May 23, 2023

Legal services and digital transformation

According to the Thomson Reuters State of the UK Legal Market Report 2022, digitalisation/ technology was the third highest strategic priorities and challenges for UK buyers. UK legal clients favour law firms that demonstrate commerciality and a deep understanding of their business as well as holistically servicing their needs.

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In the 2023 report on the state of the Legal Market Thomson Reuters, it was discovered that there was an overhead per lawyer increase from 2021 to 2022 by 3.7%; which is a notable growth area within the legal industry.

However within the same report, there was only a 0.2% increase of support staff (in IT/ technology) FTEs per lawyer growth by function area. This is disproportionate to the large overhead increase and signifies an upcoming demand for increased support to handle and optimise the new technology.

As part of the technology solutions bought by UK legal buyers in 2021 only:

6% of respondents stated that they use contract AI
12% of respondents use IP management or legal workflow automation
32% of respondents stated there is knowledge management

Although it is apparent that there are drivers of favourability with purchasing new technology (especially within corporate law where clients have reduced their own technical debts to stay updated with market trends), there is now a gap between service capability and demand. With the correct implementation, legal organisations can leverage their new technology to provide a more streamlined, trustworthy and efficient customer experience.

As technology evolves organisations, it can also act as an organisation’s downfall due to the prevalence of cyber security attacks. According to Government statistics in 2021, 39% of UK businesses suffered a cyber attack in the first quarter of the year which increased to 64% for large businesses. Beyond direct financial implications from the criminals, cyber security attacks often also lead to GDPR fines (4% of annual turnover), financial penalties, damaged reputation as well as legal and PR fees. This further impacts organisations through downtime, which results in lost productivity. To find out what the cost of your organisation’s downtime is, click here.

In the legal industry, this is exemplified by the case studies of law firms data breaches below:

Hediell, Pittoni, Murphy & Bach who agreed to pay $200,000 to the state over data security lapses that led to a data breach of over 115,000 hospital patients in 2021
Appleby who was attacked by an illegal computer hack and leaked over 13.4 million confidential papers including the finanical affairs from Meta, Twitter and the Queen in 2017
Mossack Fonseca- 11.5 million documents including public officials were leaked due to an unsecure email and outdated IT in 2018
McCarter & English suffered a network security incident which impacted access to their computer system, including email and remote working tools in 2022. This was enhanced as the firm did not have up-to-date employee contact information and technical knowledge
DLA Piper- the attack was part of “NotPetya” malware attacks which are constructed for file destruction to provide attackers with ransom leverage via Bitcoin. As a result they had to pay their IT team 15,000 hours of overtime for recovery and repairs in 2017

These examples demonstrate a clear demand to update the traditionally large tech debt within the legal industry to establish a culture of trust between legal firms and their clients.

Furthermore, Jean-Christophe Gaillard (founder and CEO of Corix Partners) argues that for firms trying to deviate from cyber security failure, talent and governance have to be the real levers, not purchasing more technology. This is enhanced when disgruntled employees become a threat towards progression and effective implemention of new technology due to preference and comfortability.

Solutions

An increasing number of legal firms are now using AWS cloud services due to a wide variety of solutions:

DISCO- a global provider for electronic edisclosure solutions for entire firms or corporate legal departments. Uses AWS severless capabilities for its infrastructure and AI to provide a quicker decision making process where legal judgement is not required
OpenText- helps law firms to enhance discovery phase speed, scale to manage a growing volume of legal documents and reduce new clients onboarding periods from weeks to days. It runs on Amazon EC2 instances, stores customer data in Amazon S3 and uses Amazon ECS to manage containerised application

This combination of automation and AWS exemplifies the evolution of technology designed to alleviate and improve legal workflows.

Streamlining decision making processes is something also replicated in the medical industry. At a London Tech Leaders event, CEO at inicio health James Davis talks about his previous experience as Chief Innovation at the NHS Royal Free and how they dramatically reduced their workload by increasing the amount of decisions driven by data when the risk is low. This type of process is something that should be aimed to be mirrored in the legal industry; where human judgement cannot be replaced but where these technologies can actually aid and enhance the decision making process whilst removing the cumbersome and repetitive tasks.

WeShape are IS0 270001 certified which ensures we practice the highest standards of cyber security hygiene. This exemplifies we are capable of effective and secure data handling; thus reducing supplier risk within the legal industry. Moreover, we also provide coaching and training to ensure current employees at the client’s organisation are fully independent with high cybersecurity standards once the project has ended.

Furthermore, recently WeShape have become AWS partners to support the growing adoption of amazon-based services and solutions which can alleviate and optimise the workload with the legal sector through automation.

Supplemented by our variety of technical events, our strong community network of engineers is established through our referral basis which ensures we have a range of expertise to provide our clients with the best options for them. This snowball effect basis enhances our technical squad service as we can perform with speed and efficiency. This is emphasised as 88% of employers rate employee referral programs as the best source of applicants and 70% of businesses agree that referrals have the best culture fit for their company.

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