While process automation isn’t a new concept, the legal profession has remained largely unchanged for decades – not least when it comes to how work is completed in the sector.
But in the wake of various global events, and in particular the onset of COVID-19 pandemic, the need to build more robust and resilient infrastructure has quickly become apparent.
As a result, previously risk-averse professionals are shifting gears and adopting new ways to augment their roles – with innovative technology helping to streamline, simply, and speed up major corporate transactions in particular.
The challenge is, with so much noise in the space, which tech should legal professionals be embracing to drive real business outcomes?
According to a recent Gartner study, highlighting the impact of automation on corporate legal and compliance objectives, there are a host of trends shaping the future of the industry. Vapour CEO, Tim Mercer, shares his perspective…
By 2025, legal departments will extend their spend on legal technology threefold
“Gartner’s 2020 survey of legal leaders suggests that the proportion of legal budgets spent on technology is set to surge rapidly by 2025. And 87% of legal departments expected their total number of in-house, full-time employees to stay the same or decrease.”
In a variety of sectors – including legal – there has been a real lack of investment for significant periods. Of course, that’s a generalisation, but it’s true. Therefore, there’s no denying the COVID-19 pandemic forced a deep evaluation of how tech stacks are being used.
This approach must be part of a wider strategy to be effective, though. In a recent guest blog with Ben Nicklen, chief operating officer for workplace data analytics firm Tiger, we uncovered more on this critical strand of ‘technical debt’ and usability analysis.
It’s also widely considered that, sometimes, an investment in tech means you can reduce the need for people. While that can be true, more often than not, it’s typically the case that solutions like automation alleviate the burden of admin – freeing time for teams to undertake more value-adding tasks.
By 2024, legal departments will replace 20% of generalist lawyers with nonlawyer staff
“The trend of increasing workloads and flat budgets puts a premium on efficiency. This means that legal departments must improve their processes, legal technology implementation, analytics and other digitalization strategies to support this increased workload.”
I’m seeing this pattern – of work being shifted from technical to non-technical people – in my own network, with project managers and CTOs increasingly joining organisational ranks, as opposed to traditional outsourced IT teams with small workforces.
While these hires may introduce a promising set of skills and a fresh perspective, as well as a good understanding of how tech works, it’s important that increasing focus is placed on which tech is best suited to their organisation directly.
By 2024, legal departments will have automated 50% of legal work related to major corporate transactions
“Demand for corporate transaction work has already rebounded from pandemic-driven lows. M&A work will continue to increase in coming years as companies recover from the pandemic, especially as the effects of the pandemic will have often lowered acquisition valuations.”
Tech no doubt has the capability to handle the density of corporate documents for analysis and beyond, but this is a very bold claim. While automation is expected to rise in large corporate firms where the budget is bolder, I believe the smaller firms still need to see the evidence that this kind of tech really works.
Areas of onboarding new clients, checks and balances, and interrogating land registry records with automation, should become the norm. However, the larger operational work still needs time – and I don’t think every firm is bought in just yet. They know the infrastructure is there, they just need to see it working and solving problems effortlessly, rather than worrying about the potential up front headaches that tech adoption might cause.
By 2025, at least 25% of spending on corporate legal applications will go to non-specialist technology providers
“Specialist technology vendors have long dominated the legal tech market, with the largest general-purpose enterprise software vendors making limited inroads among corporate legal departments. However, demand for legal and compliance transformation now transcends the departments themselves as CEOs, CFOs and CIOs recognize the strategic value of legal and compliance.
“To exploit some of the broader transformation investments made by other functions, specialist legal tech vendors will increasingly build legal applications on top of business application platforms from Microsoft, SAP, Salesforce and ServiceNow, among others. These will appeal to big enterprises looking to leverage existing investments, and ensure easier integration.”
I think this is probably correct. Having a workforce that is fluid and flexible has been the biggest change, but we also need to make the applications they use secure and accessible – wherever they work. So, I believe the large vendors who have traditionally dominated this legal space will lose ground to new, forward-thinking tech firms – not just around machine learning and AI, but around the actual working environment.
Bringing numerous tech services under one umbrella and having a managed service seems key. Though, it has to be a well thought-out, strategic plan that reflects the growth phases of the company, and is aligned with the requirements of all senior stakeholders.
To discover more about the benefits of automation, and the impact it could have on your business, contact our team, today.