Legal Tech Revolution 2024: 5 Key Predictions for Law Firms

In the ever-evolving landscape of the legal industry, the role of technology is becoming increasingly pivotal. The transformative effects of the pandemic has affected the traditional resistance of in-house legal departments to embrace automation. As we journey into 2024, we find ourselves at the crossroads of opportunity and innovation. It’s imperative for law firms to make strategic choices regarding technology that align with their goals, ensuring not just survival but thriving in this new era.

In this article we present the top technology and automation predictions for law firms in 2024 as presented by Gartner in their 2024 paper titled: 5 Legal Technology Trends Changing In-House Legal Departments.

Legal Tech Spend on the Rise

The post-pandemic world demands that legal departments adapt rapidly. According to a Gartner survey, by 2025, legal departments are expected to triple their investment in legal technology. The pandemic has led to an increased workload and flat staffing levels. Legal leaders have witnessed the success of tech investments in other departments and the burgeoning legal tech market. This has stoked their appetite for technology to support workflows and meet productivity demands.

Creating a multiyear legal technology strategy that evolves with changing landscapes and market advancements is crucial for success. Ad hoc tech purchases often fall short of supporting short- and long-term business goals. To thrive, law firms must align their technology choices with their strategic objectives.

“Legal leaders are seeing that other departments have found success with their tech investments and also significant advancements in the legal tech market. This is driving their appetite to expand their use of technology to support workflows and meet productivity demands.” – Zack Hutto, Director, Advisory, Gartner

The Rise of Non-Lawyer Staff

Efficiency has taken the centre stage, driven by escalating workloads and constrained budgets. To enhance processes, legal technology implementation, and digitalization, legal departments aim to replace 20% of generalist lawyers with non-lawyer staff by 2024.

The coming years will witness a rigorous evaluation of resource allocation for specific work areas. This will involve decisions about in-house lawyers, in-house non-lawyers, law firms, or non-law-firm service providers. Expanding the legal technology and innovation capabilities of teams is the focal point, achieved through various strategies like upskilling existing staff, cross-functional collaboration, or fresh talent acquisition.

Automation of Legal Work in Corporate Transactions

The demand for corporate transaction work has been steadily rising, especially in M&A activities. Legal departments are projected to automate 50% of legal tasks related to significant corporate transactions by 2024. Traditionally, heavy workloads required either higher in-house productivity or costly external counsel. Advances in natural language processing and machine learning technologies have opened a third way to handle these critical tasks.

To ensure success, the initial step is to identify specific issues that can be solved through automation rather than deploying technology in search of a problem. In this era, where technology can provide a solution for various challenges, legal departments need to ensure their strategies are tailored for success.

Maximizing Contract Life Cycle Management Investments

While automation is a powerful tool, it is not a one-size-fits-all solution. The most extensive solutions, like ML-driven contract reviews, come with underlying complexities. Legal departments often plan poorly for such initiatives, pursuing a legal technology roadmap without sufficient consideration for business or end-user needs.

To maximize the return on contract life cycle management (CLM) investments, legal departments should prioritize capabilities that align with their process maturity. A “big bang” approach often only achieves a fraction of the expected value. Unrealistic stakeholder expectations regarding a technology’s payback period can lead to negative sentiment, eventually causing technology initiatives to be abandoned.

Diversifying Technology Providers

The legal tech market, once dominated by specialist vendors, is experiencing a transformation. By 2025, at least 25% of spending on corporate legal applications is expected to shift to non-specialist technology providers. The recognition of the strategic value of legal and compliance is extending beyond legal departments to CEOs, CFOs, and CIOs.

Specialist legal tech vendors are now building legal applications on top of business application platforms from giants like Microsoft, SAP, Salesforce, and ServiceNow. This approach appeals to large enterprises looking to leverage existing investments. On the other end of the spectrum, innovative startups are leveraging AI, ML, advanced analytics, process automation, and other emerging technologies to offer non-legal-specialist solutions.

As the legal industry hurtles into 2024, the need for technology is unquestionable. By understanding these tech predictions and making informed choices, law firms can secure their place in a thriving future. In an era where technology can be the catalyst for success, embracing these trends will empower law firms to navigate the ever-changing legal landscape with confidence and innovation. Advanced Legal is here to guide your journey and ensure that your firm remains at the forefront of this legal tech revolution.