COLUMN > Innovation in Law
BY TERESA MATICH
We’ve reached a turning point in legal technology. More and more, the role of technology in the future of the legal industry lies in its potential to improve the client experience. And in many cases, we’re not waiting for an exciting new tool, feature, or innovation to enable us to serve our clients better. We already have the technology; we simply need to adopt it and incrementally improve the way we use it.
Over the past five years, the main themes from Clio’s “top technology trends to watch for” survey11 http://www.clio.com/blog/legal-technology-trends/. have moved from blockchain and AI to empathy, easier experiences, and better client service. And that was before a global pandemic forced those hesitant to adopt technology to transition to online services in order to keep serving clients and stay in business.
The pandemic-pushed technologies we saw law firms start using en masse are nothing new: video conferencing software, voice-over IP phone services, and cloud-based document management software are all well-worn tools in industries outside of legal. What’s innovative isn’t the technology itself, but how lawyers are using it. A new process, a new focus, and a new goal can amplify the benefits of technology for both lawyers and their clients.
Take the results of Clio’s most recent Legal Trends Report,22 http://www.clio.com/resources/legal-trends/. for example, which looked at aggregated and anonymized data from tens of thousands of legal professionals to compare how the use of three technology solutions within the Clio platform—online payments, client portals, and client intake and CRM (customer relationship management) software—affected business performance. Law firms studied who were using the technologies saw a comparatively better year-over-year performance throughout the pandemic. Through the summer of 2020, law firms that used electronic payments collected 2 to 3 percent more. Meanwhile, firms using client intake software in 2020 saw over 20 percent more cases every month from February onward. Overall, firms using online credit card payments, client portals, and client intake solutions together were expected to collect $37,622 more revenue per lawyer in 2020 at the time of the report’s publication.
What’s the purpose of these technologies? To provide a better, smoother client experience.
According to the recent Clio report, 65 percent of consumers prefer to pay using electronic forms of payment. Providing this option means law firms are more likely to get paid faster and collect more, but crucially, it also means convenience for the client. Relatedly, 52 percent of consumers believe that most legal matters could easily be handled remotely without having to meet in person, while 26 percent say that lawyers who aren’t able to represent their clients remotely are not good lawyers. Even if we look well beyond the pandemic, remote representation would make a world of difference for clients who were previously forced to take time out of their workweeks to commute to a downtown office just to gain access to the legal system. The innovation here is a client-centered approach, enabled by technology, that leads to a better experience for the client and more efficiency at the back end of the firm.
Let’s talk in more depth about what it means to be a client-centered law firm—and what it doesn’t mean. Many firms believe that they’re client-centered, or at least that they have a focus on client service, because they do what they’ve always done. They continue to provide what the client has always expected from the legal experience—formal case updates on crisp firm letterhead, for example—without digging deeper to grasp what the client truly wants. What’s more important to legal consumers: the formality of case updates, or their frequency and simplicity? The answer to this question will depend on a given firm’s practice area and clients, but we’re betting that many clients would choose the latter.
As Clio co-founder and CEO Jack Newton explains in The Client-Centered Law Firm,33 www.clio.com/resources/client-centered-law-firm/. being client-centered is about creating a good product-market fit. In other words, you need to get laser-focused on what it is that a client is truly looking for, knowing what it is about your offerings that meet that need, and delivering that service to clients in a way that makes their entire legal experience as effortless as possible. There is not a single client who has ever wanted a lawyer—what clients want is a solution to a problem. They come to a lawyer because they expect the lawyer to solve that problem.
Being client-centered doesn’t mean sacrificing firm efficiency or success either. In many cases, a focus on providing a better client experience will uncover plenty of opportunities for decreasing overhead, improving efficiency, and generally improving the day-to-day work of employees at the law firm. Technology is almost always a key factor here, but innovation is driven by improvements in process. Successful law firms strive to understand their clients’ needs well and to meet them with existing technologies.
Consider the billable hour. In some cases it may still make sense for clients to pay hourly, but in many cases the billable hour does not make sense for legal consumers. Using an alternative fee structure, such as flat fees (especially for routine legal needs) and providing price predictability offers more value and peace of mind to clients. This type of billing can be better for law firms, too, providing greater revenue predictability and helping to attract more clients.
So why do so many lawyers still use the billable hour? It might be due to years of industrywide inertia and hesitancy to change, the perceived simplicity of tracking time worked, or simply “we’ve always done it that way” habit. But the billable hour also might live on because it’s the most straightforward way to stay on the right side of keeping fees “reasonable,” as required by most state ethics rules. ABA Model Rule 1.5 prohibits fees that are unreasonable, but what counts as reasonable or unreasonable depends on a number of factors that must be evaluated on a case-by-case basis.44 www.abajournal.com/magazine/article/lets_be_reasonable. Which raises another issue: Client-centrism is the wave of the future, but there are structural barriers making it more difficult for legal professionals to get there.
Our courts provide an example of a structural barrier. Systems are structured around what makes sense for lawyers, instead of what makes sense for clients. Pre-pandemic, it made sense for litigators to go to court every day during a trial; it’s part of the job. But for clients, this schedule means taking time off work and taking on additional stress just to get access to the legal system. We believe our judicial system is good at discerning the truth, and yet we can’t imagine a justice system without the live theatrics of a jury trial—and clients pay the price.
None of this is what most clients are really looking for, which are lower-cost legal solutions that require lower demands on their time.
The good news is we can do better, and many of us are already thinking this way, thanks to technology that’s long been available and has more recently been adopted by more and more legal professionals. This year’s Legal Trends Report found that 89 percent of legal professionals surveyed believe court systems can be improved with better access to technology, 88 percent of legal professionals believe that the public should be allowed to access court files electronically through an online portal, and 45 percent of legal professionals believe technology can help create a more equitable justice system. Many of us want change: We just need to continue adopting technology in private practices and in our courts so that we can leverage it to come up with creative, client-centered solutions.
We need to think beyond what’s good for our firm or for the legal industry and instead think about how to move forward with clients at the center. The gap between the service lawyers provide and client expectations is now narrower than ever thanks to the increased use of technology that became a necessity over the past year. If we can keep up this momentum, there’s a huge opportunity to improve the way clients engage with both their lawyers and the legal system, leading to happier clients and more profitable law firms.