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The digital dilemma in law firms

The ambidexterity challenge

The digital revolution is sweeping across all sectors, and the legal industry is no exception. However, law firms, characterized by high knowledge intensity, low capital intensity, and professionalized workforces, are finding it challenging to balance their traditional practices with the adoption of new digital technologies. This balancing act, known as ambidexterity, is at the heart of the digital transformation dilemma in law firms.

The slow pace of digital transformation in law firms

Compared to other Professional Service Firms (PSFs), law firms have been slower in their digital transformation journey. The study explores this phenomenon through interviews with representatives from law firms, complemented with data from architecture firms, legal industry data, and field notes. The findings reveal that established law firms face structural and cultural barriers to implementing ambidextrous solutions.

Comparing law firms and architecture firms

The study draws a comparison between law firms and architecture firms, both categorized as Classic PSFs. While architecture firms have successfully combined digital exploration with ongoing exploitation, law firms have primarily focused on exploitation, leaving digital exploration to new legal tech firms. This difference can be attributed to the industry context and professional culture.

Key findings and implications

The study uncovers that both structural and contextual ambidexterity pose a challenge for established law firms. Structural ambidexterity involves exploring and exploiting in different structures, while contextual ambidexterity involves performing both tasks within the same structure. The findings suggest that industry context and professional culture play a significant role in determining whether the organizational setup will enable or hinder digital exploration.

This research contributes to the understanding of barriers to embracing digital technology in law firms and offers insights to practitioners seeking to overcome these barriers. It underscores the need for law firms to adapt to the digital age, highlighting the importance of balancing the exploration of new digital opportunities with the exploitation of existing business models.

Meet the researchers

This insightful research is the product of a collaborative effort by:

• Charlotta Kronblad, House of Innovation, Stockholm School of Economics, Stockholm, Sweden
• Johanna E. Pregmark, Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden; RWTH Aachen, Aachen, Germany; Foundation IMIT, Gothenburg, Sweden
• Rita Berggren, Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden