This week we caught up with Sam Flynn co-founder of Josef Legal to talk legal innovation, law tech and how his new legal chatbot builder, Josef, is set to increase access to the law for the general community.

What is Josef and how does it work?

“Josef is a digital lawyer backed by a chatbot builder.

On our no-coding-required platform, legal organisations can build and launch their own chatbots without the need for expensive developers. These chatbots can help people resolve a legal problem, including by preparing a personalised document for them (such as a letter or agreement). Because all of these interactions are automated, it allows legal organisations to provide their services at scale.”

How did the idea for the platform first come about?

“Josef was borne out of a meeting in late 2016 with the heads of the major community legal centres in Australia. We were invited to help figure out how technology could be used to deal with access to justice issues.

The answer that we arrived at was a legal chatbot that could provide legal information and assistance to help people resolve their own legal problems.

That soon evolved into a chatbot builder which any legal organisation could use to build their own bot.”

What problem has Josef been developed to help solve?

“Josef was developed to bridge the access to justice gap.

This problem is demonstrated by the fact that of the 8.5 million Australians who face a legal problem every year, only 4 million seek any kind of legal assistance. The problem is worse in the US and the UK, where we are also operating.

For our business clients (such as law firms), this also represents an enormous latent market and an extraordinary opportunity which can be captured by using Josef to automate and scale services, streamline their organisations and connect with clients.”

What is Josef’s potential utility for community legal centres and law firms?

“Josef’s utility is to allow legal organisations to automate and scale legal services, streamline their organisations and connect with potential and current clients.

For community legal centres, this allows them to help as many people as possible, particularly in the face of a disconnect between increasing demand and decreasing funding. For law firms, this allows them to help more people while also letting them access a huge, unaddressed market, which in the US alone is valued at USD$50B.”

How can members of the public use your technology to find legal answers and who ensures the accuracy of legal information supplied?

“The content of the chatbots is developed by the community legal centres and law firms that build them. In this way, Josef brings expert legal knowledge to end users.

At the moment, all chatbots will be launched by the community legal centre or law firm, such as onto their website.

The first chatbot that has been launched on Josef is Health Complaints Assist.

This is a free chatbot which helps users make a complaint about health services, including by automatically drafting a letter for them! This chatbot is improving health services, one experience at a time, and could help thousands of people each year.”

What sort of reception has Josef received among the legal industry? Has the response surprised you? 

“We have had an extraordinary response from the legal industry.

In a few short months, we have signed up clients across Australia, the US and the UK, from CLCs to a large fintech company in New York.

Some people have found this surprising, because the legal industry is renowned as a conservative industry. However, we think it makes perfect sense given the ongoing conversation about the need for the legal industry to technologise and modernise and the fact that it doesn’t make sense that so many people are not getting the legal help they need.

We have the legal expertise, and now we have the technology, so why wouldn’t we help them?”

What are a few long-term goals that you would like to achieve?

“In the long-term, we want to change the way that legal services are provided to ensure that people get help whenever and wherever they need it. We want to get to the stage where people who have a legal problem seek legal assistance, just like people who have a health problem see a doctor.”

What are the cost implications for users?

This article is sponsored by Vobis Equity Attorneys. 

There is a new generation of machine in action now, and these are systems that can replace parts of, and sometimes all of, certain kinds of professional work” – Richard Susskind

Last night’s Q&A panel discussion offered a fascinating glimpse into what the future could hold for the Australian workforce. Experts like Adam Spencer hypothesised that the increasing role of robots and AI could cause the loss of thousands of jobs across a range of sectors, particularly mining and service industries. Others like the Assistant Minister for Industry, Innovation and Science, Craig Laundy, took the position that the increased use of robot and AI technology could create many more human jobs that will be needed to support new workplace infrastructures.

Among the list of professions to which AI has been considered a potential threat is the legal industry.

You will have likely seen a range of incendiary headlines such as “Robots replacing lawyers a ‘near certainty,” “Law firms of the future will be filled with robot lawyers,” and “Robot invasion” circulating online with increasing frequency. The result is that many lawyers and law students have spiralled into a state of panic about the future of the profession and the certainty of their jobs.

So how worried should we really be about the rise of robot lawyers?

Let’s look at the statistics

According to a report, The Future of Employment: How Susceptible Are Jobs To Computerisation? researchers compiled data to estimate how technology could affect the job market in 20 years.  The study used four key criteria to determine whether certain occupations are at risk of being automated:

1. whether the job requires coming up with clever solutions
2. whether it prioritises helping others on a personal level
3. whether there is a need to work in small spaces; and
4. whether negotiations are required.

According to NPR’s online calculation tool lawyers have a 3.5% chance of being replaced by automation technology given that some aspects of legal work are easier to automate than others. Court reporters could experience a 50% chance of being automated, while junior legal roles such as entry-level lawyers, paralegals and legal assistants that engage in legal research and drafting documents could experience a 94.5% chance of being automated in the future.

Sophisticated algorithms are gradually taking on a number of tasks performed by paralegals, contract and patent lawyers. More specifically, law firms now rely on computers that can scan thousands of legal briefs and precedents to assist in pre-trial research.

We find that paralegals and legal assistants – for which computers already substitute – in the high risk category. At the same time, lawyers, which rely on labour input from legal assistants, are in the low risk category. Thus, for the work of lawyers to be fully automated, engineering bottlenecks to creative and social intelligence will need to be overcome, implying that the computerisation of legal research will complement the work of lawyers in the medium term.”  Carl Benedikt Frey and Michael A. Osborne.

