Category Archives: Legal

Legal

It’s like an Avatar Sequel – Consolidation within the UK 200

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I wrote a post in 2009 on consolidation in the UK top 200 law firms, I honestly thought that the UK marker would go through a series of mergers and end up with a much much smaller set of firms. But like the film Avatar (also released in 2009) it’s taken 13 years to be able to put out a sequel to that post.

It was a post from The Lawyer that caught my eye this week and reminded me of this topic. The line that jumped out was this one:

This data offers the clearest indication that more consolidation is on its way

13 years it’s taken and still the market is consolidating. This quote

Consider this: the overwhelming majority (94 per cent) of the UK 200’s total £33.47bn revenue is generated by the firms in the top half, leaving just 6 per cent (£2bn) to share between the 100 firms in the lower half

shows that even though the vast amount of revenue is in the top half, that’s still 100 firms! And it’s that top half that I can’t fathom. Of course there will always be a large number of independents in any industry, but you expect the top to consolidate to a handful of players, don’t you? Most markets talk about the Big n, never the Big nnn. Even if you take the Top 10 out (about £17bn) there’s still 90 sharing about £16bn.

So, look out for part 3 of this series in about 2035!

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General Legal IT, Legal

The Metaverse – Is it simply the latest conference topic or are we at the start of the next big thing?

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For those old enough to remember the 1990’s you may remember bold predictions like this

proving it is very hard to predict the future, if you gamble correctly on the big ticket things you’ve an opportunity of a career as a futurologist, but you’ve as much chance of being a quotable example of a luddite forever!

This was a topic of a twitter conversation the other week after a post during ILTACON22

So here goes, in print my thoughts. I think we are possibly on the cusp of the next wave of an interface into a virtual world, I also think we’re at the Netscape Navigator 1.0 stage of the journey and will have a few bumps along the way before a) the technology improves and b) the majority start to get it and embrace it. I’m not sure the “Amazon” of this new world has emerged yet, but if anyone has any share tips on that one this time round let me know in the comments 🙂

There are a few early adopters and firms looking to try things out and kudos too them, as collectively I’m sure we’ll all learn a lot about what works and doesn’t. Examples:

Artificial Law – law firms in the metaverse

German law firm opens office in the metaverse

Major law firm buys property in the metaverse and opens virtual office

Some will go for the AOL model (facebook metaverse), others will go their own way. But I’m quite fascinated by the metaverse, it’s early day but I think there is something in this one!

You may ask, what are my credentials as a futurologist? Well I did spot the potential of Amazon shortly after launch in the UK in October 1998, with my first order in November

Then I did have a web2.0 idea before web2,.0 became a thing, I just was too limited as a developer to realise the idea, the only language I knew at the time was ASP (see book order above!). My idea was essentially a Foursquare/TripAdvisor type platform for nights out. I even registered a domain name at the time:

So on this one as the saying goes “trust me I’m a Doctor”😉

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Legal

Are We Off Back To The 90’s For A New Battle In The Lawyer Salary War?

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In the past I’ve occasionally skipped a tech focussed post and looked at some general legal market posts. This is one of those posts.

A couple of stories caught my eye this last couple of weeks, an email from The Lawyer’s Horizon mailing and some data from Thomson Reuters market insight report, both related to lateral hiring and lawyer salaries.

The first was an article on Cripps, a Tunbridge Wells based law firm. It is countering larger (higher paying) city firms poaching all their lawyers by adjusting it’s leverage, as The Lawyer article puts it:

has essentially decided that hiring more junior lawyers to plug the holes left behind isn’t worth the faff. Instead, it’s now picking off paralegals from larger firms

It’s an interesting model, one similar to the Insurance practices of large firms when I started in the legal industry in the late 90’s. That led to a real commoditisation of the insurance sector, the jettisoning of said practice groups from many firms to insurance specialist juggernauts of now.

The Thomson Reuters report was on the “flight risk” of staff in law firms (legal staff) and the role most at risk, Associates. Up from an 11% likelihood in 2018-22 to a 45% risk in 2020-22. Backing up the thinking of Cripps I guess. Interestingly the report highlights that these were likely conservative numbers and the flight risk was higher than reported numbers as more than one-third of laterals changed firms even when they were not considering a move.

