Future Framework for Legal Practice
Originally Published in 3 parts - November 2019
Legal tech has brought an unprecedented rate of change to the legal industry that the traditional partnership model of law firms is not able to cope with. Even if they want to change, I have found there is no definite direction, guidance or high-level concepts that empower them to start making those changes. Some of the existing concepts are just patches that temporarily fix the issue.
The legal industry needs a new, more dynamic and flexible framework for legal practice. That is why I have developed the Future Framework for Legal Practice which is a systemic change to equip the legal industry to better handle change. But before we get to that, let’s explore and build some context around the need for a new way of thinking.
The radical growth and maturation of the legal tech ecosystem
The rate of change in the legal world is unprecedented. Much of this change is attributed to the increased energy, investment, momentum and growth around legal tech. Legal tech has many definitions. To some extent, it is a growing definition as developments and exploration create more and more implications and capacities, expanding what legal tech is and therefore the possibilities of what it can be. For the context of this series of articles, Legal tech is broadly defined as the application of technology to the practice and structure of law.
Some of these technologies relate to managing databases, others to workflows and triage. Some to extending more nuanced and complex systems for the lawyer and their practice, others created for the clients of lawyers to produce exceptional interfaces. Not to mention Court systems and their administration, in-house needs, managing legal service delivery and the list goes on.
Taking a step back, however, we can see the all-pervasive power of technology is influencing the legal sector in every way it manifests. It brings massive opportunity and in that same movement, it requires new capabilities from us. Some incarnations will do it better, some will grow faster, some will be specific and some will offer value across various applications. The reality is, legal tech has had - from its most basic and niche problem-solving - a decade or more to build momentum from within the legal profession. Importantly, legal tech has equally benefited from those not practising the law who interact with the legal profession and dedicate time and energy to producing new and creative solutions.
As the pace of change increases, it becomes clear that legal tech has grown its own ecosystem. It begins to show early signs of maturity; from the number of startups and ideas that now define their solution within legal tech, to more developed companies offering more complex applications for difficult areas of law and legal process. In between we have collaborative efforts between companies and exchange environments allowing different applications to interact with each other. The growing list of API’s that add to the infrastructure for others to build on is an example. The Tech giants themselves are getting involved - providing access to their document analytics capability (Google) or developing IP management solutions (Amazon).
Pace has also increased in terms of spend, where in the last few years we have seen exponential increases in capital flowing to legal tech; whether from funding legal tech startups or acquisitions of companies and their tech, to the increased size and growth of once nascent companies with a big vision.
The challenge of applying new tech to the traditional partnership model
With all of this increase in pace, one thing is clear: Legal tech once operated in a small sphere within the traditional model, solving niche problems for lawyers in legal practice. Now it has become a robust ecosystem of its own, redefining the way we can practice, efficiently achieving what traditionally involved manual labour with scalable accuracy and speed, expanding the scope of what a legal service provider can offer. That is not to say all solutions are perfect and achieve their desired outcome (at least not yet). The point is that momentum and growth is significant: many brilliant minds and inspired people are dedicating their energies towards this expanding ecosystem and this movement is well underway.
What we are witnessing in this springtime of legal tech is a layered and pervasive growth that permeates beyond the traditional legal practice model. For centuries we have adopted in most if not all parts of the world, across firms large and small, a time-based leverage model managed by partnership. The growth of technology and the solutions it continues to produce lead us to significant questions:
1. Can new technologies that diverge from the traditional model to produce powerful and efficient solutions for delivering legal services continue to be applied to the existing environment we operate in?
2. Can we make sense of these technologies in our current environment when the implications for their design and use relate less and less to the “way it has always been”?
3. Even if we can use them in our current system, how long can we last until the outdated way in which other aspects of the traditional model slows us down? How long can we continue to compete with our “one to one” system against the emerging “one to many” systems?
The need for a new framework for Legal Practice.
With an industry as complex and socially fundamental as the Legal sector and with so many capable and talented people globally who contribute to the profession, a solution to this challenge must be dynamic and responsive. First of all, it should apply to as many people who work in law in as many circumstances as possible and provide clarity about how to operate within a changing environment. Secondly, it should anticipate these fundamental shifts in our environment and be a framework that is conceptually simple yet powerful in practice, and above all: It should open our minds to a future of possibility and a new way of thinking.