In the light of these forecasts for the future, are law firms looking to establish new ways to deliver their legal services? How will technology likely impact the profession?

Former Chief Justice of the High Court, Justice Robert French, notes in the June Issue of the Australian Legal Review:

The profession faces challenges and opportunities arising out of the use of technology, and in particular, artificial intelligence. It is evident that AI has the potential to perform, more economically, than humans, a range of legal tasks, including document review, analysis of ways of resolving legal disputes and the provision of basic legal advice. Its speed of development and impact on the provision of legal services and the profession generally is difficult to predict. However, its effects are likely to be profound.” 

What’s trending right now in the world of robot lawyers

While the human element involved in the practice of law can never be replaced by technology (no matter how intelligent it may be), the way in which legal services are delivered could significantly change in the coming years. Below are a few examples of recent trends around the world.

“DoNotPay” – Parking Fine Chatbot (UK and US)

Created by British teenager and Stanford University student, Joshua Browder, the “DoNotPay” chatbot handles ticket appeals through a Q&A-style chat. As of June 2016, the chatbot successfully appealed over 160,000 parking tickets, saving drivers time and legal fees.

“DoNotPay” has now been developed to assist asylum seekers to make a valid application by asking applicants questions in plain English.

In Australia, there is much potential for emerging technologies to support legal services.

FineFixer – Australia (Victoria only)

In an Australian-first for the legal assistance sector, Moonee Valley Legal Service recently launched FineFixer – a new website that provides personalised legal information to help Victorians understand their legal rights and how to tackle fines.

ROSS – World’s first AI lawyer (US)

The world’s first AI lawyer named ROSS is being used by US law firm BakerHostetler to sift through thousands of pages of legal research in its bankruptcy practice. ROSS was built on IBM Watson, a cognitive system that can answer questions in natural language.

ROSS can understand questions asked and respond hypothetically through the use of references and citations. ROSS only provides highly relevant answers, meaning that the amount of time and effort currently wasted on unbillable legal research by paralegals and law clerks may soon be reduced drastically.

Bob Craig, Chief information officer of BakerHostetler says:

ROSS is not a way to replace our attorneys – it is a supplemental tool to help them move faster, learn faster, and continually improve.”

It would appear at this time that there is great potential for robot lawyers and AI to enhance and streamline legal work by reducing the number of hours spent on tasks that can be automated – such as legal research, smart contracts, e-discovery, online dispute resolution, automated due diligence programs, programs to help drivers challenge parking fines, programs to assist people claiming refunds for delayed flights, programs to apply for emergency housing, and programs to assist people claiming asylum.

Certain tasks performed by legal assistants, paralegals and junior lawyers will be likely be automated in the reasonably near future.

What the future holds for the next generation of young lawyers

The impact of robot lawyers and AI for junior lawyers may make some of us baulk.

For the majority of junior lawyers working in the private sector, an essential aspect of core legal training comes from hours of dedicated and laborious legal research. If robots are able to scan millions of documents and find the desired answer in a few seconds, will there still be a role for graduate lawyers?

Short answer: Yes.

According to the Honourable Justice Margaret Beazley AO:

Whilst the ‘grad’ won’t become obsolete, the day-to-day activities of graduate lawyers will undergo a significant shift as many of their tasks become automated.”

While automation might remove one element of the role performed by grads, this just means that the grad’s entry pathway to the law will look slightly different in the future.

In the past few years, the impact of tech disruption in the legal industry has presented a new suite of challenges for grads as tech skills have become more attractive to employers than ever before.

For young Australian lawyers:

As a generation of legal practitioners who are likely to be most impacted by these developments, your challenge will be to ensure that technological change supports the administration of justice and the rule of law and does not supplant it with concepts that are alien to our rich legal tradition,” Justice Beazley says.

For the next generation of lawyers still at university, therefore, it will be important to develop cross-disciplinary knowledge. Marketing, writing, coding, IT, business, leadership and management skills, as well as the ability to build legal technologies, will all be important areas to develop when preparing to enter the legal job market. Importantly, these skills will be needed on an ongoing basis.

Introduction of more ‘law tech’ courses at universities

Universities around the country are responding in different ways to the impact of tech disruption in the legal sector and the way in which it is changing the delivery of legal services. Hackathons are becoming increasingly popular, as is the introduction of new courses that focus on technology.

The University of New South Wales (UNSW), for example, has partnered with law firm Gilbert + Tobin and software company Neota Logic to provide students with a new course that provides students with a practical experience in using legal technology.

The elective course “Designing Technology Solutions for Access to Justice” was offered to undergraduate and Juris Doctor students in Semester 2 of the 2017 academic year.

Elsewhere, in an Australian first, the University of Technology Sydney (UTS) has launched a new undergraduate major in legal futures and technology. The course will be part of the standalone and combined bachelor of laws degrees and will be the first undergraduate legal major in legal technologies and legal futures taught in Australia.

The introduction these courses similar are a great step in integrating more tech knowledge and skills for a new generation of lawyers.

Some skills are irreplaceable 

Regardless of how technology changes the way legal services are delivered in Australia, one thing remains certain: robot lawyers and AI will never completely replace human lawyers.

Technology will continue to aid the performance of mundane and routine tasks and will likely take on a more dominant role in legal research and automated discovery etc. But human intelligence, the human capacity for negotiation, emotional intelligence and the ability to make the correct judgement call will never be the province of technology as we know it to exist today.

