Technological and digital advances in the last decade have been dramatic. Years from now, historians may view this to be as momentous a time period as the Industrial Revolution. It’s an exciting time for many, but others feel anxious about the pace of change. There are winners and losers. Most, however, will benefit. But one thing is certain: New technologies are allowing us to create new opportunities and businesses, to gather big data, analyze issues, assess outcomes, and act faster and more efficiently than ever before. There is disruption abounding, and it has dramatic implications for the legal services community.
[To read more of William Mark Levinson’s thought leadership click here]
What are we, legal practitioners, doing to take advantage of these technological advances? Are we using the latest technology to better serve our clients? Are online legal document service providers or “virtual law firms” the future of legal service delivery? What are the implications for legal consumers substantively and qualitatively? What are the risks for retail legal service consumers who choose to digitally download legal forms and fill in the blanks, rather than retaining a traditional lawyer? And what about clients utilizing the more traditional law firm model to help them navigate new laws, rules, regulations, and market developments? Clients are demanding services be delivered more rapidly and cost effectively and they deserve to have the latest technological and digital advances to meet these important goals.
Technological innovations touch four key areas for lawyers:
1. Legal cost and process
2. Risk management
3. Legal and markets guidance
4. Accessibility
LEGAL COST
First, clients want more certainty in their legal costs—and efficiencies to reduce such costs. This demand has led law firms to develop data to challenge and revamp the 100-year-old billable-hour tradition with new alternative billing models, such as fixed, flat, blended, or capped fees. Studies have shown that, in corporate law departments, approximately 70% of fees paid to outside counsel were based on billing arrangements other than standard hourly rates or billable hours.
Studies have shown that, in corporate law departments, approximately 70% of fees paid to outside counsel were based on billing arrangements other than standard hourly rates or billable hours.
Second, clients want more efficiency in the billing process and more frequently are asking for weekly legal-spending updates. Legal professionals are using artificial intelligence (AI) to examine timekeeper entries to find duplication of effort and ensure that work was authorized. Technologies are assembling financial data to enable a client to know, in real time, project costs and whether time invested was authorized. Also, many law firms are implementing shorter billing cycles with e-billing technology to turn time “inventory” more rapidly. Law firms have discovered that circulating invoices on tighter timelines means greater revenues that translate into millions of dollars annually. A win-win for both lawyer and client.
RISK MANAGEMENT
Lawyers are increasingly making use of technology and AI to better identify areas of legal exposure and evaluate financial risk. While it is unlikely that a computer can replace a lawyer’s ability to apply judgment to a set of facts, AI can develop factual information more rapidly and aid a lawyer’s evaluation of risks and alternatives.
LEGAL AND MARKET GUIDANCE
In today’s digital world, clients need and want to be able to access information from anywhere in the world 24/7. Many law firms have developed dedicated “knowledge management” departments devoted to utilizing the latest technologies to bring information and value to clients: utilizing AI to perform faster and more economical due diligence; specialized data rooms that enable transaction participants anywhere in the world to access information and documents at any time; and daily e-newspapers, which provide clients with a tailored review of legal and market developments affecting their particular business. Knowing market and legal trends in real time is critical and of great strategic and tactical value to clients by addressing issues such as intellectual property, finance, real estate, estate planning, and mergers and acquisitions.
For retail legal consumers, one cautionary consideration should not be overlooked when using technology: Many retail legal consumers use Google for substantive legal research and form documents. Online options empower the retail legal consumer to address their own legal matters. While this approach may seem less costly, don’t forget the adage “A lawyer who represents himself has a fool for a client.” While online research is a less costly approach up front, in the long run, mistakes or omissions can be a trap for the unwary and result in losses far greater than the cost of consulting a legal professional.
ACCESSIBILITIES
Law has gone mobile. Lawyers now have access to their law firm’s database on their smart devices. Client documents and information from other sources is available through secure, web-based platforms that can be accessed anywhere, anytime. Attorneys can serve their clients whether in the office or out of town. Information is always at their fingertips to serve client needs.
[For more on Carlton Fields’ approach to Corporate Law click here]
TECHNOLOGY IS A POWERFUL LEGAL TOOL
Technological and digital advances give legal practitioners important tools to better serve their clients; achieve desired results efficiently and cost-effectively; and have remote access to important databases and thus the ability to serve client needs on a moment’s notice. As legal service providers, we must not only utilize advanced technologies, we must continue to be engines of disruption ourselves, always thinking about how the latest technological resources can be used to develop new skill sets and automate routine processes, how we can use AI and big data to understand and analyze information more efficiently and cost-effectively, and how we can use digital and technological advances to educate, inform, and serve our clients in real time.
