CEO and Co-Founder at Everlaw — cloud-based software for litigation and investigations.
Law is among the slowest industries to adopt new technology. Lawyers are culturally risk-averse; it comes with the job title. Litigators are also accustomed to the pace of courts, where cases can take years to be resolved and don’t move at the speed of 5G. For corporate lawyers, deals tend to drag on, too. Those problems are amplified by attorney-client privilege, the requirements of trust and keeping data and communications confidential and secure. As a result, many legal teams have been slow to try new technologies like cloud-based software, citing security concerns.
The Covid-19 pandemic, however, is forcing the industry toward digital transformation.
Even before Covid-19, lawyers acknowledged they were tech laggards. A Gartner CEO survey from December 2018 found that legal departments positioned to support digital business efforts can increase on-time project delivery by 63% and increase the number of digital projects with appropriate risk management measures in place by 46%. Yet “general counsel are concerned that existing legal and compliance practices are incompatible with the speed at which digital business operates,” a Gartner research vice president said.
The business of law, the sensitive nature of legal information and the need to respect attorney-client privilege put unique requirements on lawyers. Regulations governing record-keeping as well as data privacy and compliance requirements make safeguarding security and data privacy critically important. Lawyers who are risk-averse and culturally resistant to change were reluctant to take a chance on moving data from the corporate data center to the cloud. Surprise — security concerns held them back.
Then, the pandemic came and changed the game for everybody, including law firms and in-house legal teams. Videoconferencing, virtual notaries, digital documents, e-signatures and e-filing are becoming widespread. Cloud-based company Clio’s 2020 Legal Trends Report released in early October found that 85% of responding firms are using software to manage their practice, 79% store data in the cloud and 83% hold virtual meetings with clients. The report also found that 69% of consumers prefer to share documents electronically and 56% prefer video conferencing to phone calls.
Before the pandemic, market dynamics were putting the pressure on legal teams to transform the way they work. One of the biggest drivers was the growth of alternative legal service providers (ALSPs) that use technology to gain efficiencies in delivering services — such as legal research, document review, ediscovery and litigation support — at rates that are more competitive than traditional law firms. In addition, C-level executives were following larger philosophical shifts to align the various divisions within a corporation to meet the same overarching business objectives, including moves toward metrics and cost efficiencies.
Another function that has forced law firms and in-house legal teams to adopt tech is public expectations regarding services have changed. Amazon, Uber and Netflix, among other services, showed people the power of mobile apps and instant delivery. Software-as-a-service and cloud apps brought speed, convenience, remote accessibility and flexibility to business services and work life in general. This shift to customer-focus will likely require a change in the traditional legal business model which is entrenched in the longstanding law firm partnership structure.
The pandemic has forced law firms and legal teams to trim costs as the industry was hit hard in April when 64,000 jobs were cut, or 5.5% of the total — a nearly 20-year low, Thomson Reuters reported. Nearly half of the country’s 100 largest firms ended up cutting pay or furloughing employees, among other cost-cutting measures, according to Bloomberg Law. In-house legal teams, in particular, are finding that they need to be able to do more work with fewer resources.
The technology journey for legal teams doesn’t have to be painful. There are some important steps that can help ease the transition.
Kickstart cultural change.
The most important thing for digital transformation efforts to succeed is change management — creating a technology-embracing environment among staff. This entails articulating what specific benefits the technology will bring and getting buy-in, not just from IT but from the top executives on down. In addition to the productivity, efficiency and cost savings technology can provide, legal teams will be able to promote greater transparency and convenience to clients, and employee quality of life benefits too. Prioritize technologies that will solve your organization’s biggest pain points and develop a business case that shows why the change is needed. Develop a plan to measure success so all the business leaders understand the potential impact.
Focus on user experience.
Lack of familiarity and ease of use are the most common impediments to end user tech adoption. Before choosing new technology, get an understanding of the needs and wants of clients and employees. IT teams should get feedback from all stakeholders and pay attention to the level of tech experience people have. Dedicate time for trainings so people feel empowered instead of overwhelmed. Hire or designate a program manager to focus on the technology projects, and recruit tech champions who can mentor others on their technology journeys.
Because legal teams deal with so much sensitive and confidential data and are subject to specific rules around client-attorney privilege, data security and privacy are critical considerations for any technology adoption. Law firms need to protect against data breaches, ransomware, phishing attacks and other cyberthreats by using solutions that offer strong encryption, intrusion detection and response, data loss and prevention, identity access and records management and policy-based controls. Choose legal tech that offers strong security for things like case management, eDiscovery, client service chatbots and AI-based tech-assisted review. For more general office productivity functions, consider outsourcing to cloud providers that offer highly encrypted services and reliable uptime.
This pandemic-prompted digital transition is just the beginning of a larger evolution for the legal profession that will lead to more efficiency, stronger security and better client service.