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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

Trends in Legal Technology in 2021

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Every November, the American Bar Association (ABA) publishes its annual Legal Technology Survey Report. In it, it gives an overview of the trends in legal technology in 2021. And while the data for the 2020 report were mostly collected before the pandemic, the 2021 report does reflect the impact of the pandemic. Those effects were reflected, e.g., in the primary hardware people use, where their primary workplace is, in the flexibility of work hours, and in telecommuting.

Each year, the Law Technology Today website publishes a series of articles, providing a summary of the key findings of the report. Here are the most important highlights.

Demographics

The average age of respondents remains high, at 57 years old (compared to 58 last year). More than 60% of respondents have been practicing for 30 years or more. The youngest age group (25-39) made up only 13.6% of respondents.

The respondents came from firms with the following sizes: 24% came from solo firms, 20% from firms with 2-9 attorneys, 20% from firms with 10-49 attorneys, 6% from firms with 50-99 attorneys, 15% from firms with 100-499 attorneys, and 15% from firms with more than 500 attorneys. The size of a firm is significant in the survey, as larger firms typically have greater budgets for investing in legal technology and the necessary corresponding technology training.

Websites and Marketing

The survey pays a lot of attention to communications with clients and the role websites, and more specifically client portals play in these communications. (We have previously published an article on client portals for law firms). The report recommends using secure client portals because communications are more secure than through email or traditional mail. But even though client portals have been around for years, only 29% of respondents say their firm website includes a secure client portal. They are most common in firms with 100+ lawyers (51%), followed by firms of 10-49 lawyers (22%), 2-9 lawyers (19%), while only 9% of solos offer a client portal. Most lawyers use traditional email to communicate with their clients, with only a minority using more secure email modalities like registered or secured email (23%), encryption (43%), or password-protecting documents (32%).

Lawyers mainly use their websites for marketing purposes. By now, 94% of lawyers have a website. 69% of respondents said their website was mobile-friendly, 5% said it was not, and 26% did not know. Virtually all websites for law firms contain profiles of the lawyers. By now, 59% of law firm websites also provide legal articles and 51% provide information on recent cases of interest. 37% of law firms said they have a blog, 57% said they did not, and 6% did not know. The larger the law firm, the more likely it had a blog. Law firms are still underutilizing their websites and use them mainly for one-way communication. Lawyers need to find better ways to engage with their target audiences, rather than just push information out to them. And simple things like client-intake or scheduling of appointments also remain the exception, rather than the rule.

Social media have become an important marketing tool for law firms. 87% of respondents said they were active on LinkedIn, 61% on Facebook, 37% on Twitter, and 13% on Instagram. Client email alerts remain important, too, with 72% of law firms using them. Video is a medium that is barely utilized, with only 28% of respondents saying their law firms use video for marketing purposes. (If you would like to find out more about using video in your law firm, we published an article on the subject).

As was the case in previous years, the report concludes that law firms largely lack a strategic approach to marketing. They also are not paying attention to analytics, so they do not really know which strategies are working, and which are not.

Practice Management

Overall, the report found few noteworthy changes when it comes to practice management. The main exception pertains to hardware trends and changes. This is an area where effects of the pandemic were most clearly felt. With more attorneys working from home, for the first time, the majority of respondents (53%) indicated that they were using a laptop as their primary device, while 44% still use a desktop as their primary device.

The number of attorneys using e-books for legal research has remained unchanged at 52%. Website libraries remain the most convenient tool for legal research.

Document-related software can be split up in five categories: document assembly, metadata removal, document and records management, redlining, and PDF creation. All five categories stayed relatively constant in the last year.

Communication software can also be broken down in five categories: voice recognition, CRM (customer relations manager), instant messaging, electronic fax, contacts, and remote access. Here, too, there are no noteworthy changes compared to last year.

General office use and management software can be broken down into nine broader categories: project management, databases, presentation, accounting, electronic billing, time and billing, spreadsheets, calendaring, and word processing. Overall, “general office use” is the most popular reason to have software. Of these nine categories, usage of project management comes in last position, but did grow from 27 to 31% of law firms using it. Counterintuitively, the use of accounting software dropped from 78% to 72%.

