The legal industry has always relied on traditional methods and labor-intensive processes.
However, the legal landscape is undergoing a significant transformation with the rapid advancement of technology and multiple legal technology trends making headway. Legal technology, or “legal tech,” is revolutionizing how legal professionals work by streamlining processes and improving productivity and client service.
As a result, technology-driven legal teams witnessed considerable growth in 2022 alone, with a staggering 63% reporting increased profitability. Further, the survey reveals that 87% of corporate and 83% of law firm lawyers perceive technology as highly significant to their work.
Besides, after grappling with the pandemic long-term and its effect on industries worldwide, staying up to date with legal technology trends has become imperative now more than ever.
Legal Technology Trends Worth Watching in 2023
The global legal services market size is anticipating growth from $788.94 billion to $1112.75 billion in 2026. The data highlights the immense potential for legal firms to procure business opportunities.
However, lacking to implement effective technology is a significant roadblock to success in the dynamic legal landscape. Law firms and departments that disregard technology adaptation are at a definite disadvantage amid fierce competition.
So, here is the rundown of some top emerging legal technology trends shaping the future to empower decision-makers to take control of their organization’s tech needs
1. Artificial Intelligence
Artificial Intelligence (AI) often get confused with automation, but they aim to tackle different challenges.
AI has the potential to address intricate interpersonal responsibilities, including problem-solving, perception, and human planning. AI complements human intelligence, similar to the project management triangle. On the other hand, automation technology only aims to replace human effort in executing repetitive and predictable tasks.
While AI is yet to deliver transformative results in the legal industry, legal firms should not stay behind in making AI applications more streamlined. AI systems possess the capability to learn and improve continuously. Further, machine learning as a subset of AI can help in the following aspects:
- Process vast amounts of text and voice conversations
- Identify patterns in legal matters
- Perform impressive predictive modeling tasks swiftly
In addition to finding privileged documents, AI can analyze contracts to identify missing terms with corrections and alternative suggestions, among other things. Legal professionals use AI to extract valuable insights from data, leading to the discovery of critical evidence for case development and litigation strategies.
The law industry can leverage such legal technology trends to enhance client experiences like it began transforming B2B marketing. Another possible application of AI is helping law firms during investigations by recognizing patterns, red flags, and irregularities, thereby reducing risks.
2. Improved Workflow with Automation Tools for Manual Tasks
Automation technologies are increasingly getting prevalent to simplify and automate legal tasks, such as legal research, document drafting, and contract management. One such technology is Robotic process automation (RPA) which utilizes software automatically executing repetitive and time-intensive legal tasks.
Attorneys and legal staff often get bogged down with administrative work. Process and workflow automation tools can streamline time-consuming administrative tasks, such as sending email reminders and scheduling meetings.
The industry is also witnessing an upward trend in the partial automation of legal research. While entirely automating legal research is impossible, many popular tools, like Westlaw to LexisNexis, implement improved natural language processing (NLP) techniques.
These legal technology trends can reduce the burden of law professionals to find the specific information required in the cases. The workflow automation tools for legal work, such as citation checking and citation management, are also getting mainstream.
3. Enhanced Data Privacy and Cybersecurity Practices
Law firms face the challenge of securing private data as computer software usage increases. As law firms possess considerable sensitive and personal information about their clients, disclosing such data is unacceptable and prohibited.
According to an ABA survey, 29% of lawyers reported security breaches, such as lost devices, hacks, or exploited websites.
Additionally, the cybersecurity levels implemented within a firm directly influence the system’s ability to safeguard against breaches and correlate with the firm’s overall income. Although most security breach events did not lead to significant harm, 37% of the respondents acknowledged suffering financial losses totaling billions of dollars because of such breaches.
The survey also includes insights into the security tools law firms employ for protection against breaches. The following is a breakdown of specific security methods utilized by law firms, along with their respective percentages of usage:
- File encryption (43%)
- Email encryption (39%)
- Two-factor authentication (39%)
- Intrusion prevention (29%)
- Intrusion detection (29%)
- Remote device management and wiping (28%)
- Whole/full disk encryption (26%)
- Web filtering (26%)
- Device recovery (27%)
- Employee monitoring (23%)
- Biometric login (12%)
When cybersecurity practices seamlessly integrate into a law firm’s business operations, employees can enjoy enhanced flexibility and convenience in accessing and exchanging necessary data, particularly in remote work.