Former Chief Justice Robert French says:

The challenges for the profession in Australia are many and are shifting rapidly in a variety of directions. It might be said there has never been a more exciting time to be a lawyer. There has certainly never been a more challenging time, nor one in which the stakes are so high. 

What do you think about the role of technology in shaping the future of the legal profession? What do you consider to be the challenges or opportunities? Let us know in the comments! 

This year, the 2017 State of the Profession Address was held at the Law Society of NSW on Thursday,
21 September where The Honourable Justice Margaret Beazley AO, addressed members on a topic at the forefront of every Australian lawyer’s mind – “Law In The Age Of The Algorithm.”

The law is not immune to technology

Algorithms are present in our day-to-day lives and (perhaps in spite of wishful thinking by many lawyers), the law is not immune to the influence of technology.

Justice Beazley suggested the challenges for the legal system and the legal profession are twofold:

1. keeping up to date with new technologies
2. using technology to serve clients and further the administration of justice.

The second point is fundamental to the efficient and effective administration of the legal system.

For young Australian lawyers:

As a generation of legal practitioners who are likely to be most impacted by these developments, your challenge will be to ensure that technological change supports the administration of justice and the rule of law and does not supplant it with concepts that are alien to our rich legal tradition,” Justice Beazley said.

Changing nature of the legal workplace

The changing nature of the legal workplace is reflected in flexibility and connectivity.

Justice Beazley considered how technology has brought about change by aiding communication and legal research and also because it knows no borders. Her Honour observed that this has enabled globalised legal practice that has connected offices around the world in ways that couldn’t be imagined a few decades ago. Amalgamations between Australian and London-based firms, for example, as well as several London-based and American firms opening offices in Australia has impacted the type of legal work undertaken. It has also intensified competition for partnerships and increased the pressure and expectations placed on associates.

While technology has positively changed the face of the modern legal workplace – by giving lawyers the freedom to work anywhere and anytime – this freedom often manifests more like a trap that sees us working everywhere, all the time.

There is a story … of a lawyer on a family holiday on a yacht in the British Virgin Islands precariously clinging to the mast to gain enough reception to send a final message to the firm back home. It is reputed that there are competitions where lawyers compete for the most exotic place from which to clock up billable hours – the base camp of Kilimanjaro being one particularly notable entry!” Justice Beazley said.

Justice Beazley reflected on France’s legislation that prevents employers from contacting staff after working hours. Her Honour considered that this approach would not be an obvious reform that would gain traction in Australia.

New mechanisms for legal advice

Described as the ‘death adder leaning over the lawyer’s shoulder,’ Justice Beazley also talked about the new buzzword which will have an impact on legal work and jobs – artificial intelligence.

Whilst the ‘grad’ won’t become obsolete, the day-to-day activities of graduate lawyers will undergo a significant shift as many of their tasks become automated,” Justice Beazley said.

Her Honour considered that it will be difficult to predict the full impact of AI on the legal profession. A few examples of recent developments include ‘smart contracts’, automated due diligence programs, programs to help drivers challenge parking fines, programs to assist people claiming refunds for delayed flights, programs to apply for emergency housing, and programs to assist people claiming asylum.

Online dispute resolution models that do not require the assistance of a lawyer are being promoted as a quick and effective tool to resolve disputes and to increase access to justice for the ‘missing middle’ cohort of Australians who cannot afford legal representation but who do not qualify for legal aid.

Last year, the Australian government provided funding to National Legal Aid to look into creating an AI system for divorce proceedings. Graham Hill, National Legal Aid chairman, estimates that 20% of all family law disputes in Australia could be resolved using online dispute resolution. The benefit of this approach would be to save time and money and, if implemented:

This development would free up judicial resources to be used for difficult disputes and in cases where the legal principles need to be established or clarified,” Justice Beazley said.

Facilitating procedures in court

Technology is changing the face of court procedure and processes. In particular, the administrative functions of the court, pre-trial procedures and the hearing process have been impacted.

Some examples Justice Beazley touched on include online filing, e-discovery and document management, electronic courtrooms, video links in criminal matters, and the use of safe rooms from which vulnerable witnesses may give evidence.

Some of the challenges associated with the use of technology in the court system include the extent to which parties are able to navigate technology; and the cost of technology as well as the time and cost involved with training judges to use it.

Impact of technology on the development of law 

For lawyers, one major challenge is to understand the suite of new legal problems arising from technological innovation across industry, commerce and social communication. For example, the unique legal issues associated with multi-national corporations minimising or avoiding exposure to tax obligations, the implications of blockchain technology and crypto-currencies such as Bitcoin.

Last month, the Australian government announced plans to regulate Bitcoin through anti-money laundering laws and, earlier this year, Japan became the first national government to adopt this approach. This makes Bitcoin exchanges in Japan now subject to audits and other anti-money laundering safeguards.

The legal issues which are thrown up by these developments are tied to algorithms – the entire Bitcoin currency is built on them! There will be no choice but for the lawyer in the third decade of this century to understand the implications of algorithmic technology. The refrain of the 20th century lawyer ‘I did law so I didn’t have to do maths’ will be as archaic as the penny farthing bicycle was at the beginning of the 20th century,” Justice Beazley said.

The human cost

Her Honour observed that the role of the court is foundational to society and that robots, on their own, will never be able to achieve this.

