Legal technology certainly trends! As legal technology has revolutionized the legal industry. Gone are the days when law practice was exclusive to trained legal professionals. Service disaggregation in the legal supply chain has made it possible to define, standardize, and systematize processes. This development has made it possible for legal tech companies to offer commoditized solutions to lawyers and non-lawyers without falling within the strict legal ambit of providing legal services. There are also interesting legal technology trends in some jurisdictions such as England and Australia, where there have been a relaxation of laws and regulations to allow non-lawyers to participate in running law firms.
One of the most important legal technology trends over the last couple of years is the widespread adoption of law practice management software. It has been around for years, but it hadn’t been widely used. In the last couple of years, we have seen a huge uptake, mainly because of lawyers moving to the cloud and cloud-based practice management platforms’ availability.
There has also been the growth of analytics in legal technology, the ability to take information already available in electronic form, and glean new insights. A good example is court analytics. For some years now, court records in the US have been online. There are now legal tech companies that are extracting court data and disclosing exciting facts, such as how often a judge rules a certain way in a particular type of case or how well a specific law firm does in a certain kind of matter. A lot of intelligence that wasn’t available through a traditional research service is now available.
This article considers the top legal tech trends and their impact on the legal services industry’s future.
Gartner Hype Cycle for Legal Technology Trends, 2020
We begin with an examination of Gartner’s technology hype cycle for 2020. The Hype Cycle is a tool that attempts to capture the state of emerging technologies annually and is a leading authority on tech trends.
The tool explains technological evolution by categorization into five key phases as follows:
- The Innovation Trigger: This is the point where technology emerges. Early proof-of-concept stories inundate the media during this phase, but few, if any, usable products or services exist. During this stage, commercial viability is unproven.
- The Peak of Inflated Expectations: This stage is marked by success stories and failures, and often some irrational exuberance. At this stage, startups have money thrown at them as investors speculate on the technology’s future. Some companies take action by adopting the technology, while others adopt a wait-and-see attitude.
- The Trough of Disillusionment: The hype downs down, and reality sets in; the true worth of the technology and its commercial applications is still questionable as implementations and startups fail. Surviving innovators can only attract further funding rounds by improving products and services to early adopters’ satisfaction.
- The Slope of Enlightenment: At this stage, the technology is more widely understood, and its commercial applications are evident. There are second and third-generation products and services. Many more organizations adopt technology, even though risk-averse companies remain cautious.
- The Plateau of Productivity: This is the phase of mainstream adoption. The technology attains critical mass in terms of new adoptions. A new economic ecosystem built around the technology may also emerge during this stage.
(Image source: Gartner)
According to Gartner, all new technology follows this pattern. The chart below shows the current hype cycle for legal technology 2020 trends.
(Image source: Gartner)
From the chart, one can pick out four key trends beyond the hype and the plateau of productivity.
- Enterprise Legal Management (ELM)
Enterprise Resource Planning (ERP) completely restructured the finance function. ELM will do the same thing for legal workflows and processes. This market has many faces. Vendors are amalgamating many different technologies and applications into a single platform that streamlines legal practice management.
Borrowing from the lessons learned with ERP, rigid, inflexible systems that could not quickly respond to business needs became hindrances to business.
That said, law firms should resist the temptation to hop onto the bandwagon without proper planning. The procurement process should begin with an in-depth audit of the law firm’s needs and desired business outcomes.
- Subject Rights Requests
The ubiquity of the Internet has created widespread concern about how companies handle user data. We recently saw the CEOs of the four largest tech companies summoned by the US Congress to respond to many concerns that included measures to protect user data. Laws have been enacted in various jurisdictions to protect user data. What’s of concern is the subject rights requests (SRR) built into these laws. For example, the California Consumer Privacy Act (CCPA) provides that California residents have a right to know what personal information a business holds about them, request a copy of that information, and request deletion of the data. The European Union’s General Data Protection Regulation (GDPR) has similar provisions. What is now becoming clear is that lawmakers did not anticipate just how costly SRR compliance would be for businesses. According to a Gartner Security and Risk Survey, it costs an organization roughly $1,400 to respond to an SRR request. The workflows are manual, and organizations often fail to meet the legal timelines because they need between two and three weeks on average to respond to each request. Organizations have also had to hire compliance officers and law firms to oversee the management of SRRs specifically.
SRR automation will help businesses quickly comply with SRR requests.
- Predictive Analytics
Predictive analytics first appeared on the Hype Cycle in 2010. It sat in the Slope of Enlightenment for a while before gradually moving to the plateau of productivity. It is an established technology that uses data mining, predictive modeling, and machine learning to analyze historical and current facts to predict the future. It is in use in many applications across a wide range of industries. The technology is relatively simple to use and pre-package.
