The Digital Fingerprint: How Legal Service Providers will thrive in the future of law
By Quddus Pourshafie.
There’s one phrase we all need to understand: “digital will level the playing field”.
I’ve explained and expanded on this most recently here.
This week I wanted to breakdown what I call the “Digital Fingerprint”, the most important thing future-facing firms need to understand about the new digital arena. This “Digital Fingerprint” is the unique signature of firms as they enter a level playing field in digital business. But first, let’s look at why the current big players succeed in winning substantial work to maintain their millions in revenue.
Currently, the larger players in the traditional Legal Service Provider space (starting from mid-tier all the way up to global outfits) rely on two main levers to attract top-level work and clients. These two main levers are:
Size (or capacity), and;
Brand (or reputation).
Size Size (or capacity) signals to a client that it is a “safe bet” to go with that provider. The size infers capacity to throw people and resources at the problem, being able to service a combination of high volume, high complexity and time sensitive matters. At a minimum it is the probability that such a substantial collection of experts (lawyers in this case) would produce a self-regulating hierarchy with exceedingly exceptional people as you get to the top.
Let’s not get into what sort of culture that has created and the devastating effects on people who run that gauntlet.
Legal Service Providers also rely on size to justify their costs and overheads. Sometimes it’s an empathetic plea: “we run a big operation, we need to look after our people”, sometimes it’s framed up as a premium offering: “we charge what we charge because we’re the best”, Sometimes its a combination of both, or other various narratives spun to justify feeding the beast.
In any case, this isn’t a comprehensive exposition on the multitude of ways a Legal Service Provider would define its Size as its benefit, it is merely to establish that Size is a main lever when a client considers where to take substantial work. Brand Brand and reputation are also signals of a “safe bet” where either the standing of particular individuals or the brand outfit is such that there is a common understanding this firm will get the job done and hopefully, done well. The question of quality of work is less of an issue, but a question nevertheless. Brand goes a long way into easing the client when trusting the capacity of the provider. Brand is also communicated in a variety of ways: presence in a locality, buildings and offices, online and through networks, affiliations and relationships old and new.
Brand and reputation is also built through past successes, which is sometimes defined as substantial cases won, the value of M&A transactions completed, the defense of high profile criminals and so on. It’s rare that lawyers will impress their prospective clients with how much time and money they can save the client, how much value they can deliver, though I see this shifting as we have new entrants into the market offering future-facing legal services. These new businesses clearly don’t see their profits from the billable hour, and their language/posture confidently reflects this.
Now that both Size and Brand have been explored a little, let’s see how Digital disrupts. Digital: the level playing field In digital, these two main drivers are uprooted. The size of a firm does not necessarily translate to quality or capacity to serve. In fact, we’ve seen how firms who’ve struggled with work from home implementations are unable to deliver the way they usually would when everyone comes to the fancy building in the urban sprawl of a city. But more importantly, technology in a digital arena scales much easier in both cost and availability, leveraging a one-to-many system vs. the traditional one-to-one scaling and growth. Essentially, you don’t need to throw more people at a problem where well placed technology and process can augment the people you have to take on more, or produce work more efficiently/accurately by offloading the manual and repetitive work. Here we can see how smaller players can now compete on value and delivery without needing the sheer pool of lawyers to throw at a task. I actually believe that smaller firms with the right technology stack and a well designed system will leverage the most benefit from the accuracy, speed and overall efficiency of technology.
The branding the firm relies on also takes a substantial hit. Impressions made by the best high-rise or fanciest office (to both clients and the workforce) is no longer applicable. On the other hand, the resources required to create a presence online are far more attainable, but also require creative thought and agile execution. Essentially, you’re building a digital shopfront: it doesn’t cost as much, you have many (almost unlimited) options and capturing the narrative of “value” or “sophistication” is something completely different.
Brand in digital does not use the same assets as Brand in physical.
To be clear I’m not advocating for the use of digital to the exclusion of physical, we are of course a human based service - which is why it’s so important to leverage the best of both. However, thinking about digital as an “add-on” (like we have about our websites for example) is becoming less effective and relevant.
