Contrary to popular belief that the legal sector is slow to change, it is very dynamic. Legal professionals are constantly updating their practices to survive the competition, cut expenses and meet the growing expectations of clients. And technology is a key component of staying ahead of the game.
As the legal sector moves deeper into the digital age, we’ll examine some legal trends that are predicted to rule the scene in 2024. So let's get started!
Increased use of AI and technology
Artificial intelligence has been a legal trend for quite some time.
At that time, the majority of tools were represented by machine learning and natural language processing technology, which solicitors use for research or scanning large volumes of e-Discovery. The use of predictive analytics was rare in legal industry statistics.
However this year, the spike in popularity of ChatGPT found its reflection in the legal world. Developers already offer generative AI software for lawyers based on GPT-3 and GPT-4 models.
And even though it’s too early to suggest that AI will replace lawyers, in the nearest future we’ll likely see the rise of “co-pilots”, “co-counsels” and “ digital assistants” in the legal market.
As technology continues to develop, legal professionals can make more informed decisions, provide better service for clients and automate routine tasks. It can save firms money, as they don’t need to hire additional staff or delegate work to expensive outside counsel.
But, as with any new technology, AI and data analytics brings new challenges and concerns. Currently, experts rise questions about the possible implications of AI for intellectual property and data privacy, and how it should be reflected in policies.
Growing complexity of cybersecurity and data privacy
Cybercrimes increase in numbers. They are also becoming more complex and costly. Thus, security remains one of the key trends in the legal industry.
The average cost of a data breach in the world increased by $110,000 in 2022 and now stands at $4.35 million.
These are the highest numbers in history.
Both public and private actors take action to improve security. On a state level, countries introduce new regulations and programs to adequately address growing threats.
As for the corporate sector, the issue goes beyond simply staying compliant with the law. Businesses, including global legal firms, are commonly targeted by criminals. Apart from penalties following the attack, companies may lose clients and prospective partners. Thus, in 2024 organisations are likely to introduce additional steps for protection. For instance, providing education and training for staff and adopting new technologies may be introduced to mitigate cyber risks.
Cybersecurity, of course, comes hand-in-hand with data protection. This year is prone to be one more busy year in dealing with data. European countries remain key trendsetters in privacy law. Experts expect new regulations in the EU and the UK. The developments may address analytical cookies and the data transfer regime.
Growing importance of ESG
Interest in environmental, social, and governance (ESG) issues has rocketed in 2022. And it’s likely to keep the same pace in 2024.
The bigger the company is - the more ESG factors come into play. But even a small business can lose clients, cooperation opportunities, and investment attractiveness if it fails to meet the criteria.
In-house legal teams and law firms are not just spectators in the process. Firstly, they need to respond to ESG requirements within their internal teams. Secondly, businesses expect their lawyers to become reliable partners in navigating a complex landscape. Clients need legal help to understand the latest regulatory developments, evaluate risks, and implement ESG in their daily practices.
On a state level, the previous year was marked by many important ESG-specific laws, and this trend is likely to continue in the coming year.
The Corporate Sustainability Reporting Directive (CSRD) entered into force on January 5, 2023, affecting companies operating in the EU.
Many upcoming legislative pieces were be adopted in parallel with CSRD.
In addition, on 28 November 2023, the UK's Financial Conduct Authority ("FCA") published its "Sustainability Disclosure Requirements ("SDR") and investment labels" policy statement (PS23/16) (the "Policy Statement"). The Policy Statement introduces a set of new rules aimed at tackling greenwashing, including investment product sustainability labels and restrictions on how terms like "ESG", "green" and "sustainable" can be used.
While the EU remains a pioneer in adopting new regulations, we can expect other states to follow legal industry trends for promoting sustainability, social responsibility, and ethical governance.
Implementing new approaches to work
Covid-19 has forced businesses to introduce more innovative work approaches. In particular, the legal trend for remote work and virtual collaboration has increased. Lawyers have become more involved with technology as they adjust to the new economic and work realities.
What can we expect this year?
Technology use will continue to grow
In a race for efficiency, general counsels struggle to get more work done while cutting costs - and technology may be the only answer.
Very soon, we'll probably observe that legal teams are relieved of many duties that can be delegated to computers.
Legal departments will become more flexible
This is shown by two factors. First, the role of legal operations is growing. Their involvement in in-house legal tasks is increasing. Companies understand that tightening costs is impossible without operational improvements. To do this, you need to regularly review processes and make changes.
Second, legal departments have to deal with constantly changing goals and requirements. Apart from typical roles in teams, ALPSs and external advisors are now recruited to complete tasks. Also, compliance and contract work are on the rise, requiring specialists with narrowly focused skills.
Constant transformation of legal teams' responsibilities, and decentralisation of processes due to outsourcing require lawyers to be flexible and agile.
The legal landscape is constantly evolving, and this year is not an exception.
Key industry trends for 2024 are related to technology and increasing business efficiency. Lawyers will likely explore AI and data analytics opportunities to make informed decisions and improve client services. Cybersecurity and data privacy remain significant concerns, with new regulations expected in the EU and UK. ESG and post-pandemic developments are also attracting significant attention.
To remain competitive in a rapidly changing world, legal professionals need to embrace cutting-edge technology and develop new skills.