Hello everyone, in prepping for interviews and ACs, I have decided this is one of the trickier questions I have come across. Reason being, this is such a general question and it is so easy to slip up and talk about something cliche (BRExit) but how is it NOT possible to talk about Brexit??? It's an elephant that needs to be addressed in the room! This applies to the Technology Revolution as well. So, I have decided to do a summary and quick write-up on why I think the Technology Revolution is one of the main challenges facing commercial law firms today.
The common theme of this is change and competition. The Technology Revolution is going to change the way the legal sector operates, but how?: (Bear in mind these points also work as an opportunity for the firms, based on how you want to answer the question and argue it)
1. The change in client expectations
The flexibility and convinience of technology has transformed clients expectations. Clients will increasingly deamand for legal services that can offer them great value. This generation of clients who are demanding on the go legal services is otherwise known as the "Amazon generation" clientele. (Being able to order legal services from our fingertips like how w order things from Amazon) Examples we can see in how clients expectations are changing and firms need to innovate to accommodate this is how innovative firms like Bird and Bird, BCLP and Pinsent Masons are emphasising on client solution technology to offer them the most convinient, reliable and secure legal services ranging from contracting services to asset protection.
2. The diversification of the legal business
Since we have now seen how clients expectations are changing, law firms wILL innovate to compete. Their incentive to innovate becomes higher and thus, with all the legal tech opportunities that exist around us, law firms can also take advantage of this and diversify their revenue streams by investing in legal technology opportunities. (This can be argued as a challenge for firms that haven't shown signs of innovation because this means competition for them) Examples we can see are how Allen & Overy have invested in a legal tech space called FUSE and they utilise and develop cutting-edge legal technology in changing the legal landscape. Mishcon de Reya are also investing in a legal tech space called MDR LAB. with the help of technology, we can also predict that smaller firms can utilise technology to surpass big firms that are resistant to innovate.
3. The challenges of seeking talent
with the change that comes with the technology revolution, the role of a lawyer is also changing. Lawyers need to be a legal and commercial expert, as well as possessing an acute sense of literacy in technology. Firms need to select their legal talent carefully to ensure they hire the best people for the job. This is coupled with the competition of other firms in attracting top talents. Examples of how firms are changing the way they are looking for candidates include Clifford Chance and Freshfields' new emphasis on STEM graduates who have critical thinking skills and technology literacy.
4. The fragmentation of the legal market
The technology revolution has brought about alternative legal service providers such as Axiom and Riverview. Coupled with alternative business structures, law firms are facing an unprecedented competition in offering legal services to clients whose expectations are constantly changing. There are ways to adapt to this challenge, such as merging, specialising and expanding its international reach. However, firms that are resistant to innovate and adapt will shrink. It is clear that the legal sector is no longer the traditional sector we once knew, so firms need to differentiate their offering and digitally transform.
This is the end of my summary of what I think is one of the main challenges law firms are facing today! Please leave comments on what you think are the main challenges law firms today are facing. I would like to hear more about regulatory changes and geopolitical instability in-depth.