It may all be a moot point as reports are starting that the job market is cooling, but I have always wondered if a significant recession hit again what would be the big moves from firms, last time it was a move to lower cost bases for back office work (eg moves from London north to Manchester) or service centres in lower cost places (eg moves to Belfast, Warsaw etc). Possibly the new trends have started, but currently addressing other issues, like this to battle the current salary wars and also like technology innovation pushes in firms to both provide efficiency and new business opportunities?

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General IT, General Legal IT, Legal

Should we stop chasing blockchain?

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At the back end of last year I saw an excellent presentation on blockchain, a technology I have tried to keep an open mind on. But this talk kind of confirmed all my fears. Let me take you through the key parts of the talk and then I’ll leave the comments open to see whether you all come to the same conclusion or can point out what I’m missing.

Blockchain is  a distributed ledger technology.

A ledger is a essentially a list of transactions.

A hash is created for each transaction, a value that is unfeasible to reverse. So it verifies the transaction hasn’t been changed. If you then hash a “block” of these transactions with a hash record together you get a block hash. Then if you add each block hash to the next you get a ….. chain.


Then distribute these ensuring the chain is agreed between them all, the more copies the harder it is to change or fake the ledger.

That’s blockchain and so far seems pretty useful as a way of protecting data?

But if the ledger cannot change and isn’t regulated then errors cannot change either right?

But it’s good for smart contracts right? The blockchain tech makes the contract unalterable. But a bug in the code and, well back to the point that the block chain makes the contract virtually unalterable ie impossible to unpick! (something that has happened)

All technology has issues, so I get this is not a reason to dismiss the concept. But unless you have zero trust in other parties and require unalterable data and where regulation or law doesn’t help, I can’t help think a standard secure database can do the job you’re after?!

Pretty much what the Australian Government said, this is a quote from Peter Alexander, Chief Digital Officer at Australia’s Digital Transformation Agency :Oh and one more reason blockchain technology like bitcoin may not be worth pursuing : “Bitcoin Mining Now Consuming More Electricity Than 159 Countries Including Ireland & Most Countries In Africa” source

To me the key question then is simply why do you need a distributed ledger, especially laws firms as it kind of removes the need for them in the transaction. If both parties agree a contract on a distributed ledger, you’re pretty much saying it doesn’t matter if we don’t trust the other we’ve an unalterable contract without the need for a middle man. Maybe it just shifts everything from transaction law to litigation? And if you actually still need the lawyer to create the contract then why not just put it in a secure database of the law firm?

Thoughts?

Oh and a big credit to Paul D Johnston who’s original presentation on what is blockchain was the jump off point of pretty much all of the above!

 

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General Legal IT, Legal

Legal Tech question: Is the abundance of lawyers stifling innovation?

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Like at many other legal technology conferences, I’m sure that at ILTA last week in the US there was lots of questions about the billable hour, questions on when law firms are going to change and a good use of the good old buzzword “innovation”.

In fact a quick twitter search and I can find a few quotes from sessions:

But what if the big thing that is really holding everything back isn’t a lack of desire or an inability to do so? Maybe it’s much more simple than that. This thought crossed my mind when I came across this article on UK productivity over the summer break, in particular this part:

“if you provide an economy with an almost endless supply of cheap labour as the UK government has, employers will use it instead of investing in any kind of productivity raising automation?”

I thought maybe this is it for law firms. There is certainly not a shortfall of the number of people entering law, in fact there are probably more than is needed. So are we simply seeing this over supply play through firms? Yes I know there are some exciting ventures into automation and machine learning, but I wonder whether they are mainly driven by marketing the firm than real productivity drivers in the firm?

I would be interested in hearing comments and thoughts, to me it doesn’t yet feel like we’ve hit the tipping point as we did in personal injury and insurance work. A point that really accelerated the use of case management technology in the late 90’s and led to boosted productivity and huge competition in that sector.

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General Legal IT, Legal

Lawyers coding – are we belittling the IT developers skills?

