What technologies have gained the most traction since Covid-19? What are the most important trends that legal business leaders should be prepared for in 2023?
In this article, we will set out our predictions on the technology that’s likely to shape the legal businesses of the future.
For an example of the power of science and technology to influence the world, you have to look no further than the speed of developing and rolling out the coronavirus vaccines. The vaccines were created using modern technology but they depended on the knowledge acquired from research going back decades. As the saying goes in the technology industry, it takes years to create an overnight success.
So, what new technological developments can be exploited by legal businesses to make them more efficient, deliver a superior customer experience and ultimately more profit?
Here are eight trends worth considering in 2023…
1. The end of passwords
Passwords were developed in the early 1960s by MIT professor, Fernando Corbató as a way to protect private files on his new shared computer system, and this type of authentication became the standard for protecting all digital information and transactions.
But passwords (or alphanumerics) are notoriously insecure as opposed to other methods of authentication. Password managers like Passwordstate and Dashlane can help by tracking the alphanumerics, and even replacing the weak ones for you, but eliminating passwords entirely would be the way forward to better data security.
New data security technology is already available. For example, companies like Okta and Duo as well as personal identity providers such as Google offer ways to log in to apps and services without the need to enter a password. Apple offers a facial recognition system using biometric login technology, and, most recently in March 2021, Microsoft announced that some of their customers could go completely passwordless and followed this up 6 months later by telling them to delete their passwords altogether.
These new authentication methods are becoming more readily available. You have probably experienced some yourself. When you enter a site or open an app, instead of being asked to enter a password, you receive a prompt to enter a six-digit code, tap a notification on your phone or click on a link sent via email, or just raise your phone to your face.
Much easier than using passwords where you have to type in a bunch of characters and symbols that you have to recall, write down, or store in a database, and, most importantly, infinitely more secure.
2. Cloud-first strategies
There are far-reaching benefits for IT professionals in the legal sector to move their firms to the cloud. Including stronger security and increased flexibility for remote working, enabling their clients to enjoy a better client-centred experience.
As forecasted by Gartner:
“Worldwide end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022, according to the latest forecast from Gartner, Inc. This is higher than the 18.8% growth forecast for 2022. Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature.”
Here are a few areas where legal businesses can leverage value from the cloud:
2.1. Data storage in the cloud
Cloud computing services have been widely available for a number of years now, but the trend for 2023 is for more widespread use of cloud data storage for security to counteract the growing risk of cyber attacks on law firms.
Another benefit of migrating data to the cloud would be to offer lawyers the ability to supervise and manage their legal proceedings via the internet using any computer or mobile device from wherever they happen to be in the world. Law firms relying on the cloud for their data management continues to grow, with 74% of firms now storing client data in the cloud.
2.2. Enhancing workplace culture — in the hybrid working era
Business executives now recognise that building connections and company culture not only happens in the real world but more importantly online too, on platforms like Slack.
Brian Elliott, SVP, Future Forum, Slack explains in a Salesforce 2023 tech report:
“The data shows investing in collaboration tools and techniques pays off, with digital leaders outpacing digital laggards on every dimension. Today, productivity scores are 59% higher in leaders than laggards in Future Forum’s Pulse survey. More surprising to many executives, a sense of belonging with one’s team is 2.2x higher for leaders versus the laggards.”
2.3. Enhancing communication methods
Firms looking to modernise their office communication systems to enable better connectivity to staff and clients from any location are looking to cloud-based systems with softphones, sophisticated features and direct integration into their practice management systems. One advantage of this is the ability to text with clients via a platform that allows anyone in the firm to participate.
3. More human robots
Robots in 2023 will become even more human-like in appearance and capability. They will be used in real-world events as, for example, event greeters; they will also be able to perform complex tasks in warehouses working alongside humans in manufacturing and logistics. Imagine a robot receptionist at your firm’s front desk!
While humanoid robots, like Pepper from Japanese conglomerate SoftBank, have already been trialled in UK offices, it’s the AI kind of robot lawyers hitting the headlines right now.
A court hearing in February 2023, for a speeding violation, is set to make history when the defendant is advised by artificial intelligence.
The technology from the company DoNotPay is set to tell a defendant exactly what to say and when during an entire court case. It is likely to be the first-ever case defended by an artificial intelligence robot.
