29 March 2017

Innovation in the Legal Profession

The latest NSW Law Society Future of law and Innovation in the Profession (aka FLIP) report is unlikely to strike some readers as profoundly original, incisive or useful.

The report finds that
  • Consumers of legal services are seeking value and competition is increasing . 
  • New ways of working are proliferating. 
  • Inhouse corporate lawyers are driving change, seeking client-focussed service , using legal technology, re-engineering work processes and monitoring costs. 
  • Changing cultures, consumer pressure and lower prices are driving increased use of legal technology . 
  • New areas of work and new roles are likely to emerge with technology. Artificial intelligence raises regulatory and ethical issues that require investigation and guidance for solicitors. 
  • There is an urgent need for funding for legal assistance and a role for technology and innovation to aid access to justice . 
  • The law graduate of the future needs a range of new skills and knowledge. Change can enhance personal wellbeing if its introduction is appropriately supported. 
  • A variety of emerging, flexible work arrangements (eg freelancing) could promote diversity. 
  • Connectivity and globalisation raise new and great opportunities and threats for lawyers. Globalisation is challenging domestic law reform. 
  • Innovation and changing consumer behaviour require practical guidance for solicitors and raise regulatory questions that require further investigation. 
Recommendations are
  •  Help solicitors share information about new ways of working. 
  • Establish a centre for legal innovation projects to research and support change. 
  • Investigate setting up an incubator for tech-enabled innovation. 
  • Sponsor an annual hackathon for community legal assistance. 
  • Advocate for appropriate funding for community legal assistance. 
  • Empower solicitors to better plan and implement change within practices. 
  • Integrate wellbeing into CPD, and change and innovation projects. 
  • Promote diversity and monitor impacts of flexible work arrangements. 
  • Offer CPD on practical topics in private international law. 
  • Seek ALRC reference on laws that affect cross-border disputes. 
  • Research efficacy of online legal documents and investigate regulating legal information. 
  • Raise awareness of the value of legal advice. 
  • Draft guidance for lawyers as entrepreneurs and businesspeople. 
  • Continue supporting solicitors and innovation by investigating how to reduce regulatory barriers. 
The report is summarised as follows
 CHAPTER 1: DRIVERS OF CHANGE: CLIENTS’ NEEDS AND EXPECTATIONS • Consumers across the market for legal services are increasingly seeking value for money and expecting lawyers to be competent users of technology. • Larger inhouse practices are driving change, seeking greater value from external firms and reducing legal spend. These teams are: • streamlining work processes • seeking and using improved legal technology and • rewarding client-centred service. • Many inhouse teams’ changing work processes and their use of external law firms and service providers rely on dividing work into discrete jobs (unbundling) which are shared between the internal team and external providers. As budgets shrink and competition grows, clients value timeless qualities in their lawyer: clarity, practicality, an understanding of their motives and objectives, a preparedness to work collaboratively. 
CHAPTER 2: LEGAL TECHNOLOGY • Legal practices are increasingly interested in and engaging with legal technology. • Interest in technology is being driven by the availability of increased computing power at lower costs, cloud computing, devices and the internet (mobility and connectivity) and consumer behaviour. • Smaller firms are benefitting from the reduced costs of technology. • Lawyers are benefitting by applying metrics to analyse business practices (eg for costing work) and learning how data fuels machine learning and other advanced computing applications. • New areas of work and new roles are likely to emerge as legal technology develops and matures. • Lawyers’ levels of skill and interest in technology across the profession is uneven and some lawyers require encouragement and support. • Artificial intelligence raises ethical and regulatory issues that require investigation and guidance. 
CHAPTER 3: NEW WAYS OF WORKING • I n New South Wales today there is evidence of various ways of working, including ways of pricing, structuring practices, managing projects, and engaging with clients. These include: • paperless practices • networks of firms • inhouse practices, outsourcing and “insourcing” work • single principals with panels of freelance lawyers • chambers practices • legal “hubs” or “marketplaces” • p art law firm/part technology companies • online and virtual firms • “ alternative fee arrangement”/time-based billers • multidisciplinary practices. • New ways of working are being adopted not only by inhouse practices but in community legal centres, by traditional law firms looking to innovate and by small practices whose agility can be a great advantage. 
CHAPTER 4: COMMUNITY NEEDS AND FUNDING • There is a high level of unmet need for legal services in the community. • The foreshadowed reductions of Commonwealth Government funding from 1 July 2017 will significantly impede the already constrained ability of legal assistance providers to supply necessary legal services to vulnerable people in the community. • The cost or perceived cost of legal services is a significant barrier to obtaining legal advice or representation. • There are many ways that technology can facilitate access to justice provided that solutions are created with expertise and oversight and ethics and design principles at their core. • There are many examples of innovation among community legal assistance providers but the sector is in urgent need of funding. • A technology gap threatens to separate corporate and wealthy Australia, and disadvantaged people with legal problems. 
