Legal Innovation Forum – Key Takeaways

On October 3, 2023, ClearyX analysts Kaitland Goulet and Egi Troka attended the Legal Innovation Forum in Calgary, Alberta. This year’s theme focused on how leadership and collaboration are driving change and delivering value in the evolving legal ecosystem. The following are key takeaways from the panels.  

Driving Alberta’s Economic Innovation: Alberta has a culture of enterprise, having one of the highest number of new businesses in Canada. Legal leaders play a significant role in driving innovation as advisors and connectors who apply a business lens to risk tolerance. Innovation is driven by highly engaged, multi-disciplinary teams that complement each other’s skills and operate in a safe environment where opinions can be freely expressed. Innovative lawyers are collaborative and optimistic for change, having empathy for people’s problems and a passion to solve problems.

Future of the Legal Ecosystem: In 2023, lawyers can take control of their practices and increase their productivity as GenAI tools are embedded in products and workflows. Companies like Simplex Legal and Goodlawyer are leveraging these tools to improve service delivery, with a focus on efficiency, accuracy, and cost-effectiveness. These tools can handle repetitive and tedious work, reducing errors and distilling buried insights. Use cases include the summarization, extraction and interrogation of a full suite of documents. The best legal tech tools are being created by people who are deeply embedded in the area of practice being targeted, as they know the area, pain points and where to look for inefficiencies.

The structure of the legal industry is changing. Investors are pouring more money into legal tech as the demand is driven by clients who request responsiveness and immediate results at a cheaper price. Law firms are feeding Alternative Legal Service Providers (ALSPs) work. It is estimated that approximately 80% of ALSP’s revenue is coming from law firms, while the rest is from the Big4 and other sources. Meanwhile, law societies are using “sandboxes” to foster innovation, allowing for rule exemptions in regions like Arizona, Utah, and several Canadian provinces.

Mastering Change Management: The reality is that individuals are either inspired or forced to change. Stakeholders in the legal industry have taken an entrepreneurial approach to change management. They encourage ongoing discourse and follow market demand to understand problems and craft appropriate solutions. Law firms have found that incremental change, rather than fundamental change is a more realistic and successful approach. When faced with resistance to change, the best approach is to ask why this resistance exists to help improve the change process and obtain better adoption. Regardless of the approach taken to innovation, lawyers’ duty of competence includes technological skills.

Solving for the people puzzle: There is a disconnect between law school and legal practice due to generational and situational differences. Law students and young lawyers have different career aspirations and perspectives. Lawyers are moving to in-house opportunities much earlier in their careers than what is traditionally expected, largely due to beliefs of improved work-life balance, value alignment and flexibility with an in-house career. Millennials and GenZ employees tend to desire increased transparency and communication from leadership, as they were raised by families who included them in “grown-up” discussions. The pandemic has also transformed physical workplaces, adding another layer of complexity. Yet retention issues are often dismissed as a cost of doing business in big law firms, leading to a lack of motivation to foster a positive work culture. Ultimately, lawyers should focus on the impact they want to make, rather than chasing a dream job at a specific workplace, to have greater career satisfaction.

In conclusion, the forum highlighted that technology will not replace lawyers but will equip them to deliver better value. As the saying goes, “Technology will not take your job away, but a lawyer who is better equipped to use technology will.”

Alternative Legal Careers

The traditional assumption has been that an individual graduating from law school will almost always enter private practice, climb the law firm hierarchy and reach the coveted status of equity partner. Why else would you go through the trouble of attending all those early morning constitutional classes, and the effort of being called to the bar? By many accounts, a sizeable number of lawyers are currently unhappy with private practice. Surveys conducted by the American Bar Association indicated that 24% of lawyers who passed the Bar in 2000 were no longer practicing law in 2012[1]. Surveys conducted by the International Bar Association indicated that 33% of lawyers under 40 were considering pursuing a different area of the law, while 20% were considering leaving the legal field altogether[2]. Fortunately, many lawyers can increasingly leverage their legal training to pursue alternative legal employment, including quasi-legal positions, alternative service providers including legal tech, ADR/mediation, policy work and education to name a few areas.

The first evolution in the shift away from private practice can be credited to the proliferation of ‘in-house’ counsel positions in the early 1990’s, created largely by banks and insurance companies to try and manage legal costs. Companies have continuously scaled up their in-house legal departments to manage many of the tasks that would otherwise be outsourced to private firms, leading to large in-house legal teams now being  the norm and not the exception. Departing the world of climbing the law-firm ladder, and the immutable law of billable hours, is a change many lawyers are happy to make.

The second evolution came with the growth of ‘quasi-legal’ positions in the mid 2000’s, most notably the creation of specialist positions in the e-Discovery space. With law firms looking to control litigations costs and employ processes to manage the potential thousands of documents that would eventually be turned over in the discovery process. Legally trained specialists were needed in this rapidly evolving e-Discovery space. This specialization allowed lawyers to focus on one key part of the litigation journey, in turn developing novel processes to increase efficiency and reduce client costs. Since this adoption, almost every large international law firm now has a dedicated e-Discovery department.

The legal profession is evolving, and the latest leap forward is the use of AI. Legal technology is advancing at an exponential rate and law firms will need to adapt to stay competitive. This growth in technology will also lead to a simultaneous growth in roles for people who have legal knowledge and the ability to embrace the growth of new technology and processes. ClearyX is at the heart of this evolution! For example, Due Diligence Analysts specialize in all aspects of transactional diligence, while Transaction Managers manage multiple projects simultaneously, both utilizing innovative processes and the use of technology.

It is clear that the profession will continue to grow and change, in turn will creating new alternative legal positions and new ways to leverage the power of a law degree. The future of law has never looked so bright!