Law firms and in-house legal departments have long resisted technological change, even at the cost of decreased client satisfaction. However, this mindset is changing as we enter our third year of the COVID-19 pandemic. With a crunch on staffing resources, increased work-from-home opportunities, and legal tech streamlining inefficient workflows, it comes as no surprise that the latest industry reports show a significant increase in technology spending.
Discover how digital solutions such as entity management software have addressed many operational issues legal departments and organizations faced in 2021 with this overview of top legal tech sources and trends. Also, learn more about current legal industry challenges and how they can be addressed successfully with the latest state-of-the-art digital legal tools available.
ABA TechReport | The American Bar Association
The American Bar Association's ABA TechReport 2021 was released at the end of November of this past year. It covered several prominent areas of legal technology in eight separate articles. This report combined data from numerous sources, including its annual Legal Technology Survey Report and industry analysis and predictions by leading legal tech experts.
The ABA reported an increase in technology budgets, up 3% from 2020 to 65% in this publication. This trend again appears to correlate with firm size. When asked if they are using cloud computing for work-related tasks, 60% of survey participants said "yes," and the remaining said "no," either saying they didn't or didn't know. This statistic and others highlight how the pandemic has clearly led to technological change in the report.
2021 Legal Technology Trends and Technology Predictions | Gartner
The Stamford, Connecticut-based technology research and consulting company Gartner identified five primary indicators that law firms and in-house legal teams alike should not neglect in their tech strategies. These areas of consideration include artificial intelligence (AI), increasing tech spend, virtual legal assistants, and legal technology experts.
One significant prediction made in this report is the expectation of a three-fold spending increase by legal departments on technology by 2025. Gartner associates this jump to pandemic-induced disruption of operations that has forced prioritization of legal automation and related tech to manage demand with limited staff availability. The drive for industry leaders to expand their technological capabilities is due to other firms having success with tech investments and the advancements in entity management tools and solutions.
ILTA's 2021 Technology Survey Highlights Need for Information Governance | JDSupra
This JD Supra article was based on an analysis of ILTA's 2021 Technology Survey. The findings of this report underscore the challenges law firms continue to face in the realm of information governance, all of which have been become more challenging to address because of the COIVD-19 pandemic.
Some of the statistics noted in this analysis involve issues with Microsoft Teams governance policies and how legal professionals and departments working from home use this platform. For example, survey responses regarding the encryption of shared documents externally were shocking. Only 8% of the respondents enforced encryption of externally shared documents, while 40% did not, and the remaining 50% did not permit external sharing at all.
Positive trends that were shared included findings that law firms were shifting to cloud solutions and appeared to be less averse to new legal technology, such as document management and entity management software.
Legal Entity Management: Beyond compliance | Deloitte
This recent research study commissioned by Deloitte Legal revealed that 26% of in-house attorneys believe global compliance issues have become one of their most significant challenges. This finding is only second to 44% of firms reporting that they have "to do more with less."
Deloitte's analysis concluded that these law practices and departments could make these challenges less worrisome if entity management and compliance efforts were prioritized early. To achieve this goal, the consulting giant recommends creating an operating strategy for legal that aligns with the entire organization it supports. This allows for analysis through multiple organizational viewpoints, and once compliance issues are controlled, measures can be created to prevent repeating previous mistakes.
Deloitte emphasizes in its findings that entity management and the data it provides can support additional strategic activities beyond compliance, including risk management, entity rationalizations, transactions, and reorganization of corporate structures.
The Take-Away
With the pandemic accelerating the demand for technological solutions in almost every industry, legal professionals and law practices are changing their attitudes towards these advancements. This can seem like a formidable undertaking, but it doesn't have to be with Athennian––a cloud-based entity management platform with top-rated intuitive solutions that help scale your business, make data-driven decisions, and drive profits.
Want to learn more about Legal Innovation? Download The CANLIF Legal Innovation Report.
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