Digital disruption is changing every industry around the globe - legal is no different. Although the legal sector has been a little slow in investing in technology, law firms are gradually making a digital shift. They are more frequently adopting legal tech solutions to streamline legal operations and automate repetitive tasks.
Legal tech accomplishes everything from automating contract management to accelerating case delivery and improving client satisfaction. These legal technologies have empowered legal professionals to increase work efficiency and maintain a healthy work-life balance.
Let’s learn the ROI of legal tech and how the legal industry embraces technology.
ROI of Legal Technology Explained with 25 Incredible Stats
According to Statista, the ROI per every U.S. dollar invested in legal tech in North America equated to around $6.68 in 2019. By 2025, the ROI is expected to rise 3X and hit $9.14.
Bloomberg law’s ‘2021 Legal Operations Survey’ reports the following improvements due to the adoption of legal technology.
1. 84% of law firms and 63% of in-house legal departments praise legal tech for boosting their efficiency.
2. ‘Law 360 Technology Survey’ reports that, on average, 9% of lawyers’ time can be replaced with automated tasks, thus increasing efficiency.
3. Nearly 91% of law firm leaders adopt technological solutions to cut costs.
4. An insight gained from the Bloomberg Law’s survey says that law firms have reported that efficiencies from tech use have risen by 50% from 2019.
5. Lawyers have indicated that improved productivity and efficiency is the key driver behind legal tech adoption in law firms.
6. With the adoption of legal tech, the quality of work has improved tremendously. Lawyers are happy with how tech is impacting their day-to-day work.
7. 71% of law firms report the use of tech results in improved quality of work. And nearly three-quarters of lawyers (73%) spend less time on lower-level tasks using technology.
Top Tech Solutions Adopted by Law Firms and In-house Legal Counsels.
Efficient Timekeeping and Billing
Using timekeeping software to track billable hours can save up to $39,000 per year for a single attorney. Tracking time and billing using technology results in more accuracy than manual records.
Accelerating Legal Research
According to the ‘ABA profile of the Legal Profession 2020’, nearly 65% of lawyers use online research technologies rather than traditional print materials.
The online research tools help accelerate legal research, which took 18% of lawyers’ time.
Among the firms that use AI, nearly half use it for contract review and negotiations, and 86% said they use AI for legal research.
Securing IP Management
Legal tech is enabling professionals to simplify trademarking, copyrighting, and patenting processes.
· According to the survey by Netwrix, 51% of respondents label human error as a primary cause of IP infringement. AI and machine learning algorithms help professionals search historical data to compare the new IP patent to similar ones and identify infringements.
Automating Contract Reviews
2. Industry ARC shares that with the help of legal tech, a contract can be reviewed in less than an hour, saving 20-90% of the time needed to perform this work manually without sacrificing accuracy.
3. AI legal tech offerings for businesses increased nearly by two-thirds in 2021 compared to 2020.
4. JP Morgan reported that their in-house program, COIN extracts 150 attributes from 12,000 commercial credit agreements and contracts in a few seconds using legal tech. The task is equivalent to 360,000 hours of legal work by lawyers and loan officers per year.
5. 70% of businesses indicate that “using tech to simplify workflow and manual processes” to cut costs.
Enhancing Security Via Cloud Storage
The ABA 2019 legal technology survey reports that 58% of respondents use web-based software services. When you move your database to the cloud, the overall speed of operations improves dramatically.
Lawyers continue to use popular consumer cloud services, and 36% invest in cyber liability insurance policies to protect themselves from security breaches.
Improving Client Satisfaction
Embracing the Legal Technology
The right use of tech tools makes law firms more competitive in the market, so spending is also set to increase.
Gartner predicts that by 2025, legal departments will increase their spending on legal technology by 3X. Legal tech spending is projected to rise to 12% in 2025 from 3.2% in 2019.
· According to Crunchbase, venture and growth capital investments into legal tech startups hit a whopping $1 Billion.
These impressive statistics show the impact technology has on the legal industry. Technology has positively affected every aspect of the legal domain, from legal research to contract management.
With new advancements and innovations coming in the legal industry, many firms embrace technology. As per the Wolters Kluwer report, 50% of the lawyers expect AI, Big Data, and Predictive Analytics to benefit the industry. And 47% of law organizations plan to make adjustments and adapt their processes for innovative technologies.
The future of legal technology is looking bright. The market is growing gradually. With more acceptance from legal professionals, it will only become more robust.