Market News

6 Changes The Legal Industry Should Prepare For

By Joey Seeber for

2020 — what a year! Attorneys and compliance pros have had to adapt rapidly to the many new safety practices that COVID-19 has forced on us and that will continue to be necessary in 2021. But the legal industry will actually benefit from this chaotic year because we have learned from necessity what is meaningful: simplicity.

Our clients will feel this in how we serve them, how we help them use technology, and how we humanize the billing model. Furthermore, one direct result of the pain of 2020 is a new spirit of collaboration — and we should embrace it while we can.

Here’s how we envisage 2021.

Clients in the Driving Seat

Even before the COVID-19 crisis struck, clients were demanding improved efficiency, predictability and cost-effectiveness from their legal partners,[1] and this is expected to continue.

Law firms and legal service providers across the board, and their partners, will need to build solutions based on the understanding that a client is also a customer, whose needs and wishes must above all else be understood and, to the greatest extent possible, met. This will drive changes across the board in 2021.

Law firms should adapt to this new demand by introducing practices that include productized pricing and process outsourcing. Take Inc. for example and its debut into the legal service market with the IP Accelerator. This venture introduces a select network of law firms based in the U.S. and Europe to businesses worldwide needing intellectual property services.

Amazon says the participating IP law firms have agreed to prenegotiated rates for standard services involved in obtaining a trademark registration. They are also capable of assisting with copyright registrations, design patents and other IP protection strategies.

These vetted firms save clients both time and money in securing IP rights as well as enable them to benefit from Amazon’s brand protection program, which identifies and removes harmful online listings to help protect a brand’s credibility.

Amazon has, in effect, packaged IP legal services. This will allow them to better deploy their assets and deliver measurable results, which will be a determining factor for success or failure in 2021 and beyond.

Increasing Demand for Technology Adoption

Underpinning all of this change, specifically changes geared toward improved deliverables, will be technology. All the upheavals of 2020 have driven the legal field to a more significant adoption of advanced technologies.

Key areas for overhaul in 2021 will be directed toward delivering better client services with more cost transparency. This will involve greater use of open-source software to solve problems such as legal process management and the development of in-house workflows.

The goal for clients will be more tailored solutions with more predictable expenses, while law firms will look to sustain profitability.

The future is in the hands of law firms, alternative legal service providers, the Big Four accounting firms, and frankly anyone who touches the legal ecosystem. How well they use technology to better deliver services will be another factor determining 2021’s winners and losers.

Billing Revolution

Here, we expect to see twofold change: Law firms might need to move away from billing by time to billing by deliverables, and embrace the concept of charging a fixed rate for standardized services.

This is already common in many other industries. We’ve reached a point where most legal services have the potential to be productized, standardized, packaged and sold in units, just as manufacturers do with stock keeping units.

For example, instead of benchmarking the opaque cost of a compliance review, we now have the data to break it down into constituent parts and price each identifiable element in the production process to see and then understand legal production costs, much in the same way the rest of the business understands its costs.

This is a good thing, as this type of transparent pricing model represents a giant step toward enabling equal access to justice for everyone.

In addition, new state laws and pilot programs could accelerate movement away from the billable hour model. For example, the Utah Supreme Court’s regulatory sandbox[2] is allowing nontraditional legal businesses and nonlawyers to offer their services to lower-income clients, which could bring more value-focused, predictable payment structures to the table.

This aligns well with the first prediction — putting customers first. The better firms can understand their customers and predict their behavior — think about what can be done here using artificial intelligence, machine learning, sentiment analytics, etc. — the more efficient and cost-effective processes will become.

As we mentioned above, Amazon has already set an example in this regard by introducing their own IP Accelerator and offering small businesses affordable access to trademark and other legal services. But more broadly, this move underpins the trend of clients at all levels seeking partners who understand that they have choices, and perhaps more importantly, understand them and their unique needs.

Expect Movement on a Federal Privacy Law

The variation in privacy laws from state to state, the lack of standardization around processes and the painful absence of clarity overall are increasingly burdensome. We believe this will lead to proposals for legislation mandating a comprehensive federal privacy law. This might become a priority in 2021.

Any time there are changes such as these, whether expanding or consolidating requirements among states and the federal government, there is a need for well-versed counsel to help navigate through the initial legislative fog. Not only will there be a need to assess initial requirement, but, perhaps more significant, also to develop ongoing compliance programs.

That said, we think it’s too much to expect a definitive federal law that preempts state law. While such a law may clarify certain baseline issues, it’s likely any federal privacy law will also allow states flexibility to add their own laws and policies.

In the meantime, the European Union General Data Protection Regulation is a great marker for how to prepare for federal and state privacy legislation.

A Rising Tide of COVID-19 Claims

COVID-19-related actions added to the already crammed caseload of 2020. For example, there was an increase in employment claims ranging from wrongful dismissal to failure to provide mandated COVID-19 sick leave.

In 2021 we envisage the U.S. Securities and Exchange Commission[3] continuing to enforce actions not only against specifically targeted coronavirus fraud but also addressing an ongoing — and largely unprovable — stream of private lawsuits and putative class actions challenging securities filings and public statements in light of COVID-19.

On the privacy litigation front, there is increased likelihood of backlash from both home and office workers against employers using surveillance methods such as bots, spyware or video monitoring. We can also expect some cases challenging employers’ imposing mandatory COVID-19 testing or vaccination.

Overall, we believe COVID-19-related internal investigations and corporate audits will skyrocket, which will fuel additional demand for privacy compliance services, and then, fuel even more demand for lawyers and counsel to help wade through these cases and corresponding privacy regulations. Legal professionals will require agile privacy and data-related workflows to handle this higher volume of requests.

Remote Work Sparking Creativity

One positive effect of 2020’s enforced deep dive into remote working is a new openness to innovation. We’ll see remote workers leading the creation of alternative technology models to solve problems as they arise, using no-code software, for example.

Contactless transactions will grow and evolve. And, as suggested in an October 2020 report by Forrester Research Inc., businesses will increasingly equip their remote workforce with automated tools such as software bots, process automation and artificial intelligence solutions — all while maintaining robust cybersecurity policies in place to ensure employee and company personally identifiable information remains secure outside of the office.[4]

Law firms will face decisions about equipping remote employees for the long haul — at least much longer than first anticipated at the beginning of the pandemic. Equipment, security and technology stipends might all be considered.

Furthermore, the emphasis on technology will drive new solutions for practicing lawyers, for use both internally and externally for clients. Opportunities to provide additional value to client services will follow using similar enhancements to technology software, data management and analysis tools, and security solutions, all in an effort to maintain fluid, remote working relationships, likely for the long term.

In summary, my perspective is that the crisis-fueled changes of 2020 will combine with the ongoing evolution in our industry to supercharge innovation and improvement in 2021. In other words, a smoother playing field for clients and legal professionals alike.