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Australian small law is already transacting in a digital world, and innovation is not just for larger or cutting-edge firms anymore was the resounding message from Smokeball Founder and CEO Hunter Steele and all the speakers at the inaugural Smokeball Spark conference for small law firms and sole practitioners to more than 330 delegates in Sydney last Friday.
The ‘new’ new law
“COVID has made every firm a new law firm in some regards,” said ALTA President Karen Finch. “It forced the whole legal sector to change its delivery of services and ways of working. Now small law firms are all innovating in real time, working flexibly and being adaptive in their pricing and technology adoption to meet client needs. Small firms are primed to lead the next phase of progressive law offerings, much more so than the mid-size or large firms.”
“Small law is 82 per cent of the legal industry in Australia”, she added. “With every business currently reviewing their legal spend in a recession environment, there is a huge opportunity for innovative small law firms that are ready to win work from larger firms.”
Indeed 64 per cent of delegates in attendance agreed or strongly agreed that they had the characteristics of new law firms including a collaborative approach to work, flexible work policies and being focused on client outcomes. 12 per cent disagreed, and 3 per cent strongly disagreed.
The market for adaptive and digitally focused legal firms does not just come from businesses but from the highly discussed, digital natives. “Client expectations have shifted rapidly in the last few years for individuals,” said John Ahern, Global Head of Property, InfoTrack. “They are less inclined to walk into a firm to do business, they have an awareness of security issues and they want more digital engagement, expediency and transparency in their engagement with firms”.
Tom Dreyfus, CEO & Co-Founder Josef agreed: “Client communications and access to information on matters has become much more important. In the Netflix era, clients want access to services on demand using online digital solutions. They don’t want to wait 24 hours for a call back”.
Recruitment and Retention
In addition to a shift in client expectations, there has been an expectation shift in graduates and younger lawyers. “This tech-first generation of lawyers want their workplace to utilise the technology they have learned about in University to automate administrative tasks and free them up to do exciting legal work and get involved with clients”, said Karen.
Terri Mottershead, Executive Director for the Centre for Legal Innovation warned that the new generation of lawyers don’t want to work in a traditional model of backroom support for years. “Our future employees embrace autonomy and want to own a project, have client contact, and contribute early on to what the firm is doing. If they can’t find that in traditional practices, they will go out on their own”, she said.
Terri reminded delegates that “Old ways won’t open new doors. Influences on the talent framework are more different than they have ever been before. We need different capabilities to future-proof our firms. Stop cloning for talent by hiring from the same schools and Universities. Hire people who ask questions, who see things differently, find ‘intrapreneurs’ who want to innovate your business and retain them. It’s critical for growth.”
Terri also advised firms to “recruit for empathy, curiosity and relationship building skills, these are the things AI can’t do and won’t ever be able to do. Humanity will increasingly be a differentiator in a technology and data-driven industry”.
The AI Factor
AI and especially Chat GPT was top of mind for delegates. 48 per cent of delegates strongly agreed, and 36 per cent agreed that AI tools like ChatGPT will fundamentally change way we practice law over the next 5 years. Only 9 per cent disagreed and 6 per cent were neutral.
35 per cent of delegates identified as innovators (tech enthusiasts), 23 per cent as Early adopters (visionaries), 23 per cent as Early majority (pragmatists), 14 per cent as Late majority (conservatives), and 3 per cent as Laggards (sceptics).
Keynote speaker Holly Ransom noted ‘new intelligence’ which she defined as the “skills that robots can’t do” will be an increasing focus for all business including law as AI grows. Our human qualities and how we can demonstrate them at work will be key particularly in leading our firms and engaging happy and fulfilled staff and clients.
Tom Dreyfus noted “The rate of technology adoption in the Australian legal industry is significantly higher than anywhere else in the world. On a global scale, we have much more small law innovators. However, it’s important not to adopt technology for the sake of it. Don’t buy a solution looking for a problem. Is there an economic driver for your innovation: will it open new revenue streams or improve existing revenue margins by doing work more efficiently, more quickly or will it help by getting clients to pay more for it? Take what you are already doing and do it better with technology. It's ok for that to be the reason you are taking on new technology, not to completely change who you are or what you do”.
Hunter Steele reminded delegates “AI can’t replace lawyers. It’s a productivity tool but clients will always need people for what is generally the biggest or most challenging times in their lives. Use technology to help with the heavy lifting of client intake or document generation to improve the client experience and make the experience easier”.
A Seamless Client Experience
Many speakers touched on the topic of the client experience and the need to redefine legal clients from people or businesses in need to consumers of legal services whose interaction with all elements of your firm’s brand, people, products and services influence whether they will retain you, return with repeat business and recommend you to others.
Paul Hugh-Jones, Beaton Research & Consulting explained across all industry sectors “Customer expectations have changed, the experience now has to be better, faster and more personalised" and even in legal services clients want to be delighted rather than just satisfied.
There was a huge interest in his session Creating a seamless client experience where he explained that positive engagement with clients is everyone’s job. "Everyone in your firm makes a difference to the client experience. Even those who aren't client-facing”, he said. In fact he noted that firms succeeding at customer experience boast happier and more engaged staff with year-on-year growth in employee satisfaction scores.
The firms succeeding in customer experience are twice as likely to invest in relationship building skills, have a client service charter and invest in formal feedback surveys with all clients, not just key clients. “Getting feedback is very powerful,” he added. “The critical piece is addressing client feedback. Make sure you take action on it or you're simply raising expectations and not doing anything about it."
Small Law Equals Big Impact
Talya Faigenbaum of Nest Legal described innovation as “not about invention, but about impact. Even a small-scale change can have a big impact, and especially in small law, whether that is for your clients or your employees. It’s about making things easy for people and building or improving your service to cater to their needs and experiences.”
Talya explained that the best kind of change is a balance between innovation and improvement. “While it can be beneficial to be an early adopter of good technology, be open that your innovation may not be a tech solution. The best innovation is human-centred design, so it’s important to ask the right questions, be responsive to feedback, accept the process may be non-linear, be open to failure and don’t have expectations.
To build an innovative culture in your firm Talya recommends “build a team with innovation in mind, create regular opportunities for brainstorming, empower your team to be innovation, make it a KPI or deliverable, be accountable and always come back to your why”. And her top tip: “Iterate, iterate and keep iterating”!
Roadmap for Growth
“Growth is in your control,” said Amanda Little of Amanda Little & Associates. “It is different for everyone and your success measurements can often change. The key consideration is to know your boundaries and build growth in a phased process.
Amanda took clients through a 5 step process of growth: establishing your firm, stabilising your firm, sustainable growth, acceleration and expansion and leadership and innovation. While Amanda said practitioners and firm leaders need to cross established boundaries for growth it is imperative to do this in a manner that is sustainable for the business. This means taking calculated risks in an agreed direction that is underpinned and supported by a recurring profit or income that looks after your employee and staff costs while you expand.
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