Why are many firms still reluctant to implement legal technology?
Historically, the legal industry has been slow to embrace change, especially in terms of technology adoption. A 2020 ABA survey found that only 58% of firms use cloud-based data storage. And only 7% of survey respondents used tools employing artificial intelligence (A.I.).
In the recent past, however, unprecedented forces have led to a rapid transformation in the legal space. To successfully navigate economic distress and a global pandemic, today’s law firm must adapt to change and embrace innovation to turn challenges into opportunities.
Yet even law firms with ambitious, tech-savvy team members with an appetite for new tools and process improvements face resistance to change. To drive lasting and meaningful innovation, it’s helpful to understand the sources of this resistance so that they can be addressed.
Resistance to change
It’s no secret that the legal industry has tended to trail others in the adoption of new technology. When the co-founders of Clio started practicing law in the late 2000s, they found a landscape littered with 1980s desktop software, coupled with expensive, difficult-to-use and on-premise hardware. This portended a huge market for their cloud-based law practice management software.
Although legal tech adoption accelerated during the 2010s, the industry still has much ground to make up in comparison to other B2B verticals. A 2020 ABA survey, found that only 58% of firms use cloud-based data storage. And only 7% of survey respondents used tools employing artificial intelligence (AI), despite the popularity of AI-based tools in other industries such as finance. The legal field is a highly regulated industry that is dominated by a risk-averse culture of precedent—far from the ideal conditions to promote new initiatives. When justice is at stake, there are some real and tangible reasons to resist change.
Security and privacy concerns
Legal professionals have an ethical obligation to maintain technology competence. It is their duty to safeguard data, since clients regularly entrust them with highly confidential and sensitive information. Recent high-profile customer data breaches of large companies—including law firms—serve as reminders of the importance of cybersecurity. For many firms, a strict and sometimes inflexible commitment to tried-and-true technology practices is mistakenly believed to be their safest option. Adopting technology that appears to increase their risk profile is discouraged, if not outright prohibited.
Time constraints and the tyranny of billable hours
Most law firms in the U.S. are partner-owned and driven by billable hours. This business model tends to create a drive to maximize short-term profits over long-term innovation. Firm administrators may be inclined to view any non-billable activity as a waste of time, making it difficult to justify investing the time necessary to implement new systems.
Unfortunately, this traditional approach to managing a law firm overlooks the long-term benefits of new technologies, including increased productivity, efficiency, and competitiveness. As a result, the daily revenue generation pressures that accompany billing in six-minute increments continue to pose a barrier to wider tech adoption.
When evaluating new technologies, law firms also have concerns about the costs of implementation—especially when there is no immediate return on investment.
It’s true that legal software often comes with a steep price tag in the short term. However, an up-front investment in technology can drive down operational and administrative costs that sap a firm’s profit margins, improve case outcomes and client retention, and help elevate the firm’s reputation in the eyes of their prospective clients.
Lack of commitment to tech training
Another challenge is the training required to operate new systems. It may feel overwhelming to think about all the new processes and policies that need to be documented and the team training sessions that need to be scheduled—all while completing your daily responsibilities and meeting short-term goals. Yet tech training is a crucial part of a law firm’s success.
Benefits of embracing technology
Despite pervasive hesitancy about technology adoption in the legal sector, the Covid-19 pandemic appears to have brought firms to a tipping point. As U.S. public health orders closed or restricted access to law offices and court buildings starting in March 2020, many firms were forced to embrace technology in a way they never had before. Cloud-based collaboration tools, video conferencing, and practice management software became essential to business in a matter of days.
This sudden shift in the legal industry coincided with a societal shift in the use of communication and collaboration technology. Consumers now use cloud-based and software-as-a-service applications to supplant tasks that had to be completed in person—buying clothes, home supplies, and groceries; purchasing music, renting movies or transportation, even seeing a doctor. As people increasingly expect to find answers to even the most complex problems online and on-demand, law firms will need to adapt their workflows to meet these expectations.
For legal professionals eager to embrace change, all of this is good news. Modern legal technology equips firms to make data-driven decisions, recenter around the client experience, and offer more attractive pricing options like flat-fee billing. All of these attributes provide a competitive advantage in today’s rapidly evolving legal marketplace.
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