On 29 April 2021, the BRYTER Legal Strategy Symposium took place online. The topic of the symposium was “From Services to Products”. Moderated by Mark A. Cohen (CEO and Founder, Legalmosaic), the participants Michael Grupp (CEO and Founder, BRYTER), Dan Reed (CEO, UnitedLex) and Bill Deckelman (Executive VP and GC, DXC Technology) discussed the challenges and opportunities in turning legal services into digital products, and the strategies to consider. The participants especially took the so-called digital transformation of the legal industry and the changing demands on and ideas of modern legal service into account.
The observations and prognostications made in the symposium’s discussion can be summarized as follows:
While digitization has been advancing for a long time and has revolutionized many business sectors, the legal industry is just starting to experience the beginning of a digital transformation. Legal-tech companies not only want to change the legal industry at the edges and support the conventional work of lawyers anymore, but also want to fundamentally change and revolutionize the legal industry as a whole. While digital transformation has already separated the leading companies from all others in other business areas, such separation could be also expected for the legal industry soon. Digital legal service offerings will prevail in competition.
Digitization is not just about software. It is also about work-flow assessment, process analysis, information flows, training, collaboration, and a paradigm-shift in management. The digitization of the legal industry will lead to a better integration of legal services into client’s processes.
That digital transformation in the legal industry has progressed comparatively slowly so far is due to the fact that legal services are heavily regulated, and the legal industry has managed well without the demand for digital contributions. Furthermore, the legal sector is very precedent-based. But today’s world demands more innovation than precedent. Therefore, the legal industry needs to be more progressive and revitalized through digital transformation.
Unlike in the past, technology today is not demanded just for technology’s sake. The use of digital technology has become a core business need. Though it is not to be expected that legal service providers themselves will experience an immense technological change. Rather, a paradigm shift in business and behavior is to be expected. The parties involved in legal advice will change. Legal service providers will become customers of legal product providers. There will no longer be a dialog only between the service providers and their clients, but the legal product providers will be involved in the consulting relationship as well.
Key elements of successful implementation of legal products are empowerment, transparency, work-flow insights and well-working technology. By taking these aspects into account, a more customer-oriented practice and better customer experience can be achieved. The element of empowerment is a response to the increased need of customers to be involved in processes in a self-determined and independent manner, e.g., through self-service portals. The transparency factor also plays a decisive role here, as customers can be given an insight into information flows and processes.
In the end, value to business is decisive. The digital transformation of the legal industry will turn legal service and product providers into business partners of their clients.
Risk assessment will be promoted by digitization since data can be made available more quickly, more easily and in more diverse ways as well as more transparent for all parties involved. It can be presumed that data will become the most valuable asset also in the legal sector. Mere legal expertise and knowledge will no longer be exclusively demanded. The ability to accept change and allow innovation is becoming increasingly important for lawyers. In addition, digital skills are becoming increasingly important. Creativity, ingenuity and the ability to adopt new perspectives will be crucial for future lawyers as well.
Moreover, a change in the valuation of legal services is to be expected. Up to now, billable hours have played the most important role. In the future, valuation will be based more on the outcome than on the time required. This change in understanding will be accelerated by the development that many legal services are to be standardized through digitization and will change from services to products. Outcome-oriented valuation of consulting already is a trend.
To conclude: Not only services or products will be sold by the digitalized legal industry in the future, but also user experience. Corporate legal departments will become more diverse in terms of the skills of their employees. Customer empowerment will take place, legal services will become more broadly available, and lawyers will have to be more open and dynamic. Legal advice will be more often regarded as a part of the value creation processes of companies.