Technology Is Changing The Legal Industry LandscapeDon’t Let Your Firm Get Left BehindIn PWC’s 2017 Annual Law Firms survey, firms said that one of their top two priorities across Business Support functions was improving the use of technology. And, the focus for improving IT functions within their firms centred around getting the basics in place.

The PWC survey results echo what we’ve been hearing from our clients and experts across the industry; there’s an abundance of technology and innovation available, but many of the IT basics aren’t yet being leveraged effectively. Some firms are still using processes that are heavily paper-based which is hampering their ability to compete in the market.

And the knock-on effect not only impacts your own firm, but also your clients and any other businesses you engage with. We sat down with established legal consultant, Bill Kirby; COO at award-winning firm Jackson Lees Group, Joanna Kingston-Davies and Nasstar’s CEO, Nigel Redwood, to hear their insights and tips on staying competitive in today’s crowded marketplace.

ContentsChapter OneTechnology in the Legal Sector 3

Chapter TwoInnovation in the Legal Sector 5

Chapter ThreeCloud in the Legal Sector 7

Chapter FourGDPR & Security in the Legal Sector 9

In PWC’s 2017 Annual Law Firms survey, firms said that one of their top two priorities across Business Support functions was improving the use of technology. (Source). And, the focus for improving IT functions within their firms centred around getting the basics in place.

These results echo what we’ve been hearing from our clients and experts across the industry; there’s an abundance of technology and innovation available, but many of the IT basics aren’t yet being leveraged effectively. Some firms are still using processes that are heavily paper-based which is hampering their ability to compete in the market.

And the knock-on effect not only impacts your own firm, but also your clients and any other businesses you engage with.

“We still see practices who aren’t even using email for the majority of their client and business interactions,” says Joanna Kingston-Davies, COO at the Jackson Lees

Group. “When we have to engage with a practice that is still relying on fax machines and letters for communications, it slows down the process for everyone involved.”

Not leveraging technology effectively is now having a big commercial impact on many firms, and has the potential to cost them their business.

“Every year, approximately 350 law firms go bust due to not properly managing their working capital, whether it is generally down to not regularly validating work in progress or allowing time recording to outstrip fixed fee arrangements,” comments Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy. “Technology can help make many of these activities become more efficient, by triggering reminders and speeding up administrative activities to deliver better services to clients. We hear a lot, for example, about AI but many firms are still not making the most of the technology they already have.”

Legal Technology Have You Got The Basics In Place For Success?

We still see practices who aren’t even using email for the majority of their client and business interactions.

Joanna Kingston-Davies, COO at the Jackson Lees Group

Technology in the Legal SectorChapter One

The report from PWC shows that the most popular digital and technology initiatives across the sector include: client collaboration tools (72%), automated document production (41%), mobile applications (39%) and data visualisation (13%), so firms are clearly looking at how tech can improve their operations and enable them to compete in a demanding market. (Source)

Protecting with technologyMany firms are now also looking at how to better protect themselves now that technology is central to their firms’ operations, especially for data management and client communications activities.

Across the industry, we’re seeing clients investing more money in security measures to protect their IT and systems. In short, cybersecurity awareness and spending are on the rise.

“The main focus now for many law firms is cybersecurity and how they can put in place as much protection as possible to mitigate the risk of a cyber-attack,” adds Nigel Redwood, CEO of Nasstar. “Cybercriminals recognise that law firms hold valuable information that could be lucrative in the hands of a cybercriminal, and with GDPR penalties coming into play in May 2018, firms will need to ensure that they have steps in place to protect data and manage situations accordingly in the event of an attack. We’re certainly seeing more clients increasing their investments in cybersecurity technology.”

With 62% of law firms reported to have been a victim of a cyber-attack (Source) and the increasing reliance on technology to manage documents and store files, many firms still need to do more to better protect themselves. In 2015, 4% of all data breaches in the UK reported to the Information Commissioner’s Office related to the legal sector (Source), and the sophistication of attempted cyber-attacks continues to grow.

But the buck shouldn’t just stop with IT when it comes to protecting your firm from a cyber-attack.

“As more services move to being based on technology or cloud services, such as hosted telephony or case management software, the risks around protecting data and systems inevitably increase”, says Bill Kirby. “So, with every step forward in terms of increasing the amount of technology being used, firms also need to consider how to increase their security and data protection – and it is not just IT but also the human element – and management has to own the whole process.”

Competitiveness across the industryTechnology clearly provides an opportunity for firms to become more competitive, with many regional firms using their smaller footprint and agility as an advantage when it comes to refreshing their approach to tech.

Bill Kirby has seen the impact of regional firms embracing technology: “Many regional firms are more competitive than the traditional commercial London practices because they have been forced to review their businesses to uncover cost-savings and improve efficiency.”

