In-house lawyers have been notoriously slow to embrace the tech-backed delivery of legal services, but Legal Business research drawing on responses from more than 600 global clients shows many believe technology will transform the way they work.
Indeed, more than half of the responding general counsel and legal decision-makers (54%) at major companies expect artificial intelligence (AI) and cutting-edge automation to have a substantive impact on the way their teams work within five years.
Eight out of ten clients have the same expectation of AI on a ten-year timeframe in the research, which is conducted as part of a flagship report on advanced technology in the law published in the November issue of Legal Business.
More than half of those responding believe that less advanced technology tools and automation will have a ‘significant’ or ‘very significant’ impact on their departments within three years.
The largest blue chip buyers of legal services are at the forefront of this change – with companies like BT and Vodafone pushing for new, tech-driven models of handling the law. More than two thirds (69%) of FTSE 100 respondents expect AI to change the structure of their legal teams in just three years.
The findings herald dramatic changes to the $600bn global legal services industry as advanced forms of automation and intelligent machines affect the legal profession.
At the moment the impact of automation is most striking in the mountains of contracts that major companies struggle to manage, as well as the increasing burden of compliance, data management and related litigation tasks, but such automation is predicted to rapidly move into more lucrative bespoke legal work.
Other key findings in the report include:
• Company buyers of legal services are currently spending the majority of their budgets on employing and instructing lawyers. Only 11% of respondents said they spent more than 5% of their legal budgets on technology.
• Clients expect to increase investment on legal technology and new tools to become more efficient. Nearly three quarters of respondents (74%) forecast an increase in their technology investment over the next three years. This figure rises to 82% for FTSE 100 respondents.
• Clients want better ‘dashboards’ to measure and control their legal spend and exposures. Eighty-eight percent of clients said it was important to improve the quality of ‘management information and trend analysis data’ in the future, against only 7% that said it was not a priority.
Quoted in the report, BT general counsel for UK commercial legal services Chris Fowler said: ‘People are demonstrating how technology can take some of the noise away and allow us to focus on the coalface stuff.’
Bank of Montreal Financial Group deputy general counsel Jolie Lin said: ‘This doesn’t mean the end of lawyers, but it certainly means there will be fewer lawyers.’
One senior partner at a top ten UK law firm concluded: ‘There is a silent arms race going on among the top law firms. We’ve had tech coming into law before but it was safe tech. E-mail didn’t change the law, it just made it quicker. But this is the game-changer. I’d be staggered if the board of any sizeable firm isn’t discussing this.’
For further analysis of our survey findings and analysis of the advance of AI and automation, subscribers can click here.