Technology is changing the legal sector. The UK government has recently announced that it is investing £4 million to modernise the UK legal industry through its LawTechUK programme. The initiative is a part of a drive to keep the UK at the global forefront of legal services.
All law firms are under increased pressure to adapt to new ways of working and the changing expectations of both their clients and employees. A recent survey by Wolters Kluwer found that 77% of legal professionals interviewed understand the importance of legal technology. However, only 32% think their firm is prepared to use it to be more productive. In light of this, legal businesses must rethink their workflows and methods to ensure they don’t fall behind their competitors.
Across the sector, many trends are improving efficiency, security, and ultimately leading to more profitable and rewarding work.
Here are five tech trends that are currently shaping the landscape for law firms:
1. More adoption of tools that automate the management of legal documents
Many tasks in the legal profession can be automated. In fact, according to McKinsey, between 22 – 35% of tasks can now be automated – including tedious and time-consuming document reviews and contract updates. This frees up lawyers to use their time on more important tasks, such as liaising with clients.
Furthermore, artificial intelligence and machine-learning technology have been proven to be very useful in the legal sector as they help firms be more efficient. This includes looking at historical data examples to apply rules for new situations, helping companies save time and money. According to Deloitte, BT’s internal legal team was able to save up to 50% of their time in reviewing documents by applying AI.
2. A shift to the cloud
An increasing number of law firms are moving to the cloud for their data management. According to IDS, 74% of law firms in the US are currently storing client data in the cloud, as clients proactively ask for cloud solutions.
This shift has been in part due to more people working from home during the pandemic but also as a way to protect the firm from cybersecurity attacks (as we will see in the next point). It also plays an important part in retaining talent as it allows employees to work more flexibly where and when they want.
3. A greater focus on data security
According to the American Bar Association’s recent report, 29% of lawyers said they had been victims of cybersecurity attacks last year, with 37% admitting to having lost revenue as a result of these security breaches.
With more people working remotely, data security has been more difficult to achieve. However, the rising uptake of cloud technology has been a key enabler to help solve this issue. Moving data to the cloud can be more secure as firms rely on tech providers with bank-grade data encryption, making information much less vulnerable to hackers. Furthermore, by having regular independent security audits in place, companies can prevent unauthorised access or alteration.
4. More legal tech spending
Notably, Gartner estimates that legal departments will increase their legal tech spending threefold by 2025. Adding to that, Statista expects the legal tech market to reach US$25.17 billion in revenues in 2025. This growth is pushed by the development of new technological tools that can help improve the delivery of legal services.
A new generation of law graduates is entering the legal profession. They have grown up with technology and are more likely to want to see it in their workplaces. This new generation of lawyers and the need to keep up with the current market both factor into the increase in legal tech spending.
5. New employee retention tactics
The Great Resignation is not expected to slow down anytime soon. One in five workers are planning to leave their job this year, according to PwC’s Global Workforce Hopes and Fears Survey.
The legal industry was also heavily affected by this exodus of talent leaving the profession. Law firms need to act quickly if they want to attract and retain talent. Offering flexible work – in terms of where and when – can help entice the new generation of legal professionals who seek the right work-life balance and are not as interested as previous generations in careers that burn them out.
We can expect to see a blurred line between technologists and lawyers as firms look to expand their legal technology and innovation capabilities by focusing on the skills their existing staff already have. Moreover, firms are planning on borrowing expertise from other internal/external functions via rotational programmes or going down the route of hiring new talent.
The bottom line
The law profession is certainly due to change in the upcoming years and there is no doubt technology will play a key role in this. It will not be about replacing legal professionals but rather augmenting their skills, using technology to improve efficiencies in delivering services, and freeing up lawyers’ time for client liaising where emotional intelligence may be needed.