The Significance
While law firms and legal departments can make relatively fast progress bolstering their tech knowledge, revamping internal processes and reining in pandemic-era tech, addressing other technology challenges will likely be more difficult and time consuming.
Take, for instance, the cost of legal technology products, which has become more expensive this year than during the peak inflation period during 2022. While keeping a tight rein on tech costs was once seen as the mark of a business-savvy law firm, as more begin to see technology as a vital competitive advantage, stagnant or decreasing tech spend can quickly become a red flag.
“When they see a firm that is spending less on technology than other peer firms, they no longer consider that a good sign,” said Greenberg Traurig Chief Information Officer Jay Nogle. “There was a time that anything that you kept a tab on expenditure-wise was a good sign of a healthy law firm, and now they’re pointing out … your peers are spending more on the technology than you are.”
Spending more on technology, however, isn’t always easy. It may take significant time for the impact of technology to prove its financial value—especially when it comes to new innovations such as generative AI. For law firms and legal departments who require a clear and fast ROI before making investments, and rely on traditional metrics such as the billable hours, this could mean a change in business models. And that’s not likely to be a simple, or quick, endeavor.
“Whichever firm is the first to really figure out what exactly the right mix is of human intervention and technology and then figures out how to price it, that will be a very lucrative solution,” Rush said. “Because it’s not one or the other. It’s not people or tech, it’s what’s the right mix? …And everyone’s in uncharted waters here.”
Law firms' and legal departments' ability to leverage technology will also come down to whether they have the right internal talent to deploy or develop the tools they need. But while legal tech offerings are growing exponentially, technologists, IT specialists and data scientists are in short supply. ”Of course the vendor is always [saying,] ‘you should buy all the products,’ but the reality is you should only buy as many products as you have people to deploy,” said PacerPro co-founder Anna McGrane.
The Information
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The Forecast
Setting a law firm or legal department up to effectively procure, use and budget for technology will be pivotal for those looking to tap into its potential. But those that get it right will likely be using similar, if not the same, legal tech products and underlying technologies. So is the future just a level playing field of more tech-savvy players?
Not exactly. One factor that will likely prove one of the biggest differentiators in the market especially when it comes to generative AI—will be getting the right talent in place to deploy and develop technology.
“So we may all have the same tools. But we may not have the same talent working with the tool. … What differentiates you? It is how you’re using this tool, who is using this tool, how you’re putting the tools back together. … It’s also how you’re able to attract talent, how you’re able to keep talent, how well your talent can perform,” said Orrick chief innovation officer Wendy Curtis.
Getting the right talent may be far more challenging than addressing all the other challenges on the road to tech maturity. Those that already have such talent, or have the resources to be competitive in a market where technologists, IT specialists, and data scientists are in low supply and high demand, will inevitably have a head start.
It’s likely that these players, which encompass Big Law firms and well-resourced legal departments, will pave the way in showing just how, and how much, the industry can and should leverage technology, including emerging innovations such as generative AI.
