Digital Technology Digital disruption

Digital disruption in the legal sector: A complete overview

Posted by David Smetana on Jul 22, 2020 10:30:00 AM
statue of the scales of justice - illustrating digital disruption in legal sector

 

‘Those who disrupt their industries change consumer behaviour, alter economics, and transform lives.’ – Heather Simmons, author of ‘Reinventing Dell’

Despite being a typically risk-adverse industry, the legal sector is prime for digital disruption. And, if implemented effectively, it could transform your law firm for the better.

From enhancing productivity, to enabling collaboration and identifying profitable opportunities, there are plenty of areas where disruptive technology can improve your firm.

We want to take a deep dive into digital disruption in the legal sector, outlining what it is, the potential benefits to your firm, and examples of disruption you may choose to adopt.

So, let’s get started.

Table of contents

What is digital disruption?

To define it simply:

Digital disruption refers to the impact new digital technologies have on a business’s services, clients and workforce. Digital disruption is becoming more and more prevalent within all industries, due to the mobilisation of technology and the introduction of new technologies.

Although digital innovation isn’t new to the legal sector, there are still more brilliant opportunities for disruption.

Of course, these opportunities hold their own benefits and challenges.

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What are the pros and cons of digital disruption?

Before implementing technological change in your firm, it’s vital you identify the benefits and challenges of digital disruption. Failure to clarify this increases the risk of disruption that isn’t profitable or helpful.

Here are some of the most important pros and cons for you to consider.

Benefits of digital disruption

Increase productivity

When done right, digital disruption will boost productivity in your business. Employees can scrap paper methods in favour of digitised, traceable processes. In addition to this, they can work outside of the office, helping them handle urgent tasks in a timely manner.

For your clients, you can cut out bureaucratic processes and enable digital signatures. This decreases friction, which gives clients a better experience and in turn boosts your firm’s productivity.

Lower IT labour costs

If your firm chooses to migrate to the cloud, either partially or fully, you’ll experience a reduction in IT labour costs. As cloud providers handle the patching, updates and security of servers on their end, you won’t need to lift a finger. In addition to this, you’ll cut out the need for costly future on-premise maintenance.

That said, if you’re worried about TCO costs and navigating cloud spend, we recommend either getting in touch with an expert or using Azure’s TCO calculator.

Unlock business insights

Data-driven insights and decisions will help you navigate roadblocks in projects, as well as reveal new service or marketing opportunities.

As an example, your law firm may use data to determine how to price your billable hours in line with client expectations, national averages and local competitor rates. 

Challenges of digital disruption

Readiness

Don’t jump in all at once. Any technological change management process you make should be informed.

For instance, if you find that certain legacy applications need to be kept on-premise for regulatory needs, don’t try and move them to the cloud anyway. It’s important to measure your readiness and find the right mix of technology.

Cyber security

Eighty percent of law firms run at least one service – such as an email server – that has an exploitable vulnerability, according to a 2019 government report.

Although technologies, such as cloud computing, come with unparalleled built-in security measures, there are still steps law firms must take to mitigate all risks. This means:

  • Increasing cyber security training
  • Implementing multi-factor authentication
  • Ensuring your data security practices and policies are up to date
  • Vetting legal software to ensure it meets the highest data security standards

Cultural and technical changes

It can be hard to shift expectations and implement change. Your staff may have ingrained habits and a narrow field of view – as long as they feel well equipped, why worry about broader improvements?

But technological change should be empowered by everyone within your firm.

So, when adopting disruptive technology, make sure you have the complete buy-in of your partners, employees and loyal clients. And, if they struggle to adapt to any changes, be willing to offer help or get consultation from an IT expert.

3 examples of disruptive technologies in the legal profession

Now that we’ve discussed what digital disruption is, let’s look at some specific areas of digital development.

The following three examples are just a taster of digital disruption within the legal sector today.

1.  Blockchain

Forty-one percent of surveyed legal firms plan to use blockchain for transactional purposes. In addition to this, 21 percent plan to use the technology for business support and 31 percent expect to utilise it for high-value legal services.

If you weren’t already aware, blockchain refers to ‘blocks’ of records which are linked and secured via cryptography.

But how does this technology integrate within your firm’s services? Here are a few ways blockchain could disrupt your business:

  • Smart contracts. By using blockchain platforms, law firms can cut the manual work out of signing contracts without compromising on security. It also means lawyers can create and validate legal contracts without the need for paper or human intervention.
  • Intellectual property. Many intellectual property filings undergo a time-consuming manual approval process. Blockchain cuts out the middle man by allowing content creators to upload their intellectual property onto a network for repeated reference in future.
  • Chain of custody. Using blockchain technologies, firms can keep their chain of custody evidence documentations digital, auditable, and traceable by using time-stamped cryptographic

2. Cloud computing

Admittedly, the legal profession isn’t new to cloud computing. In fact, many firms use cloud-based apps, such as the Microsoft 365 suite, for productivity and out-of-office work.

However, when it comes to law-specific tasks, only half of firms use cloud solutions. This digital disruption, if untapped, could prevent legal firms from streamlining their services, boosting employee productivity, and providing a more competitive service.

These are just some of the ways the cloud can boost your law practice:

  • Remote working initiatives. Cloud environments and relevant applications allow for a distributed workforce. There are many benefits to a remote workforce. For example, 24 percent of employers say it reduces staff churn.
  • Legal cloud services. Separate from productivity apps, there are many legal cloud services applications that could revolutionise your firm. Clio, for example, is a completely online case management software that allows you to run your business securely from anywhere.
  • Scalability. On-premise servers are hard to scale. Why? Because you need to buy new racks and space to house your data. Moving to the cloud empowers your firm to scale with ease.

3.  Legal analytics

When it comes to big data and analytics, the legal industry is still lagging behind. The reason behind this is different for all firms, but can range from historical conservatism towards technology, to lack of skill sets and resources.

Regardless of the reason, it’s important to understand that data can unlock huge value for your company. When analysed, it can provide a treasure chest of innovative, actionable business insights that could revamp your offerings and profitability.

Some key untapped big data opportunities are:

  • Case study analysis. Gathering and analysing historical case data, such as jurisdictions, will help you better predict a case’s success. For example, if a judge ruled a certain way in X previous similar cases, the chances are they might rule the same way again.
  • Marketability. Understanding your target customer base and marketing to them in an appropriate way is essential for business growth. Marketing insights can help you focus your targeting, refine your strategies and pinpoint key areas for investment.
  • Pricing. Your firm needs to be profitable and From planning staffing requirements, to analysing billable hours and previous pricings, big analytics can help you arrive at profitable, fair prices for your services.
  • Case management. Using an online, data-driven management system will help you compile key project metrics. With this data, firms can work towards streamlining project management and identifying and removing bottlenecks.

Is it time for your firm to disrupt the norm?

From blockchain technologies, to cloud computing and legal analytics, there’s already a wave of new technologies for your firm to consider.

Unfortunately, many firms still resist change. Reasons for this include cost worries, lack of technical skills and employee push back.

But the truth is, disruptive technologies – when implemented securely - empower you to make informed decisions, provide better services, and stay ahead of your competitors. Without technology, you’ll struggle to make tangible improvements and drive ongoing profitable business growth.

So, if you find yourself tiptoeing around digital disruption initiatives, reach out today. Our team of experts have the experience, advice and solutions to help you power-up your firm.

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