How Technology is Giving Law Firms a Competitive Advantage
Staying relevant to clients and growing your law firm requires staying abreast of industry trends. That’s a no-brainer. But sometimes finding good information can be a challenge, and interpreting new data can sap your free time.
But even in the crowded field of legal content, there are a few studies that rise above the rest. Wolters Kluwer has just put out one such study. Their Future Ready Lawyer survey contains insights from over 700 legal professionals. If you want to know where the legal industry is going, it’s a worthwhile read. You can go here to read the full survey.
Future Ready Lawyer examined how client expectations, technology, and the pandemic are changing the future of law.
Here are a few key takeaways from the report:
Digital Transformation Speeding Up
First, the survey shows that the legal sector sees digital transformation as critical to achieving better services for clients, as well as increasing productivity and efficiency. Rebounding from challenges of the past year hasn’t been easy, but the report shows how legal professionals are positioning themselves to get to a better place in the future.
In the past year, technology was a lifeline to the legal profession as physical distance had to be maintained. But as the pandemic continues, these hard-earned innovations are gaining momentum instead of going back to the way things were. Being future-ready means embracing these changes through innovative technology solutions.
Your Results May Vary
Although the survey suggests a quickening pace of innovation, not everyone’s on board. The amount of lawyers who reported that their organization is prepared to stay abreast of future challenges is low. About one-third of those surveyed, or 32%, believe their law firm is prepared to use technology to be more productive.
Legal Departments Embracing Technology as A Solution
91% of legal departments now plan to ask firms to use technology that makes them more productive and efficient. These legal departments are giving more weight to technology when evaluating law firms. The pandemic has increased pressure on legal departments to take on larger workloads with smaller budgets. As a result, they list among their top challenges the automation of routine tasks, leveraging technology in work processes, and reducing outside legal costs.
To alleviate these pressures, 84% of legal departments plan to increase their investment in technology to increase productivity.
Law Firms Also Using Unique Technology
Law firms are also making fast headway into changes led by technology. Most law firms are looking to change the delivery of their services in this new landscape. Some of these transformational solutions include Big Data and Predictive Analytics, Machine Learning, Artificial Intelligence, and Robotic Process Automation. But even beyond the buzzwords, tools like practice management, document automation, and payment solutions are becoming more widely adopted and impactful.
The biggest impact, lawyers said, that impacted their organizations was the increasing importance of legal technology, yet not all are fully using technology to support performance or give them a competitive advantage.
Tech Leaders Keeping Their Lead
Those who were already fully using their technology were the most resilient through the pandemic. Being a technology leader enabled them to support clients remotely as soon as the pandemic began, giving them a lead. Their profitability also grew more than those who did not embrace technology as early. These technology leaders continue to outperform their peers, clearly showing why investing in technology is crucial.
And, despite the roadblocks of the pandemic, 47% more technology-leading law firms saw profitability increases, while tech-transitioning firms (28% of which saw an increase in profitability) and tech-trailing firms (13%) struggled.
The Future Ready Lawyer Survey shows that more legal organizations than ever are implementing new technology: 88%, up from 84% in 2022. These implementations include developing legal technology solutions in-house, hiring a tech specialist or team, and partnering with technology-focused consultants or software companies.
Pandemic Drives Home Importance of Tech Adoption
lawyers who reported a decrease in business, 41% said they expect business to return to pre-pandemic levels by the end of 2021. 51% expect it to return by the end of 2022. A small 6% don’t expect business to return to former levels until 2023 or later, and 2% are uncertain it will return at all.
This leads law firms to identify where they can cut costs, while still serving clients better. All of this points to the growing importance of technology and firms’ ability to adopt it. An overwhelming 91% of legal organizations say that technology has been very important in delivering their service. At the same time, 80% agree that technology needs have increased due to the pandemic. Of those, almost all of them have increased usage of their technologies during the pandemic.
Technology Needs Will Continue to Rising
As the pandemic continues (and hopefully starts to recede), lawyers will change not only where they work, but also how. Obviously, remote work will be more common. But lawyers believe even after the pandemic has passed, employees will use multiple devices for work. Also important will be continuing to improve digital skills for working remotely and prioritizing digital communications with clients.
Even in firms that are trying to find cost-trimming opportunities, investment in technology may increase long-term value. Of the 61% of law firms that expect to increase their investment in technology over the next three years, they do not anticipate cutbacks in budgets to last long term (because the efficiency reaped via technology will enable greater savings).
Client expectations are beginning to change as the world changes and digital transformations are codified in other industries. Adapting to the legal industry’s new digital landscape can improve everything from client intake to revenue and staff morale (no one loves spending long hours on routine tasks).