Is technology disrupting the legal profession?

Ever since “legal tech” became a thing, lawyers have been dreadfully anticipating the time when technology will disrupt the legal profession. The media has been fuelling lawyer worries, and attention-grabbing headlines like “The robot lawyers are here– and they are winning” or “Lawyers could be replaced by artificial intel- ligence” have kept lawyers awake at night. Artificial intelligence (AI) and machine learning in law has become the talk of thetown, and for good reason, as the use of legal technology helpslawyers to get things done more efficiently and cost-effectively.Thus, it does not come as a surprise that legal tech start-ups are becoming the Starbucks of the legal profession – they are popping up on every corner. It is estimated that there are over 1000 legal tech start-ups worldwide and that the legal tech industry is worth USD 15.9 billion globally.

There is no doubt that legal tech is here to stay. Is there a reason for lawyers to be concerned that legal tech will entirely auto- mate the legal profession in the future? I don’t think so. The future is now. Lawyers face increasing pressure from clients to deliver more value at a reduced cost, and legal tech is the keyingredient of the solution to this problem. Many law firms are already using legal tech to drive efficiencies and productivity byautomating routine tasks on due diligence, legal research, trans- action management, and document management. Legal tech is indeed transforming the legal profession. However, it doesnot pose a threat to law firms that are embracing technology to provide technology-assisted services to become more efficientand effective. They will be the preferred choice of Increasinglysophisticated clients who will appreciate the efficiency gains of technology-enhanced services. In contrast, law firms that areslow to adopt legal tech in their organizations will most likely face a competitive disadvantage in the long run as they will beunable to provide services as cost-effectively as those law firms which have embraced legal tech.

The above is also true for law firms operating in CEE. The CEE legal market is becoming increasingly competitive due to the influx of new competitors and increased price competition. However, at the same time, conventional CEE law firms are generally inefficient in providing services. Although international law firms develop and use legal tech tools in more developed markets, it appears that the implementation of such tools is lagging in their CEE offices. Language barriers (because AI and machine learnings are
primarily developed for use in English-speaking jurisdictions), the size of the markets, and local lawyers’ reluctance to use legal tech tools when providing legal advice seem to be the main reasons for this situation. The reluctance of lawyers to embrace legal tech tools when providing legal services (to be fair, lawyers seem to be curious about the prospects) and the general resistance of conventional CEE law firms to innovate proactively has already opened room for alternative service providers to enter the legal market.

Clients want conventional law firms to be more tech-savvyand to be able to provide cross-border advice on the basis of alternative fee arrangements. It seems that the Big Four have recognized this and are muscling in on CEE’s legal markets by embracing technology to provide cost-effective legal services by offering packages that bundle accounting, audit, and legal services for a cut cost. They are using technology to gain a competitive advantage over conventional CEE law firms, and it seems that they are winning. Now, this is a genuine reason for CEE lawyers to be concerned about the future of the legal profession. The Big Four have the financial power, motivation,and presence to make an impact on the CEE legal market. To compete with the Big Four, conventional CEE law firms will have to build a culture that embraces the use of legal tech to be able to deliver faster, better, and cheaper legal services to clients.

Conventional CEE law firms and legal departments who adopt legal technology will be well-positioned to deliver services to clients more efficiently and effectively. The improvement of AI will likely decrease the need for human intervention on routine legal work in the future. However, lawyers’ perspective, creative-thinking, and judgment on complex legal work cannot be replicated by technology. Therefore, lawyers will continue to do their job quicker, more accurately, and better by using technology.

By Gjorgji Georgievski, ODI Partner

Contributing Advisors