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The Future of Legal: Challenges Ahead, Metaverse Hearing, ChatGPT, and Highly Integrated Outsourced Paralegal Services
Published: July 21, 2023
Lawyers are critical thinkers. However, when it comes to embracing modern technology and innovations, the law industry as a whole lags behind.
An overwhelming majority (79%) of attorneys agreed that legal tech is one of the leading industry trends in 2022. As the regulatory structure becomes more intricate, law professionals are expected to ramp up their digitization efforts to keep pace with seismic shifts. Fortunately, some firms have begun introducing projects like Metaverse court hearings, ChatGPT for legal documents, and outsourced paralegal services.
How can these legal trends impact the future of legal organizations? Let’s find out.
Legal Trends 2023
According to Maria Quinones, a judge in Colombia’s pioneering Metaverse court, the proceeding felt more life-like than a mere Zoom call.
Court participants will attend the virtual courtroom as avatars, and the proceedings will take place as in an actual legal trial.
The legal industry has already benefited highly from the Internet (Web 2.0) in many ways, from facilitating seamless communication with clients to streamlining various transactions. But with the imminent rise of the Metaverse, law firms have the potential to reap even more benefits in the digital sphere.
Let’s take, for instance, Metaverse hearings wherein a legal proceeding is held in a 3D, virtual, and game-like space. Court participants will attend the virtual courtroom as avatars, and the proceedings will take place as in an actual legal trial. Since the hearing applies the immersive principle, avatars can synchronously interact with each other in real-time. Even when the participants leave, the virtual court will still continue to exist.
According to Maria Quinones, a judge in Colombia’s pioneering Metaverse court, the proceeding felt more life-like than a mere Zoom call, as the experience simulates a real courtroom environment.
Future of Justice
A recent article described Metaverse court hearings as the “future of justice,” highlighting some of these strengths:
It upholds the Sixth Amendment of the U.S. Constitution, which is the right to a speedy trial without undue delay by alleviating unsettled dockets.
Participants can create their own avatars to protect their anonymity and reduce the potential of internal biases.
In abusive or criminal cases, victims won’t be forced to be in the same room with their alleged perpetrators.
Meanwhile, a 2023 study found that the Metaverse can boost the U.S. GDP by 2031, contributing roughly $560 billion annually to the economy – an amount that accounts for about one-sixth of the global GDP.
Despite the immense potential of the Metaverse, however, it’s still important to acknowledge that as a relatively new innovation, certain issues must be addressed. One significant area of concern is the constitutional and accessibility implications of conducting legal hearings digitally, especially for individuals who may not be technologically inclined.
Nevertheless, by strategically addressing these challenges and ensuring robust digital infrastructure, the legal industry has the opportunity to embrace far-reaching possibilities that can positively impact the political, economic, and social landscapes in the United States.
AI expedites time-consuming and low-value work, allowing lawyers to channel more of their precious time and energy into high-priority, billable tasks.
Lawyers took 92 minutes to complete reviewing five NDAs, while the AI only needed 26 seconds.
When it comes to average accuracy AI (94%) scored higher than lawyers (85%).
Lawyers’ long work hours, have intense deadlines, and in a high-pressure environment. This situation can easily take a toll on their mental health and well-being.
As a matter of fact, a recent survey revealed that lawyers have reported experiencing burnout more than half (52%) of the time in their practice. Approximately 46% also reported a decline in their well-being.
Fortunately, lawyers can leverage the right software to ease their workload and maintain a more flexible schedule.
What’s more, the 2023 Legal Trends Report also showed that cloud-based technology plays a significant part in fuelling a law firm’s success. Here are some key highlights from the study:
62% of lawyers tend to be happier with their client relationships.
They are 24% more likely to have greater satisfaction with their profession.
The likelihood of their mental and emotional wellness increases by 21%.
Artificial Intelligence (AI) is a great example of a technology that the legal industry leverages to boost productivity. AI expedites time-consuming and low-value work, allowing lawyers to channel more of their precious time and energy into high-priority, billable tasks.
