The legal sector has undergone a rapid digital transformation in recent years. The technology developed for the legal world (legaltech) has been gaining strength and faces a daily transformation that brings with it great challenges for all its actors.
It’s not new to talk about the competitive legal market and the fact that lawyers in this current era must be very proactive and reinvent themselves. The message is that it’s no longer enough to be “legally very good,” but rather one must be comprehensive, as the market itself is beginning to demand new ways of working.
To delve deeper into where we’re headed in terms of trends in the legaltech ecosystem in 2022, how the legal market is competing, what advantages legal professionals will have who embrace technology and incorporate new tools into their daily work, and whether the legal sector is ready to work more collaboratively with other professionals, we brought together five renowned specialists in Latin America who, over the past few years, have dedicated themselves to understanding and applying legaltech from their respective areas of expertise.
They are with Fabián Urriago Guzmán, Knowledge Management Director at the firm Gómez-Pinzón Abogados; Cecilia Danesi, Professor of Artificial Intelligence and Law at the University of Buenos Aires, Argentina; Jesús Vicente Menoyo, Senior Associate Legaltech at Ecija; Mariano Werner, CEO of Lemontech; and Miguel Montero, founder of Atomian.
The way legal work is done is facing a major transformation challenge. Where are we and where are we headed in terms of legaltech trends in 2022?
Fabián Urriago Guzmán pointed out that it is clear that “technology developed for the legal sector has been gaining significant momentum for several years. Various reports, especially those published by Statista, indicate that legaltech companies generated over $18 billion in revenue worldwide in 2021, and it is estimated that revenue will exceed $20 billion in 2022. The trend shows that the sector will experience continued growth, reaching over $25 billion by 2025.”
According to Gómez Pinzón’s lawyer, “the data above allows us to conclude that the legal sector is indeed very attractive, is undergoing an irreversible transformation, and that law firms prepared to adapt quickly are the ones that will be sustainable and endure. In my experience, by 2022, everything related to internal efficiency in the provision of legal services through technological tools will be of greater importance, ultimately generating client satisfaction, high-quality legal products, and very good profitability.”
He explained that this can be achieved by implementing technology in the operational processes that take up the most time for lawyers on a daily basis, for example:
Document automation is one of them; today, lawyers spend a large part of their time formatting documents manually, with a high risk of error.These platforms mitigate errors and streamline reviews by seniors and partners.
Online management and administration of large-scale operations is the way to reduce the time spent compiling and organizing information. Furthermore, it provides a collaborative platform for stakeholders, enabling centralized work and visibility of each responsible party.
The incorporation of electronic signature platforms substantially reduces the manual work of printing physical documents, handwritten signatures, and travel to finalize transactions. Today, documents can be signed by multiple people in different parts of the world, from a mobile device and in real time.
On the other hand, artificial intelligence has reached a significant level of maturity and can substantially contribute to lawyers’ work in the massive analysis of information. Today, due diligence services and discovery sessions in litigation and arbitration can be carried out in much less time and with fewer people than in the past.
Mariano Werner, in turn, stated that “legaltech is increasingly taking shape and becoming more important in the daily lives of lawyers. This is a fact. Perhaps not in the same way in all countries, because some are more advanced in terms of technology and expertise, but what is certain is that lawyers are increasingly aware that these technologies are great allies for improving their management and their relationship with clients.”
I went on to explain that “in 2017, $233 million was invested in legaltech. In 2018, investment exceeded $1.663 billion (Forbes). On the other hand, the market value of artificial intelligence in legaltech was $3.245 billion in 2018, while by 2026 the value could reach $37.858 billion (Zion Market Research). Without a doubt, legaltech is becoming a cornerstone for the legal industry.”
For his part, Jesús Vicente Menoyo started from the point that we are at a very interesting moment where the first changes are arriving to improve the way things are done within the legal sector, “many law firms and legal consultancies are changing their day-to-day operations, focusing on projects and processes, and this is a very important milestone for our industry.”
