Legal technology utilization is increasing. The trend is here to stay.
Technology utilization has exploded in 2020 and the trend is here to stay. The question that remains is how is the stay at home economy and utilization of online technology services going to impact your law firm and the practice of law?
Legal marketing hasn't advanced much in the last twenty or more years. The formula for a successful legal practice remains tried, tested and true. Develop relationships, deliver great legal advice and results, and watch the work continue to come in.
Google started to change that model in the mid 2000s, where law firms (in particular personal injury law firms), realized the power of the internet for their legal business and the amount of traffic the firm could generate by ranking high in organic search results. That model then moved to Google ads, where firms compete for clicks, which resulted in some of the highest "cost-per-click" fees compared to other industries in the United States.
Over time, that advertising model moved to social media, where firms used Facebook, Twitter and Youtube (among other platforms) to generate clicks. Others realized the power of a "click" and numerous legal directories were created to generate revenue in exchange for sending traffic to law firms. This is primarily where the small to mid-size personal injury marketing sits today.
The question is, where is legal technology software it going from here?
The legal technology market remains relatively untapped compared to other industries. This is not surprising, as law is historically a slow adopter of legal technology.
Often, successful lawyers tend to be those that have more experience. The successful lawyers tend to be the decision-makers at law firms. More senior lawyers tend to be less familiar with technology trends than the younger generation. Not surprising, since technology isn't their business. Further, the legal sector has some unique challenges when compared with other industries (i.e. protection of solicitor-client communication and maintenance of confidentiality). Combine these factors, the legal business has been a slow adopter of legal technology. That is changing; and fast. A generation familiar with technology is moving into leadership positions in law firms and client familiarity with technology is driving change. This legal technology trend is only going to continue.
The legal technology sector has seen the following amounts of private investment over the last four years:
In 2016, $224 million was invested in the legal tech industry;
in 2017, $233 million was invested in law tech;
in 2018, $1.6B was invested in legal technology companies; and
in 2019, another $1.6B was invested into legal technology companies (annualized).
The investment shows no signs of slowing up, and lawyers see this trend continuing. In a recent Aderant legal technology blog contemplating Legal Tech Predictions in 2020, attorney Frederick Esposito said:
“Legal technology will continue to advance, especially with the advent of AI. There will be more attention paid to client focus, improved value and efficiency. Alternative fee arrangements and other pricing strategies will be brought back into a renewed focus coupled with a focus on process improvement and project management, employing lean and six sigma principles to providing efficient and cost-effective legal services.”
Most of this legal technology investment to-date is in areas of practice management, e-discovery, client collaboration tools and virtual office and virtual court proceedings products. Change is happening fast and soon these investments in these legal companies will result in more and more usage from law firms.
Where does it go next? What does this mean for practicing lawyers?
Where has technology and software helped customers of other industries and does this have any analogies with the legal industry?
There is one brand that has changed how we purchase goods more than any other. Amazon.
Regardless of your personal feelings about Amazon and its impact on small businesses and the retail industry at large, the simple fact is that Amazon has forever changed how we think about purchasing goods.
Amazon isn't alone. The fallout from the coronavirus has pushed everyone online, for everything. Businesses of all kinds have realized that success (and sometimes survival) means having a strong online presence. This move has also resulted in tremendous growth for companies like Shopify (who easily allows you to create an online website site and business presence), ETSY (the online market for handcrafted and other goods) and even traditionally large physical retailers are seeing most of their growth coming through online sales (BestBuy, Home Depot, etc.).
More than anything else, what Amazon provides is convenience to consumers of goods. Can the online consumer goods market provide any incite to where the market may be going when it comes to hiring law firms or finding the right lawyer? If you are an attorney, do these trends mean anything for your legal business?
Where is legal technology services taking law firms in 2020 and beyond?
The greatest opportunity for legal technology services in 2020 is in legal marketing and providing online services to make legal marketing more cost-efficient and less cumbersome. To succeed in legal marketing, you need to build a platform that brings clients to you.
Lawyers are trained to practice law. That is their specialty and obviously core to their legal business. As the legal market has become more and more competitive, lawyers have had to spend more time marketing. This means less time practicing law, and less time making money. It erodes margins and increases stress on lawyers and law firms.
The competitiveness of the legal industry is why so many law firms have flocked to Google Ads, trying to find a way to minimize the time and cost to find new clients.
The technology company that finds a way to solve this dilemma for law firms has an incredible opportunity.
Legal technology has already made breakthroughs in (i) practice management tools, (ii) e-discovery, (iii) contract review and preparation, and (iv) records management. While there remains a lot of room to improve existing technology and tools, the fact remains that no technology has yet to solve the marketing strain imposed on law firms.
We recognize a gap in the legal market. There is stress on consumers of legal services as they struggle to know how to find the right lawyer or whether they should hire a lawyer. There is a strain on law firms trying to find the right customers for their business. We also recognize the personal injury market is large in the US and under-serviced by technology.
This is the space where Adidem is designed to help.
At Adidem, we use software to simplify the process to hire a personal injury lawyer and to provide individuals looking for a personal injury lawyer with the relevant information needed to help decide which is the best personal injury lawyer to hire for their claim.
We also allow any lawyer to sign-up to use Adidem. No restrictions, no-sign-up fee and no exclusivity with any particular firm or lawyer. Rather than you having to look for the right lawyer, we bring the legal market to you.
This is important, as Adidem:
can provide you with access to the broader legal market in your city without you needing to contact all those lawyers;
allows any lawyer with an opportunity to offer their services for your claim;
allows you to obtain information with respect to your claim to determine which lawyer you may want to hire; and
makes lawyers compete for your work.