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How legal tech helps law offices boost efficiency and attract clients

Recent disruptions like COVID-19, political instability and economic volatility coupled with changing customer expectations have been forcing the legal industry out of its comfort zone of cozy conservatism — right into the growth zone of digital transformation. 

Digital transformation is an essential step into a new reality where law firms can easily amplify their value to clients, boost efficiency, and improve their teams’ well-being — all at the same time.

Law offices can take this step right now.

Why should you embrace digital transformation and how to do it right?

Many law offices don’t seem to be enthusiastic about digital transformation yet. And here is why. 

“Lawyers tend to be change-averse and are happy to continue working in the same old ways that they’ve always known. This coupled with the business model, i.e. hourly billing rates [as many as 77% of US attorneys prefer hourly rate to any other billing method — Loio], means they are not incentivised to work differently,” says Sharan Kaur, a corporate lawyer, SaaS legal tech start up mentor and legal digital transformation evangelist.

But things need to change.

“Both law firms and in-house legal teams are increasingly aware that in order to remain competitive they need to adopt some level of digital transformation,” Kaur states. 

“Clients are expressly asking whether technology is being used at the firm and to what extent,” she emphasizes. 

Luckily, as many as 64% of law firm leaders already believe that insufficient use of technology may have a detrimental effect on profitability.

How do you kick off the digital transformation of your law office? The answer is: start small.

“Create a focus group to specifically understand the pain points in your organisation and match those against the legal technology platforms that can be used to alleviate the pain points. Have discussions with peer firms to understand what they are doing about similar pain points and the technology they are using. Start with small repetitive tasks and avoid the big bang approach.”


It’s worth noting that digital transformation is not just about blindly adopting every legal tech tool available in the market. It’s not about introducing legal tech just for the sake of doing it. It’s about creating an innovation-powered legal culture and improving internal processes by utilizing a combination of tools that are already in use and several new technologies to their fullest potential.

Before the start, it’s crucial to know what technologies and approaches have proven efficient for other market players.

What legal tech tools and innovative approaches already work for law offices

First of all, let’s talk money. According to Statista, the return on investment (ROI) per every one US dollar invested in legal tech in North America reached $6.68 in 2019. By 2025, the ROI is expected to go up by roughly a third and hit $9.14.

Secondly, let’s talk efficiency. No less than 82% of law offices (both law firms and in-house legal departments) use tech with the expectation to boost efficiency. And it delivers! According to Bloomberg Law, the number of law offices reporting improved efficiencies attributed to the use of legal tech in 2019 increased by a whopping 50% in 2020.

Thirdly, let’s talk cost-efficiency. As many as 91% of law firm leaders are adopting technological solutions to cut costs.

Are there any other benefits, though? Loio has decided to ask Colin Levy, a legal tech evangelist and thought leader, to comment on this matter.

“One large benefit is the freeing up of time — time that is likely better spent on higher-risk, more strategic work as opposed to spending it on time-consuming, lower-risk, routine tasks.” 

Colin Levy, attorney, legal tech evangelist and thought leader, writer and speaker.

“Another large benefit is more insight into your work,” Levy adds. “For example, in the contracts space, technology can allow one to pull out useful data from your agreements, such as key milestones, commonly negotiated areas of risk, and what are the common compromises one makes when negotiating a certain type of agreement.” 

Levy believes that the third benefit is “the facilitation of business models better aligned with the needs of customers. These models tend to feature a disaggregation of the practice of law from the delivery of legal services using data and a wide array of skill-sets including process improvement, project management and tech-savviness.” 

Stats suggest that legal tech adoption has even more improvements to bring to the table.

With all these advantages in mind, legal offices are increasingly allocating separate budgets for legal tech adoption. In 2020, the share of such law firms reached 66% (up 21% as compared to 2019), while the share of such in-house legal departments hit 55% (up 28% as compared to 2019).

What legal tech tools do they mostly invest in?

Let’s look at the stats from Bloomberg Law’s Legal Technology Survey 2020.

According to Colin Levy, it is hard to say which tools have the biggest potential in helping the legal industry evolve: “The legal industry while often perceived as being monolithic is not monolithic, but has different segments: e.g. solo and small firms operate far differently from Big Law or a legal department. Certainly, tools enabling better and closer collaboration, particularly given the current pandemic, are helping to enable the legal industry to continue to operate effectively despite not being able to work together in person.”

Levy adds: “I would also say that legal research tools have allowed for increased access to the legal system and in doing so have helped to lower the cost of legal services. In the world of the legal department, which has been the world that I have inhabited for most of my career, contract review/management tools have allowed for lawyers to allocate their time more productively and spend less time on the routine, repetitive, and standardized legal tasks.”

Apparently, digital transformation is becoming an integral part of the legal industry evolution. How will it continue to unfold?

What’s next?

Although it’s impossible to see into the future, it may be safe to assume that we are likely to witness a trend towards smarter legal tech adoption. A growing number of legal leaders will realize two things. Firstly, the impulse to implement legal tech should come from the top. Secondly, legal tech adoption shouldn’t be treated as a side project, but rather be a consistent effort documented in a law office’s growth strategy.

It’s already becoming clear that implementing legal tech tools is inefficient without investing in change management. Although there are some tools that can be easily used from the word go — like Microsoft Word add-ins, others require time and effort to get to know.

Legal teams should be navigated through legal tech adoption and motivated to master tech solutions. Navigation can start with such a little thing as a pre-deployment warning for end-users that although the software may not seem intuitive right away, but once they get the hang of it, they’ll become much more efficient than when doing it in the old way. Having a dedicated tech team and holding training sessions may be necessary to proceed, too.

As for motivation, encouraging innovation through compensation decisions may be a wise option to take.

To wrap up, the legal industry is stepping into the era of unprecedented opportunities for all the market actors — legal offices, law practitioners (do you like our illustration at the top of the page?), and customers. Technology is arguably an extremely important enabler of this era. If approached wisely, it can work magic.

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