Helps lawyers automate various AI-soluble writing tasks such as marketing, content creation, and legal documentation.
However, ChatGPT lacks the capacity to gauge the intricacies and nuances of the law.
ChatGPT, an AI-powered chatbot launched in 2022 is already revolutionizing the workflow in modern law firms.
At its core, ChatGPT answers open-ended text questions with text responses, either in paragraph or bullet format. It helps lawyers automate various AI-soluble writing tasks such as marketing, content creation, and legal documentation. With ChatGPT’s assistance, lawyers no longer need to start their work from scratch.
For more promising results, law companies also employ Harvey AI which specializes in generating legal data and templates. Additionally, the software can assess contracts, strengthen due diligence, and ensure regulatory compliance.
Problems with ChatGPT
ChatGPT also raises a few red flags in the legal sphere, much like all innovations.
For one thing, the results obtained by ChatGPT aren’t always accurate and factual. While it’s programmed to work with a massive bulk of data, a lot of the information available to the program is outdated and irrelevant. What’s worse, if you plan on subscribing to the free version of ChatGPT, then you should know it can only render data from before September 2021 – access to real-time information requires a premium subscription.
As a machine-learning setup with only a surface-level understanding of legal principles and precedents, ChatGPT lacks the capacity to gauge the intricacies and nuances of the law.
You may be opening a can of worms if you’re completely dependent on ChatGPT, especially in areas requiring in-depth legal knowledge and analysis.
In fact, ChatGPT already came under fire recently. In a controversial case, ChatGPT cited non-existent jurisprudence in an affidavit causing the lawyer who wrote it to suffer legal sanctions.
Ultimately, this goes to show that while ChatGPT can be helpful in the legal field, it still requires further development. Until then, the authenticity and accuracy of legal research generated by the program still needs to be heavily vetted. When it comes to the law, the skillsets of legal professionals will always be superior over any AI technology.
Paralegal Services Outsourcing
Some key advantages of paralegal outsourcing:
Legal counsels are free from the burden of administrative and repetitive legwork, improving their employee morale and satisfaction.
Companies can strike down overhead costs, like payroll taxes, employee benefits, and insurance.
Outsourced paralegals are available even after work hours and during holidays.
Paralegal outsourcing tasks you can outsource:
Personal Injury Paralegal
Today’s legal clients demand quick, seamless, and convenient experiences when dealing with legal practitioners.
Unfortunately, with the current economic downturn, law firms are pressured to cut down operational costs such as a lawyer’s wages, office rentals, utility bills, and marketing strategies – thus, negatively impacting their client experience.
What are the factors fuelling the significant rise in a law firm’s expenditures? Let’s take a closer look at the numbers:
On top of that, research indicates that a massive chunk (93.5%) of a law firm’s spending is attributed to external expenses, such as hiring outside lawyering services. In 2021 alone, the median outside legal spending peaked at a whopping $14.5 million, nearly twice the amount from the previous year which was at $7.9 million.
These numbers paint a clear picture of the legal process outsourcing (LPO) market’s immense growth potential. Amid labor shortages and economic uncertainties, LPOs allow legal firms to outsource paralegal services, so that in-house legal teams can focus on their core competencies and bottom lines.
In essence, paralegal outsourcing services help law firms fulfill their work needs without overwhelming their in-house staff with burdensome administrative tasks.
Here are some paralegal services outsourcing solutions:
Legal Transcriptionist: A legal transcriptionist requires these three abilities: excellent listening skills, swift typing skills, and proficient writing skills. This is because their role requires them to listen to audio recordings from legal practitioners and transcribe them into documents to be used in court. The end result of documents may be produced as pleadings, motions, legal memorandums, and agreements.
Legal Secretary: Under the supervision of an attorney, a legal secretary works on several administrative and clerical tasks to rectify the efficiency of all corporate operations and case organization. Some of their duties include producing legal documentation, finalizing legal forms, corresponding with clients, and responding to inquiries. Since they’re the “front window” of a law firm, lawyers trust that secretaries are always well-prepared in dealing with various concerns.
