Adapting to and adopting technology: Future proofing your law firm

November 1st, 2019
x
Bookmark

In the article by Emmie de Kock ‘Are you building a law firm of the future?’ 2018 (May) DR 20, Ms de Kock highlighted some of the external factors and technological advancements of which legal practitioners should be aware of. The aim of this article is to highlight some of the practical examples of measures that firms can implement to exploit the opportunities created by the new technologically driven environment.

In the past decade there have been major advances in various technological sectors. The advances in technology have resulted in major changes to the manner in which we communicate, disseminate and consume information, conduct financial transactions and even how we relate to each other. As the world in which law firms exist has adapted to and adopted these new technological advances, law firms must similarly adapt and adopt the new world in which they exist if legal practice – as we know it today – is to continue to be relevant and commercially viable. The profile of legal practitioners has also changed with (often younger) more technologically savvy practitioners entering the profession. There have been many articles written on the topic of law firms of the future and also around the question of whether robotics, artificial intelligence (AI) and algorithms will replace the legal practitioner. Articles on law firms of the future include:

  • Yvonne Jooste ‘Technology and law firms of the future’ (www.tech4law.co.za, accessed 30-9-2019);
  • Yvonne Jooste ‘Some challenges facing the South African legal fraternity’ (tech4law.co.za, accessed 30-9-2019); and
  • Sam Mire ‘What’s the future of law? 26 experts share their insights’ (disruptordaily.com, accessed 30-9-2019).

The new world in which we live has introduced new terms into our lexicon, including AI, data mining, big data, digital content and disruptions. The Internet has become a huge resource for the legal profession and those with whom the profession co-exists in the new world. The advantages and disadvantages of the other products of the technological development, such as social media, falls outside of the scope of this article. Depending on one’s point of view, technology can be the huge unknown and new world ‘boogie man’. To some, technology may be seen as a potential disruptor or a tool to be used to better provide legal services in a more efficient and cost-effective manner. Technology cannot be ignored. The emergence of the legaltech industry is a reality of which legal practitioners must take note.

The need to adapt to and adopt technology

It is often said that the legal profession is, in many ways, conservative and slow to adapt and adopt changes. While the truth or otherwise of this general statement can be argued ad infinitum, in order to remain relevant, the profession must avoid being ‘so last century’ (to use modern day parlance).

As the broader world in which legal practice exists and is conducted changes, so is the need for the legal profession to change in line therewith. In our line of work at the Legal Practitioners Indemnity Insurance Fund NPC (the LPIIF), we have the opportunity to interact with a broad range of legal practitioners. Broadly speaking, there are many firms, which have adopted technology and implemented a number of appropriate technological solutions, which help run various aspects of their operations. On the other hand, there are many (particularly smaller practices) which – for a variety of reasons – have not embraced and implemented technological solutions in their practices. Many firms still, unfortunately, operate using manual and paper-based systems. Admittedly, the extent to which a firm may need to embrace and implement technological solutions will be determined by a number of factors including the areas of practice, location, including the size and structure of the practice. However, every firm needs technology to some extent in order to operate in the modern era. As the consumers of legal services become more technologically advanced, their expectations of a corresponding advancement in the technological solutions utilised by the service providers they choose to engage will commensurately grow.

In analysing the underlying reasons for the prescription of claims for example, it is concerning to note that there are many firms who still operate on a paper-based diary system in the form of a physical book. Such a system relies on the accurate capturing of information and regular updates made as and when changes occur. Human error is always a factor in these circumstances. The single diary could also either be lost or destroyed, resulting in the firm losing valuable information and running the risk of missing important dates in respect of the various matters it is dealing with – these could be prescription dates, court dates, dates for lodgement of important documents such as trade mark renewals, appeals or even dates for consultations and meetings. Suggestions to such practitioners that consideration be given to utilising one of the many electronic diary systems available have, at times, been met with surprise or even doubt. Despite the number of claims arising in such instances from a failure of the manual diary systems, the practitioners concerned (and their support staff) often go to extraordinary lengths in explaining the supposed reliability of the manual systems they have in place.