Individuals need to feel that they are treated ‘fairly’ in their interaction with the legal system. Fairness in this context is not only in the outcome of their case or resolution of their issue. It is the human need to be listened to,” Justice Beazley said.

To sum up

This year’s State of the Profession Address by The Honourable Justice Margaret Beazley AO, raised a number of fascinating opportunities and challenges to the current practice of law in Australia, and forecast a range of ways in which technology is likely to impact the future of the profession.

Technology, AI and robots do have their limitations and, as such, can never replace the human element which is fundamental to the effective function of the legal system and access to justice. Technology is, however, likely to change the nature of the role of Australian lawyers by streamlining current legal processes and enhancing the administration of justice.

Yes, the future is uncertain … but this means that it is full of possibilities.

To young lawyers, Justice Beazley says this:

You are uniquely positioned at the forefront of this new era of law and lawyering, it will be you who will get to determine what the future looks like.”

She added a cautionary note regarding the challenge in embracing algorithmic technology, which will be to recognise the inherent limitations of it and the need for human involvement and monitoring.

Personally, I think that the future is something to be very excited about.

Watch the Honourable Justice Margaret Beazley AO’s full State of the Profession Address below:

How do you think technology is impacting the practice of law in Australia? What challenges or opportunities have you observed? Let us know in the comments!

Gone are the days of a job for life, and thank God, how boring. Today we must all be ready to adapt and embrace change. The only certainty in our professional and personal life is that things will change whether we are ready or not. So instead of fighting it, make it happen the way you want. Consider the benefits of slash careers, write your own story and don’t be limited by the scepticism and fears of those around you. And remember, even when you feel lost and uncertain and second-guess yourself, don’t worry, it’s normal, we’ve all been there. Just hold strong and have faith in yourself and if all of that is too hard, then just pretend until your ego catches up to your success!

I wanted to be a famous actress

For me, the attributes of embracing change, remaining adaptable and having a love and understanding of language have all been integral to my career. These attributes were incubated in the performing arts. Yes, I wanted to be a famous actress. I know, not the most common starting point for a lawyer.

Or … maybe a lawyer

After studying performing arts at UWS Theatre Nepean and taking up acting, I then found myself
teaching … something I had never planned on doing. Then, with the intervention of a good friend, I decided to take the leap and study law.

I remember being terrified because I really didn’t think I had the brainpower. I was always the fun, bubbly, arty one … not the serious lawyer. Thankfully, my brain cells managed to multiply and I ended up practising law for about nine years before moving from the legal arm at one of the big four banks to the frontline as a bank manager.

Now I am thankful for the skills I’ve picked up along the way because they enhance my client-centric focus in my current role at Nexus.

Opportunity doesn’t knock, it whispers!

To me, life is like reading a book. You don’t turn to the last page to find out how it pans out. You want to see how it develops.

If someone pointed me out to you in the theatre while portraying Hermia in Shakespeare’s A Midsummer Night’s Dream and said, “Wow… she’d make a great general manager for a bank in 20 years’ time”, you’d laugh. For me, this is the most exciting thing about my career to date. I never saw any of it coming.

As my father once said to me, “opportunity doesn’t knock, it whispers, and you have to be listening.”

My journey into the law was amazing and a turning point for how I saw myself and my potential. Can you believe it? I was awarded first-class honours! And while I loved law and its practice, I didn’t like the way the traditional firms operated so, embracing change yet again, I moved to Hobart and began a PhD in bioprospecting.

Eventually, I came back to Sydney and worked in a couple of law firms including Truman Hoyle, which embraced my non-traditional lawyer personality. The more I practised law the more I became interested in what my clients did. I used to call it the “so-what” factor.

The law books say you can’t do it, but so what?

Really … a banker?

I contemplated work in business and ended up as legal counsel at Westpac. My inquisitive nature is never quelled and I started looking on the bank’s intranet to better understand its business. I thought the frontline sales team could do with some co-ordinated support, so I put together a proposal for a new job for myself. It coincided perfectly with Gail Kelly’s move to create a customer-centric culture. A series of secondments upskilled me to the extent I was then appointed as the bank manager at Hurstville, one of the top four branches in the country.

It was amazing. I loved it. Again I could feel my brain cells multiplying. It was a completely different skill set. Everything I had learnt as a lawyer actually hindered me. I had to learn to retrain a lot of things, even just simple communication.

I realised that legal language is terrible. After my experience as a bank manager, I now approach it differently. I can appreciate the mindset you get into as a lawyer, it is challenging, but it doesn’t work for everyday Australians, and that is who we are servicing. Communication fascinates me and I learnt that bankers are very good communicators because they are sellers. Lawyers traditionally aren’t.

And back to law … but no longer a “handbrake!”

Now back working as a lawyer I appreciate just how difficult it is to run a business unit. It’s a completely different skill set and I have huge respect for my clients and the work they do. What we do as lawyers is such a tiny facet of their business. It’s not everything, not the be all and end all. When you’re in a law firm you can trick yourself into thinking it’s a really important thing. It’s not, and for business it’s a headache and they don’t even want to think about the headache. No one wants to know about it.

The challenge is to be seen as part of the solution, not part of the problem.

When I was moving into the business arm of Westpac, the people who gave me a shot were more interested in my performing arts background. That’s what gave me the edge. My legal background was a concern to them. A lawyer in their minds was a handbrake. But a lawyer can be part of the solution.