Liaison Officer: They act as a go-between for different clients, entities, or agencies in fulfilling a common goal and prioritizing their mutual interests. In that sense, they oversee interactions and facilitate the sharing of information between people or organizations. For instance, a liaison officer may establish a client relationship with a social service agency, the city government, or NGOs to ensure effective programming.
Personal Injury Paralegal: In essence, they support personal injury lawyers in preparing personal injury claims of the defendants, such as discovery or settlements. For this reason, effective interpersonal skills, excellent organizational skills, broad knowledge of litigation procedures, and consistent professionalism are necessary for this role. Finally, they must maintain a fiduciary relationship between clients and attorneys through proper documentation.
Legal Researcher: These professionals assist lawyers in researching relevant and up-to-date jurisprudence, laws, and legislation to strengthen the latter’s stance during litigation or other means of dispute settlements. They may branch out beyond the court system as well and continue their career path in real estate, finance, insurance, or private firms.
Collections Paralegal: If companies aim to stabilize their bottom line, it is ideal for them to hire collections paralegals. These specialists are in charge of any work that’s related to collections, such as monitoring customer accounts, informing clients of their overdue payments, recording all collection calls, and resolving customer complaints. They also submit regular reports on the status of collections, such as clients’ payment failures and repayment progress.
To improve the quality and efficiency of legal services, it needs to be supported by non-legal services. Here are some examples of non-legal support that law firms can outsource:
Record Keeping: Knowledge and records are valuable assets of legal firms. Whether it be electronic or analog, record-keepers serve law firms by archiving all sensitive legal documents and data through a stringent and consistent process. From time to time, these professionals will also update record-keeping methods and filing systems for better organization and security.
Database Maintenance: Cross-checking references, laws, and other information can be time-consuming for lawyers. Here, database maintenance experts can help legal practitioners optimize their database servers and ensure access to real-time data. With the availability of real-time data, lawyers will take less time in searching for relevant records.
Word Processing: Legal word processors work on improving written legal correspondence and drafts. First, they scan the documents to look for technical errors or inaccuracies. Then, the processors correct the copies and improve the presentation following specific professional standards. Generally, these specialists are highly proficient in Microsoft Office apps and other transcription programs and tools.
Scheduling: Scheduling assistants add entries of all appointments, programs, and meetings in a calendar software to keep lawyers informed of their daily and weekly itineraries. They typically leverage an appointment scheduling app for clients. That way, clients can conveniently book initial appointments with a law firm in just a few clicks.
Data Entry: Besides storing data, law firms also need to be assured that the data is accurate. Being a valuable “behind the scenes” officer, a legal data entry specialist thoroughly verifies facts and information added to the company’s server. When mistakes are found, they will work closely with lawyers and promptly fix the errors.
By offloading these tasks to remote paralegals, law firms can focus on their case management, business expansion, and customer experience.
After all, client care is one of the biggest growth drivers in an industry where building trust is imperative to one’s success. Customer-centric approaches have been proven to lead to higher profitability.
A 2022 report found that 88% of business consumers find their experience with a firm is equally important as its product or services. Simply put, how you deal with your clients can make or break your bottom line.
So, how can your business elevate its customer experience? Simple. Outsourcing paralegal tasks will allow your in-house team to allocate more time and attention to client communication and relationship building. Lawyers can devote their energy to understanding client needs, providing personalized advice, and maintaining regular communication.
Apart from improving client communications, outsourcing can also boost a firm’s productivity, scalability, and revenues.
Challenges in the Law Industry
The appeal for legal assistance experienced a slump by 56% of law firms.
In a survey of 1,000 consumers, 50% of them were more likely to forestall legal help until the pandemic had abated.
Only 14% of legal firms saw an uptick in business activities during COVID-19.
From 2017 to 2021, many departments multiplied their staff capacities, with recruitment and talent management showing the highest increase (4.5%) — followed by practice group operations (3.9%), and executive management (2.9%).
Support staff compensation accounts for the largest segment of overhead expenses, with an approximate spending of $70,000 in 2022.
