We analyse the top takeaways from a recent survey of GCs and in-house lawyers to understand how technology can help them deliver their core objectives.
Legal technology is booming. According to data from financial services giant Raymond James, M&A deals in the space jumped by 26% in the first half of 2021, while investment passed the £1 billion mark.
With so much at stake, it’s crucial for companies that develop and supply legal tech to remain in touch with the evolving needs of lawyers and non-lawyers alike.
With this in mind, it was fascinating to read a recent survey conducted by The Lawyer in association with software and professional services company Wolters Kluwer. The survey asked more than 130 general counsel and heads of legal from across the UK to discuss their current attitudes to technology, and the challenges they face in adopting it.
The survey produced a number of talking-points, and we’ve highlighted four of them below, in the hope that they’ll be as useful to you as they have been to us. We’ve also detailed how ThoughtRiver’s AI-powered contract review platform can address each of the challenges outlined in the survey, and enable the legal community to realise the full potential of the digital tools at its disposal.
The survey asked respondents which steps they plan to implement over the next three years to increase the efficiency of their legal department.
Greater use of digital solutions emerged on top, ahead of the structure and redesign of internal processes and the creation of a single repository for key information, dates and documents. Other common priorities, such as greater uptake of analytics, use of paralegals and adoption of outsourcing, all finished well down the list.
This stat in itself is hardly surprising. Digital technology has the potential to energise our operations in a way that process and structural tweaks simply cannot.
We’ve often discussed how artificial intelligence can add real speed to key processes, for example reducing the time it takes to conduct contractual reviews from hours to minutes or even seconds.
But the benefits go further than that. Much further.
Lawyers, no matter how intelligent and experienced they are, remain hostage to human failings. They may be prejudiced towards a particular point of view. They may favour one subject matter over another. They may make mistakes through tiredness or overwork. They get tired, and they need days off. And, like everyone, they will have some tasks they naturally prefer (and thus perform with greater accuracy) than others.
Legal tech has none of these failings. It is unbiased, impartial and impervious to the rigours of work and life. It can keep working for as long as is needed, and, crucially, it will perform all tasks with equal diligence. In surveys carried out in March 2020, involving 490 practitioners, 63% of in-house lawyers said technology had made their organisation more efficient; for law firms, the figure rose to 84%.
For big firms, these gains will be significant. Many multinationals are hamstrung by old-fashioned manual practices, and technology provides a gateway to transformation (little wonder that accountancy giants EY, KPMG and PwC are all planning to invest over a billion dollars each in legal tech).
However, for smaller firms, the benefits are potentially many times greater. The corporate world remains dominated by a handful of larger companies, and nowhere is this truer than the legal profession. In the business and commercial affairs segment, the largest segment of all, 46% of all work is gobbled up by the major players. Technology can offset this advantage by making small firms quicker, braver and more dynamic than their bigger rivals.
Respondents were asked what percentage of their everyday work involves legal technology, and what they imagine the figure will be in five years’ time.
Right now, nearly half of respondents, 48%, say that less than 20% of their work involves legal tech, and only 11% say that a significant chunk of their work (more than 60%) is done digitally.
However, fast forward five years and the figures are totally different. Only one in 10 respondents say that technology will account for 20% of their work or less; in contrast, more than a third say that at least 60% of their work will involve digital tools.
This drastic increase doesn’t just reflect the potency of legal tech right now. It also shows the potential of innovations coming down the pipe. Recent breakthroughs such as natural language processing (NLP), which allows technology to understand the nuances of language, have huge ramifications for the legal industry. NLP will make the contract-review process even smarter, super-charge electronic discovery and zoom in on legal documents to pick out the most minute problems.
At the same time, existing legal tech staples will improve even more. AI is getting faster, and more powerful. Machine learning can be trained faster than ever before. Chatbots are getting smarter, able to have more realistic conversations and handle a greater number of queries at the triage stage.
But there’s an equally important change at work: the human bedrock of the legal industry is changing, too. The younger generation of workers are far more willing to switch jobs than their older partners, and as various studies have shown, they demand that their workplace be tech-savvy as a condition for joining and staying.
