As law firms increasingly adopt technologies like data analytics, artificial intelligence (AI) and blockchain, integrating environmental, social, and governance (ESG) practices has become equally important. This was the key insight shared by legal professionals at a recent arbitration roundtable dinner in Hong Kong, facilitated by Conventus with participation from Opus 2. Held under Chatham House Rules, the gathering offered a candid look at the ESG pressures shaping today’s legal industry and the role of technology in responding to these challenges.
Insights from the arbitration round table hosted in Hong Kong
The discussion highlighted how law firms are expected to leverage technology to meet evolving ESG standards. One example discussed was an AI-enabled solution that identifies compliance-related training needs, streamlining ESG practices for clients. The efficiency AI offers in these tasks underscores its value: processes that might take days to complete manually can now be managed in moments. These advancements, however, come with a learning curve, making it essential for firms to balance adoption with quality control.
For firms looking to adapt quickly to ESG demands, technologies that enable paperless workflows and virtual collaboration can be highly advantageous. Platforms that reduce paper dependency and support remote participation, such as those offered by Opus 2, allow legal teams to operate efficiently across jurisdictions while advancing sustainability efforts.
Meeting client expectations in ESG compliance
Clients increasingly expect transparency around ESG, from environment impact to diversity, equity, and inclusion (DEI) practices. At the roundtable, participants shared examples of clients seeking detailed ESG policies and actions. In one request for proposal (RFP), a firm was asked to disclose not only aggregate ESG metrics but also individual lawyer contributions, signalling a push for more personal accountability in law firm ESG initiatives.
For smaller, regional firms, meeting these demands can be challenging. While larger firms may have dedicated ESG teams, smaller firms often rely on tools that streamline compliance and increase operational efficiency. Technologies that enable virtual hearings and document management without extensive paper use provide a practical solution, helping firms reduce their environment impact in ways clients are increasingly expecting.
Regional differences in ESG adoption
The roundtable also touched on regional differences in ESG priorities. Western firms often focus on compliance and hire specialised roles to oversee these initiatives, while firms in parts of Asia are still adjusting to the pace of these changes. In China, for instance, ESG discussions predominately focus on environmental issues like emissions, with social and governance concerns receiving less attention.
In Hong Kong, regulatory frameworks are evolving to bridge these gaps. The Hong Kong International Arbitration Centre (HKIAC) has introduced new rules that address adverse environment impact, providing arbitrators additional factors to consider when determining costs, which notably involve consideration of any adverse environmental impacts arising out of the parties’ conduct in the arbitration.
ESG’s growing influence on dispute resolution
As ESG awareness grows globally, the number of ESG-related disputes is expected to rise, from climate impact cases to corporate social responsibility issues. The roundtable participants debated whether arbitration, with its flexibility and confidentiality, is better suited to ESG disputes than litigation, particularly in cases with public interest implications.
Some participants suggested that a new cohort of arbitrators with expertise in ESG issues could be beneficial, as traditional arbitration practices may not fully address the nuances of these disputes.
Embracing technology to drive change in law firm culture
Roundtable participants noted that technology adoption in law firms across Asia has been slow, often hindered by institutional and professional inertia. Traditional billing models that reward time over efficiency further complicate this shift. One participant suggested that moving toward value-based or flat fee pricing could encourage firms to adopt digital solutions that support both compliance and ESG goals.
Changing mindsets takes time and considerable professional re-education, and investing in new technology can be costly, with returns that may initially seem uncertain. However, technology that simplifies processes and is intuitive to use can drive acceptance.
For firms ready to embrace this shift, paperless processes and remote work technology offer a pathway to achieving sustainability and ESG compliance goals. By reducing the environmental impact of their operations, such solutions contribute to a broader vision of responsible, efficient dispute resolution. Opus 2’s digital hearings solutions, which facilitate secure, paperless hearings, and virtual collaboration, support law firms in lowering their carbon footprint and advancing toward these objectives.
