Over 100,000 jobs in the legal sector have a high chance of being automated in the next twenty years, according to extensive new analysis by Deloitte.

The Deloitte Insight report, which predicts “profound reforms” across the legal profession within the next 10 years, finds that 39% of jobs (114,000) in the legal sector stand to be automated in the longer term as the profession feels the impact of more “radical changes.”

Spurred on by the quickening pace of technology, shifts in workforce demographics and the need to offer clients more value for money, this transformation will mean that by 2020, law firms will face a ‘tipping point’ and the need for a new talent strategy, with the report finding that “businesses must prepare effectively now so they are not left behind by the end of the decade.”

Automation, changing client demands and the rise of millennials in the workplace will significantly alter the nature of talent required by law firms in the future, according to the report: ‘Developing legal talent. Stepping into the future law firm.’

In terms of the former, to date automation has meant the loss of some, lower-skilled jobs such as legal secretaries. However, new, high-skilled roles have been created to develop and manage new technologies. The report estimates that technology has already contributed to the loss of more than 31,000 jobs in the sector but that there has been an overall increase of approximately 80,000, most of which are higher skilled and better paid.

Automation opportunities have grown in the legal sector and robotic process automation has been maturing slowly over the last decade. However, the report finds that there is more the legal sector can do to automate other routine processes using robotics, algorithms and artificial intelligence. “Some firms are already making use of virtual assistants to help clients and support in-house functions. Further technological advances over the next decade mean that future skill requirements will change,” the report says.

It adds: “The use of data and technology is growing in the legal sector and there is scope for greater application in future. For instance, some law firms are making use of the large volumes of contract information and data they have to create value for their business using advanced analytics. There is significant potential for high-skilled roles that involve repetitive processes to be automated by smart and self-learning algorithms. In the short term, there will be a need to support and manage this transition.”

To prepare for the talent tipping point in 2020, law firms must make radical changes to the way they attract, develop and retain new talent, including assessing the profile of future Millennial employees and working out how to nurture loyalty and demonstrate social values and aspirations. “It will be important to demonstrate strategic value to differentiate firms from their competition through efficiency expertise and service quality,” the report finds.

It adds: “Law firms will need to have a clear strategy for dealing with changes in client demands, technological innovations, the regulatory landscape and policy developments if they want to remain competitive and ensure they attract the best talent.”

Firms’ options in terms of their wider strategy include considering whether to maintain the status quo; making adjustments (which requires them to consider whether employees have the right skills and whether there is a need for investment in technology); radical transformation (for which an organisation must have the right culture and leadership buy-in); or refining and refocusing their offering (involving a scaling back of existing services and products.)

The report, which envisages scope for a greater use of contract lawyers as firms look to flex their talent requirements, finds that there will be fewer traditional lawyers in law firms as non-lawyer roles grow alongside greater use of technology and alternative career options.

“We believe that the most successful law firms will be those agile enough to flex resources in order to meet client needs at an efficient price.”

Peter Saunders, lead partner for professional practices at Deloitte, said: “Advances in technology mean that an ever greater number of traditional, routine tasks within the legal sector can be automated by smart and self-learning algorithms. Some firms are already making use of virtual assistants or e-discovery tools. However, there is more that the legal sector can do to use automation and technologies.

“Further technological advances over the next decade mean that future skill requirements across all roles will change. Our report shows that firms have already identified a mismatch between the skills that are being developed through education and those currently required in the workplace. Employers will need to look for lawyers who are not just technically competent, but who have a broader skill set.”