The SMAC Stack & The Diffusion of Legal IT Innovation

Blog: By Joanne Hunter, Head of Marketing, Select Legal Systems Limited

 

When using the phrase ‘The Digital Law Firm’ I am talking about the law firms that have embraced the four key corner pins of ‘digital technology’ as enablers for the business of practising law.

Those enablers, often referred to collectively as the SMAC Stack, are – social, mobile, analytics and cloud. 

  • Social – a law firm that uses social media and other innovative tools to interact with customers, smartly, proactively and responsively.
  • Mobile – a law firm that enables its clients to use the tools and devices they rely upon in their everyday lives (phones, tablets etc.) to interact with their solicitor wherever they are, rather than having to remember to do it when they get to the office/home.  I am also referring to the law firms that give their fee earners similar tools to manage their cases wherever they are.
  • Analytics – a law firm that uses its data to understand how, when and where their clients, and prospective clients, consume legal services.
  • Cloud – a law firm that embraces a new way of accessing technology to solve business problems and respond to a changing legal market.

While each of the four technologies in the SMAC STACK can impact a law firm individually, their fusion is proving to be a powerful force that can create entirely new legal business models.

A Prediction That Came True

Although I have witnessed a lot of progress in the last 20 years it still surprises me that many of the exciting technologies that were dominating column inches back in the 90s still have not truly reached widespread adoption, two decades on. I have a 1996 book entitled ‘Digital Law’ written by a young man called Richard Susskind (now Professor Richard Susskind OBE, IT advisor to Lord Thomas of Cwmgiedd the current Lord Chief Justice of England and Wales.)  It was not a book about computers or about using IT in a legal office, as one might expect from its title.  It was about the IT revolution and its impact on law.

In his 1996 book Susskind touches on all the elements of the SMAC STACK to some degree (of course his terminology was different back then).  He wrote about knowledge based systems, electronic legal networks and workflow for case management.  All proven technologies that have been around for a long time but tools that are still not being taken advantage of by many law firms.

In the book Susskind quite accurately, in my opinion, predicted that the future of law depended directly on the profession’s response to new technologies.  The onset of Tesco Law and the ABS (alternative business structure) that have evolved since the book was published provide some evidence, again in my view, that Susskind was right.

The Divorce Negotiator a client of Select Legal Systems Limited is one good example of this.

Divorce Negotiator assists both parties through the divorce paperwork from initial Petition through to Decree Absolute.  Carol Sullivan, who is not a practising solicitor, set up Divorce Negotiator to help couples in England and Wales achieve amicable divorce.  A qualified legal executive, Mrs Sullivan has franchised her business model and three years after launch has handled over 400 amicable divorces.  Divorce Negotiator focuses on reaching a fair settlement for the whole family guiding couples through ‘the grounds for divorce’ and all aspects of the law regarding settlement, children and basically making the process completely transparent and less daunting for everyone involved.  The business’s use of technology is at the heart of this unique service and its success.

The Diffusion of Legal IT Innovation

Having worked closely with many amazing legal business leaders over the years, I do understand embracing technology is sometimes more complicated in practice than it is in theory.  Select Legal Systems’ client Rod Hughes of H&R Hughes  sums this up beautifully in our case study video here.  Rod explains why legal experts want to concentrate on practising law and not waste too much precious fee earning time learning about IT.  Who can blame them?  Finding a technology partner you can trust is obviously key.

However, a marketing tool springs to mind that if applied to the legal profession could help us understand the industry’s rate of technology adoption or non-adoption.

The Diffusion of Innovations theory, developed in the 60s by Everett M. Rogers, is widely used across global industries to analyse how, why and at what rate new ideas and technologies spread through cultures, communities and industries.  It relies heavily on human capital – i.e.   the knowledge, talents, skills, experience, intelligence,  judgment and wisdom possessed individually and collectively by a population. These resources represent a form of wealth which can be directed to accomplish the goals of the nation or state or a portion thereof – e.g. the legal profession.

The tool categorises the community (or profession) into:

  • Innovators – in our industry they are usually leading legal entrepreneurs / risk-takers  – financially well-off with an ability to understand complex technologies.  While others may consider the innovator to be rash or daring, they are usually willing to accept the occasional setback on their road to success.
  • Early Adopters – legal opinion leaders / legal agents of change – usually highly respected by their peers for having a reputation for successful use of new ideas and technologies.  They are often willing to share information about innovations with others in the profession.
  • Early Majority – law firms that adopt technology just before the average tranche of Practices in the industry.  Their innovation decision making time is usually a little longer than early adopters because they tend to deliberate longer before adopting a new innovation.
  • Late Majority – the sceptical law firm whose adoption of technology is more likely to be borne out of economic necessity and in response to strong market or legislative pressure.  Usually cautious and reluctant to adopt technology until most others in the legal profession do so first.
  • Laggards – very traditional law firms usually the very last to adopt innovation, if at all.  Fixated on the past, laggards are usually suspicious of change agents and tend to base their decisions on the decisions of previous generations.  An innovation adopted by a laggard may already be considered obsolete by an innovator.