Legal tech isn’t just going to give law firms an advantage in their day-to-day processes. It’ll also allow them to steal a march in the war for talent. The direction of travel is only heading one way; there’s no other option but to climb aboard.
When asked which specific improvements they plan to make to their organisation and its processes over the next three years, nearly half of the survey sample (49%) said they would work on collaborating with other departments throughout the company and third parties. An even greater percentage (58%) say they’re planning to improve the way they collect, organise and retrieve legal information. This reflects a clear desire to become more connected and more efficient for the benefit of the wider operation.
In the past, law departments have often been silos, cut off from the rest of the company. The phrase ‘stuck in legal’ is a frustratingly common one; to critics, lawyers are simply ‘the department of “no”’, an island that slows progress and thwarts innovation. No doubt you’ll share our sentiment that this criticism is unfair, that lawyers in fact do everything they can to bring speed and progress to the business. But whatever the rights and wrongs of the traditional image, lawyers have to adapt to the digital age.
Thankfully, it seems many lawyers are ahead of the game here. In fact, previous studies and thought-leadership articles have shown that in-house lawyers and GCs are actually assuming more responsibilities. Rather than focusing purely on the legal aspects of the job, they are now branching into areas such as the burgeoning field of environment, social and governance (ESG) issues.
COVID-19, of course, poses a challenge to this new role. With many lawyers working from home at least part of the week, it can be hard to maintain contact with the rest of the company. In this climate, it is doubly important that in-house lawyers and GCs maximise their collaborations and make every effort possible to stay in touch with their colleagues.
One way this can happen is through an automated digital issues list, documenting what needs to happen to get to signature and who is responsible for each action point. Recognised as best practice but often only used for large value transactions, an issues list is a great way to communicate with clarity and transparency. Legal is no longer a black hole for contracts – the business understands what stage negotiations are at, and how best to move things along.
When asked what challenges they face when introducing new legal technology tools and services, ‘gaining stakeholder/user buy-in’ emerged as the biggest headache among the survey’s respondents, ahead of coping with a higher workload with the same workforce and the increased need for training.
Unfortunately this reflects previous research, which shows that the majority of in-house legal teams lack the technology they need. In fact, 97% of those who answered the EY 2021 Law survey said they had encountered resistance when trying to secure investment.
However, the benefits are obvious when you know where to look. It has been estimated that 23% of all lawyers’ work can be delegated to technology, and Gartner believes this figure will double in the coming years. With so many lawyers reporting that they feel stressed and burnout, this kind of optimisation can make a vital difference.
And there’s more. By harnessing digital tools to use data more effectively, lawyers and law firms can identify inefficiencies, root out opportunities in their market and sharpen their strategic focus, homing in on the areas that need improvement. In fact, 93% of respondents in a survey said that analytics would add value to their practice.
Above all, legal tech offers a remedy to the budgetary constraints that many lawyers and law firms face. GCs have said they expect workloads to rise by 25% over the next three years, but three-quarters say their budgets won’t rise accordingly. Furthermore, more than half of in-house lawyers say they are committed to reducing their external legal spending.
By speeding up core tasks and removing the need for human involvement, legal tech should be part of the solution. To coin the phrase adopted by the survey, it will allow companies to handle a higher workload with the same workforce.
What’s more, lawyers can use the current uncertainty to their advantage. In a world that remains roiled by pandemic variants, bans, lockdowns and force majeure clauses, there will always be a crisis around the corner. And as we wrote in a previous blog, you should never let a good crisis go to waste if you want to achieve positive change.
At ThoughtRiver we’re committed to delivering legal technology that makes all contracts easy to understand for everyone, lawyers and non-lawyers alike. That means we need to continually listen to you and your peers so we understand what challenges legal professionals are facing, and how you can better align with business needs.
We envisage a future where legal is always connected to the rest of the business. The days of getting ‘stuck in legal’ are over. Lawyers will become agents of transformation, allowing data to be extracted, interrogated, visualised and shared throughout the business. Lawyers won’t just manage change – they will lead it.