Why Law Firms Transform but Clients Standstill: The Problem of Low Adoption of Digital Legal Services and Self-Service

‍Index

• Introduction: The ground reality in legal differs from popular perception
• Section 1: How Perceptions and Biases Shape What Legal Clients Do
• Section 2: Poor ‘Productization’ Can Stop Clients from Consuming Legal Services Digitally
• Section 3: The Balancing Act: AI-Based Legal Services vs the Human Touch
• Section 4: Traditional Fears About Legal Complexity Intimidate Clients

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Many point to how the legal industry has been one of the last to transform. But is this an idea that’s still true?

The numbers globally indicate rapid digitalization in legal. For example, in research commissioned by the Solicitors Regulation Authority (UK) from the University of Oxford, on tech and innovation in the legal sector, it was revealed 72% of law firms use tech to improve service quality.

The previously reluctant, slow sector is transforming fast and now appears to be turning into a thriving digital industry on par with other professional services industries.  

But on the ground, in our work and discussions with law firms in countries such as the Netherlands and those from the Scandinavian region, the sentiment is that client adoption is low. There is very sparse online content and data reflecting or supporting this narrative.

Most of the research, content, and opinion pointing to clients increasingly looking for and using digital legal services including self-service options, may reflect only the segment of clients who can be considered ‘early adopters’ and not those who take much longer.  

So perhaps what we’ve encountered is a case of lawyers describing their experience digitalizing service aspects still in transition. And time will surely ensure more of their clients adopt.

But law firms need to be acutely aware of the many reasons their clients are presently not taking to the digital legal services they’re so painstakingly offering clients.

This can help soften the risk of the massive investments made to transform while also ensuring law firms and their clients can enjoy the many benefits of more effectively and empathetically digitalizing the legal business.  

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Legal clients have less self-service experience in comparison to industries like banking

Self-service in any industry can be worrying for users. But in segments like banking and other financial services, both individuals and businesses have had years of experience handling their financial needs through apps and online portals and the like.

But if we consider self-service in the legal space, there's been less exposure and practice. This is reflected in the lower confidence among clients and makes it natural that adoption is low and late.  

As legal involves regulation and compliance, this lack of experience or confidence can cause fear and anxiety, two emotions that can severely hinder higher adoption of your digital legal services.

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Exploring the main reasons for low use: psychological, perceived complexity of industry.

As law firms think about how their efforts will be perceived and received by their clients, the reasons for low adoption must be closely considered and addressed.  

The old misconception in the product, innovation and tech space, ‘if you build it, they will come’, can prove useful here.  

Legal firms may transform rapidly and build, buy, or subscribe to software that their clients can use in getting traditional legal services digitally; however, this needs to be received with equal energy by their clients for it to bear value.  

Law firms that understand what prevents their digital service efforts from being adopted by existing clients and attracting still more clients, will be able to benefit from the numerous benefits digital legal services including self-service offer law firms and their clients.  

In this pillar-style article, we explore some of the main reasons for this gap in expectations between law firms and clients, ranging from low client confidence to poor productization. As different members of our team dig deeper into the different aspects of the low client adoption debate below, feel free to read the overview on this page or explore in detail the aspects that appeal to you more.

Here’s to more meaningful, informed legal transformation!

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How Perceptions and Biases Shape What Legal Clients Do

When we consider the legal space, another industry, or absolutely any part of the human experience, it is our perception or the meaning we give what is around us that makes us ‘feel’.

Fear, anxiety, joy, and the full spectrum of emotion result from how we perceive, and this in turn shapes how we act. Across this process, there are cognitive biases or ingrained patterns that guide perception.  

For example, legal services have long been ingrained in many as cold and complex matters. And clients have come to expect legal services to be delivered one-on-one.  

A change to this, even if it offers convenience and lower costs, is unsettling for the mind. Our work and discussions with law firms in the Netherlands and the Scandinavian region, helping them simplify and grow certain parts of their business through technology, have led to insights that strengthen this idea.  

Where the law and compliance are concerned, people still generally seek structure and familiarity over innovation. Associated biases can shape what clients do and don’t do.  

So, law firms need to be sensitive to client perceptions and biases that guide how they respond to the digital legal services on offer.  
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Poor ‘Productization’ Can Stop Clients from Consuming Legal Services Digitally

As law firms think of different ways to be more productive, drive new revenue, and improve client experience, they often begin to ‘productize’ and digitalize services that were offered manually before.

It is a tried and tested method to scale aspects of the legal business that are manual and resource heavy. This can include converting legal services such as company formation and legal contracts into packaged offers with fixed prices that clients can easily consume digitally.

In this process, many law firms subscribe to or purchase LegalTech products available in the market, have custom software built by external parties, or resort to developing solutions in-house if they have a sizeable IT team.  

But as we explored in the pillar page introduction, on the ground, in our work and conversations with law firms, it’s evident clients don’t take to digital legal services as much as online data reveals.

Could the reason be poor productization of these legal services?  

For law firms to ensure higher use of their productized legal services, they need to be selective in the legal services that they productize (not every service is a good fit), have a dedicated product development team or get external support, and pay close attention to the needs of the target audience.
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The Balancing Act: AI-Based Legal Services vs the Human Touch

One of the most divisive topics in the legal industry between 2022 and 2024 has been AI.

Even with the advantages it brings legal businesses in terms of time savings and higher productivity, clients raise questions about whether AI-based legal solutions can be empathetic.

Personalized service and the trust and confidence this leads to is missing in such solutions, many clients say. In the Scandinavian region, particularly, our research with legal firms indicates clients prefer the type of empathy that humans show, even if it costs three to four times as much as digital legal services.

And the lower trust due to the absence of this personal connection, for many, reflects the values of the law firm. Clients equate this with the firm trying to provide clients with an inferior, generic service that is automated, instead of the usual personalized service they’re used to.  

Law firms, therefore, need to delicately navigate the balance between providing digital legal services that use AI and the human touch clients still expect.
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Traditional Fears About Legal Complexity Intimidate Clients

Closely connected to the perceptions and biases of legal clients, is the traditional mindset many have about the legal industry.

And so, today’s legal client’s expectations stand in contrast to the promise of digital legal services, despite the convenience and economic benefits they provide.  

We are quick to assume that the traditional mindset is restricted to demographics less familiar with technology such as those who’re older, but we must note that it is also caused by legal clients’ preconceived notions about the complexity of the legal system.  

The legal system can be intimidating for many with the repercussions for mistakes being dire. Naturally, the industry is looked at as a cold and rigid one requiring professional help to navigate.

Parallelly, being traditional and not LegalTech savvy, when researched, had showed greater willingness by clients to adopt technologies such as video consultation and e-signatures, as opposed to smart contracts and chatbots.

Law firms are helping legal clients overcome these traditional worries by promoting learning, incorporating user-friendly third-party solutions, and serving as a resource hub.
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