Beyond digital inventions—diffusion of technology and organizational capabilities to change

Abstract

Digitalization is currently creating numerous opportunities for value creation in intellectual industries. In the legal industry however, the vast majority of law firms have remained the same without responding to the rising opportunities. The reluctance in the mainstream legal industry to adopt new digital technologies has created a duality to the field (with legal tech enthusiasts on one side and traditional sceptics on the other). This chapter explores why and discusses the connection between industrial diffusion and capabilities to change residing in individual firms. We relate digitalization to technological shifts in the past and explore the specific challenges and barriers for a digital transformation among law firms. We find that most law firms neither have the technological capabilities nor the economical motivation to change, why digitalization has, instead, become a source of fear. However, in order to seize digital opportunities and adapt to the constantly, and rapidly, changing environment, law firms need to overcome this fear and develop organizational capabilities to change. We conclude that for a true industrial transformation—beyond digital inventions—we cannot only focus on the presence of new technologies but we also need to address the diffusion of them.