The world's first robot lawyer will run on the defendant's smartphone and listen to commentary to provide its client with instructions on what to say in arguments.
4. Technology to help hybrid working
Adapting to hybrid working is essential for legal professionals to manage the newly distributed workforce most efficiently and cost-effectively. Using new technology tools will maximise opportunities for collaboration, mobility, virtual meetings and working remotely. The aim is to make the lawyer/ client experience as good, or better online as it was when everyone was in the office.
So, what technology is out there that firms can benefit from adopting?
Here are a couple of examples:
4.1. Microsoft Arc Bluetooth wireless mouse
For remote working, Microsoft has developed a mouse that you can flatten for convenient packing, it switches off automatically when flattened so saving power when not in use. It wakes up when returned to its curved shape and the Arc Mouse shapes itself to fit your palm to give you your very own office gadget. It requires Microsoft 10/8.1, has a wireless range of 5m in an office environment and connects via Bluetooth.
4.2. Microsoft Teams Premium
Microsoft Teams Premium is a Teams add-on license that allows organisations with Microsoft 365 subscriptions to enhance their Teams experience. It has benefits like more personalised and intelligent meetings, enhanced meeting protection, and advanced management and reporting capabilities.
Teams Premium can put custom logos and backgrounds for the Teams lobby, AI generate tasks, intelligent searching within the transcript and automated chapters for playback. Teams Premium has added security by limiting who can record, and additional protection for private discussions. It also offers advanced webinars, automated reminder emails, a registration waitlist and a virtual green room for presenters.
Microsoft has developed the interaction of Teams with some Microsoft Office apps; Cameo integrates the Teams camera feed into PowerPoint live presentations which enable better customisation for these presentations; also Excel Live allows real-time collaboration of Excel within Teams calls. Microsoft has also updated Teams Chat to include short video clips, which could be used as a way to communicate important content as an alternative to a time-consuming video call.
For more information about the Teams Premium add-on license, see Microsoft Teams Premium licensing.
5. Smart contracts via blockchain
An example of Blockchain use in the legal sector is HM Land Registry’s Digital Street research project.
The project’s aim was to build a prototype that would enable a digital transfer of a property that automatically updated the Land Register. They worked with conveyancing firms Mishcon de Reya and MyHomeMove, payment intermediary Shieldpay, digital identity provider Yoti and HM Revenue & Customs to build an end-to-end proof of concept. They also created a simple mobile interface for the buyer and seller so they could complete their actions on their mobile phones, such as verifying their identity and signing their agreements.
They then tested the prototype against a real-life property transaction. The sale of a refurbished, semi-detached house in Gillingham in March 2019. It had taken 22 weeks, much longer than the six weeks the buyer and seller had expected.
They then ran the sale and purchase through the blockchain prototype. Once each action had been completed (such as drafting the sales agreement) the application automatically informed the next party it was their turn to act. The demonstration of the technology ran through, end to end, in less than 10 minutes.
Blockchain technology will revolutionise the legal sector. Blockchain ledgers are just one type of technology transforming the law. From smart contracts to digital identity, blockchain’s decentralised properties are becoming popular amongst legal technology companies because of transparency, streamlined data management, and, most importantly, data security.
Because of the decentralised process, blockchain transactions can be transparently viewed at all stages of the chain. Whether it is a financial transaction or an information exchange, each blockchain node creates a new copy of the current chain to make it easy for users to track and document a data transaction.
Therefore the data transaction will be stored across a network of computers, instead of just storing the information in one centralised location. So each computer network involved within the transaction is constantly updated as new blocks are added, making it harder to be hacked by cybercriminals.
Blockchain technology could reach the legal mainstream by the end of 2023 and be fully integrated across the legal sector in the next three years.
6. Legal document processing automation tools
With Smart Contracts, via blockchain in their infancy, there continues to be a huge investment in tools that automate the management of legal documents.
A significant part of a lawyer’s time is dedicated to the creation, analysis and management of legal documents. According to a McKinsey & Company study, 25% of this time could be automated with the right legal technology solutions.
Document automation means creating automated templates using software, to be used for legal documents (such as contracts). Once the templates are created, users can then input their information and the software can instantly generate the contract.
Lawyers are very mindful of this need for speed and accuracy, as demonstrated in a recent Wolters Kluwer survey in which 79% of respondents said that they were worried about the increasing complexity and volume of documents they have to analyse.
