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Shifting digital landscape: NewLaw disrupts BigLaw through innovation, design and access to justice

Shifting digital landscape: NewLaw disrupts BigLaw through innovation, design and access to justice

The legal sector is being disrupted by legal tech and innovation as well as consumers’ increasing need for more efficient legal services at lower cost: What does the future hold for the practice of law? And can ‘doing law differently’ signal better access to justice?

A number of legal commentators and practitioners have described a definitive shift in the legal industry. Specifically, how legal technology and innovation is paving the way for a new age of law. And more importantly, how a shift from a lawyer-centred framework to a customer-centric marketplace is a result of changes in how clients want to “buy” the law.

This shift signals a new way of doing law, a new approach that is now termed NewLaw or Alternative Legal Services. The first element in the shifting legal landscape is the disruptive nature of legal technology and innovation. During the recent Innovation and Tech Fest, participants in the South African alternative legal services sphere described how legal tech has, for many years been considered both a threat and an enhancement to the legal profession.

The emergence of NewLaw or alternative legal firms and legal entrepreneurs using digital technology to streamline the business of law has forced a change in the operations of so-called BigLaw or traditional law firms. There have been a number of advances in digital legal technology.

In the US, investment in legal tech reached $1-billion in 2018. As Dean Raviv, attorney, entrepreneur and co-founder of GoLegal wrote in 2018: 

“In the world of new law, IT companies can provide you with most of your regulatory compliance needs. Machine learning algorithms can formulate an expertly crafted contract, which your legal advisor might only have to tweak. A chatbot could advise you on divorce proceedings, and the papers will be e-filed to court. Litigation discovery will be almost instantaneous. And while the old-school firms continue to pay their lawyers millions to draft NDAs (non-disclosure agreements), your new-age legal service providers are automating anything they can.”

However, only talking about legal innovation in terms of technology misses the point. While many want to peg technology as the transformer of the current and future legal landscape, the tech-hype tends to be over-exaggerated in the legal industry. The shift is deeper than tech. NewLaw approaches centre on the experience of law and how it can be improved.

Margaret Hagan, author of Law by Design and Executive Director of the Legal Design Lab based out of Stanford Law School and Stanford University’s Institute of Design, calls for design thinking to be implemented in the legal services sector. Design thinking offers a way to rethink and improve the experience of law. Hagan states that design “offers a clear, human-centred process to envision what […] better legal systems could be, and then craft and launch interventions to realise these changes. It offers intentionality in the face of a system that has been hacked and patched together haphazardly and without user testing. Design holds the power to crack open the world of law, and make it more accessible, democratic, and usable.”

Modern clients now demand quicker, cheaper and more efficient legal services. The rise of NewLaw is, therefore, fundamentally consumer-driven and the result of a shift in the market dynamics of the legal industry. It has emerged from various interconnections, including TCF (treating customers fairly), global markets, the information age, consumer first, education levels, new players in the legal market and innovation in business models.  

Traditionally, law has been insulated from market dynamics; it’s a professional service regulated by the Legal Practice Act and law societies that uphold an increasingly out of date framework of legal practitioners providing traditional legal services and court representation.

For Hagan, traditional lawyering’s outdated framework could benefit from design thinking, which “resists trumpeting cool, futuristic technology for its own sake. Design [rather] focuses on whether products, services, organisations, and systems are usable to the people who deliver them, and for whom they are supposed to serve.” Design thinking has been used in the fields of management, healthcare and financial services and the legal industry has been slow to realise its potential.

The shift to a customer/client-centric framework also, at its core, revolves around the possibility of providing better access to justice. Access to justice, as enshrined in the South African Constitution and identified as one of the 17 Sustainable Development Goals (SDGs) adopted by the United Nations, include the substance of the law, the availability of legal institutions and their quality, the availability and quality of legal assistance, the quality of outcomes, and legal empowerment. The world continues to grapple with access to justice as the equality gap widens and new data from the World Justice Project estimates that 5.1 billion people have unmet justice needs.

Access to justice is multi-dimensional and justice delivery has to do with the spatial, temporal, linguistic, social or symbolic barriers that keep people from accessing the law and justice. It is no secret that legal processes are costly, time-consuming and traumatic for many. A recent survey conducted through legal expense insurance company, Law For All, found that 86% of South Africans experience stress-related illnesses when dealing with a legal problem. Further, 50% of South Africans face legal problems; only 55% of South Africans know where to get legal help; only 45% feel like they can enforce their legal rights; less than half of South Africans feel their justice problems have a fair outcome; and only half of all legal resolutions are implemented.

Participants from the Legal Innovation and Tech Fest confirmed the fact that access to justice has been traditionally seen as something that exists outside of legal firms; it is a problem for government, law clinics and NGOs. In contrast, some NewLaw firms and entrepreneurs are seeking to implement and design legal products and services that can meaningfully assist people in solving their legal problems by democratising the law, educating clients and offering faster and more efficient legal services at lower rates.

As such, true NewLaw (as opposed to firms that use the label, but still do the same old things) transforms how legal services are delivered. Some of the features of NewLaw firms include the following: these firms get work through marketing, business development and unique selling points as opposed to traditional law firm methods that rely mostly on reputation and personal relationships or networking; they create a client offering based around the brand of the firm and not the individual; and they view their output as a product and not an art. This allows them to focus on developing value-based or output-based billing as opposed to the traditional billing hour.