What people think they need isn’t necessarily what they do need, and that’s where the skill set of the lawyer and the skill set of the banker come in. The theatrical background and love of teaching were integral to my success in the national manager role at Westpac, especially upskilling regional bank managers. Everything is simply a problem to be solved.

Many businesses and legal firms talk the talk when it comes to collaboration and collective wisdom, but few walk the walk. They baulk at bringing in people with different skill sets. That’s not the case at Nexus. It’s all about complete collaboration and striving for success. It’s all client-centric. Law is the only industry that thinks it doesn’t have to concentrate on customer service. My skill set from Westpac is a perfect fit – for me, the client is at the centre of everything.

Good business structure involves flexibility and strength. Those attributes apply to a good lawyer and a good law firm.

So remember … enjoy the journey, own your path and don’t apologise for taking a different route. Often it’s the choices that fill us with the most fear and make the least sense that end up defining our success and happiness.

What do you think about the prospect of sticking with one career for your entire professional life? Is the diversity and constant interest of a slash career something that interests and excites you? Let us know in the comments!

Nexus Law Group Founder Marcus McCarthy

Since the phrase ‘NewLaw’ was coined by George Beaton it has quickly become a meaningless buzzword. Multiple new businesses have jumped on the bandwagon and announced themselves as ‘NewLaw’ when, in fact, they are either just a traditionally structured firm operating virtually; a fixed pricing strategy; or a lawyer procurement agency for a disconnected bunch of sole operators and not a law firm at all.

Richard Susskind has predicted the end of lawyers with the emergence of artificial intelligence. But not everything that glitters is gold, and not everything that is artificial is ‘intelligent’ when it comes to serious lawyering.

Very little of the so called ‘NewLaw’ landscape is actually new at all, or delivers any net positive benefit to clients, and certainly not lawyers. Much of ‘NewLaw’ is not even run by qualified lawyers, or law firms. This may not be the best outcome for consumers despite the promise of a lower price tag or a fixed fees.

Anything that brings about less cost for consumers can be a good thing, and it is a laudable aim to service the end of the market that cannot afford traditional legal services, but there is one universal truth in this world – you get what you pay for. If the cost is driven too low, or is free, the quality of the advice always suffers. No one can expect real expertise done properly to be cheap or free.

If ‘NewLaw’ is only about less cost to consumers, then it is a false economy. Less professional value leads to less skilled and more generic input, which ultimately results in less protection, additional cost and problems in the long run. Online documents, even when intelligently automated, can be an example of this.

It is also true that there are always better ways to do things that can reduce cost and increase quality. If you can do both, it is the holy grail of business improvement (and, of course, a rare thing).

The problems with traditional practice

I came into the legal profession with a business management background and, although I loved being a lawyer, I could not understand why the legal profession was structured in the way that it was. Partnership models and corporate structures full of enslaved, unhappy lawyers on a path to nowhere who were constantly switching from job to job looking for a better world that did not exist. At the same time clients were (and still are) disgruntled with the high rates paid for lawyers.

I realised it was the very structure of traditional practice itself that caused the problem, driven by high overheads and unrealistic hourly budgets as a result. If both lawyers and clients are unhappy at the same time, something is clearly wrong with the system.

There was (and still is) a vast disconnect between the fees charged to clients by the larger firms and the low relative returns for skilled lawyers. This can drive many lawyers into sole practice, which can be an even harder and isolated road which does little to relieve their desire for a better professional career experience. The reason is simple – they end up replicating the same traditional structure they just came from, with the same overhead problems.

It is the law firm model itself that needed a change. In fact, the law firm model needed inverting so that great lawyers could take control of their own careers in independent practice, without the high overhead and budgets, but remain fully connected with others doing the same.

The answer was connected sole practice.

There is a vast sea of ex top-tier legal skill out there, but only by connecting them into one operating platform can they compete with the top-tier as a single law firm. A law firm based on the connection of independent contractors, instead of employees, could have less overheads and more skill at less cost than the traditional large firm structure ever could. Such a thing could be a new practice option in the market that did not previously exist – an option sitting squarely between the big firm model and sole practice, without the downsides of either.

Unfortunately, it did not exist. But with the help of some new cloud technology platforms, I created it. It’s called Nexus Law Group – Australia’s first ‘dispersed law firm’ or as I prefer to call it these days, the ‘embedded contractor law firm model’ (I’m still trying to come up with a less boring name for it …).

Changing the industry

What has been interesting to watch is how the industry reacts to this new model.

There are the typical naysayers that believe a firm based on embedded contractors could not be successful, or perceived it as a threat to the industry. However, it has proven to be very successful and, in my view, it was time for a positive change. There is certainly room for more than one practice structure in the market.

Most of ‘NewLaw’ are not engaged in any revision of the typical business structure of law or seeking to develop a culture of collaboration, commonwealth and information sharing.

Only the embedded consultant model is doing this. It is, in fact, one of the only new legal business models undertaking a fundamental and positive restructure of the law firm itself, and even the industry commentators seem to be missing this rather obvious point of difference in the NewLaw landscape.

Law firms vs legal networks

What is really confusing the industry right now is the difference between websites running simple networks of disconnected lawyers, recruitment or bidding services, and the embedded lawyer network. At first glance they look the same – but they are in fact vastly different.

Look past the flashy website and clever words and understand what is really happening behind the scenes. The difference between the two is obvious – one operates as a law firm, one does not. One has chosen to comply with legal profession legislation, one sidesteps it with a non-legal business that lists or procures independent lawyers. This is much easier to do, but comes at the cost of no longer being a law firm.

