Five Top Legal Industry Trends of 2022

The pace of change in the legal industry has been steadily increasing in recent years, accelerated by the pandemic, technological advancements, and wider cultural evolution. Law firms are feeling the pressure to adapt to new ways of working and the changing expectations of both their clients and their employees. How can you safeguard your law firm’s future, ensuring that you excel where others might fall behind? Start by learning about these five important legal industry trends that will shape the landscape for law firms in 2022 and beyond.

1. Legal Workflow Automation

Workflow automation continues to be one of the most compelling developments in the legal industry. McKinsey estimates that 23% of a lawyer's work can be handled by automated technology. Indeed, 50% of lawyers are already using a form of artificial intelligence (AI). When it comes to contract analysis, for example, automated tools are 9% more accurate than lawyers and 21,131% quicker—taking 26 seconds to review five NDAs, compared to 26 minutes.

Legal practice management software is a valuable tool for automating time-consuming and low-value tasks, allowing lawyers to focus their time and energy on crucial billable activities instead. Automated workflows can be tailored to expedite administrative processes and document creation, collect key information, and instantly pull live matter data into email templates. When a step changes, the system can also automatically delegate tasks to the relevant member of staff and/or inform your client of the matter’s progress.

In short, workflow automation increases productivity and performance across your law firm. What’s not to love?

2. Increased Collaboration Within Law Firms

The pandemic has highlighted the importance of collaboration within law firms. Lawyers who work from home can’t simply walk up to their colleagues’ desks and ask them a question. Instead, law firm teams require efficient and effective tools to collaborate digitally in real-time. Unfortunately, however, 15% of lawyers believe that collaboration decreased among team members as a result of the pandemic—while seven out of 10 lawyers believe their firm has collaboration problems.

But it’s not all doom and gloom. Law firms that can figure out how to collaborate effectively reap the rewards, such as earning higher margins and increasing client retention. It’s an area where workflow automation can make a very meaningful difference, allowing law firm teams to collaborate much more easily in real time. At each step of an automated workflow, all the required information is instantly gathered and checked off before moving forward. This keeps everyone on the team on the same page throughout the process—when a step changes, the system can automatically delegate tasks to the right staff member, inform client of the matters progress, and add deadlines to the calendar.

3. Focus on Data Security

Data security has always been a hot topic for law firms, but in 2022, it’s going to become one of the most important emerging concerns in law. For some perspective, the number of global data breaches up until Sept. 30, 2021 exceeded the total number of events throughout 2020 by 17%.

Law firms are at particular risk of ransomware attacks given that they hold sensitive data, such as clients’ personally identifiable information (PII) or confidential details surrounding specific cases. When New York City’s Law Department was hacked in June 2021, the breach exposed a wealth of highly sensitive data—including evidence of historical police misconduct.

The rise of remote working has made data security harder to achieve—and more urgent—than in previous years. Information now must be collected and shared on digital channels operating outside the firm’s own firewall. Law firms must of course protect their own ingress, egress, operating systems, firewalls, and so on. Beyond that, however, it’s critical to implement cloud-based tools that prioritize data security with end-to-end encryption capabilities, and automatic backups. These features ensure that only those who are supposed to view sensitive data can do so.

4. Flexible Options for Client Communication

When clients require legal help, they’re usually going through incredibly tough times—whether they’re fighting to protect their intellectual property (IP) or are themselves facing trial. It’s therefore crucial that lawyers communicate clearly throughout the entire process.

Back in 2001, we heard that “poor communication is at the heart of most complaints made against solicitors”. However, for many firms, poor communication is still all too common. Perhaps their communication is infrequent, they use channels that the client doesn’t readily engage with, or they speak in confusing “legal-ese.” On the flipside, firms that master effective client communication will achieve more successful outcomes, receive fewer complaints, and will undoubtedly increase their client retention figures.

Legal practice management systems with client management capabilities allow firms to streamline their communication processes, ensuring no query ever goes unanswered—while reducing the time lawyers need to spend compiling emails, texts, and so on. Even better is a system that integrates with the law firms’ favorite communication tools, including Gmail and Office365, to create communication workflows that work for both lawyers and their clients.

5. New Employee Retention Tactics

We’re currently in the midst of “The Great Resignation” across all sectors, including the legal industry. Since April 2021, over 19 million U.S. workers have left their jobs, while 40% report that they are at least “somewhat likely” to do so in the next three to six months.

This is due in part to the way in which younger generations want different things from their workplace than their predecessors. They’re less forgiving of high-pressure environments where burnout is the norm, and they also have more options than in the past. According to employee retention specialists Retensa, “A wider range in career options, growth in Alternative Legal Service Providers (ALSPs), and disruption due to artificial intelligence have all contributed to an unclear career path for new attorneys.”

This high turnover has a drastic impact on law firms. It’s estimated that employee turnover costs the 400 biggest U.S.-based law firms $9.1 billion per year. When you consider that replacing an individual attorney costs anywhere from $400,000 to $800,000, this is hardly surprising. Indeed, the average law firm only retains five out of 20 associates that they hire.

Law firms must act quickly to prevent workplace turnover from becoming an insurmountable problem. This might include allowing teams to work remotely or encouraging their employees to have a better work-life balance. For instance, one firm has even tried paying its employees $1,000to spend time away from the office—while another provides on-demand mental health counseling.

Cloud-based tools support firms that are embracing these new retention strategies. By ensuring lawyers can access key data at any time, wherever they are, they can work remotely just as effectively as they do when they’re in the office. What’s more, by automating low-value and tiresome tasks, lawyers can spend their days doing what they love—and avoiding confusing processes and unnecessary admin tasks.

Embracing the Future

The five legal industry trends outlined above are having a significant impact on the sector, improving efficiency, security, and ultimately leading to more profitable and rewarding work. Find out how Actionstep can take your firm to the next level in 2022 by getting in touch with our team.