Digital Disruption:

The Legal Landscape

Having identified that the goal any Digital Transformation strategy should be directed towards is agility, this chapter will look at the fundamental drivers behind Digital Transformation in the Legal sector; forces that are changing and disrupting the sector landscape in such a way as to make Digital Transformation not only desirable but an urgent necessity.

Playing catch-up

Generally speaking, Digital Transformation has been slower to impact Legal than other sectors; traditional methods have served well up to this point, and the technology that would offer a step change in legal operations (e.g. machine learning and automatic document processing) has previously lacked maturity.

Reluctance to change is now dissipating, thanks to driving forces such as the appearance of online-only lawyers, the emergence of disruptive new players (such as LegalZoom) into the legal market, and the clear opportunity there now is to increase margins through process and service automation.

In spite of this change in mindset, studies have highlighted that legal firms are still behind the curve when it comes to providing customers with what they expect: namely, digital channels through which to communicate, and a change in commercial structures.

Impact: In order to gain or defend market share, legal firms need to increase agility in order to respond more rapidly to market demands.

Customer demand for speed of access and response

In the digital age, consumers are becoming ever more demanding. They expect to be able to access information whenever and wherever they need it, and for any queries they make to be met with a rapid response.

As a result, legal clients expect to be able to access case or other legal documentation, updates and supporting information through online, multichannel portals. They also expect to be able to communicate in real-time with legal professionals for additional information or advice.

Firms that cater to these expectations stand to achieve greater levels of customer service, and evidence suggests that they also achieve improved case or contract efficiency on the back-end, with staff being able to more quickly access the information they need.

Impact: Legal firms need to provide different or improved levels of customer engagement.

Cost and profit pressures

The Legal sector has many time and labour-intensive operational areas: documents are often in paper form and must be processed; research is time-consuming; and reviews of information can be difficult, especially in large or complex cases.

Even though digital solutions such as IManage have had a big positive impact on records management, coordination and governance, many stages of the overall process flow are still low-value tasks, and are performed manually.

Now, however, legal organisations are beginning to evaluate and adopt solutions that automate or enrich the manual steps in processes; they are also leveraging Business Intelligence to identify characteristics of efficient teams so that these can be replicated. Such initiatives are driving improved profit margins and - thanks to their removal of low-value, mundane, time-intensive tasks - uplifting workplace morale.

Impact: Automation and efficiency is required to protect profit margins and minimise workforce attrition.

Regulation and sector pressures

Regulation and data protection issues are a primary concern for legal organisations. Legal work by its very nature, requires the collection, storage and processing of large volumes of Personally Identifiable Information (PII). Regulations such as General Data Protection Regulation (GDPR) and the associated expectations on audit, proof and management of data have obliged organisations to granularly classify, manage and track data.

These conditions have increased the burden on organisations to adhere to regulatory standards; they have also highlighted the concern that human error, employee abuse or external malicious activity can compromise the Intellectual Property (IP) of an organisation, threaten its compliance or damage brand value.

This concern has increased with the proliferation of social media; the public now has numerous channels through which to spread bad or damaging news, and the loss of data or exposure of mismanagement can have a catastrophic impact on a company’s brand.

Impact: Legal organisations should continue to simplify regulatory compliance and introduce more proactive security.

Workforce retention and mobility

Today we work in the most age-diverse workplaces ever, with ‘Traditionalists’, ‘Baby Boomers’, ‘Generation X’ and ‘Generation Y’ (a.k.a. ‘the Millenials’) all sharing office space. Of course, having four generations working together in the same environment presents new workforce dynamics and challenges.

With attorneys, paralegals and other legal professionals now working beyond retirement age, many legal firms and legal departments are trying to find balance despite a generation gap between the oldest and youngest employees of more than 50 years.

The pending exodus of nearly 80 million retiring Baby Boomers from the workplace and the entry of Generation Z (born between 1991 and 2012) into it will continue to shift workplace dynamics, and legal organisations will need to adapt.

A survey statistic1 has highlighted that legal organisations view shortage of and retention of young talent as one of the key challenges they're facing.

The coming change in workforce age is driving legal firms to review ways of working and to consider how they must adapt to cater for the digital-native cross section of the workforce, for example by offering tools that drive greater collaboration and flexibility.

A further challenge for organisations is presented in the balancing of the expected provision of digital platforms (supporting modes of working) with the ‘on demand’, nothing-is-fast-enough mentality of younger employees. Digital-natives will not necessarily wait for IT to resolve a lack of access or capability, and will often prefer to take matters into their own hands. The proliferation of various cloud storage services and public Platform as a Service (PaaS) platforms provides the opportunity for employees to bypass corporate IT, introducing the risk of data or security breaches and lack of governance. It’s important that this is prevented, as so-called 'shadow IT' undermines business support for IT, investment justification and efficient resource management.

Impact: The digital-native generation expect improved collaboration and digital platforms.

Section Summary

There are several key factors influencing the drive for change in the Legal sector.
While this list of business drivers is not exhaustive, these were the topics most talked about by Legal executives.
The need for Digital Transformation extends beyond merely fixing problems and maintaining the status quo. Increased profit, happier staff and the enablement of a greater focus on revenue-generating initiatives are just some of the benefits that can be realised.