Indian law firms are reluctant to invest in legal technology. However, with the advent of accurate AI-based technologies and an increasingly competitive market, implementing legal technology is no longer an option, but a necessity. Law firms are now hiring more technology management professionals who can create roadmaps for technology-driven financial growth and develop innovative client solutions that leverage cutting-edge technology.
It is no secret that the Indian legal industry is generally lagging behind when it comes to technology adoption. The legal community has typically distanced itself strategically from the technological explosion that has driven the country's growth over the past two decades, dismissing available market tools as inaccurate, lacking legal acumen, and impractical. Ta.
This technology-free (or at least low-tech) model continued to work for many years, reinforcing the view that legal market growth was not tied to technology adoption. However, things started to change in the second half of the last decade. This is because of the emergence of a new crop of tech-savvy law firm leaders in the legal tech industry who find utility in not only improving efficiency but also building technology into their infrastructure. It not only reduces costs but also serves as an effective brand building tool.
Additionally, the legal market is becoming increasingly competitive with the emergence of small law firms offering high-quality services and a personalized approach at competitive prices. As a result, top law firms can no longer ignore the need to deploy technology tools to remain relevant and competitive in a fragmented and disruptive market environment. Failure to implement technology can result in loss of market share and reduced competitiveness.
Connecting technology to growth
Cyril Amarchand Mangaldas spearheaded his law firm in 2017 when it signed an agreement with Kira, a Canadian AI software provider, to handle contract lifecycle management for transactions. The company was also one of the first to hire C-level technology executives, hiring Komal Gupta as chief innovation officer to drive technology integration.
Technology experts are in high demand in the legal world today, and even small law firms are investing heavily in building technology capabilities.
Mr. Gupta, a lawyer by training, said the increasing trend of Indian law firms hiring technology executives is a response to the ongoing digital transformation within the legal industry. “Law firms recognize the need for skilled professionals who can guide them through this dynamic digital environment,” she says.
Despite high investment costs, the need to remain competitive has led medium-sized companies to invest in technology growth. In March, criminal law-focused MZM Legal became the latest company to hire Suchorita Mookerjee, formerly senior vice president of legal shared services at US business solutions provider Exela Technologies, as chief technology officer. Ta.
“Technology strategy for Indian law firms, especially large and mid-sized law firms, is no longer an option, but is becoming the new normal,” says Mookerjee.
“Clients are asking law firms to innovate and deliver more valuable services…As overhead costs are killing businesses, technology is being explored to help improve efficiency and productivity. “During this challenging time, staying focused on the path forward includes considering technology as an essential partner towards the success law firms want to achieve.”
– Suchorita Mookerjee, MZM Legal
“Clients are demanding that law firms innovate and provide more valuable services. Courts are evolving and becoming more digital, and they are actively forcing firms to do the same. Overhead costs are killing businesses, and the market pressures are not kind. Staying focused includes considering technology as an essential partner towards the success law firms want to achieve,” explains Mookerjee.
Mookerjee points out that technology investment budgets at law firms are increasing rapidly. “That direction has accelerated since the pandemic. Ten years ago, legal tech wouldn't have been on law firms' priority lists. Now it's probably in the top three.”
Globally, 10 to 12 percent of law firms' annual budgets are devoted to technological advances. But Indian law firms have yet to meet that standard, Mookerjee said.
CAM's Gupta explains that quantifying return on investment when it comes to technology infrastructure remains a challenge in law firm budgeting. “While return on investment can be difficult to quantify in the early stages, the impact on quality, time savings, and user experience can be measured during the pilot phase,” explains Gupta.
Building a technology roadmap
What law firms now agree on is that the right C-level leadership is key to driving technological change in processes. Technology executives are responsible for building the technology infrastructure broadly on two fronts. Internally, it increases company efficiency, reduces overhead costs, and improves financial health. Externally, we provide our clients with innovative solutions using cutting-edge technology at competitive prices.
As the head of a technology department, executives examine existing infrastructure for alignment with the company's long-term growth and strategic goals.
“Creating a comprehensive technology roadmap always helps define the transition from the ‘as is’ to the future stage,” says Mookerjee.
Next, executives build the right capabilities that are right for their companies, both in the short and long term.
“When faced with a problem that requires a solution, I thoroughly evaluate both off-the-shelf solutions and the possibility of developing customized in-house solutions,” explains Mr. Gupta.
“If your solution appears to be effective, but requires changes to existing configurations, I recommend implementing these changes first. “We spend a lot of time providing training, managing expectations around technology capabilities, monitoring impact and results, and providing feedback for continuous improvement,” she says.
Connecting technology to a law firm's financial health is a key responsibility of technology executives. By leveraging generative AI to improve accounting, practice management, resource allocation, cybersecurity, business intelligence, and ultimately profitability, law firms can manage their finances with unprecedented accuracy and ease. It will be.
“For example, advanced analytics can provide a panoramic view of a company’s financial health, highlighting profitable areas and identifying where costs can be cut. Billing automation can improve cash flow and profitability. Time tracking automation has reached a different level with geo-tagging,” Mookerjee explains.
With a vast number of vendors and software providers at their disposal, technology professionals must choose the right partner or build capabilities in-house to implement the company's vision at the right cost and within the right timeline. there is.
Choosing the right tool
Mookerjee says that for law firms, technology is not just a third-party vendor, but an important partner. The current buzzword is “AI-enabled” technology. Experts say most companies see AI as potentially providing a viable solution.
“This was not the case 5-10 years ago when solutions only guaranteed 20-30% delivery. Manual intervention/quality checks were still required. With AI, this The problem is about 80-85% resolved and likely to improve as AI learns.At the immediate level, companies are investing in document management, practice management software, and data security management solutions. We are considering it,” Mookerjee explains.
Identifying, contracting, and managing AI software providers for law firms is difficult, says Mookerjee. “It's hard to get them to understand why lawyers want what they want and why nothing more than a complete resolution is expected. Developers have their own style and their own logic. Yes, that logic often conflicts with how lawyers see things, and even a basic level of disconnect in nomenclature and classification logic can cause the entire algorithm to incorrectly select the correct variables. there is.”
“The cost factor cannot be ignored. In India, apart from the top 20 law firms, not many law firms can afford the kind of technology that is available in the market. It is not only costly but also time consuming,” she added.
As Mr. Gupta points out, large law firms are looking to build more technology in-house. In 2019, CAM launched Prarambh, India's first legal tech incubator, with the aim of nurturing young entrepreneurs and developing bespoke legal technology solutions for the Indian legal market.
“It has been a rewarding experience working with the legal tech developers at Prarambh, our legal tech incubator, and the developers our firm contracts with. Be open to understanding, which is extremely important given the complexity of the legal field. The flexibility to customize solutions to meet these needs is especially valuable. Equally important, be open to feedback. and a willingness to take the initiative and make the necessary changes accordingly,” says Mr.
“Accuracy is paramount in the legal world. Every word, punctuation, and formatting choice can have a huge impact on the meaning and legality of a document. So understand accuracy and prioritize it. Having founders and developers who support us is invaluable,” adds Gupta.
