Over the past few years, innovation and technology have transformed ideas into big businesses. The ride-sharing platform Uber is now so ubiquitous that it has completely upended the taxi industry. Startups such as Uber clearly demonstrate that disrupting established business models can lead to lower costs and a better customer experience that keeps them coming back.
Market disruptors come in all shapes and sizes depending on the industry, but they do tend to share some key characteristics. Critically, they share an unwavering commitment to improving the user experience. The reason for this is simple – people become accustomed to doing something in a particular way, and most will not start doing it differently without compelling reasons, such as ease and efficiency. The legal industry is one that can clearly benefit from innovations that improve the ease and efficiency of working with a lawyer, and doing legal work. This article provides an overview of the different innovators disrupting the legal industry, and how to choose an alternative service that works for you.
The Legal Industry
The legal industry is ripe for disruption. The traditional way of interacting with an external lawyer will likely be familiar to people in the business world:
- identify a legal need that must be addressed;
- send it to the lawyer;
- lawyer reviews the matter;
- meet with lawyer to discuss; and
- instruct lawyer to proceed with whatever next steps are required following the meeting.
The lawyer and their team complete all the work and attend meetings as necessary. All the time taken to do so is calculated as an hourly rate broken down into 6-minute increments, which is then billed to the client.
Of course, with the passing of time and developments in the technological landscape of business, the legal industry has accepted some minor systemic changes. The most common and widely implemented change has been the digitisation of documents and lawyer-client communication. Most legal resources are now available online, and lawyers can communicate with their clients and review or send legal documents via email. However, the change is marginal and aside from easier, more efficient communication, the law firm model remains fairly undisturbed. Lawyers are typically still viewed as specialists whose role is to interpret complex legislation and jurisprudence to provide specialist advice that reflects their best judgment in light of knowledge built up over many years of practice.
For some legal work, the traditional structure is likely still the best one. There may well be cases that demand a highly experienced legal practitioner with a team of junior lawyers at their disposal. There will also be situations where a client has an in-house legal team that is able to provide legal advice without the need for billable hours. These instances usually apply to large corporations and transactions, so what if you find yourself in need of legal advice without an in-house legal team or the funds to work with a traditional law firm?
What Options are Out There?
There are many alternative service providers that you could send work to, and it may be hard to choose between them, depending on the nature of the particular job.
The table below covers the various types of innovators in the legal industry. It is not a complete account of all available options but will provide a good indication of the different organisations. Some of these providers are based overseas. We’ve picked them because they are some of the better-known providers, but it is likely that there are or will soon be Australian equivalents seeking to do the same thing.
|NewLaw Business||Services Provided||Example Organisation(s)|
|Legal Process Outsourcing (LPO)||Outsourcing of high-volume legal tasks such as discovery, and conducting due diligence. LPO businesses tend to minimise costs by using inexpensive labour from cheaper jurisdictions.||
|Legal Marketplace||Online platform connecting businesses or individuals with lawyers who advertise their services on the marketplace. These platforms tend to cater to small businesses and startups.||
|Dispersed Law Firm||A firm comprised of independent lawyers who find and perform work themselves, paying a fee to the firm for them to maintain the administrative and regulatory responsibilities of running a business.||
|Tech Driven Law Firm||A full-service law firm using innovative technology to deliver legal services. The client can access a full range of services and customised documents in an efficient, cost-effective way.||
|Hybrid Legal Services Business||Providing a variety of legal services and support, including in-sourcing, and assistance with large-scale projects such as due diligence.||
|Labour Hire/Legal Placement||A labour hire service, which finds and recruits lawyers for in-house roles.||
|Legal Software Companies||These companies focus on facilitative technologies, such as speech recognition, task delegation, hiring, e-discovery and artificial intelligence.||
|Online Document/Information Platform||An online business that provides access to legal information and creates legal documents.||
How Do You Decide Between Different Models or Providers?
Each model has limitations and advantages. We’re not proposing to look into all of these different models in too much detail but have picked out a few that we think are worthy of further discussion.
Legal Process Outsourcing (LPOs)
LPOs are an outsource function that is perfect for instances where there is a particularly high volume of menial work. Key examples are reviewing documents for litigation or conducting due diligence for mergers and acquisitions.
LPOs tend to recruit legal assistants from cheaper overseas markets to perform these tasks. The most common locations for these workers are India and South Africa. These markets have comparatively high levels of legal graduates and far lower labour costs. LPOs can perform high volume review tasks at a much more cost effective rate than an equivalent team of Australian lawyers.
Importantly, these reviews tend to take place following ‘deal playbooks’ that are set up before the work is outsourced. The client is also able to create a set of instructions that the LPO team must follow. This is a crucial step to the success of a project. It is important to remember that LPOs are not usually staffed by Australian lawyers, so the instructions will need to be clear to avoid issues down the line.
Tech Driven Law Firm
Full disclosure – we’re going to talk about LegalVision here for a minute since we fit into this category.
A ‘Tech Driven Law Firm’ such as LegalVision emphasises the use of internally developed technological and process innovations to turn around high volumes of work more efficiently and cost effectively. Our emphasis on technology means we are exploring everything from machine learning for document reviews to more basic innovations such as using a custom built CRM and document generator.
The advantage of the kinds of innovator firms that fit into this category is that qualified Australian legal practitioners complete the legal work, but at a much lower cost than traditional law firms offer. We like to think there aren’t too many disadvantages, but one of them would be having to accept interacting with lawyers in a different way. For example, LegalVision encourages replacing face to face meetings with online conferencing to discuss advice and work output, as meetings can often be an inefficient use of time for both the client and lawyer.
Legal Software Companies
These innovators look at the ways technological innovation can assist their clients with the practice of law. For in-house teams, this could include streamlined document retention systems, document and email automation and speech to text software.
For the most part, these organisations aren’t doing legal work themselves. Rather, their offering is facilitative – giving private practices and in-house teams the ability to self-service in the most efficient ways. A disadvantage associated with these may be that software can make mistakes, and lawyers may still have to check for errors by hand. They will also need to think about information security when using programs that hold large amounts of confidential data.
The choices are plentiful when it comes to choosing an alternative legal service. Choosing the right tool is important, and knowing what legal technology provider will be the best for your business may not be immediately evident. The best way to determine what will work for your business is to get the best possible understanding of what you need at the end of the day. You may want to drive efficiency in your in-house legal team by purchasing legal software or using LPOs to alleviate menial tasks. Perhaps you simply need contracts drafted for your business and want to outsource them to a full-service firm you can contact online. What you choose will depend on your business and your needs. If you have any questions or require assistance with a legal matter, get in touch with our commercial lawyers on 1300 544 755.