LegalTech and LawTech to Boost Productivity and GDP
The legal industry has undergone significant changes in recent years, thanks to the advancements in information and communication technologies. These changes have led to a shift from traditional paper-based methods to digital ones, resulting in increased productivity, reduced costs, and greater access to legal services. With the use of automation, artificial intelligence, cloud software, and emerging legal service models, the operation of lawyers and law firms has been transformed.
The 2022 Global Legal Department Benchmarking Report by ACC shows the median per cent of legal spending allocated to legal technology at two per cent. This article delves into the rise of the legal industry from paper to tech, highlighting the impact of technology on the industry.
Efficiency and Cost Reduction with Automation and Collaboration Tech
May 2022 report by AppInventiv, provides an overview of how the legal industry has moved away from paper-based methods to digital ones has been one of the most important changes. In the past, lawyers usually used paper to communicate, file, and keep track of information.
The use of electronic document management software has made it possible for law firms to keep and organise their papers digitally, saving time and cost and making it easier for teams and clients to find and share information and interact.
Automation tools have made it possible for machines to take on tasks such as reviewing documents and entering data, allowing lawyers more time to work on more complicated and valuable tasks. This has made law companies more efficient and has cut costs, making legal help more accessible to clients.
Bill Tilley, in his LinkedIn blog “The Incredible Rise of LegalTech”, describes that the use of artificial intelligence (AI) is also changing the law business. AI-powered tools can help lawyers analyse large amounts of court data, find trends, and make predictions. This is particularly useful in areas like contract review, where AI can help lawyers quickly identify possible risks and problems in contracts.
Further, by using cloud technologies for effective collaboration, lawyers can work with other lawyers from anywhere in the world, giving them more freedom and cutting down on the need for office space. This has made legal services more accessible and affordable.
Emerging Service Models and Social Concerns
The legal industry has also seen the emergence of new legal service models, such as online dispute resolution (ODR), virtual law firms, and legal chatbots. These models allow individuals and businesses to resolve disputes online, reduce overhead costs, and enable lawyers to work remotely, making legal services more accessible and affordable.
A report by LawtechUK states that increased usage of digital technology by legal service providers could enhance productivity by up to GBP 1.7 billion ($2.1 billion) annually. The study also highlights the growth in investment in specialised legal tech firms in the UK and predicts that by 2026, yearly investment in law-tech start-ups and expanding companies could reach GBP 2.2 billion ($2.7 billion).
Law companies need to keep social concerns in mind and ensure that their use of technology does not get in the way of their legal duties.
Balancing Tech and Law
Manupatra's LinkedIn blog - Is Technology Reliable In The Legal Sector? questions the reliability of the technology in the legal sector and highlights the importance of balancing its benefits with social concerns. For example, using AI for court decisions raises concerns about bias and unfairness, and law companies must ensure that their use of technology aligns with their legal obligations.
On the other hand, GlobalData Thematic Research's article "Legal tech is transforming the legal industry" suggests that embracing technology is essential for providing high-quality legal services and remaining competitive in a digital world, despite the challenges that need to be addressed.
Overall, the legal industry is experiencing significant changes as technology continues to advance, with a shift from paper-based to digital systems, the incorporation of technology and AI, and the emergence of new legal service models transforming the way lawyers and law firms operate.
Author: Varun Bhatia, Co-Founder of 3NServe.
