The legal industry is almost always in a perpetual cycle of disruptive changes. New administrations throw outlaws they disagree with as quickly as they can. Different legal threats and risks emerge daily. Societal changes shift the focus and demands of clients. Technology adds a whole other arena of complication, innovation, and disruption.

The past few years have seen a variety of revolutions that disrupted law from all angles. Let’s look at the changes that have been made and the impacts created.

Legal Technology Investment Exploded

A shift in the relationship between the legal sector and technology was well overdue but even when it came, it took people by surprise.

In 2018, Forbes found that investment in legal technology grew 713%. In 2019, Bloomberg estimated that over $1 billion in funding had been distributed to legal technology by Q3. Among the recipients of ever-increasing investment sums was the Canadian practice management platform, Clio, which emerged with $250 million.

The growth in legal software for law firms has been nothing short of staggering and it is not slowing. By 2025, Gartner expects law firm budgets to have increased threefold.

Most funding comes as a result of increased demands from firms and the approval of new technologies by the American Bar Association. Innovation has predominantly focused on practice management, contract lifecycle automation, and litigation finance. These inventions and the subsequent upgrades have completely changed how firms do business.

Technological Fluency Becomes Mandatory

Law education has changed considerably. In 2016, Florida became the first state to make technology training an obligation for lawyers. In 2019, North Carolina became the second. Legal professionals have always resisted technological change through indifference and, often, arrogance but technology can obviously no longer be ignored. Lawyers must complete a mandatory 1-hour CLE training program.

As per the North Carolina State Bar:

Technology training” shall mean a program, or a segment of a program, devoted to education on information technology (IT) or cybersecurity (see N.C. Gen. Stat. §143B-1320(a)(11), or successor statutory provision, for a definition of “information technology”), including education on an information technology product, device, platform, application, or another tool, process, or methodology.”

2 states and 1 hour of training might not be considered revolutionary or even newsworthy but they are the tip of the iceberg. Other states will follow suit soon.

In response, law schools around the nation have scrambled to get ahead of the technology infusion and it is changing the prospects of graduates. Emerging lawyers are now entering the market with a distinct competitive advantage over tenured professionals.

Digital Law Firms were Born

Since 2011, smartphone ownership has climbed from 35% of US citizens to 85% in 2020. 77% now own laptops or desktop computers. The comfort and familiarity with technology and expectation of online service have created a new avenue for the legal profession to offer advice.

Whilst pre-pandemic virtual law offices may have been a rarity, it is the expectation of many clients now. Clients see no need to commute as every other product and service they avail of is accessible online.

The new demands are changing the geography and physical presence of law firms.

Fancy offices in the business district are not the emblem of prestige they once were. Clients forced immediate responses, efficiency, and digital offices to become the priority. This means firms now must think about their address being proximal to clients so that they show up in online searches. They are having to implement online billing and information sharing portals because it is a market need.

Service and asset prioritization look very different in 2021 as firms continue to consider scaling back physical locations.

Legal Technology Changed Human Capital Requirements

It was only a matter of time before legal technology broke into the industry. Despite resistance, firms are adopting technology at the greatest rate in history.

A 2016 Deloitte prediction suggested 39% of legal jobs would be consumed by technology within 10 years. While it was, and remains, an exaggeration, redundancies are appearing.

Junior roles spent reviewing, and editing legal documents are vastly improved by the best AI contract review software. Accounting, customer care, and client intake roles are being swept aside by digital billing cycles and chatbots. The human capital required to run a successful firm has changed significantly.

Cybersecurity and Threats Grew Significantly as Concerns

In the past 10 years, cybercrime has gone from being a moderate concern to a real worry for law firms and even governments. Having seen the Irish Health Service hacked and extorted, President Biden instructed the FBI to clamp down on cybercrime in 2021.

However, the law firm response has continued to be exceedingly slow. In 2018, 26% of law firms had experienced a data breach. In 2019, this stayed at 26% and will increase to 29% in 2020. The ongoing threats even developed a new product built for law firms – cyber liability insurance policies. Considering how many firms experienced breaches, the uptake on insurance should be higher than 36% but alas the threat continues to be underestimated.

Cybercrime and ransomware attacks threaten the legal field as the information is typically extremely sensitive. This issue has increased since the remote working environment hurried digital service delivery. Threats remain but the agonizing pace of law firms to innovate has and will carry on living a precarious cyberlife.

Final Thoughts

Law is never far from a monumental, short notice change and things will be no different going forward. In the immediate crosshairs is likely to be the 100 environmental laws rolled back in the Trump administration. Beyond the laws themselves advancing technology is beginning to ask: How far is too far when it comes to revolutionizing law? Both France and the UK have outlawed the use of AI algorithms to predict specific judge decisions.

Law is braced for more change, threats, and disruption with the re-emergence from the pandemic and divisive state that the nation has been left in but as Greek Philosopher, Heraclitus, put it, “There is nothing permanent except change”.

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