In the ever-changing field of law, experts argue that firms that refuse to change their archaic ways will be left behind as firms that embrace technology will rise to the top of the market.

1. Will the Digital Age Wipe
Out Law Firms?
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2. Summary:
In the ever-changing field of law,
experts argue that firms that refuse to
change their archaic ways will be left
behind as firms that embrace
technology will rise to the top of the
market.
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3. According to Forbes, law firms need to leave the past behind and adapt to the
digital age. Since the economy tanked in 2008, many firms have struggled to
maintain the level of prestige and power they once enjoyed. The introduction of
new legal service providers, increased outsourcing, abysmal billing rates, and
other changes in the field have contributed to new challenges for firms. Digital
business models, as well as marketing technologies and data analytics, have
created new incentives for firms to change their ways—or else risk being left
behind.
Firms measure their success by the billable hour, revenue per partner, and profits
per partner. These are the center of the law firm model. Many consulting firms
and accounting firms have switched to flat fee arrangements, but such set ups
are rare in law firms. Although clients are able to see just how many hours were
spent on their case, many have become frustrated with the emphasis on billable
hours, since it seems to prioritize time over value or results. Such models may
also cause tension between partners at firms, who may compete with one
another over handling cases. However, law firm rankings are published and
performance metrics are evaluated by hour and headcount.
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4. New legal services providers who implemented flat fee and lower rate services
have reaped the benefits. Some companies that provide e-discovery, document
review, agency work, legal research, patent services, and other such legal tasks
have become competitive, and many have collaborated with law firms. Therefore,
corporations are able to pick and choose which services they want, and from
which provider—which has increased competition among firms.
Many say that firms “let the crisis go to waste.” Instead of adapting, they missed
the growing importance of technology and digital business models. While other
legal service providers created new service models and technology solutions,
firms laid off attorneys and staff and rehired new ones in the recession. By 2012,
the market had changed—a new group of competitors off-shored their teams,
replaced certain tasks with technology, and strengthened their marketing
technologies through social media channels that were backed up by data
analytics.
A majority of firms have been slow to adopt even the most basic technologies,
such as CRM systems. In a 2015 survey conducted by Ackert Advisory, 70% of
firms have a CRM system, but not all actually use them.
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5. In fact, just 7.3 percent of these firms actually have strong usage of the CR
systems. In other fields, CRM is a standard marketing platform that is essential to
growth and client relations.
Marketing processes and staffing have also seemingly fallen by the wayside. A
2015 Greentarget and Zeughauser Group survey questioned over 200 in-house
counsel and top law firm marketers. LinkedIn and Twitter-based content was
ranked fifth among content channels. Additionally, roughly two-thirds of law firm
marketers did not have plans or were not sure about any plans for creating
innovative ways to share their knowledge. Sixty percent did not have a single
individual assigned to oversee the firm’s content marketing strategy.
Of course, firms know that digital business models and new technologies are
important for success. It’s getting these into place that is the issue. A 2015 PWC
survey showed that while 80 percent of firms stated they understood the
importance of a digital strategy, just 23 percent actually had one in place.
In a 2015 MyCase study, firms revealed that their primary focus was on updating
their websites, and moving to a paperless office, LawTechnologyToday.org
reported.
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6. Many marketers and designers recommend that websites be updated every two
to three years to remain current. It is also key to make a website mobile friendly,
as most Internet traffic is from cell phones and tablets. Additionally, firms
reported investing in practice management software and moving their firms to
the cloud.
Many firms may underestimate just how much time they will save by switching to
a digital model. For example, LawTechnologyToday.org added that the typical
office worker makes 61 trips to the fax machine, printer, and copier every week.
Additionally, the site estimates that every misfiled document costs firms $125 in
lost productivity, an average equivalent of four weeks per year.
For firms who want to remain relevant and continue building their brands, they
must begin the transformation. In fact, since law school graduates and associate
attorneys use social media frequently, firms who demonstrate strong digital
strategies may be seen as desirable employers. Additionally, the growing number
of tech startups will also remain interested in law firms who understand their
business models and appear digitally savvy.
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7. For firms that are beginning the adventure of digital transformation, they should
focus on three areas. First, they must reexamine their internal tools and systems
to create connectivity and drive useful data and insights on their clients to
understand where the growth in the firm comes from. Next, firms must create
new processes, invest in marketing solutions, and hire marketers to create
attractive content and share it on social media and the Internet. Lastly, firms must
look closely at which of their services can be digitized to reduce costs—or, they
may examine whether certain services can be enhanced by technology to
improve client experiences. Doing so will certainly increase the odds of survival
for firms that may be resistant to change.
See Law Firms Are Working Like It’s 1995 for more information.
This article “Will the Digital Age Wipe Out Law Firms?” first
appeared on LawCrossing’s employer section. It is the world leader in “pure”
monitoring and reporting of legal jobs, through its active and growing research
into all legal employers throughout the world.
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