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What are the risks of using Technology for companies to solve Legal problems?

A team of lawyers discussing the risks of using Technology for companies

Despite substantial advances in legal technology, automation has not been successful in taking over the legal sector. According to recent data from the American Bar Association, just 10% of legal firms have completely adopted technology, implying that most companies continue to rely on old techniques. 

Nevertheless, according to a 2019 Wolters Kluwer report, just 55% of legal professionals are confident in using technology successfully. These data show a hesitation among legal practitioners to embrace technological change, which might be attributed to various issues, including expense, a lack of competence, and ethical concerns.

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Several more estimations are based on lawyers’ reluctance to use legal technology. These issues include a lack of technical knowledge, skills, and understanding, security and effectiveness concerns, and resistance to change due to conventional practices. According to the 2020 ABA Legal Technology Survey Report, many companies lack infrastructure and knowledge, with the majority lacking a defined legal technology plan or dedicated technology employees. 

According to a 2019, a poll conducted by the Legal Executive Institute, legal professionals are also concerned about data privacy and cybersecurity threats, with 68% ranking data privacy as a major issue and 61% concerned about cybersecurity risks. In this article, we’ll explore the potential risks of using technology for companies to solve legal problems and what steps they can take to mitigate them.

Types of technology used by companies to solve legal problems

Today, we’ll look at the different sorts of technology that businesses utilize to tackle legal issues.

Electronic Discovery (eDiscovery)

Electronic discovery is one of the most popular sorts of technology businesses use to address legal challenges (eDiscovery). The process of identifying, collecting, and producing electronic documents and other types of electronically stored information (ESI) in response to a legal request or inquiry is called “eDiscovery.” Algorithms and machine learning are used in e-discovery systems to evaluate enormous amounts of data, categorize documents, and discover pertinent information.

LPM (Legal Practice Management) Software

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Another technology businesses use to tackle legal difficulties is legal practice management (LPM) software. LPM software is intended to assist law firms and legal departments in managing their cases, clients, and budgets more efficiently. Time tracking, billing, document management, and case management are all included in LPM software. LPM software can help legal professionals operate more efficiently and effectively by automating common processes and optimizing workflows.

Contract Management Software

Contract management software is a technology that assists businesses in more efficiently managing their contracts. Contract management software offers tools for creating, tracking, and monitoring contracts, as well as automatic notifications and reminders. Companies may decrease the risk of mistakes and guarantee that their contracts are up-to-date and legally compliant by automating the contract management process.

Artificial Intelligence (AI)

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AI may evaluate enormous amounts of legal data, spot patterns, and trends, forecast legal outcomes, and automate basic processes like document inspection and contract analysis, allowing legal experts to focus on more complicated issues.

Blockchain Technology

Blockchain technology is a distributed ledger technology that businesses utilize to solve legal challenges of security and trust. Blockchain technology creates a secure and transparent record of transactions that cannot be modified or manipulated. Blockchain technology may be used in the legal context to offer a safe record of legal transactions such as contracts, patents, and trademarks. This can help reduce the risk of fraud while also ensuring the security and transparency of legitimate transactions.

Risks of using Technology for companies to solve Legal problems

While technology might assist in speeding up the legal process by automating mundane procedures, it is crucial to remember that it is not a replacement for human judgment. Moreover, relying only on technology to handle legal problems can be dangerous since it may fail to account for a specific case’s subtleties or the law’s complexity.

Furthermore, technology can only operate with the data provided to it. Therefore, if the data is inadequate, wrong, or biased, the technology will deliver faulty results. This might have major ramifications in the legal arena, such as losing a lawsuit, suffering legal fines, or harming a company’s reputation. Let us discuss some of the major risks associated with using technology by businesses to resolve legal issues.

Data confidentiality and security

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Data privacy and security are two of the most serious dangers associated with employing technology for legal solutions. Businesses frequently deal with sensitive information, and if that information falls into the wrong hands, the implications may be severe. For example, a breach of client confidentiality might result in reputational harm, regulatory fines, and legal action.

Companies must ensure their technology solutions have adequate data privacy and security protections to prevent this risk. This includes safeguards like encryption, access limits, and frequent audits to ensure that data is adequately safeguarded. As an example, adobe experienced a data breach of over 38 million accounts posted on the dark web that exposed adobe user IDs and passwords, full names, Credit/debit card information, and Product source codes (Acrobat, ColdFusion, ColdFusion Builder), this incident being one of the most significant data breaches in recent years.

Automation is not always the answer

The arena of how various case laws, legislation, and agreements are being added to the legal sector demands creativity, spontaneity, and intuition to handle complex legal work, and hence, in these cases, we cannot rely on automation. Businesses are involved in a lot of transactions of material, money, and services daily, which follow a standardized process and help in clarifying the structure, providing reliable information easily, however, it cannot be trusted in cases of disputes if it shows there’s a complete fault of one party while this issue has been due to sudden law changes, taxes, sanctions, etc. 

Too many options to choose from

There’s an abundance of technology and software providing different services, however, many lack industry standards. Being an industry that is still in its transition phase, not many tools can provide services to big corporations. This, again, provides either limited or wrong solutions to the companies. 

Possibility of Ethical Issues

While employing technology to address legal challenges, ethical considerations are possible. Legal work frequently entails complicated ethical considerations, and any technology utilized in this setting must adhere to ethical rules and standards. This is especially troublesome when technology automates legal tasks requiring human judgment or discretion.

Compliance with the law

Compliance with legal and regulatory regulations is another risk linked to employing technology for legal solutions. Businesses must ensure their technological solutions comply with applicable laws and regulations, including data protection legislation and electronic discovery standards. Failing to meet these standards may result in legal penalties, fines, and other consequences. One popular instance is using the cloud for technology solutions. The impact of GDPR on customer data security in non-EU companies or the use of private clouds, which are difficult to set up and still leave room for data theft.

Choosing from different IT solutions

Utilizing IT solutions assists lawyers in understanding the advantages of legal technology and socializing its employment in the legal industry. It is based on many factors, such as future goals and development, the accuracy of the legal technology, data security, the owner of future intellectual property, and the deployment of technology with our existing systems. But this is problematic, as these numerous IT solutions are not governed and regulated by state and federal laws. Some also violate their ethical obligations toward their clients.


Finally, technological solutions have the potential to dramatically enhance legal procedures and give several benefits to both businesses and individuals. These technologies can enhance accuracy and efficiency while streamlining legal operations and lowering expenses.

While there are risks to employing technology for legal solutions, it is crucial to highlight that these risks may be addressed by effective monitoring, training, and security precautions. Businesses may cooperate with skilled legal professionals to ensure technology is used responsibly and effectively.

Moreover, technological breakthroughs like artificial intelligence, blockchain, and cloud computing are being used in the legal industry to provide further benefits. These tools are changing the way legal practitioners work, allowing them to serve customers with faster and more accurate legal services.

As a result, the advantages of technological solutions in the legal profession are substantial. Businesses that invest in these solutions and take the required precautions to avoid related risks may expect to enjoy the benefits of increased efficiency, cost savings, and better legal results for their clients.

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