As 2018 gets off to a cold start in much of the U.S., I've been reflecting on last year, looking forward to warmer weather, and thinking about what the new year holds'for the legal technology industry in general and Litera Microsystems in particular. Recent years have brought an increase in competitive pressure from alternative legal service providers, which I expect will continue. The question is, how will law firms respond to this newer source of competition? What else will change in the coming year?Here are my predictions for the industry as a whole'and stay tuned for what I expect to see in 2018 from Litera Microsystems specifically. 1. Law firms will differentiate themselves in response to market pressures.As non-legal businesses increasingly offer legal support services, expect to see two broad types of response. Some firms will react by trying to compete head-to-head, dropping their prices or offering alternative fee arrangements. Others will respond more thoughtfully by rethinking processes, reinventing their leadership, and revisiting their use of innovative technology'all of which can improve their provision of services while controlling costs and turnaround times. 2. Legal technology companies, especially startups, will continue to consolidate'as will law firms.Both legal technology companies and law firms experienced a surge in mergers in 2017, particularly involving smaller companies. This consolidation is likely to continue, with the startup market especially ripe for partnerships and acquisitions. In light of an almost 500% increase in legal technology patents over the last five years, there are hundreds of new ideas for technological tools and approaches that can be combined and expanded in new and exciting ways. 3. New technologies will focus on improving lawyers' workflows. Much of the growth in legal technology should be targeted toward improved work efficiency, allowing busy lawyers to respond rapidly in today's competitive legal market. Look for technologies that will enhance attorneys' workflows while improving the quality of their work'these approaches will drive growth in both legal technology and legal services. 4. Artificial intelligence is here to stay. We can expect to see more practical applications for automation and AI for legal professionals. Many firms may be looking to startups who are finding their niche in the market. Our document automation tools, Contract Companion and DocXtools, will continue to redefine the market, delivering an unprecedented standard of care in legal drafting. The legal industry will also see more innovation in AI approaches within M&A due diligence and litigation support too. 5. Legal work will continue to migrate in house, reducing dependence on outside counsel.With the help of technology, in-house groups are becoming more capable by the day and absorbing more work that used to be sent to outside counsel. We've already seen this with our clients, leading to more accurate work at a lower cost, with a quicker turnaround, and I expect this trend to accelerate.At Litera Microsystems, we're excited about our new consolidated venture, and we're looking forward to bringing all of our customers'however you got started with our teams'smart technology that will help you achieve your goals for the year. Reputation matters. Let us help you maintain yours in 2018.