The International Legal Technology Association (ILTA) recently released the Legal Technology Future Horizons Report, a report that provides insights and practical ideas to inform the development of future business and IT strategies for law firms, law departments and legal technology vendors.
The research undertaken by Fast Future Research and led by Rohit Talwar included two global surveys, interviews with managing partners and CIOs from law firms and corporate legal departments, vendors to the legal industry, external futurists, and academics and experts on technology and innovation, and case studies on the application of IT in law firms.
The 140 pages complimentary report, including all findings, infographics and case studies, can be dowloaded here: Legal Technology Future Horizons Report 2014 »
The report identifies the following six criticial issues for law firm leadership:
- An accelerating pace of technology disruption and diffusion with the associated challenges of learning to manage rapid systems change and embrace thestrategic potential of IT
- Responsiveness to client needs around value, speed, innovation and security
- Industry level forces such as intensifying competition, changing firm structures, business models, new entrants and a heightened talent agenda
- The impacts of consumerization, commoditization, automation and the pursuit of optimal firm scale
- Responsiveness to the opportunity and competitive challenges presented by emerging economies
- The pursuit of differentiation in the face of continuous change
In an interview in Inside Counsel, Future horizons: The outlook of technology in law, Rohit Talwar explains further how he sees clients pushing on their firms to think more strategically about getting work done. “More and more legal casework is actually data management, information management, knowledge management and management of underlying information systems and technological infrastructure. IT and legal service delivery are now intermingled. Clients want IT to move from the back of house to the front of house.” Rohit Talwar also expects clients to continue to push for innovations. “Clients will demand more, so firms will innovate.”
By its own admission, the legal sector has historically seen itself as a slow mover and cautious adopter of IT innovations. Generally, legal has followed rather than led clients and other professional sectors in driving IT-enabled innovation. That situation is changing, not least because clients are demanding it – they are clarifying their expectations to all of their professional services partners.
“Out of all the forces of change shaping the operating environment for law firms over the next decade, advances in science and technology could have the most revolutionary impacts. /…/ For some law firms and in-house legal departments, IT innovation is already a strategic priority. For the rest, it is becoming clear their future survival and growth depend on making the intellectual and emotional shift toaccepting that they simply won’t have a viable business without mastery of IT.”
Some of the interesting responses to the survey on the application and impact of ITon the legal profession included these notable findings:
- 73% agree or strongly agree that the capacity for rapid IT-enabled innovation will be a critical differentiator for law firms in the future.
- Despite the importance placed on the role of IT in delivering law firm innovation, only 15% agree strongly with the view that in the next decade the role of the CIO will evolve from Chief Information Officer to Chief Innovation Officer.
- Given the scale of the opportunity, 77% agree to some extent that technology firms will increasingly enter the legal industry, using disruptive innovations to provide direct legal service delivery.
- 91% expect the transparency of the legal process to increase as a result of client demands.
- 88% expect emerging technologies to become an integral part of courts in developed countries.
In the exeutive summary of the report, the following fore core themes are highlighted in regard to the transformative role of IT:
1. The Client Is the Priority
Focus must be on IT investments on securing and enhancing customer relationships. Strategic priorities must include quality of insight and advice, speed, responsiveness, flexibility, enhancing the capability and efficiency of professional staff and the capacity for innovation. Operationally, client demand is expected to focus on clarity of progress and budget reporting, providing real-time visibility of legal workflow, improving collaboration, integrating with client systems and building intelligence into systems to add insight and value and reduce the level of human involvement required.
2. Leverage Lawyers
Productivity, strategic insight and impact of lawyers must be enhanced. At the most basic level, they need to perform from anywhere at any time on a range of personaldevices that could emerge over time. Next, artificial Intelligence will play a major role in learning how lawyers work, personalizing the support and gradually automating many of the tasks historically performed by professionals.
3. Re-Engineer Processes
Workflows must be streamlined, broken down to discrete tasks to be allocated to the lowest cost resource that can complete them – a lawyer, outsourced service partner or intelligent system. This will accelerate the commoditization of many tasks and could reshape the legal value chain as more low value tasks are parceled out toexternal providers.
4. Innovate to Differentiate
As a greater scope and volume of work is automated and the price gets driven down, firms must focus on using IT to generate and support client-focused innovation. This may be the development of new products and services, taking onactivities traditionally performed in-house by the client and moving up the value chain into areas such as new product development.
Another key finding in the report is how artificial intelligence (AI) is seen as a potential long term game changer for the legal sector, with 88% agreeing that AI advisers and helper apps will structure legal documents and check the content generated by lawyers. In the latest issue of Legal IT Today there is an interesting article on this theme – “Judgement day? Can AI take over the legal world?” – where David Halliwell predicts that “It’s only a matter of time – and inclination – before artificial intelligence (AI) takes over the legal world”. But who will lead the way? As David Halliwell points out, “Most of the AI innovation in law is coming from small start-ups, but as Rocket Lawyer and LegalZoom have shown, start-ups and well-funded ABSs may be able to develop the heft to start make some major investments soon /../. The bigger players in the game are getting active in this space too. For now, the most forward thinking law firms and in-house legal departments will be watching deveopments carefully.”