The current technology shift has several opportunities which require this new way of thinking.
One of the pertinent changes is the movement away from all-in-one solutions developed in-house. The growth of the SaaS (Software as a Service) industry means that someone who wants to develop a solution for a future-facing firm is actually involved in systems architecture and design with many more choices than previously available. The ability to link one service to another has also flourished alongside the SaaS ecosystem, typically done via API (Application Programming Interface) and even the connection service is itself offered by the likes of Zapier.
This also feeds another fundamental change: movement away from traditional CAPEX expenditures associated with legal practice and using a more agile OPEX model. The smorgasbord of technologies that are available to lawyers is for the most part subscription-based. This availability means it is becoming possible to build more robust solutions that are affordable as the market competes on value. It also means that you are able to switch your technology stacks as better solutions are developed, or if there is a strategic change in direction of the firm. This capability for dynamism becomes invaluable as the changes in areas of law and client needs will demand significant adaptation from lawyers. It also has the potential to drastically lower overheads and provides greater oversight across business performance.
Another significant change is the need for having a physical location, or whether large expenses need to be spent in maintaining many physical locations. This is also now up for debate as leaner technology-based models mean accessibility to your practice, team and tools anywhere, any time.
Finally, consumer behaviour when accessing products and services has seen a fundamental shift as well. People reach for their phones to not only research, communicate and understand what they want - but to purchase it, interact with it and in the context of Information and Professional services, receive it. While consumers continue to demand value-based fixed fee services available to them, there is always the valuable human element to what we as lawyers do.
These are a few of the environmental shifts that have greatly impacted the future direction of legal practice. It is clear that there is no simple transition from the legacy partnership model.
The Future Framework for Legal Practice
The divergence of legal tech, once supporting niche areas of legal practice, is now maturing into its own sub-industry. Not wholly belonging to the Law, it is a marriage of the Legal and Technology industries which brings fundamentally different thinking and approaches. If we ask ourselves how we can make sense of legal tech in our traditional models, we will struggle to answer in a sustainable way. This is why a new framework is needed.
The Future Framework for Legal Practice developed by FutureLab.Legal is a conceptual framework, simply designed to provide a base from which you can build (or grow) a Law Firm that can adapt and thrive now and into the future. This framework is a new way to envision the Firm or Legal Practice, allowing you to best navigate the opportunities that exist now and make decisions about how you want your firm to be in the future.
We explored the need for a new way of approaching the concept of legal practice. The context around the impact of technology on our profession was briefly explored including the fundamental changes to the surrounding environment which calls for a new way of thinking that lead me to the Future Framework for Legal Practice.
The Future Framework for Legal Practice invites you to a quantum leap in the way you approach the operation of your law practice. Let’s dive into the makeup of the framework, exploring the various environments and the rationale behind its structure. The Future Framework for Legal Practice is made up of three environments. So let us take a closer look at what constitutes them.
Environments - A Concept
The idea of using “environments” allows us to compartmentalise core areas of law firm operations both in concept and in practice. It also creates the necessary separation or “sandboxing” to best align to possible regulatory requirements and importantly, to lay the foundation for a firm that is secure by design in our ever-pervasive technological world.
Ultimately these environments allow us to make sense of how to segment the technology we select from the market, to know what purpose each technology serves and finally how they interact with the other environments. This way of thinking gives you the clarity and agility to address internal changes within the firm and external market demands which together form the twin complementary purposes of your practice.
The Internal Environment
The Internal Environment is where the core processes of your firm are conducted, where the integral legal work of the practice as it is traditionally understood are established. Think of it as your workshop, where you and your colleagues are able to conduct your day to day affairs in a scalable and efficient way. The goal of the internal environment is to augment your human processes and capacity with complementary technology.
Within the Internal environment we have a few sub-areas to identify the core processes that you can select and build a technology stack or “tech-stack” from the existing market. The general nature of the framework allows you to pick and choose not only what you better understand, but also what is more suitable to your particular work-style and scope. Importantly, it allows for iterative change within the firm processes to allow for the existing people to adapt.
