Why Legal Teams Should Leverage Legal Technology?

Introduction

The Legal Technology Market, valued at USD 30.05 billion in 2022, is poised for significant growth, with industry revenue expected to reach nearly USD 54.59 billion by 2029, marking an 8.9% increase. This tells us the impact of technology's transformation in the legal domain, evident in reshaping communication, file-sharing, and procurement practices. For example, legal professionals now leverage online databases over traditional law books, shifting from paper to digital contracts and revolutionising client management through seamless smartphone execution. Hence, this gives us an idea of how legal technology actively redefines and enhances the legal profession by introducing efficiencies to formerly intricate tasks in the digital era.

In line with what Clio CEO Jack Newton said in the LawNext podcast

Technology in general, and AI in particular, have the ability to take the respectable, mechanical, and predictable aspects of daily tasks, freeing us from the need to expend our energy on such endeavors. Our focus should be redirected towards strategic initiatives for firm growth, client engagement, and ascending the value chain. The opportunity for us to make a meaningful impact on access to justice lies in amplifying the impact individual lawyers can exert in addressing client needs and scaling operations.

Moreover, 77% of queries remain unresolved without the help of a lawyer highlighting a significant gap in the market. The 23% of issues resolved with the aid of a lawyer represent a $600 billion annual market. There is a vast untapped potential that we can harness, and by leveraging AI and technology, we can enhance efficiency and unlock new opportunities.

Legal technology is not here to adapt to the digital era; it actively redefines law practice by introducing efficiencies and simplifications to what was once an intricate landscape of everyday tasks. This article delves into the diverse ways legal technology continues to reshape and enhance the legal profession.

Why Do Legal Teams Need Legal Technology?

Legal teams can benefit significantly from integrating legal technology into their operations. As has already been observed, in 2021, the global market for legal technology made about $27.6 billion. Most of this money, around $22.2 billion, came from established companies in the field. Hence, Here are several reasons why all legal teams should adopt legal technology for their modern legal practices:

Enhanced Practice Efficiency

Legal technology is indispensable for optimizing daily operations within legal teams. From automating routine administrative tasks to streamlining communication, these tools significantly enhance overall practice efficiency, allowing legal professionals to focus more on substantive legal work.

Improved Case Management by AI:

Legal teams dealing with complex matters benefit greatly from specialized technologies tailored for case management. Advanced case management systems and artificial intelligence-driven analytics provide invaluable support, ensuring a more comprehensive and effective approach to navigating intricate legal scenarios. 

According to McKinsey Global Institute, about 23% of lawyers' tasks could be done by existing legal technology. Artificial intelligence (AI) is making things better in this scenario. It helps by doing tasks that take a lot of time, like researching, looking through documents, and analyzing cases. 

Billing Precision and Optimization:

Legal technology also plays a crucial role in improving billing accuracy and efficiency. By implementing cutting-edge billing tools, legal teams can automate workflows, track billable hours more effectively, and gain real-time insights into financial performance, ultimately contributing to increased billings and improved financial management.

Agile Working Environments:

The dynamic nature of the legal team requires agile working practices. Legal technology enables this flexibility by providing collaborative platforms, cloud-based solutions, and communication tools. These technologies empower legal professionals to work more flexibly, fostering seamless collaboration and adaptation to the evolving demands of the legal industry.

Legal Research:

Technology transforms the traditionally time-consuming and daunting task of legal research. AI-powered legal research platforms efficiently examine extensive case law and legislation repositories, significantly reducing the time required for manual research. These technologies not only find pertinent precedents and monitor changes in legal rulings but also optimize resource allocation within law firms, allowing more time for client consultations and strategic initiatives.

Improved Client Engagement:

Over the last decade, client expectations have undergone significant transformations due to technological advancements. Nowadays, clients demand a higher level of service from their attorneys – one that is faster and competitively priced. Legal technology is crucial in meeting these evolving client expectations, enabling law firms to deliver personalized and positive experiences.

The adoption of cutting-edge tools such as AI-powered research software and automated document drafting facilitates efficient communication with clients, ensuring they stay well-informed about their cases while setting realistic goals. Additionally, legal technology's capacity to automate repetitive tasks, like document reviews, addresses clients' concerns about billing for extensive administrative work. 

