Digitalisation: A Change in the Legal World?
The world and our lives in this modern age are now heavily determined by digital technologies, and a clear example can be seen taking place within the Legal Sector. Law firms such as CMS have begun their transition to become more digitalised through the introduction of various legal tech and online platforms. But a key question arises of whether this will lead to a significant increase in opportunities in the sector, or pose a new threat and challenge to the industry.
Life after Covid-19
A major shift towards digitalisation and online working took place during the Covid-19 Pandemic, and has been implemented permanently within not just the legal sector but professions as a whole, post-lockdown. According to Statista, in 2020 during the height of the pandemic, approximately 5.6 million people worked mainly from home in the United Kingdom.
The above blog post also focuses immensely on the impact of Covid-19 on the legal sector, mentioning there being a “undeniable paradigm shift” to the digital transformation — which I would also heavily agree with as it has been evident on how the world and various industries have had to adapt and compromise in order to keep business running and markets somewhat stable despite a major recession.
1. Opportunities made present in the Legal Sector due to Digitalisation
There have been drastic developments in the legal industry created by Digitalisation and development of technology. The aim of this transition according to a CMS Insight has been to:
1) Reduce workloads by eliminating redundant tasks
2) Boost efficiency through improved collaboration
3) Promote innovation through the implementation if new services
Many have argued that “tech will fundamentally change the way in which firms and lawyers do things”. There is now a widespread range of technological advancements tailored to make legal work more efficient and accessible. For example the introduction of Virtual Law firms or Legal Libraries.
These advancements mitigate the need for unnecessary tangible material which require more time and effort to maintain.
The days of physical files and tangible documents are slowly getting left behind. Particularly in the legal industry, there is now a major shift towards digital libraries and cloud storage for all matters being dealt with.
“Many law firms are resistant to change and fear the presumed costs and pains associated with adopting new tech”, however there have been various pivotal benefits identified ranging from “speed, consistency, collaboration and outcomes”. Arguably, these pros far outweigh the cons, and digitalisation is paving the way towards a more optimal and distinct method of work, in that the increased rate of collaboration and integration of traditional work with digitalised technology allows for a more unique, distinct and enhanced service for the clients.
The introduction of case management software which is often described as “purpose built to allow client information to be accessed from one place” through various platforms such as Clio, MyCase and Legal Files is becoming more utilised by major law firms.
These online platforms, promote the trend of Digitalisation and how the concept as a whole is providing opportunities to allow industries to have a more centralised approach to work, focusing particularly on its seamlessness and ease.
Research has shown 70% of lawyers use legal technology tools when conducting Legal Research in matters.
According to a Report by LawtechUK, evidence suggests that the increased use of digital technology in the legal sector could result in gains up to $2.1 billion dollars annually. This in turn suggests that both law firms and clients are accepting and benefiting from the digital transformation of the sector.
2. Challenges Digitalisation poses to the Legal Sector
One of the major reasons that cause a neglect to Digitalisation in the legal industry is the general lack of urgency and acceptance by firms and businesses to adopt the technology and implement it within the industry. According to a Report by ‘The Sunday Times’ “The average spend as a percentage of fee income on legal technologies continues to be low, at 0.5–0.9 per cent”.
An Industry Insight written by Conosco says that concerns from firms may include the possibility of breached data, which may endanger client’s confidence and cause potential legal complications.
The potential of a cyber attack can be seen as a viable reason to avoid the digitalisation of legal documents as it carries significant risks with it and can cause a potential loss in business and tarnish reputation in the industry.
As per Statista, the average cost of a data breach worldwide as of 2022 in the UK is $5.05 million dollars. This shows the sheer risk implementing a digitalised software in the legal business can carry. Therefore it is fair to expect Law firms to be hesitant completely committing to become totally digitalised.
The ‘Internet of Things’ along with the development of particular legal technologies including Artificial Intelligence is also becoming heavily predominant within the legal sector. In a TMT Practice Note it is stated;
“As the capability of IoT devices increases, complemented by the incorporation of additional technologies such as AI, M2M learning and blockchain, the likely applications will more and more frequently operate without human intervention”.
This essentially leads us to believe that the reason why law firms may not want to transition towards more automated digitalisation as it may mean there is less control and can cause catastrophic errors if not monitored, particularly in areas such as ‘Smart Contracts’
3. Conclusion:
There are clear advantages and disadvantages of Digitalisation, however firms are beginning to realise the need to provide the best services whilst utilising technologies adequately.
Digitalisation is taking over!
