Law firms are facing increased pressure to transform to keep up with technology and trends in other industries. Customers are pressuring their legal team to provide faster, more efficient and lower-cost services without compromising on quality. As one of the longest and prestigious professions, the legal sector has previously resisted technology change, mostly for cultural reasons but with the pressure coming from customers, the industry is finally taking steps to catch up.
Thomson Reuters Peer Monitor – Legal demand vs technology spend
Legal Industry in Australia
2018 was a year of unprecedented growth in the Australian legal market, 2019 demand was fueled by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Hayne Royal Commission), strong corporate deal flow, regulatory changes, several major infrastructure projects and strong direct foreign investment.
In 2020, demand has settled and three key impact areas became apparent, which will likely be incorporated into the strategies of successful firms going forward.
Technology expenditure:
Legal technology has become the biggest impact area of the legal industry. Advancements in legal technology that provides solutions for e-billing, e-signature, dashboards, workflow automation tools, and general compliance have become the biggest adoption for the legal industry as the use of technology stacks and application integration picks up momentum.
The hype around Artificial Intelligence (AI), Robotic Process Automation (RPA) and other business process improvement solutions is getting a lot of attention from junior lawyers to managing partners, practise group leaders and general counsel. While it’s great to see so much attention is being paid, the majority are still trying to understand the basic concepts and use cases of these platforms.
Legal AI, robots and BPI solutions are the perfect technological ally for legal departments and law firms because they can handle repetitive and tedious operational tasks – given that 63% of in-house legal work is repeatable, fact-based decisions that involve no need for human judgement or interpretation. By taking on these tasks, in place of human workers, RPA frees up legal advisors to spend time with clients – creating more billable hours and enabling law firms to become more competitive.
Reaping the benefits of RPA
The main advantage of RPA is the reduction in time and costs, especially when considering that the most common method of charging used by law firms is by the hour. Software robots can complete tasks up to five times faster than human workers – and in light of this, Deloitte Consulting LLP has joined an alliance to jointly develop and deliver RPA solutions to its clients at a global level while also establishing a more focused and innovative collaboration to automate legal and compliance.
The first solution was a robot that can search for information in public records, which is common in due diligence processes – and which takes approximately seven minutes, as opposed to the three and a half hours it takes a person to do the same task. Software robots also reduce errors – which can be very costly to businesses. This year a mistake in drafting a contract cost a leading London law firm nearly £2 million.
There are many daily time-consuming, repetitive processes that are mandatory but do not necessarily need to be performed by a lawyer and that RPA can handle. Considering the trademark registrations or verifications of disputes made by law firms and reviewing and processing high-volumes of stored documents as part of a large transaction or due diligence process, are just some of the processes that are suitable for automation. By automating these repetitive tasks to software robots, lawyers’ time is freed up to focus on what really matters: the complex legal issues that these transactions may raise.
Public sector law and RPA
RPA can also help with legal functions in the public sector, which faces problems that require easy-to-deploy, low cost-solutions: from a high volume of work that blocks productivity to employee shortages, cost optimization, frequent changes in regulations and policies and department siloing. Bureaucracy, waste of paper, inefficient or obsolete systems are the most common problems that can be improved through automation with minimal costs, compared to a more complete digital transformation program. There are a number of RPA solutions that public sector law departments can use, as well as private firms and professionals:
- Export control robots
– which reduce business risk and improve legal productivity, whilst automating the validation of new parties and partners. - Regulatory robots
– which compile regulatory changes, as well as automating the monitoring and updating of changes within the European Union (EU Parliament, European Commission) and the United States legal and regulatory requirements databases. - Conflict of interest robots
– which automate conflict of interest disclosure and verification within an internal, searchable database, and reduce the time needed to identify conflicts from weeks to minutes. - Contract robots
– which automate the identification of agreements that require legal review, accept or reject changes on standard templates and common clauses and allow law professionals to focus on reviewing and negotiating complex contracts. - Robottorney
– which is a legal enquiry chatbots that respond to common queries over email or internal chat tools and provide answers in real-time, freeing up legal counsels to focus on more complex and strategic requests.
What does the future hold for the legal sector?
Deloitte forecasts that by 2025, the quickening pace of technological developments, shifts in workforce demographics, and the need to offer clients more value for money, will force a profound transformation of the legal sector. Professionals must keep up with the fast pace of change, and rapidly adapt to the needs of their clients.
Adopting an ‘automation first’ mindset, whether in-house or outside counsel, will undoubtedly transform the way the legal sector works. Addressing its business challenges with a hybrid human/software workforce, using software robots to automate daily processes and freeing humans up for more creative, strategic tasks is destined to make a huge difference. Taking an automation first approach and providing a clear path forward for organisations to embrace a new dynamic will ultimately result in legal success – and change the way the legal sector works forever.