Given that 40% of a lawyer's daily routine involves non-practice-related tasks, investing in new legal technology becomes a strategic move. Reclaiming this time allows legal professionals to redirect their efforts towards activities that fortify client relationships, offering a compelling rationale for embracing these technological solutions.

To be perceived as reliable and effective legal experts, moving beyond outdated tools like fax machines and embracing modern technologies is essential. By incorporating chatbots, automated appointment systems, and secure client portals, legal teams can enhance responsiveness, simplify access to case information, and improve overall communication, while email campaigns and online marketing strategies contribute to establishing more efficient connections with prospective clients.

Data Analytics:

Informed decision-making is paramount for legal teams, and technology facilitates data gathering and analysis. A data-driven approach utilizing advanced analytics tools allows law firms to study billing, case outcomes, and client satisfaction. Insights gained from data analytics enable strategic resource allocation, optimize growth opportunities, and empower firms to adjust strategies in response to client demands and market conditions.

Therefore, the power of technology to automate manual and repetitive tasks is a game-changer for legal teams. By eliminating inefficient processes, automation increases the speed, quality, and scale of legal services. Automated billing, document generation, and accounting systems minimize human errors, enhance accuracy, and free up valuable time, enabling personnel to focus on revenue-generating activities.

What Are the Different Types of Legal Technology? 

Legal technology encompasses various tools and platforms designed to enhance and streamline legal practice. Here are different types of legal technology: 

Practice Management Systems (PMS):

Practice Management Systems serve as integral software for efficiently administrating law firm practices. These systems encompass a range of tasks, including tracking vital deadlines, overseeing cases and documents, and managing client billing and payment processing.

Matter Management Systems (MMS):

Matter Management Systems are pivotal in supporting the review, storage, management, and delegation of legal matters across various legal processes. A key allure of MMS lies in their robust data management capabilities, which prove essential for optimizing legal operations.

Document Management Systems (DMS):

Document Management Systems offer electronic solutions for storing, organizing, and retrieving documents. These versatile software tools extend their functionality to include email management, ensuring that documents and conversations are systematically filed under relevant folders.

Expert Systems/Workflow Automation:

Expert Systems, often synonymous with workflow automation, empower legal professionals, managers, and staff to automate manual processes, thereby enhancing the scalability of legal services. These platforms streamline tasks such as matter intake and triage, document creation, advice delivery, approval workflows, and more.

Document Automation/Document Assembly:

Document Automation or Document Assembly software facilitates the creation of legal documents using if-then logic. Capable of generating multiple drafts, this software inserts captured information, manages conditional clauses, and adjusts grammar based on context.

E-Billing Software:

E-Billing Software takes charge of managing legal expenses, enforcing fee protocols, monitoring internal budgets, and analyzing spending trends and service provider costs and performance. By automating tasks such as reviewing bills and generating reports, this software eliminates the need for manual processes.

AI-Enabled Contract Review:

AI-enabled contract review software revolutionizes the speed, ease, and accuracy of drafting and reviewing contracts. Leveraging machine learning, this software automatically identifies and extracts key details or errors within documents, significantly enhancing the efficiency of the contract review process. With AI, even a contract can be checked in less than an hour, saving 20-90% of the time it would take to do the same work by hand.

Hence, according to the 2020 Legal Trends Report, nearly half, specifically 45%, of legal professionals think that technology has the potential to contribute to a fairer justice system. This finding suggests a positive outlook on the role of technology in shaping the future of the legal industry, which is quite encouraging.

Conclusion

The evolution of legal technology presents a critical paradigm shift for legal professionals navigating the complexities of the modern legal landscape. The paradox revealed by Gartner's survey underscores the challenges faced by in-house legal teams, emphasizing the imperative for a nuanced understanding of available legal tools. From enhanced practice efficiency and improved case management through AI to agile working environments and automated processes, legal technology emerges as the linchpin for addressing multifaceted challenges.

The transformative impact is evident, redefining communication, research, and document management, and replacing traditional methods with efficient, tech-driven alternatives. Embracing legal technology is not just a strategic move but necessary to meet evolving client expectations, optimize resource allocation, and make informed decisions through data analytics. As the legal profession continues to reshape, adopting cutting-edge tools becomes the cornerstone for legal professionals aiming to deliver excellence, streamline operations, and thrive in an era where technology catalyzes unprecedented advancements.