What is Legal Technology & top trends for 2023

What is Legal Technology?

Legal technology is the use of tools and software to help legal teams improve their legal service delivery. The goal of legal technology is to help legal teams digitize and automate their services to improve delivery, access and speed to the business. In 2021, over half of all legal departments increased their use of legal technology, highlighting the market demand for in-house legal tools within the industry. Legal technology is a rapidly growing area, with new advancements that can help add value to legal teams across organizations. Has historically been very conservative up until recently. A survey from Gartner found that although 87% of legal departments are looking to decrease their full-time staff members, this will increase threefold through 2025 as in-house legal teams struggle to keep up with increasingly complex demands from their organizations. Knowing what legal tools are available and the value they provide is vital to the success of in-house legal operations.

What are the different types of legal technology?

Practice Management Systems (PMS)

Practice Management Systems are software that manages the running of law firm practices. These tasks include tracking important deadlines, managing cases and documents, billing clients and accepting payments.

Matter Management Systems (MMS)

Matter Management Systems support the review, storage, management and delegation of matters within a variety of legal processes. One of the biggest appeals of MMS is that they provide strong data management for legal ops.

Document Management Systems (DMS)

Document Management Systems help store, file and search for documents electronically. This software is also capable of email management which ensures file documents and conversations are stored under relevant folders.

Expert Systems/Workflow Automation

Expert Systems, also commonly referred to as workflow automation, enables lawyers, managers and staff members to automate manual processes and scale the delivery of legal services to the business. These platforms automate and streamline matter intake and triage, document creation, advice delivery, FAQ answers, approval workflows and more.

Document Automation/Document Assembly

Document Automation or Document Assembly is a legal document automation software that helps create documents by using if-then logic. This software can create multiple drafts of the document and can insert captured information, manage conditional clauses and adjust to use proper grammar depending on the context.

e-Billing Software

This software typically handles legal expenses, enforces fee protocols and internal budgets, and analyzes spending trends and service provider costs and performance. Legal teams will often avoid reviewing lengthy bills and typing line items into spreadsheets to generate reports, but e-Billing software takes care of these manual processes.

AI-enabled Contract Review

AI-enabled contract review software increases the speed, ease and accuracy of drafting and reviewing contracts. This software leverages machine learning to automatically call out and extract key details or errors within the document.

How can legal technology improve your legal department?

Not only is legal technology beneficial to the lawyers who use them, but it also helps everyone that participates in an organization’s legal system. Legal automation especially has the most direct benefit to legal departments because it improves the way they engage and receives legal services. Legal teams can increase their department’s value when they implement the right legal tools for their organization’s needs. Here are some examples of what legal technology can do to benefit their departments:

1. Giving back time to legal teams – Legal teams do not get to spend much time working on high-value projects. In fact, only 17% of an in-house lawyer’s time is spent on strategic work. Legal technology allows legal teams to refocus their expertise on high-impact tasks by using legal automation to create self-service journeys for low-complexity tasks.
2. Business clients do not have to wait as long for services – There are times when legal request volume is high, creating a bottleneck effect. In some cases, clients will have to wait for extended periods of time just to get a response from legal teams. When legal teams utilize their tools, they can improve accessibility to services through legal self-service while addressing important legal requests quickly.
3. Higher compliance rates among legal teams – Legal automation technology improves the accuracy and adoption of legal practices and processes. For example, by adopting automated compliance solutions, organizations can increase efficiency and the quality of work, increasing their competitive advantage in the market.
4. Creates consistency of service delivery – A major benefit of leveraging legal technology to provide legal services is that it creates visible and direct improvements to the delivery of legal services to everyone.
5. Capturing data – Legal teams must keep accurate data to work more skillfully. The use of legal technology allows legal teams to access and capture data that is more difficult to attain with manual methods like calling and email. Using legal technology to capture and store data ensures that legal teams do not lose any important information.

How are companies using legal technology in their departments?

