In the Gazette’s roundtable event on the modernisation of the legal profession, 11 people gathered in a room to thrash out what the issues are and how law firms can face up to them.


Though there were representatives from law firms with 200 and 600 staff, most came from the smaller end of the profession. This was by design – the larger City and regional commercial law firms live in their own rarefied world, the experiences of which most law firms do not see as relevant. The Gazette wanted to hear from a range of firms, from a sole practitioner to an IT chief of one of the smaller City firms. The forum was developed to offer an exchange of ideas, and what follows represents just some of the key points.



The panel boiled down some of the major issues facing the profession to legal reforms and commoditisation, with the general feeling that IT can help the current and future business of law far more than partners currently understand.



William Flack, a partner at two-partner London-based Flack & Co, told the forum how his firm uses technology to drive down costs and increase efficiency in the face of the legal aid reforms. Flack & Co uses an advanced set of solutions including digital dictation, but in particular scanning all incoming documents and destroying or returning the paper originals unless they contain an original signature, making his office as digital as possible.


‘Embracing IT was essential in the legal aid sector to meet the threats and opportunities. We kept finding that we were overheating as a small firm, with massive amounts of demand from clients, and that we could only take on a certain amount. But now we’ve been able to take on more clients without increasing our size – in fact we’ve decreased it.’


Simon Meehan, chairman of the Legal Software Suppliers Association and head of software company AlphaLaw, agreed that technology can make a big difference in legal aid work. ‘Costs have been driven down in the legal aid business. You can’t set the rate, the rate’s set for you, and it has been moved down and down. You have to embrace the technology to take cost out of the business, whether that is making the people more productive or using the technology to get rid of the people, whichever way.’



Reforms to legal aid are not the only driver. Future reforms to the whole profession, driven mainly by the Clementi review of legal services, are seen almost universally as an opportunity by the forum panel. The two dedicated IT chiefs on the panel, Jon Gould of top 50 City firm Charles Russell, and Sam Luxford-Watts of 24-partner central London practice Winckworth Sherwood, cannot wait for law firms to be ‘more like other companies’.



Mr Gould explained: ‘When I’ve talked to lawyers about Clementi, they see it purely in terms of... investment. I see it completely differently. I see a whole load of corporates out there which have legal departments bigger than most law firms and which, if they have the ability to turn those from cost centres into profit centres, are going to seize that opportunity. This whole thing is going to be split wide open.



‘Sam and I will love Clementi because it will finally give us the opportunity to have a stake in our employers’ business [as non-lawyer partners].’ And that business will quite possibly be headed by non-lawyers who have solid business experience.



‘A firm’s not going to run as a corporate unless it has got corporate people in there running it,’ said Mr Luxford-Watts. ‘Most lawyers are not corporate people.’



Using technology to be more like a business is how James Knight, managing director of virtual firm Lawyers Direct, works. Lawyers Direct contracts 45 self-employed lawyers, but has a very small management layer. ‘The wonderful [thing] about structuring away from employment and towards self-employment is that you never have any problem with dead wood. It’s self-regulating. If you don’t work, you don’t get paid. It’s fair.’



One of the reasons why rapid change is needed, according to the panel, is the speed with which clients are wising up. They want more from firms, for less. As Vicky Harris, business development director for Merrill Legal Solutions (formerly WordWave), said: ‘Clients are more aware of the huge overheads and expenses that large firms have in terms of these expensive offices, processes and systems. They are becoming a lot more price-sensitive, and firms are having to put in intelligent bids, showing how they’re utilising technology, to win the business in the first place.’



This hankering after more for less has driven other businesses towards commoditisation and maximum efficiency through technology. Law will be no different, and the changes are happening now, said the panel members. How firms react to and exploit commoditisation will spell either their demise or their domination.



Exploiting commoditisation and using it to a commercial advantage is the essence of Out-Law, the legal news service set up and edited by Struan Robertson, senior associate at national firm Pinsent Masons. ‘We took the view that basic information is something people expect to receive free of charge,’ he told the panel. ‘We don’t make our money from giving out basic legal information – we make it from legal advice, and so Out-Law is really giving away a lot of useful material as a marketing exercise. It gives people something valuable and demonstrates our expertise, and people come to us as a result of that. It’s a very subtle way of selling what we do. A lot of people use it – some of them are never going to become clients, but the number that will makes it all worth our while.’



Out-Law has certainly been popular, and the value of giving away basic legal information because it is a highly commoditised product to show off a firm seems to have little better proof.



But while IT can solve some issues, it will not work for everything. And getting this through to partners is not easy. Disaster recovery, for example, is far more of a business issue than one of IT.



But remote working, being embraced at Charles Russell and Winckworths as well as the basic working model for the virtual firms on the panel – The Legal Desk and Lawyers Direct – is an element directly within IT’s remit. Tara Trower, partner in The Legal Desk, said: ‘Our technology and telecommunications clients expect us to use technology in the way they do. Some of them would be appalled if we sent them invoices purely on paper. They’re quite happy to work in a virtual environment. In fact, they expect it. They don’t expect to have to come in to London to meet us.’



However, the panel agreed that certain clients will have radically different needs, and it will be a key challenge for law firms to serve both kinds of client. The question is: how can technology help? Apt buzzwords are ‘customer relationship management’ (CRM) and ‘business intelligence’ (BI), technologies used extensively in the world of industry and currently being pushed hard at the legal business.



Firms need to grasp the nettle and use business intelligence and management information to see whether they can be profitable in the sectors they are in, said Bill Kirby, ex-sales director for legal IT firm Axxia and now a consultant there. This will help them ‘make that big and brave decision of pulling out and admitting a particular sector is not profitable’.



The panel agreed that, if properly implemented, CRM has enormous potential. However, if it is underused, it is merely an expensive Rolodex. Overall, misusing the technology they own is one of the major mistakes some law firms are making.



‘There are huge amounts of technology out there and, in my experience, they’re not using it,’ said Mr Meehan. ‘Small firms are just skimming the surface with what they’ve got.’



Technology will also, in theory, allow the smallest of firms to compete with the largest for certain types of work, said the panel’s sole practitioner Justin Patten.



‘The sole practitioner now has a strong opportunity. Due to the explosion in technology, all of us, anyone doing home work, can be in competition with anyone else.’



So what do law firms need to examine right now?



One answer that provoked nods of agreement was learning how to start working as any other kind of business. It is easy for lawyers to say they are running their firms as a business, explained Mr Kirby, but it is getting across the need to change from top to bottom that is at the heart of this matter.



‘Most law firms do conveyancing, but that is disappearing as it goes to the bulk providers. They do some personal injury. They do wills and probate. Many of the work activities that the small firms do, the high street firms and the like, are disappearing and they’ve got to face that.



‘They’ve either got to consolidate or get in with somebody else,’ he says. ‘And embrace technology like they’ve never embraced it before.’