A few years ago, when contemplating whether to continue working full time in my law firm, perhaps as a CIO, or start my blog, I talked to Aaron Street, co-founder of The Lawyerist. Aaron told me, “There are firms that want to be innovative, and then there are firms that just want to say they are innovative.”
I was reminded of this insight when I read the recent Thomson Reuters Report released in late June entitled The Digital Strategy Report. The Report compiled and summarized several statistics on whether law firms had formal strategies. Strategies to innovate their digital operations and move forward into the future. The Report was written by my friend Zach Warren of Thomson Reuters. Zach was formerly with ALM and a panelist on our weekly LegalTech Week roundtable.
The conclusions from the statistics were both depressing and downright scary.
The conclusions from the statistics were both depressing and downright scary. Depressing because of all the hoopla about how the pandemic has moved law firms forward from a technology standpoint. The Study, however, suggests to the contrary. When it comes to whether law firms look at tech and innovation with a long-term view, law firms haven’t changed much.
Scary because large language models and generative AI can potentially be disruptive. These technologies are almost daily morphing into different forms and present new abilities. But the Report confirms that too many law firms still have no plan or strategy for systemically dealing with and evaluating even existing technology, let alone new potential game changers like generative AI. Frankly, I think many firms that say they have a formal strategy to deal with digital transformation and potential disruption don’t. Or at least don’t have a plan that is in any sense strategic or useful.
Thomson Reuters conducted 115 interviews with those in leadership roles (from law firm COOs to Managing Partners) earlier this year. The Survey was global, although 41% of the respondents were from the U.S. The interviews were of those in firms of all sizes. But Thomson/Reuters admits that the responses skew toward larger firms. (That fact alone is scary since large firms should have the resources and sophistication to have strategic plans in place).
Some results that stand out from the Study. 83% of those interviewed said having a strategic plan to deal with technology and innovation was very important. But despite this recognition, only 54% of those polled say they actually have such a plan. Of those firms claiming to have a plan, 56% admitted they had no way to measure progress against the plan! And of the firms with a plan, only 34% of them bothered to consult the clients they serve about the plan and its development.
The fact that barely half of the primarily large global law firms admit to having any sort of plan (written or otherwise) is striking. And I suspect the 54% number itself is questionable. Thomson Reuters understandably had no way to determine how robust the plans of these firms were or even if they existed. Knowing law firms, I suspect some (many) of the interviewees would be reluctant to say they had no plan. Or they may have been tempted to say sure, our firm has a plan, even if it only exists in a vague fashion in someone’s head.
It’s often said that if something isn’t measured, it can’t be managed. In this case, it’s more accurate to say if you don’t measure it, it likely doesn’t exist.
And the fact that so many of the firms with plans admitted they had no way to measure progress under the plan is revealing. It is fundamental in developing any strategic plan that there be measurables. Measurables ensure the plan is effective, practical, and relevant. Otherwise, the plan will gather dust on a shelf and never be consulted. It’s often said that if something isn’t measured, it can’t be managed. In this case, it’s more accurate to say if you don’t measure it, it likely doesn’t exist.
The other statistic that stands out: so few firms involved their clients in the plan or its implementation. That could suggest that the plan, if it exists, doesn’t address the fundamental issues of client needs and service. Or it could indicate that firms didn’t really care or want to know what their clients-the ones for which law firms exist and who they serve—care or want.
Or worse still, it suggests that the goal of creating the plan was to simply check off a box that it had done instead of creating a roadmap for the future. No matter what, it suggests a fundamental problem. If the plan doesn’t consider what clients want or need, how can it be of much value? Serving the needs of clients is a law firm’s reason for being. Or should be.
And a final so what. On a recent Kennedy Mighell Report podcast, Ivy Grey, Vice President of Strategy and Business Development for WordRake and legal tech thought leader, noted the frequent confusion between goals and strategies. Goals are what you want to achieve. Strategies are how you plan to achieve those goals. I wonder if those firms who say they have plans started by defining their digital and technology goals.
Not having measurables and not talking to clients about the plan suggests that not much thought was given to the overall goals and vision. Not having articulated goals guarantees a weak strategic plan. It indicates a lack of interest in having a robust and relevant plan in the first place.
A lack of vision, a lack of articulated goals, and the absence of a robust strategic plan to deal with these developments is like trying to safely drive down a road at 120 miles per hour while looking only in the rearview mirror.
Even before the advent of ChatGPT, technology, and the digital revolution posed challenges to the legal profession and the status quo. In many ways, law firms were already the most vulnerable to disruption. AI, predictive analytics, automation, Web3, the metaverse, VR and AR, blockchain, and new competitors to law firms (Big4 and ASLPs) all impact and could threaten how lawyers practice law. All could impact the law firm business model. Now we have generative AI and large language models. These technologies guarantee further and exponentially disrupt traditional law firms.
How can a firm hope to keep up without a robust plan and clearly articulated goals? How can it compete with firms that are thinking and planning for the future impact of all these technologies?
A lack of vision, a lack of articulated goals, and the absence of a robust strategic plan to deal with these developments is like trying to safely drive down a road at 120 miles per hour while looking only in the rearview mirror. Unfortunately, it’s how many law firms have traditionally managed themselves.
Bottom line: some firms want to have a digital strategic plan, but then some just want to say they have one.