The Law Firm of the Future - Part 1 - March 2025
A number of you will have seen our recent article, The Lawyer of the Future - The Lawyer of the Future - March 2025 — Hyperscale Group Limited. Thank you to everyone who has contacted me; this has given rise to really good discussions.
I have been encouraged by a few clients to document some thoughts on the law firm of the future. This has proven to be quite in depth, so we have broken it down into two articles. Like everyone, we don’t have a crystal ball, but the following part 1 of the article hopefully sets out a few themes which we will see in successful law firms of the future. Part 2 will follow on Friday.:
1. AML, KYC and Conflicts – AML, KYC and Conflicts will become digitised, potentially with some form of digital token or identity driven by some more advanced technology tools such as Legl. This is because current processes are inefficient, the challenges have gone on too long and unless we improve things we will have a wave of deep fake fraud incidents - Generative AI: A New World of Risk — Hyperscale Group Limited. These tokens will also be used for other purposes such as digital signatures.
2. Pre-screening – The quantity of data is growing by the day, and we will see an increasing amount of pre-screening of clients and third parties we deal with, but in addition AI will assess the difficulty of incoming work. We are already seeing this in areas such as Real Estate, but data points to enable this are growing in every area of law. The difficulty of a job will become much easier to understand in advance.
3. Automation – We are going to see a huge increase in automation meaning that in some areas of work law firms will very much have an oversight role and will be focused on adding value in different ways. This automation is going to include document assembly for high volume precedents, Gen AI for lower volume precedents and playbooks/document mark-up tools for incoming documents. Law firms will also have to rethink value as these tools will be available to their clients. With increased regulation more work will become advisory and strategic.
4. Email – Email is currently the weapon of choice for the legal industry, but volumes are becoming uncontrollable. Currently 346 billion emails are sent per day increasing at 4% to 5% per annum. With Gen AI this is predicted to materially increase. It begs the question, will email be a sustainable method of working for the legal industry? Will it also have the digital authentication law firms need to ensure they are dealing with people they think they are dealing with? Will lawyers be able to cope with the volumes and will pushing out emails from CRM systems remain an effective marketing method anymore? I very much doubt it. The quest for delivering a better client experience will demand more as well.
5. Platforms of the Future – The fundamental operating model for Big Law, e.g., PMS, document and email systems and CRM is no longer going to cut it alone. We have written about this before - The Search for the Missing Middle — Hyperscale Group Limited. We need a much more flexible, fungible system that wraps around these systems, that allows firms to do more. Ideally it will be no code allowing firms to share information with clients, to subcontract and to put in place” pop up ability” to deal with projects. These systems will also act as an orchestration layer for other systems and AI tools. The list goes on. Fundamentally many firms are realising the client experience delivered by historical LegalTech is not enough.
6. Auto Work Allocation – We have already seen a growth in demand for capacity management systems and systems delivering better metrics. It is completely foreseeable that we will have algorithms that allocate incoming work to lawyers according to ability, capacity and margin. It will also allocate work to AI tools as phase one of production processes. Where it is necessary to include other advisors (whether internal or external), this will be managed as part of the process. Agentic AI will automatically complete other tasks.
7. AI – It is no shock that AI will become more ubiquitous. Law firms will work with multiple layers of AI (agents, screening, data extraction, generative, voice, videos, the list goes on). Firms will need to understand the governance and capability of what they are using. They will have no choice but to leverage the best tools in the marketplace but will also develop specialist tools which are unique to the work they do. Benchmarking of AI will become much more scientific, and suppliers will endeavour to value price whilst law firms will have to become better at procuring and navigating a crowded market. AI will be swapped in and out and used on a just in time basis.
8. Data Driven – As mentioned above, volumes of data are growing exponentially, and data will become central to the areas of work and many activities conducted by law firms. Litigation is a great example where we have numerous systems that will show you the chances of success in disputes. This will go further with more data points included in dispute analysis and this is borne out by predictions of the Master of the Rolls. We have seen this happening already in the Real Estate market and many of our corporate clients are doing the same with contracts to help understand what “market “looks like and how their agreements compare. Various firms are already doing this with public data too. In short, legal work will become more factual and data driven in certain areas and again law firms need to become more result orientated by leveraging this and price accordingly. Some firms will become much better at data management than others and will win work as a result. There will be greater data flows between clients and firms as well as between firms and better audit trails will be needed.
9. Knowing Your Client – Extending the data point further, some firms will really excel at using data to understand their clients. We have previously written about the Failure of LegalTech - The Failure of LegalTech — Hyperscale Group Limited but over the years many core LegalTech suppliers have failed to leverage data to produce even the simplest dashboards. Some firms have made good inroads, but we have been shocked by a couple of examples we have seen where data businesses have analysed the market and been able to give insights into client’s future behaviours and strategies purely from global information and news sources. I think we are going to see more of this as well as firms getting to know their own data and experience and bringing this into the pitching and proposal experience. Tied in with this will be triangulating data sets. For example, if you are targeting clients with a particular profile, by leveraging the open data sets and triangulating them will give greater insights e.g., which companies at Companies House own what land or businesses and are proposing to sell, who fits the profile of your ideal target etc?
10. Niche v Full Service – Many of you will have heard me talk before about the digital onion and how easy it is to push out technology that benefits everyone (i.e., this is technology not LegalTech) but how hard it is to drive projects within each practice area (using “real” LegalTech). The latter is proper LegalTech and requires you to engage and get under the skin of legal delivery but very few firms have anywhere near the resource needed to be able to do this given the number of teams they have. The benefits, although great are also lower as there are less lawyers and matters in specific areas. Accordingly, often this is a neglected area dealt with by third party start-ups. I think increasingly law firms will have to make a choice. If they want to be full service, they will need to gear themselves up accordingly to do this. Partners running those practices are going to need to have decentralised legal engineers to deal with all of the demands. If not, law firms will have to make choices and decide exactly what they are going to be good at and do less things but do them well. The other main alternatives are to rely on third party suppliers and start-ups and/or to use no code systems like Kim.
11. Mergers by Algorithm – In recent years we have seen a huge amount of merger activity from law firms. In an era of increasing public data and a move towards making tax digital with transparency of financials, we are going to start to see “mergers by algorithm” where the initial assessment is conducted by technology. We will also see mergers driven by the need to build capability in certain areas i.e., if one firm has produced a phenomenal tool to automate an area of law, that could for example be the driver behind a merger where that tool could be rolled out to a much bigger firm. Another option might be firms selecting preferred parties for certain work where they have developed advanced technological capabilities. We are also going to see (and we have already seen this), certain SaaS contracts classed as onerous contracts due to a lack of cost control forming a barrier to merger. See The Silver Lining of Cloud Software? — Hyperscale Group Limited.
12. The Rise of TradTech – I am not going to repeat what I said here The Era of TradTech — Hyperscale Group Limited but we will start to see new approaches to SaaS and data management. In addition, some firms will start to develop or jointly own software to control their supply chain/insulate themselves from onerous price increases.
For further thoughts on law firms of the future please see part 2 of this article which we will post on Friday. Like I say, no one has all of the answers, but it is important that we start thinking about these things and gearing ourselves up as we currently don’t know the speed at which things will happen. If the last three to four years are anything to go by, I recommend advancing some of these areas asap.
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