Is digitalisation accelerating structural change in the Swiss legal market?

Swiss government services, and in particular the digital exchange of legally binding documents, are significantly hindered by the glacial progress in the acceptance of digital signatures and electronic court submissions in Switzerland. Our country’s public sector with its three layers of government and federal tradition is at least a decade behind most EU, Anglo-Saxon and ‘Asian Tiger’ economic frameworks when it comes to the digitalisation of services in legal transactions. This includes notary services, court systems, government forms and workflows for the submission of business relevant information at county, cantonal and federal level, and much more. Most of these transactions still occur on paper, are ‘signed and sealed’ by hand and exchanged by snail mail (not email!). At best, they are pseudo-digitised, i.e. scanned as a PDF from paper documents, or the efforts are doubled by entering them in parallel into electronic systems to support the paper flow.

At the same time, law firms hold back on the use of cloud-based technologies because of the uncertainty of whether and what information can be manipulated and stored in the cloud without compromising the attorney-client privilege. This is a significant threshold issue at a time when many important technologies are no longer available as internally hosted solutions but only through the cloud. Law firms are ambivalent about this. Some firms secretly hope this will protect them from foreign or multi-disciplinary competition. Other, in the main larger firms think they can out-spend medium and smaller law firms by purchasing ever more expensive internally deployed systems. However, neither strategy seems safe in a world where the public is pressuring government to liberalise the rules on cloud and professional privilege.

In-house legal teams are unaffected by the privilege considerations holding back law firms, at least to the extent they cannot claim such privilege. They are quite prepared to avail themselves of the innovative digital services and technologies available in the cloud. The in-house legal teams’ access to cloud based digitalisation and a continuing unrelenting desire to lower legal costs will further erode the work available to law firms. The erosion of law firm work is off to a slow start but, unless law firms are allowed to embrace the cloud, will accelerate. The cost advantage and innovation lead of in-house legal teams will accelerate as they adopt ever more cost effective cloud based technologies like e-billing, document automation and transaction collaboration platforms.

In the longer term, the customer is mostly right and especially in Switzerland business usually wins. This will be true both for business customers and for consumer based legal service customers. I am very optimistic that the obstacles to digitalisation in the Swiss legal market, namely the decade-old lag in updating critical e-signature/e-identity and e-commerce regulation and infrastructure will be overcome. This will greatly improve the value the customers of legal services will obtain.

Photo by Loic Djim on Unsplash