There are various ways that legal departments can leverage legal technology to boost their productivity and bring value to their organizations. Whether it’s workflow automation tools or contract lifecycle management software, there’s plenty you can do with legal technology. Below are some ways that lawyers can leverage a tool like workflow automation to streamline their workflows:  

• Coca-Cola Europacific Partners uses Checkbox as part of its legal tech stack as a legal workflow automation tool. As a result, their legal team has automated multiple internal operations including bank guarantee management and semi- or fully automated drafting, execution and filing of simple, low-risk agreements.
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• Xero also leverages Checkbox in their legal tech stack as an automated NDA solution, that rapidly deploys NDAs through no-code automation. They were also able to create a self-service NDA tool where business users are self-guided through the information intake, the generation of an NDA, through to e-signature.

Emerging Legal Technology

The introduction of Chat GPT-3 and other AI advancements has significantly impacted the legal technology landscape, which is a continuously evolving space. New AI applications and solutions introduced to legal departments on a regular basis, and staying updated with industry news is critical in remaining informed about the latest developments in emerging legal technology trends. With that being said, here is a breakdown of the emerging AI scene in legal technology:

• Contract Management: AI is revolutionizing contract analysis and management processes. Companies are using AI to analyze and extract key information from contracts. This also assists in streamlining contract lifecycle management.

• Document Automation: AI-based document automation platforms are becoming increasingly popular. This technology can automate the generation of legal documents, such as contracts, agreements and legal letters, reducing manual effort and accelerating document production.
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• Legal Chatbots & Virtual Assistants: The introduction of Chat GPT-3 and similar AI models has led to the development of legal chatbots and virtual assistants. These AI-powered conversational agents can interact with clients, answer common legal queries and provide initial guidance.
   
• Compliance & Regulatory Technology (RegTech): AI plays a crucial role in compliance and regulatory processes. Companies are leveraging AI to monitor regulatory changes and ensure adherence to legal and regulatory requirements. It can also assist in identifying potential compliance risks and mitigating them proactively.
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• Workflow Management: AI tools are being applied to streamline legal operations and workflow management. These tools assist with task assignment, deadline tracking, collaboration and resource allocation, optimizing the efficiency of legal teams and enabling better project management.

What are some legal technology trends for 2022?

1. Increased cybersecurity – With many teams having shifted, or already shifted, to remote and hybrid work, legal teams will need a stricter security framework to prevent data breaches. The Washington Post reported that globally, organizations lose $1 trillion annually due to breaches. As a result, there is an upward trend in making cybersecurity technology more accessible to legal teams.
2. Increase in spending – Since the pandemic, legal teams have been tasked with greater workloads, putting pressure on their already scarcely staffed teams. According to Gartner, by 2025, large organizations will need to have multiple legal technologies in their stack to meet these increasingly complex demands. As a result, legal technology saw record levels of activity in 2022 with new platforms entering the market. As teams make the push to automate their day-to-day tasks, legal technology spend will continue to increase.
3. Rise in workflow automation – Legal workflow automation allows legal teams to automate, streamline, and execute processes between people, systems, and data using predefined business rules. As organizations make the push for legal teams to become more strategic, the legal tech space will see an increase in demand for workflow automation for quicker and more accurate legal processes.
4. Increased demand for a platform solution – With a variety of tools in the legal tech ecosystem, it can be difficult for legal teams to keep track of which tools perform specific functions. Many of the tools that exist in the market today are single-point solutions designed to solve a specific problem. Organizations adopt many different tools for multiple solutions, which can cause confusion among the legal teams that use them. As a result, platform solutions will be in higher demand for legal teams across organizations.

As general counsels and legal ops look for new ways to increase efficiency across their legal departments, legal technology will serve as a major asset to help legal teams drive change in the organizations they serve. By using legal technology, legal teams can quickly scale their legal service delivery independently. When legal teams adopt legal automation technology, it ensures that legal teams can achieve significant, organization-wide benefits.

In conclusion, legal projects will continue to increase in size and demand, requiring more labor from legal teams with fewer resources. The key to success for legal teams is in delivering professional and efficient services, which is vital for the success of legal teams everywhere. Automation in the legal industry will propel legal teams forward as they look for ways to improve their in-house legal operations. Legal tech serves as an extension of the legal team to improve the overall quality of their legal services.

Learn More: Is legal technology something you’re looking to implement in your legal teams? Request a demo today, and a legal technology expert will help determine if our platform is right for you.