How Legal Tech is Helping Law Firms Get Future-Ready
Law firms have been reputationally slow to adopt legal tech as part of their day-to-day practice. Often, it shows.
Consider the range of everyday processes that slow down as soon as legal teams get involved. Everything from multi-million dollar commercial contracts to a simple residential house purchase slows down significantly as soon as legal teams are part of the process.
Is some of this a necessary and important facet of legal process and due diligence? Absolutely.
Equally, a good chunk of time is also added by low-value, manual work – the likes of which has long been automated in other industries.
Now, this is changing.
Whilst, in the later part of the last decade, there was a steady but gradual drive towards legal technology adoption, it has been the impact of the COVID-19 pandemic that has accelerated these trends significantly.
According to a recent report by global professional services provider Wolters Kluwer, over 50% of law firms anticipate working from home more in the future, whilst 41% expect an acceleration of virtual courtroom hearings.
As a result, 66% of law firms want to improve the way they digitally communicate with clients, and 62% of legal professionals say that there will be increased remote collaboration with colleagues and third parties.
The key to adapting to this new normal will be increased usage of the right kind of technology. Rather than simply maintain the status quo, the right use of legal tech has the capacity to improve it – for lawyers and clients alike.
What Sort of Legal Tech Is Available Now?
‘Legal technology’ is a spectrum. At one end, there are general use tools like e-signature and video conferencing that aren’t specific to the legal sector, but have legal-specific uses like signing contracts, carrying out virtual hearings or communicating quickly with clients.
At the other lies a number of highly-specialized tools on the cutting edge of legal technology. For example, contract analytics solutions use machine learning to score drafts for complexity, legal phrasing and enforceability. Elsewhere, AI tools can help forecast opponents’ arguments using data from a vast dataset of previous cases.
In between lies a raft of automated solutions for a wide range of legal practices, including:
- Legal billing
- Due diligence
- Time and expense recording
- Legal calendaring
- Client accounting
- Compliance management
Where do most law firms sit on this spectrum?
The Wolters Kluwer report cited above suggests that the top five priority technology investment areas for law firms are, in order:
- E-signature: 63%
- E-meeting and e-voting management: 46%
- Document and contract workflow management: 40%
- Workflow management and process automation: 34%
- Analysis of regulatory and case law trends to predict results of claims: 32%
So, it’s fairly basic, non-specialist tools that take the top spots, followed fairly closely by automation technology.
Whilst predictive analysis (perhaps the most ‘future-facing’ of these technologies) lies in fifth place here, it’s interesting to note that it’s beaten additional research solutions, client management, automated contract creation, collaboration tools and legal spend management into the top five.
These results suggest that law firms are genuinely interested in cutting edge AI applications, whilst perhaps not having basic tech in place yet.
It’s an interesting position for an industry to be in, and might suggest we’re on the edge of a massive legal tech boom as law firms accelerate their digitalization strategies significantly.
What Challenges For Law Firms Can This Tech Resolve?
Even without the impact of COVID, the types of experiences that are attractive to clients have changed significantly over the past decade.
People are now considerably more comfortable carrying out complex and sensitive processes digitally. Take banking as an example – in 2010, customers were cagey about internet banking. Now, at least 48% of adults in the UK use some form of internet banking – and that was before a pandemic that boosted mobile banking registrations by 200%.
In short, your clients are now used to the convenience of digital services elsewhere in their lives – even when dealing with data sensitive processes. It won’t be long until they demand it in the legal sphere.
This would be less of an issue for law firms if every player in the industry was coming to the realization at the same time.
The reality is that the Big Four professional services companies, an increasing number of alternative legal service providers, legal tech startups and a few larger law firms realized this a while ago.
This places them in an ideal situation post COVID, where the ability to collaborate digitally will become more important than ever before. It’s also beneficial more generally, as automated solutions attract clients with potentially major cost and time savings compared to traditional legal firms.
