“Digital adoption has taken a quantum leap” due to the pandemic, with companies transitioning to remote work “40 times more quickly than [executives] thought possible,” according to an October 2020 McKinsey report.
Traditionally law is a technological adverse sector, however, during the pandemic the legal industry has remained no exception, overcoming conventional barriers to transform into a tech-friendly world. From court hearings to multibillion-dollar negotiations occurring over video conferences and General counsels to private practitioners are virtually meeting clients from the convenience of their living rooms, was that imagined ever before? It's apt to say that pandemic has transformed the legal profession by inducing vast changes within its numerous aspects.
Primarily, the aim of the legal industry to integrate technological tools is to continue its legal practice, as it existed before the pandemic. Still meaningful and quite logical is the adoption, and use of LegalTech—i.e., leveraging sophisticated software powered by artificial intelligence (AI) and Machine Learning (ML) for efficient, and cost-effective working; employing legal analytics to make informed decisions and transitioning over to no-code automation for the legal processes, has overhauled the legal profession.
Enterprise, housing legal departments to independent law firms are broadening their use of technology to enhance workflows and efficiently meet the demands of the clients. By incorporating a multi-layer technology-driven solution that can adapt to the fast-changing business environment, which ensures success in the market. Gartner, a legal and compliance practice firm, found that the technology budget of an in-house legal department in 2017 has swelled from 2.6% to 3.9% in 2020. They predict LegalTech spending for the in-house budget will increase to approximately 12% by 2025, a threefold increase from 2020.
LegalTech is gaining ground, owing to its popularity and efficacy. As more lawyers are switching over to a remote working environment, technology has turned out to be a vital tool to connect with clients, without compromising productivity, yet ensuring improved competitiveness and increased client satisfaction. Employing LegalTech enables the completion of tasks with minimal human input. For instance, automatic contract reviews, and record management; hassle-free requesting of e-signature by software; streamlining communications and finding relevant clauses from data, frees a lawyer from burdensome repetitive work and allowing him/her to focus on more critical and complex issues of the client, thereby driving up productivity.
Bloomberg’s stats suggested that the adoption of LegalTech in law firms, and in-house legal departments have brought more improvement, as depicted in the following table:
Source: Bloomberg’s Legal Operations Survey 2020
With all these advantages on the plate, legal departments are setting aside a separate budget for LegalTech solutions by performing internal departmental surveys, evaluations, and analyses. But which tech tools should they be investing in?
Let’s look at the table below about the most utilized LegalTech solutions by law firms.
Source: Bloomberg’s Legal Technology Survey 2020
However, with the influx of cash pouring into the tech market, doubts are hovering around the legal fraternity, which has grown to myths, quite prevalent nowadays. As law firms are now geared up to triple their technology budgets by 2025, it’s time to separate myths from truths.
Let’s Debunk Myths!
Myth#1 AI will soon replace lawyers because it’s meant to automate administrative tasks, thereby cutting the jobs of the lawyers.
Truth: AI is progressing rapidly and can take time-consuming, and logical tasks. Nonetheless, its application within a law firm only restricts to automating tasks, not to replace a thinking process and a judgement by a legal professional, albeit it can suggest recommendations, which are at the discretion of an expert.
LegalTech usually provides specific tools, requiring human input to suggest useful solutions. Hence, an attorney will remain an essential part of the legal market. Automation, powered by AI or ML is to help with tiresome, repetitive legal or non-legal tasks undertaken by employees, requiring hours of research, drawing a comparison, reviewing contracts. Having AI software in place can simply evaluate intakes against the target and provide a result. In this way, you can spare time for the most important client of the firm, as well can pursue the most important cases, defining the future of your firm.
Myth#2: Adopting LegalTech solutions is expensive for smaller firms. This investment is better for Big Law.
Truth: Initially, it might seem a big investment but in the longer term it is beneficial and cost-saving for the firm, outweighing the initial cost incurred on adopting the technology. There are zillions of helpful tools available for free, or on trial periods. The trials allow clients to gauge the value of the tool and see whether it might be useful for the firm or not before its purchase. The idea of tools is to reduce time spent on doing extra work and improve the cost-efficiency of the firm.
Myth#3: For a non-technical guy, technology is difficult to understand and requires a technical mind to implement solutions.
Truth: Nowadays, to understand LegalTech, one may not require the knowledge of coding, and tech-powered computing programmes. It’s quite easy to understand the basics, which does not require a lot of time. Simply, you just need to learn to manage tools and operate the software by following the provider’s instructions. By spending a considerable amount of time on training, anyone can learn, and manage to use LegalTech efficiently.
Myth#4: Law involves too many intricacies for LegalTech solutions to deal alone, without any human supervision.
Truth: LegalTech is not invented to replace the law experts, however, it’s there to augment the efficiency, abilities, and accuracy of attorneys. Primarily, it serves to eliminate tasks, costing time and unnecessary delays that clients are increasingly intolerant of.
In an era of digitalization, the tech-savvy generation is completely relying on the digital world and expects virtual service available in every field of life. Public awareness has developed a common understanding of those functions of a counsel that require human handling and those that can be done through the help of technology.
The legal fraternity has had a history of keeping innovation at bay. There was always quite less demand for upgrading a legal department and more importantly automating its processes. However, that’s no longer the case, and now with the adoption of innovative LegalTech tools, the lawyers can practice in peace, without compromising transparency. It’s a meaningful exercise to debunk myths, find truths of LegalTech by carrying out a bit of research and implement solutions that are right for your firm and which will gain you the biggest advantages over lazy competitors.