A recent article by Nicola Shaver for Legaltech Hub contained an insight I found fascinating. In Designing for Adoption in Law Firms: Getting Generative AI Right from the Start Nicola noted
"…research in innovation diffusion often cites the “9× better” rule: for a new solution to overcome status quo bias, it must be perceived as at least nine times better than the incumbent approach. Communications theorist Everett Rogers called this the “Relative Advantage” theory and considered it the most important driver of adoption. That means even during use case prioritization and solution selection, firms need to be focused on adoption, with special attention given to which solutions are capable of delivering an outsize benefit compared to those whose utility is more incremental."
It reminded me of an excellent post by Casey Flaherty, Advancing Our Thinking On Low-End Friction. Casey makes a similar point, albeit more anecdotally, starting with:
“They’re so busy that our practitioners need to realize not a 10% improvement but a 10x improvement in productivity before they will take the time to investigate, let alone implement and incorporate, a new tool” is an observation the always astute Kyle Dumont of Morgan Lewis made to me the other day."
We’ve observed this ourselves where in recent conversations with law firm partners, they have been convinced that there are solutions out there that will generate entire sets of loan and security documents using AI in 30 seconds. Clients will still need them to use the AI and their fees will remain high. Nothing less than that would be acceptable, but in the meantime* it still takes a day or longer to do that work manually.
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Nicola’s article contains some excellent advice for technology providers to assist in finding use cases that deliver immediate, obvious value, not abstract promises. There's a need to continue to improve compatibility with existing workflows and systems, simplicity, trialability and the observability of benefits. It’s all good stuff, but customers should also consciously consider the 9x bias and how it is harming them.
Because we've been focused solely on legal automation, centred around document automation, we've come across many use cases where immediate benefit can be delivered in days. Yet, perhaps for the reasons Nicola has noted, taking 75% out of the time while increasing quality and reducing risk is often not enough. Even the automation of loan and security document packages such as mentioned above can be delivered in weeks, not months, and the time savings will likely exceed 90%. Immediate improvements are available but they’re not being taken up. For those who follow cricket, nobody wants to collect the easy singles along the ground anymore - they'd rather go for the boundary or nothing.
I struggle to understand this for several reasons:
- If the work really can be automated to the silver bullet extent, what value is the lawyer adding? Is there a role for them at all, and how much can they charge for it?
- If the new solution is doing most of the work, and anyone can licence that solution, what room is there to meaningfully differentiate and avoid becoming a commodity provider?
- In many industries, companies are continuously improving and seeking every 1% improvement they can find. If a law firm, or new entrant, adopts that approach they can rip the core out a firm’s practice without warning which could cost millions in revenue: Redundancies to follow law firm’s loss of major client
- Clients may not wait for a competitor to offer a new solution. Some may choose to bring the work in-house.
- While waiting for a magical solution that will provide a perfect outcome, firms are missing all the obvious quick wins that are available now, wasting money, losing the opportunity to learn and be more prepared for future developments, and leaving themselves open to disruption.
Casey Flaherty points out a further key flaw in this approach.
"Once we reduce baseline resource costs by 50%, there is no further improvement we can make—save eliminating the cost entirely …—that can ever have an equivalent impact"
What this means is that by taking the easy and quick first 50%, you capture most of the gains you are ever going to get. You also capture the gains that anyone else could ever get, and make it that much harder for someone else to come in and cut your lunch. From a position of relative strength, you can then accumulate further small gains with low cost and risk.
What do quick wins look like?
For in-house legal teams, this could mean adopting simple and low cost self-service workflows using tools like Cognito Forms, SharePoint, Power Automate and Digital Signing, such as you can see in this video (which I recorded in 2022 so this is not new at all). Combined, this can remove days or weeks from an entire process, and empower the business to move much faster with lower risk.
For lawyers in firms, consider the bread and butter work that you deliver every day. As one example relevant to New Zealand law firms, look at Enduring Powers of Attorney. Something that almost everyone should have, technology allows law firms to deliver them quickly, affordably and very profitably. As you can see in this post and the video embedded in it, once you have the required information, with a leading document automation platform such as HotDocs you can generate a set of documents for a couple in around 10 minutes.
Established technology such as document automation often will deliver 9x improvements, but it does often require an investment of time to learn something new, and some change to existing ways of working. It’s not like an AI ad.
The ROI of established technology such as document automation is often greatly misunderstood and undervalued. If you'd like to learn more about the incredible ROI that document automation delivers, you should check out The Definitive Guide to the ROI of Document Automation.
