We all have experienced a change in our lives brought on by the enormous changes in computer technology. Granted, advances in data sciences, supply chain management, and information technologies have all impacted our lives in positive ways, but they are less obvious than hardware. Yet, those advances in software had just as much an impact on our lives as a society as the physical technology we hold. For attorneys, that appears to be a different story.
In this article, we will explore the ever-advancing legal technology, AKA legaltech sector, and discuss how it impacts the practice of law in the United States. You’ll learn some definitions of legal technology, key advances in the areas that improved the legal field, and the top five ways in which legaltech has changed the legal industry.
What is Legaltech?
As professionals, we come from every area of law and every part of the country or world. Often confusion arises from how we define standard terms. To help avoid this issue, we are going to spend some time explaining legal technology and some of the related terms.
Legaltech. It references a broad group of digital instruments and mechanisms, both software, hardware, virtual, and cloud-based software used in practicing law.
Website. This internet-based platform allows specific groups, such as the public or clients, to learn, contact, communicate regularly, and even transfer documents with a law firm.
Office software. It refers to a proprietary informational technology [IT] that allows for information received to be processed in any way desired, such as intake, storage, communication, drafting, accounting, and many other purposes.
Integration software. An IT bridge designed specifically to assist in transmitting data from one repository to another and/or translating the information into a different format.
Communication software. An IT that focuses on transmitting information from any person or entity to the attorney or vice versa.
Customer relations management [CRM] software. CRM technology uses metrics and predictive algorithms to optimize your client relationship through various modes of communication.
Automation software. It refers to IT intended to increase efficiency through pre-programmed, repetitive workflows.
Compliance software. This is IT designed to filter various documents and transfers of information through the lens of a specific statutory regulation.
Rise of Legaltech and the Evolving Law Firm
Attorneys have traditionally been slow to adopt new technology because the justice system itself was old-fashioned. Things began to change when states started implementing electronic document management software or EDMS. Once that occurred, the need to digitize documents for submission to the courts opened the floodgates of legaltech, becoming more widely adopted.
There is a spectrum of legal technology being adopted within the legal field. Some states have mandated basic digital communication and compliance, and that is where many sole practitioners will stop adopting legaltech. Then on the other side of that spectrum are those that thrive in a more digital space. Innovative firms function nearly paperlessly rather than worry about physical documents being lost. Such offices also strive to meet all or nearly all of their service and client obligations even without physical signatures.
By law, every attorney needs to keep their clients’ files for a prescribed amount of time. Some states allow for purely physical files, and others allow for more digital format recordkeeping. This has played a role in some of the legal professions’ slow adoption of legal technology. No attorney enjoys wasting space for storing physical files and would rather invest that space for another associate.
Importance of Legal Technology
The article has described ways of defining and viewing the gamut of where a law firm may be on its path of adopting legaltech. Now, let’s take a break and discuss the importance of legaltech. Legaltech positively affects clients, attorneys, and support staff.
Increased effectiveness of attorneys
Legaltech has significantly impacted the effectiveness of attorneys and their support staff in improving the quality of services offered to their clients.
Less strain on human resources
increasing the utility of each staff member with legaltech freed those human resources. Most of that extra time recovered went into cross-training staff. That allowed different staff members to step into another staff member’s shoes for various reasons.
Improved quality of services
The other fantastic effect of legaltech has been the improvement of the quality of those that work within a law firm.
When legaltech can increase your efficiency, you have more time to spend on personal wellness. That may sound unimportant, but in states like Iowa, some years, the burnout rate could be as high as five years from initial licensure. Legaltech has lowered that rate substantially.
That’s how important legaltech has become in states across the country.
What Technologies Do Law Firms Use?
Law firms have adopted the use of a wide variety of legal technologies. From integration & automation software to cloud computing, artificial intelligence to data forecasting — law firms have leveraged their might within the tech sector. In this section, the article is going to briefly mention the most prominent new legaltech that law firms currently employ.
This form of IT technology does not require a physical space within the proximity of the professional for it to exist. One merely needs technology to access and utilize it via an internet browser. The most-used cloud-based piece of legaltech is not even designed for the law. Rather, calendar synchronization was created for the general public to keep track of important dates. For attorneys, important dates, such as statutes of limitation, are crucial for risk management.
Integration & automation software
Most law firms keep a log of all calls and correspondences. This includes intakes, non-representation letters (rejections), and invoicing. Law firms now invest heavily in software that integrates and automates many of these otherwise derigor processes. This frees up the brainpower of staff by avoiding data entry and transfer.
