Digitalization of Indian Legal Industry and Its Trends

Advancement in information technology (IT) has always been one of the transformational factors in any business industry, and the Indian legal industry has not been untouched by its impact – although the industry has been gentle to adopt digitalisation as part of its practice. But we have seen various law firms, be it family-run or contemporary, accepting the technology and also keeping themselves abreast of technological developments.

The introduction of technology in the legal industry is the outcome of echoes happening in the broader business ecosystem, where the convergence of new technologies and automation with business processes have created client and business advancements, along with the adoption of modern systems.

The impact of legal technology is rapidly changing the practice of legal departments and law firms as they become more aware of the cost efficiencies being shaped by IT. Recent developments in legal IT are also facilitating the development of new strategies, business processes, management structures, collaborative and conducive working arrangements, delivery-oriented systems and client relationships.

The driving forces behind the interrelationship between legal-service providers and their clients are as follows:

• New entrants in the market
• Strong price competition and alternative fee structures
• Productization
• Clients’ expectations
• Innovative delivery approaches

These forces have encouraged legal departments and law firms to re-strategize their practice models and operations. In such an evolving ecosystem, the technology has become an epicentre of growth by ensuring the redesign of processes, client delivery, productivity, and profitability, as well as firms’ economics. IT will not only act as the enabler of the value chain but also as the value creator.

In the current scenario the following trends are emerging from the evolution of digitalisation in the legal industry:

TREND 1 – Robot Lawyers/Artificial Intelligence

Artificial intelligence (AI) has been able to adept the ecosystem of the legal industry, and has been able to minimise rote tasks. The introduction of AI to legal technology has revolutionised the industry as well as digital applications like contract management, time-sheet, research, legal analytics and more. It has been discussed that lawyers may get replaced by robots driven by artificial intelligence, and that they will play a crucial role in executing matters and transactions. Cyril Amarchand Mangaldas has taken the first step by providing a platform for the pilot artificial Intelligence project of the country. Various service providers, like Anvi Legal, have also ventured in.

TREND 2 – Client Delivery and Communication

Legal technology is defining new avenues to streamline the lawyer-client relationship. Various portals and collaborating platforms are facilitating the systems, providing faster turn around time (TAT), virtual presence and availability, transparency toward the matter status, document sharing, research and audio/video facility, along with sophisticated security technology. With advancements in communications and client interactions, which were historically driven by personal meetings, calls and letters have now taken a shift towards video conferencing, Facetime to texting, online dashboards with MIS, etc. Firms like Nishith Desai Associates have already developed systems such as data management, knowledge management and client-relationship management, along with various other in-house softwares. Hammurabi & Solomon has also adopted a system to enhance the relationship with its clients. Singh & Singh Lall & Sethi has created a benchmark by becoming India’s first paperless firm.

TREND 3 – Cloud Computing

We have seen law firms showing a significant inclination towards cloud computing. Firms are procuring cloud-based firm-management software in such areas as document management, practice management, knowledge management, client-relationship management and human-resource information systems. With the advancement of digitalisation, law firms are leaning towards virtual servers to secure and archive their data. Recognising the importance of such smart technologies and cloud computing, law firms are making huge investments not only in procuring systems, but also in adopting the sophisticated tools to secure the same. Virtual computing tools are also facilitating reductions in fixed costs, and are allowing lawyers to work remotely either from courts, clients’ offices, home or co-sharing spaces. Organisations such as Reliance Communication, Tata Capital, National Stock Exchange, Oriental Bank of Commerce, Khaitan & So, Fox Mandal, Saikrishna & Associates, etc. have procured cloud-based systems to facilitate their practices.

TREND 4  – Performance Mapping

Being a service industry, it is imperative and critical for law firms to track the productivity and profitability of the delivery. Factors like client generation, billings, billed hours, receipts, etc. have become essential for practice. Legal technology has made it clickable to create such reports and analyse the same. It has become assessable to benchmark the teams by mapping their performance and productivity. The legal industry has travelled from manual discretionary performance evaluation to automated human resource information systems (HRIS).

