Legal Technology: Gateway to the Future for Law Firms?

Legal Technology A Gateway to the Future for Law Firms

The legal industry is probably one of the most traditional and conservative ones — yet ignoring technological advancements can lead to inefficiencies, reduced competitiveness, and poor client service quality. In a rapidly changing global environment, innovativeness is the key, and those who adopt technologies earlier are likely to gain a significant competitive advantage.

According to the Diffusion of innovations Theory, early adopters comprise around 13.5% of the population and tend to reap all the benefits of implementing technological advancements sooner. For the vast majority of legal professionals who fall into the later stages of technology adoption, it’s essential to bridge the gap quickly.

Legal technology has already proven its value in various aspects of the profession, from automating routine tasks to facilitating more sophisticated legal analysis.

Around 75% of legal professionals believe that legal tech is a must-have, and the main reason for adopting legal tech is increased efficiency. Legal technology is not the future of law firms — it’s their present reality.

Legal Technology Report by ACC

Understanding Legal Tech and the Fusion of Technology with Law

Simply put, legal tech is a symbiosis of technology and law. It includes different software, tools, and platforms that help structure legal workflows, enhancing the performance of legal services and lawyers’ efficiency. These range from simple document management and billing tools to more advanced ones, such as artificial intelligence in legal research, predictive analytics, and blockchain for security and transparency in transactions.

The main characteristic of legal tech is its constant evolution. As technology continues to advance at a pace never before seen, legal tech keeps adapting and evolving and continuously bringing new tools and applications to bear that address the dynamic needs of the legal space.

One of the main mistakes law firms make while integrating technologies into their workflow is using software applications that are not connected. This lack of integration leads to fragmented systems where data and processes are isolated, hindering efficiency and reducing the overall effectiveness of the technology. Hence, more and more legal tech companies are focusing on developing all-in-one solutions emphasizing the importance of interoperability and seamless integration. 

How Legal Tech Is Changing the Game for Law Professionals

The intersection of technology and the law is reshaping the legal landscape in profound ways. Legal technology, or legal tech, has the potential to revolutionize far more than just the way lawyers and other legal professionals do their work; it’s transforming the nature of what that legal work actually is. This transformation is evident in several key areas:

Automation of routine processes

Like any other work, the legal profession is associated with many routine tasks. Receiving payments, managing client information, scheduling appointments, and handling document management are just a few examples of these tasks.

Routine and management tasks can take up to 40% of a lawyer’s time.

Thomson Reuters

Legal tech allows lawyers to save their time and focus on what they love — practicing law and providing high-quality legal counsel to their clients.

Data-based decisions

Big data and advanced analytics are being incorporated into legal tech to provide better decision-making capabilities for lawyers. Through analysis of the humongous amount of data, the lawyer can now give more accurate advice to the client.

From doing due diligence by analyzing information from contracts to predicting a successful appeal by a specific judge, data use takes legal services’ precision and efficiency to a new zenith.

Better client experience

Approximately 70% of Americans favor online access to legal services, prompting a shift in the legal industry towards technology and the law and the emergence of virtual legal practices. The ABA TechReport indicates that 11% of those surveyed characterize their practice as a virtual law practice. 

With the increasing demand for digital convenience, this trend towards virtual law practices is enhancing the client experience by offering greater flexibility, accessibility, and efficiency in legal service delivery.

Top Six Legal Technologies Redefining Law Firms 

Modern-day lawyers use various technologies to improve their practice, simplify the workflows, and help ensure better services reach the clients. Here are the top six leading legal technologies that became indispensable to lawyers:

  • Contract management — The popularity of contract management software has surged among legal professionals and reached a 65% adoption rate in law firms and legal departments. AI-powered contract management and drafting software like Loio is already changing how legal documents are created, reviewed, and managed.

    Technologies that automate the process of contract management and drafting expedite drafting with guarantees of accuracy and consistency in the developed documents and, consequently, save the most valuable resource we have — time.
  • Legal eSearch — The introduction of AI-driven tools in legal research has once and forever changed the approach to collecting and analyzing legal information. Today, lawyers may search giant legislation databases during short time frames with the help of modern platforms.
  • E-billing — The adoption rate of e-billing has increased from 47% to 55% during the previous year. The previous year reflected a growing trend among law firms and legal departments to streamline invoicing and payment processes. This shift towards electronic strengthens law firms’ efficiency through the automation of billing cycles and overhead administrative costs reduction but also gives large transparency and accuracy in financial dealings.
  • Document repository — Picture a world where every legal document is neatly organized, securely stored, and effortlessly accessible. This is the reality digital libraries offer to around 54% of law firms. They serve as a centralized hub for document management, ensuring that files are safe and readily available for remote access.
  • Legal hold — Due to the high complexity of lawsuits, legal hold technology is rapidly gaining popularity. It helps maintain all relevant information when litigation is likely to commence, thus protecting electronic evidence from alteration or destruction.
  • Matter management — Matter management systems streamline the organization and tracking of cases from start to finish. They help keep all case-related information organized and improve internal workflows, which in turn help law firms meet deadlines.