In the current stage of legal innovation, the internal environment is built up of the following categories:
Process and Workflow Automation
This concerns any technology that can automate work that typically requires manual human labour. There are many SaaS based services that essentially put a series of tasks that were once manually done into an automated process, moving you into a more consistent, scalable and predictable business operation.
Not all the options in the market are necessarily categorized as legal tech, but those who venture to develop technology for the legal market will have more tailored services. For example, a Contract Management platform service would commonly sit within this sub-area. These services can also act as “glue”, like the industry dominant Zapier, managing the connectedness behind the scenes.
Communications
This sub area is fairly self-explanatory. It comprises any service that provides communication capacity within the firm environment and allows for collaboration and sharing of documents etc. Note that the technology you use for internal communications can also be used externally with clients and partner businesses, however you will need to be able to separate accessibility. An example of this type of service currently dominating the market is Slack which has all the abilities mentioned above and also runs on a subscription basis.
Legal Analysis and Application
This area is more specialised in that it involves legal tech that is being specifically developed to deal with the complex aspects of legal practice. Applying AI, contract analysis, prediction of outcome intelligence are just some areas that would form this tech-stack. This is currently an exciting space globally and most service providers offer technology that will only become more and more accessible over time.
As the cost of these specialized services are quite high, initially legal service providers would contemplate subscribing to one or two of these technologies to form their core service and build their identity around those capabilities. As the technology becomes more commoditized, legal service providers are able to add this capacity to the firm without it forming their core specialized service offering.
The External Environment
The External Environment is the client facing area of your firm. This is where clients are provided visibility and convenience in their interaction with you and your services. Of course, it is envisioned that human interaction forms much of the relationship-building. However it is important to construct a digital experience that not only increases client sentiment but streamlines your ability to build context around each legal situation.
Within the External Environment we also have a few sub-areas to identify the core processes that you can select and build a “tech-stack” from the existing market. The same logic and rationale applies here as it does to the Internal Environment. The sub-areas allow you to make sense of the services in the market and potentially indicate to you the necessary elements for your external facing environments.
Client Portals
Current client portals are a more classic approach to allowing your patrons to digitally “visit you”. Usually it is a website portal where the client can login and have access to a variety of documents, billing and possibly status indications of milestones achieved.
The new approach to client portals is often about interactive experiences for the customer when they digitally “visit you”. Imagine building a tech-stack that starts with an interactive questionnaire of no more than 5 questions (basic metadata collection, multiple choice on what they are looking for today etc.) which redirects to a button list where the (already onboarded) client can upgrade, change the status or add on additional time, products or services complete with terms and conditions. Depending on their choice they could again be redirected to a folder that allows them to download what they're looking for or alternatively it flags someone at the office to contact the client about their interactions.
There are services in the market that are not necessarily considered legal tech, but do a fantastic job of streamlining an onboarding process, product or subscription service selection, and generally creating a more fluid experience for new and existing clients. Creativity and a healthy dose of curiosity are indispensable when curating a solution from the market.
Apps
The fundamental difference in Apps is that the “experience” lives with the client - on their mobile device of choice and sends critical information back to you in order for you to provide your service. Single purpose apps are showing up globally as people develop a solution around a specific question that has enough utility to benefit from the immediacy and convenience of the mobile experience. LSP’s can spend a lot of capital developing apps, however with a little creativity and using the existing “no-code” platforms or infrastructure platforms (from Google, Amazon, Microsoft, etc.) to produce something that is incredibly useful to individuals who may or may not be clients. Building an Alexa Skill would be a unique approach to an easy app that would sit in the Amazon Echo ecosystem.
Standalone Solutions and Scalable Products
As legal service providers embrace this technological shift, move away from playing catchup to taking the lead in the future of law, there will undoubtedly be products, and spin-off solutions that form part of their market offering.
Early examples in the current market are contract templates that are pre-filled via a self-directed questionnaire then available for purchase and download on the site. This example does not require any lawyer input, generates revenue 24/7 and can be accessed by as many people as there is demand. Again, as new ways for interacting with the external environment become commonplace, creativity and curiosity will prove indispensable in the innovative solutions you can build.
