The legal sector is in the midst of unprecedented change and technology is the juggernaut pushing it forward.
This all-encompassing change comes in myriad forms. It is the age of the client: we are more informed and price sensitive than ever and demand much faster, more transparent and more human experiences. Competition is far greater as technology gives rise to virtual firms and automation looks set to change the very essence of how law firms work and deliver value.
In the face of so much evolution and revolution, legal firms are beginning to embrace the digital future and are finding more innovative ways to manage profitability and the performance of their people. Even though it seems the pace and extent with which legal practices are commissioning change is decreasing, 80%¬π of lawyers have an un-resounding appetite for it. Here are the top five digital trends shaping the legal firms of tomorrow:
1. Machine Learning, automation and artificial intelligence
The benefits of process and collaboration technology are already being felt but it is cognitive technology and machine learning that has the potential to change the very fabric of modern legal work. Artificial intelligence can detect and use patterns in data to automate previously human-based tasks such as document filing and high-level research and bots can eliminate the need for human intervention in time-intensive tasks such as tax returns and form filling.
While many commentators have warned against AI (potentially automating up to 30% of legal workers’ routine tasks) the real opportunity is in freeing up human resource for greater corporate endeavour and re-skilling employees to drive more billable hours.
At a time when 60% of lawyers consider client retention an issue and there is a gap between clients’ and lawyer’s perceptions of the service on offer – machine learning can free up the resource needed to provide the more human, personal element of relationship building that is so often considering lacking in the profession.
2. Working smarter – greater workplace mobility and employee expectation
The ubiquity of mobile devices in the workplace has helped firms to realise the financial benefits of an increasingly mobile work force – improved service for clients in an increasingly 24/7 age, increasing workflow efficiency and reducing overheads as the requirement for large statement offices decreases.
This need to work smarter is not just about hard commercial benefits and responding to client needs though, it is also driven by changing employee expectations and demands. Lawyers’ expectations of their careers have shifted as they see how technology can improve the very essence of their working day and the arrival of Millennials into the workplace (they will make up 75% of the workforce by 2030) compounds this further as they expect mobility, agility and digital efficiency as a minimum. Legal firms striving to attract and retain the brightest and best talent must recognise the necessity of working smarter in a digital age – be that through agile workplaces, new collaborative technologies or the use of automation.
3. Enhanced data-led decision making
As legal firms invest in new digital solutions, working practices and machine learning, there is an opportunity for lawyers to really understanding operational costs, process efficiency and how work is done.
It is only through enhanced auditing and performance tracking that law firms can truly understand their operational efficiencies, question their working practices and use that information to shape more strategic decision-making.
Figures from Lexis Nexis suggest that greater use of analytics could save up to 70% of the expenditure involved in legal reviews.
Better use of data can also support legal firms as they look to deploy alternative pricing models in order to respond to clients’ increasing expectation for fixed prices and cost-certainty. This degree of commercial insight is perhaps one of the greatest gifts of the digital revolution – enhancing the use of performance metrics and data analytics to build a more relevant, customer-centric and competitive law firm.
4. Heightened competition
The legal services market is growing. The powerful Big Four accountancy firms have moved in, online legal services abound and New Law entrants are providing a more dynamic alternative to traditional firms. The balance of power between clients and lawyers has shifted too. Clients are better-informed, more demanding, less brand loyal and cost conscious. The onus is on accessibility, efficiency and feeling heard, for they will shop elsewhere if the service is not good enough.
It is technology and its digital tools that, when harnessed properly, can give legal practices the battering ram they need to barge the competition out of the way and respond to changing marketing dynamics. As legal practices recognise the need to overhaul workflows, improve efficiency and better understand clients, they stand to thrive in an increasingly crowded market place.
5. Governmental, judicial and regulatory pressure
In addition to the move to the paperless office, which has been ongoing for the last decade, legal firms now have to consider the complex levels of regulation they will face in the wake of Britain’s decision to leave the EU and also the introduction of GDPR. The complexity of these issues acts as a powerful driver for change and innovation, as firms ty to make sense of how these events will impact their operations, clients’ needs and the competition.
Technology has changed consumer behaviours beyond all recognition. Legal practices must look beyond making incremental digital improvements and instead embrace the opportunity for widespread organisational change and innovation. As firms strive to survive and stand-out in the age of the client, it is clear that a ’digital first’ model provides clear and far-reaching wins for the profession. Over the next five years, technology will become even more pivotal to the delivery of legal services in the UK.