TREND 5 – Online Legal Services

We have have recently witnessed various online platforms that provide opportunities to potential clients to connect with lawyers for basic services ranging from trademark registration, registration and execution of wills, leases, contracts and lease agreements, to dishonouring of cheques, consumer complaints and recovering suits. Platforms like LawRato, Path Legal, MyAdvo, Legistify, Aapka Consultant, Lexcarts, SoOLEGAL, MeraVakil, etc. have initiated the trend of bringing experts from different legal fields and locations to offer comprehensive legal solutions to the client. These online legal service providers connect legal practitioners and categorise them as per their practice areas, locations and fee schedules, making it easy for the client to do the cost evaluation vis-à-vis sensitivity of the matter.

The Indian legal industry is one of the oldest professions, and it is witnessing a transformation with the development of smart technology. From the client’s perspective, the services have become cheaper and more accessible, whereas from the firm’s perspective they have become more productive and profitable. The adoption of technological approaches is not only saving time and money, but also becoming a facilitator in nourishing relationships and assisting firms to achieve the next level of growth.

Foreign Law Firms and the Indian Legal Market

The topic of liberalization of the Indian legal profession has once again gained steam to become a hot point of conversation, both in India and globally.

The new Indian government has pro-liberalization lawyers at the helm of the ministries of Law and Finance. India has the third largest GDP as per the Purchasing Power Parity Index, and with the new government having a clear reformist approach across industry sectors, there has been a substantial and meaningful movement towards clarity in the legal sector as well.

As a signatory to GATS, India has an obligation to open up the legal sector. After years of see-sawing, in 2014 the Ministry of Commerce began working on a cabinet paper through a 15- to 20-member inter-ministerial group with limited representation from non-government experts.

The indications are that the proposal will contain a phased-entry strategy for foreign law firms, which will begin with progressive reforms for strengthening Indian law firms and then the gradual entry of international law firms in all non-litigious areas of practice.

Over the past decade, Indian firms have grown in both financial and manpower numbers. The frequent ups and downs of the market, international expansion of Indian corporations, introduction of new practice areas such as competition law, cyber law, etc., and a mix of fragmentation as well as consolidation of law firms have all helped the Indian legal profession to grow in strength and learn from its experiences.

While the world eyes India, a host of Indian firms have opened offices in places like Palo Alto, London, Geneva, Dubai, Singapore and Tokyo, as part of their own plans to go global.

What should foreign law firms do?

Over a hundred international firms have increased their focus on India in the recent past. Even without liberalization, evidently there are opportunities well within the legal framework that these foreign law firms find profitable. These firms stand to gain immensely with the opening up of the legal industry.

The following are some aspects that international firms who are already in India –  as well as those looking to enter India – should consider in light of India’s current environment.

Strategise: As is the case with any venture, the most important factor is to reduce “ad-hocism. “Having a plan in place with a long-term vision is imperative. There are pros and cons to the various ways that international firms plan their India strategy, including best-friend relationships, referral arrangements, India desks and outsourcing. The differentiating factor for success is to strategise the strength of the firm and the kind of work the firm is planning to undertake.

Understand India better: As the world’s largest cultural mix, India’s diversity is often difficult even for us Indians to completely understand. International firms that are interested in India need to account for this diversity, including such simple steps such as wishing your clients well on important festivals, learning key words in the different languages, and understanding the food and other local preferences

Show that you care: A sure-shot way for gaining accessibility in any new country is to cater to the society. Law firms can look at offering lectures to law students, taking up pro-bono initiatives and tying up with NGOs as some of the ways that this can be achieved.

Invest in India: Show clients in India and in your home country that you are serious about India. This could include making India-specific collaterals and knowledge kits, increasing visibility by writing and taking up speaking opportunities in India related journals and forums, amongst other activities.

With or without liberalization, one thing is for sure:  there are exciting times ahead for the Indian legal industry. Some of the above thoughts will help international firms make the most of their foray into India, while staying well within the stipulated legal framework.