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Legal IT

Legal Technology Predictions for 2023

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Towards the end of every calendar year, the American Bar Association publishes the results of its annual legal technology survey. Several legal service providers, experts, and reporters, too, analyse existing trends and subsequently make their own legal technology predictions for 2023. Some items stand out that most pay attention to. In this article, we will look at automation, artificial intelligence, cloud-native solutions, virtual legal assistants, data privacy and cybersecurity, crypto technologies, blockchain, and smart contracts. We will briefly pay attention to some other trends, as well.

Automation

Automation keeps being a major driver of change in many industries. The legal sector is no exception, even though it lags compared to many other sectors. Lawyers seem to take longer to catch up that automation is beneficial. It is making many processes in the legal industry faster, more efficient, and less expensive. Automation has proven to be successful in fields like legal research, e-discovery and document review and management. In 2023, we can expect to see this trend continue, with a renewed focus on automating the law firm administration and on the creation and review of legal documents. Automated workflows can be used to streamline legal processes, such as litigation support, e-discovery, and case management. Automation can also assist in organizing and tracking progress and regulatory changes, data collection, reporting, and communication. An increase in automation will help to improve the accuracy of legal processes, reducing the risk of errors, and increasing efficiency.

Artificial Intelligence

Artificial Intelligence is becoming ubiquitous. In many aspects of our lives, there now are AI solutions available that make life easier. In the legal sector, too, AI is starting to make waves. In all the above-mentioned examples of automation, AI is playing a crucial role. As mentioned above, AI has already been successfully assisting lawyers with legal research, with process and workflow automation, with the generation of legal documents, as well as with e-discovery. But those are still fairly simple applications of AI. It can do far more. These days, AI is also being used to digest vast volumes of text and voice conversations, identify patterns, or carry out impressive feats of predictive modelling. The virtual legal assistants that we’ll discuss below, too, are all AI applications. If properly used, AI can save law firms much time and money. In 2023, we can expect to see a more widespread adoption of AI in the legal sector. (More on Artificial Intelligence and the Law).

Cloud-Native Solutions

Cloud computing has been a game-changer for many industries. Previous reports had already revealed that lawyers, too, are more and more relying on cloud solutions. This should not come as a surprise, as Cloud-based solutions provide many benefits, including reduced costs, increased scalability, and improved data security. They help lawyers and clients share files and data across disparate platforms rather than relying solely on emails. Additionally, cloud-based solutions are more accessible, allowing legal firms to work from anywhere and collaborate more effectively with clients and other stakeholders. In 2023, we can expect this trend to continue. (In the past, we have published articles on cloud solutions for lawyers, on managing your law firm in the cloud, an on lawyers in the cloud).

Virtual Legal Assistants (VLAs)

In the past, we have talked on several occasions about legal chatbots. Chatbots have sufficiently matured to now start playing the role of virtual legal assistants. VLAs are AI-powered chatbots that build on basic neural network computing models to harness the power of deep learning. They use artificial intelligence algorithms to assist law firms with various tasks. Gartner predicts VLAs can answer one-quarter of internal requests made to legal departments. They extend the operational capacity of law firms as well as of in-house corporate legal teams. As a result, they assist in reducing lawyers’ average response time and producing distinct service delivery efficiencies. Furthermore, as VLAs are a form of automation, all the benefits of automation apply here too: virtual legal assistants can help to improve the accuracy of legal work, reduce the risk of errors and increase efficiency. At present, virtual legal assistants are still primarily being used in uncomplicated and repetitive operations. Recent breakthroughs, however, indicate that they are already able to take on more complex tasks and will continue to do so.

Data Privacy and Cybersecurity

Ever since the GDPR, data privacy and cybersecurity have become increasingly important. In 2023, we can expect to see an ongoing emphasis on data privacy and as well as an increase in attention to cybersecurity in the legal sector. (The examples of high-profile Big Tech corporations receiving massive fines seem to be a good incentive). Law firms have understood that they too need to make sure that they have robust data privacy and cybersecurity measures in place to protect their clients’ confidential information. Several law firms also provide their clients assistance with the legal aspects of data protection.

Crypto technologies, Blockchain, and smart contracts

The market of cryptocurrencies was volatile in 2022. That did not stop an increase in interest in the underlying crypto technologies. Experts predict rises in a) regulation of cryptocurrencies and crypto technologies, in b) the adoption of cryptocurrency, c) a growing interest in decentralized finance (DeFi), and d) an increase in attempts at cryptocurrency taxation. We are already witnessing an intensification in litigation with regard to cryptocurrency and crypto technologies. This trend is expected to continue. Litigation about NFTs, e.g., is one of the areas where litigation is expected to rapidly increase.

