The ability to predict trends has always been a highly coveted skill, due to the economic benefit of jumping on bandwagon just at the right time, the rise in cryptocurrencies and the increasing value of NFT’s are proof of this. Without vetted statistical analysis from previous experience and synergetic case studies, they can often backfire with adverse effects.
Why do we seek predictions, especially at the beginning of a new year? It is as simple as risk and reward; the untold treasures for even the least secure of gambles make them feasible to the most rational of men. Predicting trends can be difficult, but the reward of accurate inferences can be hugely beneficial.
Due to our wealth of legal technology expertise, and inspiration from Artificial Lawyer’s 2021 trends blog, we have decided to create our own predictions for what we think might happen in the legal tech space in 2022.
Technological costs will rise for legal companies
62% of small law firms’ budget costs are for technology use, with firms spending on average $20,000 per year on software[1]. With the rate at which technology is adopted and the looming threat of Covid-19, these budgets have, theoretically, exponential potential to grow with the increasing acceptance of legal technology.
While technology adoption was not a priority for law firms and legal departments a few years ago, the use of such tools has become necessary to keep up with competition. In keeping up with the industry, legal departments and law firms will dedicate a budget to gain a competitive edge via the tools at their disposal.
More businesses will be looking for legal tech solutions to automate work
It has happened in several industries thus far, the use of technology to make everyday tasks easier and faster is commonplace. Due to the charge-by-hour model lawyers operate in, there has been difficulty getting them on board initially, but this same idea will apply to the legal industry. And in their search for competent solutions, things such as the increased speed of contract review AI or the increasing demand for cloud saving could mean cost efficiency and ROI.
“Lawyers will continue to bill by the hour and it will continue to prevent many firms from offering a more active, consultative service. Client pressure to reduce prices and demonstrate efficiencies will continue, alongside increased salary demands from associates. Those static prices and increased costs will require technical solutions, including AI and machine learning.[2]”– Hugo Seymour, Chief Operating Officer at Della.
Predictive Analytics
Predictive analytics is a well-established technique that analyses historical and present information to anticipate the future, often using data mining, predictive modelling, and machine learning. It is used in a variety of applications across a wide range of sectors. Despite rapid adoption in other areas, adoption in the legal industry is almost against its nature, and even so, the market seems to have more prospects for pre-packaged solutions. The growth in predictive analytics legal technology can assist law firms in better managing workloads, working faster and improving accuracy.
Our previous blog post goes into detail about how reacting in time to avoid costly litigation nightmares is an invaluable skill and the importance of becoming a predictive department here.
Increased accessibility of legal AI, hence a larger audience
“I think that an AI provider like Google, Document AI, will make common basic AI available for everyone (like detecting the parties)” – Nicolas Chauville, Founder / CSO / CTO at Della.
Google’s latest foray into the legal tech industry could be indicative of a growing interest in contract review solutions – and that same principle may well be applied to all facets of legal technology. This could be both a good thing and a bad thing, for users and vendors. Commercialisation could mean the removal of some part of the key audience for legal tech solutions and decrease competition, but also shine a light on the subject adding a more varied consumer base. Adopting synergetic technologies will be good for legal tech companies, but the art of picking the correct AI provider for their needs becomes a lot harder for law firms.
An upgrade to the billable hour business model?
There have since been claims that this will be the year that the billable hour is replaced by a more modern business model, which rewards value over time spent. But it just doesn’t seem to be quite so simple to overhaul such an ingrained model with the argument being “if it ain’t broke, don’t fix it”.
Margo Trebicka, Customer Success Director at Della, gave her thoughts on the topic. She believes that one way to move towards a more modern model involves actually incorporating legal technology usage in the billing model.“More law firms should create an environment for lawyers to dedicate time to new technologies by creating a chargeback system for its use. There should be more incentive to find new tech solutions, with the removed cost-efficiency pressures being one of them. With that in mind, they should stop focusing on efficiency and instead make corporate productivity and compliance central.”
Conclusion
The trends that will shape the industry in the upcoming year are simply an unquantifiable unknown. However, with a backing of industry insight and in hindsight of the biggest year in the growth of legal technologies, the associated error can be significantly narrowed, making predictions important tools in furthering the growth of a company in an industry.
Even the greatest philosophers and pioneers did not know they would be so prior to the fact. A lot of the greatest discoveries happen on simple chance and luck. We will be looking forward to what our growing industry has in store for the upcoming year.
Watch this space for the latest legal technology trends coming to us in 2022!
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