“The future belongs to those who seize the opportunities created by innovation.”
The legal industry has long been mired in conservatism when it comes to innovation. Nothing necessitated a disruption of the healthy flow of profits, the excessive hours, or archaic traditions. But that has all changed.
Innovation is now a major concern because the rest of the world couldn’t wait any longer for the legal industry to jump on board with the digital transformation. As other industries moved forward, law firms are forced into playing catch up much to the benefit of the clients. Let’s look at why innovation in law matters now more than ever!
Satisfy Evolving Client Demands
Law used to be a world protected by intellectual and power barriers. Few would dare question lawyer processes and expenses. Fortunately for clients and innovation, numerous paradigm shifts occurred.
The 2008 recession propelled the need for transparency among professional services and the emergence of e-commerce has instilled an immediacy demand. Of course, there are many other factors contributing to the recalibration of the power dynamic between lawyers and clients, but the relationship has noticeably changed.
Clients demand improved services and billing transparency. They see every other industry innovating and law firms who fail to do so are refusing to serve their present needs. Clients may not know the specific software for law firms, but the demand for speedy services means law firms need to innovate to maintain their client relationships.
Competing with New Market Entrants
Countless courageous entrepreneurs and lawmakers have also grown wearisome of the innovation resistance.
As market entry requirements have relaxed, a groundswell of Alternative Legal Service Providers has come to split the pie. ALSPs break down lawyer’s task lists and apply new technologies to modify and automate. Document review, contract management, IP applications, and more are all readily available from technologically proficient alternatives.
Similarly, robot lawyers and DIY legal platforms compete with lawyers on pricing. The likes of DoNotPay and Nolo allow clients to file simple claims and construct legal documents using templates and automation reducing the need for costly expertise.
Each new entrepreneur drives a need for the legal industry to evolve or risk losing market share. Regardless of the response, the newfound competition rewards clients.
Emerging Lawyers Bring a New Skill Set
Graduating from law school and passing the state bar used to produce relatively homogenous talent. Firms choose from recruits with varying standards of the same skill set. That is not the case anymore.
Today’s law school graduates are taught and motivated differently. They are aware of the opportunity technology brings to law and are equipped to operate most pioneering tools. This skill set will contribute to an earlier than expected ascendancy into leadership roles.
To satiate the appetite for leveraging technology and interest in climbing the ranks, recent graduates apply to forward-thinking firms. They believe innovation-forward firms will develop their careers quickly and will lead the legal markets soon. If firms want to attract top legal graduates, they must subscribe to an innovative mindset.
Slowing Enrollment Rates to Law Schools
Law school entrants grew from 20776 in the 60s to a peak of 52,404 in 2010. In 2020, that figure now stands at 38,202, a 27% drop in just a decade.
The marketplace of emerging legal talent is drastically reduced. The reduction of talent availability means that firms are having to find innovative ways of providing services. Time-consuming processes are first on the chopping blocks. Though resource-heavy tasks have been in the crosshairs of emerging AI and automation software, it is no longer an option to modify. It is a must.
Law firms are searching for tools to automate as many tasks as possible to ensure the legal minds are available for income-generating work. After years of defiance, law firms must innovate quickly to avoid a human resource shortage.
Meeting the Social Needs of Lawyers
The unspoken reality of life as a lawyer is of hardship and mental health struggles. The hours are long. The cases are stressful, and the pressure is mounting. Fortunately for lawyers, the public interest in matters of mental health is diagnosing the depression and substance abuse rife throughout the industry.
The truth about mental health is forcing the hand of firms who historically turned a blind eye to wellness needs. Firms are now compelled to find ways of relieving the mental burden if they want to keep their talent.
Law firms are turning to innovative technology to assist lawyers to reduce their work and travel schedule and improve remote work flexibility. HR departments are requested to develop policies and strategies that help maintain the mental health of the legal practitioners. This is bringing new investment in health and wellness programs as part of a reimagining of the recruitment packages offered.
The irony of the previous innovation resistance is that it contributed to the divestiture of the legal markets and fuelled an urgent demand for innovation today. While law firms may not have been drivers of the original innovative behaviors, clients and competitors have made a growth mindset compulsory.
In response to the call for creative invention, firms are scrambling to get ahead. The gap between invention and the application of innovations is narrowing quickly. To secure a legal firm’s future, seizing the opportunities created by innovation is a necessity.