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There have been a few articles in the legal press about lawyers training in coding and I’ve been meaning to write a blog about it for a while, I’ve just had a voice in the back of my head saying “Surely this isn’t the solution to the alleged problem with legal and technology”, one professional doesn’t solve a problem by retraining as another surely? I mean Tesco and Sainsbury’s didn’t retrain their checkout staff as coders when they decided they needed to move into online selling did they? OK I know that is a little beyond what is happening in legal, but it crudely highlights the point.

Reason I have taken time to write this is that I don’t want to sound like a Luddite and a dismisser of change, but equally I really dislike the notion that you can simply train to be a coder and develop secure, scalable applications. It belittles those that have spent years learning, developing their skill and gaining a huge amount of experience building applications. A whole profession of developers and other IT professionals.

I think there are huge benefits of gaining a knowledge of technology in any profession and wholeheartedly welcome developing this knowledge in lawyers. I equally think law firms could do a huge amount to develop the knowledge of IT professionals in the practice of law, something that doesn’t get the airtime in the legal press. Innovation will come by looking at the problems and utilising the whole workforce to solve them in new ways, not by simply retraining those that frankly are the core to any law firm, the lawyers.

I think this quote for me shows where the right balance is (full article here):

“If you want to be a lawyer who knows what technology can do then you should learn to code – or at least have an understanding of coding. Which is different to learning to code. As a Spanish-speaker I can read a book in Italian but I couldn’t write a book in Italian.”

It’s understanding the language, but trusting the native speakers when you need to write the book. At the moment for me (at least in the legal press narrative) the current trend seems to dismiss the natives. Get the balance right though and there could be some great solutions to the challenges ahead!

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Legal

Are the agile workplaces law firms are creating the new advocado bathroom?

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I’m not there yet, I don’t work in an office full of bean bags or collaboration couches (isn’t it a settee?) nor do I have access to a juice bar. But in order to be a modern organisation we need all this to create a fun, happy place to work right?

Although I’ve not found evidence of a law firm with a slide or a ball pool, there are plenty that are embracing the “agile working” trend sweeping through corporates.

     

But are we doing this for the right reasons? There is a narrative that equates this new office style to fun and happiness, but a recent satisfaction survey by glassdoor shows a different story. The fun and happiness comes from the business itself, its culture, job security or work satisfaction. Much to my delight happy workplaces don’t need beanbags, barbecue stations and ball pits.

So let’s put back some traditional 1990’s wooden desks and plain black padded office chairs, keep the carpets a nice shade of grey or dark blue and put back those false ceilings with fluorescent lights?

No I’m not serious, but I think we need to look at why are we doing this and ensure it’s not just to try and make our people happy. And I actually think the law firms doing it are doing it for the right reasons. Create an office space that allows people to work how they want and how they need too, allow flexibility for the teams that want to move about and collaborate when they need to. Allow for quiet spaces and more traditional layouts for those that need to concentrate and support it with the right technology to facilitate all this.

For me I’d rather work in a law firms version of an agile workplace than a Google style office, after all I can’t help think that advocado bathrooms were once a huge trend!

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General Legal IT, Legal

Experience in Artificial Intelligence – lessons for Legal IT in 2017

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To start 2017 I thought I’d have a quick look at 2016’s favourite Legal IT topic, Artificial Intelligence (AI). Reason for picking this topic is down to two pieces of technology that I brought into our household at the end of last year that utilise AI heavily. Those are Nest and Alexa.

The former has brought home to me what I think is going to be a key issue in adoption of AI in law firms, that is trust. My Nest thermostat “learns” over time and one of the key aspects of this is watching for when you go out of the house, the system then reacts by turning thee heating down. At the same time it triggers my Nest security camera to turn on. Over Christmas though I’ve noticed, on odd occasions, when we were out that the camera would turn on but the thermostat wouldn’t drop the temperature. Other times though it would, there seemed to be no consistency. After a lot of old style IT troubleshooting and a lot of googling, I eventually found that this wasn’t a bug, but that Nest had learnt patterns and our locations and kept the heating on when it thought our trip was local and brief, thus in its mind turning off the heating was less efficient (as otherwise it would need to heat the whole house from scratch on our return). The camera though it realised should be on immediately.

