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Three ways to innovate in the legal market by Isabel Parker

Isabel Parker is one of those outliers in the legal tech market. She was the winner in the Professional Services category at the 2020 European Women of Legal Technology Awards. Listed as one of the top ten innovative lawyers in the 2018 FT Innovative Lawyers Report, and during her tenure as Chief Legal Innovation Officer at the renowned Freshfields law firm, the office was voted the most innovative in Europe in 2019.

In her book “Successful Digital Transformation in Law Firms: A Question of Culture,” Parker candidly reveals the paths and secrets for a law firm to innovate and achieve the coveted success of digital transformation. Right from the start, Parker poses a question: Why are law firms generally skeptical about adopting an innovative and digital agenda? According to the British jurist, there are three answers to this question.

The first is that law firms, in general, are making money, suggesting that the business model works. Why fix something that isn’t broken? It is undeniable that many law firms are profitable, especially those at the top. However, the concept of “creative destruction,” as proposed by the Austrian economist Joseph Schumpeter, emphasizes that the market is not static and is constantly evolving. This means that new products or services flourish and replace existing ones, shifting from the classic sports analogy of “don’t change a winning team” to what we call “Infinite Organizations,” where constant reinvention is essential. The term “reinvent” has been adopted by the global law firm Baker & McKenzie to name its innovation projects.

The second answer is related to experience. The experience of providing legal services is not comparable to commoditization, as legal services are tailored, highly customizable, and somewhat “tailor-made.” While legal services may not be entirely subject to complete automation, Parker provocatively suggests that not everything lawyers do is complex, unique, and scarce. She notes that lawyers may be rightfully proud of their professional experience, but a significant part of their work may not be as special as perceived. This is particularly relevant as even top-tier firms are not immune to the inevitable transformation brought about by legal tech. At this point, a parallel can be drawn with British jurist Richard Susskind, who, since 2012, in the classic “Tomorrow’s Lawyers,” warned about the necessary mindset change for legal professionals. The concept of tailor-made experience is challenged by a kind of “more for less,” where clients seek better value and are increasingly looking for it in providers outside traditional law firm partnerships, offering cheaper and more competitive prices. Among them are legal tech platforms dedicated to contract management and automation, legal research, document classification and “reading,” data analysis (analytics), legal practice, compliance, litigation management, e-discovery, e-billing (fee management), and many others.

The third answer is based on the brand. Indeed, it is one of the main assets of a law firm and establishes deeper relationships with clients, as trust is at stake and cannot be copied by competitors. However, the inexorable force of technology may erode this trust relationship simply because clients’ businesses are undergoing abrupt technological transformation, and consequently, their service providers must also follow this logic. It’s like a chain reaction of dominoes. Parker suggests that if clients cannot see the lawyer as intelligently adaptable and open to such changes, a kind of tech-friendly professional, they may question the need to pay for a Rolls Royce when all they need is a Mini Cooper.

Parker, who currently leads legal tech practices at Deloitte and citing former Intel CEO Andy Grove, reflects on whether only the paranoid survive. She invites us to answer a series of questions in her work, a kind of practical manual to be followed by all those who intend to innovate in the legal market. It’s a typical bedside reading kind of book.

In conclusion, it’s recommended to watch the lecture by the British jurist at the 2022 Lisbon Law & Tech event (link), which presents even more pathways for the future of legal organizations. Although Parker may not be a tailor in the literal sense of the word, her work, which has already become a classic, reminds us of Coco Chanel, who said, “One cannot be innovative forever. I want to create classics.”

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