“I am convinced that the coming years will be a great challenge for professionals in the sector, for firms and consultancies in order to delve deeper into the development of technological solutions that improve efficiency within the legal function.”
Miguel Montero said they are finding a sector that is very receptive to digital transformation and also very rigorous in its demands. “We also see that the administration has strongly committed to the introduction of digital processes. In terms of penetration, I can speak specifically about artificial intelligence solutions, and there I see an uneven pace. It might seem that, for the moment, only the big players have the budget to undertake AI projects, but I like to think that we were born to go against that mantra; today, both small firms and large companies use Atomian equally.”
Mariano stated that “at Lemontech we can confirm that, in recent years, the use of technology has been steadily increasing, and this will likely continue to be the trend for years to come. This is especially true with the implementation of artificial intelligence, which guarantees automated and less cumbersome processes, and blockchain, with its smart contracts.”
We also expect the consolidation of advances in big data, cybersecurity, machine learning, contract management, electronic signatures, the Meta universe, among others.
In any case, beyond all of this, what’s truly exciting is that we’re at the very beginning. There are so many opportunities to generate value through technology in law, so much monotonous, manual work that can be replaced. The future really does look different from the present.
For Cecilia Danesi, the pandemic accelerated the growth of legaltech and technology across all sectors, including the legal field. “Consider that the courts, which in many cases were reluctant to incorporate technology and digitization, had to do so; in other words, the pandemic was a huge accelerator that I don’t think we would have achieved in a decade. Where we’re headed, I believe the challenge lies in consolidating all the digitization we incorporated during the pandemic. And when I talk about consolidation, I mean that many things were done haphazardly during the pandemic, especially in those legal sectors that hadn’t yet incorporated technology. So this consolidation has to go hand in hand with technology that is efficient for the process, not just the digitization of a bureaucracy.”
The goal is to make processes more efficient through technology; this goes hand in hand with a joint dialogue between the courts, state agencies, and law firms.”
How is competition shaping up in the legal market in 2022?
Fabián Urriago Guzmán pointed out that there are many ways to compete in the legal market and “experience has taught us that the only one that is not viable is competing with the price of legal services; this is a big mistake that some law firms make, thinking that it is the viable way to grow and retain their clients.
Where I believe the greatest impact can be made and healthy competition achieved is by focusing efforts on excellent customer service. These days, clients choose law firms that offer added value to their legal services. By this, I mean lawyers who speak their client’s language, who are approachable and flexible (they no longer wear suits and ties), who respond quickly to emails, calls, and WhatsApp messages, who know their client and their industry inside and out, who apply legal knowledge dynamically, and who have extensive experience in the areas for which they were hired.
On the other hand, what we must always compete with is legal products of very high quality and assertiveness for clients, and I think this is clear to everyone.
Finally, by coherently integrating legal services, processes, technology, and people, we will be able to offer more effective services and become the strategic partners our clients need.”
Mariano Werner continued, pointing out that “staying up-to-date with today’s rapidly changing world will help you face the market with more and better tools. For example, with the implementation of technologies in the legal sector, we confirm that, with mastery of them, lawyers and firms in general can manage their activities practically and efficiently, leading to greater productivity and profitability.”
Taking action in the face of the market/competition: Staying up-to-date guarantees you’re at the forefront. However, assessing what your competition is doing is also crucial. Review how they’re handling certain legal issues, what platforms they’re using, what strategic alliances they’re forming… With this in mind, you’ll always have the opportunity to improve and stay one step ahead in the future.
In today’s competitive legal market, lawyers cannot afford to offer advantages in management, client service, and specific tools that enhance their legal services. Failing to prepare and incorporate new tools with concrete advantages is simply madness. Today, lawyers must be highly proactive in reinventing themselves.
Control and time savings: In management processes, thanks to lawyers better recording their time, firms have increased revenue and provided better service to their clients. Furthermore, law firms and departments handling a large volume of legal cases can manage them more efficiently and automatically.
