Even with all of the issues COVID-19 caused in the larger economy, the legal industry had a financially strong 2021. Profits were up among many larger law firms, legal service providers saw increased work and market penetration, and corporate legal departments were able to take advantage of these market efficiencies for their business partners.
That isn’t to say, though, that a financially strong performance means the legal industry is maintaining the status quo. On the contrary—2021 showed that the legal industry that it can change, grow and adapt, all while maintaining the same level of client service and, yes, profits. Between increased remote work, more intelligent data use, and improved employee training and deployment, the legal industry is coming to work smarter than ever before.
Attorneys and legal technologists largely believe these trends will continue in 2022, but on a larger scale. Read on below for how they believe the business of law, legal’s relationship with alternative legal service providers, and more will shift in the coming year.
This is the final in a seven-part series of 2022 predictions from Legaltech News. Last week saw our predictions for cybersecurity, remote work and COVID-19, and privacy, and earlier this week our predictions for legal technology innovation, e-discovery and contract/transactional technology. The quotes below are in alphabetical order by name, and some have been edited for length.
Bobby Balachandran, CEO, Exterro: “Upon reviewing the ACC Leveraging Tech Report Survey, you’ll notice the metrics point to the increasing demands placed on legal teams by regulators and ever-growing data volumes, illustrating that GC are increasingly tasked with overseeing matters of litigation, privacy and compliance. … Poor or mismanaged internal practices, including insufficient data retention policies, weak compliance with data breach response and notification regulations, and/or failure to execute effectively on data Subject access requests could all result in costly litigation for the department. We predict that in 2022, the frustration with disparate and disconnected tools demonstrated by survey respondents will give way to demand for a cohesive GRC platform that enables GCs to remain compliant with changing regulations, orchestrate tasks between key business units, and mitigate the risk of litigation.”
Brad Blickstein, principal, Blickstein Group: “Law firms and law departments will—and should—be more thoughtful about whether to buy technology and deploy it themselves (which is a heavy lift for many legal teams) or move the work to an ALSP, who are often better suited to use tech on their clients’ behalf, The deliverable ends up being work product rather than tech, and clients don’t have to worry about procuring, implementing, training on and supporting technology.”
Catie Butt, executive director, A&O Consulting: “I believe there will be increasing demand for access to collective knowledge available from global providers including law firms. Data spanning practice groups, sectors, jurisdictions and multitudes of lawyers—if consolidated, structured and made available at dashboard levels, could be extremely useful to business teams. It could help them detect trends, identify opportunities and make informed decisions to grow their businesses. This data is a valuable commodity and providers including law firms will be thinking about how to use it.”
Michael Callier, VP, head of solutions and consulting, Factor: “The market and regulatory landscape for the practice of law and provision of legal services will continue to evolve. Competition between ‘traditional’ and ‘new’, alternative legal service providers (ALSPs)—including independent ALSPs, law firm captive ALSPs, and the Big Four—will continue to broaden the definition of those services and satisfy client demand. However, to meet client demand and compete on pricing, technology, and efficiency, many law firms will hasten their decisions around how they can compete and will explore the value of teaming up with best of breed legal tech companies versus building their own proprietary solutions.”
Lavinia Calvert, lead, marketing and business development solutions business, Intapp: “Historically, law firm partners have seen marketing as an expensive cost center focused predominantly on tactics, but we’re now seeing a new narrative emerge. Firms are strategically increasing their investments in business development and technology as a means to accelerate growth. New technology, and marketers who know how to wield it, are harnessing the data floating inside firms to leverage predictive client insights and supercharge business development. In 2022, we will continue to see firms prioritizing the adoption of client relationship management technology that helps BD professionals tap into sales pipeline data, identify new selling opportunities, and respond quickly to warning signs.”
Chris Cartrett, CEO, Aderant: “Law firms have always been siloed between the front office and back office, with the front office laser focused on serving clients while the back office managed the business operations. Over the past several years, we have seen a greater need for these functions to become more aligned, and an increasing demand for quicker and easier access to information. In 2022, thanks largely to the growth in cloud-based applications and legal tech investments in APIs, we will see these siloed departments begin to truly work in tandem with one another. This alignment will enable firms to provide greater service to their clients, and drive better efficiency across the business.”