Experts also expect an ongoing interest in and an increased adoption of Blockchain technology. Blockchain can be used to securely store and manage legal data, reducing the risk of data breaches and ensuring the integrity of legal records. Additionally, blockchain can be used to automate many legal processes, such as contract management and dispute resolution, by enabling the creation of smart contracts. As we mentioned in previous articles, smart contracts can streamline many legal processes, reducing the time and cost associated with contract management and dispute resolution. They can also help to increase the transparency and accountability of legal transactions, reducing the risk of fraud and improving the overall efficiency of legal processes.

Other Trends

The ABA survey report noticed that law firms are spending more money on legal technology than ever before. In many cases, this involved investing more in tightening cybersecurity.

The trend to work remotely and to use video conferencing for virtual meetings that started during the pandemic is ongoing.

More than ever before lawyers pay attention to their own work experience, as well as to the user experience for their clients by making their law firms more client centred. There is an ongoing focus on work-life balance, not only for the lawyers but also for the employees of law firms. Law firms are finally starting to consider things like employee satisfaction.

While billable hours remain the most used fee model, there has been a noticeable increase in lawyers using a subscription fee model.

Finally, the trend that law firms are increasingly hiring people with hybrid profiles is continuing. By increasing cognitive diversity, law firms want to close the gap between professionals with knowledge of legal matters and those with enough legal tech expertise to manage the digitization and automation of workflows. Gartner predicts that by the end of 2023, one third of corporate legal departments will have a legal tech expert in charge of managing the digital transformation and automation of internal processes. Large law firms are also increasingly hiring lawyers that are familiar with business administration.

 

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Legal IT

Legal Document Assembly

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Lawyers produce documents, lots of documents. They write letters, warnings and exhortations, briefs, reports, contracts, etc. So, it shouldn’t come as a surprise that one of the first areas where law firm automation started was document assembly (also called document automation or document generation). In fact, lawyers have successfully been using document assembly for over three decades.

Document assembly is one of the four pillars of law firm management that can be automated to a large extent without the need for AI. The others are customer relation management(CRM) or contact management; the combination of billing, invoicing, and collections; as well as managing tasks and deadlines.

The principle behind document assembly is simple. You take frequently used documents, and create a template for them, that can then be used to create new documents by automatically adding the relevant data. It’s a standard feature in word processors. By using macros or elements built into the firm management software, or a combination of both, it is possible to integrate more advanced features like check lists (for which items to include), optional clauses, rules and calculations, etc.

There are many benefits to using document assembly. The most important one is that it improves productivity and efficiency. Typically, document assembly is a part of practice management software, which has access to the relevant data that have to be merged into the template. Creating a new document (or the basis for a new document) therefore takes a fraction of the time it would take to do the same thing manually. It also leads to less errors in the text than would be the case with manual input. And another way that document assembly increases productivity and efficiency is that, once the process is fine-tuned, it can easily be done by newly hired or junior staff, with minimal training.

Document assembly also helps increase revenue in other ways. By using commercially available professional templates for legal documents (or by swapping templates with other lawyers), you can widen the range of services that you offer. You could even use a client portal (like CICERO Web View) where you give your clients access to these templates. They have to fill out an online form to provide the necessary information that the system doesn’t have yet, and then they can create the new documents by themselves. You could also put some commonly used simple templates and forms online as a free service to attract new clients.

With the growing demand for Alternative Fee Arrangements (AFA), document assembly also offers a better way of controlling costs that benefits both you and your clients. With automatically assembled documents you can charge a fixed fee per document, rather than charging the client by the hour or minute. That way, both parties know exactly what they’re getting in advance.

As was illustrated above, it is possible the further improve productivity by using your standard documents in combination with online forms to capture the relevant data. If your client enters the data online, it saves you the trouble of having to do so. And don’t forget that document assembly can also be used to compose emails. By creating a set of standard templates for emails, you can further increase productivity.

Artificial Intelligence is already taking document assembly to new levels. There already is the example of an Artificial Intelligence system (Kira) that scanned documents to then extract the relevant data by itself that had to be merged into a (Hotdocs) template, generating a legal document all by itself. In other words, nobody had to look for or enter the relevant data as the Machine Learning algorithms were able to do it.

Machine Learning algorithms have also successfully discovered certain rules that are being used to combine or omit certain clauses in legal documents. And there are Artificial Intelligence solutions available that will review legal documents and point out certain problem they may have. They do it faster and generally more accurately than their human counterparts do.

Experts expect Artificial Intelligence to further disrupt how document assembly is being used. They predict that it will evolve in a way where a different approach will be needed, where more is automated, and more is tested and validated.

 

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