Maximizing Legal Technology by Leveraging Future Trends
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Maximizing Legal Technology by Leveraging Future Trends

CIO Review

Legal leaders can optimize compliance and legal workflows by exploring possible future technology trends.

Studies show that only 11 percent of legal departments are delaying the implementation of analytics, technology, and automation initiatives to reduce these pressures. Despite this, nearly half of the corporate legal teams consider technology their biggest weakness. As a result, tired legal teams searching for quick fixes to old problems with limited technology skills may result in disaster. Particularly since the marketplace is highly volatile and much hype is flying around.

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Research expects the following trends to apply through 2025 to help navigate the current market conditions and capitalize on new digital opportunities for supporting legal and compliance workflows.

Multiple vendors: Large organizations must develop relationships with at least four legal tech vendors to fulfill their requirements. Each vendor can only provide some of the legal software large organizations require. It is still important to note that the application markets remain distinct, vibrant, and distinct in their own right despite some consolidation, including matter management, legal case management, legal spend management, e-billing, document management, contract life cycle management, e-discovery, and intellectual property management. Despite the entry of established enterprise technology vendors into the legal technology market, market segmentation will continue in the near term.

The popularity of CLM solutions: Most leading CLM solutions will support scanning and interpreting any contract natively. To compete, other vendors will follow their lead and incorporate these capabilities into their solutions. The industry's leading CLM vendors have recently acquired or built solutions that support contract extraction and advanced analytics. This will lead to a loss of smaller contract analytics vendors to larger CLM vendors or out-competent, making it easier to obtain this functionality with an established CLM provider.

Digital adoption: All new legal tech automation offerings will include human-in-the-loop solutions that combine staffing with software. Despite the promises of technology, corporate legal teams have yet to see transformational improvements from applications marketed to them in offsetting rising workloads or increasing efficiency. Advanced AI-based solutions still require human supervision, training, and handling. It is becoming increasingly important for vendors to combine staffing, process (re)design, and technology to capture "law as code." Corporate legal teams often need more technical and legal expertise to do this.

Compliance and regulations: Half of the organizations will invest in third-party risk management (TPRM) solutions due to legal requirements for environmental, social, and governance disclosures and strategies. Due diligence is expected to pay closer attention to environmental, social, and governance issues as organizations increase their use of third parties by 76 percent. Failure to do so could cost them dearly. As third-party risk information is captured, managed, and reported, due diligence processes and monitoring of third-party relationships will become more vulnerable.

Compliance training: Employee compliance training will be reduced by 50 percent in corporate compliance departments, replacing costs with embedded workflow-based controls. Compliance leaders believe their training needs to meet their objectives. In addition, employees need to retain the knowledge they learn from training. Approximately 42 percent of employees need to remember completing gift and entertainment compliance training, while another 27 percent do not recall completing finance compliance training. When embedded controls are built into employees' workflows, they are shepherded toward compliance, resulting in a 50 percent reduction in compliance violations. Over the next 12 to 18 months, compliance leaders plan to allocate 82 percent more resources toward embedded controls, according to a Gartner survey. As demand and supply-side market activity increase, legal technology investment will continue to rise. Technology investments that support legal workflows should not be avoided, but end users should be aware of potential headwinds.

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