Firms that are able to capitalise on technology advances across the industry as early as possible can use it to speed up their processes; replacing traditional, paper-based activities with software-driven tech to increase their operational agility, and ultimately deliver better services to clients.

With every step forward in terms of increasing the amount of technology being used, firms also need to consider how to increase their security and data protection.

Bill Kirby, Director at Professional Choice Consultancy

A recent report into innovation in the legal sector found that although many firms recognise that technological innovation can help them to differentiate themselves from the competition, many practices are still not taking the required steps to capitalise on the opportunity that innovation offers them. The Law Society found in their 2015 – 2016 survey that one quarter of small firms are still spending 90% of their annual IT budget on maintaining existing IT systems, while 19% were spending their entire IT budget on keeping existing technology running (Source).

Today, many of the top law firms now have job roles dedicated to addressing innovation, so why aren’t we seeing more examples of innovation across the sector?

“There are many technology innovations that firms aren’t able to use because they don’t have the right technology foundations in place today,” says Bill Kirby, Director at legal consultancy specialist,

Professional Choice Consultancy. “For example, any of the advanced analytics tools that firms could be using require a good base of data and connected systems, in addition to added security to protect all of this data being collected. There are a lot of ‘defensive’ actions that firms need to take to solve their current business issues and security needs before they can start to capitalise on newer innovations.”

Innovation in client service deliveryBut innovation is occurring in many firms, and it is mainly being driven by client demands and increases in expectations of how legal services should be delivered.

“We’re seeing firms making more investments to use technology to deliver innovation across client services,” adds Nigel Redwood, CEO of Nasstar.

Rather than focusing on back-end IT, more investment is now being directed at technology which can accelerate frontline services. This has turned how IT is perceived on its head within law firms, and tech is now seen as an enabler for delivering client innovation.

Nigel Redwood, CEO at Nasstar

Innovation in the Legal SectorChapter Two

Legal Technology Have You Got The Basics In Place For Success?

“Rather than focusing on back-end IT, more investment is now being directed at technology which can accelerate frontline services. This has turned how IT is perceived on its head within law firms, and tech is now seen as an enabler for delivering client innovation.”

Instead of IT being a service only managed by the IT department, client-facing teams and partners are now engaging with new technologies to see how they can drive increased sales activity and improve the client relationship.

“In the future,” says Joanna Kingston-Davies, COO at the Jackson Lees Group, “we see AI playing a key role in our marketing and sales processes by helping direct clients to the information they need on our website, educating customers on our products and increasing conversion rates across our marketing activities.”

Innovation is not only having an impact on client-facing services, but is also being leveraged to improve the efficiency of back-office operations.

“I see Artificial Intelligence, bots and automation as the next big tech trend to really impact on the legal sector,” comments Joanna. “As a business, Jackson Lees is starting to experiment with AI and automation by implementing scanning software to auto-scan and file records coming into our organisation. This means our operations team’s time is freed up to focus on other activities, and the information reaches the lawyer quicker.

We already have a number of activities automated through our practice management software that triggers actions and next steps based on inputted data.

Interestingly, we’ve not used this increase in automation to decrease headcount; instead, we’ve dedicated more focus and time to client-facing services.”

Rather than using AI and automation technologies to keep business costs to a minimum, innovative firms like Jackson Lees are reinvesting savings into front-line services to improve client satisfaction levels and enable them to do more for customers.

Leveraging today’s technologyHowever, one of the main messages we’re hearing is that much of the technology that firms need in order to make their service delivery more innovative and efficient already exists within their businesses today – it just isn’t being used effectively.

“There are lots of examples of supposed ‘innovation’ occurring in the legal sector,” says Bill Kirby, “however, there’s an abundance of technology that already exists today and isn’t being effectively leveraged, so the first step is for firms to embrace the technology they already have, and get more out of it. Are you getting the most out of your existing software investments? Are you using your practice management and case management packages to their full extent? Are you even on the latest releases?”

Because many existing and readily available technology solutions aren’t being used to their full potential today, some of the more radical innovations across Artificial Intelligence (AI) and chatbots are unlikely to take the industry by storm overnight, as some industry figures are predicting.

“In terms of artificial intelligence, there is a lot of hype in the industry and we’re yet to see where it can be applied for maximum impact, it’s more likely it will be integrated piecemeal into practice management systems rather than sparking an AI revolution over the next 12 months,” says Nigel Redwood, CEO of Nasstar.

There are many technology innovations that firms aren’t able to use because they don’t have the right technology foundations in place today.

Bill Kirby, Director at Professional Choice Consultancy

There is now a general acceptance across the sector around cloud technologies as more and more firms get ‘comfortable with cloud’.

