Technology - Driving Change in the Legal Sector
According to the Law Society, there are five great drivers of change in the legal profession that can be clustered into five groups: Globalisation, how clients buy legal services, technological and process innovation, and wider political agendas around funding, regulation and the principals of access to justice.
In part 1 of this series: Driving Change in the Legal Sector, we focus on how emerging technologies will continue to play a vital role in innovating service delivery and influencing client behaviour through increased efficiency and cost-effectiveness. We chat to Adam Zdravkovic, Legal Specialist and Divisional Manager for Search Legal in Manchester, to get his insights on how these changes will impact skill requirements within the sector.
More firms prioritising technological and process innovation
The Law Firm Leaders survey, which polled the managing partners and senior partners of 50 national and international law firms, shows that technology is expected to have the greatest impact on law firms in the short term, with 4 in 5 law firm leaders seeing it as a major factor to their firm’s success over the next five years. Unsurprisingly, technology is considered a strategic priority for 94 percent of law firm leaders surveyed.
The role of the in-house legal and compliance function is rapidly evolving to keep up with the changing needs of the businesses they support, and technology will play a central role in empowering law firms to match the increasingly sophisticated demands of their clients. “Traditionally, the in-house role has been characterised by risk-spotters and general advisors. But with automation taking over more repetitive, compliance-based work processes, we are beginning to witness a shift in focus towards a more proactive approach that will increase the demand for strategic partners and business enablers,” Adam notes.
He also observes that the shift comes with risks, saying, “In order to keep pace with the changes brought about by technological innovation, an in-house legal team needs to ensure that its members have the necessary skills to manage this.”
Client behaviour drives technological adoption
“The need to embrace technological innovation is brought about by a number of different drivers which include the desire to break down outdated business models, the realisation that certain tasks do not require reservation to the legal profession and, the need to widely expand access to legal services at a competitive cost to clients,” says Adam. Technology will be instrumental in setting firms apart from the competition through being more easily accessible, efficient and consistent – minimising the risk of human error.
Recent years have seen the rise of what is known as alternative legal service providers, which aim to provide a more cost-effective alternative to traditional internal work structures and service delivery methods. These organisations tend to offer a more flexible working environment for their lawyers, and operate in a more cost-effective way – a benefit they can pass onto their clients.
Some use technology to deliver additional value to their clients in areas such as workflow management, trend analysis, document assembly and other contract automation products. “These organisations create a competition in the market, and it is likely that as time goes on, more law firms will embrace similar technologically innovative solutions to keep pace. Some law firms won’t of course, and others will take too long to embrace the change – creating even more room for new entrants and more competition in the legal sector, and in turn make businesses more likely to invest in increasing numbers of lawyers in their in-house legal teams," says Adam.
"We’ll also see more in-house legal teams adding lawyers with skills which haven’t always been seen as essential to even larger internal teams – like pensions, property and employment solicitors, and paralegals too,” he adds.
With the need to increase efficiency whilst ensuring accuracy, many law firms are considering the automation of repetitive work processes. An opportunity exists to automate steps that are taken in relation to commercial legal activity in supporting repeatable transactions and non-transactional work. Automation will not only reduce cost, but should also minimise risk through greater consistency.
What these changes mean for skills in the industry
As the legal profession evolves with business demands driven by the advancement of technology, skill requirements will also change, according to Adam, who says, “Because digital disruption is well on its way to redefining service delivery and client behaviour, we will likely see an increased demand for professionals with skills not traditionally characteristic of lawyers.”
“Law firm employers will not only seek to appoint tech-savvy professionals to facilitate the transition process, but they will also seek advisors with the foresight and ability to offer business insight to clients. This could see the appointment of project managers, sales executives, dealmakers and data and technology experts,” he continues.
While digital disruption may open the door to innovative opportunities, it also begs the question regarding which skills and work processes will be engulfed by the wave of technological transformation. “Currently, in addition to legal knowledge and the ability to articulate information about complex cases, solicitors must also possess transaction experience, analytical skills, project management capabilities and social intelligence. It’s a more challenging time than ever to be a lawyer!” says Adam.
As it stands, computers are best suited to undertaking repetitive tasks and are less suited to perception, personal interaction and social intelligence. Technologies that are being developed include:
- Data mining systems: Capable of analysing large volumes of unstructured databases in order to isolate specific targets and provide statistics to identify trends and opportunities.
- Workflow systems: Assist in process management and the production of statistics regarding the workflow.
- Contract generators: Which flex to accommodate various parameters and offer basic legal guidance on acceptable negotiation terms.
- Artificial intelligence systems: This can trawl unstructured databases to answer abstract enquiries. Such systems could be used to evaluate a third party paper and provide legal advice regarding negotiation options.
A reasonable number of options already exist for the first three technologies listed above. At this stage, the utilisation of true artificial intelligence systems in the legal market appears to be some way off, and the cost and complexity of the technology is currently prohibitive.
Although technology may assist in providing an alternative source of legal knowledge or experience, it is not sufficiently advanced to provide adequate responses to free form enquiries. It is also not yet capable of providing the appropriate level of social intelligence or communication skills required to facilitate many complex commercial transactions. “For this reason, a large degree of human interaction will continue to be required for the foreseeable future to support high-value or complex transactions,” Adam advises. However, this could change with time.
Specialists from BT Legal predict that the most immediate impact on the legal profession will result from data mining technology and the computerised automation of processes. This technology could support document review for disputes and commercial or M&A activity. It could also produce more accurate information on risks and trends and assist in contract generation. Such technology is likely to result in a smaller legal workforce to support the same volume of activities although, to some extent, this will be as a result of replacing lawyers with non-skilled contract negotiators whose skills have been augmented with technology.
"Moving forward, legal professionals should aim to expand and enhance their skill sets in order to keep up with technological transformation in the sector," Adam concludes.
About our Contributor
Adam Zdravkovic – who initially pursued a career as a trainee solicitor – is a legal specialist and Divisional Manager for Search Legal in Manchester. He has a thorough knowledge of the industry and over 7 years of experience providing legal recruitment solutions to a variety of companies, organisations and law firms. Adam focuses on in-house recruitment for commerce and industry clients, and manages a team of private practice and international legal recruitment specialists.
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