Legal Tech – is your firm sailing into the sunset?
The recession of 2008 set in motion massive change in the legal profession. Long gone are the days where law firms could charge clients what they like. They now have to find innovative ways of staying competitive in a landscape where clients now demand more for less. Client pressure is the catalyst for change in the way legal services are provided, with a greater emphasis on added value. Firms, and in particular traditional partnerships, will need to adapt to the change otherwise they risk drowning in a sea of competition.
So what is the direction of travel?
It is clear that technology is going to play a huge role in reducing overheads, but any transformation is going to be hampered by the headwinds of conservatism within the profession. The partnership model is not best set to implement rapid technological change. The reality is those with the greatest seniority (and influence) are likely to resist investing in a future which may not include them. They have one eye on retirement with no interest in investing in the future of the firm they are leaving behind. The pace of change is therefore dependent on the influence of more junior partners to point the ship in the right direction.
The growth rate of alternative business structures, where shareholders are aiming for longer term and consistent growth, will also be a persuasive precedent for change.
Not all firms are in the same boat though. Over the last decade some have made great strides to embrace technology, understanding there will be no return to the era where they were able to dictate rates. However, it is clear that recently there has been a real acceleration in the amount of firms contemplating and implementing legal technologies. The direction of travel seems to be towards a future that combines legal work with technology, and a future where legal work is carried out more efficiently, both in terms of time taken and cost.
Should we embrace technology?
There are plenty of articles out there at the moment predicting the use of legal technologies is a virtual certainty. Some even go as far as prophesising an industrial revolution, where tech start-ups will change the face of what we do and how we do it, whichever sector you currently work in. The rapid pace of change is inevitably going to concern some in the legal sector, and others may feel their firm’s business model does not require amendment.
However, those that do not embrace legal technology risk becoming uncompetitive especially in relation to volume work, or work requiring review of significant amounts of data like document reviews. Those at the vanguard of change will be able to do work quicker and cheaper than those that have not embraced it, leaving them unable to compete.
The reality is that technological change will change the way legal work is carried out, and in doing so will provide new opportunities. These new opportunities will be beneficial to both legal professionals and their clients. Automation, for example, creates documents quickly and consistently allowing one to provide excellent service to clients at competitive rates. AI, on the other hand, allows lawyers to review documents significantly quicker and cheaper than if done manually, which reduces the costs burden on the client.
So while some firms resistant to change will find themselves all at sea, others who embrace it will ride the wave of change. There will always be a role for lawyers, but it is likely that the nature and scope of their role will change. Lawyers will be required to understand technology, and provide their clients with advice on the most cost efficient way of dealing with their matter using the latest ‘lawtech’ solution. Larger firms will have centralised teams devoted solely to generating first draft documents across the firm, while others use portals to allow clients to create their own legal documents.
This isn’t something that will happen in the future. It is happening today. So where will we be in five years time?