LegalEx 2022 Expert Panel: The Future of Technology in the Legal Sector

Verify 365By Legal Futures Associate Verify 365

One of the most anticipated legal events in the world, LegalEx, was back in London in November 2022 as the most comprehensive and all-encompassing exhibition and conference bringing together legal professionals, legal technology experts and those facilitating the business behind the law.

Dedicated to facilitating business growth, streamlining processes and encouraging the professional development of legal firms and professionals, LegalEx 2022 had something for everyone, addressing the needs of each part of a changing legal industry.

The two-day event provided the perfect opportunity to hear from industry leaders, such as Rudi Kesic, CEO at Lawtech 365 Group and Investment Director at ADN Capital, on the latest strategies, practices and technology solutions, with a content schedule covering legal tech and IT, cyber security, future-proofing firms and AML compliance.

Technology solutions showcased at LegalEx included the leading global lawtech vendors such as Verify 365 digital onboarding technology and Actionstep cloud-based practice management software, which offer digital transformation tools to law firms to ensure lawyers looking to grow and stay ahead of their competition in a digital-first world can flourish.

Stephanie Boyce, Rudi Kesic, Peter Wright and Heather Anson

The 3000 LegalEx visitors had access to over 90 cutting-edge exhibitors and over 100 accredited educational seminars from some of the world’s top legal experts and most forward-thinking speakers. All under one roof, they were able to explore the latest tools, products and services with innovations that are changing the game in legal business growth, practice management and AML compliance.

One of the keynote theatre panels, “The Future of Technology in the Legal Sector” was facilitated by Rudi Kesic with panel contributors including Stephanie Boyce, Peter Wright, Heather Anson and Geraldine O’Reilly.

With the emergence of new technologies, legal services will be fundamentally different in terms of job function and the way in which services are provided. This session dived into how digital transformation will impact the legal sector and how firms and those in the legal profession will have to adapt to stay ahead of the curve.

Rudi Kesic opened the panel and outlined some of the key post Covid-19 realities:

“Covid-19’s digital shift has transformed the legal sector. A push for widespread adoption of digital technologies within the legal workplace has not only changed the way lawyers work but has significantly improved client service, demographic reach and return on investment in a competitive landscape. Over the past three years, there were a number of new challenges and trends affecting the sector, making it crucial that professional skills stay sharp, and that lawyers are aware of the latest regulation updates affecting their daily work.”

According to Rudi Kesic, the Covid-19 pandemic sped digitisation of the legal sector by 10 years in just a matter of months. As 2020 lockdowns sent a larger percentage of the sector into a remote environment, law firms were forced to introduce digital aids, technological tools and an online engagement strategy for a new digital demographic.

Rudi pointed out that while the shift to an online future has significantly increased global outreach for law firms, competition has never been so steep. The legal sector is booming with “hustle-hungry lawyers” who are battling to see more digital client engagement.

The real question is whether legal technology is the recipe for success?

Digitising the legal Sector post-pandemic

It’s no secret that the pandemic forced several major changes within the legal sector. From a spike in remote working to changing the way law firms connect with their clients, lockdown culture and a shift to all things digital significantly transformed the industry. As global law firms shut down their offices and online communication methods such as Zoom boomed, most law firms dipped their toes into technological innovation to navigate their way through the Covid-19 crisis.

Rudi added that over 75 per cent of law firms invested more in digital technologies in 2021 than any other year, with over 50 per cent of law firms claiming that they were able to adapt to technological innovation 20 times faster than expected.

“As law firms adapted to global lockdowns and a quick turnaround for remote transformation, technology which usually takes up to 12 months to implement was introduced to remote employees in less than 5 days during the first lockdown, as law firms worked hard to retrain and redirect staff and navigate a new digital world. What does that show you – anything is possible,” added Rudi.

Elements of strong leadership and a push for increased HR support were vital as law firms shifted into a digital sphere.

“What’s changed over the last five years has two dimensions: your fee earners and support staff now matter as much as your clients in many cases, and law firms are creating digital-first culture to compete in this world,” he commented.

“If we’re going to make digital transformation happen in the post-pandemic world, it’s got to be all about working with your people by providing the digital tools, energising them, and listening to them. That’s how we come out of this stronger than we were before.”

One legal technology group that saw a large spike in popularity in the sector was automation-based tech, such as machine learning and artificial intelligence. With a larger online audience than ever before, many law firms prioritised automation to address higher levels of client demand and reduce spending by digitising repetitive tasks.

According to a study by Lawtech 365, 65 per cent of law firms invested in at least one form of automation technology to respond to the pandemic’s impacts. Two years on, the study found that 75 per cent of law firms across the globe have continued investing in automation after seeing significant returns on investment during the pandemic. It’s no surprise that experts believe most of the legal sector will be dominated by process automation in 2023.

