Embracing The Tectonic Shift: How Technology Is Transforming The Legal Profession
Technology today is an integral part of our lives. If somebody did Maslow's Hierarchy of Needs today for professionals, technology would be one of the physiological needs in place of food and clothing. It is a reality and a necessity. It is the spool for executing the companies' strategies.
Forward-thinking and future-ready organizations can only do with a digital strategy if they want to engage with their customers and employees. Tech-enabled interactions and data-driven decisions are fundamental to providing a quality experience and result across workflows.
Digital Transformation of Legal Profession
Legal professionals were laggards regarding technology adaptation when Covid took over, and there was no option. Today, legal businesses of all sizes are contemplating their digital strategy. According to a Gartner Report, 4 of 5 legal departments plan to increase technology spending. By 2024, legal departments will replace one out of five lawyers with a nonlawyer staff, and 1/4th of the expenditure on corporate legal applications will go to non-specialist technology providers. By 2025, legal departments will have automated 50% of legal work related to significant corporate transactions.
A tectonic shift is happening in how law firms and legal department’s function. In-house Legal departments have their legal-tech stacks for case management to improve efficiency, compliance management, contract drafting, better knowledge management, contemplating legal strategy, and bringing down duplicity of efforts.
For instance, there is Artificial intelligence-enabled legal software with the history of all the cases in India that can predict the probable outcome of the matters by providing the data points from past case laws and provide judgments and precedent law to be used by lawyers in their present cases.
The templates for legal documents are freely available on the internet. Much ground-level research on legal propositions, referencing, document structuring, proofreading, compliance management, cause list management, and diary management which interns, junior lawyers, secretaries, clerks, and paralegals used to do, is now done with automated software at lightning speed.
Legal departments and law firms are allocating budgets for technology integrations for legal work than hiring new resources. There is an apparent strategic benefit of using technology besides quicker turnaround time. By automating the work at the bottom of the pyramid, the firms and departments would stay unaffected by changes due to attrition. Ship rocking at the bottom would preserve the firm's knowledge.
Future Roles in Law Firms
Does that mean Legal Tech will eat entry-level lawyers, paralegals, and clerk jobs? Not really. People have continued going to the doctors even though the Mayo Clinic website and YouTube offer complete detailing about various kinds of disease management. Instead, people now go to specialists and make informed decisions. The same is going to be the future of Legal Engagements. Companies will engage with specialist law firms for different types of legal mandates. The corporate retainer models will take a backseat, and engagements will be for specific assignments.
Technology specialists will garner more importance in law firms, and ace lawyers will have skills in data analytics. AI will enable lawyers to extract powerful insights from data that can uncover critical evidence. In addition, lawyers' skills will come into play in interpreting the data, strategic thinking, court craft, and the ability to improvise in front of a judge.
Data Entry and Data Management Professionals will take more central roles in creating streams for inputting vast volumes of text and numbers. They will feed the data into the systems for machine learning and natural language processing to generate accurate reports. Managing Partners, General Counsels, and Senior Lawyers will spend considerable time on data management strategies.
Caveat: Mama says you do not take candy from a stranger!
Parents tell their toddlers don't take candy from strangers. The same applies to the adoption of legal Tech in companies and law firms. Again, data safety is the most important thing here because firms deal with extremely sensitive information.
Most of these SaaS (software as a service) solutions in Legal Tech are services that a third-party provider offers as a ready-to-use product. Therefore, the firms should take it with a pinch of salt and never blindly rely on the provider. However, check on data security, stability of the company, and compliance as the data and whatever you do with the system are on third-party servers.
The other way to integrate technology in your business flows is by developing on-premises software, which many more prominent firms with large technology budgets are doing. However, with this implementation type, the company is left to its own devices regarding software maintenance, support, and upgrades. While this is much responsibility, there is more control over data, better AI capabilities suited to your practice, and customizations vs. a SaaS application. The indication today is that machine learning solutions work best when integrated into company systems.
The smaller firms might take the services of Legal Tech companies. Still, more prominent firms will prefer developing their Legal Tech department, which some firms are already doing.
Whether SaaS or on-premises, the firm leaders must know their "why" for implementing technology. In the end, technology should not be driving the vision and strategy, but it should be in pictures first. Technology should be an enabler and not a driver. Else it won't work.
Author: Khushboo Luthra, Associate Partner at Singhania & Partners. Views are personal.