Innovation has become a buzzword across almost every industry.
The legal sector, however, has long resisted the pressure to modernise. Much of this reluctance stems from the conservative nature of many law firms and the central role that reputation plays in client relationships.
Eurostat reports that fear of security breaches is the main reason professional organisations avoid adopting new technologies. For many firms, the efficiency gains offered by digital tools have not outweighed the perceived risks of cybercrime.
Yet leaks still occur, and it is increasingly debatable whether paper‑based systems are more secure than their digital counterparts.
This hesitation has created an opening. New entrants are beginning to use technology to challenge traditional law firm business models and reshape how legal work is delivered.
Digitalisation or Innovation
Technology in the legal sector operates at two distinct levels.
The first is digitalisation, where automation is used to improve efficiency. This includes reducing the time spent on administrative tasks such as reporting, billing, filing, document review and repetitive research. In this context, technology supports lawyers and enhances existing services.
The second level is genuine innovation.
This occurs when new business models emerge to offer entirely new services. These models are often developed by start‑ups that use artificial intelligence and machine learning to create independent platforms.
One familiar example is DocuSign, which enables clients to sign enforceable contracts without relying on traditional intermediaries.
Improving Efficiency
Lawyers are highly trained professionals, yet they spend a significant portion of their time on routine tasks.
Reducing the need for manual processing would allow them to focus on more stimulating work and improve motivation. Clients would also benefit, as fewer billable hours would be required for administrative tasks.
Technology can also improve consistency, since repetitive work completed manually can vary in quality.
Hesitancy around cloud technology has limited collaboration, data sharing and analytics within firms.
New platforms are addressing this gap. Legatics, for example, provides a secure online workspace that tracks legal processes, generates automated checklists and allows clients to monitor real‑time progress. It has been particularly praised in mergers and acquisitions.
Another emerging tool is CARA by Casetext, which uses data analytics to help lawyers review arguments previously used by opposing counsel. Other start‑ups are developing similar tools that draw on internal firm databases or publicly available information.
The Question of Efficiency
The traditional billable hour model creates a structural tension. Firms earn more when they spend more time on a matter, which reduces the incentive to adopt efficiency‑enhancing technology.
The Law Society of England and Wales has noted that efficiency is unlikely to be desirable while hourly billing remains dominant.
Pressure for change may come from elsewhere. In‑house legal teams, which operate on fixed salaries, have a clear interest in reducing administrative work and focusing on more complex tasks. Start‑ups also grow gradually and can become influential over time.
These forces may encourage firms to rethink their business models, possibly shifting toward fixed project fees.
Artificial Intelligence
Artificial intelligence is gaining traction in property law, where lawyers must process large volumes of publicly available data.
The start‑up Ravn uses AI to extract and cross‑check information from the UK Land Registry and produce legal notices. Orbital Witness uses high‑resolution satellite imagery to identify risks in property transactions.
AI is also being applied to judicial decision‑making. A team of American researchers has developed a machine learning model capable of predicting United States Supreme Court decisions with an accuracy of seventy‑two per cent.
Judicial proceedings can be viewed as records of human decisions, which makes them suitable for pattern recognition. Predictive models could assist litigants, inform citizens and influence markets.
Cloud Computing and Blockchain
Cloud computing has enabled the development of smart contracts.
These contracts use cloud storage and blockchain technology to create enforceable agreements with lower transaction costs and enhanced security. Blockchain is well known for its role in cryptocurrency trading.
Its decentralised structure stores encrypted data across a network of computers without intermediaries, making it highly secure. Banks and governments have shown interest in blockchain, and it may soon appear more frequently in general contract law.
The Current Attitude of Large Law Firms
Many large firms are establishing in‑house innovation hubs. Allen and Overy has created Fuse, and Clifford Chance has launched Create 65. These departments hire specialists and invest in promising start‑ups. Their existence reflects growing pressure for innovation and a gradual loosening of traditional structures.
A Deloitte report from 2017 noted that clients increasingly demand speed, lower costs and more technologically capable lawyers. This shift in expectations suggests that disruption in law will continue.
Balancing internal modernisation with external innovation may be the most effective approach. Outsourcing administrative tasks to specialist providers could allow lawyers to concentrate on complex work and improve performance.
Final Thoughts
New competitors are entering the market, and the traditional law firm model is unlikely to remain unchanged.
Scepticism about innovation and security is declining, as is the belief that digitalisation will replace legal jobs. The nature of legal work will evolve, becoming more challenging and more technology‑focused, but lawyers will not be replaced by machines. Innovation creates new roles, and recent Deloitte research shows that more jobs have been created by technological change in the United Kingdom than lost.
Encouraging innovation both internally and through collaboration with start‑ups could help law firms embrace the opportunities ahead. Pressure from clients and other industries will continue to grow, and maintaining a competitive advantage will become increasingly difficult.
The sector must be careful not to miss the moment.
Not sure how close you are to qualifying?
The path-fit quiz reads your situation and shows you which routes you are ready for, and exactly what to do next. Four minutes, no account needed to start.
Check your readiness