The sector is undergoing enormous change, with Artificial Intelligence (AI) and the advent of legal tech changing the way law firms work and the services they offer. 

What’s behind the latest push for digital? 

Client needs have evolved drastically in the last 10 years. In this time, the legal industry has shifted from a seller’s market to a buyer’s market, with consumers in the driving seat. Clients are increasingly vocal about their needs and desires, from demanding more value for money to greater accountability.

That’s not all. Digital transformation has paved the way for cheaper services and automated processes, sparking the birth of thousands of legal tech solutions that can handle anything from a divorce application to a claim for a delayed flight. This means that consumers can shop around more than ever before, and if they’re unhappy with a service, they’ll simply find another.

Let’s not forget the changing commercial landscape. Businesses are becoming increasingly globalized, connecting teams virtually around the world and conducting transactions across borders and jurisdictions. When it comes to legal services, this increasing complexity means that firms must become more agile and adaptable if they’re to keep up with their clients.

Finally, it’s important to consider how society is shifting from face-to-face to digital communication. Recent research found that 65% of millennials and Generation Z’ers prefer to communicate digitally, flagging a new need for legal professionals to offer immediate responses to questions and problems. Think about it: why should a client wait days for paper documents to arrive in the post, or hours for a simple email that could be dealt with by an automated response? 

Consumers and clients want faster services that are more efficient, secure, and reliable. While this may sound like a tall order, it’s the new reality for law firms around the world. 

How is the legal sector being digitalized? 

There is widespread acceptance of legal tech and innovation across the legal industry, with many firms opening in-house innovation hubs to develop their own tools and software. In particular, there has been a rise in the use of AI in natural language processing to allow for systems to scan contracts for loopholes or missing clauses or generate answers to a client’s inquiry. The technology is also used on databases such as Westlaw to search and find the most accurate results, saving legal professionals time and allowing them to focus on high-value tasks.

The technology is being rapidly adopted across the industry. A recent report investigating the adoption of AI in London law firms highlighted some of the most common uses of AI, including legal documentation generation and review (noted by 63% of firms), e-discovery (63%), due diligence (47%), research (42%), compliance (32%), and administrative support (also 32%). And those numbers are only set to grow.

AI is also being applied to high-volume litigation. The tech sifts through a document and cross-references this against hundreds of other files, helping litigators instantly identify risk, exposure, and the relevant legal issues in any given case. What’s more, tools such as this can review past arguments, success rates, and even how particular judges reacted to these arguments to help legal professionals determine a solution that is most likely to succeed.

But innovators warn that the industry is only scraping the surface of new technology’s huge potential. Much of the new tech in the field is being used to process standard legal tasks quicker and more efficiently. This has obvious gains, allowing lawyers to focus their time on the more challenging aspects of their role, but some argue that this misses the point. The industry should explore how AI and other technology like it could radically shake up the legal sector, and what digitalization could mean for the entire service delivery. 

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What are the main challenges in digitalizing services?

Security and culture are the main obstacles to implementing full-scale innovation programs. Moving communications online raises concerns for cyberattacks and data breaches, with fears that vital company data could be hacked and ransomed. In addition, over a quarter of firms worry that their systems may contravene GDPR, while 40% fear disclosure failings and regulations around data collection. 

As for culture, it’s important that digitalization is incorporated within a firm’s overall strategy and not merely an afterthought to keep up with trends. And for an industry with embedded working practices, fairly rigid hierarchies, and strict regulation, changing to a fully digital offering won’t happen overnight. As with any significant change in ways of working, training and education must be implemented in order to mitigate challenges and risks. 

And the benefits of doing so are already evident. Law firms implementing digital systems show higher rates of talent retention, greater efficiency, productivity, and agility. And this is just the beginning. With new applications being explored every day, the legal landscape is set for a dramatic transformation in the next decade. Ready or not, digitalization in the legal industry is here to stay.