Barriers in Legal Tech Adoption and How to Overcome Them
While the pandemic has accelerated digital transformation across all industries, many law firms are still struggling to overcome several legal tech barriers. One in five law firms report that they are ready to adopt new tech and embrace digitization. By comparison, 60% of business leaders see tech adoption as crucial to their growth, and 50% have made digital transformation initiatives a top priority.
To those in the legal industry, the legal tech barriers are nothing new. The industry is notorious for its reluctance to implement new technology and replace more traditional processes. We’ve talked to several experts in the industry to get a deeper understanding of the legal tech barriers adoption challenges law firms face as they shift from a traditional to a digitized environment.
Main Legal Tech Barriers
The legal tech barriers become more evident when you look at the numbers: business organizations see technology as a critical component of their success and have increased tech budgets to 5.49% of their revenue. While the percentage of the in-house budget spent on tech adoption rose from 2.6 in 2017 to 3.9 in 2020, the legal industry is still lagging and facing several barriers in legal tech.
What is stopping law professionals from keeping pace? The legal tech barriers to adoption challenges stem from various reasons, from cybersecurity concerns to budget constraints and insecurities about their tech savviness. Let’s look at the leading legal tech barriers 13 industry experts see.
- Mismatch of expectations and reality
There are two sides to this spectrum, as Cat Casey, Chief Growth Officer at Reveal, puts it — some see legal tech as a panacea to all the problems law professionals are facing, while others fear AI-powered legal tech will replace lawyers.
The Black Box Challenge — not knowing how technology such as AI works or arriving at a conclusion — is one of the most common legal tech barriers. According to an American Bar Association report, 35% of law professionals cited the accuracy of AI technology as one of the barriers to legal tech adoption. 23% of those surveyed admitted they were not interested in purchasing AI-based tools.
Even when they do see the potential of legal tech, a lot of lawyers wrongly assume that AI tools fully automate their day-to-day tasks. Automation software like Loio, for example, can help lawyers draft legal agreements with more speed and accuracy, but it’s not all-encompassing. It’s a document management system developed with a clear purpose: to save time, help lawyers become more efficient, and address their clients’ needs better.
That’s why, when it comes to legal tech barriers adoption, Stephanie Clerkin, Director of Litigation Support at Korein Tillery, thinks it’s wrong to see legal tech as a fix for everything. According to her: “The biggest misconception has been and will continue to be thinking legal tech is an infallible ‘easy button’ that will fix everything. Although legal tech significantly aids in streamlining, it cannot automate all legal processes and continues to depend on human expertise and input.”
- Cost vs. needs
While legal tech investing has been steadily increasing to the point where it broke the $1 billion mark, its costs are still one of the major legal tech barriers lawyers have to overcome. When asked about what stopped their law firms from implementing new technologies, 19% of respondents cited the cost of switching as one of the main barriers in legal tech.
It’s not just the initial high cost associated with law tech solutions that makes firms reluctant to accelerate their digitization efforts. AI tools can also impact the industry’s traditional pricing model, with 45% of law firms believing that artificial intelligence will lessen their reliance on billable hours. For many law professionals, becoming more efficient translates into lost profits, which makes costs one of the primary legal tech barriers to adoption challenges.
At its current state, AI can handle simple, less specialized tasks, but it can’t replace higher-level work. In fact, “legal tech can lead to cost savings, but it may show up in stages, meaning that some of the ROI may occur right away, some more a little while later, and then further ROI realized once the solution is fully utilized, says Colin S. Levy, Director of Legal Malbek.
To overcome these legal tech barriers, law professionals need to balance the costs of the services they choose with the features they offer. The key is finding not the cheapest tool but one that will automate your firm’s workflow while allowing you to keep costs down.
- Onboarding process
Even when willing to invest in technology, law firms involuntarily create new legal tech barriers because they assume they will immediately reap the benefits. That’s rarely the case, as new technology requires time and training.
Law firms often encounter legal tech barriers to adoption issues because they try to replicate the processes they used before. According to Khrhysna McKinney, Legal I.T./Electronic Discovery Consulting and Recruiting at K L McKinney, this strategy is wrong. Law firms need a clear understanding of their processes and business goals to get any value from their implementation efforts.
- Lack of time & incentives
Law firms need to invest time and resources into training their staff, but as reports show, only 22% of law professionals believe they’ve received adequate training on their company’s tech. Peter Duffy, legal tech Innovation Consultant and Founder at Titans explains that the lack of time is one of the main legal tech barriers. Learning new systems requires time, and without the right support, lawyers can become frustrated and revert to the old methods.
Another big legal tech barrier to adoption challenge is that lawyers aren’t incentivized to implement changes. “This is not because lawyers want to maximize their billable hours. It is more that there is often an absence of a positive incentive for lawyers to explore new ways of doing things. The billable hour does not encourage that kind of behavior,” explains Jack Shepherd, a specialist in legal tech and knowledge management at iManage.
- Cybersecurity & privacy
Due to the sheer volume and sensitive nature of the information they are entrusted with, law firms are prime targets for cyber attacks. According to the American Bar Association’s 2022 Cyber Security Report, 25% of law firms have suffered a data breach.
The stakes are immensely high, and it makes perfect sense that privacy concerns are one of the top legal tech barriers.
