Legal tech is a panacea for productivity, an escalator to efficiency, they say.

But here’s an unpopular opinion: legal tech doesn’t always make legal practice more efficient.

Let me explain.

Lessons from a previous tech boom

Economist Stephen Roach found that from 1980 to 1989, tech investment in the service sector grew by over 116% per worker — an astonishing amount.

This is not unlike the spike in tech investment we’re currently seeing across the service sector in response to the pandemic.

But during the 1980s tech-investment-boom, Roach found that worker output in the service sector increased less than 2.2%. Another study from the US Federal Reserve found that the contribution of computers to real growth in business output between 1987 and 1993 was no more than 0.2%.

On these stats alone, buying new tech to improve your productivity would be a pretty bad investment in the 80’s and 90's.

Why did this happen?

More stuff vs better stuff

One explanation might be that digitisation often creates more work. Our computers are complicated, change every few years, and often require fixing or assistance from IT teams.

Another reason, more pertinent and perilous for the legal profession, is that technology often makes tasks just easy enough for us to do ourselves.

In the process of ‘empowering’ professionals to ‘do more for less’ with technology, we can end up with a scary situation: highly-paid, highly skilled workers performing ‘easy’ administrative tasks that aren’t very valuable.

For example, in 80’s and 90’s, one study by economist Peter G. Sassone of departments in major US corporations found that new office technologies lead to a reduction in headcount across support staff who previously performed the functions of computers (such as typists and secretaries).

With fewer support options available, highly specialised professionals spent more time on administrative work. In other words, they became generalists.

But as Sassone’s 1992 paper found, generalists don’t produce the same amount of valuable outut as specialisists. In fact, Sassone argues that as specialists perform more administrative tasks, organisations need to hire more specialists to produce the same amount of output.

Sassone crunched the numbers and argued that organisations he studied could immediately reduce their staffing costs by 15% by hiring more support staff and allowing the specialists to do what they do best. The irony!

Back to lawyers and legal tech

Lawyers, in particular those in corporate legal departments, are under immense pressure to improve efficiency in 2022.

Many are trying to address the burden of administrative overload, to fight back against the rising tide of low value work lumped on lawyers in busy organisations, by buying legal technology.

But as the examples above show, technology alone can actually decrease productivity. Many popular legal technologies, from knowledge management systems to matter management applications, come with their own administrative burden.

And as lawyers spend more time dealing with the adjacent activities associated with new technology, they have less time to produce the kind of highly-valuable work that their organisation needs.

To be clear, it’s not necessarily the case that technology will create more problems than it solves. A new paper from Michele DeStefano and co suggests that implementing proper change management principles before buying legal technology can alleviate some of the issues associated described above.

But it is clear to me that legal technology is no panacea for productivity, and that we should be careful not to turn highly specialised lawyers into generalists — no matter how ‘enabled’ their efficiencies may be.