Few periods could possibly be more in need of an innovative mindset than the last year – which is why it’s fortunate that many law firms have long invested in building out innovation teams, technology incubators and client-oriented solutions hubs. Adoption of new technologies and ways of doing things has arguably rescued businesses across the country from operational paralysis, and innovation is now central to firms’ future strategies and those of their clients. But innovation functions and their priorities have also been affected by remote working and pandemic-induced circumstances.
Karim Derrick, product and innovation director at tech spin-off Kennedys IQ, says mandatory remote working in spring 2020, just as the pandemic was starting, didn’t cause too much disruption, but did put one project around insurance claims in jeopardy, as it was reliant on making in-person observations of decision-making processes. “The carpet was pulled out from underneath us. You’re not physically sat next to people you’re trying to observe, so we were concerned about losing something in that remote environment,” he explains.
However, Derrick says that fear was eventually assuaged, as remote working ultimately worked in the project’s favour. The virtual observation carried out was less obtrusive than it would have been in person, making for better results, he says, adding that the collaboration aspect of development was surprisingly also much easier when remote working: “We made much more progress than might have been the case if people had been expected to be physically present at a given office.”
Not missing the engagement
All the law firm innovation people Briefing spoke to this month reported a similar story around collaboration becoming easier in many ways, as remote working has opened up digital avenues that were underused. At Reed Smith, innovation engagement manager Adam Curphey says innovation projects have benefited from more communications channels: “People didn’t always feel expert enough to talk about the types of innovation Reed Smith could provide, or weren’t fully aware of them. Now that everyone has Zoom and Teams, we’re much more able to publicise what we can do internally.” Initiatives like a three-month Innovation Seasons programme – modules intended to provide lawyers and business services professionals with a grounding in one area of innovation and to demonstrate which tools the firm already has at its disposal – have been instrumental in this area and attracted large online audiences of over 150 people per event, he adds.
“Clients are recognising that transformation is more complex than adopting a specific technology. We’re trying to help them design a next-generation operating model around what a law firm supporting an in-house legal team should look like in three years’ time.” James Touzel, partner and head of FutureLaw, TLT
“Clients are recognising that transformation is more complex than adopting a specific technology. We’re trying to help them design a next-generation operating model around what a law firm supporting an in-house legal team should look like in three years’ time.”
James Touzel, partner and head of FutureLaw, TLT
That engagement, combined with goodwill around the success of shifting to digitised, remote working, has led to greater buy-in, Curphey adds, resulting in a new, “nice-to-have” problem: enthusiasm is sometimes running ahead of the formal system. “People want to revolutionise things and apply artificial intelligence – which is great – but we still have to collect data and go through the right development processes,” he explains.
That feeling of increased enthusiasm and engagement is echoed by Shilpa Bhandarkar, CEO at Nakhoda, Linklaters’ law tech startup, who says the age of Zoom has made it easier to connect with external stakeholders. Although she admits it can now require more organisation to perform demos of products, Bhandarkar says the business has seen greater interest, and accessed a wider range of clients and investors, than was typical in the pre-Covid world. “Geographically, the situation has also created a level playing field. Suddenly you can access investors who aren’t in the same city as you, or even on the same continent. What does it matter if everyone is on Zoom or Webex? You’re still doing the same pitch,” she says.
That said, there’s no rush to achieve a digital-only world. Although teams at Linklaters and Nakhoda have continued innovating through conferencing and digital whiteboarding tools, Bhandarkar says the importance of the firm’s London innovation hub is undiminished and, in fact, she foresees more demand for similar spaces in the future: “Activities like legal design processes benefit from in-person collaboration. That’s what people are missing at the moment. Lawyers need to get together and discuss their transactions in a more collaborative way, and the Nakhoda product managers need to workshop features with software developers – these experiences are richer in person.”
Time to face the change
Being removed from the office has also forced firms to do many business-as-usual activities differently, says Shruti Ajitsaria, partner at Allen & Overy and head of Fuse, the firm’s tech innovation hub. “I can still give documents and administrative tasks to my PA virtually, or have paper documents sent to me, but doing so shines a light on the inefficiencies in our processes,” she explains.
Underlying this, she adds, is a change of thinking which has been more important than the adoption of any one specific technology. “People might previously have had a growth mindset – a positive attitude to change and a willingness to learn – in terms of legal subject matter, but not in terms of how you approach solving a problem and what tools to use. That’s changed. People have had to ask themselves ‘what tools can I use to be the best lawyer I can be?’” she explains.
