Ken Crutchfield, vice president and general manager, LRUS Legal Markets for Wolters Kluwer Legal & Regulatory U.S., discusses the results of the 2020 Wolters Kluwer Future Ready Lawyer Survey.
Please give us a brief overview of the 2020 Wolters Kluwer Future Ready Lawyer Survey. What was your goal in conducting this survey?
Ken Crutchfield: It was an independently conducted survey of 700 legal professionals across the United States and in nine European countries, and it was really done to assess the future readiness and resilience of the legal sector. The survey was conducted in January 2020, so it was pre-COVID, but the goal was to identify how well-prepared legal organizations are to drive and deliver higher performance in the future. It covered five areas: (1) top trends in readiness across the legal profession, (2) driving successful client relationships, (3) changing legal departments, (4) changing law firms and (5) technology.
What were the key findings?
The two top-level findings were that technology is very important and that there are gaps – gaps in understanding, gaps in readiness, and gaps in terms of the ways that law firms and corporations look at the problems here. The survey was conducted before the crisis fully took hold, but it already revealed that legal professionals see technology as a key force in change in the profession, and it’s critical to improving relationships, performance and productivity. The increasing importance of legal technology was the top trend for 76 percent of respondents across the U.S. and Europe – and that’s across law firms and corporate legal departments and business services firms.
The survey also identified gaps in understanding, expectations, experience, priorities and capabilities, both within corporate legal departments and law firms, but also between them. The good news is that there is already work underway to close those gaps.
For law firms, the survey indicated that increasing client expectations create a sense of urgency. The survey found that many law firms are driven by client expectations. As 2020 began, we were already seeing an urgency to enhance services and capabilities. Client-focused firms recognize the importance of increasing productivity and efficiency and helping clients cope with the increased complexity. They’re seeking approaches to foster innovation, strengthen areas of specialization and increased collaboration, all while ensuring greater cost efficiency, but there are still challenges as they navigate that transformation.
What are the trends identified in the survey?
In terms of trends, less than one-third of the lawyers surveyed believe that their organization is very prepared to keep pace with the changes in the legal marketplace. So from a trending perspective, the perception of preparedness is relatively low. The difficulty of change management, and also leadership’s resistance to change, are really the biggest barriers to implementing change, both for corporate legal departments and law firms. Corporate legal departments rated that as being that the challenge 65 percent of the time, whereas at law firms it was a little lower at 53 percent.
The increasing importance of legal technology was the top trend, at 76 percent, but only 28 percent of respondents indicated that their organization is actually prepared. So you see this kind of theme emerging, where legal professionals know what they need to do but they’re not exactly sure how to do it, or not completely prepared for it.
Meeting the changing client leadership expectations was reported as a trend with a high impact, but only 31 percent of the respondents said they’re ready. So again, there is this understanding of what the problem is, but they’re not exactly able to resolve it yet.
Please talk specifically about the findings as they relate to client-firm relationships.
One thing that was very interesting is that what corporate legal departments and law firms view as important in the relationship and evaluating outside counsel are different. A law firm basically believes that price is the most important thing to their client. Second is understanding client needs, and third is specialization and using technology. Whereas corporate legal departments said that actually the ability to use technology to improve productivity, efficiency and collaboration and work processes was the most important, then specialization, and then understanding client needs and the ability to partner. So corporate legal departments seem to be looking at technology and productivity and outcomes more than just price.
What were the findings or trends related to corporate legal departments?
The top changes within legal departments we expect to see in the next three years are greater use of technology and improved productivity, greater collaboration and transparency, and an increased emphasis on innovation. That lines up as a important supporting factor for how you improve your productivity and how you adopt and use technology more. Innovation is really key.
The challenges for corporate legal departments today are reducing and controlling outside legal costs, managing the growing demands on the corporate legal department, and automating routine tasks and leveraging technology and work processes. 82 percent of corporate lawyers said that it’s important that the law firms they work with leverage technology. 81 percent of corporate lawyers expect to ask the firms that they work with to describe the technology they use to be more productive in three years, and today 41 percent do that. So we’re going to see about double that in the next three years, as more and more corporate legal departments are going to be explicitly asking their outside counsel what technology they’re using.
What did the survey reveal about technological advancements?
We know that technology is going to be integral to the transformation of the legal field, and that was born out in the survey, that technology is the key driver of change. 82 percent of respondents predicted that greater use of technology will change how they deliver services, 63 percent expect big data and predictive analytics to have a significant impact on the industry within three years, and 56 percent expect to increase spending on legal technology solutions over the next four years.
A couple of other points on that theme too are that organizational issues, including the lack of a technology strategy and leadership’s resistance to change and lack of change management processes, comprised the top category for resisting technology. So it seems to be less about the technology itself and more about how you adopt the technology and successfully apply it to a problem – that is where there’s a challenge right now.
The other point that is important to make here is that we classified firms as being technology leaders or not, and of the firms that are technology leaders, 62 percent of them reported that their profitability increased over the prior year, whereas only 39 percent of firms that are transitioning reported an increase in profitability. And of firms that are trailing in technology adoption, only 17 percent reported an increase in profitability. So that’s a pretty strong proof point that technology delivers results.
How do you think the pandemic will impact legal professionals in the long term?
The consensus here, in terms of reviewing afterward, talking with customers, etc., is that the pandemic is going to accelerate the trends that we’re seeing here. It’s going to put more pressure on. I think it was Plato that is attributed with saying “Necessity is the mother of invention,” and we’re in a very necessary world right now where we’ve got remote working environments. Corporations can’t go into the office, nor can law firms, nor can people meet with each other. So work is inherently being done digitally and remotely and through Zoom and Teams and other tech solutions. And the cost pressures that our corporate legal counterparts are dealing with are very significant. So they’re having to be creative in terms of how they work, what they can do externally, what they need to do in-house. And the same thing for outside counsel. They’re being asked to do more, particularly when there are all sorts of questions of precedent based upon the pandemic itself that are creating new sorts of issues, as well as the thousands of executive orders across the United States and beyond that have to be dealt with and addressed both in the near term and in the new normal.
Is there anything that you think we missed?
We recently co-sponsored a study with the Association of Corporate Counsel (ACC) called the 2020 Legal Operations Maturity Benchmarking Report as well, which took 15 discrete categories of maturity into account, and two of the bottom quintile were change management and innovation management, which kind of speaks to the gap that we see in terms of the ability to know what to do versus how to get there in terms of the gaps that we were discussing. So that seems to corroborate, and it also ties back to the challenges with change management and leadership buy-in. I really think that’s because a lot of this is about people, process and technology. It’s not just a technology solution where you deploy something and it magically solves your problems. You have to think about how it affects people, realign and manage the goals of individuals, and actively manage that change.
Published August 14, 2020.