03.19 Legal Briefs - LSAG Newsletter

The Digital Future of the Legal Industry Brought to You by CoreSite When did the legal industry become so fast- paced and dynamic? Mergers are happening faster

2. Rapid adoption of cloud solutions: This trend pressures many firms to step outside their comfort zone to adopt new technologies that they don’t fully understand or don’t have the technical capacity in-house to manage. 3. Mergers and acquisitions: The fast pace of these transactions among firms can result in a hodgepodge of mismatched or redundant technologies, which challenges already overworked IT teams to integrate financial and operations systems of multiple firms. Multiregional or multinational deals are especially challenging because IT teams must contend with converting time zones, currencies, and compensation models. They also have to deal with standardizing costing, billing, and account and case management practices across offices and personnel while addressing the potential impacts of geography-driven network latency. 4. Geographical distribution: Merger or not, managing multiple geographies increases the risk of experiencing IT system latency issues. Performance lags not only frustrate users of affected applications, but can also trigger synchronization and database errors that lead to more serious issues affecting firms and their clients. 5. Security: Cyber-attacks are on the rise, both in frequency and in sophistication, with law firms serving as a primary target. That said, recent surveys 3 show that only 23% of participating law firms have cybersecurity insurance policies in place and less than 40% have a dedicated security professional on the payroll. Worse, hiring an in-house team simply isn’t feasible for most firms due largely to costs driven by the growing cybersecurity skills gap 4 in the market and relying on consumer-grade technology that is ill-equipped for mounting threats and is merely a temporary band aid to a major wound.

than ever before and are larger, higher profile, and span multiple geographies 1 . No doubt, the globalization of the legal sector is here. In addition, law firms are adopting new-age technologies like artificial intelligence (AI), cloud-platforms, and new legal case management systems 2 to modernize their operations for the Digital Age. Even legal clients are moving on from time-tested hourly billing models, pushing their counsel for more complex billing structures like alternative fee arrangements (AFA) to drive down and better manage the costs of their representation. It’s an exciting time of change and evolution for the legal field, and the firms that take pains to stay ahead of the trends will gain a distinct and potentially insurmountable competitive advantage. But like other industries experiencing seismic shifts at the most fundamental levels of their business, evolution can be a double-edged sword. While providing a range of new opportunities, it also brings a slew of never-before- seen challenges or more complexity to the ones the industry has always faced. Gone are the days of running a law firm off little more than a set of servers in a room on the 7th floor managed by “the IT guy.” Today’s challenges are more sophisticated and complex. To name a few: 1. Higher performance demands: Keeping essential systems and applications running smoothly, securely, and at peak performance is an increasingly difficult task in a globalized and tech-heavy business environment – add to it that demands are higher than ever for always-on availability and minimized latency. A CIO’s Work is Never Done: 5 Key Challenges

1 Arruda, Andrew. “Top trends, challenges, and advice for law firms in 2018.” RossIntelligence. com. https://blog.rossintelligence.com/top-trends-challenges-advice-law-firms-2018/ 2 Briggs, Kevin. “Modernizing Legal Case Management Systems.” Microsoft Industry Blogs. https://cloudblogs.microsoft.com/industry-blog/government/2017/10/20/modernizing-legal-case-management-systems/

3 LOGICFORCE. “Law Firm Cyber Security Scorecard.” Logicforce.com. https://www.logicforce.com/2018/03/28/law-firm-cyber-security-scorecard/ 4 Kennedy, Jim. “Cybersecurity skills shortage.” CSO Online. https://www.csoonline.com/article/3258994/data-protection/cybersecurity-skills-shortage.html

14 | Legal Sector Advisory Group | ADVISING FOR EXCELLENCE