Investment growth in the legal sector has exploded in the past 3 years. In 2018, Forbes reported a 713% increase in investments, thanks in part to the implementation of e-discovery tools and the IPO of several high-profile companies. That level of investment has continued, with companies like Verbit and Everlaw raising $ 150 million to disrupt their respective markets in 2020.
With the influx of cash permeating the market, skepticism has grown and certain myths are pervasive. Law firms are expected to triple their technology budgets by 2025. So it is time to separate myth from truth.
Myth 1: Legal technology requires huge investments – wrong
To say that legal tech requires too much investment is a blank blanket statement with no real understanding of nuances. There are hundreds of helpful tools available with free versions or trial periods. The trials can help you understand the value of the tool to your company before you roll it out to the team. The idea of most tools is to improve time and cost efficiency so using them is more helpful for profit than not.
Myth 2: AI creates redundancies: partial truth
AI innovations are usually aimed at finding repetitive, cost and resource inefficient practices and replacing them with automation. Tools such as software for creating legal texts are not designed to rule out the prospect of junior lawyers or paralegals. They just make these tasks faster and more profitable.
In truth, job losses are the decision of individual companies. As innovation gives staff more time, companies will decide whether to reuse that time or not to pay more for it. Realistically, significantly fewer law school graduates have enrolled in recent years. A decline in junior positions will inevitably be offset by a comparable decline in talent supply.
Myth 3: Better to wait for a market-leading tool to show up: Wrong
Technology tools fight for supremacy. Case and company management leaders have emerged, but most tools operate in an oligopoly where there are alternatives.
The problem with waiting for a leader to rise to the top is that it takes time. While you wait, competitors can take irreconcilable advantage. Being the first counts.
Myth 4: Right has too many points of contact for technology to be effective: Wrong
Again, the technology is not aimed at making the legal profession obsolete. It aims to improve the skills, efficiency and accuracy of lawyers. It aims to eliminate tasks that cost time and cause delays that customers are increasingly intolerant of.
In addition, touchpoints are not the be-all and end-all. The economy is increasingly digitized. As the online-savvy generation becomes the majority, they expect virtual service. They understand what functions a lawyer needs to be human conversations and what should be done through technology. Functions such as customer admission, document preparation, billing and signing do not require expensive human resources.
Myth 5: My customers don’t like dealing with technology: Wrong
There is some truth in technology that alienates the elderly or non-digital populations when technology is the primary delivery mechanism. The answer, however, is to know your audience and meet them at their level.
To say that technology makes services inaccessible is a misnomer. Customers are more than happy to reap the benefits if that doesn’t result in exclusion. Using advanced automation and AI in-house improves service delivery, but not at the expense of accessibility. Word for lawyers is the perfect example. Innovative plug-ins and add-ons improve the quality and efficiency of legal documents and reduce costs, but the end result obtained has not changed.
Myth 6: Implementation and training are extremely demanding: partial truth
The training in everything should be a challenge, otherwise it would not be necessary. The idea that the training required will affect business productivity does not apply to all technologies. Contract analysis, electronic signature and even billing cycles can be installed relatively easily and with little or no training.
Tools like cloud, company, and case management integrated with other tools require training, but the benefits outweigh the costs. As the legal sector pervades more and more software tools, lawyers should also expect higher qualifications. Without acceptance and the introduction of improved solutions, customers are effectively underserved compared to competitors.
Myth 7: Technological innovation is wrong for large companies with large budgets
Technology adoption rates are higher in smaller companies. Cloud implementation and web-based software solutions account for up to 60% in companies with 10 to 49 employees. Larger companies sit around 44-53%. This is great because small businesses enjoy greater flexibility and agility. You are in a better position to install new software because it does not involve major changes. The bigger the company, the slower the adoption.
Myth 8: More Technology Means More Cybersecurity Threats: Partial Truth
Cyber security is the responsibility of each company. Taking necessary precautions and putting in place solid guidelines means far fewer risks. 90% of cyber injuries result directly from human error. These are people who log into business emails on unsecured networks. Opening phishing emails or downloading malware. Companies that fail to update their privacy and electronic records policies.
We live in a time when software is an extension of the professional. Training and understanding is required because innovation will not go backwards.
Law firms have a long history of avoiding innovation. Billable hours remained high and there was little need for skill and skill improvement. Lawyers could practice in peace without much scrutiny. That is no longer the case.
Customers are demanding greater visibility, online delivery, and immediate responses. Accepting and perpetuating myths without in-depth research worked, but is no longer tolerated by a demanding market that is equipped with substitutes. Most myths fall apart quickly or are easily defused on further investigation. They are not to be hidden behind it. The reality is that companies that choose to research and implement the right tools will see the greatest advantages over lazy competitors.