The Nonlinear team was recently in Los Angeles. CEO, Shannon Ryan, together with Mary Juetten Co-Founder of Evolve Law and Pat Mansuy, CIO of Nossaman LLP, hosted an exclusive round-table session focused on how digital technology is reshaping the practice of law. The event was attended equally by law firm partners and senior operations staff based on the west coast.
Shannon Ryan, CEO of Nonlinear with Mary Juetten, Co-Founder of Evolve Law and Pat Mansuy, CIO of Nossaman LLP, alongside legal round table participants.
There was recognition among participants that the field is ripe for deep change:
• Ongoing price pressure from clients is forcing firms to do more with less and manage scope more rigorously - how do we work with in-house council?
• Belt-tightening after the last recession, outsourcing and the effects of automation have altered the job market for legal practitioners. New lawyers can expect greater career instability and a possible future of freelance work
• A rigidly hierarchical organizational structure hinders capacity for innovation and discourages technology-oriented investment back into the firm
• A threat of disruption from more nimble, digitally-native legal solution providers is perceivable on the horizon
• A legacy of disparate systems that fail to meet modern expectations of user experience and don’t integrate well, cripples capacity to collaborate efficiently within the firm and derive insights from data
• Innovations such as blockchain and machine learning-driven virtual assistants, in some cases, threaten to cut law firms out of the supply-chain entirely
This is not business as usual.
The perfect storm of factors leaves law firms open to competitive threat beyond anything ever encountered by the industry. UK-based Riverview Law describes this as the legal industry’s iTunes Moment: the time when “accepted norms and ways to do things are being challenged, daily, by increasingly connected customers.”
6 Tips for surviving the change brought by digital disruption
As part of the discussion, Shannon Ryan offered 6 ideas for firms navigating the changes compounded by digital:
1. Technology is a game changer: but think business problems
Look beyond questions like “What about social?”, “Why is no one using Yammer?” or “Do we need a mobile app?” The temptation to see technology as a problem in and of itself is strong. Exploration of the true problem will yield more valuable solutions in the long run.
In his discussion, Shannon pointed to Nicholas G. Carr’s 2003 article, IT Doesn’t Matter. Carr’s premise is that the core functions of IT - data storage, data processing, and data transport – have become so widely available they have transitioned from a source of competitive advantage to an essential and basic cost of doing business. For true advantage, technology must be considered in unique and defensible ways beyond the baseline operational necessities. It must be woven in to key processes and customer-oriented solutions. Shannon suggests exploring these questions to help you get there.
2. Your people matter
In 1998, work changed forever. It was in that year, that employment share of non-routine occupations overtook the routine. Jobs that required following explicit instructions and well-defined rules followed a steady decline, while jobs that involved flexibility, problem solving and creativity followed an upward trajectory.
Meanwhile, jobs have also become increasingly temporary. Contingent workers, by some definitions, now represent approximately 40% of the U.S. workforce and this figure is expected to grow.
What do these trends do to the firm? As the role of jobs that once served as the introduction to the practice give way to automation, the pipeline of legal talent cultivated from within the firm erodes. With a greater reliance on temporary or contract workers, the core identity and knowledge capital of the firm are also put at risk. There is a massive shift out of what was previously “above the line work” with tremendous implications for the firm.
The pressure to do more with less is ever-present. The allure of both automation and alternative methods of sourcing talent will only become stronger. With that, active measures must be taken, in order to retain vision, cultivate knowledge and foster capacity to innovate – even as fewer people might be employed directly within the firm.
With the winds of change in the air, the core talent within the firm will need to be capable of rapidly detecting and making sense of the opportunities and threats brought forth by digital. This requires an employee base with special talent – talent that’s not only great at doing their job today, but in possession of the flexibility and capacity to learn about and adapt to the needs of the job tomorrow.
Steps must be taken to cultivate a digital work environment that promotes sharing and sensemaking. From this environment, the seeds of innovation should grow.
3. Be paranoid of the future
In 2012, Facebook began issuing their Little Red Book to employees. Contained within its pages, were statements about Facebook’s history and values. Starkly printed in white-on-black text was a call to action that has come to dominate the software industry: “If we don’t create the thing that kills Facebook, someone else will.”
Shannon believes that the same thinking must be applied within law firms. Digital has given rise to a host of business models that make the conventional model of the firm appear dated. Within his talk, he explored a few of the business models that have disrupted other industries – rapid exploration and experimentation upon the delivery of legal services, must become the order of the day.
4. Move digital to the core of everything
Are you a business that does digital or are you a digital business? Is technology perceived as supportive or integral to operations? These are increasingly important questions; and the answer may not be as it always has been.
VISA, for example, has come to see itself as a technology company as opposed to a financial services company. Jeff Immelt, CEO of GE said recently, that "this isn't a question of whether or not we're a software company or an industrial company; industrial companies are going to become software companies." Global insurance giant, Allianz, recently announced to their intent to become “digital by default everywhere.”
Across industries, organizations are embracing a shift towards a model that looks a lot more like a software company. The advantage is the capacity to become more innately aware of individual client or customer needs but at wider scale and much lower cost.
Shannon’s point is that digital should not operate in a silo – but must be entrenched in all aspects of the business – sales, human resources, finances, R&D.
5. Get agile & fast
Digital technology is accelerating the pace of business. Company lifespan is getting shorter – particularly for those unable to adapt to changing technologies and business models. Shannon argued that the time is now to rethink the traditional approach to service delivery.
Agile-inspired models of work have permeated the software industry; in some ways, as a coping mechanism for the rapid pace of change. Agile concepts of situational awareness and decision-making immediacy at the front lines will need to make their way into the practice of law as the legal and software worlds collide.
6. Build exceptional digital leadership
If the firm’s leadership has a low digital IQ, then the digital of the IQ of the entire firm will suffer as a result. Careful consideration must be given to imbue the top echelons of management with native digital talent.
In his talk, Shannon pointed to the boards of Disney, Walmart, Pfizer and others to highlight the emphasis these companies are making on incorporating senior digital talent into their leadership teams.
To better understand context and align your senior leadership team, Nonlinear has designed a 45 minute Executive Briefing specifically for legal firms, that analyzes and frames the challenges and opportunities inherent in today’s digital landscape.
Reach out to us if you have any questions, or comment below to share your thoughts.