Maybe surprisingly, the use of web-based software and cloud computing only rose from 59 to 60%. The firms not using cloud software mention concerns about confidentiality, privacy and security as their main reasons. Many of those concerns, however, are unfounded. (See below in the section on cloud computing).

Legal-specific software can be broken down into four broad categories: specialized practice, docket/calendaring, case/practice management, and conflict checking. Like other software areas, the access rates to these categories have stayed relatively constant.

Budgeting and Planning

2021 saw law firms increasing their technology budgets. The increases were most notable for solo practitioners and small firms. The report found, however, that solos and small firms still fall short when it comes to budgeting for security to protect confidential client information. The report urges all law firms to increase their budgets for security.

Technology Training

In the introduction, we mentioned that the larger the firm is, the larger the budget is for technology training. By now, 39 out of 50 states within the US have imposed a ‘duty of technological competence’ on their lawyers. More are in the process of doing so. This corresponded to 68% of respondents replying that they had a duty to stay abreast of the risks and benefits of technology.

Another important consideration regarding competency is whether attorneys have input into the types of technologies they use. 74% of respondents said that they were involved in the selection process for the technologies employed at their firm, which is down from 81% in 2020. The report recommends each law firm should set up a committee of potential users that identifies their needs, evaluates existing solutions, and make recommendations. 88% of respondents state they asked peers for advice for the chosen solutions.

While 74% of respondents mentioned they had the duty to be technology competent, only 59% considered themselves very comfortable in using the technology they had at their disposal, and only a dismal 29% thought they had received adequate training. 67% of respondents said they had some sort of technology training available at their firm, but this availability varies widely based on the size of the firm, with only 35% for solo practitioners, 56% for firms with 2-9 attorneys, 71% for forms with 10-49, and 99% for firms with more than 100 attorneys.

48% of respondents replied they have internal support staff, and again those numbers grow depending on the size of the firm, with 94% of +100 firms, and only 9% of solos.

By now, 62% of law firms have a technology budget, and about half of them have increased it in 2021. For solo lawyers, hardware was the biggest expense, while the largest firms invested more than ever in security. Noteworthy is that virtually no budgets were needed for software customizations.

2021 also saw an increase in law firms creating technology policies and procedures, with 83% of respondents replying that their law firms have them in place. (The pandemic and lawyers working from home plays a role in this).

Solo and Small Firms

2021 saw changes for the hardware solo and small law firms are using, with laptops becoming the primary work computers. Windows remains the most popular OS (77%), but the usage of MacOS devices has grown from 16 to 21%. The iPhone remains the most popular smart phone, with 81% of lawyers in small firms, and 61% of solos using one.

Probably the biggest change caused by the pandemic is the primary workplace. Where in 2020, 22% of solos listed their home as their primary workspace, in 2021 that number had nearly doubled to 43%. This major change in primary workplace also happened in the big law firms with more than 100 lawyers, where the number spectacularly jumped from 3% to 46%. In smaller and medium sized firms, the changes were not that dramatic.

Along with the shift in primary workplace came a shift in implementing a flexible work schedule. In 2021, 79% of solo practitioners had flexible hours, 75% of lawyers in law firms with 2 to -49 lawyers, and 93% of lawyers in firms with more than 100 lawyers.

In line with these shifts, telecommuting, too, increased due to the pandemic, with 64% of lawyers saying they had telecommuted in 2021, compared to 55% in 2020. Notable is that of those who did telecommute, 39% of them did so full time.

Cybersecurity

Law firms are primary targets for cybercrime. They have a lot of valuable, sensitive information, which makes them “one-shop-stops” for cybercriminals. And law firms’ security set-up often is not very advanced. This combination of more data and easy access is what makes them prime targets.

While about three quarter of law firms use solutions like antivirus and antispyware, only half use firewalls, multi-step authentication, or encryption.

The report urges lawyers to spend more resources on security and on teaching staff to use the security tools that are available to them.

The report also recommends law firms should a) create ‘Acceptable Use Policies’ that outline the use of the firms hard and software; b) adapt cloud-based technologies, as they are considerably more secure than on premise or hosted software; and c) develop an incident response plan.

