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The great legal reformation

24 September 2015 - By Frank Neill

Many commentators have identified that change is a significant factor in the legal services market. Given this, what do law firms and sole practitioners need to do to prepare for the future? To explore this question, LawTalk Editor Frank Neill interviewed recognised legal innovator Mitchell Kowalski.

Q: Why do lawyers (from big firms to sole practitioners) need to prepare for the future?

We are now at the beginning of what I call The Great Legal Reformation – a time when clients exhibit new and more aggressive buying behaviour, and, on an almost daily basis, competition arrives in the form of new technology and alternative providers.

Factor in the internet and do-it-yourself clients, which further strips away the mystique of law, and lawyers can no longer practise like it's 1999. And while the legal services industry has moved much more slowly than I had hoped it would by now, I believe that in 10 years, the contrast between how legal services were delivered in 2015, and how they're delivered in 2025, will be truly astounding.

The question then becomes a simple one: which side of the fence do you want to be on? Or, as one American law professor said, "Do you want to be Kodak, or do you want to be Instagram?"

At the core of all my thinking in legal services transformation is Richard Susskind's profoundly insightful comment: "Law does not exist to provide a livelihood for lawyers – a successful legal business may be a byproduct of law … but it is not the purpose."

I believe that this phrase should also be a guide to all lawyers during the Great Legal Reformation.

Q: How do lawyers avoid extinction and "reimagine" legal services for the 21st century?

Photo of Mitch Kowalski
Mitchell Kowalski

Lawyers are no different from any other business operation – whether they choose to believe it or not is irrelevant, it's true. So in order to survive and thrive, they need to understand their clients and their competitors, and continually strive to improve operations for the benefit of both clients and themselves.

Now, for those lawyers who are jumping up to point out that law is a profession, NOT a business – they're mistaken. Law is both.

For too long the business side of law has been dismissed as unseemly. Protected by legislated monopolies, lawyers have been allowed to grow complacent, fat and inefficient. However, during the Great Legal Reformation, successful lawyers will take lessons from their own clients.

They will meld together efficiency, process improvement, management expertise, technology and personnel in such a way as to create a truly unique client experience – one that cannot be easily duplicated. The result will be "stickier" clients and reduced lateral lawyer movement.

Q: Is there something specific you recommend lawyers do?

There is no "magic bullet" or no "one thing" that works for all lawyers. So, it's best to speak conceptually. What helps immensely in such a transformation is – in terms of service delivery – to stop thinking like a lawyer and to start thinking like a client.

My friend Jordan Furlong put it best: "Few lawyers walk around in their client's shoes."

Get comfortable with the fact that quality legal services is no longer a differentiator for most lawyers in the marketplace. With very few exceptions, quality legal services is now only table stakes. They are a given and expected.

Legal services, however, can be provided in any number of ways and it can be helpful if lawyers imagine what a legal practice would look like and how it would operate, if they didn't know what a legal practice was supposed to look like.

Would it employ lean six sigma techniques, project management techniques, and other common business practices found in many industries? Would legal services delivery fit into how the clients live or operate? Or would those services be focused around what was best or more convenient for the lawyer?

Q: What is your view on the usefulness of artificial intelligence (AI) in the legal profession?

AI is only beginning to chew its way through the legal profession – and it's got a long way to go.

Consider the scale that a two-lawyer firm could attain through appropriate use of AI: could they do the work of a five-lawyer firm, or even 10-lawyer firm? And at a fraction of the cost! Growth without adding personnel! And with far less likelihood of making the mundane typical mistakes that humans often make.

AI also doesn't need to eat, sleep or take vacation. Consider the advantages for a lawyer who is able to aggregate more case law and case analysis than her competitors – all through using AI. Would that help her reach a better solution for her client?

I'm often asked if AI will replace lawyers. And my response is simple: "Not all of them." AI is able to do some things better than lawyers, and lawyers will always be able to do some things better than AI. But the magic truly happens when you put lawyers and AI together.

The question then becomes, how many lawyers do we really need in such a world? And how many law schools will shut down as a result of the reduced demand?

Q: Do you have any tips on how lawyers can reduce costs and increase efficiency?

Again, there is no one-size fits all approach. Each legal practice will have to sort that out for itself.

But it's useful to take a high-level PPT approach: proper allocation of People, Process and Technology. Are the best trained, most cost-effective personnel working on the most appropriate aspect of a file, utilising the most efficient process supported by the correct technology – all wrapped up in a desire to continually improve.

And while almost every lawyer reading this will immediately say: "I do that all the time", they really haven't done it in a methodical, structured and disciplined way. But if you get that right, you'll see increased personnel and client satisfaction, as well as better profits. But beware, such a transformation will inevitably lead to new pricing models, new advancement and compensation metrics and perhaps even new career paths.

Q: How can lawyers improve access to justice?

Poor access to justice is a worldwide phenomenon and while lawyers are only part of the problem, it is well past the time of pointing fingers at court systems and government.

Lawyers need to show the world that we are cost-effective and operating at peak efficiency. We need to prove that there really is no better way to deliver our services.

Access to justice inevitably leads to a discussion of the closed regulatory system that protects lawyer monopolies, thereby aggravating the situation.

The Alternative Business Structure debate also rages across the world, however. Left out of most of those discussions is the structural benefit that can be gained from a charitable ABS such as Australia's Salvos Legal Humanitarian which is specifically designed to provide free legal and other services to those who need it most.

If regulatory reform results in the creation of a structure that directly helps address access to justice – especially when lawyers have otherwise failed to do so – how can it be denied? Part of transforming legal services is using the best available non-legally trained minds for the benefit of clients.

Mitchell Kowalski was recognised as a Fastcase 50 Global Legal Innovator in 2012, and he is the author of the American Bar Association best-seller, Avoiding Extinction: Reimagining Legal Services for the 21st Century. He will be publishing his new book, The Great Legal Reformation, in early 2016. As a former in-house counsel, and partner at one of the world's largest international law firms, Mr Kowalski provides a seasoned and unique perspective on the redesign of legal services delivery – one that is sought-after around the world. As a visiting Professor at the University of Calgary Law School, he researches and teaches innovation in the global legal services market. Mr Kowalski is also the principal consultant of Cross Pollen Advisory. Follow him on Twitter: @mekowalski or www.kowalski.ca. Mr Kowalski is a guest speaker at this year's Future Law Forum, to be held in Queenstown on 23 and 24 October (see www.futurefirmforum.com).

Last updated on the 24th September 2015