The evolution of the legal technology industry has progressed significantly over the last few years. This has resulted in the provision of legal services and the practice of law needing to adapt accordingly.
Legal practitioners have had to ensure that their services remain inventive, applicable, and obtainable to their diverse client base as their practices become more dependent on technology.
With the outbreak of COVID-19, many businesses across many industries were negatively affected, and law firms were not exempted from the same repercussions.
A general reduction in customers’ business activities was observed, and multiple M&A transactions were either postponed or canceled.
Additionally, courts and other legal resource centers were closed to help curb the spread of the disease. Research also showed that the income of law firms decreased by 15 to 20 percent in 2020, when compared to reports of the previous year.
So what does the future of legal technology in 2021 look like as the industry tries to find new ways to navigate this pandemic?
The Shift Towards Digitization
With new regulations, lockdown measures, and social distancing rules being enforced by most governments, law firms and practices have had to upgrade and digitize their services or else risk losing business. Legal firms have been forced to take an inventory of potentially outdated systems so as to adapt to the new normal.
Meetings, briefs, and client interactions had to be moved away from the traditional face-to-face environment into a digital arena that saw huge increases in the use of video conferencing tools and software. Social distancing will still largely be with us for the remaining year, and possibly longer.
Another huge change that the virus brought about has been the sudden shift to remote working. The traditional legal industry was not known for accommodating remote working. In fact, in certain instances, it was just not practical. The pandemic has forced a lot of law firms to adopt remote or hybrid methodologies and adapt their infrastructure much faster than anticipated.
All of these changes are here to stay for the year 2021 and beyond. This is despite the very real threat of cybersecurity., which was projected to cost the world $6 trillion a year by 2021. With remote working, the opening up of on-site servers has also opened up the way for an increase in data breaches and other cyber attacks. Off-site employees who have traditionally used weak passwords within their company networks could now easily become the source for an account takeover.
Companies have had to scramble to adjust and update their systems and plug any security vulnerabilities as quickly as they could. Employees also had to be retrained on the most effective and secure ways of working remotely. In fact, the automation of cybersecurity itself is another rising trend that is one to watch out for in 2021 and further on.
The Age of Automation
Digital transformation has increasingly been implemented into various aspects of business processes. Legal tech companies have started to recognize areas where certain tasks can be automated to lower expenditure and increase productivity. This makes good business sense and appeals to progressive mindsets.
Automated mailing systems, for instance, could remove a lot of manual administrative work, and make record-keeping easy and accurate. The reports and statistics provided by automated systems can also help decision-makers to understand various trends and client actions.
This could in turn lead to better-targeted marketing efforts and leads which then provide a much higher return on investment. As automation becomes more and more integrated into the daily tasks and processes of a company, the documentation needs to improve concurrently.
Accurate and comprehensive record-keeping needs to be maintained to ensure continuity. Detailed documentation on every aspect of an automated process should include points such as:
- The motivation behind the automation – what gap or administrative task was being addressed?· The processes and platforms involved – with full details on the software, login accounts, and access levels, which staff members are involved in managing the process?
- The results or reports generated – what is the expected outcome of the automation and who is responsible for addressing the results?
- The support available – this is often overlooked; if the automation fails for any reason, who is the person or company responsible for fixing it, and what is their support offering or service level agreement (SLA)?
These are important considerations, not to be overlooked. Once the above documentation is in place and is continuously reviewed and updated, then a legal firm can be assured that they can provide legal services without interruption of processes. This is even more pressing during the pandemic where efficiency is critical. Accurate and comprehensive record-keeping will undoubtedly be here to stay during 2021.
Effects on the Industry and Clients
When legal billing is automated and standardized, law firms increase their top-line revenues, reach their operational goals, and identify and fix internal inefficiencies.
However, it is the company’s responsibility to keep clients updated on best security practices. This way they avoid falling prey to ransomware attacks and other types of cybercrime.
Automation can still pose a risk to companies and client information. The infrastructure, platforms, or software must be from a reputable vendor and set up securely to protect client privacy. The lawyer-client relationship is based on trust, and it’s certainly expected that the legal industry has the funds to protect this trust.
If the platform has any security vulnerabilities it can result in severe data breaches, which in turn can lead to severe repercussions such as an account takeover or ransomware attacks. The reputational fallout will be too dire. Similar to financial institutions, public perception is that a client’s data should be the most secure in the hands of a law firm.
As 2021 progresses we can expect to see continued rapid trends in both digital transformation and automation. Artificial intelligence will continue to transform legal services, with multiple ramifications and benefits as well. The legal tech industry will have to keep up to provide the best experience to their clients and retain them for future business. The alternative is to risk being left behind.