P2P

Winter2020

Peer to Peer: ILTA's Quarterly Magazine

Issue link: https://epubs.iltanet.org/i/1323358

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15 I L T A N E T . O R G be as free to innovate because it is still figuring out what needs to be done and how to do it. This tension also plays out on the micro level with individual lawyers in firms. The junior lawyers— commonly thought of as the most tech-friendly— are often consumed with learning the law and the job, such that they are less able to appreciate and embrace innovation. As a result, it's often the experienced, more senior associates who are the real innovators. These established practitioners know the law, understand the necessary results, and grasp innovation's value in reaching those results more quickly and efficiently. Competitive Pressure Countering an established legal market's inertia is one of the most significant innovation drivers: business competition. Competitive pressure is perhaps the primary driver of innovation in the UK legal market, which has had to grapple with the Big Four accounting firms, among others, ever since the passage of the Legal Services Act 2007. The Act allowed external ownership of law firms, known as Alternative Business Structure (ABS). That pressure has led to some widespread practices, such as firms developing consulting arms to aid clients with legal technology. In a recent example, Mishcon de Reya has launched its consultancy, MDRxTECH, to "provide clients with digital transformation advice and legal engineering services." The competitive picture is similar in India. A part of the market is dominated by legal process outsourcing firms (LPOs), and independent practitioners and law firms must decide whether they wish to compete or collaborate. Komal Gupta, Head of Artificial Intelligence and Innovation for Cyril Amarchand Mangaldas (CAM) in New Delhi, explains, "LPOs are a class apart in using legal technology because their outsourcing work is only possible through technology. Their lawyers are always going to be tech-savvy, and that's driven some changes." In response to the competitive landscape, CAM has adopted dedicated technology for contracts and due diligence review, eDiscovery, and legal research, as well as proofreading and document automation. In other emerging markets, there may be a question of who firms should consider their competition. For example, Truter says that in Africa, "The majority of our customers are international clients that operate with the best international law firms, so that's who we benchmark ourselves against. That's why we're trying to be first movers with AI, transaction management tools, and other innovative approaches." Jumping over an ocean to Australia, similar pressures are at work. The legal services industry there is valued at $21 billion and—due to the rise of legal services provided by the Big Four accounting firms and disruption from more agile, streamlined "NewLaw" firms—has become intensely competitive. This has led to intense pressure for innovation and legal technology. While many Australian firms are taking a cautious approach, Australia's thriving legal tech startup scene enjoyed more than $1 billion in investment in 2018. Sandler notes, "Culturally and from a legal system perspective, Australia is well placed to take advantage of startup and legal operations growth in these geographies, and we have a competitive legal market with few large players, which forces many to engage with innovation and transformation. As such, I think we are seeing a strong focus on innovation in Australia within law firms and are starting to see in-house teams really focus on this as well." Investment in Innovation Unfortunately, despite the availability of legal technology offerings, legal departments across Australia tend to underinvest, allocating only 4 percent of their internal expenditures to technology. Without investment, innovation can stagnate. Conversely, with the right strategy "Competitive pressure is perhaps the primary driver of innovation in the UK legal market."

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