Digital Transformation in Law Firms and Corporate Legal Departments—Technology Saving the Day during the COVID-19 Pandemic

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By: Madhuri Swamy -- Lead Analyst, Legal Services

20 June, 2021

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Digital Transformation in Law Firms and Corporate Legal Departments—Technology Saving the Day during the COVID-19 Pandemic
WHITEPAPER

legal services

The COVID-19 pandemic brought the world to a grinding halt, and the legal industry, like any other industry, had to endure the consequences of the situation. Physical presence at courts were suspended, attorney meetings with the clients could not take place at the premises, and discovery and review processes could not be conducted at the client location. Data breach on legal case matters and other related security issues soon began to rear their heads during these uncertain times, especially as remote working became the norm. At this crucial juncture, when the legal industry was on the brink of coming to a standstill, legal technology, digitization, and AI tools became the only way forward for law firms and legal departments. With cost savings becoming a priority for corporate legal departments as the markets began to tumble, AI intervention came to the rescue of every law-related entity.

This whitepaper is aimed at deconstructing the idea underlying the adoption of technology in numerous areas of the legal industry landscape, especially as the scenario became challenging in the initial phases of the COVID-19 pandemic.

Introduction

The COVID-19 pandemic is bringing forth tectonic changes in the way the world functions, and its effects are expected to be long-lasting. The legal services industry is witnessing a never-before situation and is on the alert to take necessary steps to save the day. Large-scale postponing of oral arguments or courts canceling hearings have become routine after decades of smooth functioning of the legal system. Many of the legal services organizations and courts worldwide have started going fully remote, and this scenario of access to justice becoming online may continue even after the pandemic is over. Not just courts, law firms, and corporate in-house departments, but many law schools have also started moving toward online learning. Digitization has literally saved legal services in all aspects of functioning.

Effects of the Pandemic on the legal Industry and Challenges Faced by Legal Professionals

Some of the most observed challenges that law firms and legal professionals have been facing since the beginning of COVID-19 pandemic are as follows:

  1. Delay in legal processes due to social distancing — One of the biggest effects of the pandemic on legal sector is that social distancing has prevented legal practitioners from meeting in person with clients and other parties. Due to this, certain legal procedures that usually require a physical meeting, such as a contract signing requiring a witness, began to get postponed, thus affecting the entire procedure.

  2. Postponing of general court discussions — Many courts worldwide have started closing their doors to the general public, with the exception of emergency and constitutionally required hearings. This has resulted in a pileup of legal matters and an unprecedented blockage of justice in many parts of the world.

  3. Challenges posed by the new working ways and environment — Many law firms, especially small and medium firms, began to work hard to adapt to the market shift. With deadlines breached and lawyers not able to meet with clients in person, work-flow and efficiency declined considerably.

  4. Workforce shortage in some areas like employment law — With significant legal issues confronting many people and their livelihood, mostly dealing with the unfortunate reductions in the workforce and with complicated state and federal labor laws to navigate through, the demand for an employment law began to grow louder. Law firms began to redirect attorneys of other practices to employment law with all-hands-on-deck collaborative efforts to help maintain civility and equality for all.

  5. Remote notarization on the rise — With life at risk everywhere, notarization for asset management, wills, trusts, etc. began to increase. As notarization has traditionally been a process involving the physical presence of the parties concerned for signatures, etc., law firms and clients began to face the challenges arising from social distancing and lockdowns.

  6. Law firms operating on the margins faced the brunt — Unlike large law firms, which have substantial cash reserves and credit lines, smaller ones that operate on the margins were badly affected as they were mostly dependent on cash flow. Inability to pay the staff and rents led such law firms into operational doldrums.

  7. Rise in insurance claims and disputes — This surge in demand for layers caused challenges for the legal workforce, first, because of the fixed number of attorneys in a practice, and second, because of restrictions on physical meetings for dispute resolution.

Responses and Reactions of the Legal Industry to the Challenges posed by the pandemic

Law firms’ reactions to the unprecedented challenges

Apart from enforcing mandated work from home for their attorneys and staff and providing legal support and assistance to their clients through digital media proactively, law firms started planning and implementing cross-disciplinary taskforces, guidelines for clients, etc. on a war footing.

