How Law Firms Can Innovate Amid Rising Client Demands

By Mark Masson, Paul Giedraitis and Christiane Matuch


Clients often tell law firms to be more innovative and use some of the new legal technology available.

In response, law firms typically scan to see what other firms are doing and make unfocused investments in stand-alone custom products or hire technology resources tasked with addressing these demands. These technology and talent investments are then used to market tech expertise in requests for proposal and pitches, and possibly even to solve a problem or two.

But what do clients really want? Those firms that can answer this question will be the real winners in the innovation race.

The first question to ask when evaluating legal technology or a talent investment is: How will this benefit clients in areas they care about?

After all, the real value comes not from short-term marketing impact, but from long-term investment into client needs and ultimately new revenue generation. Unlocking this value will strengthen client relationships and attract new business.

The only way to find out what clients need is to talk to them, listen closely, and develop a true understanding of their pain points. To maximize the chance of success, both legal operations professionals and technology specialists should be involved in these discussions.

Clients are not asking for massive enterprise solutions beyond their business needs, like a complete contract lifecycle management solution when all they need is a central platform to store their contract or a robotic process automation system when there is not enough volume to warrant such a tool.

This is true for many offerings that do not have an obvious need or return on investment. Clients are looking for results, but firms too often prioritize the functions and skill sets needed to sustain an ever-growing law firm enterprise. In doing so, they might miss the immediate opportunities to create client value through technology and innovation talent.

Trends That Bring Value

Now emerging in the legal marketplace are new innovations and technology that create value in three ways:

  • Improving the client experience;

  • Providing increased certainty around cost and outcomes; and

  • Anticipating and managing risk.

Improving the Client Experience

Although the way clients interact with law firms has gone through a major digital transformation in recent years, work still needs to be done to improve interactions. Initiatives in this field are often hard to implement because in general, attorneys believe their services are too unique to be significantly affected by technology.

However, bringing in service enhancements that make client-firm interaction a better client experience can massively improve client satisfaction.

On a basic level, that means making the attorney-client relationship enjoyable and administratively easy by streamlining client intake, implementing sensible and straightforward invoicing procedures, and transparently incorporating the right people and systems to deliver the result.

On a more advanced technical level, service improvements include automating repeatable tasks, introducing seamless record-keeping systems with self-service reporting for clients, and integrating workflow automation that links separate business units together for a single touch-point experience.

All of these improvements have a direct positive impact on clients’ perception of a firm’s service delivery capabilities and can lead to both immediate and long-term benefits.

Providing Increased Certainty Around Cost and Outcomes

The legal sector has long been one of the few industries where you hire a professional and are not necessarily clear about what it will cost you. But clients are now asking for this kind of detail around project management and insights into budgets versus actual costs on legal engagements.

Given this increasing demand for transparency, it is surprising that basic reporting procedures and communication about progress, current delivery cost and what to expect going forward with service pricing still send many firms scrambling. This is typically because information is not readily available and therefore must be gathered in an ad hoc fashion. Being prepared for these requests and having the data ready at a moment’s notice can truly differentiate a firm.

Nobody can predict the outcome of a legal matter with absolute accuracy, but clients are increasingly asking questions that require a firm to leverage its collective knowledge by accessing judicial decisions in similar cases, settlement outcomes, arbitration decisions and court records to identify aspects of a case that can have value in predicting legal outcomes.

This knowledge can be used to inform legal strategy decisions and achieve better results. Having such prior knowledge available to share with clients helps law firms emerge as experts in their field.

Because no one person can retain or analyze all this information at once, knowledge systems and data analytics talent that can keep those technology systems evolving and up to date can be a true differentiator in the legal sector.

Anticipating and Managing Risk

Law firms have a duty to their clients, as well as to their employees, to minimize exposure to risk. Technology and supporting technical talent are critical to law firms’ risk reduction efforts. Risk can come in different forms, but major areas of focus today are on human error and reducing bias in legal representation.

With human error, risk reduction can be achieved through established technologies that address issues like inaccurate timekeeping and billing, developing safe and transparent workflow processes, and preventing the accidental disclosure of privileged or confidential information.

Systems that are meant to prevent errors in repetitive tasks, as well as to safeguard information through advanced data security models, are crucial to managing risk.

But today, clients demand that law firms fulfill certain organizational and people standards as well as compliance and governance policies that support their own investor mandates, personnel expectations and workplace culture goals.

