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Daniel Farris

Daniel Farris describes himself this way:

"Legal Technology Founder and Chief Man in Suit at NMBL Technologies, maker of Proxy. Technology attorney specializing in privacy and data security, licensing, telecom, data center and network infrastructure, digital rights management, and emerging technology matters. Former Software Engineer and Network Administrator. All around Tech Geek."

In this interview, I ask him to dive a bit deeper into his journey through the legal space.

Big Law firms have a reputation for hiring someone or giving someone a title with innovation in the name. To what extent do you think Big Law really is innovating? There are a handful of Am Law 100 firms that are both taking innovation seriously and making strides towards real change, but most are not. One example, which shall remain nameless, is a firm in the Am Law 50 that won an "innovation award" during the pandemic for being able to deploy video conferencing software and allow attorneys and allied professionals remote access to document management and billing systems. So, suffice it to say, the bar is pretty low for law firms right now.

Most large law firms are engaged in some form of “innovation theater,” in my opinion, either because they want to be perceived as progressive outwardly without having to make meaningful changes, or because they simply don't know how to innovate. I see a lot of "innovation" competitions, hackathons, and "learn to code" initiatives in the Am Law 100. All of these activities have a time and place within a broader innovation strategy, but none of them replace a meaningful and fulsome plan.

Digital transformation is difficult at most large firms because incentives are misaligned. Whereas most businesses welcome automation and efficiency, law firms as a whole tend to use a notoriously inefficiency metric — the billable hour — as their primary widget. Firms make more money when legal requests take longer, rates are higher, and the output is not easily repeatable (so clients have to keep coming back). Technology tends to process information more quickly, less expensively, more consistently, and with greater accuracy. These attributes are inherently in tension within the typical large law firm's business model. Add in the fact that the people running large law firms tend to be closest to retirement and therefore have the least amount of time to reap the benefits of investments in business or digital transformation, and it is easy to identify the incentive problem.

Firms that are engaged in some form of legitimate innovation tend to be engaged in "incremental innovation," i.e. small, gradual, low-stakes improvements to existing processes or services. Credit is due to those engaged in real innovation rather than theater, but incremental innovation simply won't keep pace with the rate of change impacting the industry from the outside.

At Norton Rose Fulbright (NRF), we are focused on more "sustaining" and "disruptive" innovation, both through NRF Transform and with the creation of LX Studio.

With sustaining innovation, we look to create new ways to deliver our services and ensure maximum client value, or to build significantly on existing product and service features with an eye toward maintaining our position as a leader in the legal industry. In that sense, our goal is to keep pace with the rate of change in the legal services market in order to "sustain" our position and market share.

With disruptive innovation, we are looking to develop or partner with new technologies and providers to significantly change and improve client experience and the way legal services are delivered. In other words, we want to disrupt the existing market and allow clients new choices in how they receive and consume legal services.

Of course, we all remain susceptible to radical innovation, particularly from legal tech providers, ALSPs, and other legal services companies, all of which are adopting and implementing technology — from basic or "dumb" technology to machine learning and AI — that have the potential to completely transform the way legal advice is given and legal tasks are completed.

What makes LX Studio different in terms of its approach from other Big Law legal tech efforts? What prompted its creation and how do you see its role within the legal industry?

Being a historically British firm with deep roots in Europe, NRF is different from and, in my opinion, more progressive and open to change than many of its U.S. counterparts. NRF Transform is a great example. Founded in 2016, NRF Transform seeks to reengineer conventional legal services to make them more efficient and effective, while also investing in "new law" services including legal technology, legal operations, compliance, and RegTech. As I know is near and dear to your heart, Colin, NRF Transform has adopted an approach to innovation and digital/business transformation that starts with people, process, and data before evaluating technological solutions.

LX Studio is, in many respects, a continuation of the trend that began with NRF Transform. Stateside, LX Studio is different than what we have seen from most of the Am Law 100 firms' efforts in three key ways: First, we pursue innovation and technology licensing that is inward looking, aiming to improve the way NRF attorneys practice law. Second and most obviously, we aim to create outward-facing products and services that will improve client experience in corporate legal departments. Third, we are committed to research and development. This has us looking for technology partners, new products, solutions, and service lines that we develop in house or in joint ventures with a third party, or by utilizing third-party tools in new and interesting ways, with the ultimate goal of transformational change. And we are willing to look at investments in the space to make that happen. Some Big Law firms do parts of each of these three things, but no one else I am aware of is doing all of them. The level of commitment we have made is greater, and I believe it genuinely sets us apart.