  • Some firms began adopting a rotation-wise presence in offices to help firms in transitioning all their attorneys to eventually operate in a fully remote mode.

  • This shift toward remote working began posing a challenge for many partners who preferred the traditional way of conducting meetings in the office.

  • However, the need of the hour took precedence, and the attorneys had to give up decades of established office culture and embrace remote technologies. All this was done to keep the industry alive.

  • Law firms also began to offer flexible payment options for their clients besides discounts, thus securing their goodwill with the clients.

These timely reactions from the law firms ensured continued services to their clients, especially in practices like employment law and healthcare law. Following the guidelines for continued operations within safety limits also helped clients in transitioning with respect to availing legal services from law firms.

Remote workingA trend that picked up pace in response to the pandemic

Although remote working has been in place for many years, it became widespread due to the pandemic. Platforms and applications propelled this culture further.

Apps such as Citrix and VMware virtual environments, virtual private networks (VPNs), HighQ (client collaboration platforms), and presentation tools like WebEx, GoToMeeting, Zoom, and Skype have helped numerous organizations continue their operations from remote working situations.

  • These tech tools can be adapted to meet the varied scales of collaboration and handle any amount of traffic for the numerous litigations and meetings that legal professionals undertake.

  • However, these advancements come with their own set of drawbacks and risks too, such as the struggle with the network speed if VPN is being used, etc.

Digital transformation of legal organizations during the pandemic — Expediting the inevitable change

One among the myriad challenges posed by the pandemic is how law firms and attorneys have had to adopt the digital transformation of their operations in order to maintain continuity.

Digital transformation in the legal industry — This transformation is nothing but digitizing every aspect of legal procedures, be it service delivery, workflow, processes, team collaboration, or engagement with the client.

Legal technology and tools for digitization during the pandemic:

As a solution to the challenges that law firms and attorneys have been facing due to the pandemic, the following technological tools are being adopted on a large scale:

Document AutomationWith an increasing amount of work in the contracts law due to the pandemic, many law firms are seeing a workforce crunch. To overcome this, firms have started adopting document automation, which helps them automate the processing of complex contracts and agreements by generating sophisticated document templates that can be easily modified with details related to the deal. It also assists in quickly creating and executing Non-Disclosure Agreements (NDAs) and helps reduce paperwork required for long contracts, agreements, and will documents.

  • e-Billing — With reduced human interaction due to the pandemic, billing and payments were required to become digital and automated. By adopting advanced e-billing solutions, legal firms need not worry about storing a stack of paper bills and dealing with spreadsheets. Automated e-billing solutions are allowing legal firms to generate invoices automatically without human intervention and are helping them share these with other law firms, adhering to social distancing norms.

  • e-Filing — There has been an increasing demand for e-filing, with people looking to file their cases online as they are unable to go to court in person amid the pandemic. Using digital solutions, it is now possible to pay court fees, penalty, fine, and other types of fees online. Besides, parties do not have to mail documents physically, and there is no need to send hard copies to chambers as well. People do not need to physically visit the courthouse, thus allowing legal firms more time to work on legal documents. `

  • e-Hearings — To ensure that the judicial system runs effectively with no delays in delivery of justice, the concept of e-Hearings was introduced. This involves hearings being conducted via digital networks, such as video conferencing. The involved parties can connect through audio-video enabled web conferencing. Until courts start functioning normally, they can effectively proceed with digital hearings and may consider prolonging its use post COVID-19 as well for small legal cases to save time and costs.

  • Time-recording Programs — These are designed to help law firms in tracking and recording the time spent by a legal professional on a specific matter. Law firms can also use it to record all the web activity, location, and calls. These can be converted into accurate timesheets for billing.

  • Contactless Attendance — Law firms have started replacing biometric attendance with the contactless attendance system, as it reduces the risk of the spread of infection through contact on scanners. This is expected to be retained post the pandemic by many law firms. Attendance is being recorded via CCTV or IP cameras installed in the office premises. HRs can track real-time attendance records of employees using RTSP-enabled cameras.

  • Social Distancing Alert System — Social distancing alert system is expected to be used in legal organizations in the post-COVID-19 scenario as well to ensure that employees are maintaining distance. This can be done by monitoring via IP or CCTV cameras installed in offices. In case of any violation, the system would send an alert to the employee’s mobile phone.

