The greatest challenges for development of the legal sector are budgetary constraints and the lack of work-improvement technology – such conclusions are drawn in the “New technologies in lawyers’ work and transformations of legal divisions” report compiled by PwC Legal. 24% of the surveyed organisations recognise the need for increased investment in legal processes and technologies in the upcoming year, yet only 3% of them have a separate budget earmarked for this.
56% of the respondents surveyed by PwC Legal state that budget is one of the main obstacles in increasing the effectiveness of a legal department’s work. The survey participants explained that the problem mainly concerns the lack of expenditure on work tools that are intended specifically for supporting legal functions (as opposed to tools that are typically used in an organisation).
Additionally, 40% of the survey participants indicate that the technological solutions available to them do not satisfy their needs arising from the specificity of a lawyer’s work. The issue concerns both the substantive sphere (relating to the legal system) and cross-border barriers (relating to unique characteristics of Polish organisations). The technologies which are most frequently used in Polish legal divisions are: centralised document archiving systems (26%), case and dispute management systems (18%) as well as tools for organising work and communication (17%).
The heads of legal divisions surveyed by us commonly pointed out the need for investment in new legal technologies designed to improve lawyers’ work routine. This is, however, not possible without sufficient funds. Improving the work of legal divisions requires increasing their budgets several times. Bearing this challenge in mind, it is pertinent to ask whether the trend of outsourcing parts of legal processes to external law firms is going to expand in the years to come.
The PwC Legal report shows that 61% of the survey participants entrust the performance of some of the processes under the responsibility of a legal department to external entities, i.e. they outsource the processes to a law firm or an alternative legal service provider (legal process outsourcing, “LPO”). The areas of support which are most frequently outsourced include inter alia: transactions, data protection, disputes, competition law and taxes.
Priorities of legal divisions
The heads of legal divisions who participated in the PwC Legal survey indicated the 3 following areas as priority ones for their legal divisions in the upcoming year:
The use of new technologies is key for introducing changing regulations, in particular sector-specific ones. The best and the most recent example of this is the GDPR, where the knowledge of systems and technologies was necessary to identify operations which involve the processing of personal data. Additionally, the implementation of the new regulation required understanding clients’ business, which is often based on new technologies.
The intertwining of law and technology is also apparent in connection with the increasing regulatory pressure present in many sectors (in particular the financial sector), both within traditional activities and innovations. Legislators, by means of new regulations, seek to establish a legal framework for using technology in providing services in the financial market.
In the era of progressing digitisation law should be technologically neutral and remain stable despite the numerous changes. It should be stressed that law does not regulate technology itself. Instead, it focuses more on the resulting phenomena and on entities which tap into technology. Some of the challenges to be faced by lawyers in the near future are issues such as e.g. criminal and civil liability for the operation of artificial intelligence, damage caused by self-driving vehicles or validity of legal actions effected with the use of machine learning algorithms.
Among important factors limiting the use of IT tools in lawyers’ work the respondents indicated e.g.: lack of tools which are “tailor-made” for a specific organisation, linguistic and mental barriers, i.e. lawyers’ reluctance to embrace the changes and learn new solutions.
About the Legal Tech survey
The analysis of the Polish market presents the results of the “Legal Tech. Transformation of companies’ legal divisions” survey, conducted by PwC Legal in Poland among heads of companies’ legal divisions in the period from April to August 2018. 60 respondents took part in the survey.