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LCN Says

The present and future of legal tech

updated on 01 July 2024

Reading time: five minutes

Legal institutions are making significant strides towards digitalisation, driven by technological integration and the evolving needs of modern working practices. As law firms navigate economic instability and embrace the rise of AI, there’s a fundamental shift in how clients evaluate their services and value.

Historically, lawyers have often wasted significant amounts of time on manual data and administrative processes, whereas their clients are becoming more sophisticated and increasingly seeking high-value consultancy rather than mere hourly billing. This means that a technology like generative AI is likely to enhance efficiency and predictability in legal services, providing the insights necessary to craft more accurate alternative fee arrangements (AFAs) and offering greater transparency.

This accelerated move towards digitalisation includes a focus on efficiency and transparency, with innovations like generative AI poised to make legal services more efficient and the work output more predictable for both clients and firms.

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The integration and implementation of digitalisation in firms

The shift is driven by the integration of technology and the increasing demands of a digitalised environment. Lawyers now have access to a wide range of innovative technologies that significantly enhance their practice. These include data analysis, contract review and analysis, document drafting, and virtual collaboration programmes.

Research by Litera reveals that an overwhelming majority of legal professionals (89%) acknowledge the efficiency enhancements brought about by legal tech, with 82% specifically attributing these improvements to AI tools. Moreover, there’s a growing trend towards streamlined business operations, with companies increasingly recognising the need for efficient, integrated systems. Adopting all-in-one solutions and customer relationship management (CRM) software not only simplifies business processes, but also improves data management and enhances client experience.

The integration of AI in law firms is revolutionising traditional workflows. Tasks that once required substantial manual effort are now expedited through AI-driven solutions, enabling lawyers to focus more on strategic and advisory roles rather than administrative tasks. This shift is pivotal in addressing the evolving expectations of clients who demand more value-driven and predictable legal services. For instance, AI-powered data analysis tools can quickly identify patterns and insights that would take humans much longer to uncover, thereby enabling lawyers to make more informed decisions and provide better client counsel.

How Litera supports law firms

It’s a good idea for firms to assess their current pain points before integrating solutions to get the best out of any new tech. When integrated intelligently into daily legal operations, AI tech fosters more data-driven approaches to legal practice. By automating routine tasks and providing deeper insights into legal data, Litera’s ecosystem enables legal professionals to deliver higher quality services with greater speed and accuracy. This not only improves client satisfaction, but also positions law firms as technologically advanced and forward-thinking. In a competitive market, this technological edge can be a significant differentiator.

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Litera’s suite of solutions exemplifies the tangible benefits of integrating AI and technology into legal practice. Among its solutions, Foundation Dragon stands out as part of Litera’s ongoing AI strategy. The tool provides legal teams with immediate access to all relevant data points from prior corporate transactions, including matters, deals and negotiating data. Such comprehensive data access empowers legal teams to negotiate from a stronger position, work more efficiently and ultimately improve client outcomes.

Kira, another key component of Litera’s ecosystem, leverages machine learning and generative AI to automatically extract and summarise provisions and data points of interest in contracts and other documents reviewed in connection with M&A and other corporate transactions. Both Foundation Dragon and Kira address the time-consuming challenges that lawyers face, whether they’re trying to win cases or produce high-quality work for clients. By automating processes such as these, lawyers can dedicate more time to complex legal issues that require human judgement and expertise.

Death of the billable hour

Law firms should be actively investing in integrating AI into their operations and workflows to capitalise on efficiency gains, glean insights into their work and deliver more value to their clients. In response to economic challenges, law firms should strategically adjust pricing models, implement cost-saving measures through better utilisation of technology and consider fee adjustments to maintain financial resilience. It’s essential to tailor these strategies based on regional dynamics and firm size to effectively navigate economic fluctuations.

The shift towards client-centric and value-driven AFAs is gaining traction as the traditional billable hour model faces increasing scrutiny. The perceived ‘death of the billable hour’ is seen as a positive change, prompting law firms to assess how to transition more of their work to AFAs. This shift aligns with clients’ expectations for more predictable and value-oriented billing practices. AI and technological advancements will play a crucial role in facilitating this transition. By providing the tools necessary to streamline workflows, enhance data analysis and improve decision-making processes, AI will enable law firms to offer more transparent and value-driven services. Firms that proactively embrace these technologies will be better positioned to meet the evolving demands of their clients and maintain a competitive edge within the legal market.

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Onwards and upwards

In order to keep pace with the latest technological advancements evolving across all sectors, the legal industry must embrace digital transformation. With so many tech providers in the industry, law professionals should prioritise those that are tailored to their current market needs. Litera aims to revolutionise the way legal teams of all sizes perfect documents, run deals and manage cases. Through integrating advanced AI tools and innovative technologies, Litera is enabling law firms to enhance efficiency, improve client outcomes and navigate the future of legal practice with confidence.

Adam Ryan is the head of product at Litera.