 

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Legal IT

Legal Technology Trends of 2020

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In November 2020, the American Bar Association published its annual Legal Technology Survey Report, which gives an overview of trends in legal technology. Now, for 2020, it is important to keep in mind that while the report was published in November, most of the actual survey was conducted in early 2020, i.e., before the pandemic started. We know from other reports that have been published that the pandemic had a dramatic effect on the usage of legal technology. These effects are not yet reflected in the 2020 Legal Technology Survey Report. Below, we discuss some of the highlights of the report. A more in-depth thematic discussion of the report can be found on the Law Technology Today website. (URLs included below).

Demographics: In 2020, the responding attorneys consisted of 26% solo practitioners, 30% lawyers at firms of 2-9 attorneys, 17% at firms of 10-49 attorneys, 5% at firms of 50-99 attorneys, 10% at firms of 100-499 attorneys, and 12% at firms of 500+. The average age of the respondents was 58. Approximately 69% of them were male, while 31% were female, and on average they had been admitted to the bar for 30 years. Based on the income generated, the largest practice areas were litigation (27%), followed by estate planning (20%), and real estate transactions (16%).

Cybersecurity: The 2019 report warned that law firms score badly when it comes to cybersecurity. Unfortunately, while there are minor improvements in 2020, not that much has changed. And that is problematic as during the pandemic that number of cyberattacks, especially on lawyers who work from home, will have increased. The number of firms that have experienced a security breach increased from 26 to 29%, and the number of firms having experienced a virus, spyware or malware infection rose to 36%. Also notable is that the larger the law firm is, the larger the number of lawyers is who do not know whether they had security incidents.

Still less than half of the lawyers surveyed were using security tools: “43% of respondents use file encryption, 39% use email encryption, 26% use whole/full disk encryption. Other security tools used by less than 50% of respondents are two-factor authentication (39%), intrusion prevention (29%), intrusion detection (29%), remote device management and wiping (28%), device recovery (27%), web filtering (26%), employee monitoring (23%), and biometric login (12%).”

It also seems that, rather than addressing the actual problems, lawyers prefer to take cyber liability insurance policies. “36% percent of respondents, compared to 33% in 2019, 34% percent in 2018, and 26% in 2017.” And there also is improvement when it comes to incident response plans: in 2020, 34% of respondents indicated their firms maintained such a plan, up from 31% in 2019 and 25% in 2018.

Cloud computing: the area of the report that is most outdated probably is the one on cloud computing. The pandemic resulted in a massive increase in the usage of cloud solutions, but that is not yet reflected in the report. The report found the legal profession still dramatically lagging behind in cloud usage, at 59%, compared to 58% in 2019. Notable and surprising is that lawyers continue to use popular business cloud services like Dropbox (67%), Microsoft 365 (49%), iCloud (19%), Microsoft Teams (18%), Box (13%), and Evernote (12%) at higher rates than dedicated legal cloud services.

As was the case in 2019, the report is alarmed by the lack of security measures law firms have in place when using cloud services. “The 2020 (pre-COVID-19) survey results showed further slippage in the already lax compliance of lawyers with even the most basic cybersecurity practices. Although lawyers say that confidentiality, security, data control and ownership, ethics, vendor reputation and longevity, and other concerns weigh heavily on their minds, the employment of precautionary security measures is quite low. No more than 31% (down from 35%) of respondents were taking any one of the specific standard cautionary cybersecurity measures listed in the 2020 Survey question on this topic. Eleven percent of respondents (up from 7% in 2019) reported taking none of the security precautions of the types listed. Only 45% of respondents report that the adoption of cloud computing resulted in changes to internal technology or security policies. These are disturbing numbers.” (Law Technology Today).

Practice Management: surprisingly, the report found that overall, the usage and availability of practice management software has declined. The only exception is for small law firms with 2 to 9 lawyers. Conflict management tools do a bit better than practice management software, but their usage and availability has stalled as well. Again, the small firms with 2 to 9 lawyers are the exceptions.

With a worldwide increase in privacy protection legislation came an increase in the usage and availability of metadata removal tools. And even though the survey was largely conducted before the pandemic hit, the report sees an increase in remote access tools. Related to this, is that the primary workstation for most lawyers no longer is a desktop computer, but a laptop computer.