70% of corporate lawyers and 58% of law firm attorneys are ready to resign in the next year.
Over the past few years, we’ve been introduced to several trends promising to drive progress in the legal ecosystem. But these technologies bring challenges that law firms also need to overcome. Let’s address them one by one and discover how outsourcing can help.
Substantial Slowdown in Business
All businesses inevitably suffer from slow periods due to unforeseen circumstances. For instance, during the pandemic, many players were compelled to enforce mass layoffs and even shut their enterprises down to make ends meet and evade bankruptcy.
An analysis revealed that when COVID-19 hit in 2020, a total of 630 entrepreneurial firms – including high-profile companies – declared bankruptcy.
Sadly, the legal industry is no exception.
With the strict lockdown measures upending the economy, it has severely impacted many law firms, suppressing their business activities. Let’s take a closer look at how the downturn affected the industry:
In a survey of 1,000 consumers, 50% of them were more likely to forestall legal help until the pandemic had abated.
Only 14% of legal firms saw an uptick in business activities during COVID-19.
Due to the financial decline in 2022 and the current economic limbo, several law firms are still struggling to recover. Here are a few statistics that prove this:
The market demand plummeted to an average of 0.1%.
Roughly one-third of law firms were confronted with a 5% reduction in work hours.
However, McKinsey revealed that law firms have historically shown more resilience as compared to the overall economy. This means that by adopting a growth mindset and a smart business strategy like outsourcing, the industry can position itself for a successful market rebound.
Growth in Overhead Costs Due to Support Staff Compensation
The concept is simple enough: When a law firm draws in more clients, it will handle more cases. And more cases means higher cash inflow.
But when a lawyer is handling an overwhelming number of cases, firms tend to think that hiring more in-house support staff is the safest fix. This can’t be further from the truth.
From 2017 to 2021, many departments multiplied their staff capacities, with recruitment and talent management showing the highest increase (4.5%) — followed by practice group operations (3.9%), and executive management (2.9%). However, with these increased staff capacities comes costly staff compensation that firms will ultimately shoulder.
Research further showed that support staff compensation accounts for the largest segment of overhead expenses, with an approximate spending of $70,000 in 2022. This goes to show that a law firm may not benefit from having too many cooks in the kitchen.
Instead of hiring multiple employees for support tasks, law firms can outsource paralegals from the Philippines to automate their workload. This will effectively drive down operation costs by up to 90% — all while providing their virtual workers with fair compensation.
Managing Return-to-Office Mandates
COVID-19 has reshaped the way we work. Out of sheer necessity, businesses were forced to find innovative ways of working during the pandemic. But since the lockdowns were lifted, studies show that many employees still prefer the flexibility of remote work over the toil of daily office commutes.
Unfortunately, while remote work offers numerous advantages like work flexibility and operational cost reduction, certain legal services such as litigation and client representation are best conducted in person.
This is why many law firms still require office attendance despite employee objections. In fact, a study revealed that 44% of young lawyers are willing to resign and seek remote work elsewhere if forced to return to their office.
Given this scenario, firms need to act urgently to attract lawyers back to the office. Here are some key strategies they can adopt:
Allowing professionals to work from home from time to time (62%)
Granting a grace period prior to the return (19%)
Moreover, law firms and their employees can find a happy compromise with a hybrid work culture that merges the benefits of both remote and non-remote work.
Low Retention and High Attrition Rates
As we move past the pandemic, there has been a noticeable surge in legal demand, leading to a growing need for legal practitioners. However, it is essential for law firms to focus not just on attracting but also retaining their employees in the long-run. Failing to do so will inevitably result in futile efforts and missed opportunities.
The legal industry is already facing a severe labor shortage. And with 70% of corporate lawyers and 58% of law firm attorneys ready to resign in the next year, the industry needs to act fast to keep pace with the growing demand for legal services.
Staff churn will not only cripple a firm’s operations, it can also directly impact their bottom line. Without an effective strategy for retention, firms stand to lose billions of dollars in revenue.
