In August and September 2019, the “Innovation Value Chain Survey” was circulated to members of the Law Society to survey the innovation priorities of Hong Kong solicitors. This is part of the InnoTech Law Hub initiative, which aims to implement the Technology Roadmap for the Law Society.1 There are 137 responses to the survey. The largest groups in the survey are private practitioners including registered foreign lawyers (77 percent), and then in-house lawyers (18 percent). While 46 percent of the private practitioner respondents work in offices/teams with 16 or more legally trained members, 56 percent of the in-house lawyer respondents work in teams of one to three legally trained members. Analysis of the responses is set out below.
The private practitioner respondents indicate that, to them, the key drivers for innovation are productivity/operational efficiency, work quality, risk management, and cost/budget control (in decreasing order of importance).2 The most popular technology products adopted by private practitioners in the past 12 months relate to legal research, followed by document storage/management and accounting and billing (see Chart 1). According to the responses, the same trend applies to the products that will likely be adopted in the next 12 months (see Chart 2).
The above trends might be explained –at least in part– by the fact that the top practice areas represented in the responses are civil claims and dispute resolution, commercial, corporate, and family law (in decreasing order). Over 20 practice areas are represented in the private practitioner responses, including admiralty, criminal, conveyancing, employment, immigration, intellectual property, and wills and probate (respondents could select one or more practice areas).
39 percent of the respondents have identified themselves as “partners” and 40 percent as “associates.” While 56 percent of the respondents are not involved in budgeting, 6 percent who are involved are willing to spend over five percent or more of their revenue on new technologies in the next 12 months (14 percent to spend around two-five percent; and 24 percent to spend less than 2 percent). The respondents note that the most significant factors restricting the identification and adoption of new ideas are funding, followed by leadership and time (other factors are culture, structure, and talent). They agree that their work needs to “firefight” constantly constrain time, leaving scarce time for ideation.
Only a few respondents have access to internal talent to support innovation initiatives. Most respondents conduct training on business and technical innovation topics either on a monthly or quarterly basis. Although the respondents review periodically opportunities for developing new services or solutions within their departments, they seldom conduct such reviews across departments and they review rarely with major clients on their changing needs. While some respondents conduct post-project reviews on an annual, half-yearly, or quarterly basis, the majority of them do not conduct such reviews at all.
Most in-house lawyer respondents find that productivity/operational efficiency is the key factor for driving innovation, and other key factors include competitive edge, work quality, costs/budget control, and team coordination/management. In the past 12 months, the most popular technology products adopted by in-house lawyers relate to document storage/management, document review, and document signing/execution (see Chart 1). These respondents expect that they would adopt more team coordination and workflow management solutions in the next 12 months (see Chart 2). These trends might be explained by the fact that most of the in-house respondents work in commercial, corporate, and compliance areas.
While 40 percent of the in-house respondents are not involved in budgeting, 12 percent are involved and have indicated that they are willing to allocate over five percent or more of their budget on new technologies in the next 12 months (20 percent to budget four-five percent; 12 percent to budget one-two percent; and 16 percent to budget less than one percent). According to in-house respondents, funding challenges are the most crucial factor restricting the identification and adoption of new ideas. Time and operational resource constraints (including legacy IT systems) also constitute critical restrictions. Most respondents note that they do not regularly review market trends, new services or solutions or their “internal client” needs, but they will commit to training and post-project reviews on an annual, half-yearly, or quarterly basis.
60 percent of these respondents note that they are neutral or do not care about the technology used by external lawyers. Rather, the in-house respondents select external lawyers based primarily on their expertise and quality of advice. Nevertheless, client communication and reporting, fee arrangement, and invoicing are also important factors for consideration in engaging external lawyers. In-house respondents have remarked that innovation in certain large organisations are hindered because of their organisational structures and their slow decision-making and other processes, such as Know-Your-Client (KYC) procedures. A few respondents have direct access to internal and external expertise to support innovation initiatives.
The survey results will inform the work plans of the InnoTech Law Hub and the implementation of the Technology Roadmap. Respondents to the survey have asked the Law Society to provide further information on technologies relevant to legal practice and support members in enhancing their technology competencies. Given the nature of legal work, it is unsurprising to see that respondents are generally interested in technology solutions that enhance productivity and help them manage document-intensive workflows. We invite members to assist us in ongoing updates of your innovation priorities so that the Law Society can formulate appropriate strategic policies and actions to ensure the competitiveness of the Hong Kong legal profession.
1. See Sebastian Ko, “InnoTech Law Hub Launches!” Hong Kong Lawyer (August 2019).
2. Other responses include competitive edge, talent attraction/retention, risk management, and market share/growth. The same set of responses applies to in-house lawyer respondents.