4. Data Storage Cloud Solutions
ABA’s 2022 Tech Report noted phenomenal growth in the cloud solutions domain. It reports that cloud usage increased from 60% to 70% between 2021 and 2022.
Utilizing cloud technology, legal practitioners now embrace flexibility to work seamlessly across multiple locations. Such accessibility ensures that whether they are working from the office, attending a client meeting while traveling, or working from home, they can access and manage all client information and legal matters from any device.
Cloud-based solutions also facilitate file and data sharing among different lawyers and clients. Law firms that cautiously migrate their data to the cloud can reap significant advantages.
Furthermore, many legal technology trends, such as automation and AI, rely on the cloud. Collaborative tools like virtual whiteboards harness machine learning and cloud solutions for optimal utilization of historical databases.
Additionally, legal firms can use cloud-native systems to modernize their office phone systems by using in Voice over Internet Protocol (VoIP) that offer advanced features. Softphones enable geographically dispersed workforces to effectively manage legal proceedings and maintain seamless communication with colleagues and clients, regardless of location.
5. Remote Hybrid Work and Court Hearings
According to a report, about 79% of clients viewed remote work availability as an important factor in their decision to hire a lawyer. Additionally, the survey reveals that law professionals, on average, spend nearly a quarter of their work time outside their physical office spaces.
According to Gartner, 39% of global knowledge workers will adopt a hybrid work model, while 9% will work remotely. With the shift in workplace dynamics, organizations prioritizing technology solutions that enhance collaboration and communication will drive productivity.
As legal teams become vital in business strategies and planning, the ability to access and collaborate with stakeholders becomes paramount. It includes collaborating with departments such as accounting, sustainability, audit, and risk teams and engaging with external legal counsel and subject matter experts. Remote court hearings have gained significant popularity and have witnessed widespread adoption.
6. Data Analytics Will Improve Performance
Statistics show 90% of law professionals agree that legal analytics makes them better legal practitioners.
Law firms can use data analytics platforms as part of an overarching contract management system, providing contract fulfillment tracking and insightful post-execution data. It also allows teams to review which clauses were quickly approved and which ones languished in extensive back–and–forth negotiations. Such retrospective analysis facilitates significant improvements in contracts during renegotiation.
Additionally, legal teams can gain the following by leveraging data analytics platforms:
- Competitive intelligence for pursuing new businesses
- Insights on judges, opposing counsel, and parties
- Understanding of project pricing for informed decision-making
7. Blockchain in Legal Operations
Blockchain technology offers a secure and transparent digital ledger that facilitates the sharing, recording, and copying of information without the ability to modify it.
Unlike traditional centralized databases, an integrated blockchain system utilizes a transparent and immutable ledger, ensuring the accuracy and integrity of the stored data. This feature can benefit legal departments facing difficulties managing a backlog of older documents.
Furthermore, law firms can leverage digital wallets through the rise of blockchain technology instead of escrow accounts for payments. Firms can use the technology to automate ownership transactions, execute payments through cryptocurrencies, and guarantee compliance with contracts and agreements involving multiple parties.
Legal technology trends like smart contracts and blockchain technology can strengthen regulatory structures. Blockchain-powered agreements can enhance network security while automating legal procedures.
Summing Up – Legal Technology Trends
The legal industry has a unique opportunity to take steps toward digital transformation. Further, the legal sector measures to adopt legal technology trends can fuel innovation and augment growth. Also, the companies delivering legal tech services and products can use the legal industry data and reach their key decision makers to push their indigenously developed technology to carry forward the whole digital transformation process of such organizations.
Data shows that many legal firms aim to embrace technology trends and increase their investment in technology. 84% of the professionals said to make greater use of technology to improve productivity in the future.
Consequently, adopting these legal technology trends will help law businesses remain competitive, improve efficiency, and deliver better client service in the evolving legal landscape.