Miguel Montero, meanwhile, believes that “digital transformation processes must be approached from the ground up. Therefore, if I had to mention three ways, I would say automation, automation, and automation. And specifically, automation in document processes such as document reading.”
Jesús Vicente Menoyo explained that “as professionals in the sector, we must acknowledge that our industry is a few years behind others, such as retail, but at the same time, we must understand that the market itself is beginning to demand new ways of working and, therefore, new service models. Undoubtedly, the billable-hours model is not cutting-edge for clients, who increasingly demand services closer to commoditization.”
I’m not a marketing expert, but I believe that if I were running my own firm or boutique, my strategy would be based on understanding market trends, specializing in a specific area, and seeing which market positioning strategy would be most beneficial to my company’s interests.
Cecilia Danesi believes that the central axes that make the difference between the different areas of legal service provision are, on the one hand, “digitalization and the use of technology because in some way it not only improves the quality of the services we provide to our clients, but also improves the quality of the work carried out by each of the legal agents in their offices; if people work better in better conditions and with better resources, they will undoubtedly be more motivated.
Another tool I believe is essential for improving skills is ongoing research—the search for new tools, new technologies, new processes, new protocols—staying ahead of the curve. This is what defines us; technology is advancing by leaps and bounds, and the law cannot afford to fall behind. We face the constant challenge of staying updated and in tune with modern societies, whose technological and digital growth is exponential.
Another key point is gender diversity along with sustainability; today’s consumers are informed, they know what they want, and anyone working under these parameters will undoubtedly stand out from the rest.
What policies are needed to boost the legaltech ecosystem in Latin America?
Fabián Urriago Guzmán said, “In my opinion, we need to align several fronts. The first is academia (university). We are preparing the lawyers of the future with the curriculum of the past, which means that when they enter their professional lives, they encounter a reality that is changing or no longer exists, a way of applying the law that the market itself demands be done differently. It is important to pause and rethink the training of lawyers, modifying the curriculum to include courses in soft skills, multidisciplinary teamwork, technological adoption, process-based work methodologies, legal design, service design, among other topics, without neglecting, of course, the legal curriculum.”
On the other hand, the justice system in Latin America lacks transformation, and I attribute much of the resistance of lawyers to adopting technology to this. Investing in processes, people, and technology is useless if, when I use the justice system in Latin America, I’m required to submit (for example) a printed copy of the complaint with a handwritten signature, or the bid and its attachments in physical boxes, and so on. Latin America did take a great step forward during the pandemic, and I hope this progress continues and we don’t regress, but we still have a long way to go in the digitalization of the justice system.
According to Jesús Vicente Menoyo, “it’s a cultural issue within the sector, ranging from universities to the very nature of law firms. We must stop conceiving of the profession as it was practiced then; that’s no longer possible. Promoting legaltech through innovation incentives could be the major boost the ecosystem needs and, above all, as I mentioned earlier, a necessary cultural shift to properly adopt technology within organizations.”
Cecilia Danesi explained that, to begin with, “policies are needed; there is no clear impetus in this regard, whereas in Spain there is, they have a secretary for digitalization and artificial intelligence and they have a lot of very interesting initiatives, but of course this has to originate from the ministries of justice and here we return to the permanent dialogue of technology, science and innovation with justice.”
According to Miguel Montero, “the most important thing is that the administration must be committed to digitalization. Solid legal frameworks must be developed that allow for the implementation of digital procedures at all levels. Otherwise, we risk finding that the digitalization of processes is a road that leads nowhere.”
Mariano Werner reflected, stating that as long as we focus on developments with concrete benefits, such as generating savings, revenue, or saving time, “the legaltech ecosystem will continue to advance rapidly. This will be the case due to the purely competitive dynamics of our markets. However, it is undeniable that if governments and universities recognized the immense social value that the adoption of technology can have in the administration of law, we could move even faster. A concrete example is the high-quality digitization of judicial processes. This is a fundamental step for many high-value-added developments, such as the automated resolution of small claims disputes. However, there doesn’t seem to be any urgency in our countries to make decisive progress on this front.”