Kevin Cohn, chief customer officer, Brightflag: “Corporate legal departments are starting to run into what other business units encountered five to 10 years ago, which is the proliferation of point solutions. Many legal departments now have a Band-Aid approach to technology solutions where what they need is a true system of record. They should be able to know who is working on what, how it’s tracking toward a deadline, where the work product is being stored, what does our spend look like, and so on. These are the basics of running the business function, but many departments now are doing it in a completely disconnected manner.”
Larry Crane-Moscowitz, legal counsel, Vaco: “While I anticipate the continued growth of ALSPs, I’m more inclined to think that this trend will be ‘linear’ rather than “exponential”—at least for the foreseeable 12-24 months. This is less because the services don’t add value and more because organizations have already endured almost two straight years of adjusting on the fly. I view 2022 as a chance for corporate legal departments to assess their learnings from COVID, see what has worked and what hasn’t, and then invest in services in a more restrained way based on those findings.”
Sara Eng, VP of legal partnerships, Ontra: “A new era of digital tools and professional flexibility provides opportunities for attorneys to launch new ventures. As a result, the possibility and benefits of becoming a lawyer-entrepreneur have never been greater. I predict that 2022 will see a significant increase in attorneys choosing to relocate away from larger cities and traditional offices to build their careers from home, either by launching a solo practice, building a boutique firm, or practicing part-time in partnership with a legal services provider.”
Scott Forman, shareholder, Littler Mendelson and founder, Littler CaseSmart and Littler onDemand: “Spotting emerging issues that may impact a company’s operations and future success has become increasingly critical. With resources for monitoring trends stretched thin, in-house legal departments will look more to technology and data analytics to fill that gap. Examining various inputs—including HR-related questions, employee complaints and other data sources, such as attendance records and engagement scores—can help reveal early indicators of risk before larger problems or costly litigation arises. As we reflect on lessons learned from the pandemic, 2022 should bring a greater realization of data’s benefits for identifying, and more importantly, addressing, issues brewing in the organization.”
Christophe Frerebeau, CEO, Della: “Legal tech is here, it’s just not evenly distributed. Firms that haven’t taken tech and data more seriously will find pitching for and winning some types of work a lot more difficult. Innovation by press release will become an issue. To avoid falling into that trap, vendors will turn their attention to selling solutions, rather than AI for AI’s sake. At the same time, AI will become more accessible, with some previously specialist features becoming configurable in tech platforms, like Google with the launch of Contract DocAI.”
Robert Grosvenor, managing director, Alvarez & Marsal: “Companies seeking to demonstrate their ESG credibility are also finding privacy, digital ethics and data protection part of the corporate sustainability assessments including compliance around digital supply chains of tech vendors, cloud services and data sharing affiliates. As a result, companies must more than ever focus on legal and operational compliance in ensuring that policy commitments, regulatory requirements and contractual obligations can be met and monitored across global and regional technology infrastructure and evolving corporate data strategies.”
Ari Kaplan, principal, Ari Kaplan Advisors: “Between September 3, 2021, and November 24, 2021, I interviewed 17 chief talent officers, eight directors of recruiting, three directors of talent, one manager of talent, and one chief recruiting officer, all in the Am Law 100, for a report—Recruiting, Retaining, and Assessing Legal Talent in a Competitive Market—supported by Thine, and 23% of the respondents advised that they work at firms that use an assessment, such as a detailed questionnaire, practical assignment, or competency evaluation. I predict a significant rise in that number in 2022 given the increased interest in and understanding of how organizations can effectively use algorithms, the need to succeed in the competitive market for talent, and the universal objective to eliminate unconscious bias in legal hiring.”
Lori Lorenzo, research and insights leader of chief legal officer program, Deloitte: “In 2022 we will continue to see legal executives elevate their leadership skills focusing on: enhancing resilience individually and for the legal function and enterprise; refining the legal function strategy; and building emotional intelligence with a focus on the holistic talent experience.”
Sam McAllister, director of litigation technology, Lightfoot, Franklin & White: “I expect to see a lot more firms addressing operational challenges by designing and building their own software solutions. Finding an existing system that checks all the boxes is a challenging and time-consuming endeavor—and it may be years down the road before you realize you chose poorly. Taking ownership of the process can lead to a more polished product and potential cost savings that better address client needs in the long run.”
