Jul 10 '14
In the last article we set the scene by explaining the background findings in the report. Now let’s get into the meat of it. In this article Elephant Creative Managing Director, Helen Hammond, takes a look, specifically, at the things the report feels you should be worrying about… NOW!
The report sets out a really excellent section that gives you clear instructions for how you can respond to this, at times, frightening IT future.
Seizing the opportunity – Ten key imperatives emerge, each of which can be enabled and enhanced through IT
- Build a global mindset. A universal business challenge facing firms of all sizes is the need to gear up to support clients’ globalization efforts and the impact of emerging markets. Even firms that don’t have ambitions to extend their own footprint will have to be capable of supporting clients as they venture into new geographies.
- Develop comfort in chaos. Firms must learn to manage and thrive in a volatile, uncertain, complex, ambiguous (VUCA) and rapidly changing reality. Developing a “rapid response” mindset becomes a core competence.
- Pursue process excellence. In an era of commoditization, intense scrutiny and rising client service expectations, process excellence is essential.
- Differentiate the brand. In a sector where standards are already high and competition increasingly intense, the search for differentiation is vital for those that want to consolidate or enhance their positioning. Firms must develop insight and strategic wisdom as core sources of advantage with the potential to enhance revenues and profit margins.
- Redefine risk. An uncertain environment creates risks both in terms of the firm’s preferred strategies and the cost of inaction. Both types of risk must be evaluated in any assessment of strategic options.
- Create magnetism: Leaders increasingly appreciate the value of encouraging the flow of ideas and opportunities into the firm — particularly as a means of speeding up the innovation process.
- Acknowledge disruptors: The legal sector is now a prime target for potentially disruptive new entrants, often coming from outside the sector. This reality calls for a systematic approach to scan for such potential developments and identify, embrace and pre-empt new entrants through collaboration and competition.
- Rethink talent: Firms need to prepare for radical changes in staffing profiles, recruitment, retention, graduate education and continuous development.
- Embrace IT opportunity: To address changing
client demands and respond to the other strategic imperatives outlined here, firms have to invest in and unleash the transformational potential of IT.
- Nurture excellence. To ensure the technology function delivers on expectations, firms need to demand and invest in best in class IT leadership.
It then goes on to look at six areas, discussing each and posing questions for you to consider, in your quest for IT utopia:
- The new client agenda
- Globalisation and global mobility
- Economic shifts and uncertainty
- Political instability
- Environmental responsibility
- Socio-demographic changes
The new client agenda
You can’t escape. Whether you want to sit in an oak-panelled room, surrounded by books whilst you wait for the squeak of the tea trolley, clients are pressuring law firms to evolve. The marketplace in which you work is getting more and more competitive and that’s driving the need for speed. Business cycles are getting shorter and faster. You need to make decisions and implement them much more quickly. New players in every sector (many of whom you’d never previously have considered a threat) are continuing to crop up, disrupting and dominating. They’re overturning old orthodoxies and ignoring accepted “rules of the game.” So what are they doing so differently to you? They’re setting out to disrupt, to start with. No, you’re right… it’s not cricket. They’re disrupting through offering innovative solutions, pioneering new technologies, introducing alternative business models and adopting more nimble management approaches. This pressure means you existing players now need to respond with your own innovations and to accelerate your adoption of new and emerging technologies.
As the report says: ‘We are entering an era of tough performance cultures where longer working hours could become increasingly common… Collaboration will be common as players seek to partner and reduce the time to market for new initiatives, particularly in developing economies. In the quest for new opportunities and short-term advantage, many firms are expected to push the law to its limits. Leaders will turn to technology to help identify and exploit potentially short-lived windows of opportunity. At the same time, businesses may find that complexity and constant change reduces their “span of control,” creating a greater focus on the role of IT in monitoring and sense-making of the evolving landscape. IT will sit at the heart of new operating models, with a particular emphasis on the use of artificial intelligence (AI) and robotics to automate tasks previously performed by skilled workers. Clients will expect their professional service partners to respond to these pressures with equally rapid and fundamental innovations’.
So what does that mean in plain English? Client expectations will continue to rise. There will be a demand/expectation for ‘anywhere/anytime’ access. This will put pressure on cost and time. Clients will increasingly look globally, rather than locally.
