The legal profession has often been considered to be change resistant when it comes to technology. Yet, many law firms and legal departments tend to prove us wrong and we have the results to prove they are on the right path.
In support of this assertion, Wolters Kluwer Legal & Regulatory recently released the 2019 Future Ready Lawyer Survey, conducted independently with 700 legal professionals from law firms, legal departments and business services firms across Europe and the US.
This unique survey demonstrated, among other major findings, that technology is already a key enabler of competitive advantage for organisations that are fostering innovative solutions today, and plan to invest even more in the future.
The Future Ready Lawyer survey also revealed that only 34% of legal professionals believe their organisation is “very prepared” to keep pace with changes in the legal market. However, 50% of Technology Leading organisations said they were “very prepared” to keep pace with these changes, compared to just 19% of Transitioning organisations.
Importantly, the survey demonstrated that leading organisations in technology adopting (Technology Leaders) perform better today, are more profitable, and are better prepared for the future than those still Transitioning to more tech-enabled business practices.
In this regard, the survey provides for the first time a key linkage between internal strategies to implement technology and their direct impact on the company’s productivity and, therefore, profitability.
The legal sector has been under pressure from a series of trends that will continue to impact organisations over the next three years. According to the Future Ready Lawyer survey, the top global trends include:
- Coping with increased volume and complexity of information (72% report expected impact);
- Emphasis on improved efficiency and productivity (71%); and
- Understanding which legal technologies deliver the highest value (69%).
The gap between the trends lawyers foresee and their readiness to manage them is quite surprising. In fact, less than one-third of lawyers report their organisation is “very prepared” to address any of the aforementioned trends.
For example, while coping with “increased volume and complexity of information” remains a concern for 72% of lawyers, only 31% indicate their organisation is “very prepared” to address it.
Also, while 69% of European lawyers surveyed identified the growth of business services firms – including the Big Four as legal service providers – as an impactful trend, only 30% of these lawyers report their organisation is “very prepared” to address it, which tends to confirm the current evolution of the legal services market.
Overcoming Hurdles to Tech Transformation
While the need for legal tech transformation may be powered primarily from external factors – including client expectations, pricing pressures and competition – the ability to successfully change and adopt new technologies must be managed with an inside-out approach.
In this regard, legal professionals identify among the main reasons to “not embrace new technology”: their organisation’s Lack of Technology Knowledge, Understanding or Skills (36%); Organisational Issues (34%), such as change resistance and lack of vision; and Financial Matters (30%), such as direct costs and proven return on investment.
In that sense, lawyers acknowledge that understanding the benefits of new technology remains a major challenge, for which some organisations report that they are taking steps to address it by hiring technology specialists to support their transformation.
Most organisations are now moving forward with implementing a variety of technologies from foundational (basic technologies organisations rely on to conduct business), to enabling (technologies that improve productivity, efficiency), and even to transformational technologies (technologies that deliver demonstrable new business results).
About one-half of Technology Leading organisations have already implemented foundational technologies and the vast majority expect to do so by 2022. Similarly, Transitioning organisations tend to be establishing a foothold with many of these technologies, but also expect to significantly increase their use over the next three years.
Among foundational technologies, third-party e-billing systems are most likely to see the highest growth among Technology Leaders, while client portals will see the greatest growth among Transitioning organisations.
In the meantime, Transitioning organisations seem slower to embrace these technologies and are expected to lag behind Technology Leaders over the next three years. Yet, online legal research software and document management should have the highest use within the next three years across both Technology Leading and Transitioning organisations. Several other enabling technologies will be widely used by 2022 among Technology Leaders including contract management software (87%), customer relationship management (85%), knowledge management (85%), practice management (85%) and data analytics (83%).
The implementation of transformational technologies, including artificial intelligence (AI), predictive analytics, machine learning, blockchain, smart contracts and decision support tools, is also expected to double by 2022. In this regard, Technology Leaders expect to embrace these technologies at a much higher rate than Transitioning organisations, confirming the correlation between such investments and a foreseeable ROI.
Yet, the lack of understanding of technologies mentioned by many legal professionals remain a major obstacle for technology adoption especially for Transformational Technologies. Despite the anticipated growth in adoption of such technologies – with more than one-half of lawyers expecting to see some impact from transformational technologies over the next three years – less than 24% believe to understand them “very well”.
Preparing for Change
Progress for technology adoption is uneven among legal professionals: Technology Leading organisations are strengthening their competitive edge, while others struggle to keep pace and may be left behind while the legal services market reshapes itself. At a time of significant transformation for lawyers, it is clear that a gap is widening between hesitant adopters and a forward-looking approach. Early adopters are now Technology Leading organisations, which found through technology, not only a productivity pool, but also a highly beneficial source of efficiency and profitability.
Are you Future Ready?