Whats the biggest threat to the future growth ambitions of top law firms?
Increased competition from international firms? No.
Attracting and retaining the best talent? No.
Remaining on top of compliance? No.
Its cyber risk. As in the accidental leakage of confidential data through email hijacks, phishing attacks and malware.
This relatively niche, back-office support problem has become so troublesome in recent years that it was listed as the biggest threat to the future growth ambitions of the top 100 law firms. A whopping 90% of law firm leaders said they are extremely or somewhat concerned about cyber risk in PwCs latest Annual Law Firms Survey.
The seriousness by which law firms are treating this threat is understandable the very foundations of the legal profession are based on client confidentiality and client trust. The pandemic only fuelled fears even further, with remote working creating a whole new set of cyber security risks for law firms to monitor, visit this site for extra info.
Despite a growing awareness of the risks relating to cyberattacks, instead of investing in long-term tech infrastructure that can adequately support their future growth ambitions, the majority of law firm leaders often expect their already overstretched and under-resourced IT teams to simply handle it. To demonstrate the severity of the situation most IT departments are in, the same PwC survey found approximately 15-31% of the top firms admitted they were unable to tell if a cyberattack had even taken place.
Law firms need to stop viewing technology as a support function. Cyber risk is only the tip of the iceberg. With a strong tech infrastructure in place, law firms can outpace their competition, better align with client expectation and properly defend themselves against cyberattacks. Without it well theyll have more to worry about than stopping their staff from opening dodgy emails.
Moving beyond the bare minimum
The pandemic acted as a catalyst for tech adoption across the legal sector, with countless IT teams working through the night to set their employees up to work from home. As a result, we saw the mass adoption of video conferencing solutions such as Microsoft Teams and Zoom and communications tools like Teams, Slack and Trello. Many firms also embraced workflow tools such as e-signature software.
While this shows great progress, most other sectors had already implemented these systems before the pandemic struck the legal sector was simply keeping pace.
Generally speaking and without judgement, lawyers often think of technology in one of two ways: they view it in far too simplistic terms (videoconferencing tools, emails, technology that was around in the 1990s), or they view at as being far too advanced and beyond reach (robotics and the like). The long-proven tech tools that can make a real difference to a law firms bottom line by automating low-priority tasks, streamlining workflows or sharing information can be overlooked altogether.
Just look at the way in-house lawyers at FTSE 350 organisations operate. Not only are these teams utilising legal technology, theyre working alongside their large enterprise IT departments to introduce innovative new processes previously unseen in the legal sphere. Another survey highlighted a significant drop in the number of in-house lawyers that felt deploying and integrating new technology was a barrier to adoption, falling from 56% in 2018 to 40% in 2020.
Law firms want to move in a similar direction, but whats holding them back is their if it aint broke, dont fix it mentality. A 2021 survey by the Solicitors Regulation Authority (SRA) found the biggest barrier stopping law firms from innovating is uncertainty about the expected business benefits (36%), followed by not a strategic priority (31%), and the mentality that it isnt needed at my firm (27%).
Getting the right infrastructure in place
Lawyers can spend spend a large amount of time on highly repetitive tasks proofreading documents, researching answers to client queries, rewiring pre-existing contracts and the like. I know what youre thinking: its repetitive work, but its important work and youre right!
But what has changed in recent years are client expectations. Clients now expect more for less. The latest LexisNexis Bellwether survey found 58% of lawyers felt that their clients are more likely to expect the same or a greater level of service for less than they were 12 months ago. In addition, 45% of respondents said client expectations are now higher. There is also a shift towards greater transparency around fees.
To counter this growing problem, a rising wave of firms are seeking to increase efficiency by introducing new systems to improve both internal and client-facing processes. These, in turn, will free up staff so that they can spend more time with clients, adding more value.
One such example is Lexis+, a platform which allows lawyers to research the latest cases, precedents and legal titles alongside accessing practical guidance across a whole suite of practice areas. All uniquely accessed from one place with one search. It also has a range of checklists, calculators and flow-charts to speed up legal work and ensure accuracy. Smart AI tools help understand the question being asked, suggesting possible answers drastically speeding up legal research.
Legal drafting tools is another example. Imagine being able to quickly draft legal documents by pulling together previously used clauses, accessing relevant practice notes and sharing them around with colleagues. Some, like LexisCreate, even allow you to do so without ever leaving Microsoft Word.
The point is, there are a wealth of CRM, automation and AI-powered tools on the market that come with massive time-saving and cost-saving benefits. But without modern cloud-based environments and systems, such as Microsoft 365, a large proportion of this technology and innovation will not be accessible.
The previously mentioned SRA survey found less than a quarter of all law firms are currently storing data in the cloud while a survey by ILTA predicted a more generous 41%. Regardless, this tells us that many firms have yet to migrate to the cloud, despite organisations such as the American Bar Association stating that client data is more secure stored on a reputable, professionally-managed cloud server than on office computers and laptops.
The real risk of failing to innovate
Firms that decide not to invest in a modern IT infrastructure now could face serious consequences in the years to come. Aside from missing out on the latest tech, these firms will risk losing clients and potential revenue.
Firms that fail to keep pace with changing demands and evolving technology requirements will look outdated, ill-prepared, and not partner worthy.
Its also a high probability that the majority of a firms client base is already using this type of technology, which means to ensure seamless integration and workflows, firms need to be using the same systems and processes. There is also the risk of law firms without the latest technological tools falling foul of client procurement teams.
To summarise, firms that fail to invest in an IT infrastructure risk:
- Missing out on innovation outdated infrastructure means not being able to adopt the latest legal technology
- Increasing security threats new technology is inherently safer, for example, the cloud is the safest place to store and manage a firms and its clients data
- Inefficient workflows not using the same systems as stakeholders results in more back-and-forth, manual updates, and human errors.