At the recent LawFest conference held in Auckland, a panel of leading industry figures were asked to interpret what all this means in terms of traditional law firm models, how technology will be applied by legal service providers, what clients are expecting from the increased use of technology, and how it will enhance the services they receive.

One point that the panel unanimously agreed on was that within every law firm, people will remain the most important and fundamental part of the future of legal service delivery. As Martelli McKegg partner Jacque Lethbridge commented, “lawyers are all relationship counsellors. From my perspective, the one thing that you can’t take out of what lawyers do is the human endeavour of the law profession – we can harness technology and AI for better delivery of legal services, but you cannot remove the important human interaction with our clients and within our teams.”

The panel concurred that human interaction must be underpinned and supported by good systems and processes. As Norton Rose Fulbright global digital transformation practice co-leader Nick Abrahams, who co-founded leading online legal company LawPath, noted, “once an organisation scales to a certain size, you need to have the systems to support those people, because you want to keep the best people … with LawPath having hundreds of thousands of customers over the years, we request that each client gives a review. It is like Uber for lawyers, and it is very interesting what people value at the smaller end of law. They value lawyers who aren’t condescending, who are very good at making the complex simple, and those who do what they say they’ll do on time, and on budget.”

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Social media and online platforms were highly valued by the panellists as a method of growing law firms. Indeed, JH LAW principal and founder Janey Haringa said, “how we show ourselves on social media, or how we portray ourselves on the internet, is important because people look for our culture. A big comment I’ll get back from clients is: ‘Janey, we’ve been following you on JH LAW’s Instagram for six months now. We feel like we know you, and it just so happens that we need a lawyer now.’ It’s an honour to be picked, because I know there are 50 other lawyers in Hamilton and across the country who can do what I do. But they chose me, because they related to my content, culture, and personality.”

Regarding ChatGPT, in Nick’s earlier keynote speech, he shared views on how AI can enhance and enable greater efficiency as a tool to assist lawyers with doing more consistent marketing. Nick acknowledged that ChatGPT’s limitations include the propensity to make up facts, likening it to Pinocchio, except without his visible nose growth! It can be difficult to tell (without research) which facts are true and which have been fabricated by the AI to support its argument and please the user.

As Russell McVeagh chief operating officer Ben McLaren went on to explain, “we’re not using ChatGPT now [at Russell McVeagh]. We just think there is risk attached to client data going into AI models. It’s just not something we’re ready for yet, and it’s not perfect. We’ve seen examples of citations going forward that have been made up by ChatGPT … So, there’s a real credibility risk for law firms using that tool and getting burned by it. However, there is opportunity to think more about legal tech, and, operationally, how you run the business. So, from a back-office perspective, there’s huge potential there.”

When it comes to “working differently” – the theme of the panel session – Jacque thought it was important that firms show leadership from the top. “[Working differently] is something we focus on quite heavily at Martelli McKegg. We’ve made up one of our latest partners who is fully remote, who doesn’t live in Auckland even though our practice is primarily in Auckland, and who is a mother of four, a part-time partner. So, we are walking the [working differently] talk,” she said.

Throughout the discussion, it became clear that new technology was an enabler of better and more efficient legal service delivery. As chair of the panel, I was keen to find out how this aligned with changing client expectations and the increased cost-sensitivity of clients in an economic downturn.

Nick felt that clients were now increasingly focusing on and talking about the value they received. “What drives clients absolutely crazy, and I can understand that as a client of law firms as well, is when you don’t hit your budget, and then, oddly, lawyers come at this from a weird or more complicated way. As a client, you don’t expect just to be told: ‘oh well, it was more difficult so we’re going to charge you an extra $15,000’. You just can’t do that. So, I think you’ve got to focus on the proposition of value, how doing it that way will be efficient and add value. And then, just making sure that if you are going to go anywhere near over budget, you’re on top of that and sharing the pain,” he said.

Janey then talked about how her clients had not yet suffered from bill shock, as it was something she set her firm up to avoid from the outset. “I haven’t really had debtor issues, which is quite nice. Once the job is done, I bill all my invoices straight away. It’s like two clicks to do on ActionStep, it’s so easy, and they are to be paid within seven days. This quick invoicing means clients were expecting the invoice and could see immediately what it related to in terms of the service and outcomes they received,” she said.

Ben noted that based on information from the Thomson Reuters platform they are signed up to, an economic downturn is in place as global realisation has dropped from about 80 per cent to the mid-70s across all law firms. He felt this was a reflection of clients being less amenable to overruns. They’re saying: “Sorry, it’s not happening right now because we’re trying to manage our budgets more rightly as a result of the pressures that are going on.” Ben shared that Russell McVeagh has put a lot of research into this area and has concluded that price itself isn’t the issue, but clients wanted the firm to demonstrate that they were cost-conscious and delivered value for a fair price.

The final question tackled by the panel was about the future appetite for global law firms to enter the New Zealand market. Ben McLaren wondered if the appetite was even there, given the small and unique nature of our local market, the currently established firms and the collegiate nature within the industry.

Jacque observed the unique offering the New Zealand market has as an island nation with cross-border connections that favour large law firms but also a growing market for more boutique and newer models. “The other thing that makes us unique is Te Tiriti o Waitangi. We have a totally unique constitutional context within the Commonwealth, and within the world. And for that reason, I do think that favours smaller to medium-sized practices,” she said.

These thoughts on the rise of the boutique firm were echoed by Nick, who felt that they have a “value proposition [that] really resonates with clients” in all markets globally.

Janey confessed she felt national and multinationals had a role to play in the continual development of the provision of legal services. In following the larger companies and how they market themselves, she realised that being authentic and personable on social media gave her an edge, as she certainly couldn’t compete on budget.

In conclusion, I felt the last three years of lockdowns, and now an economic downturn, have sped up the adoption and usage of legal technology. “The emergence of tools such as ChatGPT in everyday use has meant that law firms are now looking more closely at AI to provide more efficient legal solutions, whilst managing any associated risks. What this means is that the future of law is, now more than ever, focused on building and developing strong client relationships and having transparent pricing linked to value that clients can easily understand.”

Ben Paul is the chief executive of The BD Ladder.