A Guide to Digital Transformation for Law Firms

Law firms are finally starting to embrace technology as a means to not only improve efficiency and performance, but also to reach customers on various different channels. After two years of pandemic-driven remote communication, digital transformation is taking hold at law firms large and small as they experience the many benefits for themselves. 

This complete guide to digital transformation in law firms not only explains the ways that technology is changing the legal profession for the better, but also why it is important, how to go about it and how to handle challenges along the way.

What is digital transformation in law firms?

Law firms are a very “people-first” business. Partners who run the firms, lawyers who work with clients, and the many other support staff have largely operated outside of the world of technology. Save for the use of online document signing, customer databases and email, digital transformation has been slow to reach the legal profession.

So what exactly does digital transformation in law firms look like? Digital transformation is the process of adopting and incorporating technology across the organization to create more efficiency, reduce errors, enhance capabilities, increase insights and improve customer relationships.

Digital transformation may start with low hanging fruit such as automating mundane tasks and enabling remote meetings with clients. However, there is enormous opportunity for law firms that transform further.

There has been rapid growth in the legal technology (LegalTech) space in recent years. Specific software and platforms have been developed to improve many elements of the legal profession. The pandemic increased innovation in technology for safe document sharing, depositions and notarization. There’s also software that utilizes AI to give lawyers new insights. All of this adds up to a modern law firm that uses technology to their benefit and to benefit their clients.

4 ways the legal profession benefits from digital transformation

In law firms, digital transformation looks different from company to company. Each law firm has a speciality and specific clients that dictate what type of digital transformation matters most to them. For example, corporate law firms will have different requirements than family practices. It’s important that the firm understands all of the options and then focuses on the opportunities that would make the biggest positive impact to their own operation.

Here are four important categories of digital transformation that can positively impact law firms of any kind:

• Automation: The Mckinsey Global Institute notes that 23% of the work done by lawyers could be automated. From filing papers to signing contracts to reviewing documents for errors or discrepancies, technology has been created to eliminate these mundane tasks from a lawyer’s day. For example. Lawyers spend many hours scrutinizing documents — reviewing contracts, looking for discrepancies, looking at evidence to prepare an argument, and so on. Law firms can implement technology to support these processes, improving insights and accuracy while removing some of the burden from lawyers and junior staff.‍

• Security: This is both a benefit and a necessity. Increasing security with technology can keep information safe and give clients peace of mind. It’s also important that law firms prioritize security throughout their digital transformation. In the ABA’s 2021 Legal Technology Survey Report, 25% of law firms noted that they had experienced a data breach of some kind in the past year. As law firms experience pressure from clients to bring more of their work online, it’s important that they also invest in cybersecurity technology that ensures privacy compliance and that all data is secure. The report notes that only about half of law firms have security policies in place, and in some cases, don’t have a full time staff member dedicated to managing security. It’s important that law firms get smart about security as parts of their firm embrace new technologies.‍

• Customer Experience: Technology can give law firms an edge with customers who have embraced online channels across many other parts of their lives. Customers may prefer to share documents digitally, or have a video conference rather than visit a law firm in person. It’s important for law firms to understand which elements provide the most benefit to their customers and lean into those areas of digital transformation first. For example, real estate attorneys may start with digitizing contracts and embracing online notarization. Litigation attorneys may embrace software that enables remote evidence sharing and online depositions. Each firm has unique client needs and will need unique digital solutions to match.‍

• Intelligence: Technology can provide lawyers with insights beyond what they can glean from pages and pages of documents. There are solutions available that use natural language processing to “read” documents — spotting issues, discrepancies, and even emotions or forgeries. Software can comb through data to spot patterns that may unearth important information and insights. Sophisticated, AI-driven software can also help lawyers build a case or restructure a contract in ways that they wouldn’t have otherwise been able to do or in a fraction of the time.‍

‍How law firms can advance digital transformation‍

Historically, partners have been resistant to adopt some technologies for fear that it would disrupt the way they’ve always done business. A common concern is that technology (especially automation software) could reduce the time that the firm spends on certain clients, which might reduce hourly billing.

However, the overall benefits to the firm ultimately win out, as using technology will free up lawyers’ time to take on new clients rather than focusing on administrative or manual tasks.

The most important steps to moving ahead with digital transformation in law firms are:‍

1. Start small: Any stakeholder willing to transition to a digital technology should be given the opportunity to test on a small scale. Perhaps a certain type of document can be easily digitized for online notarization, or a certain type of case is a perfect candidate for natural language processing. With just a few tests, the team will get used to the new process and start to see for themselves how it could improve their approach at a larger scale.
2. Measure and share success: Whenever a new technology or online option is used, it’s important to measure the value to the firm. How much time was saved? How many new insights were gained? What level of error reduction occurred? Share these metrics with partners so that you can get their buy-in.‍
3. Grow intelligently: As people become more aware of the benefits of digital transformation, it will be critical to prioritize new efforts and get everyone on board before implementing another technology. Introducing too many new processes too quickly can be overwhelming and ultimately have adverse effects on digital transformation.
   

Working through the challenges of digital transformation in law firms

The digital transformation process will have its share of challenges. As with any change, it’s likely that there will be resistance from those who don’t want to change the way they work. You may also experience difficulty getting budget for big-budget software, and there will inevitably be concerns about privacy, safety and security of important information as it’s moved from paper to online or to a new platform.

Digital champions — those leading the implementation of new technology — should expect these bumps in the road and be proactive. For example, sharing a timeline that leaves room for learning and ramping up, frequently reminding colleagues of the positives to keep them motivated to change, and acting as a resource to help when issues arise. And, of course, sharing those successes loudly and proudly will ensure that everyone feels good about the work they put in to embrace digital transformation.