These are in fact ‘disconnected agency’ businesses that have no responsibility for the lawyers on their networks and do not properly connect them together in any way. This creates confusion when something goes wrong and opens the door for problems as the profession legislation states:

An entity must not engage in legal practice unless it is a qualified entity.”

Of course the agency networks will say they are not ‘engaging in’ legal practice. Although this perhaps neatly sidesteps the words it is, of course, nonsense as they are in the business of providing legal services. It will be interesting to see if the regulators ever decide to define legal practice for what it actually is – the delivery of legal services, or alternatively, exempt them. At the moment, the regulators seem unconcerned about this anomaly or asleep at the wheel.

The disconnected agency thing is proliferating at a rate of knots, simply because it is really easy to get on the ‘NewLaw’ bandwagon by throwing up a website and list a bunch of sole practitioners with the promise of work referrals. As such, the digital natives are having a field day, seemingly unconcerned about the legislative problem. It is of course much harder to build an actual law firm of embedded contractors (and much more functional).

Harnessing technology

When Nexus Law Group started in 2011, the technology did not exist to support a practice model such as this.

It wasn’t until 2013 that a cloud based practice system emerged that could run such a thing. We were able to work with the vendor to configure it to our exact requirements and build an open, universal remuneration system – the OpenLaw practice system – which now runs the Nexus Law Group.

The OpenLaw system is unique in that it allows the embedded connection of independent practices in a single platform, which allows our Consulting Principals to silo information for their own individual practices, while still providing the infrastructure needed to connect the Group for team based service.

It is a direct-access model that enables lawyers to increase their earning potential relative to traditional firms or sole practice through a direct input/direct reward remuneration system.

The system generously incentivises lawyers to refer to other specialists when a matter is outside their expertise, encouraging team-work and building a positive culture of client care.

It is a completely open and transparent system. Lawyers receive 70 per cent of everything they bill on their own matters, 60 per cent on matters referred to them, and 15 per cent of the fees for work they refer to others in the system.

To be completely open and even for all in the system was a core element in the idea behind Nexus. I wanted to ensure not only that highly skilled independent lawyers received the lion’s share for the work they do, but also for the central hub to retain enough fees to run the practice systems required for a national law firm. This, in turn, allows our lawyers to leverage off each other and the strong platform it creates.

The fact is, this universal remuneration metric alone replicates an equity partnership model without the need for a partnership or a corporate structure, which only drives up cost. The remuneration systems are fully automated and capture all work inputs for all lawyers in the system, regardless of the state (our country) in which they work.

Unlike a traditional structure – it is a freelance model which means our lawyers are free to set their own fees, including fixed fees, and to contract into in house roles or even whitelabel to other firms, which they do on a regular basis.

In building such a system we realised that it was borderless and replicable by jurisdiction so that anyone could run a dispersed law firm, including the possibility for third party firms to connect its lawyers to Nexus through a broader OpenLaw network using the same system. This has the potential to shift a large portion of the industry to this form of practice and connect separate lawyer networks together for mutual work referrals.

With a bit more tweaking we hope to launch the OpenLaw system to the broader market in the second half of this year.

And the reason for all this? To build a new foundation for the practice of modern law that is better for clients and better for the lawyers delivering it.

NewLaw vs BigLaw

Realistically ‘NewLaw’ will not wipe out the traditional big law firm, there are many people out there who draw comfort in the processes they have always known – a law firm with four walls and many lawyers, paralegals and support staff all under one roof.

Contrary to some industry commentators, it is not contractor models, emerging document automation or artificial intelligence that is disrupting the legal industry. It is the dangerous proliferation of non-lawyers delivering legal services and the rise of in-house legal teams (corporates are exempted from the above rule), who now run massive internal legal teams without regulation imposed overhead profiles of an actual law firm, and thus an uneven playing field.

The OpenLaw practice model is a viable practice alternative for lawyers, and a real value proposition for clients, who want to work directly with the lawyer of their choice without inflated fees driven by high overheads and budgets.

With technology and a common sense business model it is now possible to have some of the best lawyers in the industry at significantly less relative cost than when they were at their former big firms, while better rewarding them at the same time.

There is one universal driver for this model: happy lawyers make the best lawyers. Well rewarded lawyers, free from the strictures of traditional practice, are extremely happy – simple really.

With all of this worrying disruption out there, OpenLaw aims to bring about positive change to the industry by properly valuing and preserving the skill of experienced lawyers and bringing them together for unified service delivery, while respecting their independence and providing fair rewards for good work.

We may be swimming against the tide … but who cares, we are loving it.

Now don’t get too ahead of yourselves, this doesn’t mean I started working for free!

Instead I joined a law firm that is part of the ‘NewLaw’ wave. It is a dispersed law firm, with a completely different approach to the traditional. I am a bit of an enigma now, as I am my own boss, but still part of a team, giving direction to some and taking direction from others.

Since making the shift I have been asked – many times – by other lawyers whether I made the right choice. So I thought I would provide a little insight into a typical week for me and you can judge for yourselves … 

Monday

When I was a lawyer for a big, traditional law firm, Monday mornings usually meant hours lost to team meetings, frantic time entries, and reviewing and replying to a disturbingly large number of weekend emails from my supervising partner, colleagues in our team, and clients.