  •  Video Conferencing Tools — With strict no-travel policies and no physical meetings, video conferencing has become the need of the hour for law firms for face-to-face consultations and meetings to settle deals, communicate with clients, etc. Video conferencing APIs can be integrated into the existing website to interact with clients.

  • Virtual Legal Assistants — In the current scenario, when clients require urgent assistance on varied aspects, until a legal professional contacts them, a virtual legal assistant or an AI Chabot can assist them and redirect the queries to the concerned professional. Virtual assistants are being used in large law firms during the pandemic.

Some of the legal technology tools in the market for various legal tasks are as follows:

  • Due Diligence: Kira Systems, LEVERTON, eBrevia, ThoughtRiver, LawGeex, Legal Robot, Casetext

  • Prediction Technology: Everlaw, DISCO, Intraspexion, Ravel Law, Lex Machina, Premonition

  • Legal Analytics: Lex Machina, Ravel Law

  • Document Automation: PerfectNDA

  • Intellectual Property: TrademarkNow, ANAQUA Studio, SmartShell

  • Electronic Billing: Brightflag, Smokeball

Problems Arising from Adoption of Technology and Remote working Culture

Cyber-security — A looming threat

Remote working during the pandemic has led to another issue — data security, especially in the context of litigation and e-discovery. As the areas of e-discovery, information governance, and cyber-security rapidly intermingle, data security breach is alarmingly on the rise, exposing the organizational weak links in the information governance system. This puts corporates at risk of leakage of sensitive case data of a concerned legal matter, leading to critical losses. The discovery data that were once contained within the office premises of corporates are now vulnerable and stand a high chance of falling into the wrong hands.

Cyber-security challenges in e-Discovery

  • Issues around data access are similar to e-discovery issues and the challenge is in learning how to operate areas of information governance, e-discovery, and data security cohesively

  • Data are created and stored across many media, and the amount of data grows at an exponential rate

  • Securing information at every stage of the EDRMcollecting, copying, and transferring data

  • Ensuring that the requesting party is taking appropriate steps to secure the data once received

Cyber-security solutions in e-Discovery

  • With the help of the IT team, repurpose standard security riders from other contracts and create new contracts with appropriate protections in place

  • Ensure comprehensive protective orders at the beginning of legal cases

  • Maintain open and regular communication with law firms and e-discovery vendors

  • Reduce the number of copies involved in production wherever possible

Some of the well-known data security providers in the market are VTO Labs, Pure Storage, Sophos Professional Services, OneNeck IT Solutions, Thales, Cybriant, IBM Managed Security Services, Sirius, etc.

Challenges Faced During Legal Technology adoption and solutions

Hurdles in adoption and solutions:

Technological adoption may seem overwhelming initially, but corporates and law firms do not have a choice but to embrace the inevitable. Some of the most common challenges firms face when adopting new legal tools or software and the appropriate solutions are as follows:

  • Hurdle 1: The time to invest in technology adoption may mean time lost on casework, especially for small firms.
    Solution : After an initial investment period, the personnel would realize how new technology can save time in the long run.

  • Hurdle 2: The short-term costs of technological adoption may lead to long-term benefits, but there is uncertainty about the future.
    Solution : To reduce the risk of uncertainty, firms must do enough research about the technology before investing in it.

  • Hurdle 3: Technological solutions may not be compatible and capable of communicating and operating together
    Solution : No compromise must be made by the firm in terms of communication due to incompatible solutions. Proper research and understanding of technology are crucial.

  • Hurdle 4: The looming risk of cyber security poses a major hurdle to adoption.
    Solution : Effective risk management strategies must be designed and adopted along with the tools.

Case Examples/Success Stories of Legal Technology Adoption

Success storyDigital transformation during the pandemic

Workflow Automation — An entertainment and media giant implemented Workflow Automation, that is, a series of automated actions that replace manual processes and eventually reduce instances where physical contact is involved. The service provider Avvokahelped the client in automating a variety of internal documents like NDAs and partnership agreements.

