You can install LispWorks 7.1 in the same directory as previous versions such as LispWorks 7.0. This is because most of the 7.1 files are stored in a subdirectory called lib/7-1-0-0.
Binaries produced by cl:compile-file in previous versions of LispWorks do not load into a LispWorks 7.1 image. You must recompile all your code with the LispWorks 7.1 compiler.
LispWorks Release Notes and Installation Guide - 19 Oct 2017