The digital data vision

How technology innovation is supporting regulatory compliance and reducing risk for you and your clients - Chris Handford, SRA Director of Regulatory Policy

Hello Cambridge Law Society. It’s nice to get the chance to be the one that writes for you. I’m going to use this opportunity to talk about some of the innovations that the greater use of technology is bringing to the profession.

Even before the pandemic accelerated digital transformation across legal services, our Standards and Regulations, introduced in 2019, provided you and your firms with greater clarity, agility, and flexibility. This helped some of you to quickly switch to technology-enabled remote and online working and continue providing legal services throughout the pandemic.

Post-pandemic, many of you have permanently adopted a hybrid model, combining online and in-person customer interaction. In addition to video conferencing and electronic signatures, there are online services and apps for standard processes like customer onboarding, whereby the client submits an online form with their personal details and the nature of their case. These are increasingly linked to triage systems which automatically direct client inquiries to the department or lawyer with the appropriate specialism.

Automation supports compliance

As well as making it easier and quicker for customers to instruct a lawyer, online and automated services support regulatory compliance. Now clients can use an app to upload a photo of their passport or driving licence and take a selfie to verify their identity. Practice management systems link directly into public services such as the Land Registry to check property deeds. This instantly reduces the potential for fraud – and removes the risk to important documents.

Empowering customers

We are exploring how technology and innovation can empower consumers and increase access to justice. For example, we examined the possibilities for unbundled legal services, whereby lawyers and customers divide the legal tasks between them. Unbundling, powered by collaboration platforms that share information gives consumers more control over their cases and reduces costs, extending access to legal services. Our unbundling pilot found no significant difference in consumer satisfaction when services were unbundled: indeed, unbundling helps firms attract more clients.

Customer-facing apps are making legal services easier to access and more straightforward, giving customers more control over their data, and enabling them to check progress on their case 24/7 from multiple devices. There is more choice around customer interaction – websites, apps, chatbots, online consultations via Zoom or Teams, and messaging platforms – in addition to the traditional telephone and in-person meetings.

However it is important to allow people to choose how they interact with you. While some are more comfortable taking the time to fill in an online form, others prefer an initial meeting for information gathering – either in person or online. This will depend on the individual, and the type of advice they are looking for – whether it is a business or property transaction, or a sensitive personal or family matter.

The digital data vision

Digital transformation enables you to capture and access the data you handle. Systems, tools and apps automatically gather and leverage data which can be used to achieve efficiencies and cost savings. When a client submits an online form, the data is replicated across the firm’s operation and finance systems removing the need for additional data entry. The details can be seamlessly checked and verified. Automation saves human effort, reduces staff costs and removes the risk of human error. Therefore tech integration isn’t just for the customer – it also helps you maintain your margins, as you can decide how much of the savings gained from tech and automation to pass on to your clients, and how much to reinvest into more innovative services.

Digital transformation introduces realtime, comprehensive audit trails as the data captured is not just the data that is consciously shared to the system, but underlying metadata like the time it takes to progress each case. Systems record every customer interaction, from emails through to voice messages and video consultations. That data can be used to monitor and improve processes and ensure consistency throughout and across cases. It can also be used to protect the firm against complaints and disputes.

Tech and automation remove potential misunderstandings. And reduced risk has a direct effect on professional indemnity insurance (PII) premiums. One firm found that customers inputting their own details rather than a lawyer or paralegal taking meeting notes led to lower PII premiums because this unbundling mitigates the risk of customer disputes/claims due to inaccuracy or misunderstandings. Another firm developed an automated claims management system which lowered the cost of processing motor claims enabling it to remain competitive while maintaining its margins.

Digital transformation is a win-win for all stakeholders. Tech and automation benefit operations and profit margins, and support customers by providing a better, clearer, more verifiable, audited service. SRA Innovate supports and promotes transformational ideas, products and services that deliver these improvements through initiatives like the Regulators’ Pioneer Fund and LawTech UK’s Regulatory Response Unit.

But as law is a social framework, we need to empower all consumers, not just people who are competent and comfortable with using online services. So we also need to focus on exception handling – the human in the loop who is there to support people who need legal advice but are unable or uncomfortable with a wholly digital interaction.