Let’s dive into the future to reveal some transformative trends that will shape the legal tech landscape in 2024.
Venture Funds and the SaaS Shake-Up
In the dynamic landscape of venture capital, here is a forecast: more venture funds, mirroring the footsteps of OpenView, may soon shutter. The reason is an overabundance of investments made at unsustainable valuations. It’s a wake-up call for the industry to rethink strategies and focus on sustainable growth.
SaaS is over-saturated in many areas and less than one-third are profitable. There will be a correction in the SaaS market and those unable to demonstrate the efficient use of capital and an end game will fail. Future investment will gravitate towards platforms that use AI in meaningful ways.
AI – The Game-Changer for Law Firms
AI is set to be the catalyst for a technology revolution in law firms. Traditionally slow to embrace tech, law firms are now compelled to invest in legal technology as AI presents both opportunities and threats.
Firms that have invested in core knowledge management, cloud-based data strategy, and infrastructure are ahead of the curve. They are better positioned to swiftly incorporate GenAI into legal workflows, supercharging day-to-day capabilities. However, those who haven’t made these investments will be playing catch-up throughout 2024.
Separating Wheat from Chaff in Legal AI
AI will be a catalyst for law firms to invest in legal tech more broadly. With high interest rates and capital scarcity, angels and VCs will be more discerning in their investments. Ideas will require tangible use cases, and the legal AI landscape will witness a separation of the wheat from the chaff. There is still confusion in the legal industry as to where and how AI applies: 73 Percent Of Lawyers Expect To Be Using Generative AI Next Year…But To Do What Exactly? 2024 will be the year of experimentation as firms learn where AI can make economic and experience impacts that will inform their investment and business strategies.
Collaboration platforms, KM taxonomies/SALI standards, precedent collections, enterprise search, client/matter/firm financials data, and matter management tools are all ripe with information for verticalized LLM’s, allowing firms to supercharge attorney and business professionals’ day-to-day capabilities. Seamless data integration and rationalization to power verticalized LLM’s will be a top priority for firms adopting and adapting AI strategies. As AI technologies become integral to legal processes, firms will prioritize embedding InfoSec and data governance policies into platforms and communication channels. Minimizing risks will ensure a smooth and secure transition into the era of AI-powered legal services.
Microsoft Teams and M365: Resistance is Futile
Nearly every Am Law firm will have AT LEAST started the move to M365, acknowledging that there’s no future in on-prem infrastructure. Microsoft Teams, once used for mere presence, chat, and online meetings, is set to play a pivotal role in client/matter work and collaboration with external parties (i.e. clients).
The legal industry, often labeled as a technology laggard, is gearing up for a shift as we enter the new year. When navigating change, one thing is certain: law firms that embrace change will be the ones leading the way, and those who fail to adapt might find themselves left behind.