Investment growth in the legal sector has exploded in the past 3 years. In 2018, Forbes reported a 713% increase in investment thanks, in part, to the implementation of e-discovery tools and the IPO of several high-profile companies. This level of investment has continued with the likes of Verbit and Everlaw receiving $150 million to disrupt their respective markets in 2020.
With the influx of cash permeating the market, skepticism has grown, and certain myths have become pervasive. Law firms are expected to triple their technology budgets by 2025, so it’s time to separate myths from truths.
Saying legal tech takes too much investment is an empty blanket statement with no real understanding of nuances. There are hundreds of helpful tools with free versions or trial periods. The trials allow you to see what the value of the tool might be to your organization before you roll it out to the team. The idea of most tools is to improve time and cost efficiency so using them is more helpful to profits than not.
AI innovations typically set out to find repetitive, cost and resource inefficient practices and replace them with automation. Tools like legal drafting software are not designed to eliminate the prospects of junior lawyers or paralegals. They simply make these tasks faster and more profitable.
In truth, job losses are the decision of individual firms. As innovation gives personnel more time, firms will decide whether to repurpose that time or stop paying for it. Realistically, there are far fewer graduates enrolling in law school over the past few years. A decline in junior positions will inevitably be met by a comparable decline in talent supply.
Technology tools are battling it out for dominance. Case and firm management leaders have emerged, but most tools operate in an oligopoly where there are alternatives.
The problem with waiting for a leader to rise to the top is that it takes time. While you are waiting, competitors can be gaining irreconcilable advantages. Being first counts.
Again, technology is not aiming to make the legal profession obsolete. It aims to augment the abilities, efficiency, and accuracy of lawyers. It looks to eradicate tasks that cost time and cause delays that clients are increasingly intolerant of.
Furthermore, touchpoints are not the be-all and end-all. The economy is increasingly digitized. As the online-savvy generation becomes the majority, they expect virtual service. They understand what functions of a lawyer need to be human conversations and what should be done through tech. Functions like client intake, document preparation, billing, and signatures do not require costly human resources.
There is some truth to technology alienating older or non-digitally fluent populations when technology is the primary delivery mechanism. However, the answer is knowing your audience and meeting them on their level.
Saying that technology makes services inaccessible is a misnomer. Clients are more than happy to reap the benefits when it doesn’t cause exclusion. Using advanced automation and AI internally improves service delivery but not at the expense of accessibility. Word for lawyers is the perfect example. Innovative plug-ins and add-ons enhance the quality and efficiency of legal documents and reduce costs, but the end deliverable received has not changed.
Training in anything is supposed to be challenging, otherwise, it wouldn’t be necessary. The idea that the training required is going to damage firm productivity cannot be applied to all technologies. Contract analysis, e-signature, and even billing cycles can be installed with relative ease and little to no training expense.
Tools like cloud, firm, and case management integrated with other tools do require education, but the benefits outweigh the costs. Furthermore, as the legal sector infuses more and more software tools, lawyers should expect to upskill. Without accepting and adopting improved solutions, clients will effectively be underserved in comparison to competitors.
Technology adoption rates are higher across smaller firms. Cloud adoption and web-based software solutions are as high as 60% for firms 10-49 people. Larger firms sit around 44-53%. This is large because small firms enjoy greater flexibility and agility. They are better positioned to install new software because it doesn’t create monumental change. The bigger the firm, the slower the introduction.
Cybersecurity is the responsibility of the individual firm. Taking necessary precautions and introducing robust policies means far less risk. 90% of cyber breaches directly result from human error. It is people logging into work email on unsecured networks. Opening phishing emails or downloading malware. Companies not updating their privacy and electronic record-keeping policies.
We live in an age where software is an extension of the professional. Training and understanding are what is needed because going backward with innovation will not happen.
Law firms have had quite a history of avoiding innovation. Billable hours stayed high and there was little demand for upgrading of skills and abilities. Lawyers could practice in peace without much scrutiny. That is no longer the case.
Clients demand more transparency, online delivery, and immediate responses. Accepting and perpetuating myths without investigating any deeper used to work, but it is no longer tolerated by a demanding market equipped with substitutes. Most myths, upon further investigation, fall apart quickly or are easily mitigated. They are not to be hidden behind. The reality is that firms who choose to research and implement the right tools will gain the biggest advantages over lazy competitors.
For the restaurant business, the past year has been a frenzy. With over a million…
Over the years, the prospect of your identity being stolen can drive shivers down your…
A collaboration between artists Michael Joo and Danil Krivoruchko aka Myshil, Organic Growth: Crystal Reef…
Investors have shown a keen interest in the TOMI token since the team decided to…