Since I made the decision to work for myself, away from traditional firms, this kind of frustrating lost time is no longer an issue. Instead, I spend my Monday at an office space I share in the centre of the Sydney CBD with a range of professionals, from a variety of different businesses, working my way through a list of work matters I made for myself on the weekend. Without any other distractions, I can focus on just those items, and finish them faster, and to a much higher quality, than I would have been able to do if I was still working at a traditional firm.

As I walk home, I can’t help but think that the traditional law firm model is overly focussed on billable hours, and as a consequence rewards inefficient delivery of legal services, and excessive negotiations and discussions between lawyers on non-material matters. No one wins from this arrangement.

That’s exactly why I needed to break away from this style of legal work, before I lost my love for the law altogether.

Tuesday

I have sports training this morning.

Rather than spending the entire time thinking about work, I can instead think about how all this exercise is good for me, and try to make it to the end of the session without falling over.

Finding the time to do things for myself, while working in a traditional firm, was incredibly difficult. Even if I did try and train before work, it meant getting up ridiculously early to ensure I wasn’t seen as a ‘late arrival’ for coming in 15 minutes later than everyone else. While lunchtime training or after-work catch-ups with friends always seemed good in theory, they inevitably never happened with any consistency as there was always some piece of work that came in right at the time I had to leave.

Today’s training session ends and I’m ready to start the working part of the day. The way in which I structure my day is now all up to me, and there is no one to judge me on how I structure my day but myself. As long as I meet (and exceed) client expectations, that it the only standard I set for myself. It is a good feeling.

Wednesday

On Wednesday morning, I am working from my home office when a client contacts me to ask if I can assist in registering some intellectual property rights for them. This isn’t my area at all, but I know someone who can do it and am glad for the opportunity to be able to refer work to a colleague.

If I were still working at my old firm, I would have felt an obligation to take on this work myself, and charge for it – even though it is out of my area of expertise.

Now, I work with a group of lawyers and administrative support staff that share a similar view on how to practice the law. The first people to come together and formalise this structure decided to create a nexus of lawyers and call it … well, Nexus Law Group.

As soon as I joined Nexus, I no longer had to spend hours on the administration and insurance aspects of a sole practice. Nexus covers that for me, and does it in a much more professional and structured way than I would be able to do alone. Being allied with Nexus means I can finally get on with being the lawyer I wanted to be, and focus on those parts of the law in which I am skilled.

So now, when this intellectual property matter comes in on a Wednesday morning, I can tell the client that I will refer it to someone I know and can trust to do it for them. I even get a financial benefit for the referral from Nexus. The distributed system pioneered by Nexus works, and works incredibly well, for everyone involved.

Thursday

Now that I’m reaching the end of another working week, I try to remember what it was like when I was shackled to the routine and inefficiencies of a traditional firm.

Not once this week did I feel obliged to get to the office at 8am and work until the last person leaves – whether that is at 5pm or midnight. Instead, I can respond to my clients when they need me. I can work on ways to build my business and ensure I can continue to do what I love. Most importantly, I now easily find the time to see my wife, my family and my friends.

That’s it. Nothing else exists to cloud my thinking or to get in the way of my personal happiness or professional success.

Traditional law firms require you to give up a part of yourself to be successful, and some do this better than others. I don’t judge those who succeed at big law firms. I just know that for me, this new way of doing law makes me happy and gives me purpose and drive. I have met great people who think the same as I do, and I see these relationships having great benefits in the short and long term.

Friday

Yes, Friday! I still have a lot of things on my list, but I still feel in control.

A client calls me to suggest a drink after work. He is a really nice person, and when we see each other we might chat about work, but it never feels like a ‘business development opportunity’ that I need to debrief a business development team about on Monday morning.

Don’t misunderstand me, I’ve worked a hard week this week. There were new matters and new clients to meet and build relationships with. Old matters flared up again at inconvenient times. I still had to take care of administrative matters like filing emails, preparing invoices, chasing outstanding bills, and writing articles.

But a hard week with Nexus, as a consulting principal and master of my own destiny, is not destructive in the same way I found it to be working for a big law firm. I can do everything I mentioned above, and more, next week and the week after that.

I no longer feel like I have survived this week. I feel like I succeeded.

That is the biggest difference for me, working with a dispersed law firm.

Change is a lot like a Rubik’s Cube.

Challenging, frustrating and hard to predict.

Like that sly red puzzle piece that shifts the background of your professional game, change bides its time – only making its big move when your attention becomes too focused on solving one side to the puzzle. After all the progress you have made, this can send you reeling back to square one.

For the Australian legal industry, changes are happening everywhere. From the way the business of law is carried out to tech disruption, innovation and entrepreneurship, the traditional model for the practice of law is being re-written everyday.

Who Is Making Waves?

On Tuesday this week, General Assembly held an event in Sydney on Tech Disruption & Entrepreneurship in the legal industry, inviting an expert panel of industry thought leaders to participate and speak about these changes and their likely sources.

Image courtesy of General Assembly.

In the public sector, this is referred to as ‘crystal-balling.’

Although multiple theories were raised about the source and direction of tech disruption, it is perhaps useful to think about ‘who’ is likely to drive these changes into the future, rather than ‘where’ they are coming from.

The answer lies in exploring a demographic that itches for innovation and independence – Gen Y.

