It has felt like a long time coming for technology and innovation in the legal industry. Seemingly for years this notoriously static industry has bristled at the prospect of undergoing (gasp!) significant technological transformation.
Admittedly, this nervousness is understandable. The lawyer’s MO is to provide accurate, valuable and bespoke legal advice. Legal technology – and particularly the concept of legal automation – does not slot neatly into that dynamic.
But the reality is simple – technological innovation and development is much bigger than the legal industry. It will eventually leave luddites by the wayside. Competitors who embrace its possibilities, and who are willing to wrestle with its hurdles, will round the COVID-19 corner with a huge commercial advantage.
But what will that change look like in 2021? Here are three predictions of what to look out for…
Investment. Investment. Investment.
The worst-kept secret that law firms would like to keep under wraps is that COVID-19 was not the apocalyptic event that it was for many other industries. In fact, many firms experienced genuine growth and prosperity. The flow-on effect is that the legal industry is surprisingly well-placed to make a real foray into investment into legal tech. For the first time, we should see the industry take real risks in legal tech investment in a way we haven’t seen before.
Does this mean firms will suddenly dive into the deep end? Unlikely. There is still a fair bit of caution dragging from a 2020 that could modestly be described as “unpredictable”.
However, firms have drawn real confidence from the effective use of technology to facilitate both virtual client interaction and court engagement. Both were forced onto firms by the pandemic, but the results have been nothing but encouraging. The industry has taken the full brunt of remote work and come out okay. That bodes well for legal technology producers, who will have a much easier time convincing its buyers of the suitability and interactivity of their products.
As a result, despite the doomsday that 2020 sometimes promised to offer, expect substantial increases in legal technology investment from firms both big and small. Legal firms will have learnt that a strong commitment to digital systems makes sense in a post-COVID world. Similarly, expect venture capital investment to rise exponentially. 2021 should be the year that demand begins to meet supply.
The rise of the “lawbot”.
We’ve heard this one for quite a while. In early 2019, advisory firm Gartner predicted that by 2023 “lawbots” (essentially virtual legal assistants run by artificial intelligence) would handle a quarter of internal legal requests. That now seems like a conservative estimate. Still grossly underutilised, expect this product to become more prolific in 2021.
Lawbots are low-risk, moderate-reward products. They are remarkably easy to develop from a tech perspective. A law firm with an effective internal legal tech department could develop one itself, but could just as easily procure one. But perhaps most importantly, these products provide a nice introduction for law firms into the legal technology space. They can be tested internally to work out the kinks before being utilised on clients. Artificial intelligence in this regard is developing at a rapid pace, and properly developed bots are self-learning – the more they are used, the better their ability to respond to requests and queries. They also require minimal maintenance.
While old-school lawyers will bristle at the idea of automated conversations invading their workspace, firms should begin to see the value in having at least some this element of their business – particularly with so much of its client service operating remotely – handled by smart, self-learning AI.
Document automation finally becomes sexy.
Similarly, we have heard for forever and a day that every contract lawyer will be busking in the street once the impending arrival of document automation gets here. That won’t quite happen, but 2021 should be the year that this concept finally comes to fruition and becomes a tool to aid contract lawyers. Oft-considered the uncool, distasteful strand of legal innovation, it now feels on the cusp of providing real value to firms.
The first to go will be high volume, low complexity documents such as non-disclosure agreements. Drafting and preparation of these documents can and should be automated almost completely. But from there, it will be interesting to see how the market plays out. There is real scope for document automation to take on a collaborative element. We will soon see the end of a contract being agreed to in a static file. Parties on both sides will be able to properly collaborate on a single document contemporaneously through cloud-based technology. That is perhaps a bit more exciting than running 40 NDAs through your legal software.
These are, of course, predictions. The legal industry might not have suffered as others have in the midst of this pandemic, but it does not mean there isn’t at least some weariness about how business will be done in the future. If anything though, that weariness should encourage firms to get more tech-forward and away from what has been a very conservative past. If firms have learnt anything from 2020, it should be that whether they are looking for technology or not won’t end up mattering – it will find them eventually.