Law firms today are faced with a perfect storm of increased competition for clients, economic instability, a global pandemic, and a work from home revolution. These factors have forced even the most venerated firms to roll up their collective sleeves to drive efficiency, differentiation, and relevance or face finding their relevance and market share dwindle. Instead of relying on longstanding relationships or unimpeachable reputations, law firms are increasingly having to justify and articulate their benefits and efficiencies to court even longtime corporate clients.
Effective deployment of technology or strategic alliances with leading tech-savvy partners is helping firms stand out from the crowd and woo a much more well-informed client base.
So, how are law firms using tech to get ahead in the 2020 shark tank?
Savvy clients raise the bar
As the ediscovery market has evolved and become a more established and costly facet of business, the caliber of insight possessed by people involved in the buying cycle of ediscovery solutions has dramatically elevated. Formalization of roles in the legal operations space and the creation of the Corporate Legal Operations Consortium (CLOC) have further increased the sophistication of how corporate counsel engages with and procures services from outside counsel.
“Legal operations (or legal ops) describes a set of business processes, activities, and the professionals who enable legal departments to serve their clients more effectively by applying business and technical practices to the delivery of legal services. Legal ops provides the strategic planning, financial management, project management, and technology expertise that enables legal professionals to focus on providing legal advice.”
- CLOC, “What is Legal Operations?”
The application of more sophisticated analysis of performance, relative cost, and comparative efficiency among outside counsel has created an environment where even the largest firms are having to back up their rates and inclusion in a corporate legal panel with metrics and evidence of more efficient methods that yield improved outcomes. Whether it is leveraging technology-assisted review (TAR) to dramatically reduce time and cost to insight or scraping confusing and bloated pricing for streamlined predictable alternative fee arrangement (AFA)-friendly models, firms are leaning on technology to set themselves apart.
Leaner teams need efficient tools
The current economic volatility has led to fairly widespread headcount and/or compensation reduction in law firms and corporations alike. Corporate legal departments have to manage expectations and business demands that have not abated and in some cases have actually spiked with the pandemic. 68% of legal departments report struggling to handle the added burden of COVID-related matters on top of day-to-day business.
As a result, corporate legal teams are turning to outside counsel and technology to bridge the gap between resources and demand for legal services. To meet this increase in demand for some areas of law, firms are leveraging increased outsourcing, advanced technology, and improved utilization of existing technology.
Standing out from the crowd
Increased scrutiny by corporate buyers has brought to light how little differentiation existed between many top Am Law 200 firms in terms of output, efficiency, and overall cost. To address this, recent corporate RFPs have increasingly focused on questions relating to innovation, unique deployment of AI and other advanced technology, AFA, and other ways firms could set themselves apart. During my tenure with a top law firm, I was frequently asked questions like, “How is your firm leveraging AI to drive efficiency?”, “Describe an innovative way your firm is using technology to contain costs,” and “How does your firm track and report on efficiencies gained from technology?”
Corporate buyers are concerned with the bottom line, and expect their law firm partners to have creative ways of containing cost, improving efficiency, and demonstrating value. One of the primary ways to demonstrate all three is through the use of next-generation technology that is faster, cheaper, and more effective at finding evidence in a fraction of the time.
Work anywhere, anytime
The pandemic created not only economic instability, but also has fundamentally shifted the location of the workforce from in the office to home. As a result, the existing methods of managing document review, collecting data, and conducting ediscovery broadly have had to rapidly shift. Cloud-native ediscovery technology that facilitates secure remote document review and data collection has seen an increase in interest, and many of the strapped firms are embracing TAR workflows that allow smaller teams to parse large data volumes more quickly. Companies like DISCO that had these capabilities prior to the pandemic found the shift to be much less painful and have seen increases in output and efficiency despite the shift to remote.
Rise to the top with the right tech
The bar has been shifting for outside counsel for the last several years because of higher expectations and savvier professionals driving the legal service buying process. The economic and workforce impacts of 2020 have accelerated the need for law firms to differentiate themselves, drive efficiency, and adapt. Advanced AI and cloud-native technology combined with tech-powered outsourced experts are helping firms navigate this increasingly competitive shark tank.