It requires a re-imagining of the core business of law, and that includes where it proverbially “lives”.
So we can see how Digital disrupts the playing field so heavily relied on by traditional Legal Service Providers, affecting both the Brand and Size levers for attracting the best. Homogenized ubiquity? On of the emergent challenges once we overcome the resistance to change is the scenario where everyone struggles to differentiate because “everyone is running the same software”. This is ultimately a fallacy and here’s a few examples of why:
Most existing software and network systems we use are built on UNIX - the sheer amount of growing variety and choice in apps and technology is breath-taking. Most cars are built from metals (steel, aluminium) and composite plastics (carbon fiber, CF reinforced etc.) and yet your choices are as expansive as your taste. Most houses are built on cement foundations, yet you would spend months researching your unique dream house. Most buildings above a certain height require the same anti-earthquake systems and yet no skyscraper looks or feels the same. Most accepted forms of structure in society is expressed in Law (whether natural, common or religious) and yet the combination of those laws, cultures and societies are beautifully diverse. The most used method of exchanging value is through money or currency (fiat or otherwise) and yet what you do with it is completely up to you.
All of these are foundations from which we can creatively build our own desired outcomes. The creativity, vision, persistence and execution is what sets one result apart from the next.
So i’d like to pre-empt the argument that there would be no differentiation or some form of ubiquity once we move to digital. Instead, here is what needs to be focused on to thrive in this new arena. The Digital Fingerprint How many years, resources and money did it take to get a man on the moon in the 60s? How much easier, cheaper and safer is it for someone go to space today? When new technology is developed it takes a lot of time and resources. However, once a milestone is achieved; once a record is broken or a previously unattainable goal is attained, it is strangely repeated, copied and eventually democratized and becomes a commodity.
This is part of a cyclical phenomena of divergence and convergence in technology:
First, there is a convergence of resources and focus to build something new.
Then, there is a subsequent divergence once the technology is commoditised and people start to creatively leverage it in novel and unique ways.
With a growing smorgasbord of options through Legal Tech, with the underpinning of SaaS integration capabilities and the digitisation of once manual work, with the sophistication of the technology to take on more complexity and deliver Legal process more efficiently, we are presented with an emergent opportunity.
This opportunity; where the technology is readily available and accessible, means the focus and object for a legal practice then becomes the unique combination of the technology and experiences you create, your "Digital Fingerprint" in the marketplace.
So, every Future-Facing Legal Practice will have a Digital fingerprint, a unique signature that will be based on two main levers:
Your unique Tech-Stack, and;
The unique Customer Experience you build around that Tech-Stack.
Tech-Stack A tech-stack is the combination of various technology offerings in the market that deal with different areas of the core operations of a Legal Practice. They can range from Legal analysis tools, to Contract/Document management systems, Payment processing, Cloud storage, Communications (internal and external) and Process and Workflow automation.
No single piece of software effectively deals with all aspects of the core functions of the Legal Practice (though many try and claim this) and my belief is that they shouldn’t. The Practice Management System is also something that was useful in its time, but the focus that SaaS brings to nailing a niche process or capability coupled with the volume based pricing approach and “stack-ability” via integrations (API) means that building a tech-stack with multiple offerings working in harmony will result in a far superior base for the core functions of a Legal Practice.
Side note: Using the Future Framework for Legal Practice, you can see how different technology offerings would fit together which as a whole would have you sporting a highly capable, operationally affordable and predictable Future Facing Legal Practice.
With this Framework, adding and stacking technology according to taste and your particular focus in a law discipline(s) (i.e. family law, litigation, contracts, full service etc.) you will begin to build the unique capability of your firm to service the areas of law you have chosen.
The unique tech-stack you leverage will be a main lever for clients who are looking for specific Legal Services and capabilities in a Legal Practice.
Customer Experience The customer experience, or customer journey is about the steps you’ve taken and resources you’ve deployed against defining: how the client learns about you, interacts with you, engages you (for work or other opportunities), collaborates with you, achieves solutions with you, pays you, refers you, and all things in between.