What Future Risks Does This Pose For Traditional Law Firms?
The problem for traditional law firms is that, if they don’t act now, this group of ahead-of-the-curve organizations will set a customer experience standard that they can’t follow.
According to a 2018 report by Gartner, 81% of law firms feel unprepared for digitalization, even though the benefits are well established. This puts the 19% of firms that are ahead of the curve in an enviable position. They can be the ones that set the standards for digital CX in the legal sector. Everyone else needs to play catch up.
This could lead to high-value business gravitating towards these technologically-progressive firms. It could also drive commercial clients away from traditional law firms and towards using legal tech solutions to in-house a greater number of legal processes. After all, why would they want to pay for a day of work at an expensive per-hour rate, when there’s a SaaS app costing $50 a month that will do the same job?
Below, we focus on how law firms can leverage legal technology to challenge this gap – and perhaps even take the lead in providing a revolutionary customer experience.
Legal Tech Helps Keep Costs Down For Clients
Cost is an increasingly important competition point for clients looking for legal work – particularly with the rise of legal technology that can save so much admin time.
Digitalization helps you make cost savings that you can then pass onto your clients. These include:
- Automation of legal processes like due diligence, compliance management and legal billing: reduces hours spent on a case and potential need for third-party services.
- Automation of back office functions: reduces spend on extended back office personnel and associated equipment/office space.
- Collaborative tools like video conferencing: reduces travel and associated expenses – airplanes, hotels, meals and the like.
This allows you to run a leaner, more efficient organization. So, whilst you won’t be getting paid all of those billable hours for manual service provision, your running costs will be low enough to ease this burden.
Automation Lets You Focus On What You’re Best At
There’s more to customer experience than speed and convenience.
According to a recent PwC report, consumers will pay a price premium of up to 16% for excellent service. According to the report:
“Speed, convenience, helpful employees and friendly service matter most, each hitting over 70% in importance to consumers. Those who get it right prioritize technologies that foster or provide these benefits over adopting technology for the sake of being cutting edge.”
If you can marry the convenience of digital technology with great service, you’re onto a winner. And this might be exactly where traditional law firms can stand out.
As a law firm, you can provide a level of personalized service and advice you can’t get from an app alone. That’s what your clients value you for – not the hours of manual work that keep your juniors behind every evening. If you can automate those long, administrative tasks that add hours onto each process whilst providing a specialized, approachable source of advice, you immediately offer something that other options can’t.
If you’re a smaller firm, this also lets you max out on your existing selling points – locality, speed, efficient service and price.
Free Up Your Staff To Add Value
One option, if you’ve automated some of your processes, is to reduce the number of staff you employ. This offers immediate cost savings on salaries and expenses.
Think about how else you could use your employees’ working hours to provide better services.
You might, for example, be able to redeploy employees formerly bogged down with admin work onto more client-facing work. Alternatively they might be able to provide assistance on larger, more critical cases, thus helping you provide a second-to-none service for high-value clients.
Fewer admin hours also means more time for training. If there are areas of law that you’d like to expand into, easing administrative burdens on junior staff and focusing on skills development instead could allow you to expand into new areas.
It could also allow you to simply add more clients or cases to your roster. Training junior staff quicker and removing time-consuming administrative burdens means you have the resources to deal with an increased workload
The Right Technology Partner Is Essential
Regardless of where your firm is with legal technology, it’s important to find the right technology partner for your needs.
If you find that there’s nothing out there that quite suits your firm, you could consider custom software development. This helps ensure that whatever solution you need is a perfect fit for your existing ways of working – your software works for you, not the other way around.
At Tivix, we have over a decade of experience creating tailored software solutions for our clients. With immediate access to a range of specialists – including machine learning and AI experts – we can build quickly, effectively and to your exact specifications.
Whether you’re looking for basic process automation or something more complex, we’d love to hear from you – drop us a message here.