The Legal Industry & Information Technology

Like all other industries, Web Posting Pro, the legal industry is not insulated from the tremendous changes in information technology over the past decade and the challenges and opportunities it presents. If anything, the changes have more bearing on law firms & departments because information management is at the core of what they do – consulting with clients, colleagues, or experts; increasing compliance & regulation demands, wading through a constantly expanding sea of legislation and case law; managing outsourcing partners; keeping abreast with latest developments; or managing a mountain of matter files.

Recent Trends

Perhaps the most significant change in the legal services industry is the decline of “relationship lawyering.”

Recent times have seen increased competition & changes in underlying market structure. There has been a continuing trend of decline of “relationship lawyering.” Traditionally strong relationships between law firms and corporates are eroding, with more companies opting for in-house legal departments or “shopping around” for the best deal. Another significant trend is the increasing convergence of legal markets, where competition is as likely to come from a firm in another state or overseas as from a local firm. These & other developments exert greater pressure on legal firms to be more efficient, and attorneys must spend their time analyzing information rather than organizing or managing it.

Drivers of Technology Adoption by Legal Firms

Possibilities of Technology – Legal firms’ primary driver of greater use of information technology is developments in the technology itself. New technologies & greater bandwidths allow great possibilities in the arenas of information management, productivity, and remote collaboration. Information can be moved over the internet with greater security. And unlike yesteryear, law firms can access these technologies without hefty costs and the need to set up specialized IT departments.

In 2004, Forrester Research Inc estimated that some 39,000 legal jobs would have moved offshore by the end of 2008.

Outsourcing – Legal firms are now increasingly open to legal process outsourcing of traditionally held close tasks – research, transcription, coding, and even legal research and the drafting of legal documents. It is commonplace to see a NY-based law firm subletting research work to a team of professional lawyers & paralegals in Bangalore, India. This enables firms to cut down costs & concentrate on core legal functions majorly. But it also necessitates a greater need to communicate, collaborate & monitor the functioning of outsourcing vendors hundreds or thousands of miles away. Security is also an issue since the performance of the services often requires access to regulated consumer data or other sensitive data.

In 2004, almost 60% of lawyers worked at multi-office firms, and over 10% worked at firms with ten or more offices.

Geographic Diversification – As mentioned before, there is a distinct movement towards multiple office firms, with offices spread nationally and globally. US-based companies are now serving many foreign clients or serving the foreign interests of domestic clients. There was a significant presence of international clients in even the smallest law firms of 1 to 20 lawyers. There has also been a spate of global mergers and acquisitions of law firms in the new millennia. All this necessitates a greater need for communication, collaboration, and information exchange between branches.

Regulatory Compliance – Since the Sarbanes Oxley Act came into effect, records management has become an essential requirement. Organizations are required by law to retain certain documents for predefined periods. Also, the amendments to Federal Rules of Civil Procedure went into effect on December 1, 2006, and apply to any firm involved in litigation in the U.S. Federal Court system. The amendments mandate that companies be prepared for electronic discovery. Firms have to drastically alter the way they preserve, retrieve, and produce electronic data.

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