Technological adaptations were one of the most anticipated trends in the legal industry.
With remote working taking over in 2020, the legal industry rapidly adapted digital solutions as a necessity. This much-awaited digital transformation has led to solutions such as cloud-based software, automation, and establishing technology committees in legal departments. Gartner predicts that by 2025, the average legal technology budget is forecasted to grow three times the amount compared to 2020. With this rapid growth in mind, here are some legal tech trends to look out for in 2022:
Artificial intelligence, or AI, is currently being used to the extent of automating basic tasks. However, it is possible to utilize AI in more situations for legal teams. Any legal department has a lot of documentation to review and analyze. In the next year or so, it is possible to see the preliminary use of AI for automation of document analysis through the input of keywords to look out for. This can help teams search for relevant information faster and bookmark important documents to come back to later.
Another current usage of AI is for automation of admin tasks and billing. Currently, many companies are using AI to automate most or all their billing processes for clients. Gartner predicts that “by 2024, legal departments will have automated 50% of legal work related to corporate transactions.”
In the future, we could see AI being used for language simplification of contracts and documentation for clients, text search, and chatbots on websites.
Before we switched to a work-from-home practice, the concern lay in adapting to the legal technology challenges. With over a year of adaptation and growth, while working from home, many companies and legal teams are looking to switch to a full-time remote working situation or a hybrid situation where remote work can be done a few days a week. Adapting to the quick digital transformation has led to companies being more open to their employees working remotely.
With hybrid work and remote work here to stay long-term, we will see more players entering the market of legal technology solutions with more cloud-based and enterprise solutions. In the coming years, we may also see legal tech and enterprise tech become one, where enterprise solutions could include legal tech solutions instead of being a separate entity.
Use of Data Analysis for Performance Improvement
Using cloud-based software and technological upgrades allows legal departments to gather and analyze any relevant data. This data can help the department understand what is working and what can be improved. Many software and cloud-based applications come with built-in analysis software that helps users easily track this data. In the coming years, we will see an increased focus on data analysis and reports to measure the various automated areas to help understand the key performance indicators (KPIs).
The Legal Contracting Process Will be More Digital
Contract negotiations can take plenty of time with long discussions and approval processes. Many legal departments have made the process more efficient by using templates to create contracts that are similar in structure. In the coming months, we will see a shift in how contracts are managed. Contract negotiations could migrate online, allowing legal teams and internal teams to create a more efficient approval process. Additionally, moving the entire system online allows the legal department to keep track of a contract’s lifetime and its value for the company.
The security of all data was and continues to be a key concern for many legal departments. In 2022, cybersecurity will become a primary focus as people continue to work remotely or in a hybrid situation. We will see more and more cloud-based legal software players enter the market, offering solutions packaged with top-tier security features for legal departments.
In summary, the industry is on a comprehensive watch on what the next shift will look like. The rapid digital transformation of legal departments has been a big welcome but has also come with key concerns such as cybersecurity and productivity. Therefore, 2022 will focus more on the critical details of digital transformation and how legal departments can fine-tune their processes with current and advanced technology.