The Development of Legal Practices in the Digital Era

An Overview of Legal Practices in Transition

The legal industry is undergoing a metamorphosis, influenced by the pervasive growth of technology and the increasing demands of a digital-savvy client base. The way clients engage with legal service providers is being rapidly transformed, and this trend shows no sign of abating. The current demands in the legal marketplace are challenging long-standing concepts of how attorneys practice and how law firms serve clients.
Detecting these changes in business demands is difficult since they are not as sharply defined as in other industries. The business-to-consumer nature of law makes it much harder to analyze trends in the consumer market and how they affect the legal market. Because client expectations drive business development and a firm’s long-term strategy, lawyers must remain attuned to these societal changes that occur so gradually. It is notable that advancements in the technological arena also affect all business sectors and, as a result, the law is beginning to look and function like other businesses. Law as a business will have both commonalities and distinctions. Historically, "Law" defined a profession. It now defines a business.
The impetus for this evolution comes from a confluence of factors. The first – and oldest – of these factors includes economic pressures and adverse competition brought on by the 2008 economic crisis. This has led to dramatic shifts in the way that clients consume legal services . The resultant effects have been budgetary erosion and a reluctance to litigate. These two factors have made corporate clients more focused on the bottom line, more self-reliant, and less willing to treat their outside counsel as an extension of their in-house team. As the economy recovers, corporations are hiring more in-house counsel to manage and control their legal expenses while creating more pressure to reduce their outside counsel spend. There is a shift away from the terms "legal services provider" or "outside counsel" towards engaging what they refer to as a "trusted advisor" in "true partnership." This concept of trusted advisor presumes a long-term relationship within which both sides learn how each other work – and then adapt to make it easier for their partner to work with them.
The second factor is the true emergence of the technology sector. Twenty-five years ago, the most innovative and technologically savvy legal departments anticipated the effect that the Internet would have on both their work product and business models. However, this anticipation has only been now realized. A few factors have come together to create what some have referred to as the "perfect storm." These include improvements in legal technology, ever-expanding demand for new types of legal services, alternative fee arrangements, e-discovery, cloud computing, and mobile tools – just to name a few.

How Technology has Transformed Legal Services

The digital age has brought about a new way of doing things in the legal space. The transformation began with the introduction of technology in various aspects of the legal industry and has gradually evolved to service delivery through legal tech solutions. Law firms are experimenting with digital case laws to transform their approach to client problems while reducing costs and improving efficiency. Cloud-based services, for example, enable seamless collaboration and remodelling of expensive solutions. The growing interest in AI implementation is stemming from the need to find more efficient ways of doing things, reduce overheads and enhance the value proposition to clients. Legal research has also evolved over the years, and AI is now being introduced into this process. Lawyers are using AI to determine the context of each case after which they move to the next level of analysis that would provide more precise results. The AI facilitates an accelerated and deeper knowledge base that lawyers can tap into during their law practice. In addition, digitisation is facilitating the remodelling of litigation practices through a transition to paperless case management. Digital and multimodal case papers incrementally depersonalises and makes the justice system far more approachable for all classes of citizens and therefore makes the legal process accessible.

Changing Expectations of the Modern Legal Client

As the demands of the clients change, so too does the practice of real estate law. From the client perspective, there are three primary areas where these changes are readily visible. First, as has been discussed before, there is a growing expectation among real estate clients for a higher level of transparency in the fee agreement. What does the client want to know? The most basic response is they want to be told what the cost of the transaction will be. The corollary to this of course is that a client wants their lawyer to then provide them updates that show how closely the lawyer’s fees match up to their estimate.
Second, clients who are purchasing or selling property are demanding faster service delivery from their legal professionals. In this way, a real estate lawyer must no only have a thorough understanding of their individual state laws and practices, but also a firm grip on the processes of their colleagues. In many ways, the demand by clients for faster service requires that you and your colleagues do your homework all the time, in advance of any questions being asked.
Third, clients appreciate and respond better to personalized legal advice. The this way, the growth of the legal profession is not a hindrance to a lawyer’s productivity, it is a boon for their production of work. The cause of this is simple; lawyers best serve their clients when they understand their histories and prior legal needs. Having a firm understanding of a client’s history allows you to better assist them with their current legal needs. In this way, you can avoid the costly process of "redoing" prior legal work to better suit a client’s needs. In the end, an understanding of priorities and needs is of utmost importance in the modern legal setting.
A stark contrast to this in many ways is the path that many other professions took in the digital age. While accountants, for example, were able to simply digitize their records in a paperless format, the practice of law requires that you and others provide customers with far more individualized services. The participating lawyer must be involved with and participating in the transaction well before the first electronic signature is applied to any document. In this way, technology only serves as a supplement to the core of a lawyer’s legal practice; good communication and a firm knowledge of the customer and their needs.

