Against the backdrop of the pandemic, progressive organizations are focusing on investing in people and must-have, ground-breaking technologies. Finding the balance between staying relevant and being sustainable is a serious conversation as organizations look for creative ways to optimize their resources. On top of this, attracting and retaining top talent is a significant challenge without technology.
The legal ecosystem is one such domain where the absence of legal technology can directly impact an organization’s bottom line.
According to Future Market Insights, the LegalTech market is expected to reach USD 69.7 billion by 2032, growing at a CAGR of 8.9% YoY.
The legal tech market currently represents only 7% of the total legal services market as per the same report. Although the domain is still considered to be in the nascent stage, there has been a rise in the adoption of LegalTech solutions during the pandemic.
As remote working and streamlining communication have become the need of the hour, these legal tech trends in 2023 have sparked excitement among legal ops professionals from across the globe.
Let’s dive in!
1. Automation & AI
Digital transformation has been the buzzword in the legal industry, especially over the last few years. Automation ranks at the top in the priority list for legal professionals to streamline mundane processes including legal document management, legal research, transcription, billing, analysis, and much more.
Although only 10% of businesses are realizing the power of AI, industry leaders are striving to reduce costs and improve efficiency through automation.
With almost 25% of a lawyer’s time automatable, AI shows great promise. By 2024, legal departments would have automated 50% of legal work and increased the spend on legal technology threefold.
2. Blockchain & Smart Contracts
With low-code/no-code technologies ruling the roost, lawyers are now capable of becoming “citizen developers.”
By leveraging blockchain technology, lawyers can accelerate their transactional activities, enable digital signatures, and own a centralized repository to store legal agreements. Smarter contracts and AI-powered contract management practices shorten the average cycle time of a legal document to be processed.
With most of the repetitive tasks automated, the astronomical rates of legal fees can be negated to improve the overall demand and accessibility for legal services.
a. Consolidating technologies
Hybrid and remote work opportunities will continue to surge going into 2023 and beyond. Hence, collaboration between internal and external stakeholders has become a priority for lawyers while evaluating a LegalTech solution.
73% of law firm leaders have already made progress with regards to specific strategies to foster better communication, according to a report from Thomson Reuters.
b. Teams and other collaboration tools
Since your collaboration tools were introduced on a whim during the pandemic, the time is ripe to ensure your collaboration environment complies with your governance requirements, security policies, and compliance regulations.
c. Go the cloud way
Chances are your organization has already invested in cloud-native solutions. In fact, 76% of law firms and businesses are already on cloud or planning to choose one.
Going cloud-native not only provides easier access to data, but also enhances security.
To avail the benefits of integrated technologies, organizations must ensure that the tools they have invested in are seamlessly interconnected and streamline workflows.
a. Smart search solutions
Are you able to find the critical information you need and all related content in a single search?
According to a recent research, 54% of legal professionals waste time searching for relevant documents.
With sophisticated AI-powered tools enabling Google-like search capabilities, users can discover critical data and clauses in a single search.
b. Eliminating redundant tasks
While evaluating a legal tech solution, an end-to-end, single-interface platform makes a huge difference. This provides a cushion for your team to prioritize seamless integrations for any additional tools you might require in the future.
c. Integrations with daily productivity apps
Your organization’s digital transformation efforts will require a legal tech platform that can integrate with M365, Google Suite, and other daily productivity applications.
Integrating external tools into familiar territories allows users to negate the challenge of switching to different applications and new tasks, resulting in poor productivity and lost time.
Most importantly, integration with e-signature solutions is the way forward for lawyers to reduce cycle time for approvals, eliminate hard copies of contracts, and enable seamless contract execution.
5. Regulatory Compliance and risk management
With the increasing prevalence of cyber threats, legal professionals are compelled to prioritize data privacy and cybersecurity. The adoption of legal tech solutions that address these concerns has become paramount. From secure communication platforms to robust data protection mechanisms, legal practitioners can fortify their defenses against potential breaches. By instilling confidence in clients through robust cybersecurity measures, legal professionals not only protect sensitive information but also establish themselves as trusted advisors in a digital world.
Here's how compliance management has evolved:
• Enhanced cybersecurity and data privacy efforts
• Rise in compliance audits
• Faster recovery times and negligible data loss
• Geographic segmentation of data processing and repository
• Inherited security from cloud service providers
6. Contract Lifecycle Management
The complexities associated with contract management have prompted the rise of contract lifecycle management (CLM) platforms in 2023. These innovative tools leverage AI and automation to streamline various stages of the contract lifecycle. From contract drafting and negotiation to review and analysis, CLM platforms automate repetitive tasks, enhance collaboration, and improve compliance. By embracing CLM, legal professionals can dedicate their time to high-value activities, driving efficiency and fostering better client relationships.
The Road Ahead
LegalTech is evolving rapidly and bringing significant advancements to the industry. Generative AI, blockchain, cloud-based solutions, predictive analytics, e-signature integration, and compliance management are just a few of the latest trends revolutionizing the way legal workflows are managed and executed. Embracing these technologies can empower legal professionals to streamline processes, improve efficiency, reduce costs, and make more informed decisions. As the domain continues to adapt and leverage these innovations, we can expect further transformative changes in the future.