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Centre for Entrepreneurship and Innovation at Leiden Law School

Legal business models

A conversation with Réné Orij, Managing Director of the Centre for Entrepreneurship and Innovation at Leiden Law School. Besides this position, René also is Course director of Legal Studies and assistant Professor at Leiden Law School. His specialties include Entrepreneurial innovation and new business models and Law firm management.

With thanks to our partners from LegalBusinessWorld  who realised this interview.

You’re the Managing Director of the Centre for Entrepreneurship and Innovation of Leiden Law School. Many people know your Centre – but for those who don’t: What is the mission of the Centre and its core activities?
The mission of the entrepreneurship and innovation centre is to support law students from Leiden University in becoming more entrepreneurial and to turn them into innovative legal professionals. That’s why the centre focuses on assisting students in developing the knowledge and skills needed coping with the big challenges in the future of the legal services.

We do not aim at students only, as our raison d’être for students must be the link with the future professions of these students. That is why the centre aims to stimulate entrepreneurship amongst law firms, other legal professionals and organizations with a strong bond with law. Concretely this means the coaching of start-ups in LegalTech.

What ‘need’ does it fulfil for law students? And do you see the Centre also fulfilling a need for legal professionals?
As mentioned above, there is definitely a need to learn more about entrepreneurship and innovation.
For example – what if artificial intelligence takes over tasks of lawyers in the future – do lawyers have to become tech-savvy? In any case they have to become entrepreneurial to be able to outcompete their competitors, whenever computerized competitors or not.

You identified 4 pillars as the Centres’ core activities. What do they stand for?
Pillar 1: Information platform
A part of the centre is the information platform in which the latest trends in the field of legal entrepreneurship and legal tech are being watched. The centre has become the founding father of a network around the topic of legal tech. Within this network a think tank is set-up with entrepreneurs and scientists from the field. This means we are always up to date regarding to things happening in the legal tech market.

Pillar 2: Innovation labs
One of the goals of the centre is to help existing businesses with innovations so they can ensure their position in this world of fast technological developments. We act upon this by the means of innovation labs. Open innovation sessions with experts from the field (startups and existing businesses) and our students will be held. As a team we explore the possibilities, write business cases and find suitable business models for the changing legal services. Teams of students can perform business analytics and also discuss about possible innovations.

Pillar 3: Legal startup support
There lies much potential in terms of technological developments in the legal sector. As a centre we motivate our students to propose innovations. We then accompany them in an actual start-up. But also external startups can approach us for advice.

Pillar 4: Legal counsels/general counsels
Being in touch with legal counsels, we discuss what legal innovation actually means to them. They are par excellence the large clients of big law. What does such a client want or need from a law firm? Does the client want internet applications or internet based collaborating systems? Is it too early to think of the acknowledgement of information from non-law firms?

Looking at the change, what is the biggest challenge for the legal professional in let’s say five years from now?
The biggest challenge for lawyers is to change a very deeply-rooted attitude of ‘there is no need to innovate, because law firms operate a very successful business model. There are some very innovative people working in the legal industry, but the general paradigm in the industry is conservatism in a rapidly-changing world.

Do you think the Dutch legal market and its specific developments differ much from international developments in Europe and the US?
I do not see many differences in developments, except for the speed of change. Sizes of local markets, defined by differences in language and legal systems, differ from Anglo-Saxon part of the world. Small markets are less likely to experience quick introduction of artificial intelligence (A.I.) products. But that’s a matter of time, that AI will be able to deal with local peculiarities soon.

If we zoom in at the Law Firms, do you foresee a changing position from a competitive point of view in and between Big Law, Medium sized Firms and Small Firms?
There are some relevant issues here, which are not limited to the ones I give below:
Commoditized tasks, particularly in the mid-market, will be taken over by computers. This may lead to clustering of the mid-market, or maybe specialization into boutique firms.

For Big Law other issues may become relevant, for example the effect of a new tech revolution on Big Law’s clients. If the big money-makers for Big Law – financial institutions – lose their future fight with fintech, Big Law will be out of business.

Or another issue, raised in the next question, becomes relevant: very professional corporate departments. Large corporations will be able to deal with many legal issues themselves in the future.
Small law firms may lose a lot of business, because of the introduction of internet-based applications. But their advantage over mid-size firms, their local presence, may stay. Small is beautiful.

Some say the Legal market is on the verge of a disruptive force that will have a huge effect on the market. Then again, others say change will be an incremental process and the market will evolve naturally. What are your thoughts on this?
There is no crystal ball available that predicts our future. If A.I. is taking off, it will rather easily swallow parts of the legal market. But since at least twenty years the taking-off of A.I. has been predicted in the field of law, but no real commencement was made. In brief, for now changes are still slowly progressing, but A.I. may lead to a big bang.

The main development in corporate life that will change it all in my perspective is the blockchain. I believe all ownership of all assets in the world will be registered in a cloud-based ledger using blockchain technology pretty soon, accompanied with all possible transactions and payments.

Can you give some examples of how you support legal services more on the entrepreneurial side and how to introduce some innovations to tie in with the major developments in the industry?
We want to create awareness that leaning on principles of ‘business as usual’ will lead to the end of law firms. Understanding of principles of demand and supply, related to a legal specialization, is absolutely necessary. If there is no demand for your legal knowledge, you need to change – gain new skills and learn new things. To be able to understand what the demand of clients and prospective clients will be, we assume big data analytics will be important tools for law firms.

Important trends are globalization, increasing level of the General Counsel and related insourcing, IT solutions/tooling and more smaller offices with a sharp focus. The question is how to respond on this, how to become a game-changer?
The negative question is how not to become a laggard, but the positive is the one you describe, but in my own words: The question is how to create a competitive advantage by speedy adaptation of really useful innovations.

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