CHAPTER 5: THE COURTS AND TRIBUNALS • Fiscal constraints and community behaviours and expectations are driving innovation in courts and tribunals. • Delays in court proceedings can cause serious societal ills and in recent years, not all courts have been consistently resourced to meet pressing demand. • Technology is being used to streamline court services. • T here is a growing interest in online dispute resolution. 
CHAPTER 6: LEGAL EDUCATION • I n a changing environment, the skills and areas of knowledge likely to be of increasing importance for the graduate of the future include: • technology • practice-related skills (eg collaboration, advocacy/negotiation skills) • business skills/basic accounting and finance • pro ject management • international and cross-border law • interdisciplinary experience • resilience, flexibility and ability to adapt to change. • Further consideration and research has been identified as being necessary to determine how these skills and knowledge areas could be taught within existing curricula. 
CHAPTER 7: MANAGING CHANGE AND NEW PROCESSES • Innovation has the potential to significantly enhance the personal wellbeing of members of the profession if the introduction of change is supported appropriately. • Change should be incremental and take place within an environment of psychological safety. •  firms as well as sole practitioners will need support and may need expert assistance with strategic planning and the implementation of change. 
CHAPTER 8: DIVERSITY • A cross the profession there are many excellent initiatives under way that are designed to reduce relative disadvantage within the profession. • S ome lawyers continue to be excluded from full participation in professional life and advancement due to discrimination, sometimes operating through unconscious bias. • T he new environment of innovation and heightened competition among firms within the profession appears to be resulting in a greater availability of flexible work. • A key challenge is to ensure that strategies to achieve diversity and innovation reinforce one another. 
CHAPTER 9: GLOBALISATION • Technology, trade and people are crossing national borders more frequently than ever before. This brings risks and opportunities and requires lawyers to adapt as certain skills and knowledge become more important. • Blockchain is a technology in its infancy which could have significant impacts on various parts of the economy and eliminate and create areas of work for solicitors. • Cyber risks are constantly evolving and the preparedness of small to medium-sized firms in the broader economy is poor. Solicitors have a role to play in maintaining their own and others’ cyber security. • A n increase in cross-border transactions and disputes mean that a knowledge of private international law is increasingly important to the practice of law. • T he approach taken by law-makers to their increasingly frequent engagement with laws of other jurisdictions and with international instruments has been inconsistent and the process of law reform ad hoc, presenting areas for improvement. 
CHAPTER 10: REGULATION OF THE LEGAL PROFESSION • Innovation and changing consumer behaviour are raising questions that are of interest to the Law Society as co-regulator. These include the use by consumers of low-cost, fully or partly automated online services and the unbundling of legal work. • T he quality of emerging offerings in online legal information was not established. • Regulators’ experiences overseas offer useful insights into consumer and market behaviour. 
 The Society's recommendations are -
1 That the Law Society actively facilitate information sharing across all sectors of the profession about developments in legal technology, work process improvement and client-focussed service. 
2 That the Law Society establish a centre for legal innovation projects. The centre should: • actively facilitate innovation in legal technology and engage with the development of emerging technologies, such as blockchain • conduct and present research into the ethical and regulatory dimensions of innovation and technology, including unbundling of legal services and solicitor duties of technological competence, in close collaboration with the Professional Standards Department and the Legal Technology Committee of the Law Society • research and design, in close collaboration with the Law Society’s Professional Development Department, continuing legal education programs that assist lawyers to build core competencies in existing and emerging technologies relevant to the delivery of legal services • foster innovation cultures by creating and participating in networks for professionals and producing guidance for solicitors as to the legal technology market • foster partnerships including by actively working with the legal technology sector and legal assistance sectors to seek opportunities to secure help from appropriate technology providers for community legal services • raise awareness of justice-related innovation and of any consultations with courts, tribunals and community stakeholders as to innovations including online dispute resolution • develop strategies to increase solicitors’ aptitude for cyber management (cyber security). 
3 That the Law Society consider establishing an incubator in New South Wales dedicated to technology-enabled innovation in the law. 
4 That the Law Society: • consult more widely with professionals working in novel ways, co-regulators and community stakeholders to increase the level of engagement with new ways of working • continue to raise awareness throughout the profession of new ways of working through the centre for legal innovation projects and Law Society publications. 
5 That the Law Society sponsor an annual hackathon to harness enthusiasm and expertise to help legal assistance providers find innovative solutions to specific problems. 
6 That the Law Society: • continue to advocate in the strongest terms for the reversal of the foreshadowed reductions of Commonwealth funding for the legal assistance sector due to take effect on 1 July 2017 • press the Commonwealth Government to consult with the sector on appropriate levels of interim funding and the development of a robust funding model for future funding allocations.