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Exchange • Summer 2013 > Thought Leadership > Vertical Impact: Industries Driving Change within the Legal Sector

Vertical Impact: Industries Driving Change within the Legal Sector

By Cary Burch, President, Thomson Reuters Elite

Cary Burch

Anyone working in or around the legal market in any corner of the globe will be well aware that this is an industry constantly being challenged by forces beyond its control. Whether it is a decision to adopt fixed fees, to seek investment from sources outside of the legal industry or to increase size and geographic spread, there are no shortage of huge issues being tackled within the industry. Yet the legal sector must also face up to the challenges brought about by changes in other industries, or verticals, which have a direct impact on this ever-changing profession.

A vertical market can be simply defined as a particular industry or group of enterprises in which similar products or services are developed and marketed using similar methods. For the legal market, the challenges faced by their clients, particularly in sectors like financial services or technology, are having a significant knock-on impact that many firms may be unprepared for.

Data Security

The security of confidential client information has, and always will, remain a primary concern for all industry sectors, given the devastating consequences that can result from a data breach or loss.

While the legal industry has historically been a late adopter of devices like tablets, their growth in popularity in other sectors and the expectation that relevant data should be readily available and accessible to clients has led to an increase in the volume of information shared electronically by law firms. This not only leaves firms at a greater risk of data theft and loss, but in addition, the blurring of the lines between the use of devices in everyday life and business create added challenges of sensitive client data or information being transported off site, and potentially around the globe.

The challenge here for law firms is to learn to work with this change, rather than against it. It is not that law firms should continue to use tablets and store data electronically—particularly within the cloud—it is that they must if they want to harness and retain Generation Y workers, for whom the need to live in a technologically blended world is paramount.

Law firms must look to the strides that have been made to allay fears of data security in other sectors and industries.The key is learning to work with this shift and manage the risks, as many firms are already doing to great effect. It has therefore never been more important to ensure that technological innovations are matched by robust security measures.

Regulatory Hurdles

The advent of increased regulation in sectors like financial services is also having a marked effect on the way that law firms go about their business. More and more often, these kinds of requirements are being pushed on to clients, and in turn the law firms, the result being an overwhelming need for transparency and conformity throughout the engagement between client and adviser.

Compliance and regulation are no longer an aspect of law firm life that can be handled by only one person, and so the growth of technology and solutions fulfil an extremely critical and necessary role. Part of the challenge as a software provider in today's legal industry is the need to be ahead of the curve and build out the compliance solutions that allow the client to get to grips with regulatory changes.

However, it is not only the provider's input and expertise that are crucial, but the implementation from the customer side also plays a key part in the effectiveness. Realistically, a provider could build the best solution on the market, but at the end of the day you are still handing it to the customer to interact with and serve their client base.

With any systems containing sensitive data, there is always an element of risk once a business empowers its employees to use such a system, as they could choose to use the data for their own means. Law firms can try to guard against this through training and regular reminders of this importance of data privacy/sensitivity, but should be on their guard to identify and quickly shut down any possible misuse of the system.


It is no secret that the impact of challenges faced by law firm verticals—such as technology and financial services, to name just two—can also be keenly felt by the legal sector. However, in particular areas like security and compliance there are clear and precise steps that law firms can take to mitigate the impact, such as working closely with their legal technology provider to build a solution that meets the needs of both the firm and its clients.

Whatever the future throws at the legal sector and those verticals that directly impact it, it is worth remembering that there are very few challenges that can't be overcome by actively managing risks and listening to your client's needs.

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