Similarly, Greg Baker, lead innovation lawyer and counterpart to Bhandarkar at Linklaters, says the legal technology team has seen greater use of tech around the firm, but agrees the pandemic has sparked a wider rethinking of processes. “We’ve process-mapped every type of transaction we undertake to see where the potential efficiencies lie. There’s no cost to that, but it has highlighted where we can apply automation in future,” he says, citing high-volume, iterative work like IPOs and rights issues as areas where lawyers have been forced to rethink working habits and look for more innovative solutions, while creating longer-term efficiencies as an added bonus.
At TLT, increased automation of processes has also been a key focus, says James Touzel, partner and head of its innovation programme FutureLaw. However, he also notes the benefits of automation go beyond internal efficiencies: “It’s about quality and consistency. In-house legal departments are inherently collaborative – people get a lot from ‘working at the elbow’ of others – and maintaining that consistency is difficult with remote working. We’ve been looking at how technology can integrate with playbooks and guides that answer the need for consistency and work with clients’ authority levels and their appetites for risk.”
Of course, it’s not only law firms that have been operationally affected by the pandemic: as Touzel suggests, clients have been grappling with the implications as well. That has led to an acceleration of innovation, rather than any slowdown, according to all our interviewees this month – although sometimes these demands have emerged in new ways. At Clifford Chance, April Brousseau, global lead of Create, one of the firm’s three innovation initiatives, and focused on research and ideation, says clients’ needs have prompted new collaboration dynamics to emerge during the pandemic: “First, we’ve seen banking clients, for example, sharing problem statements with their panel law firms, and expecting them to collaborate to solve it. Second, we’ve seen a trend around multiple clients in the same sector getting together and saying to the market: ‘we share this problem – who’s going to solve it for us?’”
Her colleague, Anthony Vigneron, director of legal technology solutions, says this is an opportunity for firms to address issues in a fresh way. “When only one client has expressed a need for a solution, we’re not really solving the big problem.” One example that both cite, from the very start of the pandemic, is the creation of a framework for e-signatures that tackled standardisation issues preventing more widespread uptake, which was developed for the Global Legal Hackathon. It included collaboration between Adobe Sign, DocuSign, Neota Logic and Barclays, as well as fellow law firms Norton Rose Fulbright and Ashurst. “The tech has been around for 15 years but hasn’t been used in legal. We had to work on it together to solve some of the practicalities at the start of the pandemic when it was suddenly crucial,” Brousseau explains.
“People might previously have had a growth mindset – a positive attitude to change and a willingness to learn – in terms of legal subject matter, but not in terms of how you approach solving a problem and what tools to use. That’s changed.” Shruti Ajitsaria, partner and head of Fuse, Allen & Overy
“People might previously have had a growth mindset – a positive attitude to change and a willingness to learn – in terms of legal subject matter, but not in terms of how you approach solving a problem and what tools to use. That’s changed.”
Shruti Ajitsaria, partner and head of Fuse, Allen & Overy
And at TLT, Touzel says client demand for support around transformation has grown, prompting an expansion of the FutureLaw team to 15 dedicated employees over the last six months. But the pandemic hasn’t radically altered clients’ priorities within their transformation journeys, he says – rather, it has accelerated existing plans and matured some views of the benefits and limitations of technology, along with more collaborative partnerships between in-house teams and external technology suppliers. “Clients are recognising that transformation is more complex than adopting a specific technology. We’re trying to help them design a next-generation operating model around what a law firm supporting an in-house legal team should look like in three years’ time. That includes having technology handle day-to-day, routine tasks to free us up for more valuable things,” he explains.
Clients are also asking for more industry-specific data from TLT, he adds: “What we’ve learned from across our client base can offer specific clients insights into ways to change their own processes.” Those insights also carry across TLT’s internal processes and the ways in-house counsel and law firms interact, he adds: “How can we use technology to work on the same ‘set of rails’, whether you’re an in-house lawyer or working in a law firm? That was a key question for us before, and has been seen increasingly during the pandemic.”
Bhandarkar at Linklaters says the pandemic accelerated much of the development and thinking behind CreateiQ, which digitises contracts and the negotiation process, surfacing key details and terms more easily while also generating structured data at the point of creation. It was initially conceived of solely as a tool for helping clients to manage regulatory reform, but the scope has expanded due to the wave of digitisation brought about by the pandemic: “We realised it was applicable to wider contracting needs, while also helping larger clients to collaborate better within their in-house legal teams and with us, their legal advisers.”
She adds that the situation in 2020 also forced clients to react quickly to supply chain issues and make more decisions in real time – digitising contracts both made it easier to surface relevant information and generated useful new data: “Providing structured data is key, as it isn’t only valuable to lawyers, but the whole business.”
If we can say there are any silver linings to the period of crisis for innovation teams, it seems that at least one is the necessary clarity and focus it has sharpened around many initiatives like these. As Bhandarkar puts it in relation to CreateiQ: “The vision was there before, but the pandemic has helped us to decide which features and functionalities are the most important.”