P2P

14 P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | W I N T E R 2 0 2 0 incremental efficiency improvements. Those firms are likely focused on adopting technology, getting it off the shelf and into their practitioners' hands as quickly and as smoothly as possible. Lastly, some firms are looking to bring their clients along on the transformation journey. They can do so by including the clients in the technology and innovation design process. These firms often find value in adding a consultancy arm that can provide dedicated innovation services and digital transformation assistance. In all kinds of markets, firms are also exploring how they can pivot, perhaps by setting up technology incubators or otherwise investing in legal technology startups. Factors Driving Innovation: UK, Australia, Africa, and India While there are numerous forces influencing innovation around the world, we've roughly classified them into four broad categories: • the legal system and regulatory structure, • the maturity of the legal profession, • the level of competition in the region, and • the sensitivity to spending on technology or innovation efforts. The Legal and Regulatory System Regulation can constrain innovation, and so can the flexibility and makeup of the legal system. There may be more opportunity and less constraint in emerging markets with less regulation and fewer established firms. These open markets can present considerable gaps in service, creating opportunities for firms to innovate and quickly move the needle on providing services. In more heavily regulated markets, the amount of work required to bring about substantive changes is significant and fewer players will attempt to do so. Without a complex web of regulations, law firms have free rein to innovate. In Africa, for example, "There are pockets of extreme innovation, driven by the opportunity in the sense that many countries in Africa are not necessarily as regulated," says Cathy Truter, Head of Knowledge Management at Bowmans, an top African firm with offices in seven African countries. "Whereas in other jurisdictions you might be held back by the current, and having to go through regulators to get approvals, we can have very fast- moving innovation in these areas." Where regulations are more established, cultural differences can still drive an appreciation for innovation. For example, many European countries enjoy a data- centric culture that embraces "AI, data, and analytics as elementary parts of their future success." This attitude is spilling over into the legal profession. Maturity and General Culture of the Legal Industry The flip side of the regulatory structure is generally the maturity of the legal industry. In largely unregulated areas, the legal sector is nascent and open to new approaches; in heavily regulated areas, the profession can be so established as to be stultifying. For example, in some regions in Europe, the legal industry has a heavily institutionalized culture, which can make change an uphill battle. "In a jurisdiction where they've never done something, when you give them this new [technology] solution, people will grab it with both hands and use it to its maximum efficiency," Truter said. "By contrast, in a place like South Africa, where we have more institutionalized processes, it's harder to get the lawyers—and clients—to adopt those technologies." There's a balance to be found here: a region that is starting entirely from scratch may, counterintuitively, not F E A T U R E S

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