How Digital Innovations Are Transforming Legal Services

Digital innovations are reshaping the way industries operate. Discover how they make legal services more accessible and manageable here.

The legal industry faces a pressing challenge as technology evolves rapidly. With a reputation for being cautious about embracing change and innovation, it stands at a crossroads.

One reason legal firms hesitate to adopt new technologies is the potential disruption they may bring. Digital transformation in the legal sector involves more than adding new technology. It also encompasses reevaluating the legal process, from managing cases to communicating with clients.

Moreover, concerns about security and unfamiliarity with new tools contribute to the slow adoption of technology in the legal field. No wonder why only 63 percent of law firms used practice management software in a 2022 Legal Technology Survey Report by the American Bar Association (ABA).

Despite that, the transformative impact of technology in the legal sector is undeniable. In a 2023 global Future Ready Lawyer Survey, approximately 87 percent of attorneys reported that technology has improved their daily work.

Below, we’ll discuss further how digital innovations transform legal services and the opportunities they create for legal professionals and those needing legal assistance.

Online Marketplaces for Legal Services

The emergence of online legal marketplaces like Clearway Law is one of the notable innovations in the legal sector. These platforms connect lawyers or law firms with individuals and businesses seeking legal assistance with a few clicks.

Online legal marketplaces enable users to browse detailed lawyer profiles, read client reviews, and compare their services. This increased accessibility makes it easier for clients to search for qualified lawyers, regardless of physical location, legal needs, and budget.

Meanwhile, lawyers can utilize the online marketplace to promote their services, expand their reach, and streamline their practice. They can directly showcase their legal experience and practice areas they specialize to a broader pool of potential clients.

In the US, the market size of online legal services has grown steadily in the past few years. Its value reached around $14.1 billion in 2023. That trend will continue as more people rely on online platforms to find specific legal assistance.

Virtual Law Offices

The rapid adoption of virtual law offices is another significant transformation in the legal sector. It’s reshaping how attorneys operate, communicate, and provide legal services to clients.

Instead of relying on a traditional brick-and-mortar office, a virtual law firm allows lawyers to collaborate from anywhere and serve their clients remotely. The shutdowns and disruptions caused by COVID-19 have pushed this trend even more.

Based on the ABA Journal report, 54 percent of lawyers have been working remotely almost 100 percent of the time since the onset of the pandemic. They can provide more affordable legal services without the high overhead costs, daily commute, and other challenges associated with office work.

Digital tools and cloud technology have made that possible. For instance, video conferencing, messaging apps, and file-sharing tools let attorneys communicate with clients and work on cases regardless of their location.

Blockchain for Contract Management

Blockchain technology has transformed the process of performing and recording transactions across different industries.

According to the Legal Incubator Lawyers’ Survey, lawyers spent 18 percent of their time completing administrative tasks. That can include transferring data between software and updating client trust ledgers. Law firms can free up more time by streamlining contract management with blockchain.

By leveraging smart contracts, they can automate tasks like creating, executing, and amending agreements. Lawyers can also use it to sign contracts digitally, securely store legal agreements, and process payments.

Furthermore, the complex legal language that can confuse non-legal professionals is a formidable challenge in contract management. Blockchain technology empowers law firms to make legal contracts more client-friendly without untrusted third-party intermediaries.

Legal Time Tracking and Billing Software

Legal time tracking and billing software are also transformative tools in the law sector. Many law firms acknowledge the need to improve their efficiency in billing operations.

Besides being time-consuming, unpaid bills and cash flow problems can harm law firm profitability. Law firms often wait 60 or 90 days to receive payment after sending an invoice. If it remains unpaid in 120 days, they may write off the debt or provide a substantial discount.

Whether due to bill write-offs or timekeeping errors, losing billable time can significantly reduce the gross profit margin of a law firm. Automating legal billing and time tracking can help lawyers bill clients accurately and get paid faster.

These digital tools let law firms take online payments, offering clients secure and convenient payment options. They can also further optimize billing workflows by combining these tools with alternative fee arrangements. Law firms can set more precise expectations as it gives more price clarification upfront.

Conclusion

Law firms adopting digital innovations and adjusting how they work are positioning themselves to thrive now and in the future. While using these technologies helps lawyers enhance legal services and stay ahead of the competition, numerous challenges persist.

Before integrating any digital technology, they must consider investing in talent to help them optimize how they implement it in their workflow. Even the most ingenious inventions won’t be secure and effective if law firms don’t know how to utilize them.

(Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)