And, as cloud offerings mature, and the legal sector becomes increasingly comfortable with consuming cloud services, the range of solutions available will inevitably increase to suit new business needs and capitalise on different opportunities specific to the legal sector.

“Historically, there was a lot of nervousness in the industry about moving in-house IT systems to the cloud; especially in the legal sector where data is highly sensitive and most information is incredibly confidential to individual clients,” says Joanna Kingston-Davies, COO at the Jackson Lees Group. “However, we’ve found that if you choose a respected and experienced cloud provider, your data is safer in their data centres than your own, due to the levels of 24/7 security, resiliency and manpower that they can direct to

your IT services. Now, the way I see it, is that firms can’t afford to take the risk of not using cloud services.”

A changing legal sectorThis change in ‘cloud perception’ could be down to firms transforming the way they deliver services themselves; with many businesses transitioning to a virtual model without the traditional office structure and face to face client engagement.

“There is a move across the sector for more legal services to be ‘virtualised’,” adds Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy. “We are seeing firms without central offices delivering virtual services and many consuming outsourced accountancy, outsourced document production and outsourced telephone answering.

We’ve found that if you choose a respected and experienced cloud provider, your data is safer in their data centres than your own, due to the levels of 24/7 security, resiliency and manpower that they can direct to your IT services.

Joanna Kingston-Davies, COO at the Jackson Lees Group

Cloud in the Legal SectorChapter Three

Legal Technology Have You Got The Basics In Place For Success?

As this happens more and more, it’s only natural that their IT services will be outsourced and hosted externally – cloud is driving changes in the legal sector, but also the increasing virtualisation of legal services is changing perceptions about how IT is consumed in the industry.”

Delivering or consuming more solutions ‘as-a-service’ has opened many firms’ eyes to the opportunity that cloud and hosted solutions can offer them. Today, many firms are as comfortable with consuming IT as a hosted service, as they with utilities and energy services.

But adopting cloud is as much about taking defensive measures to protect your firm, as it is about capitalising on future opportunities. Nowadays, hosted IT and cloud services can contribute to ensuring that ongoing business operations remain commercially sustainable.

“It’s estimated that 60% of firms will have hosted IT services within the next 5 years, including the top 200 firms that to date have done little to address this,” comments Bill Kirby. “Most firms today can’t afford to have any downtime or disruption to their IT services, so many businesses are now embracing hosted services as a way of delivering around-the-clock client service without dramatically increasing costs. Delivering a 24/7 IT operation in-house just isn’t commercially viable for the majority of firms, so a hosted IT service makes commercial and practical sense.”

Industry pressures increasing the move to cloudRegulatory changes in the industry to improve service satisfaction and billing transparency for clients have meant firms are having to look at how their operations can be made more efficient to cope with commercial challenges around delivering more cost-effective services in order to compete with alternative business structures in the legal sector. But firms are still reluctant to jump straight into full public cloud services.

“More and more law firms are getting comfortable with the idea of putting their central IT systems into the public cloud, with many firms embracing Office 365 for email and communications. Regulatory pressures to drive more efficiencies are encouraging firms to look at more efficient approaches to their operations, and public cloud delivered through a carefully managed service is a no-brainer for many organisations in the legal sector,” says Nigel Redwood, CEO at Nasstar.

Addressing securityAside from driving efficiency, security is always top of mind in many firms. Many now recognise that it can be more secure to outsource their IT to a specialist provider who is an expert in detecting, managing and mitigating cyber threats, than it is to run IT operations in-house.

“It’s getting harder for firms to manage IT security themselves in-house,” says Bill Kirby, “and many firms don’t want to carry the risk of downtime or damage to their brand reputation in the event of a cyber-attack. For many businesses in this sector, a security breach would mean the end of their business, so putting that risk into the hands of an IT hosting partner who is expert in managing and monitoring IT security on a 24/7 basis is a way of reducing overall risk across the business operations.”

Nasstar works hand in hand with firms across the UK, helping them to navigate the cloud landscape; wherever they are on their cloud maturity journey. More firms are now looking at bringing public cloud solutions into what they do, but many aren’t comfortable with managing and integrating true public cloud services themselves.

“Nasstar’s hybrid approach to marrying public cloud solutions with our own in-house private cloud is delivering results for customers in the legal sector,” says Nigel Redwood, CEO of Nasstar. “We’ve recently been working with a firm who has used our service to deliver IT to its users in Australia and the UK, using Citrix and HPE technology with Microsoft Azure public cloud services for around the clock availability and support.”

As we’re nearing the GDPR go-live date, we thought it would be a good time to reach out to a few industry experts about what they are seeing and hearing in the legal sector around GDPR.

“We started looking critically at GDPR in early 2017,” says Joanna Kingston-Davies, COO at the Jackson Lees Group. “In the legal sector, it’s less of a challenge because all of our client and employee relationships are covered by contracts detailing how we manage their data.”

