Digital transformation delays cost legal firms over £1 million per project

Global News

23
Nov
2022

Editor

Research conducted for low-code application development platform provider, Toca, shows that while the appetite for digital innovation in the legal sector is increasing, several roadblocks are standing in the way of progress.

The survey of IT leaders from UK legal firms found that almost all respondents (92%) say they are expected to deliver digital projects twice as fast as they were five years ago – with two thirds (65%) saying they are expected to deliver twice as fast compared to two years ago. 

Failure to deliver innovation at speed was reported to negatively impact several areas of legal businesses – from employee satisfaction and productivity, through to user experience, customer service and business revenue. However, IT teams are being hampered by regulatory challenges, developer skills shortages, and budget constraints. As a result, costly project delays are common – with the average digital transformation projects overrun lasting three months at a cost of £17,460 a day; totalling over a £1.1 million per project. 

The survey of 50 IT leaders, from legal firms with over 500 employees, also reveals:

• The five main drivers for digital innovation in the legal sector are: business growth, meeting new industry regulation, improving digital journeys for clients, driving business agility, and keeping up with the competition. 
• Consequently, 88% of IT leaders within the legal sector agree that “building apps, connecting systems and automating processes faster is business imperative”.
• But 72% of IT leaders are struggling to keep up with the pressure of innovation and 68% say the waiting lists for digital projects are getting longer. 
• As a result, legal firms are only able to address 29% of problems they’d like to and 88% aren’t automating processes because of time, cost, or complexity – despite recognising that automation could save their average employee 4.5 hours a week.

“The legal sector has been slower to adapt to digital transformation than other industries – but we can see this is changing,” comments Mat Rule, Founder and CEO of Toca. “With competitive pressures mounting, legal firms are recognising that digital transformation is essential to long-term survival. Whether it’s using automation to maximise fee earners time or creating new customer facing apps to enhance client experience, there are many ways that technology can help firms stand out. Those that fail to be agile will soon find themselves falling behind.”

Yet delivering at speed can also create its own set of problems if not done properly. IT leaders within legal firms noted that the cost of additional reworking of applications in production, often referred to as technical debt, is rising due to projects being rushed. 

This is creating several problems:

• 88% agree of IT decision makers agree that the need for speed with digital projects results in growing technical debt at their organisation. 
• 80% of IT decision makers agree that technical debt holds them back from taking on new projects.
• 94% of IT decision makers confirm that reducing technical debt while speeding up innovation is a priority.

Another issue facing IT teams within legal firms is the need to integrate with specialist legacy systems. 88% of respondents agree that rewriting and re-platforming legacy apps is slowing down transformation and innovation. Unsurprisingly, 88% of IT decision makers in legal firms say they would prefer to leverage legacy systems to speed up digital projects, rather than rewrite and platform them. 

“The reliance on tailored legal IT systems and stringent requirements around data access and protection mean any legal digital transformation project will often be complex,” Rule continues. “This is why it’s so important that firms have the capabilities to build and manage their own applications – as they are the ones that know their business best.”

Rule concludes that “low-code development platforms enable IT teams to design, develop and deploy apps, automate processes, and integrate with existing systems in a far easier and more manageable way. In doing so, firms can overcome deployment and integration challenges faster and at a fraction of the cost, while also bringing innovation in-house to drive true differentiation.”

The research features within Toca’s digital transformation dilemma for the legal sector report, which can be read and downloaded here.