9 December 2020

The legal landscape in 2021: what can we expect?

Business transformation checklist

The phenomenal impact of the Covid-19 pandemic has spread far and wide, with most sectors including the legal industry being turned on their heads. But what’s been learnt over this year? And what can we expect in 2021?

Uptake in emerging technology

Arguably, one of the positive legal trends to come out of the pandemic is the acceleration in technology adoption to ensure businesses are able to work effectively, even at a distance. The use of emerging technologies such as AI has been gradually increasing in law firms, however with the pressures of the pandemic, this has only increased. Many firms are now using AI for manual tasks such as citation, research, documenting contract reviews and other manual processes which can be automated. The Solicitors Regulation Authority (SRA) suggests that AI has the potential to increase business efficiency for both law firms and their clients, with reports estimating that it could add £630 billion to the economy by 2035. 

Chambers, a leading legal research agency, asked a London firm partner for their thoughts on the use of AI in firms: “AI will help lawyers perform their tasks, but it won’t be replacing them. If a client comes to us and needs work on a restructuring matter or a corporate transaction, the human part of our service is still critical in finding solutions that work for that particular client in that instance. Firms need to look at the individual project and implement AI on a case-by-case basis.” 

Other areas of technology being increasingly utilised by firms is shown through transitions from hard disk to cloud, with most firms now looking to store confidential client information on a cloud hosted solution. Remote consultations with clients and the training of new employees is also leading to an uptake in the use of virtual and augmented reality. The use of AI and other emerging technologies are expected to continue their upward trend next year as well as improvements in remote working in firms to ensure the sector recovers as quickly as possible from the impact of the pandemic. 

Embracing Diversity and Inclusion 

Diversity and inclusion has been one of the hottest areas of focus this year. Seismic shifts have taken place in the current perception of workplaces being truly diverse and inclusive of all people. In all industries, including the legal sector, there is still a long way to go when it comes to this area. In a recent survey conducted by Chambers surveying 2,500 lawyers, the research found that appetites for Oxbridge and Russell Group university graduates has remained high. Those universities supplied 76.5% of trainees over 2016 – 2018. However, the figure has fallen by 5% compared to the same survey conducted over the years 2013 – 2015 showing some progress in diversification of lawyers in firms.

Following on from this, a Chambers diversity review in 2020 showed that the percentage of female trainees, associates and partners has risen over the last five years and that in the top performing law firms, LGBTQ+ diversity numbers were increasing in the right direction. The legal sector has made positive shifts when it comes to diversity and inclusion, with many promising developments. However, as with many other business industries, there’s still a way to go and scrutiny on this area of legal firms is expected to continue in 2021. 

Nurturing new legal talent from afar 

An area where the pandemic has made a particularly significant impact is for lawyers in the first years of their practice who would normally be shadowing experienced colleagues and also have much easier access to support, be that professional or personal. Where a new lawyer would normally have been able to ask a quick question about a case, get a second pair of eyes on a piece of work or feel comfortable enough to discuss their wellbeing challenges, remote working has caused this open, more human line of communication to suffer. However, with firms adapting quickly, ways of resolving this have emerged including a hybrid system where lawyers work partly from home and partly in the office. Rob Hind, Director of People in Law, commented that firms will have to invest heavily in time dedicated to development through virtual means for junior lawyers, to ensure this area isn’t affected too severely. With the restrictive pandemic measures expected to loosen up by the spring of 2021 as well as the ever-increasing capabilities of firms making remote working more efficient, this area should look much brighter for upcoming lawyers in the new year. 

Protecting your firm against cybercrime 

Against the backdrop of the pandemic, existing risks like cybercrime have seen a significant increase. The number of cybercrime reports to the National Crime Agency rose to 400% in the first weeks of lockdown and criminal activity in this area has continued throughout the year. Cyberattacks have significant impacts on firms including higher insurance premiums, having to pay for financial losses, damaged client relationships and stress and pressure on employees. An SRA review found that the cost of mitigating cyber threats is much lower than the losses of a successful attack and so it’s critical that firms invest in robust and secure systems to ensure this threat is minimised. The SRA reports that people who have not received cybercrime training are most vulnerable, with ‘phishing’ being the go-to tactic used by cybercriminals to target firms. This vulnerability is increased with remote working due to issues such as home WiFi often being far less secure than the office network, making it easier for cybercriminals to target employees.

However, it’s not all bad news and there are some simple measures law firms can enforce to significantly decrease the potential impact of cybercrime. The SRA recommends having a good working knowledge of the Code of Conduct and Accounts Rules about client’s money and information and as well as this, having clear procedures for dealing with cyber risks. An independent assessment is a great place to start which can be completed through schemes such as Cyber Essentials Plus. Going into 2021, it’s paramount that firms are aware of the threats posed by cybercrime and have clear strategies of how to mitigate the risks of it effectively. 

Spring boarding from the pandemic and going from strength to strength 

Despite the challenges the pandemic has brought, the legal industry has bounced back exceptionally well over the course of 2020, recording a 20% recovery between May and July according to data released by the Office for National Statistics in September. Rob Millard, director of Cambridge Strategy Group, said: "This correlates with what I have been hearing from firms, several of which have told me that 2020 is so far proving to be their best year ever. Working from home has freed up time previously spent commuting and demand for many areas of legal service has proved remarkably resilient.” 

Having said this, many firms still have a way to go to recover from the impact of the pandemic. Louis Young, MD at litigation funder Augusta, has commented: “Leaders continue to seek help to optimise their balance sheets and set themselves on a growth footing for Q4." However, the resilience and flexibility with which law firms across the UK have responded to the changing market and environments has meant that firms now have the tools to adapt and maintain business continuity even in remote working conditions. 

We’re here to help

This year has brought about untold challenges for the legal sector, but it’s also created significant opportunities for the industry to accelerate its digital transformation journey. Embracing digital and ensuring your systems are robust and secure will be essential going into 2021 and we’re here to help. No matter how complex your requirements are, MHR’s HR, payroll and analytics software and services can address your specific business needs and strengthen your resilience, workplace flexibility and connectivity with your people. 

Katie Buckingham

Katie Buckingham

Field Marketing Manager at MHR. 

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