What’s Driving Disruption in the Legal Industry?
Gone those days when the legal market was all about law firms and corporate legal departments. With time, this niche domain has become a complete ecosystem where a wide range of entities coexisting and contributing to a common goal. The legal industry has experienced a 180-degree disruption in the process of client service with the advent of new roles, technologies, products, and approaches.
This has made both existing and emerging legal firms look ahead to factors that are behind this revolutionary change in the market. And later, introduce those elements into their brand to taste the disruptive innovation in the legal sector. And ultimately, become a part of the legal services market which was worth USD 925 Bn in 2019 and is forecasted to be valued USD 1,045.24 Bn by the year 2025, with a CAGR of 4.1% during this period.
Assuming you to be one of those legal organizations, here we will be throwing light on those key drivers of legal disruption.
Factors Navigating Disruption in the Legal industry
- ‘More-for-less’ Challenge
In the present time, clients are hoping for more services on spending less time, cost, and effort. This has made it imperative for legal professionals to reduce their billable hours, cut down higher overheads, meet the clients with fewer resources available, and more.
In short, this has encouraged law firms to tweak their traditional business model with better methods of disruption and bring out opportunities for higher efficiency and productivity without bearing heavy costs.
2. Liberalization
Law firms, which were earlier confined to their physical boundaries, are now emerging as a more connected and interactive environment. Various legal and non-legal professionals are coming together to fulfill a shared mission:-
- Enhance accessibility of legal services offerings to clients.
- Make a single ecosystem where lawyers and clients interactions can take place and flourish.
This act of liberalization is again another factor that is motivating companies towards disruptive innovation in legal services processes and approaches.
3. Technology
Another factor disrupting the legal domain is technology.
With the advent of technology in the legal sector, the industry has refined its ways of automating their inhouse processes, managing their resources, improving transparency, and lowering down the errors and costs associated with the process.
Besides, technological disruption in the legal sector has also made it imperative for lawyers to explore the possibility of building new business and revenue models by introducing varied kinds of innovative legal solutions.
While these factors are bolstering the disruption in the legal industry, there are various challenges hindering its implementation. Aka, barriers that are preventing legal organizations from becoming a part of the innovative law industry.
A few of which we will cover in the next section of this article.
Challenges Holding Legal Firms from Evolving with Time
- No awareness
The very first challenge legal firms are facing is the lack of knowledge.
Various law attorneys and organizations are still unfamiliar with the reasons they should disrupt their traditional business practices and the key drivers of legal disruption. This is preventing them investing their time and effort into legal disruption.
2. Gap in extant
Since the legal industry is still disrupting, there is no such business model in existence that could help these firms relish higher outcomes. This is making it challenging for legal organizations to sustain in the market while innovating their processes in real-time.
3. Fail Fast, Learn First strategy
Unlike the software domain, the legal industry is not habitual to the idea of ‘fail fast, learn fast’ principle. They do not understand the need for taking a quick step to test waters, make mistakes and improve their strategy in real-time. Rather, they look forward to the idea of relying upon tried and tested methodologies to enjoy a safer deal.
This is yet another factor behind the slow disruption of legal industry.
4. Slow sales cycle
Last but not least, the slow sales cycle is also one of the challenges making the legal tech industry failing to speed up the process of innovating its practices.
The disrupting technologies and processes is making legal firms feel great about a newer form of business model. But, at the same, is making them worried about the sales conversions, which ultimately means lower profits. This is again impeding legal firms from becoming a part of a disruptive niche market.
Now as you know what challenges legal startups and establishments are facing, it is likely that you are looking ahead to overcome them and before a significant part of the burgeoning future of the legal market. So, it is advisable for you to consult with top legal tech service providers and explore better opportunities.