Only 45% of respondents said they were using legal analytics tools, down from 49% in 2019.

Technology Training: Lawyers understand that technology training is important: 82% of respondents agreed that it was important to receive training on the technologies their law firm is using. Yet, in spite of that, fewer lawyers – only 59% – had access to technology training at their firm than in 2019. The decrease in availability was largely in the segments of solo lawyers (27%, down from 28%) and medium sized firms from 10-49 lawyers (74%, down from 82%). Small firms of 2-9 lawyers, as well as large firms (100-499 lawyers), on the other hand did see small increases, with respectively 50% instead of 49.3%, and 96% instead of 95%.

The report also noted that 91% of solo respondents indicated that they were “very comfortable” or “somewhat comfortable” using their law firms available technology. It explicitly warns that these lawyers may be overestimating their abilities with regard to the technologies they’re using and underestimating their need for training. It explicitly refers to the Dunning-Kruger effect.

Websites and Marketing: Overall, most law firms (54%) still do not have a marketing budget. More specifically, for most solo and small firms having a marketing budget seems to be the exception rather than the rule: only 32% of small firms (2-9 lawyers), and 14 % of solo practitioners have one. For those that have a marketing budget, 26% responded it had increased in 2020; for 11% it had decreased; for 27% it remained the same, and 36% of respondents did not know. The marketing budget is mainly spent on sponsorship (48%), followed by LinkedIn (42%), email (41%), Facebook (33%), and print (21%).

When it comes to websites and blogs, 87% of law firms responded that they had a website. Among solos, the percentage is however far lower, at only 59%. Lawyers still seem to view the primary role of their website as an online brochure, where the website has information about the partners (98%) and associates (73%). Approximately half of the websites also focus on the cases the firm handles. And 56% of lawyers now also use their website for content marketing, where they publish their own legal articles, but only 27% uses a blog for it. Among solos, the percentage that publishes its own content drops to only 17%. Most of the websites these days are mobile friendly, with only 6% saying their websites are not.

When it comes to individual promotion, 77% of lawyers say they promote themselves on social media. Only 9% however uses other channels as well.

The 2020 Survey Report reveals there still is a big gap between solos and small firms on the one hand, and the larger firms on the other, when it comes to their marketing efforts.

Budgeting & Planning: by now, most lawyers understand that a technology budget is essential. Overall, 62% have a technology budget (up from 60% in 2019), but an alarming 59% of solos and 41% of small firms (2-9) still do not. A whopping 71% of solo firms also doesn’t have a training budget. When it comes to the size of the budget, it remained the same or slightly increased. Interestingly, it remained the same in mainly solo law firms, while it slightly increased in the larger ones. The report advises to spend time planning a budget, which includes technology training, and to measure usage and track what is working. This will allow them to prioritize accordingly and spend more wisely.

 

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Legal IT

The Legal Technology Trends of 2019, part 2

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In November, the American Bar Association (ABA) published its annual Legal Technology Survey Report. The report typically is accompanied by a series of detailed reports on specific subjects, that are published over a period of several weeks. In a previous article we dealt with the first three of those reports. In this article, we’ll have a look at the next five, which deal with practice management, budgeting and planning, technology training, solo and small firms. A ninth report was published on lawyer well-being, but it largely repeats items raised in the other reports.

Firm Culture

When it comes to demographics, the report found that the majority of respondents, no less than 71%, were male, although the gender gap decreased as age decreased. 33% of respondents was between 60-69, while less than 2% were under 29 years old; 21% were in their 50s.

With the exception of solo lawyers, the vast majority of lawyers still mainly work from a traditional office space. 34% of solo lawyers work from home. Overall, the profession keeps flexible working hours (offered by 77% of law firms) and mobile: roughly 50% of lawyers have telecommuted. 88% of those who telecommute work from home.

The report also found that there is a large and continuing gap between what the larger firms offer in terms of amenities, cyber protection, and training and what smaller firms offer.

Overall, lawyers are still working too hard, and continue to not acknowledge the strain this puts on their mental health.

Practice Management

Law Technology Today summarizes the following key points regarding the survey’s findings on practice management solutions.