What advantages will a lawyer have who embraces technology and incorporates the use of new tools into their daily work, compared to one who postpones its use?
“The profiles of lawyers that law firms are seeking today are very different from what we are used to. Now, a lawyer must be legally very good, but this will not be the only selection criterion. Lawyers who are oriented towards rapid learning, constant change, structured work as a process, working in multidisciplinary teams, and adopting technology will be the ones called upon to lead better legal projects,” emphasized Fabián Urriago Guzmán.
He added that “the advantages are numerous, but among them will be participation in the best projects, working smarter (faster and with less effort) by delegating operational tasks to machines so they can focus on what they truly know: legal counsel, understanding their clients holistically, and being the right strategic partner the client needs. Ultimately, the important thing is not just mastering technology; it’s about being a well-rounded lawyer.”
For her part, Cecilia Danesi asserted that the advantages became evident during the pandemic. She explained that “in Argentina, there was a kind of mass retirement, a mass exodus of those who didn’t want to embrace technology. On the other hand, when we talk about technology or digitalization, we shouldn’t just think about software to improve our work, but also about social media. That’s our window to the world, and it positions us differently because it generates trust, transparency, a way to showcase what we do, and a sense of belonging. Those lawyers who are already navigating the technological world are undoubtedly at an advantage, not only because they will provide better services but also because they will operate more efficiently in their daily work.”
Jesús Vicente Menoyo believes that, like all processes related to digital transformation, “technology will allow law firms and consultancies to put the client at the center of the entire strategy and offer them personalized solutions for resolving procedures and processes quickly and easily.
Technology will allow law firms and consultancies to accelerate their processes, reduce costs, and facilitate the daily work of lawyers and other legal professionals, who will see greater opportunities to focus on high value-added tasks for clients.”
Miguel Montero specified that all solutions in the field of legaltech must be geared towards supporting the practice of law.“Lawyers need to see how they can progressively spend less time on paperwork and tasks that generally lack added value, in order to concentrate on providing strategic value to their clients.”
Mariano Werner reiterated that making good use of technology guarantees more efficient and profitable work. And in the long run, “this will be the new standard, since in an increasingly competitive market like that of lawyers, you can’t afford to give away advantages. In today’s world, where information is growing by leaps and bounds, acquiring legaltech to manage your firm, your workload, or handle litigation is, I would say, a critical decision. If you have the ability to condense this information, you have the ability to make better decisions based on real information about your business (its resources and profitability), and this guarantees you’ll be several steps ahead of your competitors.”
Does the legal market require hybrid professionals who go beyond law?
Fabián Urriago Guzmán: “Undoubtedly, it has always been said that getting a lawyer to think differently is very complex, especially given their training. But the transformation the legal sector has been undergoing has taught us that anything is possible. Previously, lawyers didn’t consider the possibility of actively seeking clients; all the work came to them on its own. Today, we talk about legal marketing as a means to learn how to create strategies for capturing market share. The idea was always to offer legal services with teams made up solely of lawyers; today, we talk about legal services provided by multidisciplinary teams. The need to incorporate different profiles in order to provide more comprehensive services has become evident. This means that lawyers must enhance and diversify their skills to be able to collaborate effectively and be part of teams with diverse professional backgrounds.”
Jesús Vicente Menoyo, “of course, the sum of the value of different profiles within the same team means that the final result of the delivery that the client expects is much higher, therefore, the future is heading towards the construction of multidisciplinary teams made up of lawyers, specialists in methodologies such as LPM, technologists and litigation lawyers, all of this always accompanied by the experience of years of partners and senior associates that allow a transmission of knowledge that lays the foundations for very high quality work.”
