Must law firms keep pace with their clients’ upgrading technology? Can big law only play the game? Increase growth by leveraging technology.
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Law firms of all sizes are feeling pressure to meet client demand for both tailored services and greater efficiencies in this rapidly changing industry. Legal teams are being pressed to control costs and better respond to changing regulatory and risk management obligations. In response, they are investing more in automation, advanced analytics and other technologies that will help them manage the workload.
This trend toward the increasing technology in law is echoed by industry analysts. According to Gartner Inc., the percentage of in-house legal budgets spent on technology is expected to increase threefold by 2025 from 2020 levels as legal departments “increase spending on technology to reduce the dependency on outside counsel, address COVID-19, and satisfy a long-overdue need to modernize, digitize and automate legal work.”
Must law firms keep pace with their clients’ technology efforts?
And is it a game only BigLaw can play? In fact, legal technology is far more accessible and affordable than even two years ago. As a result, nimble small and medium-size firms can level the playing field and increase growth by understanding and leveraging technology.
Trends to Watch in 2022
We are seeing several trends in the practice of law and coinciding legal technology currents that will impact law firms in 2022.
Increasing Law Practice Specialization
Increasing complexities in a number of industries are creating the need for high-value legal expertise. The ABA Task Force on Legal Needs Arising Out of the 2020 Pandemic identified practice areas experiencing rapid growth in demand since 2020, including family law, insurance, data privacy, cybersecurity, labor and health law. Common among them are the complexities of technology, regulations or industry and their recent notable growth.
As business clients deploy new technology to manage litigation, contracts and communications, they will prefer working with equally tech-focused outside counsel. Technology providers are responding to this shift with practice-specific tools and features and integrations with courts, regulatory bodies and other industry resources.
Related: “8 Legal Practice Areas Growing in 2021 and Beyond”
Document Automation Levels Up
Every gain in efficiency frees up lawyers to focus on high-value activities and increase billable work. For example, firms using a manual search-and-replace process to create new documents can quickly realize productivity gains with document automation while avoiding common editing errors. Document automation software provides a centralized process of producing agreements, motions, pleadings, contracts and other legal documents. In addition, automation systems allow firms to create a direct connection to clients via an interview process that accelerates onboarding and custom document creation.
Both law firms and business clients are adopting automated document generation and assembly to save time, improve compliance and reduce attorney effort in document drafting.
Rising Cyberthreats
Law firms are prime targets for the theft of sensitive client information. Financial data, personal data, trade secrets and other business information are of high value to hackers. With more lawyers working remotely, firms are more vulnerable than ever.
Related: “Cybersecurity Trends: 22% of Law Firms Have Been Breached”
High on every law firm’s priority list should be a full security audit and upgrading threat protection. For practice management and case management systems, look for Service Organization Control 2 (SOC 2) compliance, which assures clients that your firm has the infrastructure, tools and processes in place to protect sensitive information from unauthorized access.
Legal Tech Meets Fintech
The wide acceptance of electronic payment methods in e-commerce is expanding rapidly across all segments of the economy, and the legal industry is no exception. In addition to bill payments, we are seeing significant growth in automated payments adoption by law firms, and it’s often client-driven. A Small Business Credit Cards study by Visa/A.T. Kearney indicates that almost 70% of small businesses use credit cards in a typical month. They are purchasing routine supplies, services and subscriptions on a credit card and will pay for legal services in the same way.
In addition to making payments easier for clients and improving the client experience, when payment processing is integrated with legal practice management software, it significantly reduces the WIP to cash period. A growing number of practice management software providers offer native e-payment capabilities.
Remote Work Is Here to Stay
Two short years ago, law firms were, by and large, operating from shared physical office space. Today attorneys and law firm business professionals routinely create, view and share documents and data from home or any remote location. The remote work transition thrust upon firms by the pandemic has proven to be a workable model with many advantages. Technology made the successful transition possible, with cloud and SaaS applications, collaboration apps and virtual meeting platforms. Some large firms may be looking forward to a full return to the office, but many small and midsize firms will remain in remote or hybrid work mode.
Related: “Tech Tips: Eight Experts on Where to Put Technology Dollars in 2022”
More Efficient and Scalable Client Engagement Tools
As firms shift more of their activities to the cloud, we are seeing increased interest in practice management software as an all-inclusive environment for managing a law practice, from onboarding clients to case filings and secure client communications via client portals to accounting and payments. Cloud technology offers security and scalability that give firms peace of mind with a remote workforce and confidence that they can quickly scale up when adding new hires or completing an acquisition.
Innovation Is Happening Every Day
The legal industry faces challenges in an increasingly regulated business environment, a growing demand for services and mounting pressure for tailored client services. But the exciting thing about this time in our industry is that technology, when properly leveraged, turns challenges into opportunities. From a technology standpoint, 2022 is looking very promising for law firms.
Photo by Lucas Hoang on Unsplash
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