They may lose between $400,000 and $800,000 worth of revenue.
The biggest 400 corporations squander $9.1 billion because of high rates of attorney departures.
Law firms have already started hiking wages to combat low retention and high attrition rates, with some raising their base pay from $205,000 to $215,000 for first-year associates, and $365,000 to $385,000 for eighth-year associates.
Will salary increases be enough to keep lawyers invested in their jobs? As it turns out, no. Reuters found that 23% of lawyers still chose to leave their firms despite getting higher salaries and multiple rounds of bonuses.
Yes, the turnover figure has eased from 24% in 2021 to 20.1% in 2022, but the current rate remains one of the highest in the past decade.
To navigate the talent crisis, it’s crucial for law firms to value their employee’s individuality and unique skill sets; not just their productivity and billable hours. Flexibility and greater work-life balance can also set a law firm apart from its competitors. Offering remote and hybrid work arrangements will help them attract top legal talent, enhance employee satisfaction and productivity, and ultimately, achieve success in a highly competitive market.
How Paralegal Outsourcing to the Philippines Will Help Law Firms
As a law firm, your goal is to provide quality legal services and keep your clients happy and satisfied – but at the same time, you don’t want to exhaust your firm’s resources, especially if you’re still a startup.
Your best route to achieve this: Philippines paralegal outsourcing services.
Highly Competent Paralegal Workforce
In the Philippines, firms have specific requirements for paralegals such as Bachelor’s degree in Law and paralegal certification – both of which demand a lot of dedication and thorough preparation.
Law students also undergo intensive academic and legal training to prepare them for the National Bar Exam.
Examinees are tested in a wide range of law subjects including Labor Law, Taxation, Commercial Law, and Legal Ethics, to name a few. On top of this, Filipino law professors use the Socratic method of teaching to develop students’ legal knowledge and critical thinking through back-and-forth dialogues with their professors.
Aspiring paralegals in the Philippines also attend the Paralegal Training Program to obtain a certification. This gives them a glimpse into the industry, preparing them for real-world scenarios in the paralegal field.
U.S.-based firms can leverage this deep pool of Filipino legal talent through outsourcing. With their solid training from local institutions, these paralegals have a strong foundation of knowledge and expertise, which could potentially save the legal industry millions when it comes to training employees.
As the reigning “BPO Capital of the World” for more than a decade, the Philippines remains one of the leading outsourcing destinations with a sizable portion of the global BPO market.
What is the distinct strength that enabled the Southeast Asian nation to rise to the top? The answer is: the outstanding English proficiency of its workforce.
Since the medium of instruction for training is in English, paralegals in the Philippines are eloquent in the language – written and spoken. The reformed education system in the Philippines has also made significant strides in its literacy rate. As of 2021, the Philippines boasts a whopping 99.27% literacy rate.
Because of this, they can easily perform paralegal tasks as all legal documents are in English. Additionally, there’ll also be fewer mishaps when communicating with your outsourced employees.
Cost-Efficient Labor Market
Aside from the high caliber of the Filipino talent, another advantage of outsourcing paralegals from the Philippines is cost-efficiency. If you seek quality paralegal services at a competitive rate, outsourcing to the Philippines is your best bet.
Choose Outsourced Paralegal Services in the Philippines
As the legal landscape evolves, it’s bound to face certain challenges along the way. One strategic way to navigate this while boosting productivity and profitability is paralegal outsourcing.
SuperStaff’s legal process outsourcing offers benefits to law firms of all sizes, from start-ups to key industry players. With more than a decade of experience in the industry, we can meet — even exceed — your client expectations. Our team consists of highly skilled professionals who are ready to leverage their legal expertise to drive the growth and success of your thriving law firm.
Contact us now to explore what LPO solution works best for your business goals.
Being Eurasian, Gleni sees beauty in diversity. Her multiracial background allows her to embrace differences and find similarities within every person. She finds the BPO industry's multicultural work environment and the synergy of unique cultures fascinating. She loves dissecting how the industry unfolds right before her very eyes.