Promoting equality and diversity in law

Last year the Legal Services Board, the sector’s regulator, concluded in a hard-hitting report that a “step change” was needed to make entry into the law easier. It said the profession had a persistent lack of diversity in hiring, retention and career progression, with a preference for “elite” educational institutions which hindered those from disadvantaged backgrounds.

Stephanie Boyce, who was the first black leader of the Law Society in its 200-year history, said:

“There is absolute, growing social opportunity in this profession, but we are acutely aware that more needs to be done. We cannot just have diversity — we must have inclusion as well. There is no point giving someone a seat at the table if you don’t allow their voice to be heard.”

Women now represent 31 per cent of partners in large private practice law firms and black, Asian and minority ethnic solicitors represent 7 per cent of partners despite making up 21 per cent of the profession.

Stephanie also pointed to Law Society research on the experience of BAME lawyers which has identified issues around law firm recruitment practices, work allocation and inclusive culture. “If you come from a black, Asian and minority ethnic background you earned less per hour than your white colleagues, left the profession two years earlier than your white colleagues and you were more likely to be subjected to harassment and bullying and discrimination, so there are some real stark issues there.”

Rudi added that the legal profession is changing. “Elite City firms Linklaters, Herbert Smith Freehills and Freshfields Bruckhaus Deringer have elected senior female leaders. In the wake of the Black Lives Matter movement, many law firms have made diversity and inclusion a priority. Magic circle firms such as Clifford Chance — which has 26 per cent female partners and 8 per cent BAME partners in its London office — have set new targets. Clifford Chance has committed to at least 40 per cent female partners by 2030 and has adopted minority ethnic targets for the US and UK for 15 per cent of new partners by 2025.”

Publishing targets is one thing – and an important step in being transparent and accountable for progress because it’s there for everyone to see – but as many firms and organisations who have been working to improve diversity and inclusion will know, a strategy and action must back it up to achieve those targets.

Instead, organisations should treat diversity as they would any other business challenge, said Stephanie.

“Plan, deliver, evaluate impact, and learn. To improve outcomes in 2023, we need to move beyond the tick box approach.”

A shift to remote working in the legal sector

Remote working trends will remain popular for most law firms in 2023. After 85 per cent of lawyers were forced to go remote during the 2020 lockdowns, most law firms now state that they plan to allow staff to remain working from home in the near future, which will result in an additional spike in technology uptake.

As lawyers swap the office for the couch, Rudi pointed out that working from home resulted in higher levels of job satisfaction, reduced levels of burnout and less psychological stress amongst WFH employees.

“From immersive training tools to machine learning, we will see more tech innovation in the remote working sector. As VR and AR applications continue to empower remote communication, some law firms are now using immersive aids to train lawyers from the comfort of their homes.”

Another significant technology transforming remote working is artificial intelligence. Using AI, employers can track remote productivity, automatically assign tasks using AI-powered platforms such as Actionstep and even enhance remote video conferencing. The question is, just how prominent could AI be as the sector steps into the future.

Rudi said technologies such as AI-chatbots will revolutionise the legal sector. Using a mixture of big data handling and machine learning, new technologies can answer legal questions automatically and store large quantities of data in secure decentralised systems while also aiding lawyers to make decisions.

However, as artificial intelligence continues to prosper, many lawyers fear that the workplace will never be the same. In fact, most lawyers predict that their roles will be automated by 2030, adding to unemployment rates and reducing the need for physical face-to-face meetings.

The benefits of artificial intelligence in the legal sector

Artificial intelligence can automatically evolve without the need for human intervention. The more data AI consumes, the greater its decision-making qualities become. AI thrives in collecting and indexing large amounts of big data. Automatically building non-biased, predictive models based on the input it receives, AI technology will reduce the chances of bad decision-making in the legal sector.

Using AI to remove cognitive biases is the key to success, according to Rudi.

“Cognitive biases are most problematic because they cause lawyers to make bad decisions. Only by filtering out the cognitive biases that are sure to arise while decisions are being made can you be confident that, at the end of the day, the best decision for you and your law firm was made based on the best available information,” he claims.

Enhancing cyber security in the legal sector

Cyber security risks continue to wreak havoc on law firms. In a post-pandemic landscape, the corporate sector has seen a steep increase in cyber-based breaches and attacks on the back of Covid-19’s push for widespread digitisation.

Peter Wright, a leading expert in Data Protection, Cybersecurity and Social Media Law, said:

“The pandemic has only worsened things. With the overnight homeworking revolution and all the added cyber challenges that came with it, including a deluge of Covid-related scams, law firms with the nature of the data they hold, need to be more on-the-ball than ever. It goes without saying that the professional reputation of any law firm plays a critical role in their continued success, attracting clients and long-term relationships, which of course are the life blood of legal practice. It takes 20 years to build a reputation and 5 minutes to ruin it.”

Peter added that as we approach 2023, law firms must not only be sure that they are doing all they can to protect their clients’ assets, data, and the firm’s reputation – but also that their trusted technology partners and software suppliers are on-the-ball with cyber security too.

Heather Anson added that it is important that firms consider the bigger picture in terms of what the threat of cyber-crime can do to law firm culture, and also take heed from the experiences of others across the legal landscape, especially learning lessons from those firms that have suffered the consequences of not acting soon enough to bolster their cyber security.

“It may be better to ask when, not if, you will be targeted by online criminals,” added Rudi.

The panel concluded that it is paramount that firms not only openly encourage their employees to share their concerns and experiences, but that they also reward the right kind of behaviour to develop an open “no-blame” culture. Nurturing a positive culture is clearly going to be key for the success of cyber security policies, and more importantly a key part of the bigger picture for the success of the profession.

The stark reality is that cyber criminals employ a range of ever-evolving tactics to bypass security controls to target employees and are becoming more sophisticated in their approach to breaking down barriers of entry. However, many law firms are surpassing the level of sophistication we are seeing from today’s cyber criminals by implementing solid cyber policies and procedures.

Lawyers “connecting” with consumers in 2023

Using AI-powered tools such as chatbots and apps to connect with clients not only reduces the workload for fee-earners but can reduce the need for widespread admin teams across the board. A recent survey by Lawyer 365 Legal Advice App found that 70 per cent of law firms teams rank app-based chatbots to be useful or very useful when connecting with clients and personalising the client journey experience.

The panel agreed that in a digital-first environment, consumer demands have skyrocketed. This is where artificial intelligence will make a difference in the future. Using a mixture of predictive analytics, historical data and self-learning chatbots, AI-driven apps, such as Lawyer 365, will transform the consumer experience and improve client relationships without the need for human intervention.

In fact, 65 per cent of consumers now claim that they prefer to initially “speak with a chatbot on an app” over a lawyer, according to research by Lawyer 365. Not only can an app-based chatbot service be quicker and more efficient for a consumer, but AI machine learning enables the chatbots to answer legal questions in seconds, using information from past client experiences.

What is the blockchain and can it revolutionise the legal sector

Blockchain technology will continue to revolutionise the legal sector. As we step into the sector’s digital era, the new technological advances will reshape the profession. Blockchain ledgers are just one type of technology transforming the law. From smart contracts to digital identity, blockchain’s decentralised properties are becoming popular amongst legal technology companies because of the transparency, streamlined data management, and ultimate data security.

For the legal sector, the onset of the Covid-19 pandemic pushed most law practices online, meaning that more data than ever before is being shared across digital portals, increasing the risk of cyberattacks and hacking threats.

Rudi suggested that blockchain technologies will reach the legal mainstream by the end of 2023 and that we will begin to see real adoption of blockchain across the legal sector in in the next three years. The question is just how “secure” is the future?

He posed the question whether blockchain security can revolutionise the future of data sharing and if law firms are still at risk in a new online landscape? He added that the beauty of blockchain is its transparency.

“Priding itself on being a decentralised process, blockchain transactions can all be transparently viewed at all stages of the chain. Whether it is a financial transaction or an information exchange, each blockchain node creates a new copy of the current chain that makes it easy for users to track and document a data transaction. Better still, blockchain’s decentralised nature allows the data transaction to be stored across a network of computers. Rather than storing information in one centralised location, each computer network involved within the translation is constantly updated as new blocks are added, making it harder to be hacked by cybercriminals.”

Example of blockchain use case in the legal sector

Rudi provided an example of blockchain use in the legal sector.

“Let’s have a look at a real use case example. Verify 365 are currently developing a super secure Digital ID Wallet, based on blockchain-driven identity management, called MyID, where clients can access and share a secure biometric, verified ID with third parties without having to go through the process of using cumbersome state agencies like the passport office or DVLA. MyID will provide “accessibility” that offers clients the ability to “control their ID” at a moment’s notice and share it securely without any risk. By creating a “MyID – Digital ID Wallet” on Verify 365, which is securely stored on a blockchain, means that if your ID is stolen and then used by a fraudster, the moment your information is used in conjunction with someone else’s, all other nodes in your blockchain will flag that ID as “fake”. So, it isn’t difficult to see the practical applications in the legal sector, as Verify 365’s MyID Digital ID Wallet will have a transformational impact for AML compliance and ID Checks, especially in conveyancing, wills and probate, family and potentially across the entire spectrum of the legal sector.”

