Caveat Venditor: What LegalTech Vendors Should Focus On

The world over, the legal industry is known to lean toward the cautious, slow to adopt change and shies from wading into uncharted waters. But the onset of the pandemic turned the tide. The legal industry leapfrogged into adopting technology and resumed work remotely, a hitherto unknown phenomenon in the history of legal practice. From online court proceedings to e-filings, video conferencing, online negotiations, e-communications, research, automation, database management and invoicing – technology touched and pervaded every sphere of legal practice management and enabled a continuous delivery of service. 

Recent studies by Censuswide and Gartner shone new light on the benefits of technology adoption within corporate legal departments. The study reveals that the pandemic has reshaped the approach to work for in-house legal professionals, improving productivity, collaboration and responsiveness. While 48% of in-house legal professionals have returned back to the office full-time, there were unexpected positive impacts of legal technology, which not only enhances productivity but also reduces operational costs and other risks. 

The study also discovered specific incidental findings. In-house professionals have not only upgraded to Legal Tech but also reinvented the work culture – a positive by-product of legal technology. 

Realised benefits of legal tech 

Adopting technology not only increases efficient delivery of services but also directly affects personal happiness, a balanced work-life and overall job satisfaction, promoting a higher employee retention rate. 

According to the Censuswide survey, in-house legal teams experienced not only the apparent benefits of tech adoption: efficient time management, database management, accuracy, collaboration, but much more. In addition to these benefits, a renaissance seems to have come about in the average in-house legal professional's lifestyle owing to tech adoption. 

The survey notes that tech adoption creates "happier, more productive employees who take the business forward at a rate that is impossible without technology." 

• 46% of in-house lawyers who adopted Legal Tech said that it made work more enjoyable, 
• 38% indicated that it improved their work-life balance due to the hybrid work mode, and 
• 38% said it reduced errors.

For employers, the primer from this survey is that one way to eliminate attrition and retain employees is to invest in technology; apart from boosting efficiency, it creates employee satisfaction. 

Fears and misconceptions of technology adoption

A March 2022 survey by Bloomberg Law reveals that most legal service providers are unfamiliar with the technology tools available. The survey further states that 9 out of 10 attorneys said legal technology improves service delivery. The survey also discovered that technology exploitation is incomplete due to "a lack of tech proficiency" in the legal industry. 

We, therefore, set out to demystify some of the often heard risks (fears and misconceptions) surrounding legal technology. 

• Complex and challenging to understand 
• Job risk to paralegals and other legal support staff 
• Comprise to client confidentiality 
• LegalTech is for large law firms 
• LegalTech tools are homogeneous and offer the exact solutions  

Tech boosts talent 

A common grouse is that while software solutions offer various features, sometimes technology solutions fail to meet the intended purpose due to multiple factors such as complex software, resistance to change and unfamiliarity.  

Always remember that only the wearer knows where the shoe pinches. Thus consulting the end-users in the buying process should not be ignored. Lawyers depend on the services provided by legal support staff, the end-users of the software product. Involving them in the decision-making process will aid in implementing technology and result in the efficient delivery of services. 

An April 2022 blog by Litera titled "All Legal Tech Issues Are Talent Management Issues" states, "The use of technology is driving changes in the way legal teams are deployed. It is driving changes in individual roles and creating new ones. And it is creating opportunities for new types of legal professionals".

A study by  Deloitte,  What's your problem? Legal Technology  mentions the general considerations undertaken before adopting legal tech to ensure effective implementation and ongoing maintenance should include: 

• Strategic alignment: Whether the legal tech is in line and suitable for the operating function of the organisation. 

• The right team: To ensure technology's selection process and subsequent functioning, the legal team's existing knowledge and expertise must be blended with specific IT expertise. 

Our May 2022 article, An Insight into Gartner's Global IT Spending Forecast, discussed that IT spending would soar higher. Gartner predicts that the in-house legal sector will spend threefold on legal technology by 2025, reducing outside dependencies, modernising, digitising, and automating legal work. 

Due to post-pandemic financial constraints, outside counsel advice is slated to be minimised, and the volume of work by in-house legal departments increased. Another cost-cutting measure is to reduce new recruitment.  

LegalTech vendors must follow the Plan, Do, Check, Act (PDCA) model, whereby:

• Plan: Understand the operating mechanism of lawyers
• Do: Tailor solutions as per customer specifications 
• Check: Open to receiving feedback. 
• Act: Showcase how the solutions can exploit existing frameworks and models.  

Mislaid fears and misconceptions have clouded the full adoption of technology. Along with Sales Led Growth (SLG) strategy that focuses on presales and the organisation's needs, LegalTech vendors must also focus on the growth and adoption post-sales, such as the Product Led Growth (PLG) strategy.

The crystal ball indicates that the future for Legal Tech aims towards the product's end-users – not lawyers but legal support personnel. The silver lining here for Legal Tech vendors and the end-users of technology, are the endless opportunities due to the realised benefits of legal technology and therefore a significant growth potential in the evolving legal landscape.

As this marks a beginning phase of the legal technology innovation, there is a positive indication that law firms will continue to adopt more innovative solutions to support the digital transformation and adapt to the evolving legal landscape, driving the success of the law firms for present and near future.

Also read top viewed Ai Legal article: The Role of AI in Legal Research.