Chris Young, general counsel for digital contracting platform Ironclad notes that ‘In-house teams used to ask their law firms about technology. Now it’s the reverse. GCs are encouraging their firms to adopt technology, and firms are hearing about the most useful software and tools from their customers.’
For many firms, this will come as unpleasant news. But there is an upside. As Young points out, ‘In-house lawyers will always need law firms, and the industry won’t be transformed by one side alone. The more forward-thinking law firms should see this moment of change as an opportunity to gain a competitive advantage and become a true strategic partner to their clients.’
Judging by the results of our survey, it is an opportunity many have failed to grasp. Under half (45%) of the more than 200 senior counsel we polled for this report said their firms were using technology to deliver legal services and solutions, while a similar number (41%) were unsure how their external firms were resourcing matters.
As one respondent noted, ‘Knowing what goes on at a lot of firms is a game of Schrödinger’s Cat. They may be using some pretty sophisticated software to bulk process our matters, but they are unlikely to tell us about it unless we push them.’
This lack of transparency was widely cited as a source of frustration. Indeed, nearly three quarters (74%) of those we spoke to said they were not satisfied with their firms when it came to technology.
Law firms should take note: 88% of legal teams said it was important that their law firms kept up with developments in technology, with 32% saying it was crucial for them to do so.
We should not place the blame entirely on law firms here. In-house lawyers may complain that their firms behind the curve, but fewer than half (44%) are asking about their external advisers’ use of technology when undertaking
panel reviews.
With so many GCs either unsure of or dissatisfied with their firms’ use of technology, it is no surprise to see that few are looking to them as a source of inspiration. Just over a third of respondents (38%) said they now looked to their firms for guidance when it came to finding or implementing legal technologies, while under a quarter (23%) reported having been advised by their firms on the use of specialist legal technology. Only 21% of respondents said their firms had offered to share technology with them.
This, for some GCs, has been a dealbreaker. ‘One of the factors that motivated me to change firms was the lack of use of technology by my old external firm’, comments the general counsel of a large commodities business.
Of course, the technology used by law firms is often very different to the technology needed by corporate legal teams. Firms tend to operate in scales and volumes that are far beyond the requirements of their clients, making tech transfer a far from simple matter.
Even so, it may trouble those in private practice to know that legal teams are beginning to look for solutions elsewhere. Almost half (47%) of those surveyed said use of technology within the legal team had already impacted their relationships with external firms.
The good news? Law firms that take a proactive approach are winning clients. As Michael Shour, general counsel and secretary of Banyan Software, concludes:
‘If a firm is wise to the implementation of appropriate technology solutions, it can allow them to complete tasks more efficiently and cost-effectively. When I see a firm doing things like this, I can’t help but appreciate that they are driving efficiently for their clients and am impressed that they are on top of things – and that can only be a good thing for business.’