The relationship between lawyers and technology is a complicated one. Precedent and reputation form the foundations of the legal profession. However, slow technology uptake has also become part of the legal profession's reputation. The traditional industry does not necessarily celebrate or encourage innovation.
While most other industries are constantly seeking new technologies to gain a competitive edge, the legal industry is late in following this trend. This is despite there being a recent increase in the number of law tech companies.
So why do lawyers resist technology and more importantly, what does this mean for the future of the legal services market and the legal profession?
Why Are Lawyers Slow to Adopt Technology?
Time is Money
Time is money, and this is particularly true for lawyers. Time spent on non-billable work means a loss of revenue for law firms. This makes implementing law tech a great barrier to law firms in the short term.
However, choosing to forgo new technologies may represent a failure to invest in future-proofing a law firm. This may cause those law firms to gradually become less competitive. Consider how many law firms are now using practice management software. Surveys show that almost 50% of law firms in the US are using practice management systems. Similar trends will inevitably occur for other law tech such as smart communications and dictation software that automate more detailed tasks.
Risk Aversion
Lawyers are entrusted with managing matters that are significantly important to their clients’ lives. This makes trustworthiness and stability desirable traits in lawyers. In fact, research has shown that many lawyers tend to have personality traits that make them less willing to try new things. In the practice of law, it is easy to understand the benefits of decision-making that is based on caution and precedent.
However, this concept of stare decisis does not have the same benefits when applied to law firms that are trying to remain competitive. Law firms are businesses, and the most innovative and agile businesses succeed.
Reputation and Quality
Since the very beginning of the legal profession, reputation has been a pillar of the role of lawyers in society. For lawyers to effectively conduct their duties, things like conflicts of interest, confidentiality, and competence must be largely unquestioned by those around them.
Many lawyers may fear that technology is not reliable enough to conduct the tasks that lawyers do, reducing the quality of legal services and thus the law profession’s reputation. However, as artificial intelligence is becoming more sophisticated, the realities are beginning to dispel perceptions about technology.
In 2018, LawGeex, a legal AI solution, tested its AI against 20 experienced lawyers in the US. The AI and the lawyers were required to review and identify the risks in five NDAs. On average, the lawyers completed the task in 92 minutes with 85% accuracy. LawGeex’s AI was able to complete the task in 26 seconds with 94% accuracy.
Much of a lawyer’s work is based on researching previous case law and other materials to form a decision on an issue before them. This is also how machine learning or AI works. AI takes in all the materials given to it, in order to find patterns or ‘legal principles’ that it can then apply.
If more tasks are automated by AI and processes are streamlined by tech, lawyers can spend more time on meaningful tasks that cannot be replicated by technology at the present moment, or could even work fewer hours a week. Billable hours may not be affected by technology, but less time can be spent on non-billable administrative or transactional tasks.
So, What Next...
COVID-19
Prior to the pandemic and despite huge advances in technology, growth in business productivity had been at its lowest since the recession in 2008. This demonstrates that businesses were not keeping up with advances in technology, and that the current state of technology was not aligned with the needs of many businesses. In 2016 alone, 26% of the Fortune 500 businesses that had been there since 1955 had dropped off the list.
Since then, the COVID-19 pandemic has forced businesses to adopt technology at a rate that has not been seen before. This global event has pushed businesses to adapt and implement technology or else risk failure.
Businesses should take the pandemic as an opportunity for growth. We are now more aware of the viability and benefits of remote work. With geographical barriers being overcome, it is essential for businesses to be agile and flexible to remain competitive.
Pressure to be Competitive
Research shows that pressure from clients is the most significant factor in the motivation to adopt law tech, for law firms in the UK. Clients of law firms are aware that technology can complete tasks that lawyers do in less than half the time. Rather than just accepting the reputation of the law firm, clients are wanting to see their lawyers provide quality service that is highly efficient. Being cognizant of this awareness can continue to push law firms into looking at technology as a key component of their service.
A report in 2018 revealed that 7 out of 10 respondents would prefer a lawbot to manage their case where it was cheaper, faster, and simpler. It also showed that one-third of respondents wanted to be able to interact with their solicitors in digital form, such as with video conferencing, and instant messaging. Consumers have become more accustomed to digital services in other industries, and this expectation is being carried through towards their lawyers.
Furthermore, law firms entering the market are intensifying competition in the legal services market. Some of these new law firms and other more entrepreneurially-minded law firms are gaining traction through adopting law tech. Such firms take on work that is traditionally done by a host of junior lawyers and associates, but it uses technology to complete the work instead. The use of law tech acts as a differentiating quality that increases cost-competitiveness and profitability.
...Invest in the Future
Law firms should look at emerging law tech solutions as opportunities for growth, rather than as potential for risks. Working closely with law tech companies can help law firms identify concrete risks while appreciating the benefits of using law tech. This can lead to more informed decision-making that benefits lawyers and clients.
Adopting communications platforms that are designed to be a component of the legal services is a simple way for law firms to increase competitiveness and show clients that they are tech-savvy. Such communications platforms not only digitize communications, but can automate administrative tasks that are required for compliance or billing. Automating non-billable tasks and showing clients that the law firm is using technology to be more efficient can add to the reputation of the law firm in a new way.
Researching and implementing law tech should be thought of as investing in the future rather than as creating opportunity costs. Losing time that could be spent on billable work is a short-term cost compared to the consequences of not investing in the future of your law firm.
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