Primer Grupo

  • With the rising amount of paperwork that firms are tasked with, this Spanish-based real estate franchise wanted to find a way to streamline the contract process, draft error-free legal documents, update the contracts when legislations changed, and collaborate effectively as a team.

  • They leveraged the document automation platform by Bigle Legal to automate their contract creation, collaborate online and offline, analyze and track progress, leverage digital signatures, and easily integrate with their CRM.

  • As a result, this technology helped Primer Grupo to save 1320 hours and €45,000 each year.

L’Oreal

  • The legal team at L’Oréal Australia and New Zealand leveraged Plexus to free up more time.

  • Plexus is a legal automation tool that offers end-to-end contract lifecycle management, automated workflows, and self-service apps.

  • Plexus’ legal innovation tool has helped the L’Oréal business team in Australia and New Zealand to “self-serve” on regular simpler legal tasks and bring in a human lawyer when a matter is more complicated.

  • As a result, while an average agreement that once took four hours to be generated is now completed in 18 minutes.

Tees Law

  • This large UK-based firm with more than 100 years of experience wished to streamline its document production.

  • The firm adopted a speech recognition tool by BigHand, which helped the lawyers record their thoughts in the moment and dictate this speech to be converted into text.

  • This legal tool has helped Tees Law cut dictation time by 33 percent, as compared to the dictation software they had used before, which was then sent for normal transcription.

The Post Pandemic Outlook

Beyond the COVID-19 crisis — Lasting impressions

The legal sector is expected to look vastly different after the pandemic. Technology will continue to rule the legal services, as it has always been the way forward. The pandemic only expedited this change, helping the sector to emerge stronger than before. Some of the predictions of experts regarding the post pandemic legal industry are as follows:

Legal technology is the future norm

  • Even after the pandemic is over, we may expect to see organizations adopt technologies that reduce costs and drive efficiency.

Shift in focus

  • As an increasing number of organizations consider how technology adoption has become the norm, the focus would shift from “how technology can support the legal industry” to “what technology does in the best way”

  • Law firms and legal departments would focus on efficient and cost-effective solutions.

Customer experience will take the centerstage

  • Tools that increase value and reduce costs for clients and/or internal stakeholders will be in demand in the post COVID-19 scenario.

Other insights on post-pandemic work scenario

  • The use of digital collaboration technologies is expected to continue even when lawyers return to the physical workplace.

  • Law firms and legal departments would continue to explore emerging technology.

  • An example of this is the development of “virtual worlds” for work.

  • A virtual world is nothing but a computer-generated, shared, online virtual environment.

  • Users of virtual worlds interact with one other through digital personal representations.

  • They speak with one another using microphones, send messages on the virtual platform, and share documents.

  • The post-pandemic picture of a law firm might very well look like this.

  • Further, legal automation would also increase post the pandemic as every firm would want to minimize human interaction and involvement until necessary.

What Changes can Corporate Legal Teams Bring in to Meet Post-Pandemic Legal Service Requirements

Internal changes required of corporates (post pandemic)

  • The pandemic has taught us all lessons, the most important being that the status quo can change at the most unexpected times.

  • Law firms and corporate in-house teams must, therefore, encourage a more flexible work culture in terms of accepting new technologies and invest in tools that improve legal processes, even if it means a departure from traditional ways.

External changes required of corporates (post pandemic)

  • Instead of engaging with law firms first and then negotiating on the type of technological tools they can adopt to reduce billing rates, corporates can include a section for understanding the technological prowess of a law firm in the RFP itself.

  • The law firm evaluation metrics must also include a section on how up-to-date the firms are with respect to their legal tools.

  • Corporates must gain market updates on the evolving legal software in legal space and look to adopt important ones if their benefits include cost savings and efficiency.

Conclusion

There is rising confidence that legal technology would transform the legal industry in a way as never seen before. It is crucial that both law firms and legal departments need to watch for such trends and the ever-changing supply landscape. Although the pandemic will end one day, the enormous changes that it expedited in the legal realm would make it difficult to go back to what it was before COVID-19. Physical presence during interactions would happen again, but online and digital medium would continue to trend even after the pandemic. The convenience, cost savings, etc. are far too high to give up.

Every law entity must continue to be on its toes and remain vigilant in this fight for survival, because although the future is uncertain, it is definitely not bleak.




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