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Innovating for Growth: Designing a Digital Services Strategy

DATE: 04/03/2021

The below article was originally published in The Lawyer in March 2021, as part of its Business Leadership Series.

Matheson’s head of digital services Tom Connor shares his insights into working as part of the senior management team to design, execute and lead the evolving digital transformation strategy at Ireland’s largest law firm.  

The events of the past year have significantly altered the way in which many people and businesses think about how and where we work. While questions remain about how permanent some of these changes will prove to be, one area of change which is unlikely to reverse is the significant acceleration in the pace of digital transformation and the adoption of technology in sectors which were previously slow to embrace such change. Microsoft CEO, Satya Natella, captured the nexus between COVID-19 and digital transformation during the company’s quarterly earnings call earlier last year when he said: “We’ve seen two years’ worth of digital transformation in two months”.

Law is a sector which has regularly been identified as one which has been relatively slow to embrace technology. While it could be argued that caution will almost always be a feature of even the most commercial of law firms’ DNA and that lawyers will set a high evidentiary bar before being convinced that the systems can do what they promise and that the promised benefits really do materialise, many large corporate law firms had already embarked on successful digital transformation journeys. These firms have recognised that digital transformation is a necessary strategic paradigm shift required to respond to changing client needs. Lawyers (both in-house and external) face increasing pressure to do more with fewer resources, driving a requirement for technology-enabled solutions. Lawyers also see opportunities to leverage technology to expand the range of services they offer to clients and to reclaim some ground lost over time to other professional services providers.

Some law firms have responded by vertically integrating digital services into their core business through establishing captive alternative legal service providers. A recent report by Baretz + Brunelle found that 35 of the AM 100 law firms were operating captive ALSPs. Others have opted for horizontal integration by partnering with third-party alternative legal service providers such as Axiom and Elevate to optimise their internal processes and provide technology enabled solutions for their clients. More still have chosen a hybrid model. The particular direction of a firm’s digital strategy will depend on numerous factors – there is no right or wrong approach. This is how we, as a firm, are enhancing our digital capabilities to meet our clients’ evolving needs.

Creating a digital culture 

Embracing technology in the legal profession comes with its own specific cultural challenges. An essential first phase of the journey for Matheson was to foster an innovation culture, encourage cognitive diversity and create a desire to identify the issues and potential solutions that could be achieved by harnessing current and emerging technologies. The firm recognised that the fastest way to achieve success was to create an environment in which the project ‘belonged to everyone’, where the desire for progress was shared across the firm and the opportunity to contribute ideas was open to all, regardless of role, position or technological expertise. With this in mind, the firm introduced a firmwide SMART@Matheson innovation and education program in 2016 and 2017. This step, led and championed by our Managing Partner Michael Jackson, alongside other advocates including Rebecca Ryan (partner in our Healthcare Practice) and David Lawson (Head of IT), was an integral part of our journey to shape and embed a digital culture within the firm. It created an environment where cross-firm conversations about innovation and collaboration were facilitated and encouraged. We also studied progress made in other industries and spoke to clients and providers for their perspective.

Designing The Strategy

The next phase of our journey was to build on the enthusiasm generated by SMART@MATHESON and design a long-term sustainable digital transformation strategy. In the summer of 2018, we organised a digital innovation and transformation themed partner conference to get feedback on a proposed approach from partners and heads of business services across the firm. Following the event, we interviewed many internal stakeholders to get their feedback and input into what future direction they thought the firm’s digital strategy should take.

We also engaged with our clients to get their input and to understand how we could utilise technology to advance the delivery of our legal services to solve their issues and address their changing needs. As well as the pressure to “do more with less”, market research indicated that many GCs harboured an ambition to transition from their traditional roles as business guardians to becoming strategic business enablers within their organisations. The feedback we received from internal and external stakeholders was an important step that helped shape the future direction of the firm’s digital strategy.

Building the Business 

Matheson established a steering committee comprised of the Managing Partner, me as head of digital services and other senior stakeholders from across the firm to consider how best to implement the agreed strategy.  Having considered the options against the backdrop of Matheson’s culture, values, capabilities and desired outcomes, a decision was made to integrate digital services into our core legal advisory business by establishing a new centrally-managed digital business unit called the Matheson Digital Services Group (DSG). The new group was not designed to act as a captive ALSP per se. It was designed to be a specialist legal engineering division within Matheson operating at the intersection of law, business and technology that would work both independently and with other parts of the business to integrate digital services into the way Matheson delivers its services to clients. By housing DSG within the legal advisory business during its launch phase the firm believed that it would have space and time to grow and evolve without the additional pressures that come with being a stand-alone entity, would have greater visibility over the opportunities for development and could leverage the support and resources of the firm.

The new group was initially resourced from existing personnel, all of whom were already involved in various aspects of digital services provision. It brought together a multi-disciplinary team consisting of 17 professionals – a combination of lawyers, AI software developers, legal solutions consultants and architects, project managers, document automation specialists and business analysts. The team was created to support a range of foundational client-facing digital services including eDiscovery, regulatory investigations, data subject access requests and freedom of information requests, diligence exercises and high volume legal work in commercial real estate, corporate transactions and litigation.

Executing the Strategy 

To properly leverage the true capability of DSG, it was important that it was embedded in the firm’s existing IT, Finance, Pricing, Risk, Marketing and Human Resources frameworks. Partnership is a core cultural value at Matheson and collaboration is encouraged in all firm activity. The DSG was able to rely heavily on the existing developed programme of IT investment, the change management expertise within the firm and the dedication and support of our business services colleagues to help layer the new business into the firm’s existing operational framework. I believe that this cross-firm collaboration has greatly contributed to the speed at which the DSG has been able to grow and evolve.

We launched DSG in November 2019, shortly before the onset of the Covid-19 global pandemic. Feedback from clients was positive and we were seeing a steady demand for our services. By mid-March, everything changed. The newly-formed team was suddenly working from home, along with the entire firm. This required the entire industry to quickly adapt and overcome business continuity challenges by becoming proficient at using new software applications while continuing to deliver services to clients. The firm had already been promoting working in an agile fashion and had the IT infrastructure in place to facilitate it, so it was largely business as usual for Matheson. The ability to draw on the expertise of the DSG team also enabled the firm to quickly adapt certain applications and reporting practices to deal with some of the new challenges and the volume of people now working from home. There is no doubt that our digital journey gained momentum; driving even greater demand for digital solutions and creating even greater visibility for DSG across the firm.

The Future 

Emerging technologies such as Robotic Process Automation, Predictive Analytics and AI-enabled content generation is likely to have an impact on the delivery of legal services in the future.  Personally, I think low-code application development platforms have the potential to fundamentally transform the type of technology-enabled solutions that law firms can deliver to their clients and I strongly believe that this is where the future lies. The challenge will be implementing this technology in a design-led way that focuses on the client experience. The question is how to design these new digital products and services and successfully layer them into the firm’s operational framework and core legal advisory services in a way that is seamless and that adds value for clients whilst protecting the bottom line. Matheson is already on the way to implementing the next phase of its strategy in this regard and the team is looking forward to the next challenge.

I am confident that Matheson’s strategic investment in establishing DSG and its strong digital culture will enable the firm to continue to successfully meet its clients’ changing needs and will continue to differentiate Matheson from its competitors in the years ahead. Matheson has a strong innovation heritage and reputation for excellence in the delivery of legal services. We have identified ways in which we can continue to replicate that in the new digital arena and we believe that the roadmap to success is in place.