The Growth of Remote Legal Advising

The COVID-19 pandemic has been an undeniable accelerant in the shift to remote work for many industries across the globe. In the legal industry, the shift has been particularly pronounced, with law firms and solo practitioners now relying on remote or hybrid work arrangements as a means of balancing work and health in an ever-changing environment. Although some lawyers had begun to incorporate flexible work arrangements pre-pandemic, others found themselves leaving offices completely and working from home, or adopting a hybrid approach that combines elements of both.
Remote legal practice has its benefits. With advances in virtual communication and cloud-based technology, attorneys can connect with clients and deliver high-quality service without ever stepping foot in a physical office or meeting space. This flexibility allows firms to serve clients from around the world and extends access to representation for clients with disabilities and those living in rural and remote communities. Additionally , working remotely can help reduce overhead costs for firms while improving work-life balance and job satisfaction for employees.
However, remote work is not without its challenges. Long hours and increased workloads can result in burnout, while cybersecurity and confidentiality concerns may arise from remote access to sensitive data and interactions via email or chat. There is also the risk of losing the social and professional networking opportunities that come with working side-by-side in a shared environment. As such, it is crucial that firms and practitioners develop a thoughtful strategy for managing remote legal practice.
As we continue to adapt to a digitally-driven way of working, remote legal practice is likely to remain an essential component of daily life in and out of the courtroom. The legal profession will need to adapt to these changing realities by staying informed on emerging legal issues, leveraging technology to enhance service delivery, and remaining committed to flexible and equitable work arrangements for all involved.

Legal Specialization and Niche Areas of Law

With the deluge of legal services available to consumers, most practitioners recognize that they cannot serve everyone anymore. The best way for solo and small firm practitioners to stand out in the crowd is through specialization — a strategy that pays for many lawyers.
Some practitioners still believe that specialization restricts them more than it helps them, but practicing too broadly places them in the lower echelon of a commodity market in which price is the only distinguishing feature. Most clients aren’t looking for a generalist law firm. Major corporations use law firms for very specific needs. Boutique law firms that focus on one target population, even individuals, have been doing well for years.
Why we see these trends now is pretty clear. Changes in society affect us all. Our society has become increasingly complex and legal specializations need to be found in smaller and smaller segments of the population. As specialization becomes necessary, it also becomes competitive.
Discerning consumers will not be lured by a lawyers or a companies services simply because a profession or business’s marketing speak states its "expert": "Renowned tax law attorney," "the best environmental law firm," or "leading patent lawyer in the region." Consumers are no longer satisfied by such glossy words.
Niche/go-to experts are in demand as never before. By the same token, many practitioners have strayed into specialization territory without any planning. It’s rather simple: hone your skills. A somewhat specialized service that is advertised online is going to be found by your target market. Clients tend to flock to practice areas that address their own needs. As these special services become more widely known, legal specialties become more competitive.
Today, we see a growing trend toward solo/small office specialization. Those solo/small firm practitioners who have made it, by taking ownership of their specialized skills for the good of the firm and its clients, market themselves with an industry leading specialty and have helped lead the legal industry into the new era.

Future Developments in the Law

As we look to the future, the pervasive influence of technology suggests that the legal industry will soon reach a state of greater coherence and unity through the digitization of many if not all functions. Legal departments will likely rely on cloud computing for the majority of their business applications. Blockchain technology could serve as more than just a ledger; it could help induce greater levels of trust and automation in legal practice. Smart contracts, for example, which are pre-agreed terms using blockchain based technology and artificial intelligence to execute natural language based contracts, will become more commonplace. Blockchain also has the potential to revolutionize the nature of legal work itself by enabling clients to do more of their own legwork in a transparent and streamlined network.
With these innovations will come new challenges related to information security as well. Law firms will have access to increasing troves of sensitive client data. Cybersecurity will thus be of paramount importance . As machine learning algorithms become better at efficiently analyzing large volumes of information, it will unlock new ways of managing not just legal transactions, but relationships with clients and decision making in general.
As the pace of technological change in law continues to hasten, so too must the evolution of legal education. Law schools have been slow to adopt these changes, and are arguably lagging behind the curve. However, students have had success teaching themselves and one another, and eventually schools, terrified of losing their competitive advantage, will have to retool their programs in order to position themselves alongside these grassroots initiatives. The 10,000 law firms that do not employ more than 100 attorneys in North America will not be burdened with the same infrastructure costs of large firms, and will be able to teach themselves to use this pre-designed technology in a way that allows them to compete in the delivery of many of the same services for a fraction of the cost.