A few years ago, a legal practitioner reported that a fire in the office block in which he practiced at the time had destroyed large parts of the building, including his practice with all the paper-based files. There had been no system of electronic storage (offsite or in some or other web or cloud storage solution) and the process of reconstructing the files had been a long, expensive and tedious one. It is not known how many matters (and clients) that legal practitioner managed to salvage after his entire professional life literally went up in smoke, so to speak. Had an electronic solution been in place, the files could have been retrieved.

As part of the International Bar Association’s 2017 Annual Conference in Sydney, Australia, visits to law firms in that city showed the benefits of using technology to not only increase profitability in terms of turnaround times for the finalisation of instructions, the benefits of using technology to enable staff to work remotely and the savings in terms of the overhead costs of the firms using paperless filing systems. In one firm, a demonstration was given on the benefits of using a technology-based project system for all areas of its commercial work, which meant that learnings from each instruction were shared within the firm in real time and, in dealing with similar instructions, legal practitioners had the benefit of access to similar work carried out by their colleagues.

Another legal practitioner practising in one of the smaller towns has reported on how, in order to avoid having to use Internet banking (which he says he does not trust or understand), he carries all documents relating to his trust and business banking with him in his pilot case wherever he goes. This legal practitioner reports that all his payments are made when he physically visits at his local bank branch on a predetermined day during the week with the recipient of the funds accompanying him. Even salary payments to staff are done in this way. While this legal practitioner may be a low risk when it comes to cybercrime and falling victim to hacking scams, the risk (and inefficiencies) of this method of doing financial transactions are numerous. What would happen if, for example, this practitioner was unable or unavailable to get to his branch timeously when a payment was due or his diary and that of the intended recipient of the funds clashed? Internet banking, while it is not without risk, is a secure and efficient manner of making payments.

Operating without the proper use of technology also open up legal practitioners to the potential for regulatory action. We have seen that many legal practitioners use e-mail domains such as Gmail, Yahoo, Webmail and the like as their official e-mail addresses for their practices. Legal practice, by its nature, involves the receipt and exchange of information, which may be confidential. Many of the e-mail domains used by practitioners do not have the necessary security features to ensure that data is stored or transmitted in a manner that meets the required best practices in terms of security. Such e-mail domains may also not have adequate firewalls and also be susceptible to hackers. A breach of the information on the part of the legal practitioner will open up liability in respect of claims and regulatory action by various authorities. Storing the research on legal topics or the databank of precedents built up over many years in practice on a memory stick or the hard drive of a computer also places the legal practitioner at risk.

The display of nicely bound law reports in the library or office of a legal practitioner may be a beautiful sight to behold and add to the ambiance of the office premises, but there are many electronic solutions and tools available, which allow legal practitioners to conduct research in respect of judgments, legislation and other research material.

What do law firms need to do?

I am not aware of any comprehensive survey conducted on technology and the South African legal profession. In its Law Firm’s Survey (www.pwc.co.uk, accessed 30-9-2019) of the top 100 firms in the United Kingdom (UK) in 2018, PWC reported that –

  • 100% of top 10 and 40% of top 11 to 25 firms view technology as the key challenge facing the legal sector over the next two years;
  • 82% of respondents indicated that cyber threats will have an impact on their future growth ambitions; and
  • 63% reported on the concerns about the impact of technological change on their growth ambitions.

The PWC report poses the following questions for legal practitioners:

  • Are the technology ‘basics’ in place that allow the firm to operate effectively on a day-to-day basis?
  • Does the firm have a technology improvement plan?
  • Is the firm aware of all available emerging technologies and does it know which ones have a ‘best fit’ for the organisation?
  • Is the firm able to ensure all new technologies adopted are secure?
  • How will the firm fund the continuing need for technology investment?

The main risks identified in the PWC survey are information security and data loss, business continuity and financial crime.

While the South African legal profession is conducted in a commercial, geographical and socio-political environment, which differs from that of the UK, many lessons can be drawn from the PWC report.

Conclusion

Law firms must embrace technology in order to meet the current and future needs of clients and the broader operating environment. In the words of William Gibson: ‘The future is already here – it’s just not very evenly distributed’ (Sabrina Weiss ‘Building the Law Firm of the Future – The Shape of Things to Come’ www.vista.blog, accessed 30-9-2019).

Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners’ Indemnity Insurance Fund NPC in Centurion.

This article was first published in De Rebus in 2019 (Nov) DR 4.