In May, I had an opportunity to join the Law Firm Marketing and Business Development Leadership Forum* in New York, where I led a roundtable on the role of lawyering technology in marketing the law firm of the future. It may not be obvious to some law firm marketers that a law firm’s practice technology is going to play a critical role in marketing the law firm of the future. But I believe it will. Here’s why:
According to conventional wisdom, law firm marketing focuses on broadcasting the expertise of the lawyers at the firm to target audiences who may be potential clients. Accordingly, law firm marketers must produce regular content such as client memos on their areas of specialization, and must encourage lawyers to speak at conferences and post in social media, etc. - all in an effort to position the lawyer and the firm as thought leaders in their industries and practice areas.
This expertise-focused content marketing is necessary, but for most firms it is no longer sufficient. Today, potential clients, especially larger corporations, are looking for more than just legal smarts and experience. They are looking for a firm that understands how to deliver results efficiently and, if possible, go beyond defensively responding to legal issues. They want a law firm that provides incremental value to their business.
Since the financial crisis, a growing consensus is that to provide additional value, law firms must address
- New pricing models
- Project management
- Process improvement
As of 2015, it is now axiomatic that tackling these “3 Ps” - and demonstrating them - is every bit as important as is lawyerly expertise. The 3 Ps emerged out of the so-called iron triangle of project management, whose three sides are represented by scope, cost and time. Any change in one side of the triangle (e.g. scope) requires an increase in one of the other two sides (cost or time). As the theory goes, it takes a lot of work to rewrite the rules of the triangle, but this is what law firms must do. Alternative Fee Arrangements (AFAs) are designed to change the rules of pricing, better internal organization will help law firms stick to project management methods, and practice technology will help with process improvement.
But this is just the first step. The 3 Ps presume law firms will continue to operate mostly on a project based (if not a billable-hour) business model. But is this necessarily the case? The most savvy law firms are realizing that by re-inventing themselves they can offer entirely new “products” that are not quite as shackled to these project management constraints; instead of reactively taking on projects, they are focused on proactively delivering business value.
This is not news in the UK legal market, where examples of innovative and progressive approaches to legal services abound. For example, Allen & Overy’s aosphere derives revenue by providing a subscription based solution for legal risk management, Riverview Law offers preemptive business-focused legal guidance for a fixed fee and Radiant Law actively seeks projects where it can provide business process improvement.
In the U.S., practice technologies have boomed first in the e-discovery segment, where now even New York’s elite law firms like Skadden are praising the benefits of predictive coding, which uses machine learning to dramatically save time and money on attorney review of documents. As artificial intelligence technologies also start to appear in the advisory and transactional practices, the opportunity to provide proactive business value will and must emerge. Technologies like Neota Logic’s expert systems can provide on-demand guidance, bypassing the email to the lawyer and guiding business principals directly to the right decisions. We at Kira are seeing a similar phenomenon, where our customers are telling us that our contract analysis software (which uses machine learning to identify contract provisions) enables them to understand business risks that would have been prohibitively expensive to uncover by engaging a traditional law firm advice.
So what does any of this have to do with the law firm CMO? Non-law-firm providers of legal services (i.e. consultants and LPOs) have been some of the fastest adopters of legal technology, and accordingly have been able to win large chunks of “unbundled” legal work (largely document reviews) by diverting in-house legal department spend that had previously been earmarked for law firms. The CMO can help law firms fight back. Non-law firm providers’ ability to provide deeper legal advice is limited by their professionals’ lack of accreditation as lawyers. Law firms, if they embrace technology to augment their legal knowledge and expertise, have a wonderful opportunity to attack the unbundling of these services and win back this work, if they want it.
Some law firms clearly do. Dentons just launched NextLaw, designed to foster the development of “new technologies to transform the practice of law”. Nixon Peabody has challenged its lawyers to “come up with at least one idea each year that could be developed into a new product.” Yet many law firms’ marketing efforts have yet to emphasize a message of practice innovation - even while managing partners cite pressure from in-house counsel and technology innovation as the most important pressures reshaping law firms, by far.
I believe we are at an inflection point. These new “products” for law firms are still in their infancy in the U.S., but they will begin to prove incredibly lucrative, and they will need a different kind of marketing support.