Summary
We have now covered both the Internal and External Environments in the Future Framework for Legal Practice. Next, we will explore the Bridging Environment, something that opens an entirely new concept of the way the Law will operate in the future.
The current models of law firms are not designed to benefit from the efficiency and scalability of technology. In the same vein, the technology being developed does not exclusively consider the realities of the current mode of practice, but are designed with a future ecosystem in mind. The Future Framework for Legal Practice is a conceptual framework designed to assist firms in building technology capabilities by reimagining the way a legal practice operates. Using this framework, law firms and other parallel businesses can build new businesses leveraging disruptive technologies.
We explored both the Internal and External Environments, the thinking and rationale behind them and how in combination they form the core capacity of a future-facing Legal Practice. Now we explore the Bridging Environment and go through the thinking behind why it exists and the way in which it expands the possibilities of your now transforming legal practice, bringing exciting opportunities with it.
The Bridging Environment completes the current iteration of the Future Framework for Legal Practice in expanding the vision of the future of legal service providers. This Environment is where the legal service providers interact with other businesses and integrate into a broader ecosystem. Importantly, the Bridging Environment goes beyond asking you what tech stacks or processes you would like between your Internal and External Environments, it now asks where you would like to be situated in the larger market of legal service providers and what opportunities and conveniences you create alongside other stakeholders.
The Bridging environment
The Bridging Environment is where you establish a connection between the core capabilities within the practice you have developed through your tech-stacks and the larger ecosystem which you interact with as part of your business.
One of the fundamental shifts in a future of law reality is the seamless interconnectedness of all parallel services and industries. It involves a constant and steady stream of relevant data and information, some of which will be used to form your differentiation in the market.
Like the previous two Environments, the Bridging Environment is broken down into sub-areas - two to be exact - which serve to help you better understand what tools you may wish to utilise in the existing (and future) market. They also help you define what areas of industry you would like to operate in.
In the current version of the Framework, the Bridging Environment is built up of:
API and Platform Integrations
Data Streams
API and Platform Integrations
This section is about how the legal service providers connect their knowledge and capability, or “work” into the greater market, how they incorporate themselves as nodes in the greater infrastructure. Creating API - Application Programming Interface - capabilities means clients (usually larger ones) and collaborators can have access to the services you have built through their identifiable key and you can stream your outputs or “work” to them.
Think of your Practice as a fountain, would you want to improve the ability for others to drink from the fountain? What mechanisms have you developed that allows people who want water to recognise that your fountain is easily accessible and available? Importantly, are you using universally accepted “signs” so that clients can spot your fountain and know how to use it? Whatever the Internal and External Environment functions you have designed - you will need a way to deliver your work and collaborate with other businesses.
It is important for you to prepare for this reality and to recognise how your practice can benefit from the emerging future marketplace, where others are doing the same.
One of the other reasons for this capability is to collaborate with other legal service providers who specialise in other areas of law or deliver complementary services. Much like how smaller firms will either be approached by larger ones or vice versa in order to tackle a larger piece of work, we can see that future collaboration amongst legal service providers using this model will have bridging environments that allow a consortium or syndicate to form seamlessly in order to service even the largest projects. This collaborative capacity also indicates the leverage those who run the Future Framework for Legal Practice will have regardless of size. Those who wish to specialise and build specific capabilities will be as valuable as the largest legal service providers who have extended resources. Capabilities will be versatile and scalable.
The second layer of interaction APIs create is allowing Aggregators, of which the first inklings are emerging in the market (One specialised early example is ReynenCourt.com and more recently Amazon’s attempt at traditional aggregation with recent IP offering), to produce a platform which will give “click of a button” integration convenience to clients small and large alike. Once the buyer has compared the services against the metrics of the Aggregator (potentially including reviews, ratings, categorisation, etc.) they can select a service and tap into the capabilities of your firm, with the clear transparency of what capability is being delivered and how much it will cost (including responsive charging depending on scope and scale, how much it taxes your internal business functions, how much extra human capacity is required, etc.)
Data Streams
Where the API and Platform integrations allow you to send your “work” in a streamlined way and/or collaborate with other firms, Data Streams are about what information is reported between businesses.