The traditional model of time-based billing often means that the best outcome for the law firm is the worst outcome for the client. Because of the partnership structure, for traditional firms to make as much money as possible, lawyers are incentivised to take longer, protract negotiations and make small problems bigger.

These businesses are a far cry from the traditional and complex legalese, hierarchy and the safeguarding of legal knowledge. Whether NewLaw will provide real competition for BigLaw depends on whether the consumers of law can bridge the trust deficit presently experienced when considering alternative legal services.

NewLaw uses a different structure – their key is structuring with an incentive towards reinvestment in the company and how it is run. It employs a client-first approach and technology is used to drive efficiency and exceptional client service.

Adrian Warren, commercial director at Plexus, a company that designs legal operating systems out of Melbourne, Australia, says for a law firm to provide actual value, it must work differently, have an incentive for efficiency, embrace technology and, importantly, have access to scale. As Warren asserts:

“There are many boutique NewLaw firms offering real value to individual clients. But what we will see in the next five years is the emergence of economy of scale in this market as NewLaw firms grow. That’s where things get disruptive. It’s the combination of NewLaw practices with scale of capital, technology and human resources that will transform the dynamic in the industry.”

Warren further explains that starting Plexus was motivated by observations of the hugely negative sentiment playing out in the legal sector. Strikingly low levels of client satisfaction with law firms, low levels of meaningful innovation or technological advancement and a profession with higher levels of depression than any other have led them to attempt to transform how legal value is created.

In the South African context, a number of alternative legal services firms and companies have emerged. Caveat Legal represents one such alternative legal service. Incorporated over a decade ago, founder Yvonne Wakefield — who was once part of the BigLaw landscape — started a legal consultancy business whereby legal services are provided by legal consultants (all with BigLaw CVs) at NewLaw prices. 

Luma Law is another example of an alternative legal service that uses technology through a LawBot. Grace Gichanga, Founder of Luma Law, addresses the issues of legal education and empowerment by stating that “there is a lot of basic legal information out there that people should know when engaging with the justice system such as where to go, which forms or documents are necessary and which process to follow.” 

Unfortunately, this is not the case and therein lay the opportunity for Luma – “Luma is an AI (artificial intelligence) chatbot that bridges the legal literacy gap by providing information on the law and how to effectively navigate the justice system through a practical and user-friendly conversational format. We know that legal challenges often evoke overwhelming feelings of anxiety; this is why we are deliberate in creating an experience that is accessible, educational and easy via chat platforms such as Facebook Messenger (soon to be on WhatsApp) that are familiar to users.”

Pop.Law is yet another example of a legal company that has as its aim the democratising of law. Co-founder and lawyer Sinal Govender and co-founder and entrepreneur Claire Keet Pollock locate their services at the intersection between law, design, and technology. Pop.Law offers services through Whatsapp and Zoom consults as well as products and services such as legal packages that can be bought through its website, which is designed to make expert lawyers more accessible. It offers legal packages as well as offering free legal checklists, contracts and guides in “normal people speak”.

These businesses are a far cry from the traditional and complex legalese, hierarchy and the safeguarding of legal knowledge. Whether NewLaw will provide real competition for BigLaw depends on whether the consumers of law can bridge the trust deficit presently experienced when considering alternative legal services.

For decades, law was synonymous with old bookshelves and fancy suits, wigs and big price tags. That became the measure of quality. Buying law online or using an alternative legal service may be equated with inferior service or expertise. No lawyer worth their salt ends up in the alternative legal sector. Ironically, more and more lawyers, disillusioned and burnt out, are looking for alternative avenues to practice law and it is NewLaw that seeks to provide better, efficient and more affordable services in an effort to democratise the law and for increased access to justice.

The trust deficit is slowly changing as the justice gap widens and consumers are more intentional of where and how they spend money. Covid-19 has also cemented trends that were slowly emerging pre-pandemic. McKinsey tracked consumer sentiments across 45 countries. Their research indicates that there is a shift to values and essentials – NewLaw offers this; consumers are not staying loyal – they are trying new things and will be looking beyond the traditional models of law; the homebody economy and the flight to digital have seen consumers across the globe looking to purchase online – law forms part of this paradigm shift. Moreover, the Pew Research Center indicates that more than 75% of all consumers seeking legal help currently use online resources to aid their search.

What exactly the shifts in consumer behaviour and the impact of technology will hold for the future of law cannot be, to use lawyer-speak, definitively determined. However, what is clear is that some practitioners and entrepreneurs are forcefully and opportunistically facilitating creative legal solutions for people’s actual wants, needs and circumstances, cracking open the possibility of real and broader legal empowerment. DM

Jackie Nagtegaal is a futurist and lawyer working within the legal ecosystem. Her work focuses on access to justice and creating inclusive justice systems. She heads LAW FOR ALL, a social impact company. She holds a law degree and a Master’s degree in Futures Studies (cum laude). She is a member of the Association of Professional Futurists, of Legal Protection International, a Knowledge Adviser for the International Legal Tech Association and an Advisory Board Member for the Warrior Project, focused on gender-based violence. 

Dr Yvonne Jooste holds a Doctorate in Jurisprudence and is a former senior lecturer in law at the University of Pretoria. She is a freelance writer interested in the impact of dominant digital technologies on privacy, equality and dignity. Her areas of research include gender-based violence, surveillance capitalism, legal design thinking, and the intersection of law and politics.

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