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Technology in the Legal Sector

In insight / By Lydia Cooper / 16 May 2018

In PWC’s 2017 Annual Law Firms survey, firms said that one of their top two priorities across Business Support functions was improving the use of technology. And, the focus for improving IT functions within their firms centred around getting the basics in place.

These results echo what we’ve been hearing from our clients and experts across the industry; there’s an abundance of technology and innovation available, but many of the IT basics aren’t yet being leveraged effectively. Some firms are still using processes that are heavily paper-based which is hampering their ability to compete in the market.

And the knock-on effect not only impacts your own firm, but also your clients and any other businesses you engage with.

“We still see practices who aren’t even using email for the majority of their client and business interactions,” says Joanna Kingston-Davies, COO at the Jackson Lees Group. “When we have to engage with a practice that is still relying on fax machines and letters for communications, it slows down the process for everyone involved.”

Not leveraging technology effectively is now having a big commercial impact on many firms, and has the potential to cost them their business.

“Every year, approximately 350 law firms go bust due to not properly managing their working capital, whether it is generally down to not regularly validating work in progress or allowing time recording to outstrip fixed fee arrangements,” comments Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy. “Technology can help make many of these activities become more efficient, by triggering reminders and speeding up administrative activities to deliver better services to clients. We hear a lot, for example, about AI but many firms are still not making the most of the technology they already have.”

The report from PWC shows that the most popular digital and technology initiatives across the sector include: client collaboration tools (72%), automated document production (41%), mobile applications (39%) and data visualisation (13%), so firms are clearly looking at how tech can improve their operations and enable them to compete in a demanding market. (Source)

Protecting with technology

Many firms are now also looking at how to better protect themselves now that technology is central to their firms’ operations, especially for data management and client communications activities.

Across the industry, we’re seeing clients investing more money in security measures to protect their IT and systems. In short, cybersecurity awareness and spending are on the rise.

“The main focus now for many law firms is cybersecurity and how they can put in place as much protection as possible to mitigate the risk of a cyber-attack,” adds Nigel Redwood, CEO of Nasstar. “Cybercriminals recognise that law firms hold valuable information that could be lucrative in the hands of a cybercriminal, and with GDPR penalties coming into play in May 2018, firms will need to ensure that they have steps in place to protect data and manage situations accordingly in the event of an attack. We’re certainly seeing more clients increasing their investments in cybersecurity technology.”

With 62% of law firms reported to have been a victim of a cyber-attack (Source) and the increasing reliance on technology to manage documents and store files, many firms still need to do more to better protect themselves. In 2015, 4% of all data breaches in the UK reported to the Information Commissioner’s Office related to the legal sector (Source), and the sophistication of attempted cyber-attacks continues to grow.

But the buck shouldn’t just stop with IT when it comes to protecting your firm from a cyber-attack.

“As more services move to being based on technology or cloud services, such as hosted telephony or case management software, the risks around protecting data and systems inevitably increase”, says Bill Kirby. “So, with every step forward in terms of increasing the amount of technology being used, firms also need to consider how to increase their security and data protection – and it is not just IT but also the human element – and management has to own the whole process.”

Competitiveness across the industry

Technology clearly provides an opportunity for firms to become more competitive, with many regional firms using their smaller footprint and agility as an advantage when it comes to refreshing their approach to tech.

Bill Kirby has seen the impact of regional firms embracing technology: “Many regional firms are more competitive than the traditional commercial London practices because they have been forced to review their businesses to uncover cost-savings and improve efficiency.”

Firms that are able to capitalise on technology advances across the industry as early as possible can use it to speed up their processes; replacing traditional, paper-based activities with software-driven tech to increase their operational agility, and ultimately deliver better services to clients.

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Thank you to our contributors for this article:

Joanna Kingston-Davies, COO at the Jackson Lees Group

Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy

Nigel Redwood, CEO of Nasstar

Lydia Cooper

Lydia Cooper

Group Marketing Manager at Nasstar.

Telford, Shropshire
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