Evolution of the Legal Department in Financial Services – Discovered Trends

February 7, 2017

Law & technologyTechnology can make our lives easier, but for most attorneys it can be a real hurdle to adopt and trust new technology. This collision between traditional lawyering and new technology has come to a head, raising many questions. For example, how can global financial firms best incorporate new technologies and methodologies within their traditional legal environments? Additionally, as these firms struggle with liquidity restraints and mandates to reduce costs, how can a legal department do its part while moving into the 21st century?

These are a couple of the questions that emerged at a working session hosted by Thomson Reuters on January 26th, bringing together senior executives from the financial legal world and technology.  The discussion, moderated by Dave Curran from Thomson Reuters Legal Managed Services, unearthed just how challenging innovation in a legal department can be.

The issues ran the gamut, but there were a few key takeaways the group focused on:

Traditional lawyering is not enough to get by in today’s landscape.

Day-to-day work is becoming ever more complex.  International financial regulations are always increasing and rarely reduced.  Understanding, organizing and distilling this constantly changing information down to a consumable format is difficult for a lawyer to do alone.  If the information is not memorialized, it can result in both added organizational risk and in expensive duplication of work.

Some executives suggested that technology can aid counsel with these problems, but first the traditional-lawyer mindset must be changed.   Lawyers must be willing to broaden their perspective in order to serve their clients more effectively.  Bringing a legal project manager to the company was one suggestion to help these lawyers.  A legal project manager, with an overall view into process and goal setting, can interpret the legal advice and place it within the broader scope of the business.

Ultimately, when it comes to setting tone and a new mindset, it was generally agreed that a forward-thinking culture must come from the top.  And, if the company already has a bad process, they should focus on process improvement before implementing new technology. Technology is not a fix-all for an existing bad process.

Law firms are not immune to the technology race.

Law firms face three challenges with new technology:

  • they must stay abreast of what is available to help guide their clients,
  • they must be well-researched on the legal implications of using modern technology in order to quantify the risk vs. reward, and
  • they must adopt technology to meet their own 21st century needs.

There are inherent risks if the law firm does not embrace new technologies.  The firm may be unable to meet its clients’ needs.  It also may be less competitive in the market because its processes are outdated and less efficient.

New training and skills are required.

Legal project management is not a course found in most law schools.  Six Sigma awareness, let alone training, is rare to find in financial institutions.  A proper project manager with these skill sets is an asset to law groups to ensure efficiency and implementation of technologies.

Project managers alone are not able to implement new processes and technology.  Lawyers with subject matter expertise must work with project managers in order to successfully implement change.  Both parties greatly benefit from developing the other parties respective skill sets. Better still, it was suggested that the legal industry should be putting pressure on law schools to ensure that the next generation of lawyers have the right skillset for what is expected and needed from the emerging next generation.

A few executives suggested that technology-specific training may be a hurdle to adoption.  Incorporating new technology must be made as painless as possible because the time required to learn how to use it may impact whether or not a lawyer is willing to adopt it for day-to-day responsibilities.

Collaboration is key.

Collaboration between a legal group and other stakeholders is key to ensuring a technology solution is the right decision.  Collaboration with project managers may assist a lawyer in quantifying case-use specifics.  Collaboration with the risk department creates synergies justifying legal technology adoption by reducing risk to an institution.  Collaboration with procurement and the front office ensures that the legal technology adopted has a positive return on investment. And, when possible, collaboration within a financial institution’s various legal groups helps to ensure that the technology can be leveraged for more than one purpose.

Ongoing internal political pressures and cost concerns may reduce the ability to adopt new technology. To increase the chance of being successful, it’s critical to strategically collaborate with key stakeholders.

What does 2025 look like?

Those in attendance were optimistic about the future. They used their crystal ball to predict that a new class of lawyers and legal practice will emerge.  These lawyers will adopt an industrialized approach to the legal challenges of the day. They will offer best-in-class legal services through incorporating modern technology integrated with project management capabilities.

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