With the digital capacity you’ve developed through your unique tech-stack, you need to then give consideration to how the client enjoys the benefits of this efficient business.
Customers may not be entirely concerned with how “the sausage is made”, though there may be points in the “sausage-making process” to which they find great value. These will become the critical points along the journey where the client would see your offering as superior compared to others. The oversight or information and explanations of what is happening, where the matter is at, a timeline of events past and future, are just some examples of the layers you add on top of your core business capacity for the benefit of the client.
Side note: the experiment run in the contract analysis/review space pitching lawyers against an artificial intelligence on speed and accuracy criteria prove the point that technology leveraged correctly will provide a superior service.
Having options that are clearly defined and priced as a core benefit will increasingly go a long way in winning clients at all levels of the market, resulting in cost clarity and even shared risk when the client is as informed on matters and can make their own decisions where appropriate.
Your unique tech-stack will therefore include SaaS applications and software that allow for this level of clarity, ease of access and high standards of service.
Importantly, the unique human aspect of your practice will also shine through in your Customer Experience. Your ability to differentiate the service as premium will involve the human elements. Your unique version of hospitality, of making the client comfortable, re-assured, assisted, informed, supported and accompanied are all human elements which contribute to whether a client chooses you - particularly as the work becomes more complex.
How you communicate might leverage the unique tech-Stack, but the journey you’ve designed can be very human. How much Salt? How much Pepper? To give an idea of perhaps how important these levers are in a Future-Facing Legal Practice, here’s a sample of how I would split the difference in resources against either:
Around 30-40% of your resources should be placed into the customer experience side of your Digital Fingerprint (CRM, CX, Communications, any tools internal or external that executes on an exceptional experience to your clients.)
60-70% of resources should focus on the technology that would essentially be the core business function or sausage-making capacity (sophisticated legal analysis, CM/DM platforms, billing etc.) that you've decided to focus on.
The split is much closer than most budgets, but this is also a more integrated approach to what is essentially a human to human service, responding to the rising client sentiment and demand for better experiences (including cost clarity, speed, accuracy and high touch, bespoke finishes). A new Vantage Point With a well established Digital Fingerprint, we now have a chance to re-imagine and re-approach the market. The two main levers to attract top-level work and clients - Size and Brand - are now within sight even though they look nothing like before. The top level talent and clients will be more responsive to the improved experience, expanded flexibility, agility and well-thought use of technology to deliver the work we pride ourselves in.
And we can be proud, not only among our peers but most importantly among our customers.
From this new vantage point - we have the tools to differentiate our experience, to test and supply the market with premium services, to leverage our solutions and apportion some against closing the A2J gap, to collaborate with businesses in more integrated ways, to syndicate with other LSP’s on larger or specialized work, to take the weekend off, to approach global markets, to work from home, to weather a pandemic, and the list goes on. In summary, the key points to keep in mind are:
Top level clients or a workforce is attracted through two main levers, Size and Brand.
Digital will level the playing field.
Every Legal Practice should then work on their Digital Fingerprint.
Every imprint will have a different workflow, style, preference and focus on different specialties of law.
Your uniqueness is tied to two things: your Tech-Stack and the experience that the customer has interacting with your service including the human element.
Your Digital Fingerprint is essential to thrive in the future of law and the benefits are much more than the “bottom line”.
About the Author
Quddus Pourshafie has paved his own way in the Legal Industry after recognizing the traditional pathways were failing to align with the future practice of law. Since his admission, he has dedicated to solving the Legal Industry’s biggest problem: transitioning into a future of law brought about by technological disruption.
Known for his ability to think laterally and connect the dots, Quddus has positioned himself to bridge the various protagonists in the legal industry to bring about the necessary transformation, making it his mission to assist those who are ready to tread that path. Quddus also believes it is the first time in recent history where young graduates can change their value proposition in the market as a digital native.
Lending from his creative DNA as a musician and various entrepreneurial ventures, Quddus continues to grow Futurelab.legal and its projects with partners around the world to accompany Firms, Universities, LegalTech companies and Regulators of the Legal Profession and prepare them for the Future of Law.