“Law technology adoption is needed within four years for individual legal practices to survive”
With the recent pandemic, the need for law technology for legal services has grown due to the preference of digital onboarding over in-person verification.
All industries have had their fair share of challenges throughout the Covid-19 pandemic, but few quite as much as the legal industry.
Law firms have been described as traditional in their ways of providing legal services and the struggle throughout Covid-19 has opened a new door for law tech solutions. With a shift to remote working and the need for virtual legal services, it was essential for the industry to adapt to new document processing and legal protection for both clients and business.
Adopting processes in line with credit and financial services is essential for law firm modernisation.
This has led to law firms requiring legal technology solutions and a more streamlined working method. With clients still needing legal services despite the whirlwind effects of 2020, now is the time for law firms to invest in technology. This article will look at legal technology (also known as lawtech), the key catalysts of change in the legal industry, why technology is important in 2021 and going forward, and examples of where legal technology can help.
Law technology, or LawTech for short, is simply software that increases and improves the efficiency of legal industry processes - whether this is within traditional law firms, alternative legal service providers (ALSPs), or in-house legal departments. From client due diligence to contract management, technology is beginning to play a vital role in the legal and further professional services industry.
The opportunities for utilising legal technology are hard to ignore. For example, in-house legal departments are expected to cut their budgets whilst working with heightened workloads. The use of technology allows departments to become more efficient and streamlined.
There are 3 main drivers of change in the legal industry: a shift in client expectations, the need to demonstrate compliant processes, and the importance of cloud-based solutions.
Client expectations are changing. With an increase in digital processes, especially within fintech and the emergence of Neo Banks like Starling and Monzo, clients expect similar experiences in other industries. Therefore, the importance of law firms replicating this client experience is vital.
Clients are now expecting their legal advice to be available on-demand and online due to increased online business transactions. For example, with online banking, invoicing, accounting and emails all being done on mobile or desktop, there is an expectation that legal services should be the same.
How many times have you as a legal secretary been involved in an 'email tennis' exchange where you are requesting documents only for things to get lost in chains and chains of emails? As a lawyer, how many days have gone by until you finally get in contact with the busy commercial client of yours in the limiting 9-5 window? These are why having an effective system that allows for 24/7 access is critical for client satisfaction and firm efficiency.
As mentioned initially, Covid-19 has forced law firms to close their offices and initiate work-from-home policies. This has needed sharp and swift transformations in the way that firms work, and the way that firms communicate with their clients. The increase of virtual legal services has meant that processes have gotten tighter with higher levels of surveillance and checks. For example, Know Your Customer (KYC), Anti-Money Laundering (AML), and Politically Exposed Person (PEP) screenings have gotten stricter, but also tougher to carry out. Very few firms had a system in place to comfortably carry out these processes remotely, leading to delays in the client onboarding process.
Additionally, with an increase in virtual work and the inability to meet with clients face-to-face, it has led to some firms cutting corners with their compliance so that they can open matters sooner. Having a system that can improve compliant processes in a remote world speeds up processes and protects firms from corner cutting.
There is growing consumer knowledge around cloud based solutions due to them being used in our everyday lives. Professionally, services such as DropBox and Google Drive are used throughout many firms in the legal sector and multiple industries. In our personal lives, iCloud and Adobe are used to store our personal information and we trust them day-in day-out. Services like these have made cloud based solutions easier for clients to understand and trust - half the battle for a law firm wanting to become cloud-based.
But, with legal technology on the rise and the world heading becoming a cloud-based ecosystem, there are concerns around the safety and security of data within law firms. With such a large amount of personal data involved in legal matters, handling the data security is crucial. It is estimated that only 40% of law firms have effective cyber-security procedures in place with a staggering 8% of firms not having any. Therefore, ensuring that your legal technology vendor is hosted on secure servers, compliant, and prepared for any cyber attacks is essential.
It is estimated that 23% of a lawyer's time can now be automated, saving 2 hours of a 10-hour working day to allow the lawyer to focus on more pressing matters. Additionally, 37% of professional services staff's time is spent on mundane repetitive tasks. Suppose a lawyer can save time by automating client onboarding or contract analysis processes. In that case, they can spend more time understanding their client's needs and creating their ideal experience, leading to increased client satisfaction.
Reducing the manual work that a lawyer must do can allow for a better work-life balance, thus increasing work productivity. Studies show that productivity increased by 21% when work-life balance is improved.
A technological shift is essential for law firms to truly excel in the future. Carried out in 2018, a survey showed that over a third of senior associates at firms believe that technological transformation is no longer a choice, but a matter of survival. Since then, the need for technology has grown significantly; and continues to grow.
Legal technology, in theory, can help law firms in most elements of their practices. But, we believe that firms should start their tech transformation by investing in technology that helps minimise laborious manual processes that legal professionals finds themselves repeating multiple times a month, a week and a day.
With complex onboarding processes for commercial clients and the need to understand their business structure, a system that can make this process less manual is beneficial. Below are a few reasons why Validient can help law firms automate the client onboarding and engagement processes so that a client can get a fantastic streamlined experience from start to finish.
If you're interested in finding out more, please book a demo, or send an email to email@example.com! We help your firm increase efficiency and effectiveness, whilst keeping your clients needs and satisfaction at the core.