The legal industry is continuously changing, and globalisation has expedited this process. Technological advancements, shifting demographics, and new forms of competition will lead to substantial transformations in legal practice in the forthcoming years.
In LPI’s recent article titled “Bridging the Process Gap with Managed Outsourcing”, we explored how the Global Outsourcing Industry has experienced tremendous growth in recent years and is projected to reach $92.5 billion by 2023.
Similarly, in LPI’s February 2022 article entitled “Alternative Legal Service Providers (ALSP) Adoption Drivers”, we highlighted a study that revealed annual spending of $6.2 billion on legal process outsourcing, e-discovery, and document review service providers, as well as $900 million on contract lawyers, in-sourcing, and staffing services.
According to Research and Markets, the Global legal process outsourcing market is anticipated to expand at a compound annual growth rate of 31.8% from 2019 to 2025.
This surge in demand for cost-effective and efficient business solutions, coupled with technological advancements and improved communication channels, has fueled this trend of remote team collaborations. In this essay, I will make predictions on the future of global legal practice and reflect on ways to prepare for these upcoming changes.
The legal profession will experience ongoing transformation due to technology. Key drivers of change will be automation, artificial intelligence, and machine learning, which will become increasingly crucial tools in the industry. The use of legal technologies to streamline processes, lower expenses, and enhance efficiency is expected to become widespread. The 2020 Altman Weil Law Firms in Transition Survey found that 78% of law firm leaders consider technology the most significant factor shaping the future of legal services.
- Diversity and Inclusion: The legal industry has traditionally been dominated by white males, but there is growing recognition of the need for greater diversity and inclusion in the sector. As the future of global legal practice takes shape, we can expect to see more women, people of colour, and LGBTQ+ individuals entering the profession and assuming leadership positions. According to the National Association for Law Placement, the proportion of minority lawyers at major US law firms rose from 16.3% in 2013 to 23.1% in 2020, while women in these firms increased from 33.5% to 38.9% during the same period.
- Disrupt the tradition: The legal market is expanding beyond traditional law firms to include alternative legal service providers (ALSPs), legal technology companies, and freelance lawyers. These innovative players offer more agile and cost-effective legal solutions compared to traditional firms. The 2020 Altman Weil Law Firms in Transition Survey found that 77% of law firm leaders believe that ALSPs are here to stay in the legal market.
- Safeguard client data: As law firms handle an ever-increasing amount of data, prioritising data privacy and cybersecurity has become more crucial than ever. Neglecting these issues could result in losing clients and facing legal and financial consequences. According to a 2020 survey by the American Bar Association, 29% of law firms experienced a security breach in the past year. With law firms heavily relying on technology and storing sensitive client data, cybersecurity has become a critical issue.
Competence through culture: Due to the globalisation of the economy and the increasing number of international business transactions, the legal industry has become more globalised. As a result, law firms must be capable of operating efficiently in diverse countries and comprehending the cultural subtleties of the areas in which they operate. The 2021 Citi Hildebrandt Client Advisory indicates that the demand for legal services in 2020 decreased by only 1.1% compared to the previous year.
Social responsibility adaptation: In light of the increasing significance of sustainability and social responsibility to clients and society, law firms must adjust their practices to align with these principles. Such adjustments may involve providing guidance on ESG matters, integrating sustainable practices into their internal operations, and advocating for diversity and inclusivity in the field.
Specialised Knowledge and Skills: As technology continues to shape the legal industry, specialised knowledge and skills will become increasingly important. Lawyers must become experts in specific areas of law, including cybersecurity, data protection, and intellectual property. In addition, legal professionals with project management, data analytics, and digital marketing skills will be in high demand.
Individuals can reflect on their preparation for future changes in the legal industry by embracing technology, staying updated on industry trends, developing specialised skill sets, and promoting diversity and inclusion in the workplace.
- Embrace technology: Legal professionals should actively seek to understand and incorporate new legal technologies into their practice. By becoming proficient in legal tech, lawyers can better serve their clients with cost-efficient and effective legal services. Additionally, being knowledgeable in legal tech can enhance competitiveness in the job market. According to Thomson Reuters, 79% of law firms are currently utilising AI tools, and this utilisation is expected to increase. AI technology is utilised for various tasks such as document review, contract analysis, and legal research.
- Stay abrupt on industry trends: Staying informed about the latest trends and developments is crucial in the rapidly evolving legal industry. To achieve this, lawyers must attend industry events, read legal publications and participate in professional development courses regularly.
- Specialised Legal Expertise: Developing expertise in specific areas of the law is becoming increasingly important as the legal sector becomes more specialised. Lawyers with specialised knowledge and skills will be highly sought-after by clients and law firms.
- Promote diversity and inclusion: Lawyers must embrace diversity and inclusion as the legal industry grows more diverse. It involves establishing an environment that is open to all individuals, irrespective of their race, gender, sexual orientation, or origin. Lawyers must foster a culture that upholds fairness and regard for everyone. As per the 2020 Citi Hildebrandt Client Advisory, clients increasingly require their external counsel to have diverse teams handling their affairs.
To summarise, the legal industry is set to undergo significant changes worldwide, driven by advancements in technology, shifts in demographics, and emerging forms of competition. To be ready for these changes, legal professionals must embrace technology, keep up with industry trends, develop specialised skills, and promote diversity and inclusivity. By doing so, they can effectively compete in a rapidly changing field and provide exceptional legal services to clients.
Ultimately, enterprises that remain open to innovation and adapt to these changes will have a better chance of long-term success in the evolving legal landscape.
Author: Varun Bhatia, Co-Founder of 3NServe.
Disclaimer: The views and opinions expressed in this article do not necessarily reflect the official policy or position of Novum Learning or Legal Practice Intelligence (LPI). While every attempt has been made to ensure that the information in this article has been obtained from reliable sources, neither Novum Learning or LPI nor the author is responsible for any errors or omissions, or for the results obtained from the use of this information, as the content published here is for information purposes only. The article does not constitute a comprehensive or complete statement of the matters discussed or the law relating thereto and does not constitute professional and/or financial advice.