The new research has suggested that medium-sized UK law firms could collectively save £336 million per year by digitizing slow and expensive paperwork which could also result in cutting carbon emissions.
Each law firm would save approximately £400,000 annually by reduced printing costs, completing administrative tasks quicker and minimising storage costs for paper documents, according to research by Liverpool John Moores University (LJMU) and E-Sign, which makes electronic signature technology.
The estimated savings assumes that a medium-sized law firm (defined as having 2-250 employees[2]) will handle 18,000 legal documents each year.
Researchers at LJMU calculated efficiency savings from digitisation, including the costs of printing, delivering and returning agreements, storage and administrative time.
Financial considerations were also given to cost increases in materials supply chain shortages, caused by the COVID-19 pandemic and the war in Ukraine.
The study calculated annual savings of £416,892:
● Printing Colour Pages £210,000
● Printing B&W Pages £84,000
● Paper Colour £15,428
● Paper B&W £15,092
● Postage £73,800
● Administration £18,572
● Storage £107,583
Environmental benefits
The shift to digitisation would also help the environment. Posting and delivering fewer documents to clients would reduce carbon emissions from transport – saving 805.895 kilos of CO2e for each firm annually.
The research was carried out by the Eco-I North-West project based at LJMU.
Eco-I North West Project Manager John Mathias said: “Businesses large and small across every industry have a part to play in reducing carbon emissions and fighting climate change.
“Becoming a greener, more environmentally sustainable business also brings other benefits such as reduced costs and increased efficiencies.
“Working with E Sign has shown how digitisation can have a positive impact on carbon emissions and costs. We would encourage all businesses to start their own low carbon journey.”
Thomas Taylor, Managing Director of E-Sign, says:
“This study shows the tangible financial and environmental benefits of implementing digitisation in the legal sector. With the UK economy expected to go into recession, smaller firms will need to make every possible saving. Electronic signatures can save a significant amount of money, improve client service and help the environment.”
Faster turnaround
Researchers also estimated that digitisation would improve client service by enabling important client documents to be signed in a couple of days, compared to a couple of weeks if they are sent by post and delayed or returned without a signature.
A faster turnaround of administrative tasks could also increase law firms’ revenue by enabling them to handle more client work, while reducing administrative costs and increasing profit margins.
The 2021 Thompson Reuters UK Small and Medium-Sized Law Firm Market Report[3] highlighted concerns around technology in the legal sector, noting that just 44% of firms have invested in automation to improve processes and productivity.
Furthermore, while use of technology to automate and collaborate has increased in the legal sector, the rate of adoption among small and medium sized businesses was described as ‘relatively slow’. Barriers cited included lack of clarity on the benefits, lack of confidence around implementation and change management approaches.
Thomas Taylor, Managing Director at E-sign said: “We know the medium sized legal sector faces huge challenges in the adoption of technology that can improve processes and efficiency. Through this research we’ve been able to demonstrate that change can be met with wider efficiency and sustainability benefits.”
“There’s no doubt that managing technology change in a legal firm can be a daunting task, however, we pride ourselves on building strong relationships with our clients, backed by our secure thinking, expertise and a personalised approach to managing the digitisation process. Firms can feel confident in making choices that will have a huge impact on day-to-day for all staff, clients and stakeholders.”
For more information on implementing digitisation for agreements in the legal sector, visit https://www.e-sign.co.uk
