The conveyancing sector has been undergoing a digital transformation in recent years, accelerated by the pandemic and championed by HM Land Registry and the heat is on to find digital solutions that will help to streamline processes, improve customer satisfaction, reduce error, minimise risk and complete matters quicker. Time is money and so the return on investment needs to be significant to outweigh the perceived challenges associated with any system change.
We had a look at some of the trends that are at the forefront of legal technology and why we think they will be adopted by law firms in 2024.
- Artificial Intelligence (AI) and Machine Learning (ML)
From drafting contracts to answering legal questions and summarising legal issues, AI is revolutionising the legal profession and although viewed with a sceptical eye by some law firms, is generally perceived to be capable of bringing huge benefits. Ben Allgrove, Chief Innovation Officer of international law firm Baker McKenzie believes that the vast majority of AI usage in his firm will derive from their existing software providers like Lexis Nexis or Microsoft 365. Commenting for the BBC recently Mr. Allgrove said “We already use LexisNexis and Microsoft, and they will increasingly get capabilities driven by generative AI. And we will buy those things if they make sense and are at the right price.”
According to Experian’s 2023 UK Identity and Fraud Report “more than a third of organisations are looking to build ML capabilities into their fraud identification and prevention strategies. ML is far superior to rules-based fraud models as the technology identifies both known and unknown trends in large datasets. When a new fraud trend or type emerges, the ML model is able to identify it and flag it to the security team immediately for further investigation.”
- Cybersecurity and Data Privacy Tools
As more and more accountability for Know Your Client (KYC) and Anti-Money Laundering (AML) screening is given to firms undertaking those checks and as Data Protection responsibilities become more onerous, they run the risk of hefty fines for non-compliance. To date in 2023, the Financial Conduct Authority has imposed penalties of £52,802,900 and the ICO issued 66 reprimands, 54 monetary penalties, 41 enforcement notices and made 4 prosecutions.
Using technology to carry out tasks quickly, accurately and above all securely will help to manage processes efficiently and provide the traceability needed for audit purposes. It is therefore inevitable that firms will be looking to enhance their existing systems to ensure compliance with regulations and reduce risk for their stakeholders, staff, customers and suppliers alike.
- Cloud-Based Collaboration and Document Management
The first step towards digital transformation can be migration to cloud-based document management systems. Colleagues can share and work on documents without the need to exchange them by email and files can be configured for protection according to the level of security required through the implementation of access controls.
Cheryl Wilson Griffin, CEO at Legal Tech Consultants believes that migration to cloud will become more widespread. She is quoted in Legal Tech Trends 2024 as saying “Our industry has been desperately holding on to two primary excuses for prohibiting cloud-based technologies: 1) client mandates, most commonly arising from financial institutions, and 2) security. Now that most of the large financial institutions have integrated cloud into their strategic business objectives, even the most conservative law firms are easing their bans on using cloud-based solutions when they’re the right fit.”
- Data Analytics
According to Investopedia “data analytics is the science of analysing raw data to make conclusions about that information. Data analytics help a business optimise its performance, perform more efficiently, maximise profit, or make more strategically-guided decisions.”
Many businesses will have an established process, even manual, for analysing data for quality management purposes at a minimum, so it is inevitable that they will broaden their requirements for richer, more in depth information and increasingly use technology and algorithms in particular for that purpose.
- ID Verification Software
With identity fraud on the increase there is a growing demand from the Government for people to be identified with accuracy and they are proposing to pass legislation in February 2024 that will tighten the requirements for the professional organisations involved. They will promote the use of technology to reduce the risk of fraudulent transactions including mortgage fraud where according to Experian’s Report “the greatest jump in fraud cases has been seen …. with fraud increasing from around 41 cases to around 52 cases per 10,000 applications.”
Legal firms will be looking at ways to incorporate these new requirements into their processes cost-effectively and compliantly. The use of Near Field Communications (NFC) technology to read the chip in an ePassport as a stand-alone ID check or used to verify who has signed a document or deed with 100% accuracy is now available and approved by HMLR for deed execution and DWP for Right to Work checks.
VirtualSignature-ID has been developing technology for the legal, accountancy and property sectors since 2014 and is ahead of the game with ground breaking applications such as its innovative virtual witnessing solution which removes the need for a physical witness provided certain procedures, as laid down by HMLR in Practice Guides 81 and 82 , are met. Contact us if you require further information.