You've been in Big Law for a while now. To what extent have you seen change in terms of the approach with clients, especially when it comes to using data and tech?

There are a small number of firms that seem to be actively engaged in digital transformation for themselves, or with regard to the delivery of service to clients and a focus on client experience. By and large within the Am Law 100 there is a lot of talk, but actual change is slow. Most digitization has come from e-discovery, litigation support, electronic billing, contract management systems (though most of the change on this one is seen in corporate legal departments), document management, and collaboration tools to a lesser extent. There is a good amount of implementation, but adoption and usage rates remain fairly low. For example, most law firms have fully digitized document management, and they all have some sort of collaboration tool (usually Microsoft Teams). Few firms have done a great job of moving past these initial steps, however, to truly change the way services are delivered to clients, to increase efficiency or transparency, or to improve overall client experience.

What are your thoughts on how legal tech has evolved over the past five years? What still do people get "right" or "wrong" when it comes to understanding legal tech?

I think there has been significant growth in the number of providers on the market and the willingness of both corporate legal departments and law firms to evaluate and adopt legal technology products. In the past, we saw a lot of fear of “the cloud,” concerns about security, and general resistance to change. A lot of that has dissipated. We’ve obviously seen a much greater investment, and a number of companies are taken seriously as service providers in the space. All of that is moving in the right direction, but the question is what happens next.

We seem to be stuck in a cycle where the majority of legal tech providers are trying to solve problems in an already saturated space. Take an area you know well, Colin – Contract Management. You have companies like Malbek, Ironclad, Juro, Conga, LinkSquares, and a number of other incumbents producing great tools. And yet, it seems like every week there is a new CLM product on the market. One could credibly make similar statements about e-Discovery tools, e-billing and time tracking, etc. Conversely, there isn’t a lot of focus on areas like legal operations, change management, and other tools that improve process.

There also seems to be a mistaken belief that in order to have commercial appeal products must be revolutionary. Automation is not enough, we need products that do the work for us. There is far too much hype around AI and machine learning, in my opinion. What lawyers need are tools that improve their ability to do substantive work more efficiently and more effectively, tools that help them focus on what matters and block out the administrative and ancillary noise that drains time and attention. We don’t need technology to replace us or think for us.

Another mistake many legal tech companies make is falling for the “one-stop shop” fallacy, the belief that in order for a tool to be useful or effective it should do everything. In fact, the technology that is most commonly adopted tends to be the simplest kind of tool that does one thing (or a few things) really well.

Finally, “by lawyers, for lawyers” is often not the selling point people think it is. Lawyers are notoriously bad at both process and technology. Without good design thinking, we will just automate existing bad processes, which amplifies the inefficiencies. That’s a fail. On the other hand, anyone who understands our industry knows that a tool that tries to totally reengineer a process will not be adopted either. We need to nudge behavior and process in the right direction but only so far as will ensure adoption. We should combine the best thinking from outside legal with our knowledge of this industry’s unique quirks and requirements.

If you could boil down what you have learned about the law and tech relationship to three key lessons, what would those lessons be?

  1. Keep it simple. You don’t have to solve all the problems. Do one thing or a couple of things really well. Solve a problem, not all the problems.

  2. User experience is the most important indicator of success. A tool that is limited in scope but easy to use will always be adopted more than a tool that is extremely robust but difficult to use. The “last best experience” concept plays in here. Some people still assume that business tools don’t need to provide the same kind of UX that consumer tools do, but because of the way we move across tools throughout the day on our devices, that line has really disappeared. The bar is a lot higher than it used to be for UX, and success depends on getting it right.

  3. Play nice in the sandbox. If you want adoption, you have to know how to make your technology operate well with other tools that your user already relies on. Don’t assume users will live in your system. User adoption is always a challenge — don’t add a change management issue to the mix too. You want to make it easy for people to continue to work the way they already are while also benefitting from the useful attributes of your system.

Daniel Farris is the co-founder of NMBL Technologies, Partner-in-Charge of the newly formed Chicago office of Norton Rose Fulbright, and one of the founders of NRF’s LX Studio. His legal practice focuses on technology transactions, privacy, and data security.



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