Despite fast uptake in other industries, adoption is less mature in the legal industry, and there are numerous opportunities for pre-packaged solutions. Below are seven of the most promising areas where predictive analytics legal technology trends can help law firms manage workloads better, work faster and, improve accuracy.
- Compliance: One area predictive analytics can prove useful is to predict compliance with policies or track new laws and regulations.
- Contract Management: Law firms can use analytics to identify contentious articles and track renewal terms.
- Intellectual Property: There are two applications in this area, identifying words and phrases consistent with the desired use of goods or services license agreements, identifying trends across historical patent applications, and predicting submission costs.
- Legal Department Management: Law firms can use this technology to predict inside and outside counsel’s operating costs. For outside counsel, predictive analytics is also suitable for improving payment timelines and refocusing litigation strategies to predict case outcomes better.
- Mergers and Acquisitions: Predictive analytics is useful when conducting due diligence investigations, especially concerning analyzing public sentiment regarding mergers or acquisitions.
- Privacy and Information Risk: Analytics simplifies data assessment for private data collected per privacy laws such as CCPA and GDPR. Predictive analytics can also track unusual behavior and predict a data breach before it occurs.
- Records Management: With analytics, records are classified, managed, and retrieved quickly.
- Robotic Process Automation (RPA)
The legal profession has lots of repetitive and routine tasks. Many paralegals and newly employed law graduates quickly appreciate this fact—many of these tasks are rule-based and predictable, making them excellent candidates for automation. Streamlining such workflows through RBA frees up staff for higher-value tasks.
Other law firm technology trends that we observe on the hype chart and that will help legal, and compliance leaders become effective managers include:
- The rise of virtual legal assistants: According to Gartner research, virtual legal assistants (VLAs) will handle at least a quarter of all service requests at law firms. VLAs or chatbots running on artificial intelligence (AI) will reduce the need for human interaction and significantly improve response times. When a VLA cannot respond to the request appropriately, the question is routed to a human resource. Pertinent contextual information to deal with the request is sent to the human resource to deal with the request. These tools’ effective deployment will depend a great deal on law firms playing an active role in their development and configuration.
- Legal technology expertise gap: Lawyers and technology have a complicated relationship. Lawyers will often tout their firm’s use of “cutting-edge technology” when conversing with clients but are ambivalent to all its practical benefits and make little effort to learn and fully adopt technological solutions for their work. This attitude is probably also because law schools rarely taught students the practicalities of full practice management. The technical revolution is led by clients, legal tech startups, and other professionals. For firms to fully reap the benefits of legal technology, the vast chasm between those with legal knowledge and those that understand technology must be closed.
- Third-party risk management: Increasingly, law firms are leveraging third-party vendors to perform activities on their behalf. These relationships can offer significant benefits, such as cost reduction, increased efficiency, and improved quality. For example, legal process outsourcing is sending legal work to jurisdictions with lower wages. However, putting trust in third parties could be exposing them to increased fiscal, regulatory, and reputational risk. The only way to mitigate this risk is through an adequate framework, controls, and oversight. Law firms need to understand better those that conduct business on their behalf or their client’s behalf. Vendors must have the right framework to protect against various risks such as cyber-attacks, natural disasters, data breaches, corruption, supply chain disruptions, or other unforeseen problems. The problem with current third-party risk management is that it overemphasizes upfront due diligence and fails to devote more effort to regular monitoring, wherein the greater risk lies. With technology, it is possible to proactively monitor critical third-party factors with triggers to signal a relationship change.
How to Keep Up with the Latest LegalTech Trends
This is a challenging subject for many lawyers. They feel overwhelmed because technology is evolving fast. Everybody wants to understand how to use the latest technology. Legal technology also has ethical implications. For example, many bar associations have rules on supervising non-lawyers. Lawyers have a responsibility to ensure that those they work with are compatible with their professional responsibility requirements. This includes using third-party legal technology vendors. When a lawyer uses third-party technology to store client data, they need to make sure it will be compatible with ethics requirements, including maintaining confidentiality. This is where many lawyers get anxious because there is much information out there.
Below are some examples of how you can keep up to speed with legal technology trends:
- Read widely: There is much information online on legal technology. Follow thought leaders on social media to get updates whenever they post something relevant. There are also numerous tech blogs and individual bloggers on LinkedIn that regularly post about legal technology.
- Collaboration: Getting together with other lawyers is a great way to stay current on your industry’s technological issues. Reach to people whom you think have a better grasp of technology than you do. The bar association is another place where you get up to speed on the latest trends in technology. This includes attending Continuing Legal Education (CLE) seminars and tech conferences.