Traditionally, legal technology focused on helping legal departments with basic functions like document storage, billing, and e-discovery. As the legal tech industry evolved, startups and developers focused on disrupting traditional processes by moving document storage to the crowd and introducing the three A’s: Automation, Analytics, and AI. While the promise of what these technologies can accomplish is dazzling, in the extremely risk-averse world of law, changes are often met with skepticism and reluctance, making adoption of new technologies slow and purposeless.
But a shift has begun to take place. In a 2018 report, Thomson Reuters discovered that legal departments rank using technology to simplify workflows and manual processes as a top priority. In fact, overall legal departments report increasing their use of legal technology by 45%, and a third of all respondent say they are increasing their budget for technology. The main solutions pursued by these legal teams include e-billing, document management, legal/litigation hold, and e-discovery. Many also use solutions designed for legal research, contract lifecycle management, and workflow automation tools.
Making the switch to a technology-savvy legal department requires a precise strategy that’s equal parts knowledge and organization. While an awareness exists regarding the benefits associated with implementing technology exists, many legal departments still struggle to identify exactly what capabilities they are seeking and if there are solutions available to fulfill those needs. Knowing the areas where technology can enhance the practice of law will help you and your team navigate the myriad of options available and choose the solution that best fits your needs.
Automation: Trading Inefficiency for Opportunity
While many legal departments continue to rely on manual processes, the resulting bottlenecks slow workflows, and other inefficiencies are no longer an acceptable pain point. One of the most significant costs experienced by most legal departments involve humans - all those hours devoted to looking through documents, tracking down emails, making changes, even dotting those “i’s” and crossing those “t’s.”
Within that context, automation provides a salvation by allowing teams to simplify and streamline many routine processes. Many software tools also exist to facilitate easy data entry and document tracking. Contract management software, for example, can enable your organization to track, share, and control your contracts in a secure, consolidated database. With matter management systems, team members can manage, track and report on internal and external matters. Document automation tools allow legal departments to create and assemble customized templates accessible to everyone in the department, allow for quicker, more efficient document creation. The addition of electronic signature means departments can track the status of contracts that are awaiting a signature and even deploy templates so that widely used documents, such as NDAs and employee contracts for swift deployment.
Analytics: Quantifying Value
Legal departments are always under the gun when it comes to reducing costs and doing more with less. Often seen as a cost center rather than a revenue generator, legal teams can struggle to put a dollar value on the work they provide. The ability to analyze and report on key data metrics provides legal departments with a new tool that not only allows them to demonstrate what they are doing but to correlate those actions to reduced expenses and even = revenue opportunities.
With E-billing technology, for example, legal departments can generate cost-benefit reporting. This type of data can be generated by using e-billing software to track and report on where the money is going, making it easy to assign a value to the work being provided. E-billing reports can also include statistics on reductions in overall spend year-over-year, alternative fee arrangements and even legal spend as a percentage of company revenue. Imagine being able to justify a new hire by demonstrating the cost of outsourcing those tasks and juxtaposing it against the (most likely lower) cost of hiring an in-house associate.
Artificial Intelligence (AI)
While elements of AI have already been incorporated into the legal profession for quite some time, it is becoming more widespread. With this greater acceptance and incorporation of AI into existing tools and processes, opportunities emerge to optimize several aspects of contract management and departmental operations. From better search functionality to automation of basic tasks, AI can dispatch time-consuming, tedious, and repetitive tasks quickly and easily, leaving your entire team with more time to focus on more substantive, high-value work.
The improved productivity alone would be enough to make AI a no-brainer, but adding predictive analytics to mix means future versions of AI-based legal tech will be able to create more meaningful reports and more intuitive contract management.
Another facet of AI involves Machine Learning. With Machine Learning, a software could be programmed to learn from its mistakes. For example, if the results of a search are rejected, the algorithm will adjust to improve accuracy moving forward. Machine learning has already improved proofreading of contracts and other legal documents, but it’s potential doesn’t stop there. Machine learning algorithms can be designed to sort through documents to flag relevant content, and use natural language processing to analyze the documents - all cutting down tremendously on the time and resources needed to conduct thorough legal research.
An Optimized Future
So how will technology transform the practice of law? McKinsey Global Institute estimates 22 percent of the work typically performed by lawyers could be automated fairly easily. For law clerks and their brethren, the number rises to 35 percent. Maybe even more significantly, according to CB Insights, over 280 legal technology startups – each focusing on a different area of law, including bankruptcy, patents, and contract management - have raised approximately $757 million in the last six years. As the big picture starts to take focus, it seems clear legal departments of the future will look much different than it does today.
Optimally, the decision to adopt a specific technology lies in determining whether it can support the department’s objectives while also allowing the entire team to work more efficiently and expediently. While vetting different tools and solutions takes time, identifying what you want to accomplish and what stands in your way can alleviate some of the anxieties associated with implementing new technologies.