Last night I had the honor to give a talk at Northwestern Law School in professor Bill Henderson's class on Diffusion theory. Bill and I have known each other since 2008 when we met at Gillian Hadfields (another legal innovation hero of mine) conference on the future of legal education. Bill's blog on innovation is my favorite read in the legal industry.

Rate of adoption for innovation

Diffusion theory seeks to explain how, why and at what rate new ideas and innovation spread.

I have been in legaltech and innovation throughout my career, starting with my first legal tech venture with Jeremy Tobias-Tarsh in 2000 (before anyone even heard of the term), via Practical Law Company and, after the sale of Practical Law Company, as advisor, board member or investor in companies such as Kira, Compliance.ai, Casetext and Hotshot to my current position as CEO of Clifford Chance Applied Solutions. During that 20 year period of fun in legal tech (and legaltech is not limited to technology but includes all kinds of innovation) I have witnessed varying degrees of pace of legal tech adoption so I am happy to have been given the chance to talk the class through a list of examples mostly from my own career.

It was great that in addition to a wonderful group of students, Bill had invited my good friend Mike Suchsland (amongst others the driving force behind the legal industry’s most successful M&A transaction (ever?), the acquisition of Practical Law by Thomson Reuters), Jordan Urstadt (founder of PartnerVine and former GC of Capital Dynamics), Dwayne Hermes and Adelaida Diaz-Roa both of Hermes Law a leading insurance defense law firm.

Industry of late adopters

Adoption of tech in legal is a challenge. Still too many lawyers at every level from associate to partner fail to see technology skills as critical to their success or survival. It is a good development that bar associations in a growing number of states in the USA require minimum levels of technology awareness. At Clifford Chance various initiatives are under way to boost technology skills (Automation Academy, Tech Academy and Ignite). The industry as a whole, however, remains woefully behind in rate of use of technology (oftentimes even of the most basic tools such as Word, Excel, PowerPoint leaving aside more advanced tools such as AI).

Fortunately there are glimmers of hope in an industry of late adopters. For example, the rate at which Practical Law was adopted in the US (within 3 years of use lawyers in hundreds of law firms, including 80% of the AmLaw 200) is encouraging.

Another great example of fast adoption of legaltech is CCDr@ft. This technology and service automates legal documents for companies. For example for one large European bank Clifford Chance Applied Solutions has automated their entire suite of mid market loan documents. There are 2,000 loan officers in that bank that can create the full suite of documents for commercial loans without the involvement of the legal department or outside lawyers. This has dropped the cost of creating these documents significantly, while making sure they conform to the standards set by the legal department.

Positive and negative factors to consider

My 2 cents trying to clarify the slow rate of adoption of tech for some innovations and the fast pace for others.

Negative factors pushing against fast adoption:

  • incentive misalignment – most firms’ senior leadership are hesitant to invest in something that doesn’t pay off within a very short time frame and preferably before they retire.
  • risk aversion – lawyers should be encouraged to take a bit more risk once every while. Try something new, who knows it may make you better😉. Failure is not always bad.
  • poor design and functionality – at this day and age do we really have to do manual time writing: my computer and phone have the best record of what I have done all day, for which client and modern applications driven by AI can automatically create complete time entries. Why are lawyers still forced to manually type in: 12 minutes drafting an email about topic A to client X in matter Y?
  • lack of training – law schools and law firms should invest significant more time in getting lawyers’ tech and business skills up to an acceptable level.

Positive factors supporting fast adoption:

  • great products that really meet users’ needs – shamelessly taking credit for the brainchild of the founders of PLC: this was a great product that met the needs of lawyers at every level both in law firms and in-house. Spend more time uncovering the real pain points of the user instead of trying to solutionize a quick patch that has poor adoption.
  • great design (the flip side of the negative one) – think Google’s simple user interface versus some desktop applications designed for lawyers “it has to look like my email program as that is what our lawyers use most” even though the use case is very different 😭😡.
  • roll-out – how do you get users to adopt an application? Only by making it available with a proper implementation plan. You will only ensure successful take up if you plan roll-out, measure and adjust and have stakeholder buy in at every level. This merits a post (or book) of its own.
  • sales and marketing – you can have the best product out there but if you don’t know how to sell it, it is dead on arrival. The other day someone flippantly said that the most important ingredient you need to sell to lawyers is decades. There is an element of truth in that but with the right processes and people you can reduce the sales cycle, almost as if you were an industry different than legal 😉.

Lessons learnt

I think diffusion theory is very helpful in legal tech both when planning and in postmortem. I walked away having learnt a lot.

As always, fascinating to hear Bill's lecture, in particular about a topic that is so close to my heart. I was truly honored to be part of the course.