05 July 2018

Legalpreneurs Spotlight - Eric Chin

Published on 05 July 2018

From sustaining to disruptive legal innovation

Having spent the past nine years as a consultant and researcher to the legal profession, Eric Chin has seen seismic economic, regulatory and technological shifts. It is a role that sees him perfectly poised to characterise the history and context of legal innovation, and what we can expect next.

“Innovation is the act of doing something in a new way, using a new idea, or adopting new processes. At the core of it is solving existing problems with new and better ways,” said Eric.

 

A brief history of legal innovation

In terms of law, innovation has undergone four distinct phases since the 1980s.

“We saw competition evolve from the race for practice specialisation, with the notion of practice groups emerging in the 1980s. This progressed to the race for scale – in other words, geographic dominance. We then witnessed the race for sector specialisation as law firms sought to remain relevant to clients. Now we are seeing a race for a multi-service offering, often using NewLaw and LegalTech solutions.”

However, according to Eric, much of this innovation was sustaining innovation which aimed to change the business of law and help law firms provide better client service.

Where sustaining innovations offered incremental change, NewLaw and LegalTech gave rise to truly disruptive innovation, allowing once expensive, complex services to be simplified and provided cheaply to a mass market.

“NewLaw and LegalTech firms are providing new and different solutions to the legal market, including access to temporary lawyers or technologies that automate mundane tasks to free up the lawyer time to do what they do best – problem solving,” said Eric.

“Today, you have LegalTech solutions that combine data analytics and machine learning to equip lawyers with the relevant cases and probabilities of case outcomes, accounting for precedent, opposing counsel and case parameters,” said Eric. “This is a world away from the law locked away in leather bound books in law libraries.”

 

Law firms that will survive and thrive are those that adapt to the new normal

“The seven most expensive words in business are ‘we have always done it this way.’ The legal profession is no different,” said Eric. He has seen firsthand how destructive legacy mindsets can be on culture – not to mention the bottom line.

For firms, now is the time to adapt. This could involve adopting alternative fee arrangements, new forms of legal analytics or knowledge management, project management or technologies. Some are building innovation from within, with roles like Head of Innovation now du jour. Others are building innovation by way acquisition or partnering with LegalTech and NewLaw firms. The Legal Services Innovation Index tracks firm which have implemented innovation into their practice.

Just as publicly traded companies have found their life expectancies shrink from 60 years to 30 years since 1970, law firms are finding their lifespans might be increasingly limited.

“The legal profession is not immune to the shrinking life expectancy that is brought about by macro changes in the industry,” said Eric. “Law firms that will survive and thrive are those that adapt to the new normal in how they leverage LegalTech and legal innovation in their practices,” said Eric.

 

Lawyers, but not as you know them

As the adoption of LegalTech picks up across the profession, the skillset and role of lawyers will change.

“The push to adopt LegalTech solutions will be driven both by corporate legal departments and law firms. Standardised, repetitive tasks will be automated, freeing lawyers up to do what they do best – lawyering,” said Eric.

Eric echoed Richard Susskind’s prediction that in the post-disruption world, only five types of lawyers will survive: the expert and trusted adviser, the enhanced practitioner, the legal knowledge engineer, the legal risk manager and the legal hybrid.

Career options for lawyers will also improve.

“Working at a law firm will no longer be the only attractive career path for law graduates. Even today, law graduates have the option of working in corporate legal departments, law firms, LegalTech startups, NewLaw firms and even the Big Four accounting firms,” said Eric.

Investment in LegalTech solutions will continue to grow.

“In my most recent work on the LegalTech market, I tracked US$2.5 billion being invested into 200 LegalTech firms by 436 investors globally. The viability of LegalTech as an attractive investment class will build a new class of investors and managers,” observed Eric.

 

Legal advice never occurs in a vacuum

Eric was quick to emphasise the commercial context of legal innovation and legal advice.

“The provision of legal advice and legal services has never occurred in a vacuum,” said Eric. “Central to the role of lawyers, particularly commercial lawyers, is to help organisations navigate regulatory boundaries to keep cashflow steady. Lawyers are engaged by organisations in the service of commercial outcomes, and it’s important never to lose sight of this. Cross-disciplinary collaboration and good communication skills will ensure lawyers work successfully with other commercial stakeholders and advisers,” said Eric. 

What is most vital is to solve the right problem.

“To quote Albert Einstein, ‘If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about the solution,’” said Eric. “Most failed innovation initiatives are due to people solving the wrong problem. Legal professionals need to be equipped with the tools and knowledge to consider the problem properly.”

Eric also sees a role for data insights to help guide trends and innovation.

“As a consultant and researcher, I see a role in leveraging data and insights to firstly paint a picture of the state of the legal profession and then sharing what has worked in the past. There are also cross-professions learnings which could advance our next innovation,” said Eric.

He also predicts the next generation of lawyers will upend the status quo when it comes to LegalTech.

“The most educated and technology-savvy generation is now entering the legal profession. If Generation Y has upended the status quo in employment expectations, Generation Z will create new paths at the intersection of law and technology,” said Eric.

In this disrupted environment, Eric sees the role of the Centre for Legal Innovation (CLI) as crucial.

“The CLI plays an important role in providing a platform for thinkers and doers to connect and share what’s worked and what didn’t. The innovation journey is messy, riddled with failures and requires an unyielding grit to solve a problem. The CLI has changed the negative narrative about disruption and provided a positive voice and resource to help the legal profession work through it,” said Eric.

 

Eric will be a moderator at the AI and Legal Data Analytics session at our 2018 AI in Legal Practice Summit on 31 August in Sydney.