So it is no surprise that the incorporation of software that allows users to automate documents, the management of contracts and legal searches have become more widespread. There has been an increase in the automation of repetitive tasks, which ultimately increases lawyers’ efficiency.
AI in document processing is also on the rise. It can reduce the time and cost of manual processing, increase the accuracy of data extraction, and ensure that all documents are managed in a secure environment.
By adopting intelligent document processing (AI) you can automatically extract information from digital documents, using, for example, optical character recognition (OCR) to convert images of text into machine-readable text, and natural language processing (NLP) to extract meaning from unstructured text. The benefit of this technology is that tasks currently done manually can be automated, saving valuable time.
One legal tech company, featured in FT.com for using AI in the legal processing of contracts and documents is UK-based Luminance. Eleanor Lightbody, Chief Executive, explains:
“The contract landscape can be complex as there has been an increase in regulation and an increase in compliance, and companies need to comply with all of these.”
She quoted an example of a US-based Luminance client, IDEXX Laboratories need to review all their contracts quickly to assess any ties to sanctioned items when western governments imposed sanctions on Russia after its invasion of Ukraine. Using an AI tool that could understand the meaning in documents in any language, they managed to complete this task in about half an hour, compared to potentially weeks of work without it.
7. Cybersecurity in a frictionless client experience
The need to offer a frictionless client experience has never been more important, and with consumers using mobile devices for most of their everyday transactions, businesses already know the need to offer their services in the online marketplace. Incorporating cybersecurity into your business model is essential for creating a seamless AND secure experience that will encourage customer satisfaction and therefore repeat business.
During 2023 cybersecurity will be at the forefront of creating a trusted, frictionless online client experience.
A couple of areas where legal businesses can utilise the latest technology to provide a secure and frictionless experience are:
7.1. Digital signatures
The increase in remote working due to the Covid pandemic gave rise to more utilisation of digital signatures to ensure higher security in online transactions, therefore increasing productivity while reducing costs.
The digital tools available can utilise handwritten or biometric (digital fingerprint) signatures.
In the State of the Industry Survey, presented by CLOC (Corporate Legal Operations Consortium) and the ACC (Association of Corporate Counsel), it highlighted that 87% of respondents had already implemented digital signature tools, with DocuSign being the most used provider.
While already widely established within in-house legal departments, digital signatures will continue to grow within law firms as well.
7.2. Digital ID verification tools
Over the past several years, there has been a rapid acceleration in the need for digital identity verification. Innovations in identity verification streamline the process of ensuring someone is who, or what, they say they are. The digital transformation underscores the need to provide a secure and easy way for clients to verify their credentials—especially when so many are being left behind by legacy identification methods.
Thankfully, there are now many ID-checking solutions on the market. In fact, the digital identity market is expected to be worth in excess of $53bn (£40.6bn) globally in 2026, doubling from $26bn (£20bn) in 2021.
The technology behind digital identity verification focuses on collecting and verifying this personal information, typically at the point of onboarding a new customer and matching it against trusted sources and testing to ensure it is real, verifiable data or not. This works by comparing the data a person sends over, whether that’s a document such as a passport or biometric data such as a picture of their face and comparing that against a verified data set. In some cases, this can include a recent utility bill, a bank or building society statement, a council tax bill, or a current photo card driving licence.
The legal app, inCase is one client communication tool that encompasses both electronic signatures as well as digital ID verification. The inCase technology uses the NFC chip reader on both Android and Apple phones to read the cryptographically signed data on the passport chip. It then uses the very latest facial recognition software to confirm a match on the ID photo compared to a live recording of the client. They are also able to provide proof of funds confirmation directly with the client’s bank.
In summary for 2023
Legal technology spending has already increased 1.5 times from 2.6% of in-house budgets in 2017 to 3.9% in 2020. Gartner predicts legal technology spending will increase to approximately 12% of in-house budgets by 2025, a threefold increase from 2020 levels.
As the legal technology market continues to grow at an exponential rate in the post-Covid digitisation, it won’t be long before legal businesses become completely automated, with repetitive and tedious tasks made simple.
Incorporating new technologies such as virtual, and augmented reality, blockchain and AI (artificial intelligence) into your business model will open up huge opportunities for growth.
These new approaches will transform the legal sector, from client onboarding to court hearings and creating new ways to communicate with prospective and current clients.