Globalisation & global mobility
Ok, so you might not think that this will impact so much if you’re getting a divorce but the report is clear that: ‘…business will be done in more countries, with Asia remaining a prime focus. Latin American and African markets are already becoming increasingly important for corporations. The Internet is seen as a “game changer” here, allowing even the smallest of local firms to participate in global markets and serve customers around the world. Underpinning these shifts is a combination of regulatory changes, technology advances and transport efficiencies. These are eliminating barriers to the movements of ideas, physical, financial, intellectual and digital assets and — perhaps most important — human capital. Greater mobility of people and data (selected by 81.9% of respondents) and increasing globalization (63%) were the two options ranked highest of all factors that would drive business over the next decade’.
Firms will need to understand how to move data around the world and be compliant with local law if they’re to keep up with this.
Economic shifts & uncertainty
If you’re planning to enlarge your global footprint you’ll need to keep up to speed with the global economy. Stands to reason. This means everything from the level of sovereign debt through to the robustness of banking, financial governance, prospects for growth as well as wealth distribution.
The report goes into some depth to talk about ‘the shadow economy’ in terms of the opportunities these goods and trade structures could offer for firms in terms of developing new monitoring and control systems, perhaps in partnership with technology companies.
Rather like the section on the economy, embracing the IT movement isn’t just a case of considering the way you do things now. It’s also about thinking of the opportunities for new business that are open to you. Could mounting economic, political and commercial issues, tensions and conflicts see greater use being made of legal systems to resolve disputes at the global, national and firm level? Could we see growing recourse to conflict management and alternative dispute resolution approaches? How is IT being used to track the evolution of emerging issues and provide an early warning system on their potential to escalate into legal disputes?
In short, what new IT demands could arise from the need to track and report on the firm’s environmental footprint? Environmental responsibility is high on the agenda in most corporations, and the legal sector is beginning to prioritize the issue. As the report states: ‘greater environmental and sustainability concerns (40%) and Global warming/climate change (29.4%) were highlighted by survey participants as critical factors shaping business behaviour in the years ahead. Environmental responsibility is expected to become a growing focal point for law firms and their clients in many markets and may increasingly be enforced through regulation. New markets are also emerging in environmental goods and services and an increase is expected in the level of legal work arising from environmental issues resulting from corporate activities’
Four core demographic trends are expected to have a major impact over the next decade:
- Global population growth
- Growing female participation in the workforce
- An aging population in both developed and developing
- Expectations of continued migration
What does this mean, within an IT and development context?
- Firms will need to work out how to accommodate five or six generations in the workplace. Overlay on these generational factors the issues of gender, sexuality and cultural differences, and accommodating diversity in all its forms could be one of the biggest HR challenges of the next decade.
- Increasingly, those joining law firms will hold greater store by quality of life. Accommodating such demands will require an investment in the IT enablers of flexibility, such as project management tools and multi-party document assembly applications.
- Similarly, new generations of fee-earners and support staff might have different expectations as to how work should be done and will be increasingly less tolerant of the need to invest manual effort in searching for and compiling information when they know that technology can do it far more rapidly, efficiently and reliably.
In the next article (to be published on Monday 14th July) we’ll look, specifically at the things a future-proofed approach to IT will allow you to achieve.
Footnote: About the report, what it aims to achieve and how they did it
The Legal Technology Future Horizons foresight research study (ED: more words in the title = more credible study) was commissioned by the International Legal Technology Association (ILTA) and undertaken by Fast Future Research between January 2013 and March 2014. Their collective aim was to explore how advances in IT could impact on the legal profession over the next decade. They spent a lot of time talking to law firms (and the people in them) both in meetings and through two surveys. The first survey looked at the ways firms were using IT within the business. This received 499 responses. 72% of the respondents were from the legal sector and included lawyers as well as professional staff from finance, HR, IT and other support functions. Responses were received from 29 countries, with the two largest groups coming from North America (78%) and Europe (15%), followed by Australasia, Asia and the Middle East. The other survey looked at establishing a timeline for emerging technology. They received 223 responses, 61% of which came from the legal industry. Responses were received from 22 countries, predominantly from North America (76%) and Europe (14%). Additional responses were received from Australasia, Asia, Africa and the Middle East.