This has a much sexier name than it does a function. In short, artificial intelligence is a form of machine learning. For example, request the task of identifying the best way to increase conversion rates of mass solicitations. The software may prescribe several models, recommend mailing schedules, and other nuances based on the feedback it receives. This multi-level functioning is enormously time-consuming and overlooks A.I.’s greatest attribute — pattern-spotting.
Pattern-spotting perfectly segues into the topic of legal tech’s foray into data forecasting. This is software that takes several of the patterns identified via A.I. or humans, in addition to outside data sets regarding demographics and market forces to create a more complex algorithm. Forecasting is another way of describing a form of statistical prediction. I’ve written about the use of many or multiple-model forecasting in predicting disability rates due to COVID. These are complex mechanisms and are excellent for law firms interested in predicting the likelihood of a set of outcomes or identifying a specific course of action to take. It is better to outsource this task to a third party than to do this yourself because of the time required.
How Technology Is Revolutionizing the Legal Sector
As a caveat, it is not the most revolutionizing facet of legaltech, but it is worth describing due to its relative ubiquity. It would be a mischaracterization to state that legaltech is less than 20 years old. Many law libraries quickly sprung up, offering different research capabilities. That need for the research came sooner than EDMS and other innovations. Its importance to all parts of legal services made it the quickest and most widespread legaltech tool to be adopted broadly.
Automation and integration are the twin juggernauts of legaltech. Each of these improvements in software meant a whole litany of tasks that employees and staff did not have to toil away doing. It also made the ability for attorneys to optimize their services. A document that may have taken many hours to rework for the needs of a specific client may be automatically updated via the integrated intake software. The impact cannot be understated.
5 Ways Technology Is Changing the Legal Profession
Legaltech affects almost every area of legal practice. However, let’s review the five most significant changes.
In the past, attorneys in most states could not solicit new clients apart from the mail, let alone advertise to people directly. In my state, attorneys were not allowed to advertise until the 1990s. Many other states even allow for direct marketing to the public, something Iowa has not legalized yet. This factor masks the legaltech innovations that have revolutionized the legal industry. This includes instant messaging on websites, websites in general, private document libraries for clients on firm websites, newsletters informed through CRM software, and automated correspondences to various parties.
Litigation entered a new phase with the development of electronic records and digital recordkeeping. Thinking broadly, electronic communications alone between two corporate parties can number in the tens of thousands of pages. Combing through all of that potential evidence, known as eDiscovery, can be mind-numbingly painstaking, but for innovations in legaltech. The most important one is the optical character reader or OCR. It allows computer algorithms to search for phrases and refine the difficult-to-read text.
Many daily processes and functions of a law firm can be automated. Once automated, a firm can divert that human capital to completing a different task. Interestingly, those other tasks require greater personal autonomy, and learning new skills often brings a sense of purpose to members of the law firm team.
This is an overlooked legaltech innovation that needs its day in the sun. As our industry continues to utilize more and more software to accomplish our services, there starts to arise the issue of data transfer. Some programs “talk well between one another.” Others require bootstrapping and other rough and expensive customized integrations. The pandemic has had the incredible impact of improving software integrations to reduce data flow issues. This has reduced workloads and overhead costs immensely.
The bane of many attorneys is the dreaded feeling of missing a deadline. Every state and jurisdiction follows a prescribed set of rules known as the rules of civil procedure or criminal procedure. These rules state exactly how many days each document must be filed with the Clerk of Court. As we became less attached to our desks and instead more mobile, keeping one’s calendar up-to-date became more of a risk. Therefore, the advent of the self-updating and auto-synchronizing calendar system reduced risk enormously for attorneys. This is probably one of the most prized components of legaltech.
What Is Legal Analytics? Legal analytics is the application of data science to the business and practice of law. It is an umbrella...
Why Attorneys Resist Technology
Many attorneys continue to resist legal technology in all of its forms. Oftentimes, there appear to be two main reasons:
1) Perception of technology as proof of personal obsolescence; and
2) Technology is more of a burden than a tool.
Both of these are genuine fears that should be addressed by professionals that are reticent to adopt legaltech. Explain that the adoption of new software is intended to empower legal professionals to help more people rather than to make them look bad or fail.
Every law firm has different needs. Those needs should dictate the areas for optimization that legaltech may be able to fill. Legaltech is not a thing to abstain from, but rather something to embrace and allow to grow your business.