For Law Firms, Technology Replaces Real Estate
An industry once famous for its hesitation to adopt technology has been forced to transform how it uses it overnight, as hearings and trials take place on video-conferencing platforms and law schools transition to online learning.
July 28, 2020 at 07:00 AM
5 minute read
Last week, the world's largest law firm, Dentons, announced that it will be closing two of its UK offices following the success of remote working during the pandemic. It won't be the only one.
As law firms face the reality of only being able to operate their offices at 10 or 15% capacity for the foreseeable future, there has been a moment of realization for lawyers as they find they can actually work remotely quite successfully. An industry once famous for its hesitation to adopt technology has been forced to transform how it uses it overnight, as hearings and trials take place on video-conferencing platforms and law schools transition to online learning.
Meanwhile, miles of premium office real-estate sit eerily empty. While the question of a full-time return to the office remains open, there is no doubt that the changes to the way lawyers work will continue long after social distancing is forgotten. Critical to this is technology, which lawyers have been adopting across their entire practice. From more basic tools such as video-conferencing platforms to advanced software that can read and analyze documents, lawyers are embracing technology like never before. To put it into perspective, we have seen a 30% increase in customers in the last six months alone.
In fairness, some areas of the legal profession were already very comfortable with technology—in litigation and arbitration, for example, gigabytes of electronic documents are impossible to review manually and so lawyers have been using e-discovery software for years. But the sophistication in machine learning algorithms and its real-life applications means technology is rapidly being adopted by lawyers on the corporate side, too. Machine learning is proving to be a game-changer for lawyers engaged in contract review, assisting them in analyzing the documents and making sure they have spotted all risks across potentially vast datasets. Indeed, instead of trawling through document after document looking for a slight change in wording in a Change of Control clause, lawyers can redirect their time into analysis of what a slight alteration in clause wording actually means for their client. This technology is shaking up the more mature e-discovery market too, with AI-powered ECA giving lawyers rapid oversight into what is within their dataset, and intelligent search and data culling capabilities helping lawyers to get to the heart of matters in minutes rather than hours or days.
There are dramatic cost implications for firms choosing to adopt technology as well. Indeed, law firms wanting to stay competitive post COVID-19 will need to do more than just update their office. As we spiral into a global recession, cost and time efficiencies are going to be key, with clients demanding rapid legal analysis for less cost. With true machine learning and AI, lawyers are able to reduce the time spent on lower-value work by up to 90%, with far fewer resources needed on each project.
For boutique firms, adopting technology offers endless possibilities, allowing them to compete beyond the confines of their limited manpower and take on cases traditionally reserved for larger firms. On the other hand, for larger firms, embracing tech at a time of crisis enables them to further develop client relationships, using advanced technology to build their reputation as a firm that meets every deadline and never holds up a deal. It can also allow firms to diversify their services offered, as they can redirect the resource previously needed to complete manual reviews to different practice areas, or to offer services that were previously unprofitable when done manually.
Lawyers should no longer think of themselves as just advisors, but also as business leaders, capable of helping their organisations grow and become more resilient to external, unforeseeable shocks like the one we are experiencing now. The shift to adopting AI solutions will likely prove to be permanent fixtures for many law firms as productivity and efficiency increases.
After every recession, we see a boom in litigation work as business seek to recoup losses from various parties. The difference will be that this time, lawyers will spend more time on screen and in virtual environments than in an office—therefore those that don't have the best technology risk being left behind.
Jason is acting CEO of Luminance, a leading AI platform for lawyers, and is responsible for overseeing Luminance's operations and continued expansion across the United States and greater Americas region. Having started his career as an M&A associate in the New York office of Simpson Thacher & Bartlett, Jason has over 20 years' experience in the legal industry across various law firm, in-house and consulting roles.
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