Law firms’ investment in new technology has slowed in the past five years, despite the pandemic accelerating different ways of working.

Research commissioned by the Legal Services Board found that just 21% of firms in England and Wales had developed new or improved digital services in the past three years, compared with 28% who said they had done this the last time the profession was surveyed in 2018.

Investment in new or improved services has fallen by 6% from 2018.

Just a third of firms offer online services and half do not regularly use social media. Currently, 15% use digital comparison tools and a further 13% plan to use them.

The results appear to show that a section of the legal profession is embracing new technology but there is considerable work to do bring the remainder along.

Barristers’ chambers, other regulated firms and alternative business structure firms were all more likely to invest in new or improved services than so-called traditional practices.

Six in 10 firms agreed that their clients expect them to use technology to deliver legal services but less than half (49%) said that technology can save money. In 2018, 70% of firms had reported that technology made it cheaper to deliver legal services.

The report said: ‘Taken as a whole, these results indicate a step change rather than revolution in the use of innovation and technology to develop and deliver legal services. The pandemic and its associated restrictions has been a major, though not the only, driver. While the level of service development has decreased slightly from 2018, it is still reported by a sizeable proportion of firms.’

The research involved interviews with 1,310 legal services providers, including 736 firms and 109 chambers, of varying sizes from sole practitioners to businesses with more than 50 people.

Most use video conferencing, with take-up lower for technology such as electronic signatures, ID checking tools, live chat or virtual assistants, and custom-built apps.

Risk associated with unproven technology was the biggest factor holding firms back from introducing new ideas, as well as a lack of IT expertise.

The use of more advanced technologies such as computer-assisted review, predictive technology, robotic process automation, and blockchain or distributed ledger technology is low, at between 2% and 5%. However, 12% to 15% of law firms expect to use them in the next three years.

Half of firms engage with external organisations as a source of ideas, as well as technology providers. Around a quarter conduct in-house research on new or existing service development. Only around one in 10 firms recruit innovation specialists, although a third engage with staff in other organisations or competitors, showing the scope for increased collaboration in the legal sector.

Alan Kershaw, chair of the LSB, said: ‘The Covid-19 pandemic has speeded up the adoption of technology, and we must build on that momentum to foster a culture of innovation that designs services around the needs of consumers.’