Why Haven’t Client Facing Systems Blossomed?

Large law firms are facing intense competition and downward price pressure. In other markets, these forces drive innovation, often involving technology. Yet we see few notable instances of law firms deploying client-facing technology that achieves real differentiation or results in winning new client work. Here, leading consultant Ron Friedmann suggests explanations, and develops future scenarios where legal tech plays a bigger role. We will also be seeking your help to confirm or reject these so please look out for and participate in a discussion and survey that will be published very soon in the Legal IT Network on LinkedIn.

A bleak picture of strategic technology

Two recent surveys found that few firms use technology to achieve substantial client impact. In May 2012, I surveyed large firms to update a list of client-facing systems that I compiled six years ago. The list excludes extranets, deal rooms, and training systems because all are sufficiently widespread that they cannot be considered competitive differentiators.

I relied on past research, web searches, and most importantly, personal sources to update my Online Legal Services list. I was surprised by how few new online services I found. Assessing the impact of these online services on firms or clients is difficult but anecdotally, my sense is that few have significant impact. (For a more detailed analysis, see my blog post on 'The Current State and Future of Big Law Online Legal Services'.)

In November 2012, the FT issued its US Innovative Lawyers 2012 report, based on survey research and interviews. Commenting on it in my blog post 'Two Ways Law Firms Can Compete – FT Innovative Lawyers Awards', I noted that large law firms can compete for business in two ways: (1) innovation in law practice and (2) innovation in service delivery and client value. For US firms, the report shows little of the latter. Only a few award listings relate to technology to serve clients and the FT discussion barely mentions technology.

The dearth of legal tech innovation

Many hypotheses could explain why we see so little apparent legal tech innovation. I offer a range of reasons to consider, in the order I consider most to least likely

Firms lack interest: the Innovator's Dilemma. Large law firms have fallen into the Innovator's Dilemma trap, made famous by Clayton Christensen, who was recently interviewed by the BBC. As he explains, successful businesses at the top of their game tend to keep moving...