BY THOMAS FRANZ
BridgeTower Media Newswires
A recently released survey highlights the continued trend of technological changes shaping the current and future legal industry.
The 2019 Future Ready Lawyer Survey from Wolters Kluwer Legal & Regulatory reveals that profitability is also impacted by evolving with technology.
According to the survey, 68 percent of “technology leading” law firms reported increased profitability from 2017 to 2018, compared with 38 percent for “technology trailing” firms. 700 lawyers were interviewed to conduct the survey.
“The firms that are well managed are going to be leading. I’m not surprised they would be the ones to be more profitable,” said Ronald G. DeWaard, a partner and chair of the Partnership and Policy Committee at Varnum LLP.
The survey examines statistics after breaking down firms into three categories: technology leading, transitioning or trailing. Leading firms already leverage technology effectively and plan to invest in new technologies over the next three years. Transitioning firms leverage technology somewhat today but do have plans to invest more in the future. Trailing firms are not leveraging technology and have no plans to do so.
Fifty-three percent of lawyers surveyed reported that their firms plan to increase technological investments in the next three years, with technology leaders most likely to report that.
In terms of keeping pace with changes in the legal marketplace, 50 percent of leading firms reported they’re very prepared to do so, compared with 19 percent of transitioning firms and just 7 percent of trailing firms.
In terms of predicting pressure from trends expected to impact their firms, 72 percent of lawyers expect increased pressure from coping with increased volume and complexity of information, and 71 percent expect emphasis to be placed on improved efficiency and productivity.
To compound those concerns, 31 percent of lawyers said their organization is very prepared to address those trends.
Dean Sonderegger, vice president of legal markets with Wolters Kluwer, said firms with an individual dedicated to learning and adapting new technologies have a better rate of success in preparing their employees for changes in this space.
“That’s a challenge for a lot of law firms to tackle because that’s a different skill set than typical lawyering is. To be effective, firms have hired someone specifically dedicated to that,” Sonderegger said.
On the trend of technology leading firms also increasing in profitability, Sonderegger said that trend is indicative of a widening gap between law firms.
“When you look at the market as a whole for law firms, we would argue there is a bit of haves and have-nots in the law firm market right now. You see that some firms are doing very well and some that are struggling. The findings from the study seem to indicate that trend will widen,” Sonderegger said.
DeWaard said the firms that are leading in technology will continue to outpace others because of a more efficient cost structure that they’ve created.
“If your people are trained to use technology then they don’t need as much support. You’ll see in the better-run firms the secretary-to-attorney ratios have much improved,” DeWaard said.
Providing increased value to clients is another key reason for investing in technology, DeWaard added.
“If you can connect with your clients better, it allows you to work with clients that are farther away effectively. In the litigation area, the ability to take in house your document production, you can effectively provide more value to your clients. That allows you to compete better and do a better job for your clients,” DeWaard said.