Law firms face more complex adoption possibilities because they are affected by many factors both internal and external to the organisation and they have a decision making unit.  If  I said on the whole people are conservative creatures that avoid change, that would be a sweeping generalisation.  But I do firmly believe there is a significant degree of truth in this statement.

When a firm feels pressured by a tension for change innovation will diffuse far more quickly.  The pressure can be inside the law firm if their situation is untenable it will be motivated to adopt an innovation to change its fortunes.  Pressure from the wider environment such as the economy, market forces or political directives have a huge effective on the rate of adoption of course too.

Rogers explains that clever marketing gimmicks and incentive programs are not enough. Diffusion is essentially a social process through which people talking to people spread an innovation.  Mass media can introduce a new idea to people but people follow the lead of other people they know and trust when they decide whether to take up a new idea or innovation. Every change requires effort, and the decision to make that effort is a social or business process. This is something I understand well as a long term legal IT marketer who has been flogging IT to the legal profession for more years than I care to admit.

Five Factors

Roger’s classic book looks at adoption in terms of 5 factors:

  • Relative Advantage:   Some marketers will tell you about saving time, saving money, doubling your income without really knowing whether or not you will.  In theory you should achieve all of those results, but I have learned over the years it is much more effective to work closely with key industry players and share real evidence of true benefits through case studies.
  •  Compatibility: How much effort is required? If the perceived cost of change is higher than the perceived relative advantage, most people won’t even try. Good technology partners take responsibility for this and work hard to make the change as easy as possible for law firms (i.e. with slick data conversion services, intuitive software and quality training etc.)
  • Complexity: How much learning is required to apply the innovation?
  • Trial-ability: Is it easy to try out? Can we have a demonstration? Can we see it in use in another firm like ours?
  • Observability: How visible are the results of the innovation? Fashion fads and tech gadgets are highly visible which helps them spread.  With legal IT again it’s case studies, reference sites/visits and hands-on demonstrations that law firms need to see.

Wow – The Last 12 Months!

It may have been a long time coming but I have to say today, for the first time,  I am completely overwhelmed at how the rate of adoption has increased during the last 12 months in UK law.   For the first time I am seeing evidence of a number of real drivers finally coming through and serious adoption of technical legal innovation taking place.  Select Legal Systems for one has seen sales enquiry volumes double over the last 6 months.

The Chancellor’s December 2015 Spending Review which allocated more than £700 million investment in the courts and tribunals system to create a swifter, more proportionate justice system, which will generate savings of approximately £200 million a year from 2020.  In my view this is the main driver.

We are seeing tangible examples that this is already happening:

  • Low Value Claims:  The recommendation in 2015 by the Civil Justice Council (CJC) advisory group for “fundamental change” in the way the courts deal with low-value claims calling for the introduction of state-backed online dispute resolution (ODR) across England and Wales in 2017.
  • Digital Court Bundles:  As part of the Justice System Efficiency Programme, in July 2015, criminal defence lawyers were invited to road test a new crown court digital case system (DCS) with case file access via WiFi and the use of digital court bundles.
  • Online Divorce:  In March 2016 British Judge and President of the Family Division of the High Court of England and Wales, Sir James Munby, addressing Barristers at a dinner predicted the likely possibility that divorce cases could be handled online by 2017.  He believes online divorce, probate and pre-proceedings regarding children will be almost entirely digitised in the not too distant future.
  • J-Codes:  As a result of the Jackson Reforms, the Legal Electronic Data Exchange Standard oversight committee has approved the use of J-Codes (based on the American L Codes System) to create a system where contentious work can  be recorded electronically from time recording data for detailed assessment and budgeting.  Despite its pilot being postponed (at time of writing this article) many in the legal profession believe this will happen.

 

There is a clear intent by the Government to encourage the digitisation of the legal profession and as a supplier of legal IT innovation specifically to law firms we are seeing the impact this is having across the profession. For the first time I personally feel we are on the cusp of a legal IT revolution.

Now that the justice system and courts are getting their act together with Government backing and a tangible driver to save £200 Million per year by 2020 – I believe the ‘Digital Law Firm’ will become a reality. The knock-on effect of a digital justice system means law firms need to raise their ‘digital’ game.  Through the widespread adoption of the combined elements of the SMAC STACK across all legal entities, I believe law firms now have every reason to become the innovators and technology adopters they have always strived to be.

A Bit of Fun – Our Diffusion of Innovation Quiz

When it comes to the adoption of innovative technology is your firm a dream team of trailblazing innovators or more a bunch of suspicious legal IT laggards? Take our Legal IT Diffusion of Innovation Quiz to find out where your firm fits within Everett Rogers diffusion curve.

Select Legal Systems is a leading supplier legal practice management software and their flagship product, LAWFUSION, offers everything from legal accounts and time recording to case management and marketing software for law firms. If you want more information about LAWFUSION please call our sales team on 01482 567601 or contact us online to arrange a demonstration.