Digital Transformation

40 Legal Tech Stats for 2020 You Must Know

Take a look at these legal tech stats to get a better understanding of where the industry is headed in tech adoption and implementation.

Blog Post

8 minutes

Apr 23, 2021

Legal tech has been a keen area of investment for firms in recent years.

It won’t come as much of a surprise to those who work in the legal industry that law firms tend to be a little behind the times when it comes to investing in digital technology.

In fact, just one in five firms report being ready to move forward with enterprise-level digital strategies for their businesses.

The reasons that law firms frequently aren’t leveraging digital technology are varied, but it is clear that there is a general reluctance to begin implementing technology and replace older, more traditional methods and work processes.

Most are resistant to embracing new technologies, citing lack of technical knowledge, skills or understanding; problems with organizational handling of change; and financial issues including direct costs and unknown return on investment.

Related Post: Achieving Digital Transformation in Law Firms

With that being said, legal organizations are slowly changing their tune with regards to digital transformation, more frequently adopting solutions to better their operations.

If 2020 has shown us anything, it’s that it is no longer an option for organizations to neglect their technology, and in addition to this, customers and clients are more demanding of who they deal with when it comes to their experience.

Much of this customer experience, as well as the working experience of employees, can be improved through the use of technology. Whether it’s an automated platform for digital payments or a digital document system, there are a litany of everyday processes that businesses can (and are) improving with new tech.

Take a look at these 40 legal tech stats and discover where the industry is headed for in the new decade.

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1.  In 2018, legal tech investments broke the $1 billion mark. That figure was topped in 2019, with $1.23 billion in funding by the end of the third quarter alone.


2. With the help of AI, a contract can be reviewed in less than an hour, saving 20-90% of the time needed to perform this work manually without sacrificing accuracy.


3. AI legal technology offerings for businesses increased nearly two-thirds in 2020 compared to 2019.


4. JP Morgan launched their in-house program, COIN, which extracts 150 attributes from 12,000 commercial credit agreements and contracts in a few seconds. This is equivalent to 360,000 hours of legal work by lawyers and loan officers per year.


5. Cloud usage among firms is 58%, with smaller firms and solos leading the way.


6. Security measures are lacking, with no more than 35% of firms using precautionary cybersecurity measures to protect their businesses. A staggering 7% of firms have no security measures at all.


7. Despite some reservations, lawyers continue to use popular consumer cloud services like Google Apps, iCloud and Evernote at higher rates than dedicated legal cloud services. Clio and NetDocuments ranked the highest among the legal cloud services.


8. The percentage of the ABA 2019 Legal Technology Survey participants answering “Yes” to the basic question of whether they had used web-based software services or solutions grew slightly, from 55% to 58%. 31% said “No”, a small decrease. 


9. When asked what prevented their law firms from adopting the cloud, 50% cited confidentiality/security concerns, 36% cited the loss of control and 19% cited the cost of switching.


10. 26% of respondents in a 2019 survey report that their law firms have experienced some sort of security breach


11. In 2018, just 25% of law firms reported having an incident response plan. In 2019, this figure had risen to 31%, and we expect the same for 2020.


12. Interest in cloud services from law firms is high, but expectations of adoption among them remain low, with just 8% of firms indicating they will replace existing legacy software with cloud tools.


13. Only one-third of lawyers (34%) believe their organizations are very prepared to keep up with technology changes in the legal market.


14. Firms described as “technology leading” fared better, with 50% prepared to meet digital technology demands in the industry.


15. 49% of law firms report that they are effectively using technology today, and 47% say they can improve technology adoption and plan to do so.


16. Over half (53%) of lawyers in the US and Europe say their organizations will increase technology investment over the next three years.


17. While over half of lawyers expect to see transformational change in their firms from technology like AI, big data and analytics, fewer than one quarter say they understand them.


18. The biggest trends cited by lawyers that are driving legal tech adoption are “Coping with increased volume and complexity of information” and “Emphasis on improved productivity and efficiency.”


