Digital Transformation & The Legal Sector: 4 Ways To Prepare

Posted by Deltek on December 24, 2019

Twitter Tweet it: 'Digital Transformation & The Legal Sector: 4 Ways To Prepare'

Over the last few years, the buzzwords have been flying in the legal industry on technologies that will change the industry. Terms like Artificial Intelligence, Robot Lawyers, Document Automation, and much more are all technologies we have been hearing about for a long time. Some of these technologies are already being implemented and applied in law firms with great success, while others may not have a real impact until they are more mature.

Regardless of what level of implementation a law firm is currently undertaking, one question any firm should be considering is; How will these changes impact me and my business?

Like other industries before, the legal sector is seeing technology transform the way clients consume their services. Everyday tools such as Google provide businesses with services that less than 5 years ago they asked their lawyer about. Clients are also showing a lower level of loyalty, and there is a higher focus on price where the services are comparable between firms. The general expectation is that legal services are provided in the most effective and efficient way possible. This has to include some level of digitalization.


Deltek Legal Solutions

Discover the legal ERP law firms are using to power performance.



As a result of this changing landscape, law firms will increasingly transform into technology firms. At the VQ Forum in Stockholm a couple of weeks ago, Nicholas Hawtin, CEO of Nordic Legal Tech spoke about how “Software is Eating the World”, and how Law Firms need to engage with Tech innovators in a profoundly different way. Technology will be a natural part of legal services, either as a self-service tool, or an integrated part of how lawyers deliver their services.

The personal relationships, personal experience, and human touch a lawyer is providing will never fully be replaced by software. But, the tools and processes lawyers use to deliver legal services will certainly change. A compelling example of how things have changed is listening to CIOs and CDOs telling us how they now are part of New Business pitches, where prospective Clients want to understand how their firm are deploying and using Legal Tech.

In the following sections, I will address 4 areas I believe it is important that you consider when creating your digital strategy.

1. Future-Proof Your Firm!

For any law firm to succeed into the future, it will be critical that they are ready to incorporate Legal Tech into their business model. Law firms need to be able to measure the impact technology has on their services, not only financially, but also how it improves the quality and consistency of their services. To future-proof your firm to adopt new technology, firms can already today start adapting their business model to deliver and measure digital services.


"Technology will be a natural part of legal services, either as a self-service tool, or an integrated part of how lawyers deliver their services."



No matter what kind of Legal Tech the firm is implementing, there are two primary ways it is being used. Either directly by the Client as a self-service solution, or as a part of the matter process by the firm’s lawyers as illustrated above.

Future proof your legal firm

Regardless of method of delivery, Legal Tech needs to be an INTEGRATED part of the firm’s system landscape. This means that when Legal Tech is used, the firm can track what matter and/or client it is utilized for. Furthermore, the firm of course want to seamlessly invoice the usage to generate revenue as a return on investment.

2. Ensure Revenues

Another trend we see in the legal sector, is that firms are taking Digital Transformation to heart. Several firms have created their own innovation companies or departments, whose purpose is to develop, implement and invest in Legal Tech.

The question that is important to have an answer to, is then how do we measure the success of these initiatives. Can we operate these entities as internal vendors for the remainder of the business, and potentially also measure them against any external vendors we engage?

ensure revenue

In the above illustration, we outline an example where we charge the Client-facing firm for the services utilized. If this is a smart document template, or any other technology that is being used in the matter process, we need to make sure the whole chain profits on the technology being used. In the scenario above, the innovation firm retains 90% of the revenue, while the traditional law firm gets 10% of the revenue for selling the service.

With a model like this, we ensure that the innovation firm gets paid, and have a healthy basis for continued investments in the future.

3. Ensuring Profitability

How can a law firm ensure the profitability of their investments in digital transformation? The first thing they need is a model to track both Cost and Revenues from their investments.

ensure profitability

With the right setup, this can all be automated. Register hours spent to maintain a service, license and other operating costs on one side, and then the individual revenues received for that service.

This will give the firm a detailed overview of their tech initiatives, and measure the real Return on Investment.

4. Measuring The Impact

Finally, I want to talk about the importance of measuring the impact of the firm’s digital initiatives. By measuring/grading the outcome of a matter, together with measuring the usage of digital tools in context of that matter, you get an overview if the overall quality and consistency of their services improve with the use of new tools. For example, utilizing AI to do due diligence on a matter, vs doing that manually. In addition to the efficiency gains, can we see a trending difference in the satisfaction of our clients on that basis? Another outcome to measure is of course the financial impact, does the new services make us money?


And lastly, can we measure the adaptation of our new toolbox? What partners and their respective departments are better at using the tools we provide?

To enable all of the above-mentioned elements, it is critical that a law firm deploy a fully integrated platform for all their business processes. By deploying the right solution together with the right implementation partner – one who can act as a business advisor for legal firms, the firm will be able to integrate any tool into their business processes.

Be ready to move quickly when the change is coming!


Deltek Legal Solutions

Discover the modern and intuitive legal ERP solution that many law firms are using to power their firm’s performance.

Download Guide