This is my trust point, until I fully understood what was going on I didn’t trust the technology. I thought it was just not working, so I had taken to manually overriding the settings when we went out. In reality it was working very well and actually better at predicting things that would save energy than I was! This issue though will be the same with Legal IT AI, getting the trust will take time and will probably need a full understanding of how the machine is learning before people will accept AI into the mainstream functions.

Alexa to me is voice recognition starting to become useful, moving from the smartphone (Siri) or the computer (Cortana) to being “in the room” makes so much sense and is much more useful. Whether it’s controlling the lights or simply putting on some music it genuinely is useful rather than a gimmick. It is impressive how Alexa is using all the data it is gathering to improve, however it also shows how far AI has to go in terms of human interaction. It is way beyond having to specifically phrase your commands or questions, but there is so far to go to get beyond a few “skills” it has now.

These two areas fuel my scepticism around AI. No that’s not fair,  it’s not scepticism it’s just wanting an injection of reality into AI within Legal. I am impressed with Alexa and Nest and the more I use them the more I get impressed by the learning, however my expectations for the technology (particularly for Alexa) were not overoptimistic. I think if we adopt a realistic approach for AI in Legal in 2017 then it can and will be a great enabling technology for firms. If we don’t temper the hype though, we’ll be disappointed or fail to trust it and it’ll go in the bin for years before we try it again!

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General Legal IT, Legal

That was the year that was – A review of 2015 in Legal and Legal IT

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To wrap up 2015 I thought I’d post a review of the Legal and Legal IT news throughout the year.

One of the big trends across law firms this year has been mergers, I touched on this trend back in 2009 and the number or mergers and consolidation in the industry continued throughout 2015.

Dentons has been the major news story as its huge growth continued through the year, we had the Dacheng merger in January, talk of McKenna Long & Aldridge joining in April, discussions with Singapore’s Rodyk & Davidson and Australia’s Gadens about tie-ups in November leaving a firm at the end of the year with a possible headcount of around a massive 7000 lawyers. Other large firms continued to grow this year with DLA Piper entering Canada in March and White & Case planning to boost City lawyer count by over 40% as it put London and New York at heart of new strategy in November. BigLaw doesn’t seem to cover these firms anymore, MegaLaw? No probably a bit too Judge Dredd that one!

Some mergers don’t come off though, in November Eversheds and Foley & Lardner broke off merger talks that could have created a £815m ($1.25bn) revenue transatlantic firm. And there were growing pains in others, in November at Norton Rose Fulbright the firm’s management looked to reconnect with City partners after years of rapid overseas expansion. But still this didn’t stop the merger talk and in November Irwin Mitchell and Thomas Eggar unveiled merger plans.

It seems the final shackles of the financial crisis had been thrown off in 2015 as growth was back on the cards or at least in the published figures, so although still an industry under pressure from clients it doesn’t seem to have affected the bottom line. Growth numbers look pretty good against most of the western economies, with 4%, 6% and even out at 7% rises in revenue across law firms according to a Deloitte survey in March. By December the Deloitte survey was still predicting firm fee income rises of nearly 5% in Q2 of 2015-16. Impressive numbers.

PEP was also on the up and into the double figures in some firms with 11% and 12% rises coming through in March figures. BLP posted PEP 22% in June! But not everywhere was rosy, some markets clearly still are ultra-competitive and this saw Hill Dickinson and Holman Fenwick both take revenue and PEP hits. As did DWF as their PEP slid 21% and revenue stayed broadly flat in August figures.

The good times though saw the top firms battle for the best associate pay rise around April/May time with 7% at Linklaters, 8% at Ashurst and 10% at Slaughter and May. White & Case then trumped them all in June with a 20% rise in London associate pay! Not to be outcome in December Slaughter and May associates were in line for bonuses of up to 16% as firms also bumped up rewards.

