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Article | Risk Management Matters – Legal PI

The Future Worlds 2050 Project: The changing landscape of the legal profession

Cyber Risk Management|Financial, Executive and Professional Risks (FINEX)|Future of Work
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By Joanne Cracknell | August 3, 2021

The world has experienced several driving forces which have dramatically changed the landscape culturally in the last few years.

The world has experienced several driving forces which have dramatically changed the landscape culturally in the last few years. From shifts in cultural and societal behaviour, whether it be as a result of an increase in inequality highlighted by the Black Lives Matter and #MeToo movements or climate change protests spearheaded by Greta Thunberg to the rise of Artificial Intelligence and consumerism, the world is ever-changing and adapting.

Adding to this, the pandemic and the close of the Brexit deal has also brought about fundamental changes to the working world and the way many businesses in the UK operate and provide services to their clients. Recognising the uncertainties and changing face of the working world, and in particular, within the legal profession, the Law Society has released their first report from the Future Worlds 2050 Project (the Report)1. The Report is a study of what key trends will be shaping the world over the next decade, how this future world will impact and change the legal profession and how lawyers can prepare, respond and differentiate themselves to what is perceived to be a more competitive landscape.

This article will look at the emerging themes identified in the Report which are predicted to dominate and affect the law, the legal profession and society during 2020 to 2030:-

Geopolitical Dynamics
Geopolitical dynamics
AI and emerging Technologies
AI and emerging technologies
Data, ethics and trust
Data, ethics and trust
Our changing environment
Our changing environment

The legal profession in England and Wales has experienced many changes over the years whether by way of the liberalisation of the market through the 2007 Legal Services Act, changes to the regulations and codes of professional conduct and a shift from traditional legal entity models to alternative business structures and to lawyers operating ‘freelance’ practices.

The trends identified in the Report indicate that further change is on the horizon and as the world shifts, many of the traditional aspects of business will be superseded and will no longer be fit for purpose. Law firms and lawyers will need to review how they operate and provide services to their clients in response to these transformations, to be in a position of strength and be able to differentiate themselves from their competitors.

Geopolitical Dynamics
Geopolitical dynamics

The unpredictability of populist leaders will undoubtedly continue over the next decade which will impact global relationships. In addition, a shift in superpowers over the coming years is expected with the E7 nations overtaking the G7 nations in terms of economic strength. China is bolstering its position as both a tech and economic superpower and it is anticipated that China will dominate the world economy by 2026 outranking the United States of America.

These shifts in power will likely open competition over territorial and jurisdictional rights, at the same time as enabling trade to thrive. This in turn will heighten competition for law firms with the services and products they provide and across which jurisdictions they can offer their services.

The legal profession is attractive to cyber criminals because of access to valuable data sources and financial systems.

Regulatory concerns will have to be addressed, especially where global co-operation is needed, around issues such as anti-money laundering, fraud and cyber crime. We have seen how cyber crime has exploited the pandemic globally, and with even greater technical advancements such as an increase in the legal profession using artificial intelligence, the prevention and control of cyber crime will become even more challenging especially as borders are blurred. The legal profession is attractive to cyber criminals because of access to valuable data sources and financial systems. It is envisaged that the trading of data including personal, financial and business sensitive data will increase, and issues around who owns and controls the data will result in disputes and new case law arising, emphasising the need to strengthen preventative measures, and enhance protection frameworks in order to minimise exposure from cybercrime.

AI and emerging Technologies
Artificial Intelligence and emerging technologies

As previously mentioned, the Report suggested that there will be a greater use of technology in law firms and employees will need to adjust their skills set accordingly. The concern here is whether the law and regulation can keep pace with the technological change.

One key change we saw during the pandemic was the rapid shift from physical court hearings to online hearings. Whilst this greatly assisted with preventing the court system from grinding to a halt, it was felt that not all involved with the online hearings were tech savvy and the process felt ‘cold’ and empathy and support experienced in person hearings were diminished using video conferencing tools.

Emerging technologies can create new commercial opportunities, exposing law firms to new clients previously out of reach, as well as offering creative opportunities for the delivery of legal services and how value is added. It is recognised that the cost pressures facing the legal profession will increase the need for artificial intelligence and the streamlining of legal functions is inevitable, as we have seen in the conveyancing world.

However, this does not necessarily mean that lawyers will be replaced by robots, as the soft skills such as empathy and insight in gauging client needs and human interaction on large client accounts which help to build trust and strengthen client relationships, cannot be replicated by artificial intelligence. Those in the legal profession may be relieved to learn that according to the Report there will be a requirement for ‘human’ lawyers, at least until 2030.

Data, ethics and trust
Data ethics and trust

Over the past decade we have seen numerous challenges around the big tech companies dominating markets and the legal use of personal data, as well as a concern about the erosion of public trust in such institutions.

It is accepted that advances in technology are necessary to combat global risk such as we have seen as a result of the pandemic and climate change. It is recognised that the legal profession will need to develop more expertise around data in order to understand issues and challenges as they emerge as technological advancements intensify.

It is expected that more ethical questions will be asked about data, especially around who owns it and how it will be captured and used, as technology evolves over the next decade. Tougher regulation around data privacy and how it is treated will need to be developed, as well as the implementation of new ethical and moral frameworks which includes the need for trust and accountability.

However, it is important that these developments are communicated in a way that those members of the legal profession who are not technological experts can fully understand, and how these developments are relevant to their work so that they can make informed choices and contributions and add value to their clients and their own personal development.

Our changing environment
Our changing environment

There is a wealth of evidence which suggests that climate change will have a disastrously far-reaching impact on the world unless change happens now. There needs to be a greater understanding of how this can be achieved. Risk relating to climate change will impact the legal profession in terms of its own exposure and should form part of a business’ long term strategic planning process.

How can the legal profession prepare for an ever-changing future landscape

As clients’ needs change and problems become more complex, lawyers will be expected to adapt and provide independent, innovative or different products and services in response. Often working collaboratively across other sectors and with different professions to identify and deliver the best possible solutions for clients.

Law firms will need to consider how they can attract and retain top talent as the world becomes smaller and the global workforce becomes more mobile. The legal profession will continue to be expected to represent society and become more multi-generationally diverse and inclusive, as well as uphold the trust placed in them and in the legal services provided.

With climate change comes new opportunities for law firms where input and advice will be required around matters such as the Green M&A landscape, climate litigation and exploring the correct forum for that litigation, as well as an increase in immigration cases as a consequence of people being displaced due to changes in geopolitical landscapes. Lawyers will be expected to find innovative solutions to help their clients understand, identify and manage these risks, which in turn will increase commercial Environmental, Social, and Governance obligations for both the legal profession and their clients.

Summary

What is clear from the Report is that change is upon us and the future risk landscape is evolving exponentially as are clients’ needs, and the legal profession will be expected to be prepared for this new Future World.

By looking forward, understanding and responding to these changes law firms will be offered the opportunity to help reshape the profession and the provision of legal services by identifying solutions to emerging needs, which will maintain and strengthen the trust already placed in the profession, as well as helping lawyers prepare for, respond to and differentiate their future selves in what will be perceived to be a more competitive landscape.

Footnote

1 The Law Society. (2021). Future Worlds 2050: images of the future worlds facing the legal profession 2020-2030. Retrieved from: https://www.lawsociety.org.uk/topics/research/future-worlds-2050-images-of-the-future-worlds-facing-the-legal-profession-2020-2030?sc_camp=5C0FE0D28B474F6BA2EE374CB3EE601B

Author

Associate Director - Finex PI UK Legal Services

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