Law has routinely been labeled as slow adaptors to the digital age. Few firms were willing to buck the trend and innovation was more akin to a dripping tap than a roaring river. Then came 2020 and the great disruption. Suddenly, technology couldn’t be adapted fast enough.
The digital transformation of legal firms has changed everything. Automation, artificial intelligence, machine learning, and technology are permeating an industry set to course through digital disruption for the foreseeable future.
The digital revolution has begun for law firms brave enough to embrace it. But what is the result of all this new technology? How have law practices transformed? Let’s take a look at the impact new technologies are having on the talent, markets, and prospects of legal firms.
- Evolving Outdated Processes
- Introduction of Digital Services
- Upskilling All Talent
- Increased and Refocusing Human Resources
- Enforced Policy Change
- Change to Employee Wellness
- Reimagined Client Experience
- Growing Market Share
- Downsizing of Legal Offices
1. Evolving Outdated Processes
While digital transformation may pertain to a digital-first mindset, basic task augmentation is at the heart of it all. Law firms have accepted lethargic, resource-draining processes for far too long. However, pioneering legal software for law firms has targeted repetitive and outdated processes.
Legal research has morphed from the old school days of examining dusty books to scanning digital libraries. Research AI tools have come far enough that lawyers can now download case summaries, case decision disputes, receive text alerts of newly minted case law, and all without having to fully understand legalese.
Processes that were exceptionally draining such as contract review and analysis, billing, retrieving file signatures, filing, and case management have been dramatically upgraded using automated AI. By installing a suite of digital tools to replace these tasks, law firms are infinitely more efficient and more profitable.
2. Introduction of Digital Services
Covid-19 accelerated the digital transition of law firms, doctors, accountants, and more overnight. All of a sudden, clients expected 24/7 virtual services and unbridled convenience like they were ordering takeaway food. If law firms wanted to generate income, they were compelled to oblige.
Virtual law firms have now become the reality. Clients who were forced to remain at home have grown accustomed to having an online legal service option and are no longer willing to make commutes, wait for responses or tolerate inefficiencies. The adjustment in consumer expectations has demanded a response.
For law firms, the new demand mandates a rethinking of the entire organizational structure. Firms now must refocus their marketing goals and channels, website aims, their client experience, employee skill sets, and more. The purchase of VOIP headsets might have been the initial modest entry requirement but mass overhauls have become more likely.
Though the knowledge and proficiency with the law have not changed, the vehicle of delivery and business function has changed tremendously.
3. Upskilling All Talent
Fluency in technology has become an expectation for all modern-day professionals. However, as lawyers have been resistant to tech innovation for so long, the digital influx is creating a skills gap. This gap is recognized in North Carolina and Florida who has both mandated technology CLEs to practicing attorneys and there is a strong case for such upskilling to be rolled out nationwide.
The obstinance to technology by senior lawyers and tenured veterans now comes at the cost of the firm and its clients. A mindset shift is required. Technology is progressing the industry and latecomers will suffer. It is in the interests of all to get on board, but the message needs to be delivered strategically.
The mindset shift requires enhanced change management strategies from HR departments and leaders. The upskilling of support teams will be required where these strategies are not readily available.
As the mindset shift is taking place, software tools and platforms will be implemented requiring proficiency training. All necessary staff needs to be onboarded to the new tools and given the unending nature of innovation, a constant and cyclical training demand is expected.
4. Increased and Refocusing Human Resources
All great disruptions cause an unavoidable chain reaction. For law firms, the introduction of new efficient technologies reduces the hours it takes attorneys to perform repetitive and time-consuming tasks. Time spent proofreading and reviewing contracts, researching for case strategies, preparing case progress reports, and more dwindles.
The reduction of resources for these tasks means lawyers have greater availability for income-generating tasks. It is largely up to the firm how the additional human capital is repurposed. However, the opportunity to take on more paying clients without compromising standards is where firms stand to gain the most.
Furthermore, it allows firms to reconsider their recruitment and onboarding strategies. Repetitive and replaceable tasks are typically given to junior associates. With many of these tasks being optimized through technology, firms can hire for different focus areas. For example, rather than hiring for labor-intensive proofreading, a law firm can use that focus on finding a technology savvy or specialization-specific role. The potential for improved hiring processes is a major win for tech-fluent firms.