19. It is estimated that 23% of work done by lawyers can be automated by existing technology.


20. 27% of the senior executives at firms believe that using digital transformation is not a choice, but a matter of survival.


21. The top challenges for corporate legal departments today include reducing and controlling outside legal costs; improving case and contract management; and automating routine tasks and leveraging technology in work processes.


22. 60% of lawyers believe their legal firm is ready to adopt new technology for routine tasks.


23. According to research conducted by Gartner, only 19% of law firms’ in-house teams are ready to move forward with enterprise-level digital strategies.


24. A recent study uncovered that 70% of consumers would rather use an automated online system or “lawbot” to handle their legal affairs instead of a human lawyer because of three important factors—cost, speed, and ease of use.


25. 70% of businesses indicated that “using tech to simplify workflow and manual processes” to cut costs was a top priority going forward.


26. 36% of respondents, compared to 33% in 2019, 34% percent in 2018, and 26% in 2017, invested in cyber liability insurance policies in 2020


27. The number of firms experiencing a security breach (such as a lost/stolen computer or smartphone, hacker, break-in, website exploit) increased in 2020; 29% of respondents compared to 26% in 2019.


28. The top three areas for technology software investment in the legal industry are contracts management (44% of firms investing), matter management (42% of firms investing), and governance, risk and compliance technologies (37% of firms investing).


29. When asked what the top priorities for their teams were in 2021, respondents in the ALM whitepaper said data privacy and security (56%), collaboration platforms (Zoom, Teams, Slack) (40%), cross-functional collaboration with other business units (ERP) (38%).


30. The number of respondents at firms continuing to report that they do not know whether their firm has ever experienced a security breach remains high at 21%, compared to 19% for the prior year.


31. On average, respondents reported that 9% of lawyers’ time can be replaced with automated tasks.


32. Among the firms who use AI, nearly half use it for contract review and negotiations, and 86% said they use AI for legal research.


33. CIOs’ growing cybersecurity concerns have not yet fully trickled down to executive or policy levels. Only 32% of firms have a dedicated data protection officer on staff.


34. Remote work environments will continue to be widely encouraged and accepted in 2021. 60% of respondents see 51%-100% of their workforces working remotely.


35. budgets for operations and capital expenditures are largely both up year-over-year, with firms showing a willingness to provide ample mobile resources for lawyers: laptops (100%), cell phones (75%), desktop charging stations (33%) and wireless displays (13%), as well as more specialized equipment like pocket projectors, solar chargers and point-of-sale devices and software like PaySaber or Square, according to those who responded when asked what they were providing to employees.


36. 77% of corporate legal departments anticipate their use of workflow and process automation to increase; only 2% believe this will decrease in their organization.


37 . There is continued improvement on the topic of developing incident response plans, with 34% of respondents indicating their firms maintained such a plan, up from 31% in 2019 and 25% in 2018. 


38. The most popular video conferencing collaboration services in legal firms are: Zoom (83%), Teams (67%), Cisco Webex (46%).


39. When it comes to project management software, Trello is the most popular among law firms (21%), with Microsoft Project (16%), Trialpad (16%), and Smartsheet following close behind (16%).


40. While 32% of respondents believe that AI and machine learning will be part of their technology roadmaps in 2021, another 42% are uncertain or not sure about how it fits into the business strategy overall.

The Future of Digital Transformation in Law 

Despite the reticence of legal firms to fully embrace digital transformation from the outset, it’s clear that all the trends are pointing towards increased adoption in 2020.

While many firms are undoubtedly lagging behind, the greater volume of legal tech tools and the explosion of investment in related technologies show that firms are keen and confident in future ambitions for tech adoption.

The biggest obstacles to this will be the culture of law firms on an individual basis—many of which are more traditional in their approach. As lawyers continue to uncover the benefits of introducing the wide range of technology at their disposal into their workplaces, the incentive to adopt more will become stronger.

Legal tech has a lot of catching up to do to reach the levels of adoption of other industries, but it’s clearly making its way there—if a little more slowly.

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