Donna McElroy, member, Dykema: “Questions that will vex employers in 2022 are finding employees with the needed skill sets, incentivizing those employees in new ways to ensure retention and helping maintain their mental health and well-being—without invading privacy rights. The workforce is now well aware that many jobs can be performed from anywhere. Employers who are resistant to allowing at least some work from home (or the beach house?) will be at competitive disadvantage with other employers who embrace that flexibility, but employers must be prepared to meet the challenges that come with that flexibility i.e., focusing on mental health and employee engagement.”
Yvonne Nath, founder, ALSP Advisor: “There are hundreds of ALSPs and arguably thousands of legal tech companies. Some ALSPs can offer talent but not the tech, and most tech companies can provide the tech but not the bodies to operate it. Everyone is trying to get their foot in the door of prospective customers. This sales activity overwhelms them and complicates purchasing decisions. I see real opportunities for ALSPs and legal tech companies to partner when they pitch (e.g., ‘If you need extra talent to help you operate this technology, we have an ALSP we’ve worked well with over the years. They’re available to support us on demand.’) I predict we’ll see more partnerships ahead.”
Bob Rowe, CEO, Integreon: “In 2022, legal operations will be increasingly strategic and essential to help legal departments navigate a myriad of issues and to find innovative solutions. Legal operations will explode across corporate legal departments and be at the forefront of identifying new activities and partners to implement efficiency-gaining approaches and address budget/staffing restrictions, contracting needs, litigation, and expanding compliance requirements. Managed services providers will be called upon to embed themselves within the legal department to help corporate legal and legal ops reduce spend, respond faster, increase quality, and provide metrics-driven insights to support continuous improvement.”
Basha Rubin, CEO and co-founder, Priori: “The past 18-months have brought a surge of demand for legal outsourcing, ALSPs, and marketplace models for a number of reasons: long-term economic uncertainty (paired with short-term growth), the ‘great resignation’ and other labor market pressures and more infrastructure in place for remote workers. The result is that many legal departments have now incorporated these processes into the daily flow of business (and liked what they saw), and we expect that 2022 will bring record growth to the sector.”
Dean Sonderegger, head, Wolters Kluwer, Legal & Regulatory, U.S.: “In 2022, the great insourcing will continue and accelerate. Increasingly, corporate legal will look to take on work traditionally done by their outside counsel and law firms will be in the odd position of competing against their customers for work. Firms that focus on partnership and finding “win-win” solutions will grow profits nicely because of this trend.”
Amy Traub, chair of labor and employment group, BakerHostetler: “Employees continuing to work remotely will exacerbate current tax and employment uncertainty and complexity. To resolve these issues, every employer will need to know where its employees (really!) are; implement, communicate, and enforce appropriate telecommuting policies; identify the state or states in which it is (or may be) required to withhold income tax; and pay unemployment compensation, workers’ compensation and/or other legally-mandated insurance. Employers will also need to analyze and quantify the impact of telecommuting on state and local income and sales tax filing obligations; and ensure compliance with applicable employment and wage and hour laws—for example: reporting, EEO, training, leave, notice, compensation, and recordkeeping requirements.”
Leigh Vickery, chief strategy and innovation officer, Level Legal: “The legal space will again follow the example of the corporation and add an emphasis on environmental, social and governance (ESG) initiatives. This is a positive step as more talent seeks a career where they can combine their passion as attorneys with a real purpose. This increased demand in attorneys searching for human-centered, purpose-driven law firms and law companies, will drive the need to know the organization’s ‘why.’ Legal design, the idea that legal practice should be made more accessible, equitable, and transparent through the considerate application of design principles, will gain more attention as an accepted methodology to help law firm and law department leaders attract clients and prospective employees in a more generous, and ultimately, human way.”
Eleanor Weaver, CEO, Luminance: “In 2022, we should anticipate that in-house legal teams and ALSPs will play an important role in the technological revolution. With corporate legal ops increasingly shifting focus towards enabling business and ALSPs already making a substantial impact on the legal market, characterized by their innovation and willingness to rip up the rulebook, the legal landscape is ripe with key players primed for technology adoption. Along with an ever-changing regulatory landscape, new modes of working and increased market volatility, 2022 may well be the year in which in-house teams and ALSPs are set to gain the most from embracing innovation.”