Other legal technologies, including data collection and processing, data retention and deletion, document review, incident and breach management, data inventory, and data mapping, have also become essential components of the legal tech landscape, as reported by ACC.

The Impact of Generative AI on the Legal Industry

AI stands out as a transformative force within digital transformation, disrupting traditional legal frameworks and processes. Behold! The fourth industrial revolution is coming, and with it, a new era of legal tech will arise. 

The development of generative artificial intelligence systems, such as GPT-3 and GPT-4, is a great contribution to legal tech because it allows the software to perform higher-level writing and research work.

As we entered 2024, AI-driven legal software tools accounted for about $37.4 billion in global spending. Despite the remarkable potential of artificial intelligence across different areas of legal services, 62% of legal professionals have yet to adopt these innovative tools.

However, with increased awareness among lawyers about generative AI technologies like ChatGPT, 89% of those surveyed are aware of these tools, and 41% have used generative AI tools for various purposes. This trend clearly indicates a growing acceptance of AI technologies within the legal industry.

Huge law firms have already realized that technology and law go hand-in-hand together and implemented AI-based solutions, saving them millions of dollars. For instance, in 2019, JP Morgan was able to automate a task that previously took their lawyers a colossal 360,000 hours of work! Since then, AI technologies have tremendously accelerated in their development and application.

In 2024, generative AI is going to experience greater adoption in the legal field across a greatly expanded range of applications — from simple documentation management and contract drafting to intellectual property management.

This year marks a turning point in the application of generative AI in the legal industry. More advanced, accurate, and reliable tools will emerge and be integrated by even more legal firms that understand that those who fail to adapt to these advancements risk being left behind.

The Critical Role of Cybersecurity in Legal Technology Adoption

With legal tech becoming increasingly popular, legal professionals start to wonder:

Is legal technologies safe to use, and what are the associated risks?

If you are one of them, ask yourself — is it safe to use fire? 

Well, it is, unless you neglect basic safety precautions or misuse it. Legal tech is no different — implement effective cybersecurity measures covered in our article, and you will minimize the risks associated with data breaches, unauthorized access, and other cybersecurity threats, ensuring that legal technology won’t ignite a crisis within your organization.

However, many law firms are still behind in developing comprehensive cybersecurity strategies, leaving them and their clients exposed to huge risks. This lag in cybersecurity adoption can be attributed to various factors, like fewer resources, a lack of understanding of the threats, or underestimating the potential impact of a data breach.

Cyber Security for Law Firms
Also read:Cyber Security for Law Firms: What Lawyers Need To Know

Cybersecurity in law firms is undoubtedly a cornerstone of maintaining high confidentiality and trust standards. In a digital age wher...

Approximately 20% of law firms don’t have policies governing technologies. But the good news is that even without comprehensive security policies, law firms can protect themselves by using trusted third-party software providers, complying with the U.S. cybersecurity regulations, and adopting industry best practices for data protection.

Plus, using simple yet effective security measures can prevent the vast majority of cyberattacks. Two-factor authentication (2FA), encryption of sensitive data, and regular software updates are prime examples of such measures.

The key to the secure use of technologies lies in prevention and agility, as the rapid evolution of technologies results in the rapid evolution of threats. By properly adapting to emerging threats, law firms can safeguard their resources and reputation against potential attacks, ensuring long-term success in the digital era.

Article by Inna Chumachenko

Inna Chumachenko is the Content Lead at Lawrina. She is responsible for managing all the content that can be found on the blog, guides, and other pages of the website. Inna has a degree in philology and a vast interest in law. In her role at Lawrina, Inna oversees the content team, establishes collaborations with writers, and curates content from various contributors.

If you have any questions or suggestions regarding the content for Lawrina, please feel free to contact Inna directly via email at i.chumachenko@lawrina.org or connect with her on LinkedIn.

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