Reshaping Business Models
within SME Law Firms
William Robins – Operations Director
Keystone Law
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How are we all doing? Business Good?
• You report you are feeling optimistic
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But change is coming
• How will you deal with change
• Will it blow you away?
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What’s the problem?
• Rise of millennials
• Change in client expectations
• Increasing costs and falling revenues
• TECHNOLOGY
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Rise of millennials
• Carrot and stick no longer works
• Millenials have been brought up differently
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Change in client expectations
• They have
• Processised
• Internationalised
• Embraced technology and remote working
• Why haven’t you?
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Increasing costs and falling revenues
Increasing costs
• Rents up
• Rates up
• Wages up
• Knowhow suppliers up
• Technology suppliers up
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Increasing costs and falling revenues
Falling revenues
• Clients expect to pay less
• Clients can and do shop around
• The big law firms are coming down the value chain
• Non law firms coming up the value chain
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Technology
• Document automation
• Personal digital assistants
• Legal apps
• They are eating our lunch
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Technology – Good news or bad?
Good News
• Technology can help us to be more efficient
• Technology will allow us to offer services at lower rates and increase
both the market and the addressable market
• Technology can help us to reduce cost and increase margins
• But...
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Technology – Good news or bad?
Bad News
• What are legal services?
- Knowing and understanding the law
- Using the law to solve problems
- Advising clients
• Can computers really do this?
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How have computers changed our lives outside
the law?
• The Internet – The connected world
• Search – redistribution of knowledge and easy retrieval of knowledge
• AI/Bigdata – customers who bought…
• Robots replacing human labour
- Drones pick stock in the logistics business
- Self check outs
- 3D printing (manufacturing at home)
- Self driving taxis
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The effect of computers outside law
McKinsey Global
2016
2m industrial robots
2025
75m industrial robots
But that’s just industry, what about professional services?
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The effect of computers outside law
• 2011 Watson won Jeopardy!
• 2016 Watson technology being used in medicine
• Faster and more accurate diagnoses
• Able to do 20 man years of work in ten minutes (1 million x faster than
us)
• Ok, but what about law?
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Preparing for the future
• Change is certain
• Game changing technology is still a few years away
• Effects of technology will be wide spread
• By 2035 47% of all jobs will have disappeared in the UK, 77% in China and
83% in Ethiopia (University of Oxford)
• But beware the boiled frog!
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Artificial Intelligence
• Our distorted view of AI
• The gulf between Einstein and the village idiot
• The status quo
• The rate of improvement
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Artificial Intelligence
• Einstein and Village idiots not so far apart
• AI improving rapidly
• Moore’s Law
• Kurtzweil's ‘The Singularity’….
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The effect of computers inside law
• Riverview – digital legal assistant
“The Advisory and Smart Assistants we launch later this year will do lower level
legal work and provide suggestions for what advice should be given.” - Karl
Chapman
• Epoq – contract drafting
• Rocket Lawyer/Legal Zoom
• Ross AI
• Keystone Law
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The effect of computers inside law
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The effect of computers inside law
• What’s the connection?
• These companies are using technology for competitive advantage
• Your firm needs to be doing this
• But how?
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Preparing for the future
• Which route to take?
• Full AI
• Craftspeople model
• Paralegal model
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Preparing for the future
• Where do you start?
• By looking at yourself
• (Or get an outsider to take a look?)
• What’s your market (geography/service/sector/price)?
• What do you offer clients?
• What’s your competitive advantage?
• What opportunities can you address?
• What problems do you have?
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Preparing for the future
• Where do you want to be in the market?
• Ceasing part(s) of your practice
• Improving part(s) of your practice
• No change
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Time to act
Ceasing part(s) of your practice
• No shame
• High water mark?
• Your market might have changed
• Use funds to invest in what you do best
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Preparing for the future
Improving part(s) of your practice
• Gradually, start changing now to
- Increase agility
- Increase efficiency
- Change remuneration models
- Change focus
- Change culture
- Change working practices (e.g. remote working)
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Preparing for the future
• How to improve
- agility – move to variable costs, which includes…
- changing remuneration models, don’t forget
- culture
- working practices (e.g. remote working)
- efficiency – delegate/processise/outsource/invest in IT => re-price?
- focus – high value, bespoke, empathy, use the IT
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A last word on…
• IT
• Get the right IT
- A challenge in a changing market
- Employ an IT consultant/director and LISTEN to what he says
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A last word on…
• Remote working
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Reduce costs (lease and rates)
Less commuting
Less politics
Happier colleagues (remember happiness?)
Continuity of service
Portfolio career
Access to millennials and disenfranchised workers
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Remote Working
How to implement remote working
• Plan
• It’s not just about IT
• What’s the culture of your business?
• Who should be able to work remotely?
• How will IT facilitate this?
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Questions
[email protected]
@KeystoneOps
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