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The year 2020 has been a challenging one, and the legal industry has taken a big hit. Law firms across the globe are pivoting to install smarter tech solutions to help them navigate a rapid shift to a digital reality.
The legal sector as we know it is inundated with paperwork, leading to significant amounts of time being spent on non-productive administrative overheads to manage paper records. Despite firms embracing new digital software solutions a large amount of information they receive, and produce, is still paper based. Whatever the circumstance, firms must ensure business continuity, and embracing Digital Transformation solutions are critical for success.
Robots are not (yet) replacing lawyers, but AI’s capacity to automate knowledge-based work, in particular its rapid processing of very large amounts of text, means that it can take on a number of legal tasks. The impact of this is likely to be, not the loss of jobs, but changing roles, new types of legal services providers, and new forms of organising in existing law firms.
By now, most lawyers and law firms have started to realize that the legal industry is most likely not immune to digitalization and significant other changes in the next five to ten years. Indeed, there is little doubt that digital tools and technologies will profoundly affect and change the way business is being conducted in the legal industry.
This realization normally leads to next questions: How can we deploy Technology in the legal space? Which tools should we implement? What are the best tools on the market?
It is however important to note that Digitalization is not primarily about the question of which tools to use, but a strategic framework on how to generate new business models and products through the use of data and technology.
Digital transformation is a long, challenging process that requires, first of all, the willingness to change and then, secondly, to experiment and take action.
First step: It’s not about tools, it’s about the process
Digitalization is fundamentally about change, namely organizational change. Digitalization is not primarily about the use of software, but rather the organizational change related to people, processes, strategies, structures, and competitive dynamics.
The study on “Digital Business Transformation” gives a striking example: “The importance of organizational change is well illustrated by Kodak’s fall from its position of market dominance, and its ultimate demise. It cannot be claimed that Kodak was not innovative. The world’s first digital camera was develop by the company in 1975 and it made major investments in digital capabilities throughout the 1980s and 1990s. Kodak failed primarily because it was not able to make the necessary adjustments to adapt to new markets and changing customer requirements. The company was encumbered by legacy infrastructure, people, and knowledge that became increasingly obsolete, and was not willing to make tough choices early enough to adapt to changing market demands. In other words, it failed to enact sufficient organizational change.”
This example clearly shows that a clear change process is necessary to win the digitalization game. Therefore we need to understand what must be transformed and how to make the required changes.
Thus a strategic view on things, a roadmap, before jumping to conclusion, is imminent. This strategic change process needs to start with the end in mind: How can and should a current business model be changed or adapted that is built on a foundation of digital technology?
Second step: Having a vision board and stick to it
As Simon Sinek puts it: “Start with why”. Digitalization can be motivated by a number of factors. The impetus for change can stem from consumers who require better, faster and cheaper products and services. The impetus can also come from new competitors in- and outside the legal industry. The motivation for change may also originate from certain technologies or tools that are deployed by (existing and new) customers. However, this source of motivation normally only depicts a lack of strategic vision. The digital transformation process should be guided by intrinsic motivational factors and not by mere external ones.
To engage in a digital transformation process there needs to be a clear vision of why a stakeholder in the legal industry wants to be digitally transformed. Curiosity about new things is certainly helpful, but not sufficient to guide the transformation process. These questions will help you sharpen your vision:
- What is our vision of our services in 5, 10, 20 years?
- What added value to we create for our clients?
- How do we want to win pitches in the future?
- How can we differentiate ourselves from competitors?
- What impact does the digitalization in our industries have on the legal industry?
Third step: Understand what could and should be digitalized and innovate
Digital transformation isn’t coming. It’s here.
The vast majority of law firms, 8 out of 10, aren’t ready for the transition. In fact, these firms haven’t even begun to make the transition. A vision itself is not executable. A “digitalization project” is therefore the concretized subset of the overall vision.
Digitalization projects may take many forms. According to Global Center for Digital Business Transformation, at least seven categories can be distinguished which could be transformed digitally. The following list comprises of the most important elements of an organizational value chain as it relates to digital transformation and establishes a clear framework for digitalization project within a law firm:
- the business model (how a company makes money)
- the structure (how a company is organized)
- the people (who works for a company)
- the processes (how a company does things)
- the IT capability (how information is managed)
- the offerings (what products and services a company offers)
- the engagement model (how a company engages with its customers and other stakeholders)
Each process can be assessed in order to improve it – with or without technology (legal project management will become an increasingly important part in every law firm). If a law firm wants to truly transform into a digital law firm it should start with a proper assessment of the processes and its potential for digitalization. This process will be most likely burdensome as it requires to think and work in new ways and to leave well-trodden paths. This all requires a clear vision and leadership to stick to the game plan.
On the other hand, an innovative culture is about setting the right beliefs, expectations, and sense of purpose. Make no mistake, it is not easy to create an innovation culture in the day-to-day business. And there’s no singular method to creating a culture of innovation. When you are cultivating innovation, you are cultivating a unique system, which means you have to be thoughtful about your approach. Whatever you do, it should align with the values of the law firm and with the firm’s goals.
Establishing a culture of innovation and making it stick also depends on understanding the ‘climate’ within a law firm: How will the firm react during periods of experimentation? Which structures, behaviours, goals, and people must be in place to unlock innovation and which structures, behaviours, goals, and people, if positioned improperly, would create discord?
Some tools, tactics and ‘building blocks’ are identified to develop an innovation culture:
Staying open, Celebrate new Ideas, Embracing failure, Empower innovation champions: amongst others.
In conclusion, the 3 steps articulated will not be complete without taking Action. Merriam Webster defines Action as “to do something: to act in order to get a particular result”
The truth is, while most of us know a lot about earning money, making things happen and bringing about change in the world, only a surprising few get to have all the abundance, glory and satisfaction this world has to offer—simply because they are the select few who consistently take action.
Taking action is the one thing that separates the winners from the non-winners…the haves from the have-nots…and the high achievers from the everyday people.
Perhaps you’ve already seen someone create a big win in their life, only to grumble to yourself, I could have done that. Or perhaps you’ve watched as a co-worker launched a new project that included your ideas—only to conclude that you stood by while they took action.
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