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The future of the legal profession depends on digital transformation

Law firms that don't adopt new technologies are getting left behind.

In some respects, the legal field has been ahead of the tech curve. E-discovery—the process of retrieving, reviewing, cataloging, and producing electronic documents to opposing parties—led to the wide adoption of related software more than a decade ago, a necessary step for managing the increased volume of documents and things subject to discovery. The federal courts launched PACER (Public Access to Court Records) to provide online access to federal filings way back in 2001. The next year, the federal judiciary began to roll out its CM/ECF (Case Management/Electronic Case Filing) system, and all filings in federal litigation are now filed electronically.

So why are so many law firms still awash in paper and limping along on legacy systems?

The answer may lie in the foundation of the way legal practices work. Legal work demands caution and restraint, protection of client confidentiality, and reliance on precedent. So perhaps it's not surprising that law firms have been slow to embrace the latest technologies, even when doing so could clearly benefit both staff and clients.

Even the pandemic hasn't prodded significant changes across the legal profession. An American Bar Association survey on cloud computing found that just 60 percent of firms used web-based services, barely up from 59 percent in 2020. Worse, only 35 percent reported using SSL to keep their data secure, and adoption of other security measures was even lower.

In her work helping law firms improve their practice management, RJH Consulting CEO Krystal Champlin has encountered this resistance firsthand. Part of her role is coaching staff and attorneys through digital transformation, showing them how technology can reduce their stress.

"Digital transformation gives people the opportunity to run their law firm like a true business, and it allows them to be more efficient with their time," Champlin says. "Law firms need to get a plan and start implementing it, or they're going to be behind the curve in a couple of years."

Given the imperative to stay competitive, digital transformation is finally making inroads in the legal world.

The pandemic as transformation catalyst

When COVID-19 sent millions of office workers home, firms that had already begun their digital transformation fared better than those that hadn't. But the pandemic also helped speed the transition for some that were hesitant to pick up new tools.

"If digital transformation was not part of our life, we would die before we reach the finish line," says Reggie Jacinto-Barrientos, founding partner of Philippine law firm PJS Law. "We launched our digital transformation about five years ago," she says—but then corrects herself, noting that she started her digital transformation five years ago but that the rest of the firm hesitated until the pandemic made the tools she put in place vital to completing their work remotely.

"The pain points were the growing inflow of work, clerical errors, personal time sacrificed, burning out," Jacinto-Barrientos says. "This required us to pause and confront the challenge: How can we be better at what we do best? We saw what others were doing, and this led us to digital transformation."

PJS was able to increase productivity, improve work-life balance, and continue its work uninterrupted through the pandemic thanks to tools that may seem basic now but were new and confusing two years ago, such as video meetings via Zoom. Software that allows her team to collaborate in the cloud has also increased efficiency and cut costs.

Jacinto-Barrientos is so committed to digital transformation that she partnered with Talino Venture Labs, a global venture builder specializing in inclusive innovation, to create UNAWA, a company dedicated to promoting digital transformation in Philippine companies and government agencies. UNAWA's SignSecure is integral to PJS's digital transformation, providing a platform to get electronic signatures on legal documents.

Please read: What lawyers want IT to understand about e-discovery

Of course, the best technology is useless if lawyers and staff won't pick it up. Jacinto-Barrientos sees the winning formula as "digital transformation coupled with change management."

"I chose associates who could be my first adopters, and I also used them to get feedback," she says. Those ambassadors assured team members that their input would impact the firm's choices during its digital transformation.

As an example, Jacinto-Barrientos describes two departments in her firm that were fearful of new technologies. In one group, the leader worked hard to open her team members' mind about digital transformation, and they were able to leverage tools to automate reporting. The other group resisted and had to work much harder to gather data to manage its practice. She eventually convinced the second group to adopt the new technologies.

"They're happy!" she says. "They have a skip in their step and excitement in their voice when I talk with them. The important thing is they both got there, and now they're converts."

In her experience, people struggle with the initial steps toward digital transformation before they reap the benefits of an easier workflow. "That's when they say the belated thank you," Jacinto-Barrientos says.

The rise of the digital-native law firm

A whole new law firm model has grown out of legal digital transformation: the digital-native firm.

FTI Law was founded in 2020 to represent whistleblowers as a hybrid, tech-based law firm. While it has an office in Manhattan, the firm's clients are mostly outside the U.S.

With clients scattered across the globe, the challenge was, "How do we build a law firm that has the quality of a New York law firm but is entirely digital?" says John Joy, founding partner and managing attorney at FTI. "We want to make sure that they can get the full offering from us wherever they are in the world."

The firm, which works mainly with international clients to report fraud to the U.S. government, needed a cost-effective and secure way to communicate while protecting clients' identities. "When you're dealing with whistleblowers, there's no group of people who care more about their anonymity and privacy than people who are reporting corporate crime," Joy says.

Quality and client experience were central principles in creating the digital-first firm. "If you want a high-quality digital law firm, it's not just about having the right software," Joy says. "The main thing that drove our digital strategy was market research to find out who our client was." Ease of use and high-end security were found to be two key features that potential customers demand. "The bottom line was security," he says. "That everything is secure, that everything is encrypted." The firm takes a zero trust approach to security, requiring two-factor security and authenticator apps for every interaction, even down to editing its website.

Please read: Secrets of successful NDAs

Another aspect of attracting and serving remote clients that's important to FTI is presentation. The firm has invested in infrastructure that helps it hold better video meetings, including good microphones, excellent lighting, and good internet connections. When client meetings are all virtual, professional video and audio are essential. Unlike other New York firms, which might have a whole floor of office space dedicated to meeting clients in spaces with impressive views, surrounded by marble and glass, FTI has to show its bona fides through a video screen. And, Joy points out, clients are judging their video interaction against other media. If the firm wants to impress and build trust, its lawyers have to recognize they're being compared to HBO.

The technology that powers the remote work of the firm also saves money. Lawyers can get digital signatures on documents that previously would have been sent back and forth by international courier. "Without that very low-cost basis, I don't think it would have been possible for us to set up the firm," Joy says. "This practice couldn't have existed, with remote workers in different locations, 10 years ago."

But cost savings weren't the primary driver for FTI's digital model. "It was really driven by the fact that most of our clients are from outside the U.S. and can't come to meet us in person," Joy says. "In that respect, we didn't really have a choice but to focus on digital, and then the challenge was giving the standard of quality digitally that someone would experience walking into a New York law firm."

Overcoming resistance and building happier legal workforces

McGrath tells her consulting clients, "Look at how much you're spending on paper and postage. You're probably dying by a thousand cuts." She also points out the extra time and money it takes to pay someone to do tasks that could be automated, something law firms frequently do out of simple inertia.

But what will ultimately drive digital transformation is client expectations. McGrath points out that, at some point, clients will rebel at being billed for two hours to write a letter when automation could allow a lawyer to prepare it with the push of a button and a quick review. "You can capture so much more value, and the clients get that value," says Kim Verska, CIO and managing partner at Culhane Meadows.

Of course, digital transformation is a journey, not a destination, for law firms. "Clients' expectations are always going to be changing," Joy says. "The last thing that you want is that they feel like they're going back in time when they work with you."

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.