Thursday, April 26, 2018

Automation in the Legal Industry

Current projections have 4.5 million American workers who drive cars, trucks and buses being replaced by computerization/robotics over the next fifteen years.  Cashiers, surgeons and tax preparers are also in the cross hairs of automation.  The ramifications for our society and economy are exciting, but it is a terrifying prospect for those who stand to lose their livelihood.  Just ask Best Buy and Barnes & Noble who are struggling to compete, or one of the many retailers that has gone bankrupt in the wake of Amazon.

Automation in the legal industry is far from prime time today.  Despite a burst of applications in the e-discovery space over the past decade, most of the automation tools designed for the legal industry are just scratching the surface, and haven't made a meaningful impact yet to industry headcount.

So, how many lawyers will be put out of work by automation?  Forecasters say lots of them 20 years from now.  Between now and then, there are few precise estimates.  One thing is for sure- the number is not zero.  Attorneys need to be focused on this risk to their profession, and may find the opportunity to benefit instead of being hurt by these changes.

What can a small law firm partner do to protect against this risk?

(1)  Adopt automation where you can.  Take the time to understand the things you can do to improve efficiency in your practice, and be willing to spend when opportunities present themselves.

(2)  Give clients access to your work flow.  Your clients will work to automate their operations, and will take you in directions that will help you keep pace with changes.

(3)  Don't lose sight of the fact that relationships the are most important asset you have.  Your clients have a sense of loyalty to you; and strong relationships are less likely to be broken by technology than weak ones.  Keep your clients close and they will help you navigate these changes.

(4)  Focus on providing an end-to-end service delivery experience.  For example, if you negotiate contracts for clients, archive them and manage deadlines/expiration that are terms in the agreements.  The more you are part of your client's process, the more likely that you are included in process changes, instead of being automated out.

(5)  Be irreplaceable.  You know you are doing something right when your clients call to ask you to do legal work that is way out of your expertise.  That means they see you as their lawyer, not their real estate lawyer or their litigator.  Clients that value the guidance they seek from their attorneys are sticky.

(6)  Educate yourself.  Pay attention to the changes that are happening, and look for ways to adapt.  This is a trend you cannot ignore away.

Staying relevant is a lifelong pursuit in any career, but the changes on the horizon in the legal industry will be particularly challenging.  Pay attention.


David DePietto is the founder and CEO of NexFirm. He can be reached at

Friday, January 5, 2018

10 Observations from 2017

As the CEO of NexFirm, I see the good, bad and the ugly when it comes to law firm management, as I watch from the cheap seats my clients around the country brave the trials and tribulations of law firm entrepreneurs.  NexFirm's clients skew to corporate practices with experienced attorneys that have AmLaw 250 pedigree.  They grow quickly and are quite profitable.  Even as the elite of the industry, they have their challenges.

1) Biz development works- for anyone.  It's a simple formula- Time and energy yield results.  Those who cop out with "I am not good at it" are hurting themselves professionally, and needlessly.

2) Hiring wrong eventually comes back to bite you.  When my clients lose a great employee, we typically find that the reason is bad communication at the time that they hired them.  Being thoughtful about compensation, and creating a career path for all on your team is your primary job as a law firm partner.

3)  Partners should "re-marry" every few years.  I see too many successful practices break up because of disputes that could have been avoided.  We encourage partners of new firms to talk exhaustively about expectations, to avoid disputes.  Time is the enemy of the understandings they arrive at before the launch of the firm.  It is important to sit down periodically and check in on goals, expectations, and perceptions of partners as they relate to the practice.

4)  If you are not hosting events, you are crazy.  There is no better return on investment than an event that puts you in a room with your clients.  Host a lunch or dinner.  Take a group to a ball game.  Present a CLE.  Just get yourself belly to belly with your clients.  The results will please you.

5)  Don't ever say no to a new matter; but use price to make it worthwhile.  If you like matter but are not sure about the client, increase your rate instead of passing.  And get paid in advance.   My clients are rarely correct when they pick and choose, and at least when you are unpleasantly surprised, you get paid for your time.

6)  Don't ask, don't get.   Insurance carriers said yes to price increases from clients who haven't seen them in years, because they asked.  Be sure to increase your rate every year, or at least try.

7)  Retainers are easier than collection agency.   I see so much wasted time, trying to collect unpaid bills.  Do the hard work up front, and don't waste your time if you are not going to get paid.  The time you save not doing unpaid work can be used in wonderful ways that can improve the success of your firm.  

8)  Trees don't grow to the sky.  When things are good, build up your cash- there is always a possible down cycle is coming.  A strong balance sheet, both personally and at the firm, can make the difference when the slow times inevitably arrive.

9)  If there is one thing that can put you out of business overnight (and I have seen it happen), it is a data breach.  Spend what is costs to be on the leading edge of data security.  You don't want your reputation hurt by this.

10)  Make your team a top priority.  Employees leave if you don't value them, especially when the labor market is as tight as it is now.  When you have a resignation, will you ask yourself if a gift card have made the difference? A dinner, a pat on the back, any sort of acknowledgement.

David DePietto is the founder and CEO of NexFirm. He can be reached at