Data streams present a substantial opportunity for parallel industries to begin to develop and interact with the Legal industry. It also serves to assist the Legal industry itself, in the role of compliance and running a practice according to the requirements of the jurisdiction.
There are several parallel industries that work alongside the legal industry, from accounting to finance, to the public sector etc. The business of law itself is something that is sustained by these parallel industries both in terms of support services that lawyers require, and by being clients of legal service providers.
Imagine a situation for example, where a Financial Institution develops products that respond to the specific cash flow requirements of mid-sized firms. This is not a new scenario, however, imagine a product that would essentially establish a data stream between the financial institution and the legal service provider where they can monitor bottom-line revenue of the legal service provider. Based on the conditions of that product, the Financier can then inject funds within a certain pre-approved range when the revenue hits a certain predefined low. In this situation, both the Financial Institution and the legal service providers have what they need - delivered to them in a streamlined manner.
Another example which would generate a whole plethora of startups and business globally: Trust Account monitoring/auditing. Whether serviced by accounting, the Law Society or Bar Associations, or the Regulator of the jurisdiction. Most jurisdictions have extensive requirements for the legal service provider holding money in trust. A legal service provider equipped with Bridging capabilities could establish a data stream with a company that is accredited in the jurisdiction to monitor and audit money held in trust using this system of interaction. In this situation, the work for auditing and maintaining trust money is managed for the legal service provider and the compliance is upheld by the Regulator in a streamlined way with minimal impact to the business and greater oversight to identifying trouble situations.
To be clear, these examples are not suggesting an increase in policing. Certainly, there are nuances and a first principle approach to ethics, privacy and security which must be considered in all applications of technology. The examples serve to open your imagination to the possibilities and effectiveness of the Future Framework for Legal Practice in an emerging reality.
Implications for the future of legal practice
This framework takes into consideration not just how the core function of a law firm of the future would operate, but also how the legal service provider works inside of an ecosystem that includes businesses not directly providing legal services. While the details of the Future Framework for Legal Practice are directed to those who would most use them (owners of legal service providers and Lawyers), it is equally for those who would be audacious enough to build around them.
One of the glaring opportunities considered through the Future Framework for Legal Practice is the existence of multiple blockchain-based exchanges that would be accessible through the bridging environment providing reliable, secure and private data-streams. Whether the focus is the finance or audit examples given in this article or any other emergent needs, third parties are invited to build environments built on the need for trusted information exchange.
My wish for you is to draw inspiration and guidance from this new paradigm shift whether you are a law firm partner, senior or just starting out, a sole owner, student, intern, administrator or technologist. Even those working in parallel industries can apply this thinking to their own work and approach to the legal industry. This vision of a future facing law firm should provide you with a drive and passion for pursuing a creative reimagining of what practising law can be. The framework also creates many spaces and gaps for other areas within the industry and parallel industries that can be filled with new companies serving new purposes. If you feel inspired by an idea that would complement this framework but not be directly related, my hope is that you pursue it vigorously.
FutureLab.Legals vision for sharing this framework
The pace of change around the legal industry is unprecedented. We face a fundamental challenge in the transition away from models that have served us for a hundred years or more, an opportunity for all to consider at whatever size or level of practice. The major gap between the developments being made using technology and those who wish to embrace them is education. Education unlocks potential and enables people to make sense of this new world.
This is why the Future Framework for Legal Practice was created; enabling you to embrace the changes in the ecosystem and empowering you to build or transform your way of practice. It encourages a new way of thinking about the practice and business of law and allows those who want to transform or build a legal service provider leverage the opportunity technology brings now and into the future.
Using the Future Framework for Legal Practice as inspiration, It is our hope at FutureLab.Legal that this series of articles give rise to more businesses that will aim to service the legal ecosystem. FutureLab.Legal’s vision of the future of law is to “raise the tide for all boats”, increasing understanding and opening minds to possibility so that those who wish to step into this new reality can take courage in doing so. We are always available for those who wish to make that change and will continue to work across the various stakeholders in the industry to step into the Future of Law.
The Future of Law is in our hands.