Usage and satisfaction of Practice Management software: while the rest of the world increasingly relies more and more on technology, the legal profession hasn’t really followed suit. The use of practice management software has been more or less stagnant for the last four years. The majority of users of these packages remains satisfied with their usage.

Need for improvement and all-inclusiveness: one of the main problems with practice management software is that most of them are still only offering partial solutions. There isn’t any program that handle every aspect of law firm management. As a result, law firms typically must rely on several programs, where their interoperability leaves much to be desired.

Rise of CRM as an alternative: as a result of the limitations of existing practice management software, there has been an increase in the usage of Customer Relationship Management (CRM) solutions in law firms.

Shifts in the Use of Laptops, Computers, and Mobile Devices: 57% of lawyers still use a desktop computer as their primary work computer. This confirms the downward trend of the last years and corresponds to the increase in the use of laptops as the main work computer, which now stands at 41%. This shift towards laptop computers can be seen mainly in large firms, followed by medium sized firms. For small firms the increase in laptop usage was limited to a 1% increase (to 35%), and for solo lawyers, the number remained the same at 40%.

The Continuing Increase of Remote Access: one of the main findings of the report is that lawyers are increasingly using remote access, with 73% of lawyers using telecommuting technologies in 2019, compared to 68% last year. These are mainly used to occasionally work from home.

Consistency of Fee Structures and the Adoption of New Technology: there was little change in how law firms charge. Most law firms, 69%, are still using hourly fees. Fixed fees saw a slight increase from 15 to 17%, which came at the expense of contingent fees which fell from 11 to 9%. Other fee structures remained the same.

Budgeting and Planning

There is some good news when it comes to budgeting and planning: in 2019, the law firms that have a budget for technology slightly increased their spending. Solo firms spent about the same as last year, and have no intention of spending more next year, where all other firms that have a budget intend to increase it for next year.

The report also advises to consider budgeting for technology training (see below), and to start using metrics to measure technology usage and the track what is working and what isn’t. “Plan well, spend wisely, and prioritize accordingly; technology is and will remain an essential part of running a law firm.” (Law Technology Today)

Technology Training

In 2019, lawyers need technology to efficiently run their practice. In fact, by now most bar associations require lawyers to be familiar with “the risks and benefits associated with technology”. To be able to use that technology effectively, training is essential. A majority of 82% of lawyers understand that technology training is important. The bad news is that in 2019, fewer attorneys had access to technology training at their law firms. Barely more than half of the attorney respondents to the survey had technology training available at their firms. The chance of having training available at the firm rises with the size of the firm, as was the case in previous years. Interestingly, the report also warns that solo lawyers may be overestimating their technology competence and underestimating their need for training.

Solo and Small Firms

Solo and small firms (with 2 to 9 attorneys) still form the majority of law firms: with 32% and 31% respectively, they’re good for 63% of law firms. When looking at the ages of the lawyers, the largest (10-year) segment consists of lawyers between 60-69.

The survey found that technology adoption among solo and small firms appears to be stagnant or declining. The only exception is the use of practice management software, which slightly more solo and small firms are using in 2019 than before. As mentioned before, rather alarmingly, less than 50% of solo and small law firms use file and email encryption, file access restriction, intrusion prevention and detection, web filtering, whole or full desk encryption, or employee monitoring.

 

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Legal IT

The Legal Technology Trends of 2019, Part 1

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Traditionally, towards the end of the calendar year, two reports are published that shed a light on the state of, and current trends in legal technology. The American Bar Association (ABA) publishes its annual Legal Technology Report (often referred to as the ABA Tech Report), while Clio also publishes an annual report on trends related to legal technology. These two reports differ greatly in scope: where the ABA report is comprehensive, the Clio report tends to focus on one specific aspect. Also noteworthy is that after the ABA publishes its full report, it always publishes a series of articles, focusing on a specific theme. For each of these, it offers a summary and analysis of the findings of the report. Those articles are published over several weeks. At the time of writing, six out of nine have been published. In this article, we’ll have a look at the Clio Report, and at the first three articles on the ABA Tech Report. Next month, when all the articles will have been published, we’ll have a look at the remaining six articles on the ABA Tech Report.

