Rise of the Digital Demand: Are Law Firms Meeting Client’s Digital Needs?

Like most industries, the legal sector is facing the impact of the fourth industrial revolution. Continuous advances in technology, in particular Artificial Intelligence (AI) and the application of lawtech, are changing the way law firms operate and the services they offer.

But, whilst there is strong recognition within the sector on the importance of embracing lawtech, research has shown that adoption is particularly difficult for law firms compared to other industries.

Olive Communications recently commissioned an independent UK study on 1000 consumers and 500   law firms and found that one in three (34%) clients would like their solicitors to offer digital services such as video conferencing, chat and Instant Messaging (IM). 66% said such services have never been made available.

The study also found that nearly three quarters (69%) of UK law firms are embracing technology internally, with the same number of solicitors using IM and chat to communicate with one another. Yet few are utilising the speed and convenience these digital channels offer when liaising with clients, despite clients’ preference for digital platforms over more traditional means like email.

Recent research from the AI powered conversational platform, LivePerson found that 65% of millennials and Generation Zs prefer to communicate digitally, rather than in person.

It’s no surprise that half of all law firms worry about keeping up with the latest technology and fear falling behind the competition when it comes to digitally enabling their customer services. A staggering 66% expressed specific concern over how lagging behind the technology curve will affect productivity, billable time and client response rates.

What’s driving the digital demand?

Recent research from the AI powered conversational platform, LivePerson found that 65% of millennials and Generation Zs prefer to communicate digitally, rather than in person. Dubbed the ‘instant’ generation, today’s busy, always on and mobile first consumer wants to engage with their solicitor, to seek advice, resolve an issue or purchase a service without the frustration of having to wait days for paper documents to arrive in the post or for an email to come through with the answer to a question that could be easily resolved with an IM or automated response.

Consumers want more control over their legal affairs and are seemingly prepared to sacrifice human interaction, favouring instead the speed, efficiency and security that multiple channel web-based communications offer.

The Government is recognising this digital demand with the launch of a £1 billion investment programme to digitalise the court service to make it quicker, simpler, and easier. An automated financial disputes claim for disputes up to £10,000, a digital divorce applications service and, an online system for appealing tax bills are among these court reforms – all of which, according to reports, have been piloted successfully with positive consumer feedback.

19% would also like access to a purely online, automated residential property and conveyancing legal service with no intervention from a human lawyer

Olive too discovered, when polling consumers, that insurance claims (46%), financial disputes (23%) and tax appeals (23%) were the three legal services that consumers most wanted to be digitalised. 19% would also like access to a purely online, automated residential property and conveyancing legal service with no intervention from a human lawyer, whilst 14% would happily use a ‘lawbot’ to make a divorce application. 11% are even happy to use an online automated system to make an unfair dismissal claim against their ex-employer.

Why law firms are struggling to digitalise?

While consumers are clearly embracing new automated, online legal services, Olive found that data breaches and cyber-attacks are two of the biggest concerns for law firms when it comes to digitalising their communications in line with consumer demand. More than a quarter (27%) worry about contravening GDPR, and 40% fear disclosure failings and regulations around custodian driven data collection.

There’s no doubt that unified, cloud-based communications can improve efficiency and security, for both the client and the firm, by becoming paperless. Web-based document sharing systems like Microsoft SharePoint, are not only an instant way to exchange documentation but also feature advanced encryption and permission controls that ensure clients’ information is safely and securely stored – eliminating the need to put paperwork in the post. Having a totally collaborative communications system also means that such documents can be updated live and exchanged safely with colleagues and clients through other integrated digital channels such as through the convenience of web conferencing instead of having to meet.

Any digital transformation must also be incorporated within the firm’s overall strategic vision and not be treated as an ‘add-on’ or ‘after thought’.

Research by Olive found that the benefits of installing the latest digital communication systems from web conferencing to cloud file sharing systems are significant. 15% of law firms claim it improves talent retention, 34% have increased their billable time, and nearly three-quarters (73%) have seen improvements in people efficiency, productivity and business agility, leading to a majority (47%) boosting their bottom line by between £20,000 and £200,000 a year.

Widespread adoption of lawtech is often hampered by the way many technology companies sell the benefits of digital communications without firstly understanding the law firm’s risk profile and how the new technology can alleviate this risk. This lack of understanding casts fear and doubt into the minds of the partners. As with any change comes new ways of working, which require firms to agree on safeguards, such as training and educating employees, to ensure any potential risks and challenges are fully mitigated and to ensure that the company reaps the full benefits of the new system.

Any digital transformation must also be incorporated within the firm’s overall strategic vision and not be treated as an ‘add-on’ or ‘after thought’. If not, it is much harder to embrace this transformation, and risks complex change management impacting on project timescales and deliverables.  Firms are advised to take a step by step approach and avoid too much, too soon. As a sector built on years of traditional working practices, heavily wrapped in compliance and regulation – transforming systems methodically; backed by education, training and continuous service support, will ensure that the adoption of new technology is easier and the transition smoother.

The future of AI in law

We’re seeing, in particular, a rise in the use of Artificial intelligence (AI) used in natural language processing programmes which enables the system to answer or even anticipate a user’s question or need. AI enabled call centre solutions such as Mitel and Google’s Contact Centre AI, use virtual agents to handle clients’ general questions more quickly and cost effectively, freeing up solicitors’ time for more time and knowledge intensive, billable tasks.

Chatbots are also beginning to be used to analyse vast quantities of historical data to support lawyers in fact findings, to help to draw conclusions and to even predict case outcomes.

As we look to the future – on our journey to the fourth industrial revolution and the advances in AI – unified, digital communication services will be the norm within the legal sector. So, now is the time for law firms to get ahead by digitally engaging with staff and clients, and in the way that they want, need and expect.

 

By Nick Beardsley, Enterprise Director of Olive Communications, the UK’s leading managed cloud communications provider dedicated to advising law firms on their transformative growth strategies.

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