The headlines on ‘how legal services will be delivered in the future’ have been doing the rounds for some time now. Thankfully, the profession is not in danger of being replaced by an army of robots anytime soon.

However, disruptions over the last few years, and the widespread emergence and public adoption of ChatGPT means that people (and therefore, those who buy legal services) are becoming increasingly comfortable with its usage.

At the recent LawFest conference held in Auckland, New Zealand, a panel of leading industry figures were asked to interpret what all this means in terms of traditional law firm models, how technology will be applied by legal service providers, what clients are expecting from the increased use of technology, and how it will enhance the services they receive.

Human endeavour

One point the panel unanimously agreed on was that within every law firm, people will remain the most important and fundamental part in the future of legal service delivery. As Martelli McKegg partner Jacque Lethbridge commented: “Lawyers are all relationship counsellors. From my perspective, the one thing that you can’t take out of what lawyers do is the human endeavour of the law profession – we can harness technology and AI for better delivery of legal services but you cannot remove the important human interaction with our clients and within our teams.”

The panel concurred that human interaction must be underpinned and supported by good systems and processes. As Nick Abrahams, global co-leader of Norton Rose Fulbright’s digital transformation practice and co-founder of leading online legal company LawPath, noted: “Once an organisation scales to a certain size, you need to have the systems to support those people, because you want to keep the best people.

“With LawPath having hundreds of thousands of customers over the years, we request that each client gives a review. It’s like Uber for lawyers, and it’s very interesting what people value at the smaller end of law. They value lawyers who aren’t condescending, who are very good at making the complex simple, and those who do what they say they’ll do on time and on budget.”

Social media

Social media and online platforms were hugely valued by the panellists as a method of growing law firms. Indeed, Janey Haringa, principal and founder of JH LAW – a successful sole practitioner firm – said: “How we show ourselves on social media, or how we portray ourselves on the internet is important because people look for our culture.

“A big comment I’ll get back from clients is: ‘Janey, we’ve been following you on JH LAW’s Instagram for six months now. We feel like we know you, and it just so happens that we need a lawyer now.’ It’s an honour to be picked, because I know there’s 50 other lawyers in Hamilton and across the country who can do what I do. But they chose me, because they related to my content, culture and personality.”

Regarding ChatGPT, in Abrahams’ earlier keynote speech, he shared views on how AI can enhance and enable greater efficiency as a tool to assist lawyers with doing more consistent marketing. He acknowledged that ChatGPT’s limitations include the propensity to make up facts, likening it to Pinocchio, except without his visible nose growth. It can be difficult to tell (without research) which facts are true, and which have been fabricated by the AI to support its argument and please the user.

As Ben McLaren, chief operating officer at Russell McVeagh, went on to explain: “We’re not using ChatGPT at the moment [at Russell McVeagh]. We just think there is risk attached to client data going into AI models. It’s just not something we’re ready for yet, and it’s not perfect. We’ve seen examples of citations going forward that have been made up by ChatGPT… so, there’s a real credibility risk for law firms using that tool and getting burned by it.

“However, there is opportunity to think more about legaltech, and also operationally, how you run the business. So, from a back-office perspective, there’s huge potential there.”

Working differently

When it comes to ‘working differently’ – the theme of the panel session – Lethbridge thought it was important that firms show leadership from the top. “[Working differently] is something we focus on quite heavily at Martelli McKegg,” he said. “We’ve actually made up one of our latest partners who is fully remote, who doesn’t live in Auckland even though our practice is primarily in Auckland and who is a mother of four, a part-time partner. So we are walking the [working differently] talk.”

Throughout the discussion, it became clear that new technology was an enabler of better and more efficient legal service delivery. The panel was asked how this aligned with changing client expectations, and the increased cost-sensitivity of clients in an economic downturn.

Abrahams felt that clients are now increasingly focusing on and talking about the value they receive. “What drives clients absolutely crazy, and I can understand that as a client of law firms as well, is when you don’t hit your budget, and then, oddly, lawyers come at this from a weird or more complicated way,” he said. 

“As a client, you don’t expect just to be told: ‘oh well, it was more difficult so we’re going to charge you an extra $15,000’. You just can’t do that. So, I think you’ve got to focus on the proposition of value, how doing it that way will be efficient and add value. And then, just making sure that if you are going to go anywhere near over budget, you’re on top of that and sharing the pain,” he added.

Bill shock

Haringa then talked about how her clients had not yet suffered from bill shock, as it was something she set her firm up to avoid from the outset. “I haven’t really had debtor issues, which is quite nice,” she said. “Once the job is done, I bill all my invoices straight away. It’s like two clicks to do on ActionStep, it’s so easy, and they are to be paid within seven days. This quick invoicing means clients were expecting the invoice and could see immediately what it related to in terms of the service and outcomes they received.”

McLaren noted that based on data from the Thomson Reuters platform they are signed up to, an economic downturn is in place as realisation rates have dropped globally from about 80% to the mid-70’s across all law firms. He felt this was “a reflection of clients being less amenable to over-runs. They’re saying: sorry, it’s not happening right now because we’re trying to manage our budgets more tightly as a result of the pressures that are going on.”

McLaren shared that Russell McVeagh has put a lot of research into this area, and have concluded that price itself isn’t the issue, but clients wanted the firm to demonstrate that they were cost-conscious and delivered value for a fair price.

Global law

The final question tackled by the panel was around the future appetite for global law firms to enter the New Zealand market. McLaren wondered if the appetite was even there, given the small and unique nature of the country’s local market, the current established firms and the collegiate nature within the industry.

Lethbridge observed the unique offering the New Zealand market has as an island nation with cross-border connections that favour large law firms but also a growing market for more boutique and newer models. “The other thing that makes us really unique is Te Tiriti o Waitangi,” he said. “We have a totally unique constitutional context within the Commonwealth, and within the world. And for that reason, I actually do think that favours smaller to medium-sized practices.”

These thoughts on the rise of the boutique firm were echoed by Abrahams, who felt that they have a “value proposition which really resonates with clients” in all markets globally.

Haringa said she felt national and multi-nationals had a role to play in the continual development of the provision of legal services. In following the larger companies and how they market themselves, she realised that being authentic and personable on social media gives her an edge, as she certainly couldn’t compete on budget.

In conclusion, the panel agreed that the last three years of lockdowns, and now an economic downturn, have sped up the adoption and usage of legal technology. The emergence of tools such as ChatGPT in everyday use has meant that law firms are now looking more closely at AI to provide more efficient legal solutions, while managing any associated risks. What this means is the future of law is now more than ever focused on building and developing strong client relationships and having transparent pricing linked to value that clients can easily understand.

Ben Paul is the founder and CEO of The BD Ladder, a business development and marketing consultancy. He has more than 20 years’ experience in providing business development and marketing advice. Prior to establishing The BD Ladder, he was the business development and marketing director at one of New Zealand’s leading law firms, overseeing its successful rebranding to Dentons Kensington Swan.