While the risk aversion can be justified, Henna Tolvanen, Legal Tech & Operations at Fondia Oyj, claims it shouldn’t keep law firms from implementing technology. According to Tolvanen, the best way to overcome these barriers in legal tech is to do your due diligence to see if the legal tech vendor’s data protection levels match yours.
There are companies like Lawrina that fully acknowledge the challenges law firms face in adopting legal tech solutions. That’s why cybersecurity isn’t just an aspect but a cornerstone of their operation. For instance, to ensure optimum security, Lawrina uses SSL certificates for data encryption, adheres strictly to GDPR guidelines, and maintains its processes to the highest industry standards.
Fear and uncertainty regarding job loss, the accuracy of new technology, and the learning curve associated with adopting these technologies are among the main legal tech barriers, says Sarah Rodriguez-Williams, Legal Technologist and Litify Consultant at Nachawati Law Group.
Estimates like 44% of tasks done by lawyers can be automated by existing technology are only deepening the legal tech barriers. It’s no surprise then that fear is one of the main barriers in legal tech, but the narrative that AI will replace lawyers needs to change. “The reality is AI is augmenting rather than replacing attorneys. Legal tech is poised to enhance the capabilities of lawyers, working hand in hand with human professionals, says Dana Kempler, Legal and Business Counsel at DK Law.
How To Overcome Barriers To Legal Tech Adoption?
Whether they like it or not, new technologies are emerging at a rapid pace, and law firms need to understand their legal tech barriers and keep up if they want to remain relevant. How do you overcome these barriers in legal tech?
Even if you are implementing new tech into your practice, there is a chance that you are using the wrong one. One report found that 70% of digital transformation projects fail because they don’t adjust the technology to their organization’s needs. Instead, they see tech adoption as the goal itself instead of a tool.
Michael Thompson argues that choosing the right tool according to your firm’s and client’s needs is a solution to overcoming these legal tech barriers. According to him, first, you need to understand what problem to solve and then look for the right solution. If your law firm is struggling with legal document creation and management, for example, tools like Lawrina Templates can efficientize this process. eDiscovery tools can make it easier to review electronic documents and information. But simply choosing a piece of software because it’s popular without a clear goal is detrimental to legal tech adoption success.
Effective communication is a cornerstone for overcoming the main legal tech barriers and must be implemented at every process stage, from acquisition to onboarding. But the legal tech barriers adoption challenges don’t end at the doorstep of your law firm, and you must trust that you are getting the best solution from the best providers. So, good communication is essential both within the organization and with third parties.
That’s why Mads Viborg Jørgensen, CEO and Co-founder at PatentRenewal.com, thinks building trust through transparency is crucial to overcoming legal tech barriers. He argues that “by demystifying security practices, showcasing a commitment to data protection and explaining how a software solution provides expertise while avoiding human errors, you can convert the skepticism into a partnership, steering the legal industry towards a more efficient and secure future.”
Inadequate or insufficient training are two major legal tech barriers, but how can law firms go around them? Somita Basu, partner and co-founder at Norton Basu LLP, thinks that to overcome the barriers to legal tech adoption, training needs to be provided in various formats like virtual, in-person, or even via phone. She also proposes the development of training centers in key cities where attorneys could attend meetings or simply drop by and ask questions.
Dana Kempler also agrees that education is a foundational step in overcoming legal tech barriers. Her advice is to “start small and focus on concrete use cases that target specific tasks, such as contract review or eDiscovery.” This gradual approach will reduce legal tech adoption problems as it helps build trust and familiarity with tools.”
Hellen Mukasa, Co-Founder legal tech Lab at the Innovation Village, thinks that in addition to raising awareness about the benefits law technology can bring, it’s also important to make adoption as easy as possible. This way, you can create a conducive environment for digital practices to thrive.
Why Is It Important to Overcome These Barriers?
The writing on the wall is clear: technology is not going anywhere, and it’s only becoming more sophisticated. It’s no longer a matter of IF law firms should focus on overcoming the barriers in legal tech but on how quickly they can do it. “We are at a tipping point now where there will be ‘forced’ adoption of certain legal technologies,” says Stephanie Clerkin. “This ‘forced’ adoption is driven by two primary factors: the exponential growth in data volume makes certain traditional manual processes impossible and the necessity to remain competitive.”
Consumer demands are also a driving factor behind law firms’ concerns about legal tech barriers. Reports show that 70% of consumers prefer “lawbots” to handle their legal affairs instead of human lawyers, and it all comes down to three main things: costs, ease of use, and speed. Client demands, combined with the volume and complexity of the data they need to handle, have made more law professionals aware of the legal tech barriers and adoption challenges they face and the need to overcome them.
Staying on top of the barriers in legal tech will also prepare law firms for future changes. The COVID-19 pandemic has clearly shown that, as an industry, we are lagging.
“We have reached a tipping point in legal and in society at large where technology and AI-powered technology are a necessity, not a nice to have, “ says Cat Casey. Despite the resistance of law firms to addressing the barriers in legal tech and digitizing their practices, all trends indicate increased tech adoption across all sectors.
The legal tech barriers holding the industry down are not without justification, but law firms must carefully weigh the challenges of overcoming them against the costs of being stuck in old-century processes and methodologies.