the core items, one has to understand that all three topics are applicable
for each type of law firm, be it a global player, a boutique, an international firm, or a category
killer. The questions are always the same, but the answers are not. The most important topic is
strategic positioning; hence, we will spend more time on this subject.
Strategic Position
Strategic positioning has a lot to do with knowing oneself and understanding the
dynamics of markets in general, not just legal markets. Law firms tend to look at themselves as
something special and unique; actually, they aren’t so special. The legal industry can learn a lot
from other industries. A useful way to understand how the legal market has changed shape since
the financial crisis — and what it could look like in 2025 — is to analyze market data from 2007
until today. However, rather than overly focusing on each firm’s turnover and profitability on a
year-to-year basis through endless listings, we prefer to compare movements of certain groups of
3 JOANNA GOODMAN, ROBOTS IN LAW: HOW ARTIFICIAL INTELLIGENCE IS TRANSFORMING LEGAL SERVICES (ARK Group, 2016).
194
Transforming Legal Services”?3 So, what does the future hold?
The crystal ball contains a startling premonition as legal market intelligence such as The
Lawyer and Legal Week ask: “When will artificial intelligence replace lawyers?” Not “if,” but
“when” and “to what extent” will artificial intelligence replace lawyers? The crystal ball also
contains a murky picture of a shifting legal market, with new businesses emerging and
potentially stealing work from traditional, brick-and-mortar law firms. Who are these
“alternative” service providers? They don’t appear in the U.K. or AmLaw Top 100, so nothing
for John Doe to worry about. Or is there? As Richard Susskind says, “the competition that kills
you, doesn’t look like you.”
So, how will John Doe find out? Who has the answer to today’s questions? To know the
right questions would be a good start. There are many John Does out there who valiantly
navigate their firm through heavy weather and turbulence. We at the Bucerius Center on the
Legal Profession, a think tank at Bucerius Law School in Hamburg, have spoken to many of
them. Our Center does research and analyzes legal markets in order to provide market
participants with knowhow and knowledge regarding the best practices of law firms and in-house
legal departments. Here is what we talk about when we spend time with the John Does:
Law firms should focus on three core areas when it comes to setting up a plan for the next
three-plus years. Such an approach may be timeless, but it must constantly be updated as the
changing market environment leads to different conclusions. Law firms have to:
1. Deal with their strategic positioning;
2. Focus on client service (the what and how of legal service delivery); and
3. Make sure that their partnership structure is well aligned with the strategic goals of the
firm.
Focusing on these three core areas is sufficient, but what about legal technology?
Innovation? Profit sharing? Governance? Mergers? Each of these is important, but first things
have to be put in perspective. Just grabbing a buzzword — e.g., “innovation” or “profit sharing”
or buying some clever technology — has nothing to do with strategic goals and leads to aimless
activism without any success.
Before discussing the core items, one has to understand that all three topics are applicable
for each type of law firm, be it a global player, a boutique, an international firm, or a category
killer. The questions are always the same, but the answers are not. The most important topic is
strategic positioning; hence, we will spend more time on this subject.
Strategic Position
Strategic positioning has a lot to do with knowing oneself and understanding the
dynamics of markets in general, not just legal markets. Law firms tend to look at themselves as
something special and unique; actually, they aren’t so special. The legal industry can learn a lot
from other industries. A useful way to understand how the legal market has changed shape since
the financial crisis — and what it could look like in 2025 — is to analyze market data from 2007
until today. However, rather than overly focusing on each firm’s turnover and profitability on a
year-to-year basis through endless listings, we prefer to compare movements of certain groups of
3 JOANNA GOODMAN, ROBOTS IN LAW: HOW ARTIFICIAL INTELLIGENCE IS TRANSFORMING LEGAL SERVICES (ARK Group, 2016).
194
