The 2023 Wolters Kluwer Legal & Regulatory Future Ready Lawyer Survey Report includes insights from 700 legal professionals across the U.S. and nine European countries – namely Germany, the Netherlands, UK, Belgium, France, Italy, Spain, Poland, and Hungary. The survey shows noteworthy differences between the countries surveyed.
The report documents the broad awareness of Generative AI’s promise and an expectation of a speedy adoption of Gen AI solutions over the next twelve months. The responders don’t seem to recognize the “headwinds” which are likely to slow both adoption and impact. Top of mind is the ongoing economic uncertainty combined with firms’ need to address the ethical, IP, security and privacy issues associated with using GenAI in legal practice.
Although the key trends below include many issues which have been around for decades, I can’t help but wonder how many of these challenges will be improved or resolved was GenAI matures and becomes pervasive across the business and practice of law.
Key trends expected to have a significant impact on legal in the next three years:
- Growing complexity of compliance areas
- Increasing importance of legal technology
- Ability to recruit and retain talent
- Increased demand for specialization and a decline in generalist work
- Law departments moving more work in-house (insourcing)
- Greater price competition/new and alternative fee structures/cost-containment pressures
- Growing impact of generative AI/ChatGPT
- Coping with increased volume and complexity of information
- Meeting changing client/company leadership expectations
- Emphasis on improved efficiency/ productivity
- Growth of alternative legal service providers (ALSPs), including expansion of Big Four into legal services
I thought the two most interesting sections of the report dealt with Generative AI and ESG.
Generative AI. The growing influence of generative AI (GenAI) on the legal industry is being acknowledged by a majority of lawyers, with 73% expecting to incorporate it into their practices within the next year. Despite not being among the top three immediate influencers of their daily tasks, GenAI is perceived as a significant trend for law firms and legal departments in the coming three years. Most lawyers (68%) feel ready for the impact of GenAI and understand its application to their work (73%). The areas of big data and predictive analytics are where 77% of attorneys, from both law firms and corporate legal departments, foresee GenAI having the most impact on their daily work in the future, which is a slight decrease from 80% in 2022.
Are the survey users too optimistic in expecting GenAI to be live in their law firms in the next twelve months? I think yes. Firms are still struggling with complex ethical. copyright and privacy issues. The other challenge is cost? The rollout of GenAI is timed to coincide with economic uncertainty and constrained budgets. Will an increasing number of lawyers be testing GenAI products in the next 12 months? Yes! Will law firms be ready to sing contracts and purchase GenAI products? Probably a longer horizon
ESG The rising priority of sustainability in society and corporate sectors has led to the emergence of Environmental, Social, and Governance (ESG) as a significant demand in the legal profession. Law firms are expected to provide expert guidance to corporate clients seeking support in this area, while legal departments face increased pressure to remain compliant with reporting requirements, improve ESG performance, and develop sustainability policies. Despite 68% of law firms establishing dedicated ESG practices within the past three years, the majority (69%) feel unprepared to meet client demand in this area. The development of ESG policies is a crucial way for firms to demonstrate their readiness in this growing field.
The data shows a decline in the number of corporate legal departments requesting sustainability credentials from their law firms, falling from 67% in 2022 to 52% currently. However, 40% of these departments plan to make such a request within the next three years. Despite this, a majority (61%) of corporate legal departments admit they are not fully prepared to meet their company’s ESG responsibilities. There’s a noticeable shift in demand for ESG, with 49% of attorneys reporting that the demand has remained the same year on year, and 43% noting an increase. This is a decline from 50% in 2022. However, half of the attorneys surveyed anticipate an increase in demand over the next three years, even though this represents a drop from 61% in 2022. The data suggests that there is potential for law firms and legal departments to further develop their ESG policies and preparedness to meet growing demands.
Top five findings:
- When it comes to GenAI, legal professionals from the Netherlands are most likely to see it as an opportunity (65%) and seem to have the highest understanding of how this technology applies to their work (89%).
- More lawyers in the Netherlands (65%) seem to be convinced about the benefits of GenAI than their colleagues in, among others, the U.S. (46%), Belgium (38%) and
- U.S. legal organizations seem best prepared to meet client demand for ESG services (44%), followed by the Netherlands (38%) and Belgium (34%).
- On Diversity & Inclusion, Belgium, France, and Hungary score below 40%, when it comes to having DEIB policies in place. Despite this, 52% of Hungarian respondents feel their organization has been successful in creating a diverse and inclusive environment. All other countries scored lower.
- The U.S. and the Netherlands share significant similarities. When it comes to GenAI/ChatGPT, for example, most lawyers in the Netherlands (89%) and U.S. (80%) understand how it applies to work. And it goes for diversity and inclusion and ESG, too. Both countries indicated a rise in demand for ESG guidance in the past year (U.S.: 59%;
the Netherlands 47%), and the majority have DEIB policies in place.