Investments in Legal Tech hits record high

In the last few years, the growth of investments in legal tech companies were not high. But in 2018, there happened to be explosive growth and the total amount of investment became greater than ever before.

Background:

A 713% annual increase in legal technology shows that the legal sector is serious about embracing new technology. 

Technology is changing the way that customer-centric lawyers are carrying out every day processes, analysing data, and providing legal services to clients. Firms that adapt will prosper, and firms that don’t will suffer.

What are the savvy legal firms doing to utilise new tech?

• Wider use of technology trends towards automating simple legal tasks and giving end users direct access to systems which will produce legal documents for them: “If you need a non-disclosure agreement, there’s no reason you couldn’t do that automatically” one senior lawyer writes.

• What shouldn’t be lost is the human element – an intelligent implementation of technology results in a greater level of human interaction, collaboration, a more positive culture, (particularly amongst junior lawyers) and a more efficient use of time across the firm.

• More and more firms are pushing to improve their agile working offering to their lawyers. Junior lawyers are increasingly looking for a better work/life balance, the ability to work from home, and more flexibility in choosing the hours they work. Previously, this was only afforded to more senior lawyers who had “earned their stripes,” but with the aid of technological advances and a push towards agile working, there is no reason that a lawyer cannot do a large portion of their work from home, whilst travelling or in any other scenario where they aren’t in the office.

How are lawyers missing out?

• Lawyers at firms that aren’t keeping up with the trend of improving technology within firms face the usual toiling away for hours performing menial tasks – and in particular, the proliferation of big data is making tasks such as discovery far more complex and time-consuming – but other firms’ structures mean that this doesn’t have to be the case.

• Firms that focus on themselves rather than what the customer needs tend to find themselves in this position. Little or no investment in fresh technology that consumers are demanding could result in them falling by the wayside. “Some firms are ahead and some are behind, the ones that are ahead will prosper and the ones that aren’t will lose an awful lot of business”, writes a Senior Associate at a leading City practice.

• From a business perspective, the implementation of AI allows for a more efficient method of predicting future behaviour amongst clients and competitors. In this regard, law firms are no different to the vast majority of businesses. Being able to accurately predict customers’ needs based on certain activities and triggers will naturally generate more business for the firm – meaning that the time saved on performing laborious, slow tasks, can now be used on dealing with fresh matters, generating more revenue for the firm.

Is there anything to be afraid of?

• Arguments made by firms that the implementation of automated services to their customers largely rely on the view that their services would no longer be viewed as “bespoke,” but the oxymoronic reality is that neglecting to adapt to modern times results in a failure to identify data correlations, potential risks that were previously unspotted, and an inability to tailor business in a way that suits their client.

• 114,000 legal jobs are likely to be automated within the next 20 years according to analysis by Deloitte, but lawyers shouldn’t worry – the advent of technology in the workplace is set to drive demand for lawyers with an advanced understanding of tech, and is steering recruitment patterns within the industry.

• As mentioned, a more widespread use of technology will never replace the fact that law is inherently a human industry. Clients will always want an experienced, professional lawyer in their corner to provide advice and understand their issues, but they don’t want to pay for hours and hours of behind-the-scenes work that could otherwise be automated, meaning a decreased cost to the client, a more efficient use of time for the lawyer, and a more prosperous future for the firm.

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