In recent years, technology within law firms has gone from a puddle - to a lake - to an ocean. The growth of legal technology has been even more pronounced during and since the Covid-19 pandemic, which led to a tsunami of adoption of legal tech by the sector. Lawyers have had to adapt to a changing legal landscape, as well as meet the evolving needs and expectations of clients.
During the Covid-19 pandemic, legal tech became of greater importance to law firms as they shifted to remote working. For example, this move meant that electronic signatures for contracts became more widespread, as opposed to wet signatures typically used in the legal industry. There became a greater need for legal technology solutions as professionals moved to virtual meetings, e-voting management, and online document collaboration.
Technology usage has continued growing and developing, but how do the pros and cons weigh up?
Pros:
Financial Growth
There is a clear financial benefit to be made from the perspective of efficiency. A Lawtech UK report indicates that the increased use of digital technology could result in productivity gains worth up to GBP1.7 billion annually. The same report highlights the growing investment in specialist legal tech providers, suggesting that annual investment in Lawtech start-ups and scale-ups could grow up to GBP2.2 billion by 2026.
Faster Data Processing
Aside from saving money, legal technology allows Lawyers to spend less time on routine administrative tasks, and more on high-quality, impactful legal work for their clients. Artificial intelligence can be used to reduce the time spent on repetitive and tedious tasks by populating contracts with clauses and automated messages. In an interview with the Financial Times, Eleanor Light body, Chief Executive of Luminance (UK-based Legal Tech Company), explained how AI is used to reduce the time needed to review contracts and stated that time-saving is as important as “the contract landscape can be complex as there has been an increase in regulation and an increase in compliance, and companies need to comply with all of these.”
Greater Billing Transparency of Legal Services
It is well-known that clients can pay extortionate hourly rates, but legal tech is highly effective for tracking the day-to-day progress of cases and deals through practice management software, further assisting the greater need due to inflation for law firms to make their pricing more transparent.
Reduced Error Risk
Using digital systems for document storage and management can reduce the risk of human error in law firms. AI systems can help to monitor critical data and ensure that important information is stored correctly, further reducing the risk of errors.
Cons
Risk
Cyber-attacks and breaches of data are growing problems. Prime examples are Facebook’s data breach and the cyber-attack on DLA Piper. The great marvels of technology are not without their flaws. Some can argue that with the General Data Protection Regulation in place, there is a reduced risk of cyber-attacks. Even so, the risk still exists, and attacks like his have a strongly adverse effect on law firms.
Empathy
Technology also lacks the human skills to deal with sensitive matters in an empathetic way. It also lacks the judgment and skills that lawyers possess when advising clients and cannot conduct certain tasks that a human can. Indeed, going forward, a focus for many legal tech companies is finding a way to incorporate empathy into their products to try and recreate the emotional understanding we get from other people, by aiming to gain a deep understanding of the user’s needs, goals, and values. But there remains an understanding by legal tech companies of the power of positive human interaction and its ability to shape overall satisfaction alongside technology.
Like everything, legal technology has its pros and cons, but it does appear that the benefits outweigh the negatives. Legal technology has and continues to, revolutionise the legal profession. There are clear financial and efficiency benefits, but tech can never replace humans, as the law requires a human touch, and technology is best placed to compliment that alongside the professionals in the field. It also brings risks to cyber security regulatory risks. Yet, it removes some of the risks of human error, and when used alongside legal professionals, can still utilise, and bring an empathetic approach to the profession.
Posted 04/05/2023 By Sarah Beckett