Was this all driven by a growth in client demand? Possibly as in London, for example, back in February TfL announced a rise in legal spend this year, the first in four years. And the Greater London Authority doubled its spend. But also I suspect a hard look at costs also help the profits in firms in 2015. Freshfields started consultation on a low-cost base in Manchester in February and announced further centres in June to create a global network of centres. White & Case mulled opening European support centres in November. And DLA Piper launched a low cost services centre in Warsaw this November, its third such centre alongside one in the US and one in Leeds.

Law firms were also looking at growing their business in other ways, putting pay to a few speakers talks in 2016? Dentons launched a tech investment arm (NextLaw Labs) in May. There were moves into the contract lawyer space in June as DLA Piper and Addleshaws moved into contract lawyer market with new ventures. DWF also launched contract lawyer, support centre and consulting offerings in June. And finally to top off a changing market KPMG boosted its UK legal capability with a Birmingham launch in September.

Quite an eventful year for law firms in general, what about the Legal IT side of things?

Starting with the stalwarts of Legal IT, Document Management (DMS) and Finance systems.

Back in January SharePoint was on the agenda again as a possible DMS in law firms with Microsoft pushing Matter Centre, by the end of the year though it was open source product. HP Worksite became iManage again with a management buyout and we saw energy back in the firm after many years of being part of a monolith. And Netdocuments continued to grow market share and cloud coverage with Europe and Australian datacentres.

In the finance arena the column inches were mainly full of Elite v Aderant, but in September Baker & McKenzie became the first global law firm to go live with the latest version of the SAP ERP system.

Elsewhere legal project management (LPM) is clearly on the move with a number of products offering support for this discipline, Umbria and Cael as examples. Strange that in the Legal press itself LPM wasn’t hitting the headlines despite strong take up by law firms and interest by clients! Proof again perhaps that contrary to the press and conferences, law firms are quietly getting on with new ways to grow the business?

I couldn’t review this year without mentioning AI (Artificial Intelligence), a marketing teams dream with a whole new “disruptive” technology campaign. 2015 was definitely hello AI, goodbye cloud in the Legal IT zeitgeist. The start of summer saw Ravn launch ACE and by mid-September, Berwin Leighton Paisner confirmed that it had become the first law firm to sign up to RAVN’s Applied Cognitive Engine. We also had US legal tech start up eBrevia has just launched its own AI offering, IBM Watson with Clifford Chance joining the growing number of City firms that work with IBM’s offering. September saw the BBC focus on Intelligent Machines, Riverview Law acquire US tech business to advance use of AI in legal market and AI goes mainstream as LexisNexis acquires Lex Machina in November and December.

The fact that cloud is now out of the news could be that finally its maturing and starting to take off, Netdocuments saw growth and Hill Dickinson kicked off a three-to-five-year IT strategy review that is expected to see a significant further shift towards the cloud.

Document automation was back in the news. Becoming more commonplace across the UK, Ashurst in September became the latest City law firm to sign up with Business Integrity’s ContractExpress solution to automate its legal precedents globally and across all practice areas. And at Clifford Chance in March, two finance lawyers were hired with coding expertise to design a template to allow banking clients to generate their own documents.

Social Media in law firms was in the news in summer as DLA Piper discussed the launch of their internal platform Grapevine.

Dentons appointed a new CIO tasked with integrating their IT after their whirlwind expansion. And we couldn’t finish the write up of 2015 without mention of the debacle at the Law Society. The start of year saw the Law Society of England & Wales endorse Eclipse Legal Systems as the one and only supplier. By end The Law Society of England and Wales’ latest foray into the role of technology supplier ended in disaster after it was forced to disband online conveyancing portal Veyo with losses upwards of £3m. Does it still have sway in Legal IT?

My final thought though for the Legal IT world in 2015 is where is the big push into mobility, business support workflow and “standard IT” that supports lawyers? Law firms are definitely looking at this, but what about the Legal IT vendors? Some show hints of the above and that they’re starting to get it. Will this be the real news in 2016 or will the marketing teams win and continue to sell us the promise of a disruptive world and robots replacing lawyers?

 

A big thank you to Legal Week , Legal IT Insider and Legal IT Professionals invaluable resources in researching the news from 2015 for this blog post!

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