Biglaw Firms Rarely Adopt Automated Deal Platforms Because They Go Against the Legal Profession’s Hourly Billing Incentives


The Point

Why don’t law firms use a software-enabled platform to automate transaction processes that attorneys typically carry out themselves? For less cost, with more accuracy, and faster than those attorneys can do manually?

Last month Gartner analyst Ron Friedmann put the question this way:

Over the last 5-7 years, we’ve seen the rise of deal platforms. Have these helped address this problem? I thought this class of LegalTech would sweep the market because it can reduce coordination. But my sense is it has not. Is this read right? If so, what went wrong?”

This Matters to Your Business

Kenneth A. Grady, former general counsel, law firm partner and innovation pioneer replied:

“On the deals where I was general counsel … Big Law associates were often double- and even triple-teamed on a task (meaning 2 or 3 did the same task).

“Partners encouraged overlap (“quality!”). Associates did not use the [automated platforms] … I’ll bet today, with the layoffs and decrease in work, many associates are scrambling for hours ….

“The basic fact remains: platforms have not taken off, firms do not heavily use them, deal work tends to remain rooted in the past, hours matter.”

Because …

Legal technology consultant Sam Moore responds to Mr. Grady’s observations this way:

“You are 100% right — I’ve been in charge of innovation at a full service commercial law firm, and the top roadblock is lawyers are not incentivised to improve. Their performance is measured on turnover, not profit. More hours = better. This will not change without leadership.”

The “leadership” that legal technology consultant Moore calls for will not come from within the legal profession. Neither from in-house counsel nor from law firms. It will take the company’s business leaders — CEOs, CFOs and others who care more about their P&L statement than they do about attorneys’ business models — to automate for less cost, greater speed, and better accuracy than existing, labor-intensive lawyers’ processes can produce.

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