Technology

During The Pandemic, Firms That Embraced Technology Outpaced The Competition

The survey results clearly indicate that technology leaders fared better during the pandemic than their peers – but what exactly made those organizations more successful?

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It’s felt as though we’ve been in the midst of pandemic-life analysis for quite a long time — and while it continues to impact our lives, we’re now far enough removed from the worst days of the crisis that we can take a look back and start to gain some understanding and perspective on the lasting impacts it has had on how we work.

The “2021 Wolters Kluwer Future Ready Lawyer: Moving Beyond the Pandemic” report has just been released, and this year provides a particularly unique perspective: a true year-over-year snapshot of the pandemic’s impacts on the legal profession. Drawing insights from 700 legal professionals in the U.S. and Europe, this year’s survey examined trends affecting the future of law as the industry overall undergoes a transformation, accelerated by the pandemic, and how well prepared legal organizations are to drive higher performance. Last year’s survey indicated that technology leaders –- or firms and organizations that had a higher rate of tech adoption — were more profitable and more prepared to handle the impacts of the pandemic than organizations that were not adopting technology quickly. and in 2020, that trend proved to hold, even as a global pandemic changed all of our lives and businesses right before our eyes.

Based on the survey’s results, technology leaders outperformed in key areas of preparedness across all areas related to technology, staffing, organizational, and client focus in 2020. Law firms and business services firms that were identified as technology leaders also outperformed their colleagues in terms of profitability. While the pandemic took a financial toll for many, Technology leaders weathered the year better than others. They were more likely to increase profitability during the past year (47 percent), compared to 28 percent for transitioning organizations and just 13 percent for trailing. 43 percent of technology leaders also reported that their business increased in 2020 — despite the pandemic.

Coming out of a full year of pressure from the pandemic, these organizations also showed stronger resiliency, agility and performance than other organizations. Forty-six percent of technology leaders reported they were very prepared to transition to supporting clients remotely when the pandemic began, compared to just 20 percent of transitioning and 8 percent of trailing organizations.

The survey results clearly indicate that technology leaders fared better during the pandemic than their peers – but what exactly made those organizations more successful? Here are a few of my own observations.

Technology leaders will leverage technology in service of productivity. The survey confirmed that professionals see digital transformation and technology as a key driver of improved performance, efficiency and productivity, and that increased use of and investment in technology solutions will continue. But what does that look like on a material level? A firm that uses technology well — to streamline traditionally time consuming tasks — is focusing on efficiency irrespective of billable hours. One could infer that a firm that is more efficient is less likely to write down hours and is likely to have a higher realization rate than peers.

They are more likely to be transparent and collaborative. The survey indicated that 80 percent of corporate legal department respondents expect greater collaboration and transparency between law firms and clients — demonstrating how highly departments value those qualities in a law firm. Leveraging technology provides firms the ability not only to increase productivity but also to be more transparent with their clients about where their time is going, how they’re driving efficiency across their work for clients, and where they’re able to add value as a result of those efficiencies.

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They are better positioned to expand their business. More than 70 percent of corporate legal department respondents said that their organization has become more selective about the law firm with which they do business and that their organization has become more sensitive to pricing. The implication of this trend for me speaks to the likelihood that, as corporate legal departments continue to face budgetary pressures, we could see an increase in corporate legal departments that consolidate their work with fewer law firms. When corporate legal departments look to give more work to fewer firms, those firms can be better positioned to receive more work — and when a firm has more work from a particular client, the learning curve per matter goes down as the understanding of the client goes up.

The survey’s results reaffirm the importance of technology to the future of the legal profession — and they provide context for the competitive differentiators that are underpinning the shifting landscape of the legal industry as its transformation continues. Technology leaders, whether it is because they embrace technology or because it is the result and evidence of a well run, client focused, problem-solving organization — are more likely to continue performing well as we brace for the future.

Ken Crutchfield is Vice President and General Manager of Legal Markets at Wolters Kluwer Legal & Regulatory U.S., a leading provider of information, business intelligence, regulatory and legal workflow solutions. Ken has more than three decades of experience as a leader in information and software solutions across industries. He can be reached at ken.crutchfield@wolterskluwer.com.

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