Cecilia Danesi, “absolutely, I believe that today we are in the era of interdisciplinarity; that is, we cannot think of any career, whatever it may be, as a career isolated from the others, and in this interdisciplinarity technology undoubtedly comes into play. Lawyers and legal professionals increasingly have to be well-versed and familiar with issues of globalization and digitalization. This requires a greater commitment, a permanent involvement. We cannot think of professionals who do not have training in blockchain, cryptocurrencies, social networks, or artificial intelligence, which are part of the present and which demand training that goes beyond the strictly legal.”
Mariano Werner, “Absolutely. Gone are the days of professionals dedicated to a single area of learning and the management of a single field of information. Today’s lawyer must be a well-rounded professional, not only because of their management and development as a lawyer, but also because clients and the demands of the business itself require it. The general public is increasingly dependent on technology, and it’s essential that you adapt and adapt your business accordingly. The legal profession today is no longer composed solely of law graduates; in a law firm or legal department, you’ll find IT professionals, Industrial Engineers, and others.”
Today, work is multidisciplinary. A hybrid professional guarantees client satisfaction and, in turn, their own growth within the legal industry. This new type of lawyer, equipped with new technologies, offers skills to streamline administrative tasks, manage legal processes, advise clients, communicate with them, and collaborate with their peers in the sector.
Miguel Montero: “It’s a trend we’re seeing more and more. Law firms are hiring IT professionals, and naturally, professionals are emerging who can understand two such different ways of thinking as those of IT professionals and lawyers. Universities are increasingly strengthening their legal tech training and providing more technical content for lawyers, so it’s reasonable to think that this hybrid profile you’re talking about will emerge.”
The disruption in the legal industry is largely due to access to new tools, but also to collaboration with other specialties and professional areas. Is the legal sector prepared to work more collaboratively with other professionals?
Fabián Urriago Guzmán commented that the experience of recent years shows that it will be impossible to provide legal services solely with lawyers. “It has become clear that profiles such as Business Intelligence, Legal Project Manager, and Knowledge Manager are essential. The legal sector is undoubtedly not yet prepared to work collaboratively. I believe it is something that will be adopted gradually due to market demands, but it will take time.”
Finally, when discussing legaltech and the transformation of the legal sector, it is important to understand that it is not just about technology; many more factors must be involved, such as culture, people, processes, collective strategy, among others, for this process to be successful over time.”
Meanwhile, Cecilia Danesi stated that “it is essential; we cannot think of a legal professional who is detached from the world, from globalization, from digitalization and from the fourth industrial revolution, and this includes collaborative dialogue. We are in the era of the collaborative economy; we cannot be outside of these parameters.”
Jesús Vicente Menoyo stated that “legal professionals, both lawyers and legal advisors, have been categorized within the business as stoppers or obstacles when it comes to, for example, entering into a contract with the other party, but I am optimistic about this. Increasingly, in-house legal departments and law firms themselves understand that they must be allies of the business, and this fosters alignment of interests with other professionals.”
We still assume a very traditional legacy where the practice of the profession was carried out through tasks, but today, thanks to new agile methodologies and technology, the willingness of legal professionals to work collaboratively with other professionals is beginning to become a reality and this, in my opinion, will bring with it greater creativity and breadth of knowledge for lawyers or jurists.”
Miguel Montero has no doubt about that. “In fact, lawyers, in the course of their profession, always end up handling the most diverse cases, and in each case, they must acquire in-depth knowledge of the subject matter to be able to defend their clients’ interests. Now they are working more and more with technology providers and demonstrate the same capacity for understanding, not to mention that they are professionals with extremely high standards and very little tolerance for error.”
According to Mariano Werner, “there are still some steps to take, but I think so. Large firms are increasingly adapting, with multidisciplinary teams to support their growth or specialization goals. It’s more common now to see firms where the CEO or head of operations isn’t a lawyer, or that employ journalists to manage their communications. Marketing in the legal industry was unthinkable before, but today any firm has at least a social media presence to communicate its achievements. It’s just a matter of time before this gains more traction in the legal industry, since it’s proven that synergy with other workforces always yields positive results.”
