While the legal and accounting industry has been relatively shielded from "disruption," this is set to change as technology enters the picture. The challenge for the legal and accounting industry is to figure out how to be more efficient as profit margins erode with the "Uberisation" of professional services, where technology aids the sharing economy in providing cheaper alternatives for clients.
With Singapore's push to become the regional legal hub, how can small- and mid-sized law firms compete with big firms and 'on-demand' lawyers for a slice of the pie? The bigger firms have dedicated knowledge management systems that are able to efficiently manage their cases. 'On-demand' lawyers compete on price and flexibility without sacrificing quality in their counsel.
For example, a will can be drafted for a few hundred dollars through online legal services, which bypasses traditional law firms to provide legal services to consumers. In an environment like this, how can smaller law firms turn these challenges into opportunities for themselves?
Change management is crucial. The adoption of technology is often perceived as costly and cumbersome process. However, at our recent Think Big event, all three speakers who are veterans in the professional services industry unanimously pointed to opportunities where professional services firms can embrace the change, rather than deny and postpone efforts to tackle the issue and thus finding themselves being ousted from the competition.
The amount of information and how it gets manipulated and analysed are critical to the success of the firm. In bigger law firms, there are legacy management systems in place that enable lawyers to quickly check for conflicts and if they are suited to represent a certain client. In smaller firms, there is a stronger reliance on Excel sheets, which may not be the best software to use when clients are chasing for results.
We have also seen cases where lawyers still store their files in hard copies and go through them manually to make decisions. If lawyers have to spend a good amount of time looking for information where talent and knowledge are the cornerstone of his/her practice, then there is room for improvement.
In this time and age, there is a need to digitise documents and store them in a centralised document management system in order to improve the knowledge management process. As a law firm, information is key. By empowering the lawyers to access essential information and business processes conveniently, we are in fact encouraging efficiencies and a spirit of doing more for the clients. This could very well be the factor that edges out the competition.
'On-demand' lawyers can afford to compete on price point, as they do without most of the trappings of big firms. While there may seem to be little opportunity to compete in this area, what smaller law firms can do is to bring down their business expenses such that it makes the client more compelled to turn to them.
One way to bring down expenses lies in the printing costs. Most legal firms scan, copy, and print thousands of sheets of legal documents every week. For both small and big law firms, it is common to scan and print about 300-500 pages for each case alone. For a law firm, printing costs represent a significant business expense.
In addition, firms need to keep a tight control on their print output by monitoring who is printing what, where, and how, and ensure that everything is accounted for. Since printing costs are 'charged back' to the client, having a high cost per print means that the law firm is now more 'expensive' to hire. This directly reduces the competitiveness of the law firm. By adopting a robust, more cost-efficient print management system, smaller law firms will be able to take on the Davids in the industry with confidence.
Singapore is a highly attractive location for lawyers due to its strategic importance as a regional economic, political, and legal hub and as Asia's leading destination for dispute resolution. Overcoming the time and resource-intensive processes that exist almost by default within the legal industry will give firms a significant competitive edge.
In an industry where information flow is rapid and unstructured, the challenge is making the best use of data on hand. The larger picture is about promoting a culture of innovation in Singapore, and such innovation is not always about chasing the newest technology that exists in the market. As Singapore strives to attain its Smart Nation goal, it is about designing better work processes and creating new business models that will deliver higher growth, more enriching jobs, and better services for Singaporeans.
We understand that technology can be deployed for the simpler tasks and help the smaller legal businesses in Singapore grow and reap the rewards in the coming years.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Vincent Low is the Director and General Manager leading sales and driving growth in market development for Canon's Business Imaging Solutions in Singapore. He graduated from the National University of Singapore in 1992 with a Bachelor of Science degree and joined Fuji Xerox as Key Accounts Manager, managing sales of digital colour copiers and providing training and consultancy to end users.