By 2025, 75% of the workforce will comprise Gen Y workers. Some of the main things valued by this generation are to undertake work that is meaningful, that makes a difference and is flexible. Gen Y workers place a high value on independence, a work/life balance and to have options for career development. They want hard work to be rewarded in the form of professional recognition and promotion.

But Gen Y are also known as the entrepreneurial generation.

65% of participants in a study recently conducted by Bentley University said their ultimate career goal was to start their own business. With 12,000 law students graduating from law schools around the country each year, and only 60,000 employed solicitors nationwide, it stands to reason that young lawyers are likely to spearhead major changes in the industry by disrupting traditional business models, pushing for varied work conditions and forging alternative career pathways.

Evidence Of Innovation

There is already evidence of young lawyers innovating to close gaps in the market. Some are launching startups to solve industry problems while still in law school.

LawFunder, a crowd-funding platform launched by Sean Roche, aims to harness the power of crowd-funding legal causes to help solve access to justice issues. BeyondLaw, a legal job search website founded by ANU Alumni Anthony Lieu and Max Burke, aims to shed light on broader career opportunities for law students. Other services such as LawyerQuote, described as the legal WebJet, are cropping up to offer price comparisons for legal services.

Elsewhere, the desire to effect change and provide a better experience for users of legal services has seen the birth of NewLaw firms.

Marcus McCarthy, founder of Nexus Law Group, describes NewLaw firms as falling into six broad categories:

1. Dispersed law firms – Nexus Lawyers, Keypoint
2. Lawyer placement agencies – Orbit, Plexus, Bespoke, Advent Balance, Lexvoco, Vario
3. Virtual firms – Hive Legal, Nest Legal
4. Online document retailer firms – LawPath, LawCentral, LegalVision
5. Fixed-fee firms – Marque Lawyers, View Legal
6. Hybrids – combinations of the above. For example, General Standards, LawAdvisor.

Tech disruption is giving rise to new business models, new ways of offering legal services with an overall focus on creating value for users of legal services.

What Are The Future Implications For The Industry?

To maintain a competitive advantage, both BigLaw and SmallLaw firms will need to adapt to the ever-shifting ‘law tech’ landscape. In the coming years, the biggest threat to traditional bricks and mortar firms is likely to be an inability to adapt quickly enough and keep pace with industry changes – whether these changes come from the online space, technology or demand by consumers of legal services (for example, reduced or fixed cost fees).

The most successful firms will be capable of pushing the envelope and developing new ways of doing business that benefit both client and lawyer. They will be able to respond to changes demanded by Gen Y and, in doing so, attract fresh and talented lawyers.

The most forward-thinking firms will embrace:

• technology as a tool to create greater value for clients
• content marketing to generate new leads and potential clients
• social media
• other emerging forms of digital marketing

Is Content Marketing Relevant For Law Firms?

After going through a recent rebrand, Dechert LLP, a law firm based in the United States, learned several powerful lessons.

In the process of rebranding, it found that one of the best ways to raise a firm’s profile is via thought leadership rather than channeling its entire budget into advertising – a common and increasingly ineffective strategy utilised by most firms in Australia. In fact, other studies have found that you are more likely to survive a plane crash than click on a banner advertisement online.

In the United States:

• Only 25% of firms have a content marketing strategy
• 47% currently have no strategy but plan to put one in place in the next 12 months
• 28% have no strategy and no future plans to put one in place

This is why content marketing is so important.

Content marketing gives your firm a pulse.

It breeds goodwill with potential clients and creates an informed client base.

The focus is on how firms can be a resource for their clients. Many Australian firms are beginning to see the value in content marketing by running niche blogs on their websites which offer useful tips and industry insights. Others provide commentary on recent decisions handed down by the Courts and the likely implications.

If your law firm can:

• establish itself as a thought leader;
• become a trusted resource; and
• create an emotional connection between itself and a potential client

that person will be more likely to convert into a loyal and ongoing client.

NewLaw Models, Content Marketing & BucketOrange Magazine

The potential for tech disruption and NewLaw models to create waves in the legal industry is not isolated to firms finding new ways of adapting to the shifting landscape.

By using innovation and technology as a tool to reach out and connect with new audiences, there is also great potential to do good and, in the process, to lift the profile of the legal industry among everyday Australians.

This is where BucketOrange comes in – as an online publication, it operates at the biting point between the law and technology, harnessing the power of the digital space both to connect with and help young Australians avoid preventable pitfalls in life.

By educating, informing and inspiring the community about the law in ways that are important to their everyday lives, and connecting users to legal services where necessary, BucketOrange aims to make the law less scary and more accessible to the community as well as to contribute to the development of preventative law.

BucketOrange is not only a way for everyday Australians to find relevant, interesting and useful legal analysis. It is also an effective medium for lawyers to:

• build a strong personal profile as industry thought leaders
• inform, entertain and inspire
• engage in work that has a social impact
• show the community a human side to the law
• reach out to a potential new client base in a meaningful new way.

Conclusion

The future of the legal industry in Australia will depend on which lawyers are best able to reach out and form an emotional connection with clients and other industry players. There is infinite potential for innovation and for those changes to flow on to users of legal services in the form of education, improved access to justice and reduced legal fees.

While increased take-up of technology has the potential to improve communication between clients, it also has the capacity to open a dialogue between law firms that facilitates collaboration, rather than competition, for business.

The real winner, out of all of these changes, will be future users of legal services.

What factors do you think are behind recent developments in the legal industry? To get in touch about writing for BucketOrange Magazine, send us an email – we’d love to hear from you.