The Path to Adoption of New Tools and Methods

Topics: Corporate Legal, Law Firms, Legal Innovation

The progress of one of the great hopes for advancing legal service has been slower than I expected.

I’m referring to the “new entrants” to the legal ecosystem, businesses which offer new tools and methods to lawyers and clients that enable legal service to be delivered better, faster, and cheaper.

The market appetite for what they offer should be ravenous. Everyone knows the clients are demanding more for less. There is obviously great market opportunity for those who seize it and peril for those who don’t.

And, the new entrants are offering very effective new products and services. Based on advances in technology and process design, they really work. They literally make it possible to deliver service at a higher quality for a lower cost. What’s more, the new entrants are well financed, staffed by very bright and ambitious people, and working very hard to penetrate the market.

The new entrants are making progress to be sure, but not at the pace one would expect given the facts I have just summarized.

So what is going on here? Several things.

First, law practice is dominated by successful law firms that are doing very well with business as usual, at least for now. Just as it once was for US Steel, it is hard for them to feel a sense that they really need to change their ways.

Second, the new tools and methods are, by definition, relatively unproven. They are new. Adopting them requires a degree of risk that the tried and true does not, which, especially for lawyers, can be difficult.

Third, adopting new tools and methods would require law firms to undertake the complicated and difficult work of changing their business models. If the work is done more efficiently by technology and process improvement, firms’ revenues will be lower per engagement and they won’t need all those highly paid associates and expensive office space. Changing the way you practice is one thing, changing the whole model is another.

In my view, these impediments will merely slow the pace of progress, not stop it. Over time, the interplay of market dynamics will overcome complacency and risk aversion.

In the meantime, here are three approaches new entrants can take to accelerate the pace of progress.

Show the Law Firms the Big Picture

Drawing on the burning platform analogy, new entrants need to show their potential customers that their platforms are on fire.

Nearly every law firm is experiencing challenges such as increasing fee pressure and the loss of engagements to competitors. But, largely because they continue to earn so much money, they don’t adequately grasp that these developments are part of an overall market trend which imperils their future. New entrants need to help them see this bigger picture. The more they do, the more readily they will be able to persuade them to take the leap to adopt their products and services.

Appeal Directly to the Clients

While the law firms may profit from inefficiency, clients do not. It is therefore much easier to make the case for new solutions to the clients themselves.

In some cases they will adopt the service or product directly. In others, they will pressure their law firms to do so. Either way, it will speed up adoption.

Prioritize the Innovative Firms

The reactions of law firms to market trends vary widely. For reasons ranging from declining financial performance (i.e., smoke billowing from the platform), to ambition, to plain old vision, some firms are more inclined to innovate and adapt than others.

As new entrants seek to penetrate the market for their products and services it is tempting to prioritize those firms who would be the largest buyers or those who are most prominent in law practice. The best approach may actually be the inverse.

New entrants should prioritize those firms which, for whatever reason, are disposed to embrace change to improve the ways they deliver legal service.