What you need to know:
- Key among these is the rise of data driven information technology, the globalisation of economic activity, and the democratisation of knowledge.
The legal services sector is witnessing a seismic shift that is having a profound impact on the practice and the profession of law.
Key among these is the rise of data-driven information technology, the globalisation of economic activity, and the democratisation of knowledge.
This means that legal clients are more sophisticated today and like others are driven and influenced by global trends, among others.
Legal clients demand more control over their legal matters, the choice of legal service provider, and more transparency from law firms in forms like the unbundling of the specific services that come under the package of “legal services”.
The legal services sector is a classic prototype of an industry on the precipice of disruption wherein those incumbent firms that do not take steps to improve and align their processes, incentivize efficiency, and adapt more efficient and client-centred ways of doing business will ultimately succumb to disruption.
The 2021 Walters Kluwer Future Ready Lawyer report found that technology-adopting leaders (in the legal services sector) out-performed those who stuck to legacy methods of doing things. The common denominator in all disruptive technologies is that they result from innovative entrepreneurs backed by venture capital.
The legal services industry is, therefore, at the verge of disruption not on the account of law firms driving change, but because venture capital and tech innovators are finally turning their attention to the industry. Venture investment in the sector has risen from $1billion in 2018 to over $4billion in 2021, according to Legal Tech.
The disruptive technologies in the sector range from collaborative technologies to digital documents generation, automated workflow, e-filings and more.
The acceptance of and popularity of legal tech has increased partly due to the Covid-19 pandemic, which forced a change in attitude even among the most conservative of practitioners.
These changes are leading to a liberalisation of the sector away from its rigid and conservative roots and the advent of new business models and organisational structures for the practice of law such as Axiom Law and Rocket Lawyer.
These trends are driving a move towards efficiency and what is now referred to as “value” billing, whereby legal work is priced not by the input by the lawyer or law firm, but by the actual value add or benefit to the client.
Vague parameters such as number of years in practice/ experience, quality and opulence, eloquence in speech or oratory, etc. are no longer enough. Reputation and credentials are also no longer enough, and have been replaced by actual value measured by clearer and more determinate metrics and parameters.
Legal tech has the potential to replace routine tasks and therefore deliver efficiency and cost savings in the sector. Software applications today can trace, customize and analyse legal data and even develop pattern-recognition techniques. The value add for clients in this is the dramatic shortening of the time needed to deliver legal services which is a cost saver to them.
For example, UK law firm Allen & Overy in conjunction with major banks produced a tech based legal solution called “Rulefinder Shareholder Disclosure” to navigate rules of international shareholder regulation. According to McKinsey and PWS studies, 25percent of lawyers’ time can be automated.
On our home tuff, law firms are championing automated document generation and consultation through a dedicated portal on their website. Courts and other public legal service providers have also been keen to adopt those technologies that drive efficiency.
During this time, Zoom has been the most used tool by law firms followed by Microsoft Teams both growing 37 per cent and 36 percent respectively compared to previous year. Tasks that traditionally took several man-hours to accomplish, can now be accomplished in a matter of minutes.
Legislation similarly needs to move on and recognise current changes and trends brought about by technological advancement. It is time for the Uganda Law Society to champion and offer leadership for legislative and other market changes that will enable the sector to catch up and remain resilient in the face of disruption. Otherwise technology will render the sector exhaustive.
Henry Owen is a legal practitioner with Cymbell Advocates