5. Enforced Policy Change
The rush to augment using technology brings with it a responsibility to introduce effective and ethical company legislation.
Law firms are now expected to introduce digital device behavior extensions to their codes of conduct and employee handbooks. The need for protective procedures surrounding client data, personal email use and fair internet use, and refreshed inventories of all technological hard and software has been driven by cyber insurers.
Even electronic record keeping is becoming a must as paper files become a dinosaur of the legal industry. To keep pace with IT policy requirements, careful and consistent internal protocol and policy maintenance is an ongoing chore that firms must make time for. Without doing so, cyber insurance, cybersecurity, information negligence, and malpractice risks will all increase.
6. Change to Employee Wellness
One of the biggest but most subtle changes that law firms are experiencing is the boost to team morale. Lawyers are well known for their work ethic and willingness to commit to overtime and discretionary effort. This has typically come at a cost to the work-life balance that unduly affects the wellbeing of your team.
However, new technologies have provided several positive personal benefits. Firstly, time-consuming tasks like research, billing, and contract review are more efficient which inevitably shortens the workday. Secondly, the opportunity to work remotely allows lawyers to spend more time with their families as the commute no longer upsets quality time.
All of these adjustments are a welcome opportunity for lawyers and support teams to prioritize well-being. In the long run, this will boost overall firm productivity and the tenure of most professionals. As mental health and burnout decline so too will absenteeism, staff turnover, and the potential for malpractice suits.
7. Reimagined Client Experience
Practice and case management tools are becoming the norm for most law firms. Such platforms automate chunks of the client intake, deposition, and relationship management process. Streamlining but at what cost? From the firm’s perspective, they need to think deeply about the needs of their client. Is a full-scale shift to digital portals accessible to your clients or will there be friction with your change?
Reimagining the client experience is a crucial facet of the digital transition. Firms can only digitize externally to the rate that their clients will accept. This means that firms may be at risk of losing clients who prefer the traditional experience if they go virtual.
Nevertheless, for those that are comfortable with the transition to technology, impressive benefits await. Chatbots allow for 24/7 intake and reception. Case management gives clients access to their own portals for ease of collaboration. Commuting to lawyer offices is no longer a necessity. Payment methods are accepted at the client’s convenience. For the digitally comfortable, the client experience easily surpasses previous methods.
8. Growing Market Share
Operational efficiencies are not the only benefits to the digitization of legal services. Service reach is also positively impacted which is pleasing to both clients and firms.
Firms are no longer confined to clients located in close proximity to their offices. Virtual service delivery means in-person interactions are not necessary. Firms are free to represent clients across the entire state expanding their market exponentially.
For clients, there are fewer barriers to legal representation. For example, a downtown Pittsburgh or Philadelphia resident can use a digital service from any law firm in Pennsylvania and not just the more expensive inner-city firms. Accessibility to affordable representation has grown which is good news for regional law firms.
9. Downsizing of Legal Offices
Among the many efficiency advantages brought by technology is the opportunity to reduce the office size. Client expectations and successful digital service delivery have normalized remote work so the need to provide desk space for all firm members no longer exists.
Firms are beginning to scale back their space needs to a more minimalist approach. Board and meeting rooms, senior leader offices, and onboarding or training rooms are the mandatories and everything else can be nice to have. The result is leaner firms with satellite offices that are much more cost-effective. Another financially efficient win afforded to technology embracing firms.
The legal industry is progressing through a disruptive transition change that accelerated considerably over the past two years. The efficiencies, opportunities, and implications have impacted all law firms whether they participate in a digital transformation or not. Early adopters are gaining a competitive advantage. Latecomers are seeing their market share decrease. Clients are reaping the rewards.
The consistent change has not been all positive news for modernizing firms. Job losses can weigh heavily on leadership teams and the consistent investment required to optimize a legal technology stack is substantial. The ever-present cybersecurity threats grow with the introduction of new technology tools and tenured, technologically naïve, lawyers are potentially the most vulnerable to attacks.
The precarious evolution facing law firms brings cautious excitement. Profitability, service reach, and efficiency are undoubtedly the biggest wins, but careful planning is a must.