Addressing The Obstacles That Stop Innovation Within Legal Profession

The legal profession is not adopting the latest legal tech solutions for several reasons. Behavioral mechanisms, partner structures, and financial incentives may be some of the primary reasons. However, there are more points to note. Therefore, we will dive deeper into this topic to discover all the major and minor factors contributing to the slow adoption of modern innovative solutions within the field of legal practice. 

Comparatively, financial markets have adopted digital transformation much quicker, making the financial markets more like areas governed by algorithms that take data from several accounts to audit and reveal information in the shape of various legal products. However, while this kind of transformation quickly emerged in finance, the legal practice field has not seen such a pace; many innovative legal tech solutions are still struggling to win the trust of lawyers and law firms. So, let’s note the major obstacles behind the slow adoption of innovative solutions within the legal field. 

The Partnership Structures of Law Firms 

‍The partner-driven structures of law-firm mostly counteract the available incentives for innovation and resist the need to change. One survey suggests that over 70% of the participating partners have been the biggest obstacle to change, and their approach is mainly focused on securing short-term profits. This makes them look like multiple businesses gathered under a single roof, with every business competing for its share. So while legal tech innovations may seem a costly affair initially, most partners will not afford to take a long-term approach to secure their places in business. This mindset is a significant obstacle to investing in new technology. 

One may say that now it is the job of the legal tech developers to make their solutions affordable to lawyers in such scenarios. However, this is a different debate that I will discuss later. Currently, we are only looking at this issue from the law-firms perspective. 

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Lack of Financial Incentives

Most law firms have been doing great in their business. Some survey reports have shown annual growth up to 4.3% for several years, so while law firms see an increase in their revenues, they are not willing to test new legal-tech-oriented solutions to grow their market shares. Deviating from a current strategy that produces steady profits is a major challenge. In addition, the current system for funds allocation is about paying for the billable only. So fewer economic incentives to innovate workflows are irrelevant. 

Legislation Protections to law firms

In many countries, the core of legal services gets exercised in law firms that lawyers own themselves. This becomes a significant obstacle because fewer incentives are given to bring change in day-to-day activities. Mostly, the lawyers try to adjust the process on their own. So while the legal profession gets protection, as a result, the speed of innovation has been slowing down. In case the major law firms of a country have been liberalized, such as in the UK, they do not mind competition from legal platforms. So some use of modern legal tech solutions has been happening here. 

The Conservative Mindset About Legal System

It sounds a bit ‘awkward’ that most societies demand their legal systems to be conservative because they consider its stability important for maintaining balance. However, such significant cultural markers always impact the way of thinking of lawyers, and they do not get ready to take risks so easily. Instead, they intend to resist them until something becomes so common that it becomes a necessity. The people working within the legal industry always work with a zero-error culture, so mostly nobody would take a chance of being the first one. 

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Behavioral Psychology of Lawyers

A number of studies conducted on the behavioral psychology of lawyers indicate that the typical personality traits make them less likely to try new solutions. For example, the overall finding of behavioral researchers indicates that lawyers score extremely low on the openness-to-change graph, are incredibly skeptical, are sensitive to criticism, and tend to be risk-averse. Instead of focusing on what could go right, a typical lawyer thinks about everything that could go wrong before building his plan to avoid all risks. So definitely, they want to avoid risks at all costs. So when these personality traits combine with cultural factors, the impact of resisting much-needed change gets instensified. 

End Notes:

Every one of us believes that the lawyer’s job is always to minimize the risk while ensuring compliance with the rules and regulations of his industry. So it is primarily the job of legal-tech developers to cross the psychological barriers that prevent lawyers from quickly adopting their invented technologies. Moreover, lawyers operate in an atmosphere where their role is to stabilize society. If they start adopting a solution only because it is the latest in the market, their reputation will get undermined. Can a legal-tech developer with a bad repute win at winning the trust of a reputed lawyer? So why will lawyers risk their and their firms’ reputations only to test new things? Think about this line.