Many articles about disruption in the legal sector are exaggerated. They explain the hype around certain technologies and are quick to paint a “do or die” adoption scenario.
But the trillion-dollar legal industry isn’t going to change overnight. As a result, the industry has lagged behind digital trends to the point that just 19% of in-house legal teams feel well-positioned to support enterprise-wide digital transformation.
Just because your industry has been slow to change doesn’t mean you can ignore the major disruptors. If you start planning now, you can take practical steps to implement the technologies that will slowly transform the legal industry.
But your first step is identifying the disruptors. In 2019, there are three major categories you should be planning for—automation, big data, and blockchain.
You’ll read and hear plenty about technologies like chatbots, artificial intelligence, and machine learning are set to transform the legal industry. All of these technologies will play a role in the future of legal services. However, their contributions to automation are what will disrupt your existing business.
JPMorgan has already developed a system, COIN, that automates the review process for commercial loans. With a combination of artificial intelligence and machine learning, COIN saves in-house lawyers 360,000 hours of work annually.
Some law firms have also started building their own chatbots to free up valuable hours for their lawyers. Norton Rose Fulbright, an Australian law firm, created a chatbot called Parker to automate responses to queries about data protection and privacy regulations. In its first day of operation, Parker sold A$15,000 worth of legal advice through over 1,000 unique conversations.
Whatever the use case, automation is freeing up time and resources for you to consider new business models. What has traditionally been a partnership model, the legal industry is shifting toward more customer-centric models that go beyond selling legal expertise alone. Now, you need to align more closely with client demands for a one-stop legal shop—and automation frees you up to do just that.
2. Big Data
It wasn’t very long ago that hard copies of legal documents still dominated the industry. Only recently did the majority of firms start to shift toward digital documents. And even though that evolution is still in progress, the rise of digital documents has opened up a world of big data possibilities.
Between 2017 and 2022, the global market for legal analytics is expected to grow from $450 million to nearly $2 billion. Big data (and analytics) is disrupting the industry by streamlining all kinds of legal operations, including mergers, acquisitions, due diligence, and research.
By giving you a means to process, manage, and store vast amounts of data, this disruptor will improve your ability to:
- Identify the best legal precedents to support cases
- Predict when it’s best to settle and when you can go to trial
- Understanding why cases have failed in the past
- Choose new areas of business to become an interdisciplinary, modern firm
- And more
Big data analytics gives you faster, more accurate insights into valuable information across your organization. Not only can this improve outcomes and open up new economic models, but it will also help you reduce costs in every area of your business.
Discussions about blockchain as a disruptor can be exhausting. Some people have gone as far as to call blockchain “the new internet,” so it’s difficult to sift through what’s real and what’s a pipe dream.
In the traditionally slow-moving legal industry, blockchain isn’t going to completely revolutionize your business in 2019. However, now is the time to get familiar with the technology and recognize how it will apply to your business. There are significant opportunities to improve your operations if you get out ahead of this technology.
Without diving deep into the details, blockchain is a digital ledger on which transactions are added as blocks and continuously verified/validated by nodes across a network. It’s decentralized and intended to be more secure than traditional transaction models.
But what does all this mean for the legal sector? A few potential use cases include:
- Smart Contracts: Legal documents created and executed directly between relevant parties, requiring fewer resources from lawyers.
- Property Rights: Cutting down on the disorganization of ledgers, paper deeds, and property cards to securely store land ownership data, streamlining the transfer process.
- Chain of Custody: Especially with growing usage of digital documents, blockchain technology creates permanent records of chain of custody under decentralized control, meaning no evidence will be thrown out due to traditional data mishandling.
Blockchain has the potential to replace middlemen in legal operations like notaries and public registries. In 2019, you should be developing the skills and knowledge to capitalize on blockchain technology as it evolves.
Don’t Let Disruptors Catch You Off Guard
It’s important to remember that all of the digital disruptors that cause stress for business leaders are just enablers. They give you the ability to make your business more efficient and deliver differentiated client experiences.
If there’s one main takeaway here, it’s that the legal industry is trending away from the traditional partnership model and more toward customer-centric, interdisciplinary services. Your clients’ expectations are changing, and all of these disruptors will help you change with them.
The key is to set a strategy (for 2019 and beyond) according to the technologies that will have the biggest impact on your business. And that’s where we can help.
If you’re looking for innovative ways to embrace these disruptors in your own business, contact us today for a consultation.
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