Digital transformation in Legal. Where we stand today.

The legal industry is undergoing a major shift as digital tools reshape how legal services are delivered. While adoption varies, mid-sized law firms and in-house legal teams increasingly recognise the need to modernise to stay competitive and meet evolving client expectations.

The current state of digital transformation

Across the UK, law firms and corporate legal teams face mounting pressure to adopt digital solutions. For mid-sized firms (typically 20 to 500 employees), technology can significantly reduce administrative burdens, freeing up solicitors’ time and improving client service. Many firms have introduced online client portals, digital case tracking and other client-facing tools to enhance convenience.

However, adoption is still lagging. A recent survey found that only 38% of mid-sized firms offer client portals and just 31% support online document collaboration. This suggests that many firms are missing out on opportunities to improve client experience and efficiency.

In-house legal departments, traditionally slower to embrace new technologies, are now catching up. A 2022 survey by the Association of Corporate Counsel (ACC) found that 59% of companies are bringing more legal work in-house as a cost-saving strategy. Yet, only 12% are leveraging AI or automation to manage these increased workloads.

However, a shift in mindset is underway. 85% of in-house legal leaders now believe legal professionals must understand technology’s impact on their work. In fact, 47% of corporate counsel identified tech adoption as the most critical non-legal skill for future lawyers.

Key Takeaways

• Law firms prioritise efficiency, with 74% actively seeking new technologies to streamline operations.
• In-house teams face growing workloads and see legal tech as the key to keeping up.
• The challenge now is how to implement these technologies securely, efficiently, and in a way that delivers real value.

For firms looking to develop a digital strategy, booking a free information management strategy session can provide tailored guidance.

The role of Microsoft 365 in Legal workflows

Legal work revolves around documents, communication, and compliance making Microsoft 365 (M365) a natural fit. Many law firms and corporate legal teams already use Outlook, Word, and Excel daily. But by integrating SharePoint, Teams and Power Automate, firms can streamline workflows without requiring solicitors to learn entirely new systems.

Secure Document Management

SharePoint Online and Teams have become key platforms for legal document management. Firms can create matter-specific Teams sites, allowing solicitors, clients and external counsel to collaborate securely in real time. Co-authoring in Word eliminates version control issues, while SharePoint’s granular access controls and encryption ensure sensitive legal documents remain protected.

For firms concerned about compliance risks, Microsoft’s Purview Compliance Suite provides legal holds, audit trails and data loss prevention helping firms meet GDPR and SRA data security requirements.

Automating routine Legal tasks

Law firms and in-house teams are turning to Power Automate and Power Apps to eliminate repetitive, manual processes.

For example, Adidas’ legal team developed an automated gift registry using Microsoft Forms and Power Automate. The system processes dozens of gift approval requests daily, notifying compliance officers automatically and reducing admin workload.

Legal departments are also creating self-service tools that allow employees to generate tailored NDAs or find relevant policies without emailing the legal team. By integrating these tools into SharePoint, firms can reduce turnaround times and minimise interruptions for fee earners.

AI-Powered automation in Legal

AI is increasingly used to speed up contract review, legal research and e-discovery. While AI won’t replace lawyers, it enables them to focus on higher-value work.

Contract Review and Analysis

AI tools like Kira and Luminance analyse contracts, identifying key clauses and flagging risky provisions. This speeds up due diligence and reduces human error. Generative AI can also draft contract templates based on predefined standards, cutting drafting time dramatically.

Legal Research and Knowledge Management

Firms like Allen & Overy and Ashurst are piloting AI tools like Harvey and CoCounsel, which use natural language processing to answer legal queries and summarise case law. AI can also support internal knowledge management, making it easier to locate past work and subject matter expertise.

E-Discovery and Document Review

E-discovery was one of the first areas to adopt AI, with machine learning now used to categorise documents, predict relevance, and streamline privilege reviews. Microsoft’s built-in eDiscovery tools within Purview enable legal teams to apply legal holds directly within SharePoint and Exchange, reducing reliance on costly third-party solutions.

Compliance and data security in Legal tech

With regulatory scrutiny increasing, firms must balance digital transformation with security and compliance. Microsoft 365 offers:

• Data encryption to protect sensitive client information
• Conditional access controls to prevent unauthorised access
• GDPR-aligned data retention and archiving policies

For law firms looking to improve compliance while modernising operations, our Information Management as a Service offering provides tailored solutions for secure data management, automation, and AI integration.

Final thoughts

Digital transformation is no longer a future consideration for legal teams—it’s a present necessity. Mid-sized law firms and in-house legal teams that embrace technology will enhance efficiency, improve client service, and maintain a competitive edge.

However, firms must take a strategic approach, ensuring that digital tools align with security, compliance, and business needs. If your firm is looking to improve document management, automation, or compliance, consider booking a free strategy session to explore your options.