In this year’s legal trends report, Clio investigated how 1000 law firms responded to prospective new clients who asked them some questions, either by mail or by telephone. They chose five common topics, and then sent 1000 mails with related questions to law firms that deal with those topics. They also made 500 phone calls.

The surprising findings of the report clearly demonstrate that law firms struggle to adequately respond to client inquiries. An astonishing sixty percent of law firms did not respond to the emails at all, and twenty-seven percent of firms did not answer or return phone calls. As part of its investigation, Clio also surveyed 2000 legal consumers on what their expectations were when approaching a law firm with their legal issue. Based on how these expectations were met, they created a scorecard for each of the 1000 law firms. Only two of the 1,000 firms surveyed got an excellent rating when it came to replying to emails. Things were only slightly better for the telephone responses, where 20 firms — or 7 percent of the total — received an excellent rating. There clearly is a lot of work to be done.

Let us now continue with the ABA Tech Report and have a closer look on its findings with regard to cloud computing, security, and websites and marketing.

Cloud computing

As was to be expected, the number of lawyers that use cloud services is still growing, with 58% of lawyers replying they were doing so, compared to 55% in 2018. As was the case in previous years, solo and small law firms lead the way, with cloud adoption around 60%. But compared to the rest of the business world, lawyers are still slow to move to the cloud.

The most important finding regarding cloud usage by lawyers, however, was the lack of security measures taken by lawyers when working in the cloud. The report warns that the situation is reaching a crisis point, as there were significant drops in the use of very standard cybersecurity practices. “Although lawyers say that confidentiality, security, data control and ownership, ethics, vendor reputation and longevity, and other concerns weigh heavily on their minds, the employment of precautionary security measures is quite low, with no more than 35% (down from 38%) of respondents actually taking any one of the specific standard cautionary cybersecurity measures listed in the 2019 Survey question on the topic.” (Law Technology Today).

Security

Last year’s report concluded that ” All attorneys and law firms should have appropriate comprehensive, risk-based security programs that include appropriate safeguards, training, periodic review and updating, and constant security awareness.” The same still holds true in 2019. In some areas, progress has been made, but as the situation with cloud usage demonstrates, other areas still need a lot of work. Most law firms need to take extra steps in designing and implementing security solutions.

Some statistics:

  • 26% of law firms reported having experienced a security breach in the last year, while a staggering 19% didn’t know.
  • In 2019, 31% of law firms reported having an incident response plan, up from 25% in 2018.
  • When it comes to encryption, 44% of lawyers encrypt their files; 38% encrypt their mail, and 22% use full disk encryption.
  • 33% of lawyers have cyber liability insurance, compared to 34% in 2018.

Websites and marketing

When it comes to marketing, the report again found there is much room for improvement, especially for solo lawyers and small law firms. The survey revealed that most of them do not have a planned approach to marketing in general, are clueless about online marketing, and may instead be engaging in “random acts of marketing.” For many law firms, it is unclear who oversees marketing, who is making the decisions and why. Law Technology Today summarizes the findings as follows: “The 2019 Survey results show that law firms—and especially solos and small firms—have a long way to go. Unless they begin to develop marketing plans and budgets, establish an online presence and regularly analyze whether their firms are reaching their targets, they will continue to face increasing difficulty competing for business.”

Some statistics:

  • Only 47% of law firms have a marketing budget, with some considerable discrepancies depending on the size of the firm: 94% of large firms, 61% of medium-sized firms (10 to 49 lawyers), 21 % of small firms (2-9 lawyers), and 17% of solo lawyers.
  • 86% of law firms have a website: solo lawyers are again lagging behind, with only 57% of them having one, whereas over 90% of all the others have a website.
  • The number of law firms with a blog has remained stable since 2016 at 30%, with solo lawyers again staying behind at only 9%.
  • More lawyers than ever – about 80% – are using social media. LinkedIn is still the most used platform at 79%, followed by Facebook (54%), Martindale (38%), and Avvo (23%). Noteworthy is that the reported use of Facebook and Avvo has declined over the past year.

Next month, we will have a look at the other findings of the report.

 

Sources: