Technology today is a top priority for law firms globally, and the situation is no different for law firms in Asia. However, even as firms in the region have taken big steps in the adoption of technology, experts feel that more can be done to accelerate the take-up, as well as awareness of the benefits it brings.

The past few years have seen technology permeate and enhance virtually every part of the services sector, and the legal industry, despite its well-known aversion to change, is no exception. Lawyers today are beginning to appreciate the benefits that the use of technology brings, ranging from improved financial performance to enhanced engagement with clients, increased productivity and reduced use of time and resources.

In Asia – and, in particular, the hubs of Hong Kong and Singapore – while law firms are definitely more aware of legal technology and its uses compared to a few years ago, actual take-up is still quite low. “There are a number of ongoing initiatives to encourage the take-up of baseline technology solutions but overall, the level of adoption among law firms remains fairly low, particularly among the small and medium law firms,” says Noemie Alintissar, manager of the Singapore Academy of Law’s (SAL) Future Law Innovation Programme (FLIP), a legal innovation incubator accelerator programme. 

The situation is not much different in Hong Kong. “There is strong interest, but generally speaking, the take-up of technology at the Hong Kong law firm level is happening at a moderate speed, despite there being many individual lawyers in Hong Kong who are very tech-savvy,” says Nick Chan, partner at Squire Patton Boggs, and vice chairman of the Law Society of Hong Kong’s InnoTech committee, which recently organised the Access to Justice (A2J) hackathon. 

Tony Kinnear, managing director, ASEAN and North Asia at Thomson Reuters, says that while traditionally international firms have led technology adoption, the emerging trend of the last 12 months is that large local firms are taking strides in investing in legal technology to enhance the business of law. “Small and medium-sized firms that are aggressively growing and/or have an early adoption mindset are also leveraging technology to differentiate themselves from the competition,” he says. 

When asked to name the most popular technology tools used by law firms in Hong Kong, Chan lists of several them, including word processing, electronic time entries, billing, back office accounting, scanning for storage, and the increasing use of cloud technology for document storage and editing, e-discovery tools, virtual data rooms and cyber security tools. “Some are starting to develop own client-facing apps, CRM tools, AI chatbots, big data analytics, e-translation, e-RFPs, e-court filings and online dispute resolution solutions,” he says.

According to Kinnear, online legal research tools are now the norm in the industry. “The exciting developments in the research space are the ability to continually streamline the process through the application of next-generation technologies like AI,” he says. “As an example, Westlaw Answers has been developed to take certain questions that are commonly asked within the research platform and mine the data in the Westlaw database to provide answers, as opposed to your traditional search, filter and identify model. One of the easiest ways for law firms to access greater efficiencies is to subscribe to a service that consistently upgrades its services to leverage the latest developments in the industry.

He adds that pockets of real progress also exist in leveraging technology to optimise business performance, by driving efficiencies to increase profitability. “Document automation and management, e-discovery, contract analysis and due diligence, and litigation analysis are where we see the industry making the most gains,” says Kinnear.

Most of the smaller firms that Alintissar speaks to already have some sort of technology in place, such as a practice management system, client-relationship management software or a billing system, according to her. “Among the larger law firms, there’s also a lot of buzz around AI-based document analysis tools, such as the AI platform Luminance.” 

TANGIBLE BENEFITS

All this is important because of the tangible benefits that these tools provide, according to experts. “Law firms in Asia are operating in an expanding market for law firm services. It’s important to note that the demand for legal services in the face of an increasingly complex world and increasing levels of regulation is not declining, but the share of legal work being performed by law firms is under threat” says Kinnear. “A more competitive landscape means that challenges – such as ever-increasing fee pressures from clients, keeping associates happy, and uncovering growth opportunities for firms are more prevalent than ever.” 

Chan agrees on the benefits. “Law firms with AI technology tools readily accessible may be able to process information much more cost-effectively than conventional methods, once the team members in the firms grasp how to use those tools to their utmost potential,” he says. “Technology can help law firms to become more cost-effective, provide a better user experience for clients, and be an attractive differentiator. Whilst AI would not completely replace lawyers, it and other tools and automation do help redefine the practice development paradigm, help maintain or expand market share, help increase client loyalty to the firm, improve early detection of potential money laundering or abuse of processes, provide more live data and insights, impress more clients, and generally make us better lawyers.” 

Alintissar says that for the time being, adopting these kinds of technologies can certainly be a competitive advantage. “Clients are increasingly demanding transparency, efficiency and lower bills – particularly corporate clients, she says. “The challenge for law firms is not only in embracing these new technologies, but also in getting beyond the gimmick and demonstrating how these tools are used to deliver better solutions to their clients.”

AWARENESS AND OBSTACLES

Awareness of technology solutions and the benefits they can bring is on the rise, agree experts, but that does not equate to take-up. “Current law firm business models often mean that mid- to long-term investment strategies are deprioritised,” says Kinnear. “For law firms to truly get value from technology solutions they need to ensure that they are addressing the core challenges the firm is facing. Working with a trusted service provider that can provide broad domain expertise and connect the firm to peers that have experienced a range of solutions is a key enabler.”

Chan has a similar take. “Many law firms have been talking about AI technology tools, but ultimately the adoption rests with whether there is budget, time spent to train up on the use of the system, and whether the caseload which requires use of those tools is proportionate to those frontloading drawbacks,” he says. 

Most of the law firms Alintissar speaks to recognise that technology can bring boundless benefits to their practice, but a lack of knowledge and understanding makes decision-making around technology adoption and implementation difficult, she says. “We need to keep having conversations about this, to educate the sector, but we also need to encourage the firms to try-out these tools to experience the benefits first-hand. Be curious, don’t be scared to experiment and find out what works for your practice,” she adds.

It turns out cost is just one of the obstacles standing in the path of adoption of technology. “Cost, fear of the unknown, and decision makers not fully being made aware of the benefits of adopting technology are just some of them,” says Chan. “You need to think of it as an advantage to gain and maintain your business and reputation, not just spending barely enough to patch up old IT systems.”

Kinnear sees the culture of the industry and traditional law firm business models as major obstacles. “The pockets of real progress and adaption are coming through a willingness to shake up the industry and drive closer collaboration with clients,” he says. “Technology is only as good as the business models it powers and should never be the end goal. New roles, such as legal engineers and legal operations teams are emerging both within in-house teams and law firms. The firms that can partner and leverage these resources are the ones that will continue to grow and win the market.”

For Alintissar, most law firms don’t know where to start, or how to curate and select the right tools for their business. “Even after purchase, they often don’t have the resources or manpower to integrate these technologies within their workflows and processes. FLIP is launching a consulting package, Lighten-Up! Consulting, to assist law firms with these types of challenges,” she says. 

ADVICE AND HELP

So, what’s the main piece of advice these experts have for law firms looking to take the plunge? Kinnear of Thomson Reuters says that practice management solutions, on the whole, are only as robust as the underlying data used within the tool. “Working with a provider who understands data, the way it is structured and how to get the most value out of it is the key to success,” he says. “As with all change management projects, focus in on one area first; once the implementation is successfully deployed, it can be used as an example to build a network of advocates within your firm to convince your partners that technology and business success go hand-in-hand. Firms also clearly need to allocate sufficient funds and focus towards implementing the technology solutions that best fit their strategy and client needs.”

Chan of Squire Patton Boggs says that as with all businesses, it is important to look at the cost of the product. “The cost needs to consider not only monetary cost, but also the time cost to train, process and maintain the system,” he says. “Weigh it against the efficiency and effectiveness and revenue that those cases using it can generate.” The Law Society of Hong Kong’s InnoTech committee also helps smaller law firms looking to get started on - and improve on - their legal technology, he adds.

To assist lawyers, Alintissar says the FLIP organises a number of events, including monthly open-house events, twice-monthly tech demos and monthly workshops. “We also organize loads of activities that provide a great platform to network with folks going through a similar journey,” she says. “For practitioners in solo or small practice, it’s great to realise that they’re not alone and that a lot of firms are facing similar challenges.”

To contact the editorial team, please email ALBEditor@thomsonreuters.com.