Rudi added “I believe that in the next 10 years we will see a giant leap in legal technology and blockchain-driven solutions that will be transformational in the sector. This is especially true for blockchain, big data, augmented reality and the metaverse. The legal sector in the future will be very different to what we see today. Blockchain driven IDs are coming, and software like Verify 365 with their use of MyID Digital ID Wallet is leading the way forward.”

Metaverse and virtual reality are gaining a foothold in the legal sector

Rudi said that he expects the “metaverse” to have a positive impact on the legal industry and he called the metaverse “the next horizon” in legaltech.

“In lawtech, the biggest opportunity over the next 10 years will be to capitalise on the potential of the space in between the real and fully virtual worlds,” he added.

He pointed out that cyber security, fraud, and money laundering breaches are his primary concern for 2023.

“As the legal sector develops, it will introduce many more connected, intelligent legal services, creating new entry points connecting our physical and digital worlds. But there are significant challenges to connecting these technologies safely and at scale – data interoperability and cybersecurity.”

Significantly, risks to cybersecurity and data privacy will not be relegated to the digital world but will have serious consequences in the physical world, too. That means law firms need the right channel, source, policies, and governance in place to have trustworthy data.

Rudi explained that many law firms have one or two pieces of the puzzle but are missing the other crucial pieces.

“Lawyers should join in consortiums and legal industry standards groups to shape governance, data interoperability and cybersecurity standards,” he said. “From an interoperability perspective, this could mean participating in ecosystem-wide efforts to set standards for how law firms onboard and verify new clients, share information, connect and communicate.”

Money laundering and identity theft will be a major challenge in 2023

Rudi also pointed to the challenges of fighting fraud in the post-Covid world, and how some of his company’s latest innovations such as “MyID” blockchain digital identity, automated client onboarding and NFC-biometrics are transforming the legal profession in its fight against money laundering and identity fraud.

“The UK has one of the most advanced legal systems in the world. While this is great for businesses and consumers, it makes the UK a lucrative market for fraudsters who want to quickly cash out stolen funds.”

Rudi set out his arguments for why the traditional and manual anti-money laundering and identity verification systems of today are fragmented, and how the latest blockchain-driven technologies can enable a more secure management and storage of digital identities by providing unified, interoperable, and tamper-proof infrastructure with benefits to law firms and consumers.

“Digital technology has led to new opportunities for fraudsters, and the Covid-19 pandemic accelerated this trend as people moved more of their lives online. Yet the solicitors who act as the gatekeepers are not doing enough to prevent the exploitation of their services,” said Rudi.

Blockchain will enable a secure management of digital identities

The latest data from the Solicitors Regulatory Authority shows a substantial increase in the number of AML non-compliance fines issued to law firms. The main reason for the increase is that solicitors are failing to meet their obligations to detect and prevent money laundering.

“There are a mind-boggling variety of regulators, standards, and agencies in the legal sector with responsibility for tackling fraud and enforcing anti-money laundering compliance. This has led to inefficient policymaking and a lack of accountability in the sector. There should be a national AML-tech campaign to raise awareness about how solicitors can protect their law firms against fraud, and to educate junior lawyers about the relevant and practical anti-money laundering procedures, and to be able to effectively verify source of funds and source of wealth in conveyancing transactions. We are calling for the SRA to be more proactive and find a way to endorse AML software solutions, such as Verify 365, which can provide law firms with the required assurance on their client’s real identity, verify source of funds and offer detailed analytics of whether a transaction might be fraudulent.”

The future of technology in the legal sector – what does 2023 hold for us?

The convergence of technologies – such as virtual reality, augmented reality, blockchain and artificial intelligence – are reshaping human experiences in new and innovative ways.

“Over the coming decade, these new experiences will transform the legal sector, from client onboarding to court hearings and creating new ways to communicate with clients,” added Rudi.

He is predicting that artificial intelligence will dominate most legal practices within the next decade, leading to the “structural collapse” of traditional law firm processes.

As companies such as Lawtech 365 and Actionstep continue to create smarter legal technology, there is no doubt that the future is bright for a truly digital legal sector.

“From blockchain analytic models to AI-chatbot innovations and e-payments and e-signatures, the client journey experience will be revolutionised over the next two years. As the legal technology market grows at an exponential rate in the wake of a post-Covid push for digitisation, it won’t be long before the legal sector becomes completely automated within a data-focused future. Expert systems fuelled by sophisticated algorithms, natural language processing capabilities, and unhindered access to stores of data are poised to uproot many well-established law practices,” said Rudi.

As for the impact on law firms, he added:

“The economic model of law firms is heading for a structural revolution, some might say a structural collapse. We may have heard a lot about “New-Law”, but the impact of virtual and augmented reality, big data, blockchain, digital identities and artificial intelligence, will make such developments pale in comparison.”


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