The only way to make sense out of change is to plunge into it, move with it, and join the dance.” – Alan Watts
In a recent 2024 article[1], it was reported that the impact of legal technology on the global economy in 2021 was around $127.7 billion. It is predicted this will increase to more than $225 billion by 2027. The article notes that the top two priorities of business support departments in law firms are increased utilization of technology and process standardization. Following this trend, we expect a rise in investments in legal technology, along with an increase in employee training for the effective use of these tools, within law firms.
In the realm of M&A, technological advancements over the past decade have already revolutionized the due diligence review process. Various machine learning solutions can now swiftly sift through vast amounts of data and summarize key provisions, identify risks, and validate assumptions. Technology also facilitates real-time collaboration through secure virtual data rooms, where sensitive information can be shared and discussed safely. Cloud-based project management tools streamline workflows, keeping parties updated in real time and aligned throughout the deal lifecycle. Technology solutions can also automate compliance checks, monitor regulatory changes, and flag potential risks early. These capabilities mitigate risks that could jeopardize the success of a deal. Companies using these tools have reported enhanced efficiency and accuracy in handling transactions.
Since 2023, there has been a massive interest in using generative AI in the legal sector. The same article notes that the generative AI legal market size was valued at $52.27 million in 2022 and is expected to balloon to a whopping $781.55 million by 2032. Applications of generative AI include generating provisions with legal documents, using predictive analytics to estimate case outcomes, and analyzing data to identify market trends, risks, and opportunities. We also see recent developments powered by a combination of AI techniques, as machine learning platforms begin to integrate generative AI into their solutions.
Despite the potential and promise, it has remained a challenge for most law firms to integrate legal technology into their systems, and several factors are to blame. One major issue is the limited time available to learn and implement new technologies while managing billable hours. As with any technology, it would be a struggle for law firms to find a balance between investing in expensive tools and managing legal tech’s constant novelty and unpredictability. Additionally, there is a widespread concern that AI might eventually replace legal professionals, a fear common across various fields.
However, instead of fearing technology, law firms should realize that technology cannot take over a profession that is anchored in humanity and relationships. The heart of the legal profession lies in the human experience – the offering of expertise and judgment, the understanding of complexities and nuances, the interpretation of laws and rules, and the making of strategic decisions. These are the exact same things amplified by the use of legal technology. Law firms that prioritize legal tech will not only be more efficient and productive, they will also create stronger client relationships and help spotlight the talents and skills of its most experienced lawyers.
Equally important as embracing advancements, law firms must also have innovation plans and policies in place in adopting and using legal tech tools and AI. Law firms must prioritize training for their lawyers and employees, as effective adoption of new technology relies on it. Like any new endeavor, continued practice will reveal more efficient methods and more effective processes over time. As such, it is reasonable to expect the emergence of new roles or areas of expertise dedicated to training and implementing legal tech systems and practices within law firms. As the legal profession is centered in client relationships, clients must also be assured that law firms are using legal tech and AI safely, effectively and responsibly. Legal tech is the future that must be both accepted and planned for. It may not replace lawyers, but it can be revolutionary when leveraged effectively. Technology is here to stay and grow, and legal professionals who take the time to learn how to ride the tide of change will rise above.
[1] https://www.lexisnexis.co.uk/blog/future-of-law/50-must-know-legal-tech-stats-for-2024