How Legal Departments and Law Firms Adapt to Transformation

The Thomson Reuters Institute’s report, “Future of Professionals,” explores how the legal profession is being transformed by rapid technological advancements. It highlights key themes such as technology adoption, client expectations, and operational efficiency. Additionally, the report notes the differing ways in which legal departments and law firms adapt to these changes.

• Approaches to technology

The report describes two distinct approaches to technology. Corporate legal departments are prioritizing cybersecurity solutions to protect sensitive information and ensure regulatory compliance. Conversely, law firms are increasingly embracing advanced technologies like artificial intelligence and automation to improve service delivery and streamline legal research and case prediction tasks.

• Internal and external client relations

According to the report, legal departments are using technology to improve internal client relations by leveraging digital tools such as portals and communication platforms, enabling real-time updates and better responsiveness. Meanwhile, law firms are experiencing a shift in client expectations, with a growing preference for value-based billing rather than traditional hourly rates. External clients seek transparency and predictability in legal costs, prompting law firms to offer alternative fee arrangements and fixed pricing. 

• Efficiency in Operations

The report emphasizes the importance of enhancing productivity and reducing costs through streamlined processes. Law firms are adopting project management techniques and legal operations tools to optimize workflows. Both legal departments and law firms use collaboration tools to facilitate seamless teamwork, while data analytics is becoming a crucial factor in decision-making. 

Although the report focuses on the differences in how legal departments and law firms adapt to transformation, it also offers a roadmap to the future that embraces technology and adapts to new internal and external client expectations.