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Stepping up the game with LegalTech

By Kamila Kurkowska.

In many law firms, the growing availability of LegalTech solutions was taken into consideration with a grain of salt, or treated as a gadget with lesser meaning in everyday business. Traditional forms of client contact, managing law firms and its processes were deeply rooted in not only firm structure, but also the lawyer mindset. COVID-19 has reshaped many well-worn rules thought to be unchangeable, demolished traditional foundations and made traditional rules of running business impossible.

For LegalTech start-ups and companies, this is a moment where they can step out of the shadows into the mainstream.

This does not mean that traditional legal firms will shut down. Rather, the digital transformation will accelerate. Solutions that were considered „nice to have” are advancing to „must-have”. Companies providing legal services can use the moment to gain competitive advantage in at least some aspects.

Newly defined organisational culture.

Over the last few years, conversations about the market referred to a term used in defining conditions on a mission- VUCA. The world of VUCA is Volatile, Uncertain, Complex and Ambiguous. In such a world, it is impossible to have the comfort of sticking to predictable rules and strategies. Despite this, in recent years we have become accustomed to stable growth and predictable client behaviours. This is why recent events come as such a shock, shaking our value system. This mainly concerns the organisational culture of firms. Those who are the strongest will survive (or not only those) but first and foremost- those who flexibly adapt to the new surroundings. Both money and clients are not gone from the market, but the ways of getting to them have changed. Innovation, not only technological ones, but also those resulting from a critical and analytical mindset and open-minded managers will give a significant advantage in the race. Companies providing legal services should quickly assess current needs in terms of innovations and effectively implement them. The most obvious of them are adapting communication tools to the digital reality, widening the scope of provided services (i.a. those which can be provided remotely), or recalibrating the risk management system. At this time, it is possible to fix many issues that have long been criticised, such as inequalities on the way to top-level posts, such as pay gaps or gender inequality.

Pricing services according to the new reality.

Box solutions, meaning those bought in a bulk and at a fixed price, are definitely on the plate. But the question remains, how to adapt this to the needs of the client, and for how much? Permanent subscriptions, which are not dependent on the amount of the legal firms’ work, are advantageous for the firm, but not for the client. Clients want to know what they are paying for and get a fixed price more frequently. This forces law firms to precisely calculate their services and price them appropriately, and also to compete with other entities, which are not necessarily law firms. Some services, especially basic ones, such as sales contracts or preparing documents for board meetings are already available on the market and do not require to be provided by well-known law firms. It is also a possibility that in the future, these services will be executed through a smartphone app or similar solutions. Soon, a blockchain- based solution for holding regular and supervisory board meetings online will enter the Polish market. Will this revolutionize the corporate law market in Poland?

Certainly, it is worth beginning with a few changes to help the client understand the pricing of our services- for example, a simplified pricing of hourly rates. Even more radical is offering services through a „reversed auction”. Law firms that decide to participate in the process and are verified by the platform provider compete, lowering the price in response to the clients’ offer. On the platform, they can see only the drop in price, but not who they are competing with. On average, this can lower the final price by 10-15%. For now, those who use such platforms are usually the largest corporations, bot with time, this sales method may become more popular. Such solutions are not available on the Polish market yet, but in the future- who knows? The first step could be creating a comparison-shopping agent for standardized services, similar to those that function in the insurance sector.

Action methodology.

How to prepare yourself for a world more sensitive to change than VUCA? We are entering an era of drastic legal and business model changes that will be difficult to assess. Robert Ambrogi, a lawyer, journalist and LawNext expert stated before the crisis: If you want to be ready for what the future holds, do not wait for it to happen”. In other words, we must take risks and act not according to what we know today, but according to what might happen tomorrow. Traditional solutions, from delimitation of competences, work methodology and tema management skills won’t work anymore. It is time for „newbies” such as systems based on scrum, agile and goal determinant systems such as OKR, or tools measuring client satisfaction. If these terms are not understandable and sound exotic, we probably have many lessons to learn. For encouragement, it is worth adding that in many businesses, such as production or IT, these tools are very effective, leading to quality cost management and better management of time and resources.

Of course, in the beginning, change in methodology will result in some resistance (as any change does), but it is important to keep in mind that being more effective, organised and having better data and risk management will give benefits not only to our law firm, but also to clients as well.

Digital transformation.

A term previously reserved for IT companies has now become a „holy Grail” for those who run their businesses in a traditional model. After the pandemic broke out, it became clearly visible that it is impossible to work without technology, and the core of the matter is not about faster computers or better wi-fi (although those may also come in handy). According to Gartner’s report, 81% surveyed law firms are simply not ready for a technology revolution. The answers to the resistant approach can be found in a Wolters Kluwer report, according to which the main factors are: lack of technology knowledge, understanding of the need for change and ability to function in a digital environment, and 36% of law firms admit this. I have already previously outlined the „deadly sins” of these firms, such as remote document management systems, data digitization or data security. Over the last years, the main factors slowing down digital transformation are distrust towards cloud solutions or digital document signatures. However, it turns out that in an era of electronic and scanned documents, market available solutions, for example those blockchain-based, may be a more secure solution than paper documents. After document digitalization, a possibility of attaching AI-based solutions, which can precisely categorize, search, analyse and detect potential mistakes more precisely than a human being, This of course does not mean that the legal profession will be replaced by machines, but that humans will gain new tools and support from “Silicon Valley intelligence”. Already in 2017, in a McKinsey report it was predicted that 23% of lawyers’ tasks can be done by a computer. Today, it may turn out that the number will be much higher, although the so-called “protein element” will still be needed to confirm results achieve by artificial intelligence.

The change in paradigms mark the market from time to time, and are usually met with resistance at the beginning, which later develops into creating innovative solutions. Can we return to the world we knew before the pandemic? Most experts agree that this is not a possibility. Law firms will have to adapt to the new rules, and those who do it first will get a leg up in the race. Similarly to the previous revolution- communicating through e-mails and negotiating deals by phone, in a decade we may be amused at stories of documents kept in binders, legal opinions written on the basis of paper files and archives, as well as AI associated with science-fiction gadgets. The notion of which solutions will stay or be discarded is not yet determined. It is, however, determined that the necessary change in our mindsets and actions is inevitable.


About the Author:

Kamila Kurkowska, CEO of Firemind, President and Founder of Women in Law Foundation, Ambassador of European Legaltech Association in Poland.

Kamila is experienced and innovative business manager, focused on legal marketing, Legaltech and corporate innovation. She have gained her knowledge and experience leading marketing and business development teams at Deloitte Tax and Legal Advisory and Harvard Business Review. Since 2015 she has been successfully running Firemind - consulting company, specialized in strategic and marketing advisory to professional services and technology companies. She advices Clients on digital and offline marketing, business development strategy and ongoing projects, serving as Head of Marketing on a number of occasions. Thanks to years of effective management of large and complex teams, combined with effective building of relationships with different groups of stakeholders, business partners and clients, she has been able to build a broad and strong business network.

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