Pros and Cons of Legal Technology

Legal software for law firms just keeps coming. It seems like every day the ABA approves new software and legal tech. Annual tech investment records are shattered routinely and the market is in constant flux as a result. Has anyone stopped to think where all this innovation has gotten us? What are the pros and cons of so much disruption?

Let’s look at the advantages to be gained from introducing new legal software for law firms and some of the drawbacks worth considering.

Pros of Legal Technology

1. Efficiency and Service Quality

The legal sector is rife with repetition and inefficiency that is causing clients to question their representation. Clients don’t understand or tolerate delayed progress and outdated methods of working anymore. Thankfully, these are exactly what new technologies target.

Between automation, machine learning, and AI, new technologies scour the legal field to eliminate repetitive and laborious tasks. Legal research is no longer done by examining books in libraries. Proofreading contracts is performed with the click of a button. Billing is done on a digital cycle rather than chasing outstanding invoices.

Clients receive more efficient and accurate services from their representation thanks to modern technologies.

2. Improved Profitability

The beauty of this improved efficiency and client satisfaction is that it also results in enhanced profitability. Automation and software are replacing non-billable tasks like marketing, time tracking, invoicing, contract review supervision, case and firm management meaning outgoings are down.

Not only are non-billable costs streamlined but more billable time is created. Firms that rely on senior attorneys for non-income generating tasks, now have the capacity to trade outgoings for income thanks to automation.

3. Extending Market Reach

Lawyers were often confined to working with clients from the communities directly around them. It limited their prospects to a proximal reach. These shackles are no longer in place with the rise of virtual firms and digital service delivery.

With the modernization of online consumerism, clients are comfortable dealing with lawyers through video calls and shared file drives. Lawyers don’t have to commute everywhere and can take clients from all over their state thanks to the technology and behaviors of clients.

4. Improved Work-Life Balance

Lawyers are quietly suffering through some of the worst mental health conditions of any profession. 28% struggle with depression, 21% with alcohol or drug abuse, and 39% work enough hours to negatively affect their personal lives.

Technology is doing far more than legislation or large firm executives to counteract this problem. Virtual firms are eliminating excessive commutes, automation is reducing the time and amount of monotonous work and effective time tracking is allowing firms to measure the demands placed on individual lawyers. By using technology tools like Loio to speed up the resource-heavy tasks, lawyers can decrease the personal cost suffered and commit their focus to wellness, family, and remaining healthy.

Cons

1. Job Threats

The reality is that efficient technology is faster and more accurate than humans. Replacing or enhancing individual tasks such as research, contract review, and more mean there is less human capital requirements. This is evidenced by the trends predicted by Gartner, Deloitte, and Forbes who estimate that 20% of legal workers’ tasks and jobs can be replaced in the next few years. This is expected to result in job losses of up to 100,000.

2. Consistent Capital Costs

Digital transformation is not just a one-off event. It is a change of mindset to one of constant growth and digital evolution. This means that the technology and software you invest in today will need to be replaced, added to, upgraded, or retired in the coming years because something new will render it obsolete. If you don’t move with the times, your competitors will, leaving you in a perilous position.

The vicious cycle of competitive evolution means that lawyers need to continue investing in technology for the foreseeable future and, it doesn’t usually come cheaply. Especially for large firms. Not only does digital transformation involve sourcing and purchasing costs, but it also requires stakeholder buy-in and training.

3. Security and Cyber Risks

Cybercrimes are committed every 11 seconds costing the global economy $6.1 trillion a year. The main target is data capture and few are more attractive sources for this than law firms.

Traditionally, all files and exchanges were done on physical paper which is much more difficult to corrupt. However, the influx of technology has changed all of that.

Firms are introducing digital tools for file sharing, accessibility, and correspondence between lawyers and clients. More digital access avenues mean more opportunities for mistakes, oversights, and hacks. The legal industry faces a grave threat and with cyber insurance costs soaring, cybersecurity is non-negotiable.

In Conclusion

Technology has heralded new beginnings for forward-thinking firms. A better quality of life, task efficiency, and improved profitability are exciting prospects. The advantages have changed the industry forever and deliver a much cleaner and more favorable service for clients.

However, with great innovation comes concerning perils. Worrying cybersecurity and capital outlay are going to be a constant. Software with robust security and free versions like Loio, Nolo, and Google Drive are pioneering but not the norm. The hesitancy to change that has dogged the industry is no longer tolerated leaving firms in a contentious position. There is no doubt that technology will continue to permeate the industry but who it augments and who it tears down remains to be seen.