Some commenters, however, thought that not enough was being done across the sector to address GDPR, and noted a willingness to leave the responsibility for achieving GDPR compliance to the IT department.

“I think there is still a lot of complacency in the market around GDPR and there are lots of firms who need to wake up to what they need to do before the GDPR

go-live date,” commented Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy. “What I’m saying to legal management today is, ‘don’t just rely on asking your IT department whether you’re on track with your GDPR commitments’. You need to go beyond just IT; staff need to be compliant in their day to day work, and training needs to be delivered to ensure employees understand how to protect your data. There’s no point spending lots of money on security technology, then giving away the passwords.”

GDPR-overwhelmWe’re hearing lots of queries from customers around what they need to do with their IT to comply with the GDPR, so we’re trying to make the process as simple as possible to avoid GDPR-overwhelm.

It’s more secure to move your data and IT to a specialist and compliant technology supplier who can manage and monitor your security for you, with around-the-clock support from dedicated experts.

Bill Kirby, Director at Professional Choice Consultancy

GDPR & Security in Legal SectorChapter Four

Legal Technology Have You Got The Basics In Place For Success?

“The topic of GDPR comes up in almost every conversation I have with technology leaders in the legal sector,” says Nigel Redwood, CEO at Nasstar. “There’s a lot of hype in the industry and supposed experts, but this can become overwhelming for many organisations. What we’re saying to our customers is to think about the next achievable step towards achieving increased data protection and GDPR compliance. Break it down into a simple next step, rather than trying to tackle GDPR compliance all at once.”

However, for the legal sector, ongoing regulatory compliance commitments mean the jump to achieving GDPR compliance should be less challenging than for other sectors. “For many firms,” adds Nigel, “they will already have been adhering to many areas of the GDPR regulation as every UK law firm is already heavily regulated and used to following stringent compliance processes. For those already complying with existing data protection policies, it will likely be a small change to become GDPR compliant.”

Marketing and prospecting under the GDPRA key point raised in a number of conversations we had with experts was around how marketing and sales outreach activities will be impacted by the GDPR.

“Something all firms will need to look at is how to handle prospect data from marketing activities as a contract won’t be in place before the prospect becomes a formal customer,” says Joanna Kingston-Davies.

Yet, despite already adhering to current data management and client confidentiality requirements, many firms are still not getting the basics right when it comes to ensuring their IT is properly secured and ready for the GDPR enforcement date.

“Surprisingly there are still some firms using Dropbox to share files, despite the US Patriot Act implications and security issues,” comments Bill Kirby. “Insecure and non-compliant technology just cannot be risked. Firms need to review their technology, policies and staff training to understand where the security gaps are – and this is the responsibility of partners and directors, not just the IT department.”

Working with an external provider, like Nasstar, whose day job it is to continually review security processes across customer IT environments and to stay ahead of the game when it comes to security and data protection requirements, can make the process simpler for law firms.

“In terms of our overall IT, we selected a provider like Nasstar who we could be confident would handle our data securely so that we are ready for the GDPR and other regulations as they are introduced,” says Joanna Kingston-Davies, COO at the Jackson Lees Group.

And for those firms who are worried about the security of moving their data out of their own data centres, it is often the safest choice to work with a tech partner who has dedicated security teams in-house.

“It’s more secure to move your data and IT to a specialist and compliant technology supplier who can manage and monitor your security for you, with around-the-clock support from dedicated experts,” adds Bill Kirby. “Keeping data and IT in-house is now no longer the ‘safe’ option that people once perceived it to be.”

In terms of our overall IT, we selected a provider like Nasstar who we could be confident would handle our data securely so that we are ready for the GDPR and other regulations as they are introduced.

Joanna Kingston-Davies, COO at the Jackson Lees Group

Thank you to our contributors for this article:

Joanna Kingston-Davies, COO at the Jackson Lees Group

Bill Kirby, Director at legal consultancy specialist, Professional Choice Consultancy

Nigel Redwood, CEO of Nasstar

Find out more...Technology in the Legal SectorFind out more about how Nasstar works with organisations across the legal sector: http://www.nasstar.com/legal

Innovation in the Legal SectorIf you would like to talk to us about how you can get the most out of your current investments and technology solutions to uncover maximum value, then speak to our legal-focused team today: http://www.nasstar.com/legal

Cloud in the Legal SectorFind out more about our hybrid cloud options for the legal sector: http://www.nasstar.com/legal

GDPR and Security in the legal sectorFind out more about how Nasstar works with organisations across the legal sector, and learn more about what we’re doing with customers to help prepare them for the GDPR: http://www.nasstar.com/legal

Legal Technology Have You Got The Basics In Place For Success?

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