An increasing number of large firms, therefore, are implementing mechanisms to support diversity, equity and inclusion, as well as social and environmental consciousness policies. In order to be considered to represent certain corporations, firms must demonstrate that they are making advances in these crucial areas.

Not having a clear strategy in place nor technical capabilities to measure such advances will put law firms at risk of competitive disadvantage and lost revenue.

In addition, tracking the individual domain expertise, accreditations and industry experience of legal team members alongside demographic data has become increasingly commonplace, as clients seek heightened visibility into the legal professionals who serve them.

Where to Begin: A Talent and Technology Perspective

Regardless of trends in the market, rapid value creation can be achieved by getting the business of law right – and that means improving all client touch points.

Perennial pain points for clients include problematic intake procedures, inconsistent invoicing and poor financial reporting. More often than not, failure to optimize these business functions leads to frustration for firms and their clients alike.

However, one individual does not possess all the skill sets required even for what sounds like a relatively simple series of tasks. Instead, you need a cross-disciplinary team with a range of technical roles. Intake enhancements via collaboration portals must be coordinated with data-driven activities such as conflict reporting, matter creation, budget planning and billing procedures.

Once a client has been onboarded, other functions come into play – like matter management, ongoing marketing and RFP activities, cross-collaboration between practices, and client success programs that also require data collection, monitoring and reporting.

All of these components need to be connected through process optimization. Talent in this space can be found in the recent rise of legal operations professionals – a very specific talent pool with specific skill sets who holistically focus on enabling firms to serve their clients more effectively by applying technical practices to the delivery of legal services.

As clients are now seeking not only improved efficiency but better digital experiences along their journey, disciplines like product management and design thinking are also playing a role in client success.

For law firms, attracting technical talent to support these critical business-of-law functions can be a big challenge, particularly in a red-hot talent market. Specialized technical resources often gravitate to career opportunities in transformative industries, software engineering or fast-growth product companies.

But creating a space with meaningful and shared purpose, aligning on an innovation road map, and seeing it through with tangible results can instill a sense of purpose and mission that keeps this kind of talent engaged. In crafting their employee value proposition to technology candidates, firms need to emphasize that the business of law provides opportunities for growth and value creation.

Advances in Legal Service Delivery

Legal service delivery advancements directly address the practice of law and can truly distinguish firms.

In this arena, we are looking at very domain-specific technical roles that can have a measurable impact on the firm’s reputation and ability to attract talent and key clients. These special projects are usually driven by practice or industry groups, and require a deep knowledge and understanding of the legal services delivered to clients.

Many of the advanced deliveries are based on using data for decision making or processing unstructured data quickly and efficiently. Examples of these technologies include analysis of litigation-related data points on venues, judges, arbitrators or settlement dimensions.

It also includes natural language processing for automated contract review, artificial intelligence advancements in mergers and acquisitions due diligence, and of course, e-discovery solutions – arguably the most mature application of data analytics technology currently in use.

Although law firms have vast data on prior cases, transactions and trends in litigation outcomes, very few take systematic advantage of this information. Data mapping can give an initial overview of what firms have and how it can be utilized.

To make full use of these opportunities, legal domain expertise, data science, software engineering and data translator skill sets are all needed. Knowledge professionals, system engineers and data professionals must work together to define a strategy to integrate internal and external systems to use these vast amounts of information.

To attract talent that can tackle these deep data challenges, firms need to fully commit to an integrated firm approach and the longer-term investment that comes with it. These projects also require a certain amount of ambition – even bravery.

Firms must be prepared to make significant enhancements to data management to make full use of their data goldmine.

Setting Up Tech and Innovation Talent for Success in Delivering High Impact for Clients

Enhancing legal service delivery requires that those who know innovation and technology and those who practice law work together, which is still a challenge for most firms. Firms that embrace this approach are very much ahead of the curve. Extensive prework is often necessary to get these functions to truly collaborate.

An overall strategy and a well-thought-out change management program can help. Typical pitfalls include a lack of accountability and departure from the actual business case. At every step of the way, initiatives must be tested against the overall strategy and business goal.

The specific talent and functional groups a firm should prioritize will truly depend on where it is in the journey. A law firm supported by many disparate legacy systems will need different support than an integrated firm. Law firms also need to decide how much of this work they want done in-house.

Once firms make the leap into what essentially is product delivery, careful consideration must be given to support, relevance in the marketplace and tools to generate revenue. A unified strategy around client growth opportunities, client experience and data technology will continue to help firms deliver maximum impact.

Article originally published by Law360, June 2022

Customer Experience
Law Firms
Professional Services